Month: February 2011

I am hoping that we have not taken full advantage of a week that is shortened not in time, but in class-room time, and therefore enjoys more time for reading. And, so, I am hoping that students are enjoying A Kojeve’s critique of L Strauss.

To gain the fullest enjoyment of A Kojeve, students should bear in mind that A Kojeve is as much a member of the Chicago School as is L Strauss. (It is A Kojeve who will set a fire beneath A Bloom student, Francis Fukuyama, and will bring Fukuyama to reconceptualize the revolutions of 1989 as neo-liberal revolutions; something, perhaps, that L Strauss could have imagined and helped generate, but which, in the end, he would have found repulsive, because banal.)

A Kojeve pulls through an important theme—the anti-Christian theme—that was already woven into T Veblen’s pack. We could say that this is pure Nietzsche, but it is more than this. What Strauss and Kojeve (and subsequently Fukuyama) bring to the table is a fundamental hostility toward what might be called “grace.” The language of “recognition,” of “honor” and “virtue”—whether in the form of Straussian isolation or in the form of Kojevean engagement—is always also the language that despises grace and therefore prefers the pagan/renaissance/heroic to the christian/medieval/servile.

Which makes the neoliberal obeisance to Christian values all the more curious; but, therefore, transparent. Christianity is a mere tool and Christians mere human beings to be used in the interests of Strauss’s (or Xenophon’s) “real men.” This does not entirely explain the preponderance of alpha male homosexuals—in the classical Greek sense—among Chicago’s intellectual elites. But it may help to explain why none imagined themselves “on the bottom” as it were. Christians are “on the bottom.”

The following is a transcript of the talk I delivered to the Friday Political Economy Colloquium sponsored by the Blum Center, University of California, Berkeley, on Friday, February 18, 2011.

The Prodigal Son and the Good Son: An Economic Parable
Presented at the Berkeley Friday Political Economy Colloquium
18 February 2011

Joseph W.H. Lough, Ph.D.
Lecturer, Political Economy
University of California, Berkeley

First, I would like to thank the Blum Center for sponsoring and Professor DeLong for planning this event. Professor DeLong called our attention in his opening remarks to John Maynard Keynes’ complaint against those who would counsel austerity and puritanism during a recession. I too can think of no better place to begin a discussion such as this than with Mr. Keynes’ complaint. The only problem is that, from our lips, or in any case from mine, this complaint cannot help but sound a bit hollow. What, practically or theoretically, do I know about austerity? What do I know about puritanism? Really. We might therefore do well to ask: does Mr. Keynes’ complaint amount to anything more than ad homonym. Austerity is foolish; puritanism is silly.

Ironically, Mr. Keynes’ ad homonym, if that in fact is what it was, may have carried more weight in Keynes’ day, in the 1930s, than it does today, because even among Keynes’ intellectual opponents—fiscal conservatives all—puritanism would have appeared even more foolish then than it does today. The retreat of secularism and humanism—we must admit—has blunted Keynes’ criticism: Austerity, foolish? Puritanism, silly? Not any more.

Let me see if I can therefore put the discussion on a different footing. Not Lord Keynes’ ad homonym, but, rather, the solid ground of science. Because, unless I am mistaken, there is something indubitably self-evident about economic austerity—something economists on the coasts—Harvard and Berkeley—sometimes referred to as salt water economists, are liable to overlook.

Don’t get me wrong. Although a product of Chicago, I am not myself Chicago. I am as “salty” as the next guy. But I do feel that, when we ask our audience to embrace one or another variety of profligacy, however packaged, we are, my friends, beating our heads against the storied brick wall. Here we would do well to draw a page from our colleague, the neuro-linguist George Lakoff. For when we say “stimulus” or “government spending,” what they hear is “irresponsible profligacy” and “government control.” Because, in their view, economic responsibility demands not a handout; indeed, not even a hand. Economic responsibility demands that the government give us the liberty to act and to fail and to suffer the consequences for our actions. That’s responsibility. That’s morality.

Immanuel Kant won this debate over two centuries ago. It went something like this: so you made a bad (or good) choice. If you are to be held morally accountable for that choice then you cannot blame it on (or count it up to) the material, bodily, conditions of your life; for if you do, then you must kiss ethics, religion, and, with it, all law and justice down the road. For there can be no condition placed on true moral freedom.

This, my friends, is the turnkey to the austerity and puritanism recommended by fresh water (which is to say, Chicago) economics. Without it, Chicago economics melts into a pool of mush. And, with it, all talk of austerity and belt-tightening. This was Amartya Sen’s message to us—a message for which he was duly awarded a Nobel Prize.

Do we embrace a negative, purely abstract, notion of freedom—freedom as the absence of constraint—i.e., the Chicago school? Or do we embrace a positive, substantive, notion of freedom—freedom as the conditions of the good life a la Amartya Sen? Aristotle or Plato? Hegel or Kant?

But this really doesn’t solve our problem, does it? For, as Professor DeLong has pointed out, there is a long list of economists quite willing, ready, and able to point out precisely where, empirically, austerity is simply wrong-headed.

But, wrong-headed for what? Surely, wrong-headed for long-term economic growth and full employment. Wrong-headed as well for general social welfare.

Aha. But, what about for freedom? But, you say, we weren’t talking about freedom. Oh, yes, we were. Or, rather, should I say, yes THEY were and are. For, really, it has always been about freedom. Even when Chicago’s Gary Becker and Milton Friedman herded their students into Graduate Course 301, the centerpiece of Chicago’s mathematically oriented economics program, with its peculiar preoccupation with price; it was always about freedom.

At which point, we could have—we should have—pulled out our big guns; not Karl Marx or John Maynard Keynes; not Locke and Hobbes. What I mean is Aristotle. Aristotle’s Politics, Book I, Chapter 1, the very first page. The heart and soul of Western thought and culture. The very core of the Core Curriculum itself; the tradition behind the Great Books Tradition: Aristotle.

Here, on page one, Aristotle asks, is the ruler of a republic simply the ruler of a somewhat larger private oikos, private economy, private enterprise? No? Why not? Because, says Aristotle, the ruler over a private enterprise, an oikos, is a despotes, a despot, the ruler over subordinates, dependents, workers, women, children and slaves. Therefore, writes Aristotle, you should never ever, ever allow a businessman to rule over a republic. No. The ruler over a republic is not the ruler over a somewhat larger private enterprise. The ruler over a republic is a ruler over others who like himself (or herself) is a substantive beneficiary of substantive freedoms.

But freedom here—as Amartya Sen points out—is not the absence of constraint. Freedom here is the substantive condition of its own possibility. You know it. You are its beneficiaries. A good education. Freedom from fear. Good health. Leisure—the time to read, to go to the opera, the theater, the ballet, MOMA, the symphony, to help your children with their homework, to go on bike rides, to work in the garden, to conduct research, the freedom to fail and to learn without the fear of losing one’s living.

These freedoms—so different, so nearly opposite the freedoms that govern the private oikos, the private enterprise—are the freedoms that compose the public sphere in a republic.

But, at the very instant that we began to understand these freedoms—for many of us it was upon reading Karl Polanyi’s Great Transformation—at that very moment we began to cede the field of economics to forms of thought and modes of research ill-suited to anything but Kant’s ethics of duty and deprivation.

At that moment—and this is pure Kant—substantive freedom lost its footing in economics. Not that we didn’t continue to talk about it and recommend it. But absent a coherent and compelling theory of substantive freedom, our talk and research lost out to their theory. We can cry “injustice” till we are blue in the face. We can yell—and we are right to yell—that families should not have to choose between health, safety, and education. But until we realize that morality for most of us intuitively entails the absence of constraint, we will almost certainly be preaching to the choir.

So. What is the answer? I don’t know. How do we begin to shift the weight of experience, at least where freedom is concerned, from the absence of constraint, to the conditions of freedom?

How do we shift our own research perspectives to supplement our quantitative documentation and modeling, with qualitative, critical, interrogation?

Which brings us back, I feel, to the story of the prodigal (or should we say profligate) son. All of you, I am sure, have heard the story; this is the story about the son who, having received his share of his father’s inheritance, leaves home and squanders it on the pleasures of this world. His father—who, in the story, represents God—is bereft and bereaved at his loss (not his economic loss, but his personal loss). But then his son returns, sick and broke. And what does the father do? The older son, the good son, counsels austerity and puritanical punishment. But what does the father—who, in the story, represents God—what does the father do? He slaughters the fattened calf. He throws a party. He welcomes his son with open arms. How utterly irresponsible!

Will $1.2T (or is it now $2T) lead us to full employment? I don’t know. But, is that the right question, even for an economist? Maybe the right question is instead: do you miss your son?

What we traditionally call state and government gives place here to pure administration—a state of affairs which Marx rightly predicted as the "withering away of the state," though he was wrong in assuming that only a revolution could bring it about, and even more wrong when he believed that this complete victory of society would mean the eventual emergence of the "realm of freedom."

Actually, it was not from the “complete victory of society” that K Marx expected the “realm of freedom” to arise. Nor did K Marx argue that it was from revolution that this realm would arise. On both counts, H Arendt relies too much on Siegfried Landshut’s apparently deliberate misreading and misrepresentation of K Marx’s actual words. These words, from Volume III of Das Kapital, read as follows:

In fact, the realm of freedom actually begins only where labour which is determined by necessity and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of actual material production. Just as the savage must wrestle with nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so in all social formations and under all possible modes of production. With his development this realm of physical necessity expands as a result of his wants; but, at the same time, the forces of production which satisfy these ,wants also increase. Freedom in this field can only consist in socialized man, the associated producers, rationally regulating their interchange with Nature, bringing it under their common control instead of being ruled by it as by the blind forces of Nature and achieving this with the least expenditure of energy and under conditions most favourable to, and worthy of, their human nature. But it nonetheless still remains a realm of necessity. Beyond it begins that development of human energy which is an end in itself, the
true realm of freedom, which, however, can blossom forth only with the realm of necessity as its basis. The shortening of the working day is its basic prerequisite.

Here it is not revolution, but the shortening of the work day, and hence the loosening of the grip that necessity has on human action, that helps introduce the realm of freedom; and, far from the social constituting this realm, it is Marx’s view, as it was Aristotle’s, that the social still occupies the realm of necessity.

Why, it must be wondered, did S Landshut and then H Arendt feel compelled to advance such a patently erroneous reading of the text unless it was their own conviction (under the cloud of the Cold War) that K Marx could not possibly have advanced a theory of human freedom opposed in principle to social control and worker domination?

The rise of mass society . . . only indicates that the various social groups have suffered the same absorption into one society that the family units had suffered earlier; with the emergence of mass society, the realm of the social has finally, after several centuries of development, reached the point where it embraces and controls all members of a given community equally and with equal strength.

Here H Arendt combines a Schmittean critique of the social with a Burkean critique of equality. It makes little difference that the society against which she is directing her criticism—the postwar US bureaucracy of the 1950s against which F Hayek, L Strauss, and M Friedman would also inveigh—was itself a fleeting epochal construct, dependent as it was on reasonably high and evenly applied taxation of wealth and a social contract and social net that, at the time, still sought to keep pace with its European and Japanese counterparts.

More to the point, Arendt completely overlooks the profound inequality within this equality and therefore completely overlooks how “the social” against which she inveighs is none other than “the economic”; that is to say, the oikos, the private household itself. Aristotle made clear, already at the beginning of his Politics, that this inequality, and the despotism by which it was sustained, did not detract from the potential equality of households to one another.

However, did Arendt direct her criticism against the universalization of the oikos, she would then have to shift her object of critique away from the social to the economic; a shift made difficult not only because it would be universally decried by other members of the Committee on Social Thought, but also by H Arendt’s own predisposition to exempt excellence (aristoi) from socio-historical interrogation. N.B., if excellence arises from the substantive freedoms the aristoi possess—wealth, health, education, and leisure—then it stands to reason that their excellence, far from testifying to an inner quality, is itself a product of these material benefits.

the very term "political economy" would have been a contradiction in terms: whatever was "economic," related to the life of the individual and the survival of the species, was a non-political, household affair by definition.

While technically true, it is clear that the ancients (including Aristotle) allotted the oikos a central role in the polis. Not only was it from the oikos (private enterprise) that the polis would draw its citizens (aristoi), but it also fell to the private enterprise to fund that in which it was prohibited from playing an active role. The relationship between economy and politics was therefore quite intimate. By common agreement, for the sake of the polis, the oikos was prohibited from engaging in political action. But, it, nevertheless, provided the means by which the polis was maintained. So, the question may be, why does H Arendt wish not to approach this intimacy?

The distinction between man and animal runs right through the human species itself: only the best (aristoi) , who constantly prove themselves to be the best (aristeuein, a verb for which there is no equivalent in any other language) and who "prefer immortal fame to mortal things," are really human; the others, content with whatever pleasures nature will yield them, live and die like animals.

We will see this same thought again in L Strauss, A Kojeve, but therefore also in F Fukuyama. In my view, it substitutes the effect (aristoi) for the cause. In Aristotle, aristocracy is the expected outgrowth of leisure, wealth, education, and good health. This is a deliberate reversal of Plato’s order, which holds that the effects of leisure, wealth, education, and good health are but the outward expressions of inner excellence. Arendt will therefore embrace the implicit view common to nearly all Chicago School members; namely, that the "social" is what makes us indistinguishable from other animals.

For Wisconsin Governor, Battle Was Long Coming

My readers may doubt my sincerity, but I like Governor Scott Walker. Let me tell you why. For years I have been teaching my students that economics, by itself, is insufficient; that, in order to think responsibly about economics, we must also learn how to think wisely and coherently about politics as well. Some of my students, unheeding, have launched themselves into quite successful careers as center/left-of-center economists. More power to them, I say. But then someone like Gov. Scott Walker comes along. “No problem,” these students say. We will just point out to the governor how all the leading economists—right, left, and center—from Adam Smith to Paul Krugman have shown how belt-tightening during a recession makes no economic sense; that what political actors need to do during such lean stretches is find ways to stimulate consumption and investment. These students will take Gov. Walker to one side and explain, in as cheerful and unbiased a way as possible, that whenever political actors have deprived working families of their purchasing power and transferred this wealth to corporate actors “in order to stimulate growth,” these same corporate actors have countered (correctly) that, since working families no longer have the means to purchase their goods, there is now no incentive for them to plow their “savings” (from lower wages and taxes) into producing consumer goods. Instead, they will sit on their “savings” (thank you) or invest it somewhere else, perhaps in Germany or France, where consumers have sufficient incomes to buy their products; or, they will pour their “savings” into manufacturing elsewhere, in nations whose families are so poor (and equally unable to purchase finished consumer items) as to work for almost nothing. Surely, once my former students explain these facts to Governor Walker; surely, he will change his ways. Right?

Wrong. Governor Walker’s hostility to working families has nothing to do with sound economic policy. If Governor Walker would not listen to the last two hundred and fifty years of economists—left, right, and center—what makes you think he is going to listen to you?

Consider, first, Governor Walker’s political base. Governor Walker’s base is composed, on the one hand, of a handful of highly educated corporate executives and lobbyists who are perfectly happy to rake in the financial benefits they will derive from his economic mismanagement of the Wisconsin economy; and, on the other hand, the vast majority of Wisconsin citizens (no offense) who have benefited from these same corporate executives’ highly successful misinformation campaigns on CNN, MSNBC, Fox, and ABC news affiliates. Who are these constituents going to believe: a bunch of egg-head economists from Harvard, Yale, Princeton, Chicago, and Berkeley; or their trusted talking-heads on the evening news? Come on.

Which is why we economists can yell, scream, and cajole till we are blue in the face.

Second, consider Governor Walker’s reasons for pursuing a course of austerity. The fact that his policies are not reality based begs the issue. Of course they’re not. Governor Walker is an ideologue. If his ideas don’t fit reality, he is perfectly happy to bend reality to fit his ideas, which he and his constituents know are right.

Finally, consider the likely consequences of contesting Governor Walker on economic grounds. The likely consequences—or, rather, the actual consequences, since we now see the result—are that he will call out his Fox-News educated constituency, whose members hate unions and hate state workers, and the unions will call out their constituencies—organized working families and non-corporate educated elites. And, so we’ll fight it out, not on the merits of the case (there are no merits to their case), but in the arena of politics.

This is not to say that economists are irrelevant. In fact, since we want our policies to be reality (and not ideology) based, we need economists in a way that Governor Walker and his constituents do not. But, we also need individuals able and willing to think politically and strategically and to canvass supporters for resources (i.e., money) to build networks of information, organization, and coordination that have a reasonable chance of standing up to their (at the moment superior) networks of misinformation, organization, and coordination.

Short of this, the only result can be: We’re right, We lose (or the opposite).

To avoid misunderstanding: the human condition is not the | same as human nature, and the sum total of human activities and capabilities which correspond to the human condition does not constitute anything like human nature (pp. 9-10).

No, H Arendt is not speaking out of both sides of her mouth. Instead she is disclosing her Kantian moorings. Lodged firmly in Kantian soil, Arendt is perfectly comfortable writing, as she does, both of the conditions that impose and press upon human beings (and therein constitute their state of being conditioned; hence, the Human Condition); but also the fact that what is human about human being cannot itself be conditioned without ceasing to be human.

I invite PE 160 students to reflect on possible relationships between action, natality, and the transcendental subject. Is it coincidental that for Arendt action is that element of human being that highlights not the ways that they are shaped by and embedded in the world, but, to the contrary, the ways that they shape and hold mastery over that world, politically. Although clearly her training differed significantly from the training of Milton Friedman or Leo Strauss, it must have seemed spectacular to observe the three interact in the Committee on Social Thought. How might their perspectives have clashed? How might they each have supplemented and reinforced the others?

Reading M Friedman’s Capitalism and Freedom, one might easily get the impression that Mr. Friedman is not a particularly big fan of government. Which is why I was pleased to find the following reassurance roughly half way into Chapter One:

The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential . . . (p. 15).

But, earlier promises in the book notwithstanding, don’t expect to find anything here about republican values, democracy, or popular self-governance. That for which the “government is essential” is to serve “both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided on” (p. 15). “Rules of the game”? “Umpire”?

Let us suppose for a moment, just for the sake of argument, that, in the instance of a republic, the government is exactly not the forum that determines the rules of the game; that the rules are decided in convention and then laid out in a Constitution (see “M Friedman, “Introduction”). Let us further suppose that these rules are felt by the conventioneers to be bound to republican values and theory. What rules are they then that this forum will determine? Perhaps they will determine a rule that subjects public things (res publicum) to private interests?

But, anyone who has read the Federalist Papers or James Madison’s notes on the Convention knows that the conventioneers feared no tyrant more than the tyranny imposed by private self-interest and party spirit, and that they were covetous of no spirit more than they were the spirit of concord and harmony; which, again, makes me wonder whether, perhaps, Mr. Friedman was confusing the U.S. Constitution with the Anti-Federalist Papers or perhaps F v Hayek’s Road to Serfdom.

But, even assuming that Mr. Friedman was not so confused, it strains credulity to believe, as Mr. Friedman appears to believe, that the U.S. Constitution and its Amendments can be understood as a game designed solely to ensure the freedom of the market place.

Indeed, if this is what Mr. Friedman and his followers believe, then among the many lessons we can take home from this belief is that our public institutions—particularly our schools—have done a wretched job teaching US History to our students, not least of all to Mr. Friedman himself, who appears to have been asleep during those lessons.