Engels on the Election

"The tenacity of the Yankees, who are even rehashing the Greenback humbug, is a result of their theoretical backwardness and their Anglo-Saxon contempt for all theory. They are punished for this by a superstitious belief in every philosophical and economic absurdity, by religious sectarianism, and by idiotic economic experiments, out of which, however, certain bourgeois cliques profit." F. Engels to Sorge, 1892

(thanks to Armagan Gezici for posting this gem)

(the full letter by Engels can be found here)

Rand Paul, Inchoate Marxist

Rand Paul, on Election Night, Nov 2, 2010:

We all either work for rich people or sell stuff to rich people. So just punishing rich people is as bad for the economy as punishing anyone.

cf. Karl Marx, from "Wage-Labor and Capital":

The labour power of the wage-worker can only be exchanged for capital by increasing capital, by strengthening the power whose slave it is. Hence, increase of capital is increase of the proletariat, that is, of the working class.

The interests of the capitalist and those of the worker are, therefore, one and the same, assert the bourgeois and their economists. Indeed! The worker perishes if capital does not employ him.....

As long as the wage-worker is a wage-worker his lot depends upon capital. That is the much-vaunted community of interests between worker and capitalist.

(Has the point not been made? Still? How bad is the hostage mentality in America today? "Treat our masters well, lest we be treated worse!" And the thought still cannot be formed -- abolish that relationship?!? The thought still cannot even be conceived of, let alone expressed?!?

Let's make it clearer still: "As long as the wage-worker is a wage-worker his lot depends upon capital." The self-evident conclusion: abolish the institution of wage-labor. There can be no true democracy so long as the many remain dependent upon the few. For what is democracy if not the equal distribution of authority?)

Late Fourties Capitalist Propaganda (Or: On Labor and Weenies)

In more than one post so far, I've expressed my, let's say, frustration (to say the least) with which the manner in which the institution of wage-labor (more commonly known as the "job") is taken as an unquestioned given.

This is of course when ideology is most effective -- i.e., when it cannot even be seen. That is, when particular historical forms are assumed to be constant, ahistorical, unchanging, etc. Or, further still, when such assumptions are not even articulated; they operate at an unconscious level.

This video, entitled "What is Capitalism?," I think well-illustrates the point. Its from 1948. (I think I first learned of this video from the subject of this blog.) It is, let's be clear, capitalist propaganda. An expression like that might seem shopworn to some ears, but it clearly fits the bill. That is, it is constructed to sell capitalism, or persuade people of its virtues, while at the same time obscuring some its most essential features. I decided to use this video when I taught a class in the History of Economic Thought.

If you watch the video, you'll see that it consists of a (mock) portrait of a terribly earnest and engaged discussion among high school students about the definition of "capitalism." They use, as an example, a visit to Mr. Brown's grocery store to buy "weenies" for the class weenie roast. After arguing vigorously (and letting us see their visit to his store) they come up with the following list of defining features of "capitalism":
(1) Private Property
(2) Profit motive
(3) Competition
(4) Freedom of contract
(5) Government-enacted laws granting rights (including certain Constitutional rights) to items #1 and #4

And, they conclude, that (1)-(5) adds up to (6) "Free Enterprise" (which, of course, is a much more attractive sounding term than "capitalism.") (Incidentally, #5 is a rather sophisticated observation-- at least relative to what most economists generally discuss. Certainly they failed to recall it when administering so-called "shock therapy" to the former Soviet Union.)

After playing this video in my class, I listed these features on the blackboard. I asked my students: Is there anything else you'd add? Or does this seem like an extensive, and exhaustive, list?

Now, on the one hand, this was one of those "guess what the teacher is thinking moments," which, as a student, I often hate. At the same time, I did want to get them thinking about what might be missing.

Finally I asked them -- who works in Mr. Brown's store? Where are his employees?

In fact, in this hypothetical, Mr. Brown, is a sole proprietor: he is self-employed, runs his own store, and has no employees. Now, while this is not entirely unheard of (there are, of course, self-employed people) it cannot in any meaningful sense describe capitalism. Most people earn their living by having a job and working for an employer. Most people are not self-employed.

This fact should be patently obvious to everyone. Yet none of my students thought of it. I recall saying to them that this might simply be because most of them had not entered the labor force yet. But I also hazarded a guess out loud (and admitted that this was just a guess) that even if you showed this video to someone who had been working at a regular job for many years, they'd miss it. And that's simply because this video is exceptionally effective. The place that people spend the majority of their waking lives -- the workplace -- and the attendant institution of the "job" (or wage-labor) is entirely eclipsed. All other features of capitalism (those that, at least to many, seem to be emblematic of "freedom" and "individuality" -- e.g., freedom of contract, the right to own one's own property, etc.) are highlighted. But the essentially hierarchical and undemocratic conditions of the workplace -- which everyone knows from their everyday, lived experience, are nonetheless completely obscured. Again, it strikes me as remarkably effective propaganda when a video can make people forget something that they experience in their everyday waking life.

(There is, as it happens, one interesting moment where an employee is actually pictured. He is a car mechanic. He says: "Freedom of contract? Don't know about that. We've got the union and seniority! I make a living -- I should worry." And goes back, worry-free, to working on the car. Get it? Not terribly subtle. Unions = bad.)

I should note that this treatment of wage-labor as being merely incidental to (rather than essential to) capitalism is entirely in keeping with treatments in standard economic textbooks. And not merely because it is continuously assumed (erroneously) that a market must necessarily entail a labor market. But also because "labor" is treated as a commodity just like any other. Capitalism entails the buying and selling of commodities, all of which are subject to the forces of supply and demand. Why single one out? Why single out "labor"? Under the logic of standard neoclassical economics, we would have just as much right to single out "weenies" as we would "labor." (I could draw a labor supply curve no less easily than a weenie supply curve. As a formal matter, they are exactly the same.)

But the treatment of labor as no different than any other commodity is absurd -- and everybody who works for a living knows this. Karl Polanyi has a chapter in The Great Transformation in which he calls labor a "fictitious commodity" -- but one need not read Polanyi to get the point.[1] One merely has to experience selling one's self (one's "labor-power" or capacity to labor) on a daily basis. It is a strange discipline indeed (that of "economics") that would formally equate the submission of one's creative capacity to another's authority with the buying and selling of weenies.

But such is the state of the discipline known as "economics." And it is, in my opinion, one of the absolutely key reasons that this discipline must be re-constructed. I'm hoping, at some point, we get around to that.


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Note 1: It may nonetheless be worth quoting Polanyi here. Noting that a commodity is, by definition, something produced for sale, labor, he observes, does not fit the definition: "Labor is only another name for a human activity which goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life..."

It is, of course, an absurd contention that the act of caring for and raising human beings so that they have as a full a complement of "human activities" as possible is (in contemporary society) with the intention of producing a commodity for sale. Other motivations are typically imputed -- the desire to, say, have, love and care for one's children being just one. I'd even go so far to say that the postulation of any other reason -- like producing a commodity for sale -- is a description that most people would find offensive. But it is a description that fits in very comfortably in the language of economics. Indeed, the matter is yet worse than that. Labor, as economics deems it, is not merely a "commodity" -- it is a "factor of production" or a "resource." Human beings, insofar as we are workers, are mere resources. We are to be used for the benefit of "the economy." (And here I thought the purpose of "the economy" was to serve people, not vice-versa.) People as such (with full agency and subjectivity) disappear insofar as they are workers. In fact, the only time human agency appears, in economic discourse, is insofar as we act in our role as consumers. There, according to economics, we are acting to satisfy our needs. But insofar as we are workers, we are mere "resources" to be used. I still remain astounded at how language which would otherwise be morally offensive can pass as innocent, purportedly value-free "science."

An illustration: recently, the Fed issued a statement saying they anticipated a "...gradual return to higher levels of resource utilization." This is their way of saying they expect unemployment to decrease. Now, tell me -- when people complain about joblessness, is that the nature of the complaint? Do people carry protest signs saying, "hey, I'm a non-utilized resource -- Use Me!" (Maybe we should. Maybe that would get their attention.)

"More"

I often wonder whether there is more commonality across the ideological spectrum than might otherwise seem the case.

For example, conservatives sometimes articulate a critique of the dissolution of social norms and bonds. But, then again, so do liberals or radicals. That is, both the "left" and the "right" seem to find some despair in modern culture, and yearn for "community" at least in some sense. The "traditional values" rhetoric articulated by conservatives is, to be sure, often nothing more than a cloak for sexism, xenophobia and homophobia. But I am not convinced it is entirely that. When conservatives rail against, for example "Hollywood," and the perceived attendant degeneration of culture, they are, it strikes me, concerned (at least in part) about the dissolution of human bonds -- and, though they would not put it this way, the commodifcation of culture, and perhaps of humanity itself.

And, of course, this is an impulse that guides many on the left. The increasing commodification of culture seems to dissolve all that is recognizably human. "All that is solid melts into air, all that is holy is profaned." (Marx's rather famous description of the sheer brute and transparent conditions of commodification and exploitation under capitalism, as written in The Communist Manifesto.)

Am I being too Pollyanish about finding a bridge between left and right? Perhaps. But occasionally I see works of art that suggest that there may, in fact, exist such a commonality.

One of those works of art is a short video called "More." For a silent, stop-action, claymation, six-minute film, it covers an impressive number of topics. These include: (1) happiness as a commodity to be bought and sold, as opposed to being found in human relations; (2) how the spark of innocence -- or perhaps, of one's soul -- that exists in childhood, can become extinguished in adulthood, and (3) the socio-economic structure that facilitates (1) and (2) -- such structure, specifically, being the relationship between worker and boss under capitalist relations of production.

The clip I linked to above is a relatively recent upload on YouTube. I wish I could find the earlier uploads. There were far more hits, and far more comments. What I recall from those comments was that: most people took away points (1) and (2). But fewer, as I recall, took away point (3), even though it is explicit (to the point of caricature). To me, this is a shame; for it seems impossible to speak of reclaiming our humanity without simultaneously speaking of the dehumanizing forms of socio-economic institutional relations.

Regardless, I nonetheless regard this short video as testament to the fact that there are certain common values that animate both the right and the left -- i.e., all of us.

It also says something additional about the institution of wage-labor that I barely alluded to in my earlier posts. In my earlier posts, I spoke of the ways in which wage-labor necessitated irrational social consequences -- specifically, the imperative for growth -- or "More" (the title of this video) -- irrespective of whether people actually desire "more." Here, however, lies another critique, namely, that the institution of wage-labor is dehumanizing. In Marx's language, we trade our essence for our existence (the classic statement of alienated labor, as articulated in the 1844 Economic and Philosophical Manuscripts)

In any event, after you watch it, tell me please -- do you think this video reflects values that animate political movements from both the left and the right? Or, again, am I trying too hard to find a bridge?

The Orwellian Language of "Job Creation" (Or: "Free Market" does not equal "Capitalism")

At the outset of almost every intro economics textbook, we are told that there, at bottom, two ways of organizing economic structures -- the "free market" and "command and control."

Economics typically likes to conceive of itself as a science in the strictly modern sense of the term. Normative claims are not to be conflated with positive claims. The evaluative is to be strictly separated from the descriptive.

As soon as it announces these laudable goals, it immediately, in that very instant, transgresses them. There are innumerable examples of this. The description in the first paragraph is just one. Do these two descriptions of economic systems sound value-neutral to you? Would you rather be free -- or commanded and controlled? The deck is stacked from the very outset.

But how else to describe them? Well, let's look at "command and control." One less loaded way of describing such a system might be to be call it a "planned" economy. Command and control implies an authoritarian structure. But what if the plan were arrived at through democratic means? Is democracy itself not a value? And can economic decisions arrived at via democratic means be, at all plausibly, described as a series of commands?

Now let's look at the "free market." This is typically taken to be synonymous with "capitalism." Of course, the first term has the word "free" in it -- so it's rather obviously more appealing. But is this equation of "free market" with "capitalism" a fair one?

The term "free" in free market refers to freedom from government regulation. The inability of economists to see power relations in any place other than state-citizen relations is a fantastic blind spot, at best. Economic relations are themselves power relations. And freedom and power are two sides of the coin. In any relationship (economic or otherwise), the more power you have, the less freedom I have. Can anyone who has worked in a capitalist economy say that they have not had this kind of experience? Is not the case that most people who work have a boss? Do we call the boss the "boss" for entirely arbitrary reasons?

But let me leave that aside for here (the meaning of "freedom"), since this is supposed to be a mere blog post. Let me focus simply on the term market. A market, if it is to mean anything, refers to mutual consensual economic transactions. Buying and selling.

If it is to be said that a market ("free" or otherwise) is to be equated with capitalism, then we have completely eviscerated the meaning of capitalism. The buying and selling of commodities is a phenomenon that we can find going exceptionally far back in human history. It even occurs (with merchant capitalists) alongside feudalism.

So what is it that marks "capitalism"? What new institution arises as recently as three centuries ago (at most)?

It is the institution of wage-labor. The analysis will be familiar to anyone familiar with a Marxist reading of history, but, ideological predispositions aside, it should be straightforward. What we start to see at that point in history is that labor-power itself becomes commodified. (I use Marx's term "labor-power" rather than "labor" because I believe it to be a better description of the process, and also analytically more fruitful. But I cannot go into the details of that analysis here.) Previous class systems entailed class exploitation, and the appropriation of surplus product by one class to another (e.g. the appropriation of surplus product by the Lord from the Serf), but it did not take the form the buying and selling of labor-power as a commodity.

What were the historically necessary conditions for the creation of labor-power as a commodity? Again, the story is familiar. Working requires tools and workspace (i.e., the "means of production.") If, by custom or tradition, one has certain rights to some access to the means of production (even if not formally recognized), then there is no necessity to sell labor-power. One need not do so, because one has the tools with which to employ one's own labor-power without selling it. But if no such access to the means of production is available (whether via custom, tradition, or formal recognition), then one has no choice but to sell one's labor-power to those who do own the means of production.

And this is the only description of capitalism that captures its essential features. It is the only description that distinguishes it from the selling of any commodity (which long predated the commodification of labor-power). And it is also the only description that accounts for the irrationalities and waste to be found in the system as a whole.

The above description is admittedly long, and likely laborious, at least for those reading this who are already quite familiar with the argument. But others are not. As such, this background history is exceptionally important.

Why? Because unless we make this history transparent to ourselves, it becomes impossible to imagine that work can be organized in any manner other than wage-labor.

Therefore, under conditions such as today, we find ourselves able to say nothing other than "give us more opportunities for wage-labor!" -- or, in more common parlance: "create jobs!"

But what does it mean to say that a capitalist enterprise creates jobs? It means nothing more than this: a class which has exclusive access to and ownership of the means of production permits other people onto their property (the workplace) -- hence my claim that the language of job creation is Orwellian. To "create a job" is simply to allow someone with no claim to the means of production to be permitted access to such means, so that they may enable the capitalist to produce a commodity. Nothing has actually been "created."

Put otherwise: to create jobs is not to create work. The need to work or labor is ahistorical. It is only the separation of the worker from the means of production that creates the illusion that something has been "created" when the owners of the means of production (the capitalists) allow the worker onto his property to produce commodities for sale. Absent that historical act of separation, we would not be under the delusion that something has been "created" for us.

But there is nothing necessary about this separation. It is unquestionably a historical fact; but it is not a necessity, neither economically or logically.

And we have already seen (at least from at least one post) the absurd consequences of this separation -- i.e., the necessity for GDP growth, even if that's not whats desired. We can thus avoid the irrational imperative for endless growth and endless consumption if we can change the way work is organized.

What conclusion should we arrive at? Cut through, rupture, disrupt and disperse, the entire language of "job creation." Stop begging the capitalist class to let the working class on to their property. The means of production must be held in common by those who work with such means (i.e., class itself must be abolished). To allow everyone the possibility of meaningful, rewarding work (financially, psychologically, and, dare I say, spiritually), everyone must have access to the tools with which to work.

This must be the demand. This must be the goal. How we get there is a matter of considerable debate. Perhaps I will return to the "how" in another post. But that we must is unavoidable, both as a matter of ethics, of rationality, and of bedrock principles for our continuation as a "species-being."

Some Cheery Thoughts On Reactionary Forces in America

In the midst of writing on matters economic, philosophical, cultural, and whatnot, it is impossible not to notice some of the scarier aspects of our political culture right now.

Some charming examples of xenophobia are in the news lately. One is this preposterous claim that illegal immigrants are coming over here to have "terror babies." That's right. The plot is that they will have the child here, so that they can be an American citizen. They will bring them back overseas somewhere, where they will be trained to be a terrorist. Then, when fully prepared, they will destroy America.

Another, of course, is the intense Islamaphobia in our nation today. It is actually deeply disturbing and alarming. For anyone not aware of just how intense and widespread it is (spreading throughout the entire country), watching this Jon Stewart clip might help bring you up to speed. Although I can barely even laugh (notwithstanding that he is, of course, doing comedy) because it is just so heartbreaking.

The latest in the not-knowing-whether-to-laugh-or-cry category: The Museum of Tolerance has come out in opposition to the proposed Islamic cultural center near ground zero. The Museum of Tolerance. Seriously. The Museum of Tolerance finds the Islamic cultural center intolerable. (NPR's "Wait Wait Don't Tell Me" had this take on the matter: "But in other news, an exhibit about the Museum of Tolerance just opened up at the Museum of Irony.")

As if Arizona's nativist antics weren't enough.

And here I am writing about wanting to move beyond capitalism, and perhaps towards something like a Solidarity Economy. And the question I ask myself is: What sense does it make to speak of such seemingly radical notions, when the country appears to be moving in such a fantastically reactionary direction?

Perhaps there is a slightly more optimistic way of viewing the matter. It's obviously not uncommon for reactionary forces to gain steam under poor economic conditions. So perhaps one way of viewing the matter is: if we can see another way out. If we can imagine another world, one in which economic relations are fundamentally restructured, such that the working class wasn't forever getting the shaft, maybe there would be less bitterness and hatred?

Maybe?

"I just want to live a humble life" (Or: Capitalism Requires Growth)

The alternate title of this post -- "Capitalism Requires Growth" -- should be non-controversial to any economist, whatever their stripe ("conservative," "liberal" or whatever other label they may chose).

What I'm interested in here is (a) why the statement is true, and (b) some of the implications of it.

Part of this is motivated by a discussion I had with a friend about my first two blog posts. His reaction was along the lines of (I think) that, while it may be true that people need to process economic reality in moral and quasi-religious terms, their insight is essentially correct -- namely, we have been living too well. We need to cut back (both privately and publicly).

But it strikes me as untenable to simultaneously hold that position while also defending capitalism. And the reason is that capitalism requires GDP growth. So, if one were to conclude that we are all (either individually or collectively) living beyond our means, and that we should consume less, then it necessarily follows that we must imagine a different kind of socio-economic structure.

So, why exactly does capitalism require growth? There are lots of ways of approaching this. But it seems to me that one of the most basic is the constant imperative for capitalist enterprises to introducing labor-saving technology (in Marxian terms, to increase the organic composition of capital.) This should not be a surprising fact to anyone. Capitalist enterprises do not hire people out of beneficence. They hire people because they need their labor to produce commodities (which they then sell.) If they can figure out a way of producing the same amount of commodities with less labor, they'll do so.

One conclusion from this: if a capitalist economy did not increase its output, unemployment would rise. That is, growth in GDP is necessary merely to sustain a constant level of employment. More simply, GDP growth is required for people to have jobs.

Now, this strikes me as irrational. Just irrational. It always has. Many economic textbooks open with a description of human nature such that we are insatiable -- our desires always reach beyond what we have. "Scarcity" (which economics loves to focus on) is often defined this way. (To be sure, with respect to any particular commodity, the standard theory is that of diminishing marginal utility. As such, for consumption of any given good the standard economics approach concludes that there will be a satiation point. But with respect to consumption generally, non-satiation is often assumed.)

But what if this contention were incorrect? What if it were possible for us simply to be satisfied with what we have, and not want to consume more? The entire system would be at risk of collapse. Just reflect on that for a moment. We live in an economic system that requires endless dissatisfaction. How sane does that sound?

Not long ago, I recall reading a New York Times piece on the difficulties that Japan continues to have coming out of the pain of its "long recession." And what was the threat -- contentment. People aren't buying enough.

One Japanese college student expressed the sentiment: “I’m not interested in big spending...I just want a humble life.”And that sentiment is a threat.

Note that nothing I've said here about the irrationality of capitalism relies on one other obvious feature of it: it's continual penchant for recession, depression, and crisis. That is, my point is that even without investigating those phenomena (on massive display at this moment in history) it seems to me that we have something deeply irrational on our hands, But, of course, the irrationality is most apparent during periods of deep economic crisis -- such as todays. The outcry over joblessness is something that the political establishment is compelled to respond to. And the response is always to "grow" the economy. But note that the public demand is not for growth. It is for jobs. "Growth" under capitalism, is the only means by which work can be made available. This is something that is agreed to by both liberal and conservative economists (with the only dispute between the two regarding whether the public sector can facilitate growth.)

When I say "under capitalism" what exact definition do I have in mind? Different people have different definitions. I am using a definition by which an essential defining feature is the institution of wage-labor - i.e., what we call the "job." Put otherwise, the irrational consequences I am herein tracing follow not from the transhistorical fact that people must work to produce to produce wealth, but from the particular institution -- known as wage-labor -- in which work has been conceptualized and cabined. And cabined to the point where it has become near impossible for people to imagine it in any other form. But it is absolutely essential that people envision other institutional arrangements for labor, if we are to break free of this deep irrationality. (The whole language of "job-creation" is so ideologically limiting -- or perhaps, better put, a massive ideological construct -- that it makes it exceptionally difficult for us to think otherwise. That language is nothing short of Orwellian. I'll follow that up in another post.)

This is why I have never been entirely satisfied with anti-consumerist movements. (Such as The Reverend Billy and the Church of Stop Shopping. If you've never seen them check them out. They're very funny.)

Such movements are fine as far as they go. But they don't seem to draw out all the implications from their argument. If they are right in suggesting we should find a way to be satisfied with less, then they are, in effect, arguing for something that could cause a collapse in the economic structure. So just how sound a structure is that?

Capitalist enterprises are forever looking to expand markets not only geographically, but demographically. For once a market is satiated, others need to be found, if the economy as a whole is to continue functioning. (One of the more disturbing consequences of this is the practice of direct marketing to children. Some of the best work on this subject has been done by economist Juliet Schor. Here is just one illuminating interview with her on NPR from some years back, highlighting just how manipulative the practice is.) Now, it is all well and good to inveigh against these and similar practices of market expansion. And we most certainly should. But, as I've suggested above, the relevant question that we sometimes fail to ask is: What if we were successful in stopping these practices? I've already noted above what, it strikes me, is the inevitable conclusion -- namely, a blow to capital accumulation. Thus, if we believe that there has been excess consumption, we are, whether we realize it or not, making an argument against the purported rationality of the economic system we call capitalism. And this is where, it strikes me, "conservatives" fail to realize their own contradictory reasoning. (Namely, in holding position (a) that we all need to "cut back" and (b) that capitalism is a rational system)

[I'll conceded here that I am at risk of conflating growth in consumer goods with growth in commodity production generally. Obviously an enormous amount of economic activity is driven by growth in capital goods, not merely in consumer goods. However, I am somewhat skeptical regarding any thesis that suggests that growth in the capital goods industry, however fast it may occur, can entirely make up for any shortfall in the growth of consumer goods -- simply because, the production of capital goods cannot be profitable if, ultimately, consumers do not buy the commodities which the capital goods are used to make. Regardless, even if I am wrong, and growth can be almost entirely in capital goods, there is still the necessity for growth, when it is not growth itself that is the issue when a capitalist economy goes through a recession -- it is the fact that people need work. That's the source of the deep economic, sociological, and psychological damage -- again, growth is the only means by which to meet that need under capitalist conditions, even if increased output of commodities is not desired. (The "need" I am talking about here is a complex one, but it is at least two-fold: first, the need for material security, and, second, the need to labor. To express the latter as a "need" might seem surprising, insofar as the assumption is made that labor is a pure "disutility." And yet this disregards an essential aspect of our natures, i.e.., the aspect in which we are creators, inventors, producers. This of course is the sense in which Marx describes labor as fundamental to ourselves as a "species-being" in the 1844 Economic and Philosophical Manuscripts. Always terribly curious to me is how academic economists in particular, who clearly could be making more money in the private sector, are still happy to present work as simply a "disutility," and analyze solely in terms of its "opportunity cost" of "leisure." But perhaps that subject will be reserved for another post)]

(As for the separate question, which might be implicit above, of whether my view of the dynamics of capitalism shows an "underconsumption"-theory bias, a la Rosa Luxemburg, and fails, for example, to fully appreciate attacks on that theory by Marxist scholars the likes of, say, Anwar Sheikh -- I'll let readers conversant on the literature have at it in the comments if they like.)

Just one other point regarding the hypothesis above that our current economic problems result from the fact that we, in some sense, have all been living too well, and that we need to "cut back": this simply cannot be the result of any material constraint alone, simply because of all the wealth that has been produced in the world economy. But that wealth is distributed in a fantastically inegalitarian fashion "The combined GDPs of the world's 9 richest countries (US, Japan, China, Germany, France, UK, Italy, Russia, and Spain) totaled less in 2009 than the investible assets of the world's [High Net Worth Individuals]" notes Richard Wolff, in "Economic Recovery for the Few." The constraint therefore cannot be a material constraint; it is, rather, a social constraint, i.e., an irrational socio-economic structure that makes luxury a condition of necessity.

Now, it is all well and good to point out irrationalities inherent in capitalism. But, comes the question, What is your proposed alternative? (Since, not long ago, everyone was saying There Is No Alternative -- i.e. TINA)

It's an important question. The answers are suggested to me in movements generally called part of the Solidarity Economy. Why solidarity economy practices might be (a) more rational (b) more meritorious, and (c) less wasteful than capitalism is a subject that I'll perhaps take up in a different post.

The Economic Wisdom of South Park

In my first post, I discussed (among other things) the kind of moral outrage inspired in this culture in the face of people "spending beyond their means."

In that post, I referenced a piece "In the Long Run, We Are (Not) All Dead." I chose it for a number of reasons, not the least of which was because it directly attacked Keynes on (what it considered) moral grounds.

But I just recently recalled a South Park episode, one that makes the point better than anything else I've seen, and better than anything I could write. It's called "Margaritaville."

It's sheer genius. Watch it if you can.

Residents of South Park become convinced that the reason for the economic crisis is "frivolous spending." And it not only becomes a moral issue; it becomes an explicitly religious issue. Randy walks around wearing sheets, preaching to the residents of South Park, speaking in the language of the Old Testament. They all listen in awe. Through our "needless spending", he preaches, we have "forsaken The Economy." "We have become lovers of pleasure rather than lovers of The Economy" he thunders.

How to appease the "vengeful, unforgiving" Economy that we have forsaken? Abstinence. Self-denial. Abstain from "needless spending." "Instead of cars...we can get around on llamas. Instead of video games...our kids will play with squirrels!" (It's just hysterical. If you don't want to watch the whole episode, just watch that one clip)

When Kyle objects, saying we should all go out and spend more ("whichever of you guys that has never gone out and bought something frivolous go ahead and huck the next squirrel"), he is treated as a heretic. (Quite literally: "There's only one option. We have to kill the Jew")


Of course, given capitalist conditions, Kyle is right, and Randy is wrong. (When people start spending again, by the end of the episode, economic conditions in South Park improve.) Capital accumulation (typically called "growth") is a necessary (though not sufficient) condition for increased employment, and spending is a necessary condition for capital accumulation.

But such a state of affairs is sheer insanity. Under capitalism, luxury is a condition of necessity. (That is, for people to have jobs, the economy must grow -- entirely irrespective of whether some of the consequences of GDP growth are deleterious, or even whether such growth is sustainable over the long-term. But this is all the more reason to eradicate a system under which people must sell their labor-power to acquire the mere means of their existence. That is, it is all the more reason to rid ourselves of the institution commonly known as "the job.")

[To be sure I am not misread: I am not imputing an anti-capitalist sentiment behind this episode, let alone to South Park. In fact, I'd be very surprised if Parker and Stone held such a view. I am, however using this episode to (a) show how the objection to spending has a moral & religious fervor; (b) show how spending, rather than saving, is necessary to bring a capitalist economy out of a recession, and (c) to argue that, given all the consequences of (b) we should perhaps consider transforming our economic system. This show explicitly endorses claims (a) and (b), though not (c). Whether Parker and Stone would even consider something like (c) is something I can't answer. Further, I admit, I have here barely elaborated on, or made the case for, part (c). That will have to wait for another post.]

[Incidentally, this South Park episode is brilliant on yet other questions as well. If, for example, anyone reading this blog is unfamiliar with the debacle of mortgage-backed securities, just watch this episode. If you substitute the word "Margaritaville" for "mortgage," you basically have it. And the lampooning of the Fed is also just hysterical.]

The Moral Culture of Fiscal Austerity (Or, Capitalism's Double Bind)

The Obama administration has signaled that it will push economic policy in the direction of fiscal austerity, rather than increased Keynesian stimulus. Its reasoning: that's where the political wind is blowing

“Today, a new band of Mayberry Machiavellis has gained control, counseling President Obama to ignore the advice of his economic team and press forward with deficit reduction ahead of job creation.” And the reason for this shift in priorities is, evidently, due to the “public mood.” http://www.huffingtonpost.com/2010/07/06/mayberry-machiavellis-oba_n_636770.html (“Mayberry Machiavellis: Obama Political Team Handcuffing Recovery” by Ryan Grimm.)

And, indeed, there does seem to be a great deal of fury in America over government spending. It seems to send many Americans into a tizzy. The Tea Party is the most obvious example, but it is hardly limited to that quarter.

The question I want to address here is not whether the Obama administration has made the correct political calculation. Nor is it the question of what policy position is correct. (Although I will state parenthetically that – within the confines of a capitalist system – a position of fiscal austerity during a deep recession is simply absurd. At the same time, the qualification I add here – i.e., “the confines of a capitalist system” – is itself of enormous significance. But that subject, too, must be bracketed, at least for the time being.)

Rather, the issue I want to explore here is, What drives the American public to turn with such hostility to spending, and to embrace austerity with such zeal? I find it extremely difficult to imagine that it is due to a careful examination of what can sometimes appear to be esoteric economic debates – e.g., should we now be more concerned about deflation or inflation? What is the multiplier effect of extending unemployment insurance versus that of tax cuts? What were the causes of the Great Depression? It seems to me exceptionally unlikely that most Americans have studied these issues in great detail, if at all.

No, the objection to government spending is not on economic grounds. Instead, it strikes me as being on moral grounds. Specifically, America's puritanical heritage leads people to regard spending “beyond ones means” as itself a moral defect, or a defect of character. Indeed, the massive amount of consumer debt that has been racked up is commonly given as an account or explanation of the current economic crisis. (Never mind – at least for the moment – that consumer debt was the only thing that permitted American capitalism to function for the for the last three decades.) Spending “beyond ones means” seems to be equated with a lack of ability for self-control. It is regarded as a kind of licentiousness & permissiveness – perhaps even a form of promiscuity.

This is just my own cultural observation. I will not, at least in this space, try to prove it.

However, recently, while reflecting on this question, a gmail advertisement popped up on my computer. It led to a piece titled “In the Long Run, We are (Not) All Dead: The Anti-Christian Economics of John Maynard Keynes,” hosted by the web site of “The King's Community Church.” The piece is here: http://www.tkc.com/resources/resources-pages/keynes.html

I think it's worth reading.

A Post-Modern View of Epistemology within Economics -- from a Church?

First off, one of its opening claims is an epistemological position that by no means commands universal agreement. “Contrary to the popular saying,” argues author Ken Ewart, “'the facts' never speak for themselves, but are always interpreted through an individual's personal religious grid - their individual system of thinking and evaluating things.” Replace the phrase “religious grid” with something like “discourse,” “ideology” or “paradigm” and you have an epistemological claim that sounds an awful lot like (what many would call) post-modernism. Imagine, a post-modern epistemological position espoused by a church – and one that unequivocally holds certain religious beliefs (e.g., that Jesus was the Son of God) to be themselves objectively and unassailably true!

The author goes on to say that this epistemic stance “...seems especially true when it comes to economics, in that, as the joke goes, when you have four economists looking at "the facts," you're likely to end up with four different interpretations, and maybe six! Four different economists can interpret the facts differently because they each think through different grids. Each person's grid is ultimately a result of their [religious] faith.” Again, strike the second sentence and you'd be excused for believing you were reading the likes of (in the Anglo-American tradition), say, Kuhn or Rorty, or, (in the Continental tradition), Foucault.

Now, this view of epistemology (call it “post-modern,” “perspectivism,” “epistemic pragmatism” or what have you) is one that I happen to find persuasive. That is yet another issue that must be left aside here. For the moment, I only note this curious parallel between the epistemic position of an evangelical church and certain political economists and philosophers. (See, for example, the position taken by Marxian economists Richard Wolff and Steven Resnick in, among other works, their text “Knowledge and Class.”)

The Alleged Religious/Moral Worldview of Keynes

Having established that economists reach their positions due to pre-existing religious beliefs, and explicitly claiming that “Keynesian economics, like every other kind of economics or academic theory, is fundamentally religious [and] is built on a worldview,” Ewart goes on to examine the religious beliefs of Keynes.

Evidently, Keynes' views on religion were not subtle. He viewed Christianity in particular with outright scorn, calling it “hocus-pocus.” But the author goes further than that. He wants to show that Keynes hostility to Christianity led him to eschew morality itself. As evidence, he cites Keynes participation in the Bloomsburg group. Keynes describes his involvement in the Bloomsburg group as follows:

We entirely repudiated a personal liability on us to obey general rules. We claimed the right to judge every individual case on its merits.... We repudiated entirely customary morals, conventions and traditional wisdom. We were, that is to say, in the strict sense of the term, immoralists.

[Note: Ewart does not provide citations, so I cannot verify any of the quotations in his piece. I accept them as accurate only for purposes of this essay.] Further still, Keynes rejection of God and Christ did not only lead to the rejection of “customary morals” it led to “sexuality perversion” – by which Ewart means Keynes' homosexuality. Of course, per this logic, that is the final stop for someone who goes down the road of abandoning the church. Ewart explains:

In the first chapter of the book of Romans, the Apostle Paul describes the path a man travels if he is consistent in his rejection of God. Professing to be wise apart from God leads to "futile" thinking and "darkened hearts" and ultimately culminates in "a depraved mind" and "unnatural" sexual relations. There is an integral connection between a man's thinking and his sexual life. Keynes, along with many other members of the Bloomsbury group, was a homosexual. Virginia Woolf affectionately called the group "The society of buggers." Keynes' biographer, Robert Skidelsky, described the situation as a "sexual merry-go-round" as members commonly floated from one sexual partner to another.

The author has thus painted a rather stark picture: Keynes, having rejected Christian teachings, believed himself to be able to judge morality without God's injunction, which led down to the road to the ultimate sins of homosexuality and sexual promiscuity. And all of these, of course, are tied by the author to licentiousness and self-indulgence.

What does all this have to do with Keynes' economics? Everything, according the author. Keynes was, says Ewart, “obsessed” with savings. As economists are well-aware, the problem with savings for Keynes was that it can create, or worsen, a general glut in commodities – i.e., a recession, or depression. But Ewart believes he has found the real motivation behind Keynes' attack on savings – his proclivity (as Ewart sees the matter) towards instant gratification, and his failure to recognize the moral value of self-denial for future reward. He quotes another critic of Keynes as noting that The General Theory is a "...transvaluation of all values. The great virtue is Consumption, extravagance, improvidence. The great vice is Saving, thrift, "financial prudence."'

This failure to recognize the value in sacrificing the present for the future, according to Ewart, is directly traceable to Keynes' rejection of God – i.e., to his belief that we need no external moral authority.

Now, again, I can hardly expect to prove that the current pro-austerity sentiment in America is a moral one (rather than an economic one) based on one obscure article published by an evangelical church (and one based in England at that). But it is awfully telling. Indeed, according to Ewart, Keynes himself observed that predominate norms favor thrift over spending. He quotes Keynes as saying: "The morals, the politics, the literature, and the religion of the age [are] joined in a grand conspiracy for the promotion of saving."

Should we spend or save? Capitalism's Double-Bind

And yet, if indeed we feel compelled to chastise government deficit-spending on moral grounds, we simultaneously find ourselves encouraged to spend in our private capacities on economic grounds. Indeed, all economists, whether Keynesian or otherwise, realize that continued spending is necessary for the continual functioning of capitalism. (In Marxian terms, it constitutes a break in the circuit of capital.) The debate (between Keynesians and, say, Monetarists or New Classical economists) is merely whether government spending can take up the slack when private sector spending decreases. No one disputes that if private sector spending dried up, capitalism itself would collapse. Hence, when in recessionary or near-recessionary times, politicians of every stripe encourage us to spend. For example, after 9/11, one of the first things President Bush told us to do was to keep shopping (an awfully curious thing to announce after the murder of nearly 4000 people – unless, of course, one understands the imperatives of capitalism.) His father, George H.W. Bush in 1991, went on a sock-shopping spree (a public relations debacle), to encourage all Americans to do the same.

Spending is thus our patriotic duty. And yet, at the same time, it is a moral failing. How are we to navigate that kind of cognitive dissonance? No wonder the political discourse surrounding the state of the economy is so abysmal.

One way out might be to change the economic structures themselves. For an economic system that requires continued, perpetual, near-frenzied consumption for its very survival is surely, at its core, a diseased system. Perhaps then our real task should be to change that system.

How to implement that task? I don't know. I'll leave that, as well, to a future post. (Or perhaps someone would care to offer their thoughts?)