Debunking the Myth of Free-Market and Liberalism

Debunking the Myth of Free-Market & Liberalism

After the collapse of the Soviet Union in 1991, there was a grotesque ethos of celebration present in the Western Imperialist Camps especially that of the United States of America. While there were many odes to joys being sung, the vacuum created by the collapse of the Soviet Union gave rise to a very lunatic religion that was spearheaded by Francis Fukuyama, whose devotees called themselves- Fukuyamaists and who had declared the “END OF HISTORY”. By end of history, he meant that capitalism and the free market were the only alternatives for the world as communism had failed and so human society had reached its ultimate end and everyone should enjoy the so-called post-Communist era. No wonder we had cans of Carbon dioxide asking themselves to be opened up by advertisements saying- “coca-cola, open happiness”. This was, I shall go on to stress, the greatest myth in the entire history of mankind especially when we have reached 2017 and are realizing that all the fundamental problems of this so-called liberal free-market tendencies are approaching its apocalyptic calamity and socialism is coming back with a vengeance just like the famous Hollywood line in Independence Day: Resurgence- “We knew they would come back”!

We often get to hear from economists and coffee house intellectuals that markets need to be free and that when government interferes to state what market participants can or cannot do, resources cannot flow to their most efficient use. If people cannot do the things that they find most profitable, they lose the incentive to invest and innovate.

Thus, if the government puts a cap on house rents, landlords lose the incentive to maintain their properties or build new ones. If the government restricts the kinds of financial products that can be sold, two contracting parties that may both have benefited from innovative transactions that fulfill their idiosyncratic needs cannot reap the potential gains of free contract. People must be left free to choose as Milton Friedman says. Yes, freedom! But what kind of freedom? Karl Marx in his pamphlet on “Free Trade” written in 1848, had said: Do not be deluded by the abstract word freedom. Whose freedom? Not the freedom of one individual in relation with another but the freedom of capital to crush the worker. [1]

The concept of a free market is a myth. But what is a myth? What does Roland Barthes, the structural Marxist famous for his essay “Death of the Author” and his book “Mythologies” say about myths? According to Barthes myth isn’t just a genre of stories, it is a way of saying something. According to him, the special trick of myth is to present an ethos, ideology or set of values as if it were a natural condition of the world, when in fact it is no more than another limited, man-made perspective. A myth doesn’t describe the natural state of the world but expresses the intentions of its teller, be that a storyteller, priest, artist, journalist, filmmaker, designer or politician. So this is very important to note. Myths are made. Mythology is also a kind of ideology. Free Markets, in this case, was the narrative that capitalists intended to disseminate to continue their frivolous schemes of exploitation. Prof. Ha-Joon Chang in his book 23 Things they don’t tell you about Capitalism writes: The free markets do not exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How ‘free’ a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined “free market” is the first step towards understanding capitalism. (Chang 1) [2]

Another myth that exists amongst the intelligentsia, is that liberalism begets freedom. But this is the most obnoxious joke which has ever been cracked especially at this moment of time when George Magnus of Wall Street is begging the world to “Give Marx a Chance to Save the World Economy” 3. In its editorial of 24 December 2016 The Economist chanted a hymn of praise to its beloved liberalism. Liberals, we are told, believe in open economies and open societies, where the free exchange of goods, capital, people, and ideas is encouraged and where universal freedoms are protected from state abuse by the rule of law.

Such a beautiful picture really ought to be set to music. But then the article sadly concludes that 2016 has been a year of setbacks. Not just over Brexit and the election of Donald Trump, but also the tragedy of Syria, abandoned to its suffering, and widespread support—in Hungary, Poland and beyond—for ‘illiberal democracy’. As globalization has become a slur, nationalism, and even authoritarianism, have flourished. In Turkey relief at the failure of a coup was overtaken by savage (and popular) reprisals. In the Philippines, voters chose a president who not only deployed death squads but bragged about pulling the trigger. All the while Russia, which hacked Western democracy, and China, which just last week set out to taunt America by seizing one of its maritime drones, insist liberalism is merely a cover for Western expansion. The beautiful hymn of praise to liberalism and Western values has ended on a sour note. It merely is a mythology now. The Economist concludes bitterly: “Faced with this litany, many liberals (of the free-market sort) have lost their nerve. Some have written epitaphs for the liberal order and issued warnings about the threat to democracy. Others argue that, with a timid tweak to immigration law or an extra tariff, life will simply return to normal.” [4]

But life will not simply “return to normal” – or more correctly, we will enter a new stage of what The Economist refers to as a “new normality”: A period of endless cuts, austerity and falling living standards. In reality, we have been living in this new normality for quite some time. And very serious consequences flow from this. The global crisis of capitalism has created conditions that are completely unlike the conditions that existed (at least for a handful of privileged countries) four decades after the Second World War. That period witnessed the biggest upswing of the productive forces of capitalism since the Industrial Revolution. This was the soil on which the much vaunted “liberal values” could flourish. The economic boom provided the capitalists with sufficient profits to grant concessions to the working class. That was the golden era of reformism. But the present period is the era, not of reforms but of counter-reforms. This is not the result of ideological prejudice, as some foolish reformists imagine. It is the necessary consequence of the crisis of the capitalist system that has reached its limits. The whole process that unfolded over a period of six decades is now thrown into reverse. Instead of reforms and rising living standards, the working class everywhere is faced with cuts, austerity, unemployment, and impoverishment. The degradation of working conditions, wages, rights and pensions falls most heavily on the poorest and most vulnerable sections of society. The idea of equality for women is being eroded by the remorseless search for increased profitability. A whole generation of young people is being deprived of a future. That is the essence of the present period. The Financial Times published an interesting article by Wolfgang Münchau entitled “The elite’s Marie Antoinette moment”. It begins as follows: Some revolutions could have been avoided if the old guard had only refrained from provocation. There is no proof of a ‘let them eat cake’ incident. But this is the kind of thing Marie Antoinette could have said. It rings true. The Bourbons were hard to beat as the quintessential out-of-touch establishment. They have competition now. Our global liberal democratic establishment is behaving in much the same way. At a time when Britain has voted to leave the EU when Donald Trump has been elected US president, and Marine Le Pen is marching towards the Elysée Palace, we — the gatekeepers of the global liberal order — keep on doubling down. [5]

The comparison with the French Revolution is highly instructive. Everywhere the ruling class and its “experts” have shown themselves to be completely out of touch with the real situation in society. They assumed that the order of things that emerged from the post-war economic boom would continue forever. The market economy and bourgeois “democracy” were the unquestioned paradigms of the epoch.Their smug complacency precisely resembled that of the unfortunate Marie Antoinette, the Queen of France. It is by no means certain that her famous phrase was ever pronounced, but it accurately reflects the mentality of a degenerate ruling class that has no interest in the sufferings of ordinary people or the inevitable consequences that flow from them.

In the end, Marie Antoinette lost her head and now the ruling class and its political representatives are losing theirs. The Financial Times article continues: Why is this happening? Macroeconomists thought no one would dare challenge their authority. Italian politicians have been playing power games forever. And the job of EU civil servants is to find ingenious ways of spiriting politically tricky legislation and treaties past national legislatures. Even as the likes of Ms. Le Pen, Mr. Grillo and Geert Wilders of the far-right Dutch Freedom party head towards power, the establishment keeps acting this way. A Bourbon regent, in an uncharacteristic moment of reflection, would have backed off. Our liberal capitalist order, with its competing institutions, is constitutionally incapable of doing that. Doubling down is what it is programmed
to do. The correct course of action would be to stop insulting voters and, more importantly, to solve the problems of an out-of-control financial sector, uncontrolled flows of people and capital, and unequal income distribution. In the eurozone, political leaders found it expedient to muddle through the banking crisis and then a sovereign debt crisis only to find Greek debt is unsustainable and the Italian banking system is in serious trouble. Eight years on, there are still investors out there betting on a collapse of the euro-zone as we know it. [6]

In 1938 Trotsky wrote that the ruling class was tobogganing to disaster with its eyes closed. The above lines are a graphic illustration of this fact. And Mr. Münchau draws the following conclusion quote: But it is not happening for the same reason it did not happen in revolutionary France. The gatekeepers of western capitalism, like the Bourbons before them, have learned nothing and forgotten nothing. [7]

Therefore it is time for people to understand the meta-narratives that are created by the media as propaganda. By using the word “free” and associating it with markets the signified tends to make us believe that the oppression, desperation, inflation, and exploitation of the workers are the only tenets of this freedom. Such concepts of freedom should not only be laughed at but it should be destroyed with violent ammunitions. The keyboard is one such ammunition which can act as a preface to the book called Revolution. The revolution which would democratize the enterprise and end the oppression of the few over the majority.


  1. The article can be read at trade/index.htm
  2. Chang, Ha-Joon. 23 Things They Don’t Tell You About Capitalism. Penguin Books, London. 2010. Print
  3. The article can be read at < 29/give-marx-a- chance-to- save-the- world-economy- commentary-by- george-magnus>
  4. The article can be read at <>
  5. The article can be read at < 11e6-a37c-f4a01f1b0fa1>
  6. Ibid
  7. Ibid


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