Below is a quote from my current reading, Banking Systems in the Crisis – The faces of liberal capitalism, a book which explores the different impacts of and responses to the crisis of 2008 across the so-called liberal market economies, including the US and UK, as well as Canada, Australia, New Zealand and Ireland. The quote itself considers the realities of deregulation as part of economic liberalization, noting that it is more complex and nuanced than simply restoring ‘freedoms’ to economic actors and the economy more generally. Since markets are helpfully seen as a human construct, deregulation is necessarily political. Its champions probably understand this as much as its critics, but will often use the rhetoric of an apolitical free market economics to justify and obscure reality.
“In many ways, what is commonly known as deregulation can be seen as both a prerequisite for, and a companion process of, a programme of economic liberalization. The lifting of market restrictions is often considered to be an essential precondition to creating ‘freedom’ for market actors. However, since markets are inevitably human political constructs, freedom is a relative concept. The increased freedom of one party within a contract, for example, necessarily impinges on the freedom of the counterparties to that contract. As a result, ‘reregulation’ is perhaps a more accurate description of the loosening of market constraints.
Demands for market deregulation often create markets whose rules work more in favour of particular capitalist interests than those of others – notably, for example, suppliers or customer firms, workers, the state, other members of society and the environment. This is because the rules of the free market do not, as theorized, favour all actors equally. There are differences in pre-market access to resources (finance, in particular), networks and markets, which give particular capitalist interests in-market advantages; and there are likely to be expectations of state intervention in the event of crisis (particularly financial crisis) which prioritize the interests of some over others. Moreover, state intervention does not necessarily serve the agenda or longer-term interests of the state or society, particularly when the costs incurred are effectively socialized, whilst the benefits remain private. In response to recurring international financial crises since the 1970s, for example, governments have acted decisively – usually at not inconsiderable costs – to contain the fall-out by providing the lender of last resort facilities to financial institutions, countries or markets experiencing a sudden withdrawal of funds. This tradition was continued during the crisis of 2008, the costs of which continue to mount as the problems requiring resolving have proven to be protracted.”
Suzanne J. Konzelmann, Marc Fovargue-Davies and Frank Wilkinson (2013), ‘The return of ‘financialized’ liberal capitalism’ in Suzanne J. Konzelmann and Marc Fovargue-Davies, Banking Systems in the Crisis, Routledge, p.48-9.