The Truth Behind the Free Market by Bryan Gould (Macmillan, $54.95)

This review was commissioned by ‘The Listener’ but not used

 Keywords: History of Ideas, Methodology & Philosophy; Political Economy & History;

The dominant public narrative has a vision of business and the market as progressive forces, held back by unnecessary interventions from politicians and governments. Of course the market is a very old social institution; so the narrative is talking about ‘modern’ markets. But the same is true for the government, for modern government evolved to restrain the excesses of modern markets. Like any new technology it provides both upsides and downsides. Governments try to maximise the former and minimise the latter. But that is not a part of the public narrative. Neo-liberalism treats governments as a bloody nuisance, politicians as interfering old noun-deleted. Business should rule, OK.

Bryan Gould rejects this narrative, objecting to the way that neoliberalism undermines the democratic process, instead arguing that government is to balance what an uncontrolled market does. That is not the message the casual reader gets from the media and the ideologues (and ideologies) it promotes. So he has written a book about the neoliberal myths.

It focuses on the macroeconomic and financial failures of the unrestrained market while giving much less attention to the failures at the microeconomic level such as environmental depletion, waste and the impoverishing the quality of life. No matter, he faced resource limitations and made choices, but it is well to remind the reader that Gould’s is only half the critique.

It is a vigorous one although it will not convince everyone. Neoliberal ideologists are impervious to reason. But open-minded readers will find a compelling story. There are limitations. I often wanted to engage with or elaborate his argument page by page. Perhaps the book should not be read alone but with a vigorous book-group, a chapter a week.

The group will travel over many topics – financial failure, exchange rate policy, monetarism inequality … – and many examples including detailed instances from various countries – Australia, Britain, China, the EU, New Zealand the US.

There are numerous shrewd insights. The Clark-Cullen ‘government showed itself unable get itself off the tramlines … there were no signs of the intellectual self-confidence needed to open up a real debate about how the economy should be managed’ (from a retired British Labour MP). Or

‘Universities are increasingly seen not as repositories of wisdom and civilised values, underpinning the whole breadth of western civilisation and developing educated and rational societies, but more and more as mere agents of economic development, whose role is to generate technological progress which can be turned into commercial advantage’ (from a retired vice-chancellor).

His cri-de-coeur is that ‘very few progressive politicians have analysed their situation preferring to tell themselves that they are merely acknowledging what they have persuaded themselves is inevitable and pretending that this central concession leaves intact their political positions on other issues.’ Despite being a (retired) politician Gould has made no such concessions. He can maintain his political position honestly.