Being Consumed (4) when is a market free?

Picking up from the last post on William Cavanaugh’s book Being Consumed: economics and Christian Desire

The problem with pure free-market thinking is that it offers an insufficient account of freedom. It’s a  superficial view of how freedom works.

A worker in El Salvador earning 33 cents an hour may be free to take the job and the company free to relocate there to maximise profits, but such an arrangement is all too conveniently blind to the disparity of sheer power between employee and employer. In this limited view of freedom, to ask questions of the common good or whether it is just, are simply irrelevant.

Cavanaugh makes a telling point; capitalism tends to be defended as the best system as a whole, and individual injustices perpetrated in its name are aberrations,

“A system that is allegedly based on individual rights is thus ironically justified by a utilitarian justification of the system as a whole, to which individuals and their freedoms are sacrificed.”

So Cavanaugh argues that capitalism needs some external positive standard by which to judge whether a market is free. Augustine was right; to talk about human freedom we need to engage with questions of the telos, the true ends of human life and flourishing. And it this sort of discussion free market thinking expressly wants to ban from the discussion.

But says Cavanaugh,

‘Giving free rein to power without ends is more likely to produce unfreedom than to produce freedom.’ 32

So let’s move on from generalisations that ‘capitalism is freedom’, to asking ‘is this particular manifestation of capitalism free? Is it just and ethical; does it contribute to human flourishing?’

He gives some examples of freedom versus unfreedom within capitalist exchanges:

Remember, according to free-market that for an exchange to be free, all that is needed to be known is the price. But is that enough? No wonder then that companies hide these sort of facts:

  1.       Buying a shrink-wrapped steak in the supermarket

Yes, it is cheap, but consider these ‘hidden’ costs.

– the calf spends most of its life in a caged in feedstall, ankle deep in manure

– open grazing is inefficient, so it is fed corn, supplements, proteins and antibiotics

– In 14 months its weight goes from 80 to 1200 pounds

– it is given hormone implants to promote growth (banned in Europe)

– its digestive system can’t cope with corn, and to prevent illness it is fed antibiotics

–  resistant E-coli, can now kill humans if it gets through the production process.

– when slaughtered, it is caked in faeces, where E-coli reside

– Rather than alter the diet, or the feeding and slaughter process, the meat is irradiated and sprayed with disinfectant before shrink wrapping

– Corn uses high levels of petroleum products: each head of cattle uses 284 gallons of oil. Petroleum run-off from fertilizers has run down the Mississippi and created a 12,000 mile dead zone in the Gulf of Mexico.

– overuse of antibiotics has created resistant forms of bacteria

Cavanaugh quotes Michael Pollan who has written on this,

“We have succeeded in industrializing the beef calf, transforming what was once a solar powered ruminant into the very last thing we need: another fossil fuel machine.”

Ever tightening margins and fierce price competition between corporate producers, mean that this insane system is apparently impervious to change despite its devastating social and environmental consequences. Buying such meat is NOT a free exchange. The facts are hidden from the consumer behind the cheap price.

All this versus the possibility of grass-fed beef, without hormones and antibiotics, on a small local scale by known and local producers – with a higher price.

2.       Buying a jacket from a fashion store

Cavanaugh gives an example of a 1995 investigation into the production of clothing for the Liz Claiborne chain in El Salvador. Workers got 77 cents a jacket or 56 cents an hour. The jacket was sold for $178 in the US. The factory was surrounded by barbed wire and armed guards. Workers doing 12 hour shifts had insufficient money to feed themselves and their families.

Compare this to the Mondragón clothing company in Spain.  It employs 60,000 people (83,000 actually according to its website), with annual sales of over $3billion. Founded by a Basque priest, it is based on distributism; that social order can only be achieved by a just distribution of property and recognition of the dignity of labour.

The company is labour owned and run, with one vote per worker. Capital comes from a Credit Union largely owned by workers and the community. The highest paid worker can get no more than SIX times what the lowest paid worker receives. 10% of surpluses are given to community development. The social effects have been documented as positive – lower crime rates, higher education rates, lower domestic violence, better physical and emotional health.

So which market is free?

Mondragón’s ethos is that true freedom takes account of what constitutes human flourishing.

So Cavanaugh’s point is repeated:

There is no way to talk about a really free economy without entering into particular judgements about what kinds of exchange are conducive to human flourishing on earth and what kinds are not.

In other words, ethics are indispensable for genuine freedom to exist within free-market capitalism. Talk of the ‘blind market’ delivering freedom and being left to its own devices has delivered us right into the Credit Crunch, vast unsustainable debt, a decade or more of austerity, the injustice of future generations paying for this generation’s debts and so on ….

Comments, as ever, welcome.

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One thought on “Being Consumed (4) when is a market free?

  1. […] Being Consumed (4) Patrick Mitchel at Faith in Ireland has been blogging through the book Being Consumed: Economics and Christian Desire by William Caveaaugh. The issue of money, consumption, justice and Christian morality is both extraordinarily important and difficult. And not simply because it might involve things we don’t want to hear. Even trying to understand the issues at play is an “examining the matrix” sort of thing. This post in the series is particularly good. And I now know about an amazing Spanish company – Mondragon – started by a priest that has had success with a totally different corporate model. […]

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