There’s No Such Thing as “Market Fundamentalism”

September 24, 2021

Zealots who want to force others to conform to their beliefs often exhibit a fundamentalist mindset. That is to say, they are utterly certain of the rectitude of their beliefs on the basis of some unchallengeable text, either sacred or secular. They assert what they believe to be true rather than engage in rational argument. And if anyone should disagree, they respond with some sort of ad hominem attack against the opponent, not by trying to understand why he objects and whether he might have good reasons for his position.

Fundamentalist thinking is an atavism, a throwback to the ancient tribal nature of mankind. It obstructs the acquisition of knowledge because the minds of fundamentalists are closed off to any information that doesn’t confirm their existing beliefs. When fundamentalists clash with rationalists, they resort to coercion if they possibly can, since the skeptics must be wrong and are probably evil. And when fundamentalists clash with other fundamentalists, the result is usually violence.

Fortunately, over the last 700 years or so, fundamentalism has been receding. Human beings have become more willing to listen to new ideas and evaluate them on the strength or weakness of the evidence and logic behind them. We have become less inclined to think that some inerrant text has all the answers and more inclined to consider different points of view.

Intolerance in America

Unfortunately, that beneficial trend seems to be changing. Our political divisions are increasingly vicious and intractable. Tolerance for those “on the other side” is waning. Families are torn and friendships severed over the discovery that someone holds the wrong set of views. Listening and civil discussion have largely been replaced by angry, reflexive denunciation. Ad hominem attacks have become the norm.

Two authors who are worried about this are Gary Saul Morson and Morton Schapiro. The former is a professor of arts and humanities at Northwestern University and the latter the president of that institution. They have written a book entitled Minds Wide Shut (Princeton University Press, 2021) that’s meant to shed light on the rising acrimony in America.

The authors argue that our trouble stems from fundamentalist thinking that makes people unable to see any merit in opposing points of view or to consider weaknesses in their own. “That fundamentalism,” they write,

has infected not only our politics, but also many other areas of thought. Not so long ago, it seemed as if ‘grand narratives,’ … as Jean-Francois Lyotard observed, was over. No longer would people rush to adopt theories that explain everything…. Also, not so long ago, it was an unchallenged commonplace that cultures are undergoing a far-reaching secularization that, in spite of occasional resistance, is unstoppable. The rise of militant Islam, and what some have termed ‘fundamentalist Hinduism’ have called the ‘secularization thesis’ into question. Where are the inevitabilities of yesteryear?

As Morson and Schapiro view matters, people are increasingly prone to categorical thinking that explains everything in terms of some essential text or belief system. They only see confirming evidence for their opinions and treat those who disagree as evil persons who must be squelched.

Nor is that cast of mind limited to supposedly backward segments of society. Bear in mind that the authors are at one of our prestigious, extremely selective educational institutions. Here’s what they say:

In our classes, we have seen students who adopt fundamentalist ways of thinking almost by default: not as a choice, but because they imagine that is just what thinking is. These students seem genuinely surprised that there are situations where one cannot find a uniquely correct answer, where one needs to make choices under uncertainty, and where those who recommend a different course of action might turn out to be right.

In short, many of the “best and brightest” young Americans exhibit fundamentalist habits of mind.

The academic world, the authors lament, has been falling more and more into fundamentalist thinking. There, it is often a “negative fundamentalism,” where the possibility of knowledge is dismissed and those who claim to have some are treated with disdain. “There is such a thing as missionary nihilism,” they write, “and the humanities have seen it.” Just so, and that’s a big reason why enrollments in the humanities have been dropping.

What are the indicators of fundamentalist thinking? Morson and Schapiro point to several.

First, there is some canonical writing that is regarded as inerrant, such as the Bible, the Koran, Das Kapital, or some tract proclaiming imminent environmental apocalypse. The answers to all questions can be found in them, provided you look long enough. Second, the true believers dismiss any counter-arguments as the result of evil motives, mental illness, “false consciousness,” or some other defect. That protects the believers against any doubts about their belief system. Third, fundamentalists engage in assertion and avoid dialogue. They declare that certain things must be regarded as true, rather than arguing from evidence and logic. When fundamentalist perspectives clash, the result almost inevitably is violence.

So far, so good. Fundamentalist systems are atavistic. If humans hadn’t largely broken free of fundamentalism over the last 500 years or so, our lives would still be, as Thomas Hobbes put it, “nasty, solitary, brutish, and short.” Peace and progress depend on rationalism; fundamentalism gets in the way. An attack on it is much needed.

Part of the problem?

Sadly, there’s a gigantic mistake in Minds Wide Shut — its condemnation of “market fundamentalism” as one of the causes of our growing antagonism. Morson and Schapiro write,

There are those whose faith in free markets is absolute and unwavering. To them, the role of government should be as small as possible, limited to such things as establishing and protecting property rights, which a market needs to function, and to providing “public” goods and internalizing externalities, called for by market theory itself.

Of course, there are people who argue for that position, myself included. They do not, however, base their conclusions on fundamentalist beliefs, but instead on carefully devised and well-supported arguments. The authors point to no instances at all where a pro-market or government-skeptic economist asserted that some policy must be changed because it was inconsistent with his or her “faith” in markets. Advocates of free trade, for example, do not stake their position on the mere fact that Adam Smith favored it.

If “market fundamentalism” were a serious phenomenon, you would think the authors could give some clear examples of it — as they do for fundamentalist opponents of economic freedom. (There are a great many people who automatically dismiss arguments in favor of economic liberty, calling them “right-wing” propaganda motivated by sheer greed; to their credit, the authors criticize them.)

Morson and Schapiro, try to sneak past their lack of evidence here by citing people who are generally hostile to laissez-faire and the concept of spontaneous order. First, they quote George Soros, who claimed in his book The Crisis of Global Capitalism that those who think government should play little or no role in economic regulation “believe their conclusions to be certain.” But believing that your conclusions are correct, even “certain,” just shows confidence in one’s thinking, not that it is fundamentalist. 

The closest Morson and Schapiro come to demonstrating their point is to cherry-pick a statement by Nobel laureate Gary Becker to the effect that he was sure that Americans would agree with his stance in favor of allowing sales of human organs once they considered his arguments. Sorry guys, but it isn’t “fundamentalism” to say that you regard your case as persuasive, and if someone had disagreed with Becker, he would have replied with more arguments, not with a fundamentalist dismissal.

Morson and Schapiro also rely on economist Joseph Stiglitz, who decries what he regards as unwarranted confidence in free markets. That, however, does not show that market advocates are guilty of fundamentalism. It only shows that Stiglitz is not persuaded by them. 

Too bad that an editor at Princeton University Press didn’t point out how feeble the authors’ case is here.

Authors offer weak evidence

Not only do Morson and Schapiro fail to demonstrate that “market fundamentalism” exists, but they give no reason for indicting it as divisive. Going back to the 19th century, numerous economists have argued that we would be better off if government stayed out of the economy. For the most part, their arguments were brushed aside by politicians and interest groups, which is why we today have a leviathan state. So why is it harmful for some economists today to make the case against, say, tariffs, federal student loans, or rent control laws? Elsewhere, the authors quote John Stuart Mill on the importance of counter-arguments to test and strengthen positions. That’s right, so what is divisive or harmful about subjecting any interventionist policy to a radical, free-market critique?

The notion that free markets are mostly all right but need a large dose of government control is deeply rooted in the minds of most Americans, including the authors. Very rarely do the “fundamentalists” convince authorities that some instance of government control is counterproductive and ought to be abolished. There are, however, some such cases. We got rid of the Civil Aeronautics Board and its airline price fixing regulations. That, by virtually all accounts, turned out very well for consumers. Fortunately, that decision was not stopped by cries of “market fundamentalism.” If that worked out well, why dismiss other arguments against government economic intervention as “market fundamentalism?” As rationalists, Morson and Schapiro should understand that each argument for or against government control needs to be evaluated on its own merits, not ridiculed with an epithet. 

Just how feeble this part of the book is can be seen in the authors’ discussion of the minimum wage. They write that while a few economists would abolish it and others would raise it to $25 per hour, the best policy must lie somewhere in the middle. But that conclusion doesn’t follow at all. Radical or extreme positions are not refuted just by pointing out that they are “out of the mainstream.” In fact, by calling arguments for eliminating government intervention in the economy “fundamentalist,” the authors are actually doing exactly what they spend the book deploring; namely, dismissing arguments they don’t want to engage with just by pinning a pejorative label on them.

Voluntary alternatives to regulation

Morson and Schapiro commit another common mistake (but one that seasoned academics should have avoided) in assuming that those who argue for government non-interventionism are also in favor of doing nothing to ameliorate whatever problems arise. That is simply untrue. Advocates of free markets are not unmindful that some people will be worse off, but they say that instead of government acting to help, it should be left to civil society, that is, voluntary action.

Consider free trade. Morson and Schapiro understand that free trade is highly beneficial but contend that government policy has to do something to help those who lose their jobs as a result. They overlook the fact that charitable efforts to assist individuals who find themselves in need are widespread, effective in targeting assistance, and don’t have the waste and harmful side-effects of government action.

Contrary to the authors, it isn’t “fundamentalism” to argue in favor of free trade and against government programs to deal with any resulting economic hardship. Instead, it is to argue that government intervention is consistently harmful. The key word is argue. You don’t find market advocates declaring that government programs are wrong per se.

Here’s another issue Morson and Schapiro get wrong because they depict advocates of the free market as “all or nothing” thinkers — student college debt. Some “progressives” cry that many college graduates are suffering under the heavy burden of their loans and want the government to bail them all out. Now, the authors correctly point out that many of those with large debts also have good careers and large incomes to pay their debts. Then, however, they point an accusing finger at the “market fundamentalists” who don’t think the government should give any students debt relief. Again, that’s erroneous. Just because you don’t think the government should be “generous” with taxpayer money by wiping out student loan debts doesn’t imply callous indifference toward those who are truly in distress. There are voluntary means of helping such students, like GoFundMe. Relying on them is far better than a blanket debt relief.

I would also like to know how the authors would respond to advocates of government minimalism who point out that there would be no student loan “crisis” if the government hadn’t made the huge and unconstitutional move of starting federal financial aid in the first place. No students would be looking at six-digit balances today if we had listened to the opponents of federal student aid back during Lyndon Johnson’s presidency. Many of today’s problems have their roots in the unwise expansions of federal power over the last century.

Strawman arguments weaken their case

Market fundamentalism is a strawman. It’s a shame that the authors thought they needed to include it in their attack on fundamentalist thinking. If anyone exhibits minds that are wide shut, it’s Morson and Schapiro, who have utterly misrepresented those who maintain that minimal government is best.

Despite their “market fundamentalism” blunder, Morson and Schapiro have identified a real problem. They earnestly implore people to listen to and reason with one another. Again, that’s fine, but how do we get there?

What’s missing from Minds Wide Shut is analysis of the causes for rising fundamentalism. The authors briefly adverted to a major cause when they mentioned their students who believe that fundamentalist thinking is actually thinking. Throughout our educational system, students are increasingly subjected to teaching that’s meant to indoctrinate them, to see the world in black and white, to ignore the necessity of trade-offs. American students learn to accept and defend certain positions (positions that are invariably favorable to governmental control) rather than to identify and evaluate evidence before coming to any tentative conclusions. That begins in grade school and continues through high school and into college. 

The demands that speakers be prevented from talking on campus and that books with “hurtful” material be cancelled come from students who have been steeped in “progressive” ideology for years. We won’t successfully combat fundamentalist thinking unless we return our schools to teaching knowledge and pull the plug on political activism.

The resurgence of fundamentalism is a serious problem for liberal societies. Minds Wide Shut provides a worthwhile introduction, but it calls for much more work. I would suggest to Morson and Schapiro that they revise the book to focus on true fundamentalist thinking and leave out their misleading and ill-conceived attack on “market fundamentalism.”

Reprinted from the Future of Freedom Foundation

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