Book Review: The Value of Nothing

The Value of Nothing: How to Reshape Market Society and Redefine Democracy by Raj Patel
by Tracy Kurowski on Mon 22 Mar 2010

To many explanations about the cause of our economic crisis focus on the excesses of Wall Street, and rightly so. Be they derivatives, short sales, credit default swaps, or mortgage bundling, the many financial “products” invented to create profits out of thin air brought us to the brink of a great depression, where we still precariously stand.

Economist Raj Patel describes these financial instruments and other follies of the neo-liberal economic model in his newest book, The Value of Nothing. Citing such sources as the guru of neo-liberalism himself, Alan Greenspan, Patel ably deconstructs the myth of Chicago-school economics – the model that has ruled conventional wisdom and American foreign and domestic policies over the past fifty years – that deregulation of markets for the benefit of corporations is the best way to manage the world’s economy.

Early in the book, Patel quotes Alan Greenspan during a hearing before the House Oversight Committee. Not long after the stock market lost half its value in the fall of 2008, Greenspan was called to testify about what went wrong. When prodded by Chairman Henry Waxman about why the market failed, despite the conventional wisdom that “free competitive markets are by far the unrivaled way to organize economies,” Greenspan responded that he “found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak”.

Certainly surprised at such a candid admittance, Waxman reiterated to Greenspan what he thought he heard. “In other words, you found that your view of the world, your ideology, was not right, it was not working.” But even more surprising in this exchange was Greenspan’s agreement with Waxman’s analysis. “Precisely. That is precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

As Patel explains, this was no small exchange in an obscure hearing room in the Capital. This was the Don himself, the head of the Federal Reserve admitting that the economic system that had created the financial bubble, that had dismantled the American manufacturing sector over a generation, that had dramatically shifted wealth into fewer and fewer hands was in fact unsustainable and flawed.

But more than just review the theories of economists – including Adam Smith, Eugene Fama, Karl Marx, Milton Friedman, Gary Becker, Polanyi, Barbara Bergman and John Stuart Mill – The Value of Nothing balances the strictly economic interpretation of human behavior with a humanist one. Patel also refers to recent studies by neurologists to help explain human motivation. He quotes psychologists, sociologists, literary critics, philosophers – even Shakespeare – to revisit the dominant ideology that has ruled our modern politics, that deregulation of markets is the best way to rule human society.

The book title is taken from an Oscar Wilde quote from The Picture of Dorian Gray, “Nowadays people know the price of everything and the value of nothing.” Part one of Patel’s book thoroughly examines neo-liberal economic flaws that place greater value on Volkswagens than water. Part two looks at alternative models of political and economic systems that redefine market society in ways that value participatory democracy over profits.

Many of these movements are led by peasants and organized by the poorest of the earth’s people. They are the majority world after all. Nearly a billion of them live in shanties on the edges of urban areas, surviving on the garbage of hyper-consumerism.

Many of the people who are demanding justice and organizing for their common good are illiterate and survive a year on what the average American earns in a week. These movements are not a modern outgrowth of capitalism, but have their origins in populist and peasant’s rights throughout history, such as the Charter of the Forest which was the companion to the Magna Carta and which had provided some basic guarantee of common social and economic rights to medieval Englanders.

Movements like the Via Campesina, the Zapatistas, and others also have their foundation in the International Bill of Human Rights, adopted in 1966 which was actually two treaties, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights.

The movments organize around ideas that should be quite obvious: the rights to have rights, the right to stay put, the rights over the land they occupy, the right to participate actively in the economic decisions that determine whether they will have food, medicine or even basic shelter.

The Value of Nothing is an important book for our age. As our politicians begin the great debate over how best to re-regulate an economic and political system gone mad with greed, none but the most cynical still believes in the invisible hand of markets. Unfortunately, so many of those in power are cynics.

Tracy Kurowski has been active in the labor movement for ten years, first as a member of AFSCME 3506, when she taught adult education classes at the City Colleges of Chicago. She moved to the Quad Cities in 2007 where she worked as political coordinator with the Quad City Federation of Labor, and as a caseworker for Congressman Bruce Braley from 2007 - 2009.

Tracy Kurowski writes a labor update every Monday on Blog for Iowa