Free Market Reform
Meanwhile the post war economic boom was coming to an
end. By the 1980s, the global economy was in a deep recession. Northern
economic interests were driven to counter this economic slowdown. The
governments in the US and the UK took the lead in economic reform and
restructuring of their societies. The ascendancy of this economic reform
model was consolidated with the fall of the Berlin Wall and the end of
the Cold War, when a ‘political consensus’ on economic policy was
spelt out and embraced by the governments in the North.
This economic reform gave new life to the global free
market economy. Thus under the ‘law of the market’ the free market
regulates itself. This calls for all power to the market, which actually
means unfettered access to corporations to operate free of any
institutionalised control. This free market was grounded in the doctrine
that:
-
the most rational and efficient allocation of
resources can only take place without government interference
-
economic growth is the measure of human progress
-
economic globalisation in which trade in goods
and capital can flow across national borders unimpeded in a single
integrated market benefited everyone. It leads to growth, efficiency
and spurs competition.
-
Hence countries will benefit if they become
internationally competitive and switch from domestic production for
self-sufficiency.
This faith in the free market rests on the premise
that human beings are motivated by self-interest and will seek to
benefit themselves. Therefore this will yield the greatest benefit to
individuals and society. It follows then that individuals will compete
with each other to seek their interests. Thus competition among people
(as against cooperation) is rational. As such, human progress and
advancement is measured in terms of how much members of a society
consume (Korten 1996b:184-5).
Under the free market, economic behaviour was deemed
apart from social relationships and obligations; economic relationships
were separate and independent from social rights and responsibilities
that governed all social systems. Unlike in other non-European
societies, economic institutions were embedded and dependent on the
social system; economic behaviour was governed and regulated by social
relationships; and economic activity was carried out to serve the values
of society and secure its common interests. This gave rise to values,
which affirmed the primacy of the collective good (Polanyi 1957).
The self-regulating free market was characterised by
great social upheavals in England where it was first invented and it
became the dominant force shaping European civilisation from the 19th
century onwards. This international free market system has been shown to
be highly unsustainable and destructive to human society.
The global free market has led to the concentration
of economic power in the TNCs which is unaccountable to government; it
has destroyed resources, the environment and viable social systems; it
has created powerlessness and alienation eroding the functions and
authority of states and fragmented society; it has increased poverty,
and polarised societies; it has led to the breakdown of sociocultural
systems and worldviews replacing, the common good, cooperation, the
sense of community, spiritualism, respect for life, compassion,
tolerance and love with crass economistic values that put a premium on
individualism, competition, survival of the strongest, disdain for the
weak and the losers, materialism, compulsive consumption, and arrogant
secularism.
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