Rajni Bakshi, TNN 13 September 2009, 02:24am IST
It's rumoured the free market died in September 2008. Ever since, some people have been gleefully shovelling in the dirt in an attempt to make
sure 'free market' ideology is truly buried. Others are proclaiming, "the 'free market' is dead, long live the 'free market'."
Both are a bit deluded.
Last year's meltdown on Wall Street has vaporized the ground on which the old anti-market and pro-market duel was fought. An era of 'market reforms' seems to be giving way to a period when you and i - as citizens first and as buyers and sellers second - can express our freedom to reform the market.
Before mapping how this is happening, let us unbundle 'free' from 'market'. Our experience tells us freedom works. People have been coming together for the last 5,000 years in bazaars to exchange ideas, stories, goods and services. It was just about 200 years ago that these socially embedded bazaars were overwhelmed by an ideology called the 'free market', which held that the dance of supply and demand is not only the most reliable way of organizing material exchange but society itself.
Over the last few decades, societies across the world have renewed their fight against this version of a 'free market'. They seek to reconnect the good of the market system with social, ethical and ecological values. This is a two-fold rebellion. It wants democratic governments to ensure basic rights and entitlements but not become an overweight all-providing parent. The rebels are even more passionately fighting a market culture that enriches the already powerful.
Deep inside academia some of the rebels, who go by the name 'Post-Autistic Economics Network', a web-based network
, are forging analytical tools that reconnect economics with social, ethical and ecological concerns. This work is supported by developments, at the interface of economics and neurological research, which show that human beings are not quite the self-aggrandizing individual units that classical economics led us to believe. Earlier this month Nobel Prize-winning economist Paul Krugman added energy to these trends in an essay for the New York Times magazine titled "How Did Economists Get It So Wrong?"
Social activists and innovators in different corners of the world are reminding us that money is essentially an agreement based on trust, so we need not limit ourselves to money issued by governments or banks. Communities, who define themselves either by a common interest or by geographical proximity, are creating their own complementary currencies. They find that this not only gives them an advantage in interacting with the national and international economy but also links the freedom of bazaars with caring - which the tough-luck variety of 'free market' said must be restricted to family or charity.
A segment of computer software designers have used the freedom to cooperate as the basis for a different business model. The bulk of servers through which we tap the Internet are running on software that is part of this model. It is known as both free software and open source. Their success overturns one of the most basic assumptions of the cramping version of 'free market' - that technological innovation is necessarily driven by the desire for windfall money profit.
Others working at the interface of environment and business have begun to redefine the concept of profit by rallying support for a triple bottom line. The old style 'free market' recognized only one bottom line - money profits. Today, many major corporations accept, at least in principle, they must not only make money but also show the social and environmental good they have generated. Across the world, an elaborate service industry now provides research and number crunching for triple bottom line accounting.
This, in turn, has fed the Socially Responsible Investing (SRI) sector, which now commands approximately $3 trillion globally. SRI funds apply both negative and positive screens. For example, they will not invest in a company that is destroying pristine forests or employing child labour. And they will seek out companies that are adopting technologies and business models that foster both social justice and environmental regeneration.
If all these trends have been gathering steam for well over two decades, you might ask, why was there a meltdown? Amy Domini, a pioneer of SRI, suggests this is partly because a hangover 'macho' attitude has remained deeply entrenched on Wall Street.
Those who are busy reconfiguring the market culture are not deluded idealists. They do not attempt to abolish greed and fear. Instead, they aim to locate the market mechanism in a more well-rounded view of reality.
Whether or not the meltdown has accelerated these trends is a matter of dispute. What matters is that these counter energies exist and they dare us to overcome the force of habit to explore how markets can be re-formed to fulfill both our individual desires as well as our need to serve the common good.
The writer's book, Bazaars, Conversations and Freedom: For a Market Culture Beyond Greed and Fear is recently published