The “free market” has nothing to do with keeping prices down through competition as our Liberal politicians would have us believe. It has nothing to do with Friedman’s idealistic vision of benefit for all.
It is about maximising profit for businesses. Maximise income, minimise costs, and avoid taxation.
If there was limitless supply then perhaps competition would keep prices lower for consumers – but in this world of finite resources, things go to those who are willing to pay the most.
Richard Denniss wrote an excellent article about the gas industry in Australia and its deliberate strategy to drive up domestic prices. There is plenty of gas for the highest bidder.
We have also been locked into contracts which see the bizarre position of our gas being sold cheaper overseas than here while we endure a shortage. We sign contracts guaranteeing profit for private energy providers who make incorrect assumptions about demand. We deliberately sabotage new investment to prop up old industries.
If the record profits of businesses were shared with their employees, and with the wider community through taxation, then perhaps we could see benefit in the free market. But they aren’t.
Wages have flat-lined as profits have soared. Instead of better working conditions, those we already fought for are being stripped away – penalty rates, paid parental leave, superannuation guarantee increases, permanency and hence holiday and sick leave.
Unions have been undermined and the skilled migration visa exploited. Contract and casual work strips employees of leave entitlements and a sense of security. Entry level jobs have been automated or outsourced to countries where the cost of living, and therefore wages, are much lower than here.
Private debt has reached dangerously high levels in Australia. When combined with a precarious employment situation, the workforce becomes compliant, too scared to demand a fair share of the profits their skills and labour provide for the owners of the capital.
Conservative governments seek to strip away regulations that curtail predatory business practices. Time and again we have seen the big players collude to manipulate the market, driving out smaller competitors, dampening or inflating prices as suits them, creating artificial shortages or gluts, all with the aim of market control.
The idea that a free market is self-regulating, that it will reach a fair equilibrium, is ludicrous.
Instead, the free market has made corporations the most powerful organisations on the planet. Free markets have handed control to entities who have no morals, no ethics, no responsibility other than to make money. Free markets have delivered great wealth and power to a minuscule few as the divide between them and the rest of the world becomes a gaping chasm that cannot be bridged.
They have infiltrated the governments of democratic nations to such a degree that politicians have become their paid-for mouthpieces and woe betide anyone who seeks to put the best interests of the people first.
Privatisation has been, for the most part, an expensive failure that has seen services deteriorate, jobs lost, and prices increase.
I applaud Jay Weatherill for taking back some control but, until we recognise that it is us that own the resources and make rules that ensure we benefit from our wealth and our labour, we will still be held to ransom by a market that is free in name only.
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