Criticism of Market Theory and Market Ideology

to read Franz Garnreiter’s 2013 article, click on


A real market economy functions so very differently than the harmonic optimal conceptions of market theoreticians. The economic freedom of the competitively strong turns so massively against the weaker. Due to this the real market economy leads to spectacular deficits and excesses. The abstract free enterprise principles must be restricted by a multitude of concrete measures. Thus a state is necessary. That in no way means the capitalist state represents an adequate corrective for the results of the capitalist economy. Rather a certain minimum in corrective measures is indispensable to maintain the functioning of this economic system.

Most of the existing political-economic institutions and measures were created “to solve” problems caused by the real market economy. These include a large number of monitoring authorities and measures like industrial oversight [trade supervision\?], building regulations, industrial safety regulations, monopoly legislation, bank- and stock market supervision, price monitoring, production bans and regulations and so forth. Wherever we look the real market economy produces a need for political regulations at all corners and ends in view of the food scandals, housing distress, bank swindles, destruction of the commodity labor power, air pollution through chemicals and cars and so on. The health sector plus the pharmaceutical industry, the energy industry and raw material exploitation, old age provisions and foreign trade – a market economy without extensive regulations and restrains by the state would lead to a social chaos. With everything that is important in the economy, a state is necessary to control market outcomes.

We know the term “unfettered markets.” While theory proves that only the completely unfettered, free markets bring forth the best optimal results, “unfettered markets” rightly represent a terror for most employees and consumers. Market results are only bearable when the markets are fettered.


The term “market-conforming democracy” coined by the German chancellor Merkel – underscores the pre-eminent importance of capital freedom, pre-eminent over against democratic principles. In this view, the markets constitute the fundamentals in society. The form of the state – democracy or not – is artificial arbitrary and second-rank. The first, most distinguished interest of the state is safeguarding and protecting the fundamentals of society, the capitalist market economy. Politics is then the executor of the needs and requirements of the markets, not the social choice between possibilities. Practical constraint is then the justification for politics. Friedrich von Hayek and Milton Friedman, the founding fathers of neoliberalism, said clearly that the democracy, out of control from their perspective, endangers capital freedom. They both welcomed the 1973 fascist Pinochet putsch in Chile that ensured the pre-eminence of capital freedom.

In understanding freedom as the freedom of capital, the freedom of the strong rivals over the weak, social responsibility is branded as a fundamentally subversive doctrine. Belief in social justice, according to Hayek, is the most serious threat to a free civilization.


Market theory starts from a rational economic conduct of persons, from the so-called homo oeconomicus. In this concept, being rational only means having one’s own benefit and profit as a the only goal and being radically selfish. In fact this economic system does everything in its power to produce and promote greed and egoism, rat-race-striving and aggressiveness in the human psyche and make them as dominant as possible over other feelings.

The justification of the competitive economy culminates in a basic credo. One’s own prosperity can only be assured by keeping down and suppressing the competitive opponent (who is far from being perceived as an economic partner).

The idea that an economy could be conceivable in which reasonable living conditions are possible for everyone without victory-defeat competition does not occur to the righteous. This would also not correspond to any free enterprise reality.

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