The End of History 2.0

One does not have to be a defender of the Russian Revolution to find the silence in Russia at the centenary of its 1917 revolution deeply troubling. History was made four times in the twentieth century: first in 1914, then in 1917, then in 1932, and finally in 1989. In 1914, Europeans went to war and killed one another in large numbers. In 1917 (and, by extension, 1918) Europeans punished themselves and future generations to spite their lack of courage. In 1932 the bill came due and they murdered one another in even larger numbers. Finally, in 1989, the embraced mass amnesia in what Francis Fukuyama has rightly termed the “end of history.”

Of course, by “end of history” Mr Fukuyama meant the end of fundamental contradiction in history, which he traced to the unfulfilled desire for freedom by the oppressed. With the victory of capitalism on the one hand and democracy on the other, this unfulfilled longing was cast into the dustbin of history.

We mean something else. In 1989, human beings forgot what they knew in 1945, which was that the years 1914, 1917, and 1932 made history because human beings had not taken the time to learn history’s lessons. History, it has been said, is a cruel teacher. It does not grade on a curve. No one gets an easy pass. Forgetting history does not make it disappear.

So, what might Russians learn from 1917? Five lessons come to mind:

  1. When oligarchic elites are permitted to govern a political community, they will incur the wrath of those harmed by their open disregard for their welfare;
  2. When those harmed rebel against oligarchic elites, they will not do so in the interests of freedom or justice;
  3. It is likely that those who seize power on the other side of revolutions — 1917 or 1989 — will perpetuate the conditions that led to those revolutions in the first place;
  4. The only antidote to oligarchic rule is to distribute the conditions the make for freedom — health, education, wealth, leisure, and security — as broadly as possible;
  5. Forgetting 1-4 will have catastrophic effects.

Russians are not alone in their collective amnesia. God help us all.

Karl Marx and Labor Economics

At 1 today, in Room 60, Evans Hall, we will continue our special lecture series on Moishe Postone’s Time, Labor, and Social Domination: a reinterpretation of Marx’s Critical Theory (New York: Cambridge University Press, 1993). In this close reading of Marx’s critical theory, Postone explores Marx’s mature theory against the backdrop of the growing irrelevance of traditional Marxian theory, on the one hand, and the potential of genuine emancipatory formations, on the other. Today’s presentation and lecture look closely at the work of Friedrich Pollock and Max Horkheimer, both of whom were founding members of the Frankfurt School for Social Research. Mr Postone was my dissertation advisor at the University of Chicago.

The special lecture series is nested in a course, Labor Economics (ECON 151), that explores the standard models economists use to gain a better understanding of the contours of labor markets in developed economies, specially in the U.S. For this purpose, we are using Ehrenberg and Smith’s Modern Labor Economics.

Ehrenberg and Smith’s text is very helpful for students who wish to gain a solid grasp of the field. Foot- and endnotes offer students opportunities for further reading. And the text itself is littered with helpful illustrations from history and current literature. And, yet, insofar as they methodologically restrict themselves to social formations mediated by  labor in the abstract, Ehrenberg and Smith do not explore those possibilities immanent in the capitalist social formation that point beyond societies mediated by such labor, by, for example, tradition, climate, religion, etc.

Postone’s text is helpful here because it uses Karl Marx’s critique of labor to show how abstract labor and the value arising out of labor is proving increasingly anachronistic. This, of course, was already the case in the late 1850s and 1860s when Marx developed his mature social theory. It is even more so today. Innovation has generated huge efficiencies, efficiencies that might, under other circumstances, be distributed socially to reclaim pockets of time and interest that, under capitalism, are simply plowed back into the endless, sisyphean production of ever more efficiencies while passing the benefits on to a very limited number of individuals. This is not to say that all do not benefit in one way or another from these efficiencies, but that, on different grounds, critical reflection on these efficiencies and their social distribution may help economists to imagine alternative futures where abstract labor no longer mediates social relations.

As Postone notes, this distinguishes Marx’s mature social theory from traditional Marxism, which, not unlike standard contemporary economic theory, tends to assume that labor is necessarily a central factor in any system of production. For Marx, by contrast, capitalism creates the possibility — but no more than the possibility — for “labor” in the specifically capitalist sense to be aufhebungen, to be superseded by other forms of social mediation. Another dimension that distinguishes Marx’s mature social theory both from traditional Marxism and from standard contemporary economic theory is that whereas these presuppose a comprehensive, integrated social formation where all social action is mediated by abstract labor, Marx invites us to imagine a social formation whose mediations are much more dispersed and partial, not total, not comprehensive, not universal. This supersession of the comprehensive, integrated totality created by capitalism (and by labor under capitalism) also offers us to reflect critically on the variety of mediations — art, religion, family, nature, music — that might mediate social relations in addition to work and necessity.

This perspective could be central to any consideration of labor economics; and yet it is not. Our challenge is to show why reintroducing this perspective into the curriculum may help us to think through in a far more rigorous way many of the most challenging problems presented by labor to economic theory in the twenty-first century.

Paul Samuelson and Karl Marx

Fifty years ago May, MIT’s Paul Samuelson, the grand patriarch of neo-Keynesian economics, published a piece celebrating the centennial of Karl Marx’s Das Kapital, “Marxian Economics as Economics” (AER 57:2). The piece itself is unremarkable except for one fact. Economists in the 1960s and 1970s took Marx seriously. They read him, if for no other reason than simply that half the developed world took Marx seriously and therefore he was worth reading and worth understanding — though, in fact, few did.

Karl Marx was not an economist. He poured over the writings of eighteenth and nineteenth century economists (mostly British) in painstaking detail. Samuelson himself noted:

Marx did, in his posthumous Volume II, innovate two-sector models of reproduction and growth. These are useful anticipations of work done in our day by Harrod, Domar, Leontief, Solow, Robinson, Uzawa, Pasinetti, Kaldor, Findlay, and many others. I do not honestly think that mod-ern developments were much influenced, directly or indirectly, by Marxian writings; instead they grew naturally out of a marriage of the Clark-Bickerdike accelerator and the Keynes multiplier, and out of earlier works by Von Neumann and Frank Ramsey that show no Marxian influence. But still we all might well have benefited earlier from study of the Marx tableaux (617).

Contrary to the rants of many a Marxist, Marx’s economic thinking was not only fairly standard, but, in neoclassical terms, even prefigured many of the conceptual tools credited to more mainline figures such as WS Jevons, L Walras, and A Marshall. Which is to say, Marx understood the value, but had not mastered the techniques of rigorous mathematical modeling. Were he an economist, which he wasn’t, he might be ranked among the first neoclassicals.

This week I begin a four week special series covering the writings of my mentor and dissertation advisor, University of Chicago Historian Moishe Postone. By accident, my Labor Economics course was way oversubscribed, which meant that I could not accommodate all of the students’ presentations in the “16”-week semester; forcing me to cobble five more presentations and five more lectures — required for the 25 additional presenters, extra credit for the students who choose to attend. Postone is also not an economist. Nor, in fact, am I; though I have been teaching theory and history in the Economics Department at UC Berkeley for six years.

Nevertheless, Postone’s work invites critical reflection from economists because he seats economic theory — Marx’s theory in particular — not, as many historians are inclined, in intellectual history, but, rather, in the social formations where social actors in fact are shaped and shape one another and there worlds through economic exchange. For Postone capitalism is not an illusion or “form of appearance,” which, once penetrated, reveals a deeper truth beneath the surface. Postone invites us, instead, to entertain the adequacy of concept and social form; because, as Marx himself put it: “The categories of bourgeois economics . . . are socially valid, and therefore objective, for the relationships of production belonging to this historically determined mode of social production, i.e., commodity production” (Capital I.1.4). Just as there is no secret Marxist handshake, code word, or sign, so there is no secret Marxist economics. Marx’s methodological sympathies lay with classical — perhaps even a neoclassical — economics. Where he objected was in their tendency to universalize or idealize their own social formation and the categories adequate to that formation.

Over the next four weeks I will be guiding focused discussions around M Postone’s best-known work. If you wish to join us in these discussions, please let me know: email me at joseph.lough@gmail.com and place MARX ECON 151 in the subject line. It should be an interesting discussion.

The Conceit of Innovation and Innovators

Or why economists fail at history.

By and large, I have enjoyed Robert Gordon’s Rise and Fall of American Growth (2016), which is well worth its 700 plus pages. Which is part of the reason why it is so disheartening to find passages such as the following that display profound ignorance over the sources of innovation:

This leaves education and reallocation as the remaining sources of growth beyond innovation itself. However, both of these also depend on innovation to provide the rewards necessary to make the investment to stay in school or to move from farm to city. This is why there was so little economic growth between the Roman era and 1750, as peasant life remained largely unchanged. Peasants did not have an incentive to become educated, because before the wave of innovations that began around 1750, there was no reward to the acquisition of knowledge beyond how to move a plow and harvest a field. Similarly, without innovation before 1750, the reallocation of labor from farm to city did not happen. It required the innovations that began in the late eighteenth century and that created the great urban industries to provide the incentive of higher wages to induce millions of farm workers to lay down their plows and move to the cities.

Gordon, Robert J. (2016-01-12). The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World) (p. 569). Princeton University Press. Kindle Edition.

The near universal acceptance of Gordon’s argument does not excuse its incoherence. The variable missing from the argument is the immaterial character of the incentive structure to which eighteenth century innovators were responding. A simple example can suffice: I know when I have enough shoes; one more pair cannot possibly fit in my closet. But how do I know when I have enough zeros? Immaterial value generates innovation because, as WS Jevons pointed out over one and a half centuries ago, the value of any specific good is calibrated to the aggregate value of all goods. Since the efficiency of capital and labor is subject to continuous innovation, any producer that stands still falls behind. So, the question we need to ask is: from where the incentive of abstract value?

Along with nearly every other economist I can think of, including Trump cheerleader Peter Thiel — not an economist, but whose endorsement is placed prominently on the dust jacket of Godon’s Rise and Fall — innovation is ascribed to economic rewards for individual brilliance, suggesting that all we need to do to unleash innovation is to adequately reward innovators; that would be Peter Thiel, Steve Jobs, etc.

Material wealth is insufficient to drive innovation, because, while it can grow very large, it cannot grow infinitely large. The variable missing from Gordon’s account is the shift already in the fourteenth century (1324 to be exact) from variable time and politically negotiated labor to abstract time and abstract labor. The general diffusion of the mechanical clock as the preferred instrument for measuring value in the textile producing regions of western Europe was already complete by 1600. From there it spread to other mass manufactures — glass, clay, and silver ware, and eventually to factors in construction: bricks, nails, lumber. The clock made it clear that value adhered not in the specific substances out of which things were composed, but in the opportunity sacrificed in devoting time and labor to one good or another within a comprehensive market where the value of any goods has come to be calibrated to the same abstract measure of all goods.

In this sense invention is the mother of necessity — the invention of abstract time and value.

Lying is a Strategy, Not an Outcome

So here’s what the imposter President said to the Sheriffs he invited to the White House today:

Here’s what the actual figures are:

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So, why is this important? Let’s say I was eager to build a police state, deprive citizens of their constitutional rights and liberties, and reward my supporters with the blood of those they have learned to hate. Wouldn’t it help if I could convince them that normal policing policies and court procedures do not work?

Now, let us suppose that I was able to convince enough voters that the media is collaborating with universities and scholars to deceive the public. Don’t ask why; just go with me on this one. Would it matter at all what the truth is?

This imposter is a fascist dictator looking for a nation. He found one.

You just sold your children to a corporation

Here’s the good news. The good news is that none of the Republican Senators who just voted in favor of Betsy DeVos’ confirmation send their children to public schools. That’s the good news. The bad news is that you do.

I tried to warn you about Betsy and her designs on your children, but evidently you weren’t listening.

The anti-democratic and anti-republican wing of the Dutch Reformed Church just took over your child’s education and now wants to sell it to the highest bidder. That’s Betsy DeVos. Her Church is on record — on record! — opposed to the 1787 U.S. Constitution (except of course the three-fifths clause, which it endorses), because it opens the flood-gates of republican self-government.

Idjuts!

Labor Economics and Fascism

The name the organizers of fascism in Germany gave to their movement is not accidental: Nationalsozialistische Deutsche Arbeiterpartei. The movement presented itself as nationally socialist, meaning that Germans form a unique community knit together by their nationality: Nationalsozialistische Deutsche, German national socialist. More importantly for our purposes, this movement held labor to be central to its mission: Arbeiterpartei. It was a worker’s party. Obviously this did not mean that the Nazis supported the established trade unions, much less the established socialist or communist organizations. To the contrary, in their view, insofar as these organizations had placed class above nationality, they had only served to divide the nation. The German national socialist worker’s party — the Nazis — placed nation above all else. “Germany first,” was their motto.

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While it is important that we grasp the contours of the central models that govern labor economics — which we focus on in weeks 4 through 15 — it is also essential that we grasp how the world in which you will be practicing labor economics will be fundamentally different than the world in which economists have practiced labor economics since, let us say, 1945. This has not been an abrupt shift. From 1945 through 1971, most mainstream economists adopted various elaborations of the standard Keynesian or neo-Keynesian model. Yet, beginning with the currency devaluation in 1971 and then increasingly throughout the 1970s and 1980s, economic models and policy choices much closer to the models and choices familiar to us from the 1890s through 1920s came to dominate policy circles, specially in Great Britain and the United States.

It is not immaterial to be curious over what is cause and what is effect in this transition. Did the changing shape of economic relations give rise to a transformation in economic theory; or did a recovery of classical theoretical perspectives perhaps generate a new set of policy alternatives? And, yet, however important it may be to nail down causal links, on some level we already know that causation moved in both directions; that is was mutually reinforcing and mutually constitutive.

We must also be aware that the increasingly abstract, mathematical character of economic theory and practice removed economic policy several steps from the common-sense household “checkbook” economics of income and spending that makes sense to individuals not trained in academic economics. When, therefore, economists stepped forward in the 1970s and 1980s promoting economic policy grounded in household “checkbook” economics (as distinguished from mathematically rigorous neo-Keynesian economics) it makes sense that broad segments of the public would find this version of economics more palatable than the mathematically rigorous neo-Keynesian economics that informed policy decisions across the political spectrum from 1945 to 1971. (Never mind that households set no interest rates, issue no currencies, post no bonds, etc.)

What we do know with absolute certainty is that labor economics functions somewhat differently under despotic, totalitarian, and fascist regimes than it does under standard social democratic regimes. If therefore I were to instruct students on models that assume social democratic normality when, in fact, such conditions no longer hold true, I would be preparing students to practice economics in a world that no longer exists.

This is important because it may appear as though I am politicizing labor economics. (I am a graduate of the University of Chicago, so this is highly unlikely on its face.) The truth is that students of labor economics must be prepared for the world that actually exists; and reflecting critically on the events from 1914 through 1945 may prepare to be better economists in the traditional sense — attempting to accurately model the shape of economic decision-making — than simply a blind recitation of modeling that once held true but holds true no longer. We need to be creative, self-aware, historically present and ready to engage new theory to understand the emerging world.

In a week we will throw ourselves full bore into rigorous economic modeling; but it will be sadly rigorous economic modeling that applies to a world that no longer exists. The preface we have indulged in for the past four weeks, I am hoping, will prepare us to think creatively about how we might bend the standard models to fit new conditions, conditions that can be described, generally, as fascist, authoritarian, and despotic. This does not relieve us of the responsibility to practice economics. But it does introduce variables and coefficients that generally have not been present in standard neo-Keynesian economic theory.

The Business of America . . .

http://bbc.in/2knYtFM

Listening to the BBC World yesterday (Jan 31), my attention was piqued by an interview with Dr. Jan Halper-Hayes. Who is Dr. Halper-Hayes? Well, she is an advisor to Mr Trump. Her words: “Were this any other type of company, [Yates] would already be gone.” And, of course, she is right.

But this only punctuates the fact that the new administration (and evidently its supporters) believe that the United States is simply a “company” — poorly managed, perhaps — but a company nonetheless. And this means that they have no idea what distinguishes a republic from a private enterprise.

Oh. And did I mention that Dr Halper-Hayes is a writer for Breitbart? And that Steve Bannon, right-wing white supremacist and Breitbart leader is now on the National Security Council, I suspect less to serve as an advisor than to weed out the dead wood.

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The term “statesman” here is better translated politician, “king” might be better translated oligarch, “household-manager” might be better translated business owner, and “master of slaves” despot. Aristotle’s point is that private entrepreneurs make terrible leaders in republics. They don’t get the rules.

How is it that 50% of the electorate does not know the difference between a private enterprise and a republic?

And Now the Dutch

Growing up in a household where everyone my parents knew were either “pink” or “red” (born to a non-Catholic family in the 1950s and named “Joseph”?), I knew only good things about the Dutch. Those illusions were somewhat dashed when Wendy Donniger, David Tracy, and I travelled to Amsterdam in 2005 to participate in a colloquium covering the recent spate of far-right murders targeting left-wing political figures, subsequently published as Wrestling with God and with Evil. A colleague and I decided on a whim to travel to the suburbs, to a pub, and explore how the rest of the Netherlands spent their time. It was then that I learned that “black santa” was not limited to Christmas. Mid-March and the bartender was in full “black-face” and wig, mocking before his all-white audience behaviors that he imagined common to Africans. I was astonished. And so I was not at all surprised to hear Lauren Frayer’s report this evening on All Things Considered.

According to Ms Frayer, right-wing neo-fascist politics is on the rise — yes, even in the Netherlands, which reinforces the conclusions I drew at the colloquium that the neo-fascist movement there, like our native born full-blown fascism, should not be ascribed to vestigial traces of barbarism. To the contrary, fascism is and has always been on the cutting edge of history, because history despises the body, all bodies, but most especially its own.

Bodies are, after all, embedded, circumscribed, and limited. They bear on their surface evidence of their limitation. Bodies open their mouths and speak the present, not the universal, the timely, not the eternal. And, so, we learned to hate bodies, to discipline them, seek their destruction, rise above them, to transcend them.

Attention to and care for bodies is what the Dutch learned how to do in the 1930s and 1940s, learned because of a natural confluence of native Reformed and naturalized Communist sensibilities. In both ideologies, “world” was believed to make a difference. If the “world” elsewhere was collapsing, the Dutch understood how care for bodies could change the world. And it did.

What I experienced in Amsterdam’s suburbs in 2005 was mocking disregard for bodies. That was twelve years ago. Evidently the contagion has spread.

The New French “Civil War”

This morning I was somewhat taken aback by a report from Emma Jane Kirby on BBC World News Today (http://bbc.in/2iYd6PX). A quick search around the Internet appeared to verify Ms Kirby’s report that Catholicism in France is on the rise, particularly among French youth. Most reports confirm that the rise in Catholicism’s popularity parallels the rising popularity of Marine Le Pen’s Front National (FN), whose aim is to repackage French fascism in the anti-fascist garb of the national resistance to the Nazi-Vichy collaboration of the 1940s. In Ms Kirby’s report, a defender of republican rule is heard to declare that should the wall protecting the republic from the Roman church be removed, it would almost certainly result, as it always has in the past, in “civil war.”

The report took me back some twenty years to my dissertation at Chicago where I predicted that the same form of spirituality that was then sweeping across the United States and Asia would also begin to make inroads in England, Germany, and even France. This I argued was because the ground of this new spirituality is “immanent” to the more dynamic, free-market capitalism, which, I then concluded would also make headway in Europe. Sadly, it has and the consequences can be seen in a heightened attraction among European youth for militant forms of spirituality eager to discipline bodies for the wants and excesses produced by neoliberal policy.

The rise in Roman Catholicism among young people in France should not therefore be mistaken for genuine Christian revival. To the contrary. We need to recall that at no time in either Germany or France was this peculiarly violent and hateful form of Roman Catholicism more popular than in Hitler’s Germany or Vichy France. When in the 1950s and 1960s, by contrast, French and German working families enjoyed superior education, improving health, and the benefits from a broader and deeper safety net, their hostility towards those on the outside also began to retreat. So began the so-called “dark days” for the Roman church on the European continent.

So is a continental civil war similar to that experienced in Europe in the aftermath of World War I on the horizon today? The increasing popularity of post-democratic and post-republican regimes across Europe and the rise of more violent and hateful versions of Christianity certainly give us reason to believe so. Here, Christian leaders — not least the Roman Pontiff himself — bears much of the blame, but therefore much of the responsibility for averting the impending disaster. The Bishop of Rome must continue to make clear that no ethnic, national, religious or sexual grounds for exclusion will be tolerated among the faithful; that such exclusion is evidence of apostasy. Beyond the Roman Church, other faith communities must embrace and broadcast this message. No faithful Lutheran, Reformed, Orthodox, or Independent Christian will make nationality, ethnicity, religion, or gender preference a grounds for exclusion from national life.

Should our religious leaders fail to turn their communities, then I fear civil war is inevitable; and, once again, faithful Christians will side, as they did in the 1930s and 1940s, with the anti-fascists and partisans.