I’ve been reading David Friedman’s The Machinery of Freedom: Guide to Radical Capitalism. The book is somewhat dated, and flawed in a number of ways, not the least of which is the title, which summarizes his whole economistic approach to liberty. Nevertheless, it’s worthwhile, and I would recommend it to non-capitalist libertarians, just as I would recommend Proudhon and Kropotkin to capitalist ones, and I believe I shall do so now, since checking Friedman’s blog I see that it has just been made available as a pdf. (My own copy comes courtesy of the University of Utah library.)
June 23, 2010
June 20, 2010
Just a couple of days after writing the last post, which referenced Camille Paglia’s comparison of postmodernists to Wall Street financiers, a book I had recently ordered arrived in the mail: David Lehman’s Signs of the Times: Deconstruction and the Fall of Paul de Man, from 1991, when the philosophy still had very high cachet in academe. De Man was a Yale professor who had emigrated from Belgium after WWII, and was one of the primary proselytizers for deconstruction. Thought by his cult-like admirers to be a man of the Left (though his actual writing is rather apolitical), he was discovered after his death to have written pro-Nazi and anti-Semitic articles for Belgium’s collaborationist newspaper Le Soir in the early 1940’s. De Man turns out in Lehman’s investigation to have been a lifelong liar, bigamist, and petty thief. An opponent of deconstruction could use these facts as an ad hominem attack on such ideas (and in the wake of the scandalous revelations, many did), but Lehman does a great job of avoiding arguments, on the one hand that deconstruction necessarily entails the despicable facts of de Man’s life, and on the other that such facts are irrelevant to it.
I was particularly struck by this passage:
Has deconstruction hit Wall Street? Richard Rand of the University of Alabama, co-translator of Derrida’s Glas, thinks so. In the spring of 1989, when Michael Milken was slapped with a ninety-eight-count indictment on charges of racketeering and securities fraud, Rand- an English professor- sent a letter to the Wall Street Journal defending the misunderstood junk-bond king as a “deconstructive financier.” Rand stated that the two things he had studied with rapt attention over the course of twenty years were Jacques Derrida’s texts and the Journal’s financial pages. To Rand’s mind there was quite a continuity between the two, and particularly between Derrida’s theoretical maneuvers and Milken’s leveraged buyouts. Milken had apparently made a deconstructive move when he turned the junk bond from “a ‘marginal’ (and despised) ‘supplement’ to the overall investment machine” into “a central and dynamic feature.” With his leveraged buyouts he had accomplished a “reversal” and “rewriting”- two more terms from the Derrida lexicon- of the merger-and-acquisition strategies already in place in postwar America.
This Rand guy reminds me of a character named Murray in Don DeLillo’s 1985 novel White Noise, an academic who has abandoned arts and letters for the signs and wonders of the supermarket’s cereal isle. Reading Lehman’s account of de Man also brought to mind DeLillo’s main character, Jack Gladney, professor of the trendy new field he has pioneered, Hitler Studies.
But what is the significance of the parallel? Again I would refer to the Paul Cantor essay about hyperinflation in Thomas Mann’s “Disorder and Early Sorrow.” He writes that “Everything threatens to become unreal once money loses its reality.” Severed from its origin as a real commodity valued by real actors in a market economy, money becomes a manipulative game, and so to does language when severed from reality. I don’t think anybody will dispute Saussure’s insight that the relation between sign and signifier is arbitrary, but in no way does this have the nihilistic implications of post-structuralism. The selection of gold, say, as a medium of exchange has a mixture of objective and arbitrary qualities to it. Austrians stress the former, but Keynesian and other neoclassical theories tend to see only the latter, with the result that manipulation of the money is seen as the sole key to prosperity. But it is folly to see society as reducible to linguistic discourse and economy as reducible to finance.
June 14, 2010
I’ve often wondered why most literary and cultural theory is Marxist. Conservative claims notwithstanding, most academic intellectuals, especially those in the humanities, are not Marxists. They are not radicals, mostly, but rather polite NPR-listening Democrats. So why isn’t there, for instance, a Keynesian critical theory? A post over at the blog Steamboats are Ruining Everything provides a good example of what this might look like.
The post is quite rambling, proceeding from a scene in Jane Austen that provides a metaphor for capitalist speculation to ruminations on economic metaphors in general, to the current Keynesian stance on whether “WWII solved the Great Depression”, and then on to a quasi-“Crusoe” analysis (islanders trading shells) of the role of money and representation. Obviously, since I think Keynesian economics is wrong, I find that Keynesian assumptions mar the post. But otherwise it is quite interesting, especially comparing it with Paul Cantor’s essay “Hyperinflation and Hyperreality,” on Thomas Mann’s Wiemar-era short story “Disorder and Early Sorrow,” which similarly explores, from an Austrian perspective, the parallels between representation and value in money and representation and value in culture.
A few points:
1) Not long ago, I had coffee with an undergraduate who reported that he had just read Derrida and Lacan on Poe and was excited by the idea that criticism might be the new literature. Twenty years ago, when I read Derrida and Lacan on Poe, my professors teased me the same exciting possibility. It occurs to me now that the idea is about as old as, and has certain structural parallels to, the notion that finance is the new manufacturing. Like criticism over literature, finance traditionally supervised manufacturing yet was thought to be parasitic upon it and less “creative” than it.
Finance is not necessarily parasitic upon production, but it tends to replace real economic activity in a central banking regime, which breaks the link between money and real wealth. Likewise criticism is not necessarily parasitic upon literature. Just as one can probably find money and finance as soon as soon as trade emerges, so too literary theory is almost as old as literature (there’s no reason to assume it began ex nihilo with Aristotle’s Poetics). But the period from the 1970’s to the 1990’s was a sort of “theory bubble.” The metaphor has already been deployed by Camille Paglia in her essay “Junk Bonds and Corporate Raiders: Academe in the Hour of the Wolf,” from 1991, which may well be the point when the bubble began to burst. (The equivalent of the economic “flight into real value” being the flight of intelligent students out of the humanities.)
2) I don’t see how Keynes’ theory of the “propensity to consume” necessarily entails equal distribution of wealth (or at any rate a more equal distribution of wealth).
But according to Keynes, there is a problem with concentrating wealth in the hands of the rich: they don’t spend as much of it. They aren’t, after all, in need. “Consumption — to repeat the obvious — is the sole end and object of all economic activity,” writes Keynes, in a sentence quoted by Swartz. That is, money in the bank is for the interim worthless; its value is suspended until it is put into use. Give a rich person ten dollars, and he is likely to put nine dollars in his savings account. Give a poor person ten dollars, and he will have spent all ten by lunchtime on food and services, and its beneficiaries will be people who have to work for a living and who are therefore more likely to spend it themselves. The original ten dollars, if spent by a person of modest means, will multiply their value as they work their way through the economic system.
If aggregate consumption is the goal, and if higher incomes mean lower consumption, then it wouldn’t matter if wealth was redistributed. Consumption by the rich would go up, but consumption by the poor would go down. In fact, we are led to the paradox that we would all be poor if we were all rich, and all rich if all poor.
3) The moral of the story seems to be that when the rich have most of the money and hoard it, the symbolic value of money becomes somewhat unreal—the conversion of money, which is imaginary, into value, which is real, breaks down.
Again, see the Cantor essay on how this is precisely what happens because of the government monopoly on the production of money. But these views are not necessarily mutually exclusive, since a left-libertarian analysis would find that inequality of wealth increases with government monopoly. One can see a bit of this in Cantor and Mann, who find that capitalists (speculators and war-profiteers specifically) are in fact the main beneficiaries of inflation. (There is also a conservative thrust to both, too, but I won’t go into that.)
4) The whole analysis of islanders using shells as a medium of exchange imports facets which characterize a modern central-banking economy into a primitive market situation. Shells would not emerge as money if they had no intrinsic value to the islanders in addition to being a medium of exchange. Therefore it does not matter that “The durability of the shells misrepresents the nature of fish and breadfruit” because the shells are not mere stand-ins for other goods but also goods in themselves. But even if they were just symbolic, it is in the nature of all symbols, all media, to distort what they represent. This is in a sense a defect, but we only use a symbolic medium if it has advantages over the “real thing” as well (usually simplification, but “durability” often applies as well, especially with words). The point is that in a free market we are much less likely to confuse the map with the territory than we do in a fiat money economy.
5) The question has to be asked of every liberal follower of Keynes: how do you square the belief that in the economy consumption is king with the desire for a less consumerist society? I have my own thoughts on this subject.
May 25, 2010
For whatever they’re worth, here are two completely unrelated comments I’ve made recently. The first is from Dan Carlin’s Hardcore History forum:
I agree with some of the other comments that Dan failed to define what he meant by “toughness.” Is it callousness? bravery? some combination of the two? I can see how it takes toughness to be a soldier on a battlefield, or to volunteer to be one. I can also see how it takes an amoral psychopath to do the same. But I cannot see how it takes toughness to follow orders and kill people (hundreds of thousands at a time in the case of the Hiroshima and Nagasaki bombings Dan discusses), or to give such orders. On the contrary, in a culture which demands such things, it takes bravery to refuse. The deserter may be a coward, but he may braver in a way, no? Most people do not have the courage to go AWOL or burn their draft card.
And contra the notion that we have not the willingness to do what is necessary the way our “greatest generation” grandfathers did, I find no shortage of Americans who (rather flippantly) would love to bomb the whole middle east (minus Israel, of course) into oblivion.The question is, are they “tough” or psychotic? Or perhaps both? And can technological civilization afford such attitudes?
Finally, while I think Dan’s notion of “toughness” is confused, he discusses the concept in a laudably value-free manner.
Second, a comment on a recent EconTalk podcast about the lamentable state of current econometrics:
I’ve been listening to EconTalk for more than a year now, and I’ve heard you become increasingly skeptical about empirical work in economics, leading you to proclaim that “economics is not a science.” The implicit assumption is that only natural sciences like physics, which work by inducting general laws from empirical data. As far as I know this is a very modern, 20th-century view of science, where social sciences such as economics (formerly “political economy”) suffer from “physics envy.” The older view of science denoted any systematic investigation of phenomena.
Thanks for the great work, and I look forward to more fascinating shows in the future.
February 5, 2010
Party at the Fed! EconTalk’s Russ Roberts and Spike TV producer John Papola co-wrote this rap battle between Keynes and Hayek.
January 6, 2010
HBO’s The Wire is hands down my all-time favorite television show. Somewhere in the back of my mind I’ve begun writing an essay on the sociopolitical implications of the show might be in light of libertarian theory, to be called something like “Hegemonic Bonds: The Politics of Obedience in The Wire“. Now, despite the fact that the show’s creators favor the abolition of the drug war, as libertarians do, I recognize that the show’s politics are progressive, not libertarian. But the portrait of political institutions is about as cynical as any libertarian could be. And the problems appear to be structural in nature, so the show is pessimistic about “reform” as well. Creator David Simon has been explicit that the show is a critique of American institutions, saying that The Wire is
really about the American city, and about how we live together. It’s about how institutions have an effect on individuals, and how whether you’re a cop, a longshoreman, a drug dealer, a politician, a judge or a lawyer, you are ultimately compromised and must contend with whatever institution you’ve committed to.
I’ve been watching the commentaries on the DVD lately, and its clear that Simon thinks that the show contains a radical critique of capitalism as well. At one point in the commentary, he states the show’s message as “raw capitalism is not a social policy”, and during a panel discussion, television critic Ken Tucker calls Simon a “Marxist”. Now, let’s set aside the issue of whether capitalism and the free market are the same thing or not. Someone like Kevin Carson would argue that they are not, but it’s clear that Simon means both (probably the question has never occurred to him). As a critique of capitalism in the Kevin Carson sense (what has been called “Political Capitalsim”, the show is right on, but as a critique of capitalism in the Michael Moore sense, the show isn’t even in the ballpark.
First off, the institutions portrayed are all political ones, not just in the usual sense, but in the way that sociologist Franz Oppenheimer distinguished between the “political means” and “economic means” of gaining power, where the former involves the use of force. When local governments tear down housing projects to give away the property to developers, this may in some sense be an act of capitalism, but it is in no way an act of the free market (which would include property rights for those displaced), presumably what Simon means by “raw capitalism” as a social policy. Second, The Wire goes to great pains to make comparisons between inner city drug gangs and the modern corporation. Okay, but the most elementary argument of drug war critics is that the more we try to crack down on the trade, the more violent business becomes. Businessmen who deal in illegal substances deal in an environment where state authorities are trying every day to destroy their livlihood. Is it possible to imagine a more regulated industry?
Another flaw in the show’s politics I’ve become increasingly aware of is that it fails to show how much the surveillence techniques it showcases can be abused. Part of this is just a constraint of its story, since the guys they are chasing are legitimately bad guys. And while the show admirably shows the danger of police brutality, it fails to indicate the police avarice that is ever-present in the war on drugs, in the form of asset seizure.
December 31, 2009
Hey, have you noticed that we never hear the phrase “Free World” applied to Western Democracies anymore? Maybe it’s because the U.S. doesn’t have another superpower to wage a propaganda war against, or maybe such a lie is just too damned obvious these days. Maybe we don’t really care if we are free or not. At any rate, it’s interesting to see articles not written from a radical perspective employing the term “Authoritarian Democracy” to our society. I agree with the article’s basic premise, that we (or rather that section of the bourgeoisie whose matter) have traded economic well-being for liberty. The main evil is identified with the neoliberal economic policies that came in with Thatcher and Reagan, which fits in nicely with the journalistic zeitgeist. Not that this is wrong, but rather too narrow. First of all, Keyensian macromanagement (or “macromancy” as the witty Sean Corrigan has called it) offers perpetual GDP expansion (and of course Jobs! Jobs! Jobs!) engineered at the commanding medium-heights while holding their nose at the “free market”. “Liberal” administrations have been as much gung-ho globalizers as “conservative” ones. Secondly, just because the power elite offers a trade-off between a charge card and what certain of our forebears knew as the “Rights of Englishmen” doesn’t mean that that the choice is real or necessary. And the article’s seeming conclusion that the whole mess is just a big tax dodge by the rich surely misses the point by a long shot.
But the takeaway message here is to not define freedom narrowly. It is worth considering, for liberals, that mass elections don’t mean freedom in any sense that matters in our daily lives. And libertarians who feel that their main job is forever spinning apologetics for “capitalism” ought to ponder the “Singapore model”, where lax economic regulation is mixed with extreme moral authoritarianism.
Nothing is allowed that the government fears might threaten public order or social stability; and the government’s sensitivities on this score are very delicate indeed. Spitting, chewing gum, yelling, or failing to flush a toilet in a public place; overstaying your visa; depicting (never mind engaging in) certain sexual acts; rashly employing irony or sarcasm; and, most important, criticising the government in ways the government deems not constructive – all these are swiftly and severely punished. Petty offenders are fined or caned; overzealous opposition politicians or trade unionists tend to be imprisoned for long stretches. Indiscreet newspapers or blogs are served with defamation suits. The local media is almost entirely under the control of state-owned companies, and even international publications like the Economist and the Far Eastern Economic Review watch their steps very carefully to avoid being charged in court. As Kampfner observes, Singapore “requires an almost complete abrogation of freedom of expression in return for a very good material life.”
December 16, 2009
I’ve been revisiting Robert Shea and Robert Anton Wilson’s 1975 paranoid phantasmagorical comedy (I refuse to call it “science fiction”), Illuminatus! and had to share this hilarious bit. The novel features a number of talking animals, including a tribe of anarchist gorillas, one of which explains their reticence in dealing with humans because of their politics:
If it got out that we can talk, the conservatives would exterminate most of us and make the rest pay rent to live on our own land; and the liberals would try to train us to be engine-lathe operators. Who the fuck wants to operate an engine lathe?
No doubt some Ivy League Keynesian would be appalled at the low employment numbers among the gorillas and the deflated price of bananas.
*Yeah, I know gorillas aren’t monkeys, but who wants to let a good title go to waste?
October 16, 2009
Let’s go from least to most egregious. First, Rachel Maddow, a prime example of what Kevin Carson terms “goo-goo” liberalism. He writes:
Recently Rachel Maddow mentioned Congressman Jim DeMint’s planned trip to Honduras, where he intended to encourage coup leaders to defy the U.S. government.
Maddow prefaced her remarks with a long homily on how badly the U.S. government hated military coups, because they ran counter to everything the U.S. government stands for, were so abhorrent to American values that the U.S. government cut off all ties to such repugnant pariah regimes, and blah blah woof woof.
This is amazingly stupid—almost as stupid as the Congressman I saw back in the ’90s, speaking in regard to Clinton’s Balkan wars, who said he’d learned in school that the U.S. never went to war to obtain a square foot of territory or a dollar of treasure. The U.S. government is opposed to coups, especially against democratically elected leaders? Yeah, maybe in the Bearded Spock universe. Um, ever hear of Armas? Suharto? Mourão Filho? Pinochet? I’m sure all those nice folks in the U.S. government cried over such coups, just like Iron Eyes Cody watching somebody litter Central Park—or rather just like Lewis Carrol’s Walrus, weeping even as he polished off the last of the oysters.
Maddow also suggested it was “treason” to encourage another government to defy the policies of the United States government.
Carson adds that “It’s usually Olbermann who’s prone to this kind of liberal mirror-imaging of right-wing know-nothingism”, and I have noticed a more critical attitude toward Obama, however tepid, on her show than on others. Still, she’s part of the choir for sure.
Then there’s our good friend Michael Moore, always playing trenchant critic of the status quo while stumping for what is in effect a slightly more left-wing version of it. From what I have read of his new film Capitalism: A Love Story (no, I have not seen it), he shows an American government owned by Wall Street, and yet peddles the line that the election of Obama is a sign of Hope and Change. And yet who do we find right near the top of Obama’s campaign contributors? That’s right, Goldman freakin’ Sachs! You can rest assured that if McCain were president, Moore would have mentioned this fact in his movie. But Democrats just can’t be corrupted like that. Even the NPR review I heard pointed out that Obama’s policies are largely the same.
Thomas Naylor of the left-secessionist Second Vermont Republic likes the critique of Capitalism, but not the Big Government conclusions.
Moore is fully cognizant of the fact that the American economic machine is driven by money, power, speed, and greed. Unfortunately, he is a lot less savvy in his grasp of the problem of size in America. Moore appears to be oblivious to the fact that our country, our government, our cities, our corporations, our schools, our churches, our military, and our social welfare system are all too big, too powerful, too intrusive, too insular, and too unresponsive to the needs of individual citizens and small local communities.
The reason Moore is blind to the “problem of size” (and the problem of power) is that he is obviously not some anti-establishment rebel, but an authoritarian progressive. Another NPR reviewer, Kenneth Turan, points out:
In the end, perhaps the most startling thing about Capitalism is that Moore stands revealed not as some pointy-headed socialist, but as an unreconstructed New Deal Democrat. He admires Franklin D. Roosevelt, believes in increased democracy and opportunity, and feels that the decades-long weakening of unions has fatally weakened America.
For my money, I’ll take a pointy-headed socialist any day, many of whom actually believe that it was FDR’s incorporation of unions as a people’s movement into a managerial-capitalist structure that led to their ultimate weakening. Naylor’s article also quotes Moore as saying his major hero is Abraham Lincoln, which is quite revealing if you know anything about Lincoln’s economic policies, which were essentially mercantilist, and defined by Murray Rothbard as “a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state.” If I may do a bit of shotgun revisionist economic history here, one could argue that the Hamilton-Henry Clay-Lincoln economic nationalist and pro-big banking philosophy led in a direct line to the Goldman Sachs’ America we have now. But could you make a hit movie about that?
Finally we have the selling out of the liberal anti-war movement in the Obama feel-good age (and isn’t he really like the Reagan of the left?), as Code Pink goes to Code Yellow. Founder Medea Benjamin is now thinking it might be a good idea to keep the war in Afghanistan after all, after former Karzai “Minister of Women” Masooda Jalal told her they needed more aid and more troops. Well, if the Minister of Women for a U.S. puppet says so! Medea may have just realized, along with authoritarian progressives all across the country, that this is the perfect war for her. As Anti-War.com’s Justin Raimondo writes:
This is a project sure to warm the hearts of “progressives” who long to do the same right here in the US – lift up the starving masses and pull them (forcibly, if necessary) into modernity. In the meantime, however, they’re content to settle for Afghanistan as a target of opportunity, and a kind of experimental laboratory in which to perfect their social engineering skills.
Added to this “humanitarian” impulse is the tremendous pull of identity politics, which dictates that something must be done about the status of women in Afghanistan – and if the US army does it, well then, Benjamin will hold her nose and overcome her distaste for the flag they fly long enough to applaud the “liberation” of Afghan women. Has a more appalling hypocrisy ever been conceived?
You may have noticed a theme in all these stories: a naivete in the face of power on the part of liberals, as long as that power says it is working for “democracy and opportunity”. At least, I only hope it is naivete. It could be that they know full well what they’re doing. It’s worth quoting again one of the most insightful points about the contemporary liberal mentality I have read, from Paul Gottfried’s After Liberalism: Mass Democracy in the Managerial State:
Like other contemporary social democrats who call themselves liberal, Rawls fails to discuss power. . . . The real reason, I would argue, is that liberals do not want to be seen as imposing their will upon others. They are philosophically and temperamentally uncomfortable with the power they both exercise and expand.
August 30, 2009
Sheldon Richman has a good FEE piece on why Obama’s rhetoric about “competition” and “choice” and “options” in health care is just a lot of smoke up your ass. It’s important to note that this is not a debate over a new “socialist” reform of what is a currently “market” system. He writes,
what Obama proposes is more of what we already labor under: corporate-state bureaucratic decision-making. The status quo is not the free market. It is a system of government-business collusion that, among other things, welds workers to their employers. Obama’s scheme would simply be more of the same. The reason Big Pharma and Big Insurance favor the scheme is that everyone would be forced to buy their products or coverage for their products, with the taxpayers picking up most of the tab.
The statement that our system “welds workers to their employers” jumped out at me, since it is yet another sounding of the Procrustean Theme.
It’s also a good time to revisit an article about why big business loves big government, written from a non-libertarian perspective.
And over at EconTalk, David Brady had an interesting perspective on why we can’t have a European-style system and why any “reform” in America is bound to displease everybody. The countries that have nationalized health care mostly got into the game just after World War II, ironically when prices were low and competition was high compared to now. But their systems worked by excluding a great deal of options to consumers of health services and, in a Crisis and Leviathan sort of “ratchet effect”, people got used to that. They did not clamor for choice, unlike Americans, who felt- and need to feel- like they had lots of options even as our bastard half-cartelized medical economy saw prices going up and up. Hence Obama’s appeal to market virtues like competition, acting as if the government were just another firm on the market (and in the corporatist context, they sort of are).
And finally, Roderick T. Long on a previous health care “crisis” that was “solved” by the government.
P.S.- If you’ve happened to stumble upon this post and are annoyed or offended by its stubborn attempt to derail the humanitarian efforts of the White House to bring about Universal Coverage, they have made it easy for you to drop the dime on me and my little blog. From Whitehouse.gov:
There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to email@example.com.
Don’t you worry about ratting me out. A Terrible Blogger thinks that no publicity is bad publicity, and would love to have someone from the Washington power elite follow his ramblings and ravings. In the crowd I hang with, my status can only go up!