The Big Myth, by Naomi Oreskes

Naomi Oreskes: All good myths have a kernel of truth.

The other title: MAGA: You’ve been played.

In her book: The Big Myth, How American Business Taught us to Loathe Government and Love the Free Market she researched the history of the source of the position and ideology of “Free Market” capitalism void of regulation. It came out of her work researching big tobacco and climate change for her book: Merchants of Doubt. The short of the story: The goal is to tie the thought of market freedom to individual freedom. Imposition on market freedom is imposition on personal freedom. The strategy involved reaching all aspects of one’s social involvement. There was even a magazine: Christian Economics. The Prosperity Gospel? It was recognized that Jesus was not on their band wagon. The story is about the effort and success of turning up to down and left to right. The “alternate facts”. Truthiness.

Many have been pointing out the various problems with today’s thinking, Naomi Oreskes connects it all. As a scientist, she makes plain the propaganda that has been used against America to turn America from the ideals of our Declaration of Independance and our Constitution, removing the idea of Enlightenment. Today, I see it is materialized in the bastardization of the word “woke” by the Republican/Right. She stresses how the idea of the “slippery slope” regarding regulation has been shown to be wrong over time. Naomi notes that what is missed in the argument for anti-regulation is that often, regulation actually allows greater freedom.

I present this discussion on youtube. It is almost 2 hours, but well worth the time if only for the history lesson. There are other shorter interviews you can find; however, I encourage you to take the time to hear this one especially because it is by Michael Shermer, one known as a libertarian.

The discussion begins with a review of Adam Smith and how his positions have been bastardized (my term) in service of the myth. I paraphrase their discussion as:

Ask the question: Does my action put you at risk: Adam Smith. The Wealth of Nations. Wrongly cast as a market fundamentalist, laissez-faire capitalism. Notes the need to regulate bank or the entire system is at risk. Notes the need for regulation in general. The need for workers to have adequate wages and even union due to the power differential in the market. The need for taxation. That he was of the enlightenment perspective and a humanist.

This mistaken image of Adam Smith leads to the question of: Why? Why do we have the opposite image of him, holding him up as the “father” of free market capitalism. It is because of a concerted effort by business/money to change our understanding for their own benefit. Starting mostly after WW2 by funding universities to help build their case. Money was given to the University of Chicago to create: The Free Market Project. Hiring George Stigler for his arguments against regulation and regulatory capture. Stigler’s “heavily edited” version of “Wealth of Nations” was “widely” used to teach economics.

Naomi notes that all of Smith’s discussion of regulation and taxation are absent from this version. “All of the things that make Smith into the nuanced, sophisticated thinker that he actually was are eliminated from the University of Chicago version.”

“We are not ready to suspect any person of being defected in selfishness…all for our self and nothing for other peoples, seems in every age of the world to have been the vile maxim of the masters of mankind.” Adam Smith

A big organizer for the promotion of the myth of Free Market economics is The National Association of Manufacturers. The irony is that it was created in the late 19th century to demand tariff protections. As today with the SVB failure and call for being rescued, this ideology favors and asks for government interference when it benefits their wants and organizes against it when such interferes with their wants.

The discussion moves to the social environment from which the effort to promote the idea that government was bad is born. To stress how bad life was for people, if you were a young man born in the year 1900, you would have been safer enlisting to fight in WW1 than working on the railroad. The situation and condition of the period is referred to as the “accident crisis”. In the emerging field of industrial engineering it is referred to as “inefficiencies”. Naomi suggests it is a euphemism for wasting laborers as a result of accidents. At the time, England and Germany had much lower accident rates. Europe was studied to find out why this was. It is because they had workers compensation programs which business pay premiums into (it’s an insurance program) with rates set to the level of danger of the work. Thus, an incentive to make the workplace safer. Such a program was proposed here in the US, but along with child labor laws it was resisted as interference in the “free market”. Fun fact from commissions in Massachusetts is that children as young as 2 were in the mills.

At about 36 minutes in you start to hear the basis of the book. From this we learn that what we hear today from the “free market” anti government promoter today is the same language as then. The same construct of arguments. However, unlike the adage of “what is old is new again”, the rhetoric never got old, it never aged. It just exists as the words and phrases of a religious tome.

She uses the example of the effort that went into the rural electrification process prior to FDR and the fight against it as an early example of what ultimately the tobacco industry did, the energy companies are doing, the banking industry is doing as a means to prevent government regulation and promote the mistrust of government. Ultimately the FTC concludes in the 1930’s that the campaign against the electrification was the largest peacetime propaganda campaign in the history of the US.

At 1:13:00 the discussion turns to post WW2 and the National Association of Manufacturers getting real about their campaign by recruiting academics to give credibility to their position by bringing in Ludwig von Mises and Friedrich Hayek. These two men were making the argument they wanted which in its simplest form is that regulation of the market is taking away one’s freedom. “Capitalism and freedom are two sides of the same coin. Because, if you compromise economic freedom you are on a slippery slope to Soviet style totalitarian communism. And therefore, you must defend and protect against compromises to economic freedom lest you lose your political freedom.” Von Mises served as a political consultant to the NAM in the 1930’s. NAM was behind the hiring of Von Mises at NYU and Hayek at Uof C. She notes that U of C did not want Hayek as the econ department viewed his arguments as “not sufficiently empirical”. However, Naomi notes that what was done to Adam Smith’s writings, was also done to Hayek’s book. The caveats are stripped out. The example is Hayek’s support of regulation related of pollution deforestation and workplace safety.

It is the history of the free market good, government bad argument and how it became to be believed and thus doctrine forming, ultimately to become enshrined in our law that Naomi Oreskes is teaching.

All good myths have a kernel of truth. A kernel that can and has choked society. Something more readily accomplished today than when this particular myth was formed originally.