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Market fundamentalism (also known as free market fundamentalism) is a political epithet for laissez-faire or free market economic views or policies.
The term denotes an unfounded or misguided belief, or deliberate deception, that free markets provide the greatest possible equity and prosperity, and that any interference with the market process decreases social well being. Market fundamentalism includes an unshakable belief that free markets maximize individual freedom, and that they are the only means to economic growth. Market fundamentalists believe that markets tend towards a natural equilibrium, and that the best interests in a given society are achieved by allowing its participants to pursue their own financial self-interest.
Market fundamentals reject Technoprogressive policies such as the Social wage, Universal health care, and the Basic income guarantee. Instead, they may believe that the free market will provide jobs and counteract Structural unemployment even when robots and increasingly sophisticated AIs are able to outperform humans. Biopolitics and Transhumanism attract a disproportionate number of libertarian free market fundamentalists.
Kozul-Wright states that the “ineluctability of market forces” neo-liberals and conservative tend to stress and their confidence rest on a “mixture of implicit and hidden assumptions, myths about the history of their own countries’ economic development, and special interests camouflaged in their rhetoric of general good.”
The expression is now used to signify an unjustified belief in the ability of markets to solve all problems in a society, or groups which strongly advocate against any state Regulation and defend a totally free market. It is also used to disparage the arguments of “the virtues of radical free-market economics.”
Joseph E. Stiglitz used the term in his autobiographical essay in acceptance of Nobel Memorial Prize in Economic Sciences:
“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 of Adam Smith’s invisible 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.”
Joseph E. Stiglitz
Financial regulations were progressively relaxed in the United States from 1980 (when Ronald Reagan became President) until the current financial crisis.
“[P]eople came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.”