Big Oil and Market Fundamentalism

These past two years, we’ve been hit by one catastrophe after another: the spectacular explosion of the housing bubble, the Wall Street meltdown, high unemployment rates, and now, the worst environmental catastrophe that we’ve ever seen on our shores. 

How do we explain our collective surprise, lack of preparation and inability to respond effectively to these numerous catastrophes? Two words: market fundamentalism. This is the quasi-religious belief that markets are the answer to everything. According to market fundamentalism, markets are natural, government is artificial, and there is not much in between. We’ve been captivated by market fundamentalism for over thirty years. The results have included drastic deregulation, unfettered corporate and Wall Street power, an erosion of shared responsibility or a sense of the common good. It has justified policies that transfer wealth to the top 2 percent while starving programs that benefit everyone else.

This extreme ideology also distorts social values. In theory, market fundamentalism has been linked to freedom, liberty, democracy and more. In reality, policies that are based on market fundamentalism erode bedrock values such as fairness, compassion, stewardship, stability and equality. And yet, it has been embraced by social and religious conservatives who blame the decline in values on government, not markets. Morality, it seems, stops at the economy's edge. 

We should note here that the ones who benefit most from market fundamentalist policies --- multinational corporations, like the oil industry, and the huge financial institutions, like Goldman Sachs, don’t actually believe in market fundamentalism themselves. They push the line that government should stay out of economic life while using government to shield themselves from the uncertainties of the market. They look to government to bail them out when their excessive risk-taking comes back to bite them. They want the benefits of government without having to pay for them.

And now the oil companies and their apologists want us to believe that it’s not their fault when ‘mistakes happen.’ It is all part of the risks we take to support our way of life. The disaster unfolding in the Gulf of Mexico has exposed BP’s malfeasance: their disregard for safety warnings, their attempts to cover-up the severity of the ongoing spill, their antiquated technologies for repairs, recovery and remediation, and their incompetence in coordinating and implementing the clean-up.

Make no mistake; the problems revealed by this particular disaster are not aberrations. They are industry-wide. Oil companies don’t prepare for disasters because they usually get to wriggle out of responsibility for clean-up. They spill oil all the time --- and they’ve wrecked natural environments from Alaska to the Amazon to the Niger Delta. Usually, these accidents don’t even register for them as disasters. This pattern is consistent with market fundamentalism, which insists on self-regulation and the externalization of unintended consequences. It is a pattern that we must break.

For once, conservatives seem to be at a loss. A few hearty free-marketeers are speaking out against Federal action to ensure BP pays for this mess. But, suggesting that citizens, gulf workers, states and the Federal government should foot the bill is not very palatable, either. So they are in a bit of a bind.

But it’s not just the conservatives who are at a loss. Supposedly liberal and progressive politicians are having trouble thinking outside the ‘market fundamentalist’ box. Why? Because for thirty years we’ve rejected a role for government in bringing industrial policy in line with social and environmental goals. We’ve weakened mechanisms through which government can act on the side of the people. Now that  we see how badly we need government to act on our behalf against unaccountable corporate power, we must make a decisive break with market fundamentalism. Then, maybe we can have more honest conversations about the benefits and limits of markets, and how to make them function in more democratic and sustainable ways.

Back to BP: within the constraints of market-fundamentalist policies, we are tempted to pit the US against Britain, a match that is better left to the soccer field. But, as Robert Reich suggests, this is not a battle between two nations (or one that pits British pensioners against Gulf Coast fishermen). It is a struggle between the long-term needs of citizens versus the sort term interests of shareholders. And, in this struggle, our government must side with the citizens. How? Reich’s idea, which is being embraced by a few lawmakers, is to impose temporary receivership over BP’s North American assets. The federal government can develop a coherent, coordinated clean-up plan while making sure that the funds are available for restoration, compensation and related claims.

--- Sandra Hinson