The third fatal flaw of Free Market capitalism is the Myth of Perpetual Growth.
A recent headline announced that consumer 'prudence' was sinking the economy. This reveals the depths to which Free Market thinking has sunk: claiming it's bad for people to save their money in hard times, instead of spending it on trashy junk they don't need. We have to keep our national pyramid scheme flying, the Free Market hucksters argue, our grandchildren will pay the bill.
Free Market junkies are thrilled by every increase in the GDP. But while perpetual expansion makes for nice sound bites, how long can it realistically go on? What happens when every tree has been cut down to make room for agriculture, and when every acre of agricultural land has a factory, a store, or a housing development on it?
Perpetual growth is both impossible to achieve and destructive to attempt--economically, ecologically, psychologically, and socially. To make the Gross Domestic Product our primary index of economic wellbeing is like making obesity the primary index of bodily health.
What Free Market economists are advocating is addictive behavior--it asks American consumers to spend themselves further into debt each year, to create more jobs so they can pay off some of what they spent last year. It demands that they buy more and more electronic gadgets so they can communicate with each other less and less meaningfully; that they buy more and more toys they won't have time to play with because they're too busy making money to pay for them; that they buy more cars so they get away from places made ugly and unpleasant by all the car traffic; that they buy more TVs to make up for the fact that they no longer have a life. And each purchase that fails to fill the void of their longing for a meaningful existence serves to deepen their hunger.
Of course, economics isn't supposed to be about human beings, only about "economic man", the coin-counting robot on which the fantasies of economists are based. But human choices are what create economics, and the sick, addictive choices demanded and fostered under a Free Market, greed-based system generate a sick, addictive, un-sustainable economy.
Unchecked growth is cancer. Health is balance. Capitalism cannot survive--nor can any system or program--without checks and balances. A healthy, sustainable economy is only possible if is subject to constraining influences--influences that reflect the non-pathological segments of human society. Free Market capitalists are unaware of other human motives, but they exist, nevertheless. In fact humans inhabited this planet for millions of years without greed being much in evidence--hunter-gatherers had to share to survive, and accumulation is impossible when you're on the move.
We are not, therefore, genetically programmed to be greedy. There will always be selfish people who feel deprived no matter how much they're indulged, but it is an aberration, a pathological condition, not 'human nature'. We are a social, cooperative species genetically--it's how we survived--and a greedy one only secondarily, by cultural conditioning.
Meanwhile, the pathological cycle of perpetual GDP expansion is creating our budding ecological catastrophe.
Growth on a finite planet cannot be perpetual. It will end, and not pleasantly. The most likely ecological solution is that the planet will heal itself by casting off our species. It's an inevitable cycle. As we careen along in our consumption mania we'll find ourselves increasingly poisoned by our own products, while our coastal cities are under water, the ocean itself incapable of supporting life, and half the land area turned to desert. Every worst case scenario ever imagined is made inevitable by the philosophy of perpetual growth.
Free Market fanatics will say, of course, that it's unrealistic to think of changing our ways. But Jarod Diamond has shown, in his study of failed societies, what happens to those who cling to suicidal economic and ecological practices (the two cannot be separated), on the grounds that attempting to change would be 'unrealistic' (i.e., inconvenient and uncomfortable). All those societies expired. Political 'realism' is, at bottom, a euphemism for laziness.
We have to change our ways, not because of any moral or idealistic considerations, but in order for our species to survive.
(In his inauguration speech, Obama talked of a whole new way of doing things. To understand the cultural paradigm shift that engendered this change--the shift that both Bush and the Taliban have resisted so fiercely, see my website for information on THE CHRYSALIS EFFECT: THE METAMORPHOSIS OF GLOBAL CULTURE).