What are "free markets"

Michael Hudson produced a very nice essay today on counterpunch. It expresses so clearly what I have been thinking about the Big Lie of calling recent history of finance capitalism "free market" capitalism. He also does an admirable job reminding us of the original liberal and progressive definitions of "free markets" that were typical of the classical political-economists.

Here's a selection that captures the heart of the argument;

The fact that today’s neoliberals claim to be the intellectual descendants of Adam Smith make it necessary to restore a more accurate historical perspective. Their concept of “free markets” is the antithesis of Smith’s. It is the opposite of that of the classical political economists down through John Stuart Mill, Karl Marx and the Progressive Era reforms that sought to create markets free of extractive rentier claims by special interests whose institutional power can be traced back to medieval Europe and its age of military conquest.

Economic writers from the 16th through 20th centuries recognized that free markets required government oversight to prevent monopoly pricing and other charges levied by special privilege. By contrast, today’s neoliberal ideologues are public relations advocates for vested interests to depict a “free market” is one free of government regulation, “free” of anti-trust protection, and even of protection against fraud, as evidenced by the SEC’s refusal to move against Madoff, Enron, Citibank et al.). The neoliberal ideal of free markets is thus basically that of a bank robber or embezzler, wishing for a world without police so as to be sufficiently free to siphon off other peoples’ money without constraint.

Unrestrained predator capitalism is what we have. Sadly, Obama is increasingly looking like a head shark in a tank of very nasty others. There seems to be no limit to his complicity in the neoliberal project of raiding the public resources for maximum private gain. Looks like Hoover will get his replacement in the history books. Good news is, we will be rid of him in 4 years -- I just hope we don't get Pinochet as his replacement.