Last days of free market capitalism and the true believer

Being an unapologetic capitalist is not all that it’s cracked up to be.

John Hancock, senior counsellor at the World Trade Organization, was sweating profusely as he told his audience how capitalism was entering a more radical phase that would lead to further globalization of economies, massive dislocations, de-stabilization and perpetual turmoil. And that was the good part.

Speaking the Gardiner Museum last night as part of TVO’s Big Ideas series co-sponsored by the Literary Review of Canada, Hancock credits capitalism as having allowed the West to race ahead of the rest of world. In 1800 the richest economies were four times those of the poorest. By 1914 it was fifteen times. By 1950 it was 26 times. In 2000 it was 70 times.

Now countries like India and China are catching up at a torrid pace. Hancock says the Chinese economy is doubling in size every decade and India is not far behind.

Without once mentioning the impact of rising oil prices or the cost to the environment, Hancock says transportation costs have revolutionized the world economy to the point where it’s economic for countries to ship their garbage to foreign destinations. He says that Charlemagne would be “blown away” to walk into a Shoppers Drug Mart today and see the array of inexpensive products from around the world. This is the new utopia: cheap lighters made in Indonesia.

Hancock waxes on about new global supply chains that produce goods where they can be manufactured “the most efficiently.” Now we are seeing a previously unimaginable parallel revolution with services made possible by the spread of fibre optic cable, such as digital x-rays being read half way around the world.

Hancock says every day $2.7 trillion cross-crosses the planet and that global capital markets are taking place at speeds more akin to jet airplanes. And like jet airplanes, the crashes are all the more spectacular.

The ugly side to all this is what he refers to as “creative destruction,” a side of his utopia he keeps coming back to like an annoying tic, as if this is the price we have to pay for such unbridled growth.

That includes a sped up cycle of disruption, dislocation, inequality, and radical shift as the periphery becomes the core.

Missing from his talk is what all this growth is leading to. As environmentalist David Suzuki asked a week ago during Word On The Street, who is the economy serving? An economy is not part of nature – it’s made by humans.

Hancock readily acknowledges the impact of the Occupy Movement, but insists the Occupiers weren’t against capitalism, but just wanted a bigger share of the pie.

The WTO counsellor does admit that free markets rest on political foundations, and left unchecked, free markets will undermine those pillars they rest upon.

As if markets bear no relationship to human relationships, he says the market system has a tendency to run away with itself. There is a need for countries to catch up and agree upon some global rule making and accountability, but that ultimately a multi-pillared world was more democratic than a super-power dominated world.


In a system said to have no leaders – but plenty of super-rich people with tremendous influence – the question of democracy is an interesting one.

It is ironic that China should be held up as a model when China falls outside the new democracies that Hancock insists capitalism is bringing to the world. If anything, China proves that capitalism works even better when democracy is left out of the equation.

After his speech the line up at the microphone formed very quickly as audience members challenged his assertions. What about the environment? What about labour? What about sustainability? Are the needs the invisible hand is fulfilling really manufactured needs?

Hancock said he couldn’t do many of the questions justice. For many, he simply dodged them. Asked for a third time about the environment, Hancock said companies wanted to locate in countries that had a good environment, where there was access to good healthcare and education, where countries had good laws. Of course this was all possible for head offices and senior executives when their supply chain rested in countries that had none of these things.

What was evident is that as a senior staff member with the World Trade Organization, Hancock showed himself to be disconnected from the human impact of what he was relating, as if economic growth on its own represented unquestionable human progress. He described the U.S. has becoming an hour glass as more Americans gravitated to the bottom and the top, hollowing out the middle. But he never questions what happens to an economy where this takes place.

Defensive about the role of the WTO, Hancock says WTO is no more than the sum of its parts and that countries frequently blame the WTO for woes they have the ability to change. The WTO’s failures are the failure of countries to come to agreements on higher economic standards he says.

He takes issue with those who talk about manufactured desire, saying central governments were no better at deciding what we really needed.

The reality show Honey Boo Boo is disturbing he says, but it isn’t up to a higher authority to decide what our values are.

Hancock is the unrepentant believer. While many writers are penning the obituary for unbridled free market economies, he believes that capitalism is simply entering a new phase.

Author Eric Hobsbawm, writing recently in the UK Guardian, says that state-controlled socialism and free market capitalism are dead, and that we need to shift towards a new public action.

“It needs a return to the conviction that economic growth and the affluence it brings is a means and not an end. The end is what it does to the lives, life-chances and hopes of people.”

Hobsbawm’s basic idea appears common sense. The question is, are we so ideologically spun that we can no longer see the imperatives before us?

2 responses to “Last days of free market capitalism and the true believer

  1. Free market capitalism has collapsed; it’s now a rigged global market. This is an organized criminal operation, an imperial fascist movement that is determined to destroy our very way of life.

    Free Market Capitalist

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