Show me an idealism which presents with an always socially positive outcome, that has unequivocally worked for humankind in all ages, conditions and circumstances without societal intervention or regulation? There aren’t any, as all political and economic ideals in practice are destined, with the benefit of practical application, to be viewed as an over simplified model of human functional behaviour or aspiration. A cast in stone idealism expects the feeders of any system to be in total sympathy with the core concept at all times and circumstances. This can’t possibly be the case in an infinitely variable universe and suggests a flaw in human response mechanisms which incline notably to a default go with the flow response. Market idealisms are no exception and are flawed out of the traps given society accepts bad value events too readily to its own detriment.
The ideal of markets benefiting the majority is predicated with constants in mind and not real world ubiquitous variables. The reality is that the only Constant is that there are no Constants in functional life. In this more realistic discontinuous mind fog, Variables are seen negatively as failures rather that opportunities to reach higher peaks of efficiency or effectiveness. Positive feedback and the attendant opportunity to make a value adjustment are seen, by trenchant advocates of an ideal, as a wholesale attack on the initial idea, and so the delusion trundles on. In short ideals are predicated on a set of assumptions, that are of their time, which by their very nature are prone too often to be seen as misjudgements. When initially highlighted, these misjudgments are then contorted into a call to arms for the faithful to defend the ramparts of this now exposed errant idealism.
Let’s keep this simple by saying that markets generally create competition, allow enterprise to flourish, tend to reduce prices but can fail with devastating social consequences if left to their own devices or self-regulation. In short markets work but free markets don’t, at least not all the time. At the point where markets fail to work for the betterment of the majority in society they should be subject to adjustment, suspension or abolition.
A point in case is the energy markets, that here in the UK are being allowed to speculate (aka gamble) with the very foundational fabric of society. Clearly the notion of free energy markets at this time is a misnomer given it’s creating untold social hardship. As a market it isn’t offering competition that leads to a fair and reasonable price. So why are we as a society countenancing its continued imposition, at this point in its cycle, to the overwhelming detriment to us all if not because we have tipped our hats to propping up the baser free market ideal. Like the banks the notion of free markets is deemed as an idea to big to fail. Tinker with it and there’s an implied notion in our adversarial society that the market principle has failed, which in most part is not the case.
The market principles are still sound but in need of regulation, in this the trough of its benefit cycle. The key here is not to have a neoliberal corruption free market idealism, which implies no socially beneficial threshold value triggers, but rather to have regulated markets. Markets that fall below a social index should be considered in the best interests of society as a whole.
What we need is to socialise markets to maintain their beneficial value propositions within acceptable social wellbeing thresholds. When they hit destructive thresholds, high or low, regulatory triggers should be enacted. To be clear here, this is not about setting something so ineffectual as an energy cap limit but rather to take the more obvious industrial social bedrocks into public ownership when they fail society. We did this with the banks, if you recall after the 2008 economic downturn, so why not do the same with the means of extraction and production of North Sea oil and gas. All said and done it this commodity belongs to the country. Also, as with our 2008 response to the banks, when the market in focus is again in social credit and economic equilibrium we can allow the market to work its competitive magic.
Markets work but only within certain limits of managerial freedom. If profits are low then they cause investor hardship which is bad for growth and if profits are too high they cause social hardship. In conclusion, idealisms and blind faith in anything have never worked for society beyond the narrow band of a nominal application. What we need right now is to drop the idealism and to inject some pragmatic realism, especially when it comes to managing the energy markets, by setting social wellbeing indexes and to adjust our responses accordingly.