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By Root 1520 0

introduced by labor strife, unemployment, trade cycles, and monopoly. Only the new transitional democracies have been talked by foreign advisors or bullied by international banks into thinking that laissez-faire capitalist economics is a self-sufficient social system. Predictably, the results have been catastrophic. As we will see below, what Aleksandr Solzhenitsyn calls “savage capitalism”—a system “fraught with unproductive, savage and repulsive forms of behavior, the plunder of the nation’s wealth”—has turned the new Russia into a place where “the brazen use of social advantage and the inordinate power of money” (the very problems the collapse of communism was supposed to cure!) are today worse than ever.8

Even under ideal conditions, where the depredations of wild capitalism are controlled and the economy achieves a certain self-regulation, markets have a limited capacity to generate what a society needs.9 Ideal conditions only mean that sellers and buyers interact in accord with prices whose fluctuating levels keep goods, consumers, and laborers interacting productively. At best, this only secures maximum economic efficiency in producing and distributing hard (durable) goods. Nothing else. Advocates of laissez-faire as a political strategy claim far more, however. And therein lies the problem.

There is today a disastrous confusion between the moderate and mostly well-founded claim that flexibly regulated markets remain the most efficient instruments of economic productivity and wealth accumulation, and the zany, overblown claim that naked, wholly unregulated markets are the sole means by which we can produce and fairly distribute everything human beings care about, from durable goods to spiritual values, from capital investment to social justice, from profitability to sustainable environments, from private wealth to the essential commonweal. This second claim has moved profit-mongering privateers to insist that goods as diverse and obviously public as education, culture, penology, full employment, social welfare, and ecological equilibrium be handed over to the profit sector for arbitration and disposal.10 It has also persuaded them to see in privatization not merely a paring knife to trim the fat from overindulgent state bureaucracies but a cleaver with which democracy can be chopped into pieces and then pulverized.

In America, the confidence in the omnipotence of markets has been transformed into a foreign policy that assumes internationalizing markets is tantamount to democratizing them and that human freedom is secured the minute nations or tribes sign on to the dogmas of free trade. The Friedmans called their celebration of markets Free to Choose, as if choosing brands or trademarks and choosing life-plans or common cultural norms were kindred activities.11 More recently, Jeffrey Sachs, a zealous Friedman clone and the ambitious first consul of capitalist reform in transitional societies, has argued that Eastern Europe “shed the communist system” not to create an open society but “to adopt capitalism.” That being the case, its goal must be “economic harmonization with Western Europe”—some-thing requiring radical economic reform (a “Big Bang” as the Poles called it) and ongoing economic “shock therapy.”12 Laissez-faire doctrines can imperil the nation-state, but at least the nation-state possesses a sovereign power capable of countering raw capitalism’s materialistic, privatizing consequences. In the international economy, laissez-faire doctrines are fatal, for here sovereignty vanishes and aggressive transnational bodies pursue market strategies in the absence of any countervailing regulatory bodies whatsoever. Kuttner notices that “as the ethic of laissez-faire gained ground, it did so almost in lockstep with the relative decline of its prime sponsor”—the United States.13 While earlier incarnations of international institutions like the International Monetary Fund and the World Bank permitted the flexing of American muscle in a world arena, America’s diminishing power leaves such institutions at the mercy of