March 12, 1999

The deification of the 'invisble hand'

The ideology of the so-called "free market" is obliterating all other criteria for the development of human society. The market is the way of salvation. The market has become our God. - Rt. Rev. Bill Phipps, moderator, United Church of Canada.

Ever since John Lennon sent shock waves around the globe by proclaiming the Beatles were more popular than Jesus Christ, we've been aware of the power of popular culture and consumerism to fill a spiritual void in our lives. Today the Nike "swoosh" and Coca-Cola logo are more recognizable than any religious icon, carrying with them connotations of progress and global conquest.

But as trade barriers around the world continue to fall and transnational corporations rake in record profits, some argue a new faith has taken hold, and with it a fundamentalist doctrine more dangerous than anything we've seen before. At the centre of this faith, or so the doctrine implies, is a benign spirit spreading wealth from within an unfettered free market. If left alone to work its magic, this late 20th century version of Adam Smith's "invisible hand" will eventually close the gap between rich and poor.

The Rt. Rev. Bill Phipps, chief moderator of the United Church of Canada, is only one of many on the political left convinced "market theology" will lead to nothing but devastating results, namely the "concentration of wealth in fewer and fewer hands" and a world economy that "ignores pollution, infrastructure, literacy rates, social dislocation and disease." His concerns are echoed in Dr. John McMurtry's book, Unequal Freedoms: the Global Market as an Ethical System.

"The market is not now seen as a structure to serve society," he writes. "Rather, society is seen as an aggregate of resources to serve the global market.No traditional religion has declared more absolutely the universality and necessity of its laws and commandments than the proponents of the global market doctrine."

But it's not only the left who are getting spooked by this fundamentalist fervor. Pat Buchanan, champion of America's religious right, released a book last year called The Great Betrayal: How American Sovereignty and Social Justice are Sacrificed to the Gods of the Global Economy. In it he writes, "Broken homes, uprooted families, vanished dreams, delinquency, vandalism, crime-these are the hidden costs of free trade." And Sir James Goldsmith, the richest man in Europe, remarked in 1994, "What an astounding thing it is to watch a civilization destroy itself because it is unable to re-examine the validity, under totally new circumstances, of an economic ideology."

It is the assumption global capitalism is inevitable, that our future has already been sold to a form of economic predestination, which is perhaps the most disturbing tenet of market theology, according to political economist and Parkland Institute director, Dr. Gordon Laxer.

"It's like the Christian missionaries who said we have the answers and we're bringing it to you heathens," says Laxer. "The intolerance of saying we will not even debate that there are other alternatives makes it like a fundamentalist religion. I think it's much more dangerous than any other fundamentalism, because it's about power."

The great cost of bowing to gods of globalization is an erosion of democratic values, says Laxer. He argues "under globalism, states are less oriented to internal democratic demands, and more toward adjusting the national economy to globalism's imperatives.The obligations of globalism were mandated during the 1980s debt crises and are now locked in by regional agreements like NAFTA."

Other economists, however, contend any rhetoric of "market theology" or "market doctrine" is inaccurate and polarizing. They argue history has shown capitalism to be the most successful means of allocating resources, so there is good reason to place one's faith in the prospect of a global market.

"Capitalism has been shown to work better," says business professor, Dr. Randall Morck. "If I understand them correctly, this is the conclusion many old-fashioned and economically illiterate leftists find disturbing. Future economic discourse will therefore be about how capitalism should develop, not whether or not it should. To call such a position 'market theology' is deeply insulting, and does little to foster a constructive dialogue between economics and the humanities."

Vice-President (research) Roger Smith agrees we've learned much lately about economic systems that do not work, particularly after the fall of the Soviet Union. He says the market has "demonstrated its ability to enable countries to be more productive." At the same time, "it has not addressed some of the distribution issues that are clearly there, that any caring human being must be concerned with.

"Those who believe that market forces can be beneficial have to be careful about the rhetoric they use, but also those who see the shortcomings of market forces have to be careful about the rhetoric they use too. And I'm not sure either side is adequately thoughtful and careful about its rhetoric sometimes."

Associate Dean of Business (external) Royston Greenwood also urges a more balanced view of economic globalization. "There are no ethics in the market," says Greenwood, only companies behaving ethically or unethically. Companies, and citizens, must decide what globalization means and how it needs to be adjusted to suit our social and spiritual needs.

"I don't want to portray globalization of western economic systems as panacea, but at the same time, to paint it as an entire negative is overstating the case on the other side.We don't have the structures in place yet in terms of how to manage transnational organizations and global economies."

According to Laxer, however, the tide is turning away from uncritical acceptance of a monolithic global market. Popular resistance, he says, is on the rise. The defeat of the Multilateral Agreement on Investment (led by the Council of Canadians) at the Organization for Economic Co-operation and Development (OECD) in Paris last December is one clear sign people are not simply surrendering to the transnational corporate agenda. Norway has also begun an inquiry into the ethics of globalization.

"We're in a short historical period after the fall of communism when there is an assumption we've done it all and this is the only way," says Laxer. "I think we're moving into a deflationary recession... and then this era of capitalist triumphalism will be over."

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