Corporatism Is Not the Free Market

The U.S. ceased to be a free market a long time ago.

Sheldon Richman | February 3, 2012

When a front-running presidential contender tells the country that thanks to Barack Obama, “[w]e are only inches away from ceasing to be a free market economy,” one is left scratching one’s head. How refreshing it is, then, to hear a prominent establishment economist—a Nobel laureate yet—tell it straight:

The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system . . . is . . . an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.

Columbia University Professor Edmund S. Phelps, who won the 2006 Nobel Prize in economics, and his coauthor, Saifedean Ammous, assistant professor of economics at the Lebanese American University, write that the U.S. economy ceased to be a free market some time ago, yet the free market is blamed for the economic crisis. (The real question is whether it was ever really free.)

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