The right wing is wrong

Piotr Miszczuk

‘A free market will liberate us all’, reads a slogan that is almost religiously recanted by the Confederation Liberty and Independence party, a far-right grouping that entered the Polish Parliament three years ago. Although their eleven seats in the lower house are, to say the least, not the power they’re after, their marginal political influence can tip the balance in the tight parliamentary majority, amidst the on-and-off turbulences within the ruling party.

The Confederation party got into Parliament once they finally relegated their controversial and misogynistic leader, Janusz Korwin-Mikke, and started to promote their younger and less prone to blunders activists. Their stronghold has always been the Internet, where they have been ‘destroying’ the ‘benighted’ and where their edgy statements have not infrequently been going viral. Every now and then, the comments section on YouTube abounds in the party’s sympathisers simmering with anger at the show hosts for not asking politicians about the economy but focusing on ‘futile’ ideological disputes.

And yet, Confederation’s ludicrous pseudo-scientific views don’t matter to their supporters. Denying the human factor in climate change – the backbone of most European right-wing populists – is irrelevant. And so are the abominable antiLGBT+ inclinations or the party’s pandering to anti-vaxxers and the pandemic-sceptical. But the trade-offs of those siding with Confederation reach beyond world views, as the grouping is mistaken when it comes to its very foundation – their most cherished economy.

Even though most people are at odds with Confederation’s views on abortion, minorities or access to guns, some could be tricked by their populist economic programme. Under the guise of liberal and modern views on the economy, they advocate a state that doesn’t care about the less well-todo ones who were born into poorer families, or those who have found themselves in the throes of life-altering problems, either of which can severely cripple a person’s ‘marketability’.

Formed of several groupings, including the less obvious Party of Drivers, the Confederation party is far from being unanimous within. They agree to disagree on whether people should wear be obliged to face coverings in public or what the Polish judiciary should be like. But they seem to see eye to eye about their outlook on public finance – the lower the taxes, the better. In this, they’re right, but only if you still believe that the so-called ‘invisible hand’, a concept coined as early as 1759 by economics forefather Adam Smith, still holds true.

It doesn’t mean, however, that the market economy doesn’t work at all. The ‘invisible hand’ is a term for all the forces underlying the economic demand-supply interplay. Being part and parcel of the laissez-faire philosophy, it is the idea that self-oriented choices of individuals are the best for the economy as a whole. Demand, which is consumers’ willingness to purchase products, and supply, i.e. how many goods are dangled before them, interact with each other, pushing towards equilibrium. The only snag being that the resources, predominantly including money (in economic theory referred to as ‘capital’), workforce (‘labour’) and natural resources (‘land’), are limited.

And this capital-based income has been blown out of all proportion. The world has witnessed a drop in the share of labour in the so-called ‘functional income distribution’, thus in particular the developed countries were faced with too many employers in relation to employees. Another issue here is that the owners take advantage of every opportunity to cut corners, by fair means or foul – the Economic Policy Institute’s data shows that funds obtained from wage theft amount to more than the money lost to robberies. And with so few having so much, the disparities are widening. Several meta-analyses of how discrepancies influence society have concluded that those income differences have a negative impact on people’s mental health. The promises of capitalism brought about a whole host of woes; most notably excessive control in the hands of private enterprises and the failure of political institutions to represent every citizen, amping up global disparities. A US software developer, Matt Korostoff, created an interactive chart to show the full extent of how much the world’s richest people possess. With the human inability to deal with large numbers, one only realises the true magnitude of Jeff Bezos’ wealth when they keep scrolling and scrolling to see the end of an extremely long rectangle symbolising the Amazon owner’s fortune. Trying to reach the end, one comes across the annual pay of an average Amazon worker looking like an ant seen from space, or the annual cost of chemotherapy for all US cancer patients being equal to only a modest part of Bezos’ opulence.

Nevertheless, the undisturbed demand-supply self-regulation mechanism, often hailed by Confederation sympathisers as the perfect solution to all market limitations, had been the prevailing concept until the 1929 Great Depression hit the global economy. For the first time, free markets failed on such a scale. They didn’t provide the economy with full employment even though workers were flexible about their pay demands. Joblessness went rampant worldwide, peaking at its all-time high of nearly 25%. Back then, John Maynard Keynes, one of the most influential economists in history, was the one to recognise and address the issue of inadequate demand. As a result, most capitalist economies implemented his breakthrough recommendations – the use of taxes and monetary policies to alleviate the markets’ adverse effects.

As time passed by, some of his theories turned out to be outdated, but some have continued to be an inspiration for nonmainstream economists. In 1969, the Nobel Prize in Economics was established, helping the entire field gain its momentum. New theories were springing up, and economists were constantly in the midst of developing and disproving the already-existing concepts, or propounding fresh ones. In 1972, Kenneth Arrow was given the Nobel Prize for his contribution to general equilibrium theory. Together with Gerard Debreu, who won the same award in 1983, he validated the hypothesis that total demand will match total supply in the economy, obtaining a perfect economic balance through people’s selfish choices. That, however, was confirmed only under very strong assumptions: no company having a big share in the market, people being rational about their buying preferences, and demand for different products being independent, none of which occurs in reality. Arrow and Debreu’s theory aside, the market also doesn’t work well for one more reason – information asymmetry, i.e. the difference in the knowledge between the buyer and the seller. It usually poses a barrier in fair trade and might lead to negative outcomes, such as an iniquitous advantage of worse products over better ones.

Truth be told, the Confederation Party is not completely in favour of a non-interventionist policy. Au contraire! They do desire to intervene as they please. Magnanimously, they want to allow entrepreneurs to be able to refuse service based on some homophobic or xenophobic views, but at the same time they are in favour of the Sunday trading ban, so that families can spend more time together. Such transgressions and logical inaccuracies are the bread and butter of their political agenda, by means of which they wish to pamper both Catholic nationalists and free-market economy zealots.

But the most detrimental of Confederation’s stances is the one concerning the EU. Before the 2019 European Parliament election, they vowed to ‘destroy’ the Union, joining dispersed forces under one name of Confederation. They’re still unwilling to acknowledge that, as part of the European single market, Poland could double its yearly GDP growth. EU funds, automation in agriculture, job creation, new roads and railways, an influx of foreign investors, higher quality of people’s life, better public governance, and an improvement of the environment are impossible to have escaped the notice of anyone in Poland. Bringing global environmental issues to the member states’ attention is the EU’s great merit, too, again unappreciated by Confederation politicians.

It looks like the time has come to reconsider capitalism. Its transformation might be painful and will require a joint effort of all actors. But with a looming environmental disaster and democracy crisis, we should do anything but think about ourselves only, like the Confederation party encourages us to do. A simplified image of the world they offer might be enticing, albeit the down-to-earth idea of the economy goes off at a tangent to the complex texture of the modern world.