“It is not a free market, it is a rigged market.”
Who made this sweeping generalisation, one which amounts to a total rejection of the very foundations of the neoliberal economic reasoning of the Chicago school of economics?
None other than the staunch right-winger, Michael Gove. He said this live on the TV, on Sunday, 15 January 2017.
In case you missed it, read my lips, what the Conservative Party MP for Surrey Heath said was: “it is a rigged market“. He was referring not to any one particular part of the economy, but to the whole system.
Michael Gove MP has just admitted that the great Thatcherite experiment with wholesale privatisation is based entirely on an utterly false premise. As Michael Gove so aptly puts it, markets are, in general, not free or competitive, they are rigged.
This admission surely should put a final stake through the heart not just of Thatcherism and Reaganomics, but of the entire neoliberal school of thought. Milton Friedman’s Chicago school of economics should be dead and buried by this frank description of how markets actually work in the real world.
The textbook model of ‘perfect competition’ is a quaint and charming description of a fantasy land, at best a first approximation of how the real world works. This model has underpinned the neoliberal dogma of the last forty years. It is time for it to be laid to rest.
Under the auspices of neoliberal economics, in order to achieve so-called ‘efficiency-savings’ public services have been progressively sold off or contracted out to the private sector. It makes no sense to do this in such a wholesale way once we know that the market mechanism is not free but ‘rigged’.
Michael Gove’s statement about the way markets work in the real world amounts to an admission that the creed of neoliberalism is a false God, one put about to justify profiteering, profiteering which may well not act in the interests of the many but only in the interests of a few. The last thing we need from a government is that it capitulates to venture capitalists hell-bent on manipulating markets in their own private interests.
There is no ubiquitous, naturally benevolent ‘hidden-hand’ out there, and there may well not be any generous ‘trickle-down effect’ to be gained from privatisation. Privatisation is not the catch all solution to every economic problem. Neoliberalism is based on nothing but pure fantasy.
It is time to bury the dogma of the far right and move back to the centre ground of the ‘mixed economy’ model of post-war Britain. It is time to put the false genie of neoliberalism back in the bottle once and for all. Gove puts it so very well. We should all pay great attention to what he so frankly admitted a few days ago. Markets are rigged, not competitive. It is foolish to adopt a model of the economy that assumes otherwise.