![\"\"](\"https:\/\/i0.wp.com\/farm4.static.flickr.com\/3608\/3479264260_9a7e8659c8.jpg?resize=333%2C500\" "\\"Goldman")
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[digg-reddit-me]David Rothkopf – commenting on Goldman Sachs – sees their success as a repudiation of the free market<\/a> – and I tend to agree with him:<\/p>\n I’m a dyed-in-the-wool capitalist. I love free markets. I hope a free market marries one of my daughters some day. But if some people have too many advantages and others simply can never catch up, the markets aren’t free, regardless of law or intent.<\/strong> Even if the advantages are in part derived from talent and hard work, fairness can remain an issue if other components of the success are linked to access, influence, history and other intangibles. [my emphasis]<\/p><\/blockquote>\n From this insight comes the inevitable conclusion that – contrary to the doctrine of the right-wing – the government is not the antithesis of the free market, but rather plays an essential role in creating and maintaining it<\/a>.<\/p>\n Goldman Sachs – with their obscene profits so soon after needing public assistance – demonstrate that our system has become less free and more feudal. As I wrote several weeks ago<\/a>:<\/p>\n [T]he free market is effective because it prevents any small set of individuals from monopolizing decision-making. Especially in the world today with so much information available and events moving so quickly, the \u201cright\u201d business choices to make aren\u2019t always clear. A free market \u2013 by allowing each business to make its own choice \u2013 prevents decision-making from falling victim to individual follies. But our current economic system \u2013 with it\u2019s enormous corporations \u2013 ends up recreating the feudal system in which power is not centered in a single place, but in a handful of powerful \u201cprinces.\u201d While these \u201cprinces\u201d push for free market reforms, it is not in their interest to actually achieve this ideal free market \u2013 as\u00a0Yglesias points out<\/a>:<\/p>\n As a market approaches textbook conditions\u2014perfect competition, perfect information, etc.\u2014real profits trend toward zero. You make your money by ensuring that textbook conditions don\u2019t apply; that there are huge barriers to entry, massive problems with inattention, monopolistic corners to exploit, etc.<\/p><\/blockquote>\n George Will himself has pointed out that those \u201creforms\u201d that are passed tend to be of a specific sort, following what Will calls, \u201cthe supreme law of the land\u2026the principle of concentrated benefits and dispersed costs<\/a>.\u201d What free market supporters rarely seem to admit is that the\u00a0free market exists not in spite of the government, but because of it<\/a>. And today, our market is far from free because the government has failed to protect it \u2013 and has instead allowed the worst characteristics of capitalism (exploitation of labor; externalizing as much cost to society as possible, for eg. pollution) with the worst characteristics of socialism (concentration of power and limitation of competition) to create a kind of modern feudal society. In \u00a0this feudal society, freedom is enjoyed by the \u201cprinces\u201d of finance and industry while the creative ferment of a real free market is formally protected but effectively quashed.<\/p><\/blockquote>\n David Rothkopf expresses the same thing with different terminology:<\/p>\n These guys [at Goldman Sachs] operate as ultra-citizens in our society, virtually able to tell the government to heel and fetch in ways the rest of us can only fantasize about.<\/p><\/blockquote>\n Warren Buffett seems to agree – as he claimed that America is moving from an aspiring “Ownership Society” to a “Sharecropper’s Society<\/a>” – with its suggestions of a feudal structure. Of course, Buffet now owns a significant portion of the very Goldman Sachs that epitomizes this trend.<\/p>\n Goldman Sachs – along with other major corporate powers – rise by exploiting inefficiencies in the market – and eventually must try to create inefficiencies in the market in order to maintain their profitability (which is the hyperbolized point of Matt Taibbi’s recent piece<\/a>). This contradicts those who see the market as supremely efficient – as Warren Buffet <\/a>admitted,\u00a0he would “be a bum on the street with a tin cup if the markets were always efficient.”<\/p>\n Goldman Sachs proves – with its successes – that our system is not a truly free market – but a more feudal one – in which those with sufficient money can secure power and tilt the system to their advantage.<\/p>\n