Book Review | ‘The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market’ by Naomi Oreskes and Erik M. Conway

“False information need not be coherent to be effective, and the specters of vanished liberty and tyrannical government regulation are easy enough to conjure.” So wrote critic A.O. Scott in the New York Times in 2015 about Merchants of Doubt, a documentary film based on the book of the same title by Naomi Oreskes and Erik M. Conway. 

Merchants of Doubt chronicled climate-change denialism. Oreskes and Conway investigated “why intelligent, educated people would deny the reality of man-made climate change.” Why such people, predominantly men, some of them scientists, would wage a concerted campaign to cast doubt on settled science. Was it simply to obtain position and privilege and wealth? 

Turns out the primary motivation was ideological. As the authors write in the introduction to their latest collaboration, The Big Myth, “these men feared that government regulation of the marketplace — whether to address climate change or protect consumers from lethal products — would be the first step on a slippery slope to socialism, communism, or worse.” 

Market fundamentalism is a belief in the notion that free markets are not only the optimal way to run an economic system, but the only means of organization that will not ultimately destroy other freedoms. Generating wealth is part of economic freedom, but what distinguishes market fundamentalism is casting economic freedom and political freedom as inseparable. The authors spent a decade scrutinizing this notion and more than 400 pages unpacking and debunking it.

It’s an inquiry that ranges widely over 20th-century America, from machinations by the National Electric Light Association to hinder the government from delivering rural electrification, to the National Association of Manufacturers trying to influence the curriculum taught in universities, to the ultimate pitchman for market fundamentalism, Ronald Reagan, assuring the American people that big government was the root of our problems and the magic market the solution. Intellectual justification was provided by such notables as Adam Smith, Friedrich von Hayek, and Milton Friedman, with a significant assist from industry moguls who initially funded the Chicago School of Economics. 

Creating the myth of the market as free, benevolent, fair, just, and infallible required nearly a century of concerted effort, money, propaganda, and ceaseless proselytizing. Ideas take root in society when they’re developed, sustained, and promoted by credible individuals and institutions. Capitalism and freedom were cast as two sides of the same coin, indivisible and conjoined, with the implied warning that communism, socialism, or tyranny would result, should they be decoupled. Before long, capitalism and democracy were synonymous, as was the idea that capitalism aligned with Christian values. Self-interest and profit were sanctified. One could feel justified in turning away from the poor and embracing the rich and come to believe that no such thing as the common good existed. As the authors note, “The captains of American industry had found a way to turn Protestant theology on its head, from embracing the poor to celebrating the rich.”

By the second half of the 20th century, the mantra of American conservatism was limited government, low taxation, personal responsibility, and personal freedom. This ethos filled the void caused by the weakening of the New Deal coalition, the War on Poverty, the Great Society, and the decline of organized labor. The world was changing; former adversaries like Germany and Japan were beginning to challenge America’s industrial and economic hegemony. According to Milton Freidman and others from the Chicago School, American business was overtaxed and excessively regulated; labor unions had too much sway and were an impediment to competitiveness; government at the state and federal level was bloated, slow, and inefficient when compared to the nimble private sector. 

Historical memory tends to be brief. A new generation of Americans forgot that the Progressive Era and the New Deal were remedies for the failures of market capitalism. 

Revolutions usually topple ruling elites. Not so the revolution ushered by Reagan, the former pitchman for General Electric. Reagan promoted the interests and ideology of the wealthiest and most powerful Americans. But, as Oreskes and Conway make clear, the turn from the era of big government was a bipartisan project begun when president Jimmy Carter, a Democrat, deregulated the airline and trucking industries. Carter sought to lower prices and modernize sectors of the economy, a reasonable objective in the late 1970s. While it’s fair to note that Carter started the trend, by the time Bill Clinton’s administration deregulated the telecommunications industry in 1996, followed by the financial services industry at the tail end of his second term, deregulation was a mania.

The results? Consumers gained more choices, and in some cases lower prices, at least at the outset. But according to Oreskes and Conway, deregulation of telecommunications decreased competition, encouraged mergers and acquisitions, and virtual monopolies, while in financial services it laid the foundation for the 2008 subprime mortgage debacle, the worst economic collapse since the Great Depression. The financial markets failed and the government raced to the rescue of institutions that had become “too big to fail” at a cost to taxpayers of a half trillion dollars. So much for self-regulation and magic. 

Like other types of fundamentalism, market fundamentalism bows beneath the weight of its many contradictions. The assumption that business can do no wrong and government no right has contributed to making the United States fabulously wealthy for the few and destructively unequal for many. In terms of life expectancy, health, education, and overall quality of existence, the United States trails behind much poorer countries. The intellectual proponents and cheerleaders for market fundamentalism as the only possible capitalist arrangement either didn’t recognize, or chose to ignore, that under regulated markets can be as tyrannical as a dictatorship. 

I hope this book crosses the path of legislators, governors, mayors, bankers, CEOs, judges, and others, who know, on some level, that extreme inequality of wealth and opportunity will never be ameliorated by the market. As Oreskes and Conway put it, “In domain after domain after domain, overreliance on markets and under reliance on government have cost the American people dearly.”

This review originally appeared in the California Review of Books.