America's free-market capitalism myth

This article appeared in the Patriot News, June 17, 2012.

Politicians of all stripes routinely genuflect at the altar of free-market capitalism. The alternatives to the system are not appealing.

There is socialism, of course, whose machinery of state intervention makes it immediately suspect as an inevitable harbinger of its more sinister cousin, communism. North Korea (or even Old Europe) are not shining examples.

There is state-directed capitalism, the kind you see in China, which has produced rapid economic growth through the last three decades, raised hundreds of millions of its peasants out of poverty and produced an increasingly affluent middle class.

But the Communist Party in China remains grimly determined to retain total control over the political lives of the country’s citizens, unwilling to grant them even basic political rights or civil liberties. Its barbarous treatment of dissidents such as Chen Guangcheng, the blind activist who sought help from the U.S. Embassy in Beijing, underscores the primitiveness of the regime while accounts of corruption, nepotism and staggering wealth at the highest levels of party officialdom reinforce the perception of a brittle system managed by self-serving politicians.

But our own style of capitalism and liberal democracy is not immune to cupidity or moral turpitude.

Far from it.

Politicians have always sought to enrich themselves -- through power or money. With well-heeled lobbyists and special-interest groups constantly importuning them for favors, some lawmakers have found ways of doing so. A defense contractor will hold out the promise of a plush job after you retire from government in return for a lucrative order of military equipment. The oil and natural gas industry will find ways of thanking you if you manage to give them tax breaks and subsidies. If you sign a pledge never to raise taxes, which really is a promise to forswear raising income taxes or capital-gains taxes on the richest households, billionaires will fund Super PACs to help you get re-elected. And so on.

The possibilities are endless.

Many of these arrangements are perfectly legal, which makes you wonder at the incompetence of those who get caught on the wrong side of the law.

Equally striking is how other politicians rally around even the most egregious lawbreakers in their midst. When a Democratic representative in Congress is caught red-handed with tens of thousands of dollars in his freezer, you might think the House thanked the FBI for doing a fine job and asked it to keep it up.

Not quite.

Pennsylvania is setting exemplary standards of bipartisanship of its own. After former House Speaker Bill DeWeese was convicted of theft and improper use of taxpayer funds to carry out campaign work, he was rewarded with a standing ovation by lawmakers of both parties.

At the rate at which legislators are being convicted these days (Jane Orie, former state senator, now has the opportunity to study the prison system from the inside), there should be ample opportunity for additional ovations in the state Capitol.

And if the debacle behind the Harrisburg incinerator debt is ever investigated and the perpetrators brought to justice, one can only imagine the outpouring of bipartisan expressions of affection that await the culprits on their way to prison.

Opportunities for corruption and self-enrichment are especially rife when politicians meet industries seeking to extract natural resources. The African continent is littered with such cases, with hapless citizens having to deal with their leaders’ legacy: degraded environments and bankrupt government treasuries. The profits to be made from such ventures are simply enormous, and corporations find it eminently worthwhile to grease a few palms to acquire access to the natural resource.

But that is Africa.

It couldn’t happen here, could it?

Here, in Pennsylvania, where fealty to free markets is unquestioned, regulations on fracking in the Marcellus Shale will be kept to a minimum (to avoid burdening the corporations who might otherwise pack up and go drill elsewhere) and taxes will never be raised (for the same reason).

And when Shell Oil Co. seeks to set up a petrochemical refinery, the state is happy to oblige with a subsidy worth $1.7 billion over 25 years.

What happened to the obeisance to free-market principles, you might ask?

What of the idea that the government should not favor certain firms or industries? Aren’t they supposed to compete with one another in a Darwinian effort to survive and thrive in unfettered markets? If the federal government is wrong to provide subsidies to a solar-energy firm, how is it right for the state government to offer subsidies to an oil firm? And in a few years from now, will current politicians move smoothly into industry-funded corporate sinecures?

Our own economy is hardly the “free market” we purport.

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