Do free markets camouflage their real cost to our society? Blinded by prices and the so-called free market, Raj Patel says market theory has not only failed, but has also acted as a camouflage for activities that are not about markets at all, and that prices have little correspondence with their value or even their cost. Maria Armoudian discusses how to reshape market societies with Patel.
Maria Armoudian: Tell us about the camouflage you think is occurring as a result of prices and markets.
Raj Patel: It’s pretty easy for us to see that if you are concerned about climate change, if you are concerned about labour, if you are concerned about pretty much anything, the way we are greeted with prices in the markets don’t really tell us the full story about the exercises of power that it took to make the things that we are buying and selling. If that sounds a little abstract, let’s break it down to something very simple like a hamburger. We see a four-dollar hamburger in our local burger joint, but there is a lot that is hidden from us in that price. The environmental damage in making that hamburger, for example; if the hamburger came from cows that were on pasture that once upon a time [was] forest. We heard a lot in the eighties about pasture for cattle. If that is where the cow came from then some researchers in India have said a burger shouldn’t cost four dollars, it should cost nearer two hundred dollars because, in losing that forest, we’ve lost biodiversity, we’ve lost carbon, [and] we’ve lost the oxygen being produced. That is hidden from us in the price. As are many other things, like the real cost of labour. If this hamburger is eaten in the United States the chances are that the tomato in that hamburger will come from southern Florida where, since 1997, over a thousand slaves, people in conditions of slavery, have been freed from captivity. So the pricing of our hamburgers really hides a great deal in terms of labour, in terms of environmental damage, and it doesn’t include the healthcare cost that we’ll pay after consuming the hamburger.
MA: You also talked about some manipulations. You even used Wall Street itself as an example with the Volkswagen.
RP: That is right. This is just the absurdity of the way the trading system works on Wall Street. For a very short time the biggest corporation in terms of dollar value was Volkswagen. That was because of a series of weird transactions behind the scenes that drove up the price of Volkswagen shares, just because of a certain sense of manipulation and the way that markets and hedge funds worked. But there is something very systematic about the way in which Wall Street has managed to shuffle off the risks associated with its bets. They were able to make a great deal of money in terms of bonuses and worry about the risks coming due in the next quarter. And when those risks came due it was us who ended up picking up the pieces and paying the tab.
MA: The other thing that I thought was quite interesting was the other blinding that you talked about, which is the cultural camouflage and how we have become trapped and blinded to certain realities. You call it Anton’s blindness. Part of this idea is about how markets and societies are separated.
RP: We’ve been so soaked in this idea that the only way we can value the world around us is if we put it in a market and stick a price label on it. We’ve forgotten [that] sticking things in markets and putting price labels on them isn’t a terribly good way of valuing things, as we’ve already seen. There are [also] other ways of valuing the world. And I liken it to a disease called Anton’s blindness. Anton’s blindness was named after a French neurologist called Gabriel Anton. He found this condition where people were cortically blind. In other words, the signals between their eyes and their brains weren’t being transmitted. So they were in every meaningful sense blind, except… they believed that they could see… When they bump into things their brains tell them two different things. On the one hand they believe that they can see, but on the other hand they have just hit a hard thing and they don’t know how it got there. So they have to tell a story; they have to confabulate to be able to reconcile these two different facts. This confabulation is how you diagnose the disease. But it’s also a metaphor for how we’ve been blinded by the idea that markets are the only way to go. And when markets fail, as they have so spectacularly, the only thing that we are left saying is, “Well, if only there had been better regulation”, or, “If only AIG hadn’t been quite so disastrous things would have been okay”. But what we need to do is think about ways of moving beyond free markets to other ways of valuing the world around us that can actually be a little more robust. But in order to ask that question or to get to that space we do need to realise that what we believe we can see through the prism of free markets is an illusion.
MA: And including what you say is the illusion that the market and society and the planet are separate.
RP: Again, we’ve been encouraged to believe that markets are these God-given things or in some sense natural. They’re nothing of the kind. It takes work to make markets. If people want a sense of how markets are human-made, think about slavery. There was a time when slavery was illegal, and then all of a sudden, particularly in the building of the United States, it was okay to have markets in people. But because of resistance, because of organising, because of a range of things, it was decided then to stop having markets in people. Somehow we’ve forgotten that markets depend on society, and we have been reminded recently that free markets need society to catch them when they fall. That is why we’ve assumed trillions of dollars of debt that our children will be paying off for quite some time to come.
MA: You have also talked about other cultures and how this isn’t really natural for human beings. You say cooperation is very natural in other societies. You point out Indonesia, where they keep forty-three percent and give away fifty-seven percent, whereas in the States it would be the reverse.
RP: It is interesting that we have this idea that at heart all humans are wicked and selfish and that is the way that nature has intended us. It’s true that we have selfish genes, but it’s not true that in order for us to survive as animals we have to be selfish. In fact quite the opposite is true. Through natural selection we have become fit to survive in this environment only because, not only are we selfish, but we are also capable of being cooperative, generous, and altruistic. This is a position that the philosopher Jean-Jacques Rousseau had. He understood that, while people are basically not terribly good, we [are] also capable of learning to be better than purely selfish. Experiment after experiment has shown that even the most selfish people on earth are capable of being a little bit more than purely selfish individuals. [Our culture does not] do a terribly good job of encouraging generosity. There are cultures that do a much better job of that. That is something that we ought to remember if we are going to come up with solutions about how to value resources together and how to find the real value of things other than through markets.
MA: What I wanted to touch on was the studies of happiness and fairness and how these things reflect on people’s generosity. Even [with] chimpanzees experiments have shown that they have a sense of fairness.
RP: [There are] studies that have looked at how dogs that socialise and play with others are more likely to survive than dogs that try to make it by themselves as solitary animals. [The] mortality rate doubles [for] selfish dog [compared to] dogs that are able to work with others. There were also experiments where primates were given unfair situations. If they were behaving as purely rational animals they were confronted with an unfair situation where one of their partners was given more than they were in an exchange. Even though they had the opportunity to get at least something in the exchange, the fact that their partner got something very nice to eat and they got a cucumber [resulted in them throwing] the cucumber away because the primates thought that there was something very unfair about the situation. And this sense of, “That’s not fair”, is something that humans also have. And this idea of fairness can trump the idea of just a selfish individual. If this animal is purely selfish it would have taken the cucumber, because the cucumber is better than nothing. But we are not wired that way. We’re wired to look at others, we’re wired with a sense of fairness. That is something that can work for us in very positive ways.
MA: There are two things I wanted to address with this question. One of the questions is about how money and rights are related, because money buys liberty and money buys rights to healthcare, to food, [and] to housing. And the other thing is how the culture itself is changed around having the right to have rights.
RP: One of the things that we’re told is that free markets are about liberty; free markets give us freedom. But in a free market you’re only as free as the amount of money you have. If you have a lot of cash then you are able to buy healthcare, you are able to feed yourself and your family, you are able to travel wherever you like, and [you are able to] live in a house. But because so many of our rights have been seeded to the free market there were, for example in 2008, 49.2 million people who were denied the right to food. In other words, 49.2 million Americans were food insecure. They were food insecure, not because there weren’t free markets, but because the only way that they could access food [through free markets] was through money. If they didn’t have money they weren’t guaranteed the right to food. And so, although free markets seemed to be about liberties, if you have no money in a free market then freedom is just another word for nothing that you can afford. And that idea is something that I talk about in the book. Because if you don’t have money then effectively you don’t have any right to have rights. If you don’t have cash then you don’t have the right to healthcare, you don’t have the right to food. And this idea of having a right to have rights it is something that has really been foreclosed. We’ve been denied the right to have rights because the right to property has trumped everything else.
MA: You talk a bit about the peasant movement, and you’ve talked about what happened with the food riots, with food sovereignty. Give us a sense of what the other alternatives are.
RP: One of the alternatives, and one that is very specifically about the right to have rights, comes from an international peasant movement called La Via Campesina. That movement has 150 million members around the world, including here in the United States. Their vision is that what we need is democracy. Democracy is the way that we get to have a right to have rights. La Via Campesina is interested in having a democratic conversation about food, but in order to have that we need to level the inequalities in power that prevent real democracy from happening. That means addressing the inequalities that exist, not only between rich and poor countries, where rich countries have enslaved poor countries with debt, but also within the household where inequalities in gender relations still persist and are fundamental to the way modern societies operate. So La Via Campesina have this amazing slogan that food sovereignty is about an end to all forms of violence against women. This idea that a peasant movement could come up with an idea that in order for us to have rights we need to start with equalizing power within the household all the way up to international levels gives you a sense of, firstly, how big a vision this is and how much work there is to do. But also how hopeful the transformation away from the sort of market society we have at the moment to a different kind of market society can be.
Raj Patel is a Research Professor in the School of Public Affairs at the University of Texas, Austin. He is the author of Stuffed and Starved: The Hidden Battle for the World Food System and The Value Of Nothing.
This interview was originally aired on the Scholars’ Circle. Find more here.