The Construction and Destruction of the Free Market

Since markets and energy production are the result of political decisions, we can use this state planning in service of people rather than profit.

The free market is often portrayed as a mystical force of nature that acts as an optimizing engine of prosperity and innovation. But there is no such thing as a “free” market in the sense it is meant, untethered from human designs. Markets are political constructs, and capitalist markets require the state to bound, regulate, and enforce their parameters. The government sets fiscal and monetary policy and creates laws that dictate how the economy functions, determining what businesses can or cannot do and providing armed law enforcement to protect property. It also subsidizes certain industries, businesses, or activities. Every single aspect of what is produced in a market is contingent on these choices. 

The people in power setting these parameters—politicians, CEOs, billionaires, oligarchs—understand this to some extent. They will talk out of both sides of their mouths about not allowing “red tape” to disrupt the wonders of the free market as they use policy to enrich and protect themselves and their favored industries. When it comes to energy, the world’s governments give hundreds of billions of dollars to the fossil fuel industry while indirectly subsidizing it by not meaningfully accounting for the massive social and ecological costs of greenhouse gas emissions and pollution of air, water, and land. Many US states are even passing preemption laws preventing cities from taking steps to restrict fossil fuel usage.

Renewable energy also receives (much smaller) subsidies, which is one reason why wind and solar are now cheaper than gas, and more renewable energy generating capacity is installed every day. Unfortunately, this nudged market progress, even when projected into the future, is woefully insufficient: fossil fuel usage is still increasing worldwide and emissions are at an all-time high.

Many overdeveloped countries have made progress phasing out coal, but it has basically just been replaced by gas. In the Global South, a significant amount of new fossil fuel capacity is planned for economic and infrastructure modernization. Nearly 200 new coal plants are currently under construction, mostly in southeast Asia where many of the goods we consume here in the US are manufactured. And US Special Presidential Envoy for Climate John Kerry recently said, "Gas will be key to the African countries...We’ve got to help them develop. In many cases that will be a gas transition."

This is not necessary. Money and technology transfers to the Global South can allow them to skip over the hugely polluting fossil fuel phase of overdevelopment that the Global North is still stuck in and act as reparations for historical and ongoing injustice and unequal exchange. It is hard to imagine private investment making this happen rather than continuing to resist public efforts toward a just transition. There is no reason to believe that markets, even when nudged and signaled in the “right” direction with the tax-based policies favored by technocrats, will phase out fossil fuels or add enough renewable energy capacity at the necessary speed and scale—not to mention all the other issues endemic to profit-motivated production like labor exploitation, pollution, and ecological degradation.

Since markets and energy production are the result of political decisions (i.e., planning), we can use state planning to do good things rather than bad things. We can reshape the world with public investments in and control of renewable energy, robust public transit, agroecological food production, ecosystem restoration, universal healthcare, green social housing, and more. Given how this capacity is presently used (or not used) in the US, this should invite skepticism, but I do not see any other way to marshal the monumental resources and will necessary to make the changes we need on the urgent timeline we are on. For example, fossil fuels need to be directly confronted and deliberately reduced—like with a declining cap on production—and all the workers in polluting industries given a truly just transition with well-paying, unionized jobs. 

Needless to say, this is a tall order. After decades of neoliberalism, US state capacity for helping people is hollowed out while its capacity for violence is stronger than ever. The organized Left and the labor movement, forces that when intertwined have demonstrated the ability to push politics in another direction, are still relatively weak despite promising signs of renewal. 

The COVID-19 pandemic has shown that the US has a remarkable capacity to tolerate mass suffering and abandon the vulnerable in service of profit, a new phenomenon only in its scale. But it also revealed how our government can swiftly take significant beneficial action—sending cash payments to people, enacting eviction and debt moratoriums, directing production—that did not seem possible until suddenly it was.

This is a glimpse of our two possible paths going forward in the face of an ecological crisis that dwarfs COVID-19, threatening to introduce more diseases alongside myriad interrelated forms of apocalyptic suffering and destruction. The trajectory of the status quo is accelerating abandonment with fewer and fewer people in lifeboats; the alternative is cooperation directing our efforts and resources towards the public good, locally and globally. We cannot afford to leave such important choices where they are now, guided by short-term profit accumulation, with such enormous quantities of fossil fuels and forests available to burn. In other words, we have to free ourselves from the market.