Barry Lynn: "It is private governance of the political economy...system."

I found the following analysis eye opening from an Alternet interview.

Regarding Barry Lynn's new book, Cornered: The New Monopoly Capitalism and the Economics of Destruction:

Part of the problem with the Obama administration, which is the same problem with the Clinton adminisration, is … they buy into the basic framework of interpreting antitrust law as was put into place by Reagan. Before 1981, law ensured competition for the sake competition -- to protect the market system and to prevent the consolidation of control. Since 1981, they switch it to this consumer welfare test, which was defined basically as price. If the merger will bring a lower price, it’s approved. The Clinton people and now the Obama people -- who are largely the Clinton people -- accept the same framework.

One price of cheap is that you end up with less safe products. If you get to cheap through real competition and an open market system, in which you have a bunch of different independent companies competing to find a better way to do something, and you have regulation that doesn’t allow you to cut quality in order to cut prices, then you’ll end up with both increasing quality and safety and lower cost over time. That was the old system.

What we have now is lower prices delivered by brute power forced downwards onto producers. A company like Wal-Mart exercises authoritiarian power. “Last year,” they tell producers, “we paid you $100 for that grill, this year we’re only going to pay $90 and it’s up to you to figure out what you cut.” So over time that grill is going to be less and less sturdy. The food will become more and more adulterated. T-shirts will become thinner and thinner and made by children somewhere.

Q: You argue that free-market fundamentalists paved the way for the monopolization of the U.S. economy, and as a result, the current economic recession. Does the recession mark the end of such fundamentalism or are they reframing?

BL: This recession hasn’t ended this fundamentalism. What’s behind it is private governance of the political economy and eventually the politically system.

Some think of the free-market as a mechanical apparatus that yields certain outcomes and we can’t do much about what the market decides. Others see globalization as a natural force that leads us to an interconnected world where we will be increasingly tied to China or India. None of these forces actually exist. What you actually see are people using human-created institutions to manipulate others. We need wake up to the fact that Tom Friedman’s view of globalization is a lie, that Milton Friedman’s vision of the free-market as a mechanical apparatus is a lie … The first step to emancipating ourselves is to emancipate ourselves from those metaphysical lies -- these ideas that outside forces are controlling us.

The indoctrination is that we live in a market economy that determines globalization and everything else. I don’t know why this generation of Americans was more gullible. I can’t understand that. But it’s just a fact and we need to wake up.