Saturday, 15 September 2012

A question about Pizza

Do I dislike Pizza?

An intriguing question to ask someone like me that mainly writes about politics, economics and theology. How did it come to be asked?

Well I was asked the pizza question by a guy called Caleb Cutler after I described Michael Gorbachev as a "corporate whore" for appearing in a Pizza Hut advert in the late 1990s. I made the comment in the context that it was a pity to see a great statesman of the 20th century reduced to the status of a celebrity pizza salesman. A sad spectacle in my opinion.



Caleb's written comment read:
"Ah so you don't like pizza? Got something against free enterprise?" 
So to answer his questions one at a time:

I actually really like Pizza, commercial pizza not so much, but it is usually edible so I wont complain. What I don't like is seeing one of the great statesman of the 20th century ending up hawking corporate pizza, given that I share Bill Hicks' absolute contempt for the advertising industry.



Another saddening aspect to Gorbachev's reduction to the status of a celebrity pizza salesman is the fact that his democratic mixed economy vision for Russia was hijacked by a pisshead called Boris who implemented a devastating neoliberalisation process at the behest of a bunch of American economists instead. The Russian free-market experiment was an absolute disaster. The neoliberal shock therapy session administered to post-communist Russia was one of the most obvious failures of neoliberal free-market ideology in a very long list of failures. The free market ideology managed to make Russia less productive and created more extreme poverty than the communist regime they so hastily replaced.

From this fire sale of state infrastructure and unregulated chaos there emerged a tiny minority of "winners" of course. Whilst millions of ordinary Russians were reduced to abject poverty, oligarchs like Roman Abramovich siphoned £billions out of the Russian economy to invest in absurd vanity projects like Chelsea FC and ridiculously over sized yachts.

What a warped view of the 20th Century would it take to simply ignore the fact that Russian neoliberal shock therapy ended up crippling the Russian economy, causing what was one of two great superpower less than a decade before to default on it's debts in 1998.

This brings me to the question about free enterprise, which is a lot more tricky than the question about pizza. Whether I have anything against "free enterprise" depends a lot on how "free enterprise" is defined doesn't it?

Should small businesses be free to compete on an even playing field with their competitors? Of course they should.

Should corporations be free to exploit their workers, destroy the environment, commit fraud, or use financial doping to eliminate their competition in the pursuit of vast profits and obscene executive pay? I don't think so.

I believe that the state has a vital role to play in protecting "free enterprise". If it takes the intervention of the state to ensure that there are several players competing in every sector in order to ensure competition and stimulate greater efficiency this is significantly better than allowing single enterprises to financially dope their way into markets, annihilate their competition through price fixing then exploit their monopoly position to maximise profits, going on to form international price fixing cartels with similar enterprises in order to eradicate market plurality.  If "free enterprise" is defined as a right to annihilate competition in order to maximise profits, this is actually an anti-competitive and inefficient economic ideology.

I believe in freedom to compete but I do not believe in the freedom to form economically damaging monopoly interests; the freedom to abuse information asymmetry; the freedom to form cartels; the freedom to corruptly influence governments and regulators; the freedom to profit on human suffering; the freedom to trade on insider information; the freedom to ruin the environment for insignificant economic gains; the freedom to debase the entire economic system for profit; or the freedom to use financial doping to destroy market competition and eradicate market plurality (Market plurality is a very important concept, I'll address this in a later post).

I actually believe that an efficiently regulated market can achieve much greater market freedom by the active stimulation of competition through progressive funding of infant industries. Adam Smith, the "godfather" of free-market economists also believed in infant industry protection, however free-market fundamentalists tend to completely ignore this aspect of his work, using the same selective reading strategies to read their favourite economics books as the fundamentalist American Christian right use to cherry pick passages from the Bible to justify anti-Christian attitudes such as intolerance and greed-worship.

In my opinion strong reliable and adaptable state sector is necessary to ensure a fair and level playing field. The state should intervene to support and protect infant industries. The state must also maintain the capacity to step in at short notice and intervene to prevent market failure, should the need arise. These measures are necessary in order to create a highly efficient and competitive private sector; a private sector best prepared to take entrepreneurial risk because progressive legislation would protect them from the risks of market domination by profit driven monopoly interests.

So in conclusion: I really like pizza, I'd much rather have a homemade one than a Pizza Hut one though. I don't have anything against "free trade", unless of course we are talking about the free-market, anarcho-capitalist definition of "free trade"; that corporations should have the absolute freedom to do whatever the hell they want in pursuit of profits, no matter what the harms they inflict on others in order to make them.

I don't believe in the anarcho-capitalist definition of  "free trade" because I believe in a social-democratic form of regulated free trade. However anyone that properly understands the right-wing libertarian position should also oppose the anarcho-capitalist definition of "free trade" given the importance of non-aggression in libertarian theory. The only people that would buy into this "deregulate everything, let corporations do whatever the hell they like" definition of "free trade" are economic illiterates that buy into absurd simplifications (private always good, state always bad) because they are incapable of actually understanding any kind of complex, pragmatic or even vaguely realistic economic theory.


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