Imagine a mythical world not visited by the Little Prince. An epitome of free market where demand and supply are the only governing forces. The ‘invisible hand’ has infiltrated so deep into the society that it now defines all relations, social and economic, all liberties, all institutions.
In this hypothetical world, you can hire people to do everything you don’t want to do. There are enough services to connect you with the needy people in this world who would do it for you. Don’t want to wait those few minutes when you book a cab? No issues, they got premium services, exclusive for those whose time is more important than others. Don’t want to stand in the line to take out cash? No issues, the line standing services got you covered. And of-course there’s immense competition in this world which constantly improves the market. So while someone would be willing to stand in a humongous line for peanuts, someone else would be willing to do it for half the peanuts. For giving the customer (more than) enough choices and serving them (too) well is the first commandment here.
The thing you need to survive in this world is not social or political relations, not physical or mental strength, not even academic or artistic talent; but one and only thing: Money.
Wait. Isn’t all this a little too familiar?
The above system is based on the economic philosophy of laissez-faire which calls for abolition of government intervention in industry, and a complete separation between state and economy. Lately, the philosophy has been referred as Free Market Capitalism and it continues to be the most popular school of thought in political economy. Proponents of the ideology include several classical economists and neoliberal thinkers including Adam Smith, Ricardo, Hayek and Milton Friedman. The American administration during the Cold War, specially under Reagan and Nixon, not only followed the policy but also forced it on other nations.
Unarguably, markets are important places of economic activities and it is important to ensure a significant degree of freedom for the markets in order to promote innovation, creativity, and productivity in industry. However, in the twenty first century, the forces controlling the markets have become immensely powerful resulting in an imbalance because of which changes in the economic sphere have spilled over into the social sphere. According to professor Michael Sandel of Harvard University, “Unless we want to let the market rewrite the norms that govern social institutions, we need a public debate about the moral limits of markets.
Consider a few examples which illustrate how the market is making entry in new, once unthinkable areas:
- In the United States, a company linestanding.com provides seat holding services to avoid the long queues in order to book the few reserved seats for the public hearings of Congress sessions and Supreme Court which are allocated on first-come, first-serve basis.
- In amusement parks, there is now a fast-track line besides the regular line, for those premium customers who can pay extra. Similarly, many major companies such as Uber and Amazon offer faster, better services to those who can pay more.
- Airline industry has started offering pay for extra leg-space option, thus creating tiers within the economy class, leading to additional avenues for capitalisation.
- Many sperm banks have come into existence in the US where each sperm has a résumé of its own. The sperm of a handsome, tall, athletic Yale graduate, for instance, would be valued much more in the market as compared to the regular ones.
These examples illustrate how the debate surrounding the free market has now gone beyond the economic sphere and needs to be examined from a moral and social perspective.
Firstly, there is a need to examine the extent to which market should be allowed to penetrate within a service. The fast-track services create a situation of Imperium within Imperio, a class within class. It further segments the society and can be harmful. For instance, consider this: anybody who has lived in a hostel might relate to standing in a long queue for those few chapatis at the hostel mess. Now, can one possibly imagine a fast-track line for chapatis so that those who can afford might be able to get their food faster than others?
Secondly, we also need to contemplate whether market entry should be allowed at all in a few sensitive areas. Bioethics is perhaps the best example. Using animals, and sometimes willing humans in medical experiments in exchange for money is justified by many market fundamentalists since it’s based on consent. However, there is a need to question whether this consent is truly free, or a forced step taken due to poor financial situation. Similar concerns emerge in the debate on organ donation and commercial surrogacy, which India has recently banned. The principle of human dignity should be valued above the principle of liberty for the free market.
Emerging technologies such as gene therapy also raise concerns. Market have already made entry in the progeny section with the sperm banks. Now, with the new revolutions in genomics, imagine if someone can pay to ensure that the genes of their progenies would automatically result in them being tall, athletic, fair and intelligent. Wouldn’t that be a death blow to the idea of equality of opportunity?
Thirdly, there is a need to examine possible human rights violations by the market players for the sake of more and more profits. In an attempt to improve the quantum of services for premier customers, many industries are degrading their services for the regular customers. They hope to drive them towards paying more, sometimes to the extent which can be considered human rights violation, like reduced leg-space in long distance flights. A case in point is the leaked news which surfaced in 2017 showing that American Airlines planned to order new Boeing 737 jets with just 29 inches (74 cm) of pitch in the last three rows to make room for an extra row of premium-priced seats toward the front of the plane.
Fourthly, we need to consider the effect of free markets on human motivation, especially in areas such as art and literature. The most talented singer need not be the most entertaining. Unfortunately, in the market model, entertainment rules over has moved genuine talent away from the industry. Good luck trying to successful Satyajit Ray in the twenty first century!
The unrestricted marketplace has also led to corporate control of the economic and political sphere. Kaushik Basu, Professor at Cornell University, former chief economist and senior vice president, World Bank, argues here that complex strategies are being designed by banks, corporations, and individual marketers in the name of Innovative Marketing to dupe ordinary people, poor workers and peasants. This promotes a market where value-extraction is rewarded more highly than value-creation. Basu further argues that the belief held by market fundamentalists that if the market is left completely free, such behaviour will get eliminated by competition has absolutely no basis, either in economic theory or in evidence.
The Preamble of the Constitution of India secures to all its citizens Equality of Status and of Opportunity. But if anything, we are moving away from it the more we move towards a market society. Wealth inequality is rising as evident from the Oxfams India Inequality Report 2018 which concluded that 73% of the wealth generated in India in 2017 was accumulated by just 1% of the population.
But it is the hidden social inequality which is even more stark. From online shopping services to online retail to online dating; every area the market enters, it makes life more easy for the affluent section, thus making the world more unequal.
It is said that the best thing about time is that it runs at the same speed for everyone, young or old, rich or poor. But the market around us suggests otherwise. It works on the time is money principle and hence, the premium time-saving services for those who can afford. Not to mention the entire cosmetics industry which works on the principle that you can beat time to look younger if you can spend money on the their products.
Noam Chomsky once held that “in free-market capitalism, freedom is one of the commodities on market, and if you are affluent, you can have a lot of it.”
These words by Chomsky must be a warning to all of us. The forces of market and those controlling them should not be allowed to govern the social structures of our world, it should be the other way around.
Anurag Vaishnav is a former consultant to the Himachal Pradesh government, and an alumnus of the Indian Institute of Technology, Kanpur.