Market fundamentalism, also known asfree-market fundamentalism, is an ideology[1] and a term applied to a strong belief in the ability ofunregulatedlaissez-faire orfree-market capitalist policies to solve most economic and social problems.[2] It is often used as pejorative by critics of said beliefs.[3]
According to economist John Quiggin, the standard features of economic fundamentalist rhetoric aredogmatic assertions combined with the claim that anyone who holds contrary views is not a real economist.[7] However, Kozul-Wright states in his bookThe Resistible Rise of Market Fundamentalism that the "ineluctability of market forces"neoliberals andconservative politicians tend to stress and their confidence on a chosen policy rest on a "mixture of implicit and hiddenassumptions, myths about the history of their own countries' economic development, and special interests camouflaged in their rhetoric of general good".[8] The sociologistsFred L. Block andMargaret Somers use the label "because the term conveys the quasi-religious certainty expressed by contemporary advocates of market self-regulation".[9]
Joseph Stiglitz used the term in his autobiographical essay in acceptance ofNobel Memorial Prize in Economic Sciences to criticize someInternational Monetary Fund policies, arguing: "More broadly, the IMF was advocating a set of policies which is generally referred to alternatively as theWashington consensus, the neo-liberal doctrines, or market fundamentalism, based on an incorrect understanding of economic theory and (what I viewed) as an inadequate interpretation of the historical data".[10]
The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation ofAdam Smith'sinvisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency.[11]
— Joseph Stiglitz
Critics oflaissez-faire policies have used the term to denote what they perceive as a misguided belief or deliberate deception thatcapitalist free markets provide the greatest possible equity and prosperity,[12] or the view that any interference with the market process decreases social well-being. Users of the term include adherents ofinterventionist,mixed economy andprotectionist positions[13] as well as billionaires such asGeorge Soros;[14] economists such as Nobel Laureates Joseph Stiglitz[15] andPaul Krugman; andCornell University historianEdward E. Baptist. Soros suggests that market fundamentalism includes the belief that the best interests in a given society are achieved by allowing its participants to pursue their own financial self-interest with no restraint or regulatory oversight.[2][16]
Critics claim that in modern society with worldwide conglomerates, or even merely large companies, the individual has no protection against fraud nor harm caused by products that maximize income by imposingexternalities on the individual consumer as well as society. Historian Edward E. Baptist contends that "unrestrained domination of market forces can sometimes amplify existing forms of oppression into something more horrific" such asslavery and that "market fundamentalism doesn't always provide the best solution for every economic or social problem".[17]
^Ghodsee, Kristen R. (8 November 2024)."The other Great Depression,"(PDF).Le Monde diplomatique. Scholars at Harvard. p. 2.Despite the social carnage, those committed to the free market fundamentalist ideology persisted with their shortsighted policies.
^Quiggin, John.Rationalism and Rationality in Economics, 1999, On Line Opinion, www.onlineopinion.com.au
^Kozul-Wright, Richard and Rayment, Paul.The Resistible Rise of Market Fundamentalism: Rethinking Development Policy in an Unbalanced World. London: Zed Books Ltd., 2007 p. 14 and Chapter 6
Albers, Detlev; Haeler, Stephen; Meyer, Henning, eds. (23 June 2006).Social Europe: A Continent's Answer to Market Fundamentalism. London: European Research Forum at London Metropolitan University.ISBN978-0-9547448-3-0.
Camerer, C. (1995): Individual Decision Making, in: Kagel, J.H. & Roth, A.E. (Eds.): Handbook of Experimental Economics, Princeton, Princeton University Press, 587–703.ISBN978-0-691-05897-9
French-Davis, Ricardo.Reforming Latin America's Economies: After Market Fundamentalism. Palgrave Macmillan, 2006.ISBN1-4039-4945-XISBN978-1403949455
Kelsey, Jane (1995).A Review of Economic Fundamentalism: The New Zealand Experiment - A World Model for Structural Adjustment?.Pluto Press.ISBN1-86940-130-1
Kozul-Wright, Richard.The Resistible Rise of Market Fundamentalism: The Struggle for Economic Development in a Global Economy. United Nations Conference on Trade and Development (UNCTAD), London: ZedBooks Ltd., 2007.ISBN978-1-84277-636-0ISBN9781842776377
Ritzer, George, ed. (2003).The Blackwell Companion to Major Social Theorists. Blackwell Companions to Sociology. Blackwell publishing.ISBN978-0-631-20710-8.
Sunder, S (1995). "Experimental Asset Markets: A Survey". In Kagel, J.H.; Roth, A.E. (eds.).Handbook of Experimental Economics. Princeton: Princeton University Press. pp. 445–500.ISBN978-0-691-05897-9
