Deconstructing the Myth of Liberal Markets
Or, why the Supremacy of the Markets may NOT be the answer
The backbone of a liberal market is the belief that the market is the most efficient means of providing welfare, and that government should not interfere with the market. This ideology has been dominant since the 1980s and has led to a wide range of policies that have changed society.
Liberal welfare policy emphasises the welfare market, arguing that, when welfare is based on demand and competition, providers are forced to innovate to remain competitive in the economy, thereby improving quality of life. However, Saad-Filho and Johnston show that this is not always the case: “where neoliberal policies were introduced most emphatically, as, in the United Kingdom, key indicators show an increase in relative poverty and inequality. For example, in 1979, in the United Kingdom, 5 million people lived in households whose income was less than half the average. In 1991–92, 13.9 million people were living in such households — a rise from 9 to 25 percent of the population” (Saad-Filho and Johnston, 2005, 144–145). As such, the implementation of neoliberal welfare policies is correlated to the rise in relative poverty.
For a well-functioning society, markets need regulations
Another counterexample against market supremacy is the presence of monopolies, the detriments of which are plainly present in the insulin crisis in the United States. According to T1International, “three insulin producers… dominate more than 90% of the world insulin market” (8 Reasons Why Insulin is so Outrageously Expensive 2019). Since insulin is life-saving for those with diabetes, diabetics are forced to pay anything for it; as such, these monopolies can charge anything for it. Indeed, a Reuters article taking data from T1International, tells us that “the price of insulin in the United States per vial was $320, while in Canada… [it] was $30” (Choi 2019).
The result is a system where the needs of individuals are met by private enterprise and voluntary exchange rather than by public programs, leading to a market that is not always efficient at providing welfare, as seen in the 2008 financial crisis. Also, the markets are also not always fair, as seen by how…
