Wednesday, November 26, 2014

The Shallow Conceit of the North London Luvvie

Back in the 2000s Ross Ashcroft was briefly a BBCer and then an assistant theater director. But after the crash of 2008 he has reached for bigger things and in 2012 released a documentary on all the troubles of the world, entitled Four Horsemen. It got tons of awards at film festivals. It's available on YouTube.

You would expect that it to be pathetically banal and devoid of almost anything that might qualify as an idea. Why would it? You tell me. Where in the world would a theater person in today's London ever run into someone with an idea that wasn't safely approved by the left-wing culture that dominates the minds of everyone in the arts?

But let's take a look at Four Horsemen anyway.

The Four Horsemen of this modern apocalypse are: the rapacious financial system, escalating organized violence, abject poverty for billions, and exhaustion of our natural resources. Filmmaker Ashcroft reviews these problems in four sections of his documentary.

6:30 Empires. Empires do end, and the west has not yet come to terms with its fading supremacy. And it makes sense, from Gen. Glubb's life cycle of empires, 250 years from pioneers to conquest, commerce, affluence, intellect, and ending in decadence. Imagine an overextended military, conspicuous consumption, living off the state, and an obsession with sex. And debasement of the currency. In our decadent age everyone scrambles for the spoils amid the distraction of bread and circuses. And the baby boomers did it! Meanwhile millions of people go to bed every night hungry. So why are we still struggling to distribute wealth fairly?

16:45 Banking. Is the problem "systemic?" We review the evils of fractional-reserve banking, fiat currency, and we get the usual focus on greedy bankers and Goldman Sachs, and the evil of forcing mortgages on poor people. It's all based on the notion of "growth forever." Did you know that 97% of the money in the world is "debt?"

50:51 Terrorism. Ashocroft's got a "root cause" explanation of terrorism. The "inherent iniquity in our system of money, banking and politics has not just had consequences domestically," but also globally. Terrorism is thus a push-back against western neo-colonialism. First there's the military and its contractors, then the consultants and contractors that get the contracts from foreign aid and World Bank loans. But the aid benefits the local elites, and the people have to pay back the debt. Then there is Chile. Yes, we can still haul Noam Chomsky in front of the camera to remember that the US intervention in Chile in 1973 amounted to terrorism. But with all this outrage is it any wonder that people have no recourse but to resort to terror?

1:02:52 Resources. We have got to the end of the benefits of economic growth; the more we grow the more we create poverty. It's a question of competition vs. cooperation. We need a progressive move from globalization to localization, production not consumption.

1:13:00 Progress. There's a tendency to Hollywoodization these days. Everything must be a story with a beginning, a middle, and an end. There's got to be a villain, and usually a sacrificial victim. So it's hard to see that the system is flawed.

So what's to be done? We need to make societies more equal and reduce income difference; that will help solve environmental problems. We need to understand that the problem is pretty simple. It's about power, and its about democracy. So we need to sweep away the disinformation of neoclassical economics and the academic gatekeepers with the cleansing truth of the internet. And we need to question the system of fiat money. It all comes down to a three point plan:

  1. Return to gold as the basis of money, and maybe stage a debt jubilee, since debt is slavery.
  2. Tax consumption instead of labor.
  3. Return to a system with workers owning the place where they work and produce.
It's hard to know where to begin in analyzing such a precipitate of shallowness, but let's start with the three point program.

Yes, going back to gold and ending fractional-reserve banking is a great idea, but it's a good idea to realize why we have a fiat currency and persistent inflation. The reason is that governments are forever running out of money, or crashing the economic system with their economic interventions. The easiest way for a government to "get out of a jam" is to print money, devaluing debt and stealing the savings of ordinary people. Any big government program, whether a war on fascism or a war on poverty, ends up with a lot of government debt, and ends up with some kind of debt default.

That's why banks are such a problem, whichever party is in power. Ever since the Dutch invented the National Debt in the 16th century the government's debt has been the foundation of the credit system and the credit system has been the foundation of the rest of the economy. The banks are merely intermediaries between the government debt and the rest of the economy. The reason that bankers seem to be manipulating the system is that they are being tossed around by the machinations of the government's debt and cheap money operations. The first and most important government program is the program to sell the government's debt; that debt gets sold to bankers who are directed to use government debt for their reserves. Over time, the government regulates the banks in more and more detail, and over time the bankers learn how to manipulate their masters in the phenomenon we call "regulatory capture." Thus "greedy bankers."

In the run-up to the Crash of 2008 the government manipulation was particularly egregious because the US government had developed a policy over decades to extend "affordable housing" to subprime mortgage borrowers (i.e. minorities). The government mortgage twins, Fannie Mae and Freddie Mac developed policy to force banks to originate more and more subprime (i.e. low down payment, low credit rating) loans. But who would buy these loans from the banks and Fannie and Freddie? Simple. The investment banks like Goldman Sachs repackaged the loans and with a bit of financial trickery and sold securities that were rated AAA and could therefore be bought by pension funds and insurance companies. It all worked as long as the band kept playing.

If you read old stuff like Lombard Street by Walter Bagehot you get to understand how how the credit system works. It needs two things. And it needs debtors that can make their payments. And it needs debt that is properly collaterialized, so that the principal can be repaid if the debtor fails to service the loan.  When you get a situation where either of the two requisites are in question then you get a crisis of confidence; people start to wonder if their counterparty is sound or whether they might fail in a crash. So when the government floats about a trillion dollars in mortgages that are badly collateralized to borrowers that can't afford any downturn and maybe even can't afford to make payments right now... Well you get a financial system that is extremely fragile and will crash as soon as things start to go south and people really start to worry and take their money out of the market. Of course, you'll expose all kinds of bad apples when the market crashes, but the villain at the bottom of the story is not the greedy banker but the government that's mucking about with the credit system to give money or affordable home mortgages to its supporters.

So that's why we have fiat money. What about taxing consumption instead of labor? It's a good idea; that's what we all had in the 19th century during times of peace. But when the government gets above a certain size, consumption taxes become a real burden on the poor. And then you need to start taxing income. We could only return to a consumption tax system if we reduced government down to about 10-15% of GDP instead of the 35-40% of GDP right now. We could do it if we ended government pensions including Social Security, government health care such as Medicare, and government education.

The final item in Ashcroft's plan is to let the workers own the factors of production. There is already a government program to encourage this, the Employee Stock Ownership Plan or ESOP. But critics say that it's not such a good idea for ordinary employees to own a share in their employer's business. What happens if the company goes broke? Then the worker loses his job and his savings. There is another way to do this: privatize Social Security and let workers buy ETFs featuring the S&P 500 and the NASDAQ 100. Then workers get a part ownership in the income-generating potential of the whole economy. It's called diversification.

Now let's go back to the Four Horsemen.

Rapacious Financial System. The only way to fix this is to downsize government radically, so that government and its financing needs do not bulk so large in the financial picture. We have crazy banks because we have crazy governments.

Escalating Organized Violence. Yep, it's a problem, but it's localized at the borders of Islam. The Muslim peoples, particularly the Muslim Arabs, are having a horrific time, partly due to the west carving the Arab lands up a century ago at the end of World War I. Part of it is due to the pre-individualist, tribal society in the Middle East. Probably we are going to face a world war over Islam, and it ain't gonna be pretty.

Abject Poverty for Billions. Actually, people in the world are emerging from poverty at an astonishing rate, led by the economic growth in China and India. There has never been anything like it, ever. But then, as Deirdre McCloskey says, there has never been anything like the Great Enrichment of the last two centuries from $1 per capita per day to over $100 per capita per day in the rich countries, ever. Here's the chart on declining world poverty from the conservative think tank AEI. Don't trust the conservatives? Here's the word from the World Bank.

Exhaustion of Natural Resources. Trust the north London luvvies to be the last to know about the fracking revolution. Back in 2011 when, presumably, Four Horsemen was in production the revolution in shale oil and gas energized by horizontal drilling and hydraulic fracturing was already common knowledge. There isn't a crisis in natural resources. And if we should start to run out we have our internet billionaires that can't wait to live out their boyhood sci-fi fantasies and go mine the asteroids.

That leaves just one thing, the Glubb theory of empires and our terminal "age of decadence." To have a north London luvvie worrying about that is, well, it's a start. But, in my view, the "root cause" of decadence is the problem of creativity, the people in the arts. In my world view there are three kinds of people: Slave People --  peasants and workers; Responsible People -- knowledge workers, business people, and merchants; and Creative People. The Creative People are the big problem because they cannot be happy unless they can do something original and creative. Almost anyone can be a slave; almost anyone can learn to be responsible. But with creativity, many are called but few are chosen.

The great problem of the modern world is what to do about disappointed creative people, and to stop them before they pull down the temple in impotent rage. You could start with the problem of a 90 minute documentary that is beautifully crafted but that retails a nonsensical farrago of half-digested north London conventional wisdom.

Tuesday, November 25, 2014

Dr. Ha-Joon Chang, Renegade Economist? Oh Please!

One of the talking heads on Ross Ashcroft's Four Horsemen documentary is Dr. Ha-Joon Chang, an economist who's a Reader at the University of Cambridge in England.

In this video under the "Renegade Economist" brand Dr. Chang rehearses lefty talking points on "neoliberalism."

I didn't really know what neoliberalism was when I watched the video; I just knew that it was a term that lefties swung around as a kind of pejorative. It turns out that it was developed by spanish-speaking activists opposed to Gen. Pinochet's regime in Chile. See Wikipedia.

But before you can trash neoliberalism, you have to define "liberalism." For Dr. Chang, liberalism is a 19th century social economic theory that had a rather narrow view that everything should be run on market principles. They didn't quite realize you needed bankruptcy and limited liability laws. (Actually Marx was prescient on this, says Dr. Chang, arguing in the 1860s that limited liability was the future of capitalism). And, of course, these 19th century liberals thought that democracy was a rather bad idea, since the people would vote for an income tax and destroy incentives for wealth creation. This liberalism, of course, was completely discredited in the first half of the 20th century, through two world wars, the rise of communism, the Great Depression, and the rise of social democracy in western Europe.

What about neoliberalism? It's a remake of the old 19th century liberalism, according to Dr. Chang, but it has been modified at the margins. Now it doesn't oppose democracy directly, and endorses limited liability. It wants to maximize the domain of the market -- where one dollar, one vote rule dominates. But it still wants to diminish the domain of the state and democratic policies. It still believes that the most important freedom is freedom of property, and profit-seeking should be the only motive, and that "poor people should be punished." This ideology has been promoted very aggressively by "bad people" (Chang kinda swallows the "bad" on the video) "with a lot of money and power," so the whole world has come to accept this as the truth. Since the financial crisis of 2008 there has been some rethinking, but frankly there is too much power, money and intellectual prestige at stake for this to go away quickly.

Of course, this is a left-wing "narrative" that amounts to an apology for power, as the postmodernists teach us. Only the postmodernists generally spend their energies unmasking evil bourgeois apologies for power, rather than their own noble educated ruling class apologies.

I think the first thing to understand is that conservatives and libertarians think we are trying to understand the world, not change it. That makes us the opposite of Karl Marx who said in his Theses on Feuerbach: the point is not to understand the world, but to change it." What everyone from Marx to Mill was thinking in the mid 19th century was: what on earth has just happened, and what will happen next?

My take on the 19th century liberals is that they were trying to understand what had happened since the start of the industrial revolution. They were thinking: how should be understand this new world, and how can we preserve the beneficial changes? In fact, everybody thought, from Malthus to Ricardo to Marx, that it couldn't last. That's what Marx's "immiseration" thesis is about. He rightly saw that the ruthless efficiency of capitalism would extract the maximum out of the workers as the capitalist firms ruthlessly reduced prices.

But Marx, and all the static thinkers before and since, misses the whole point of capitalism. It is not about accumulation of wealth. It is about sudden, and repeated innovation, what George Gilder calls "surprise." The textile revolution was a complete surprise; nobody saw it coming. And it created fabulous wealth, not to mention cheap clothes for the masses. When that was petering out along came another surprise: steam railways and ocean steamships. Now for the first time ordinary people could travel -- travel the world -- and bulk goods like grain could be profitably transported across the world. It was a complete surprise. Tons of money were made, and famine was eliminated in Europe. Just as the railway revolution was at its height, along came the illuminating oil revolution. A clerk working in a commission merchant's store noticed the barrels of oil in the store, and decided to get into the new mineral oil business. Oil prices came down by 80 percent and John D. Rockefeller became a billionaire and invented modern philanthropy. Then came the electrical revolution, then the auto revolution, then the electronics revolution. Then the information revolution. The point about all these revolutions was that they were complete surprises; nobody saw them coming. The upshot is that per-capita income in real dollars has increases from $1 per day to $100 per day in 200 years. There has been nothing like it in human history. Ever.  The whole thing has been a complete surprise.

Now the question is: how does this system, or this organism, or this emergent phenomenon work? And what should be its relation to government, to society, to religion? In the 1970s, when "neoliberalism" reared its ugly head, the western world was going through a patch of "stagflation." Establishment minds decided that the world was becoming ungovernable, and that we should get used to the idea that the future would not see much growth. In fact we had to adjust ourselves to "The Limits of Growth." Nothing could be done, as the song says.

Well, not to worry. Along came a bunch of renegades, led by Bob Bartley at The Wall Street Journal. They proposed a program of hard money, lowered marginal tax rates, and reduced administrative regulation. This program was inspired by the Austrian economics school led by Ludwig von Mises (an Austrian Jew) and F.A. Hayek, and it was backstopped by "public choice" theory that argued that all regulation of business ended up in "regulatory capture" of the regulators by the regulated. Implemented by Reagan in the US and Thatcher in the UK, the result was a surprise: sky-high energy and commodity prices crashed, and a 20 year boom followed, interrupted only when people got overexcited by the internet boom in the 1990s.

Were the 19th century liberals a bit slow on relaxing bankruptcy laws? Maybe? But once the economy got moving, we could afford leniency on bankrupts, because there was always more where that came from. But go back to Middlemarch and the financial troubles of Dr. Lydgate. Should he have been able to escape his creditors, the local High Street merchants, after his ludicrous profligacy inspired by his empty-headed social-climbing wife? And what about limited liability? Well, the story on that goes back to the South Sea Bubble of 1720. After that crash, people thought that limited liability was a dangerous invitation to fraud. Limited liability got revived in the mid 19th century when it just became obvious that you just couldn't assemble the capital needed when each investor was liable for the debts of the bankrupt enterprise to the limit of his entire fortune. Limited liability protects the small investor, who doesn't have to keep an eye on the CEOs of the companies in his stock portfolio. His liability is merely that he can lose the entire value of his stock equity. My daughter's Wall Street father-in-law thinks that today's investment banks should return to partnerships, where the owners are the bankers and their entire personal wealth is on the line when the market crashes. Maybe there should be an exception on limited liability for bankers.

The argument of neoliberalism is an argument between elites. Should big corporations be regulated by the market and simple rules to penalize fraud, and incentives making it costly to pollute the environment? Or should they be regulated in detail by the assignees of the educated ruling class? It should be clearly understood that establishment economists like Dr. Ha-Joon Chang are not disinterested bystanders in this question. They are the chaps that get to do the regulating, and apply what Deirdre McCloskey calls the "sweet use of the monopoly of violence in government" to the corporate chieftains. But then what? Obviously the corporate CEOs do not just sit there when the Changs and the Grubers come calling. They learn how to manipulate the regulators, and execute a program of "regulatory capture." The result is what we racist-sexist-homophobes call "crony capitalism."

I suppose if we are honest, we right-wing nut-cases should admit that "crony capitalism" is a pejorative.

A couple of points: I don't think that 19th century liberals were really against democracy. Here's Wikipedia on John Bright, who along with Richard Cobden symbolizes 19th century "Manchester" liberalism. He "headed the reform agitation in 1867 which brought the industrial working class within the pale of the constitution" and gave them the vote. Conservative Prime Minister Disraeli famously one-upped the Liberals and passed universal male suffrage in a program called "Tory Democracy." So where is Dr. Chang coming from on this?

Then there are Reagan and Thatcher. The big thing about them is that they successfully appealed to the upper working class, and the left has never forgiven them. It was Reagan that enticed the "Reagan Democrats" out of the Democratic Party; in 2014 the white working class voted Republican by 30 points. And it was Thatcher that appealed to the "C2s" in Britain by passing a program for them to buy their "council houses." Just last week a Labour front-bencher resigned after sneering at "White Van Man" in a tweet.

Dr. Chang is right that there are a lot of people pushing the idea of a market-place relatively free from government power. But there are also a lot of people like him pushing the idea that corporations should be minutely regulated and supervised by government. And they are passing laws to do this, big, comphrehensive and mandatory programs like Sarbanes-Oxley in 2002 and Dodd-Frank in 2010, including the Consumer Finance Protection Bureau on which Sen. Elizabeth Warren (D-MA) did the Grubering. These are huge regulatory actions that have submerged corporations in a tsunami of paperwork. And no doubt they will all end in tears as the big corporations learn how to game them and use them to beat up their small-business competitors.

Let's at least be clear about one thing. Dr. Chang is not a "renegade economist." Nobody that "served as a consultant to the World Bank, the Asian Development Bank and the European Investment Bank as well as to Oxfam and various United Nations agencies" is a renegade. He just isn't!

There's a catchphrase that describes Dr. Chang. He's what politicians call a "safe pair of hands."

Monday, November 24, 2014

Piketty: Deirdre McCloskey Weighs In

Back in the spring the intellectual world was convulsed by a book about capitalism written by a Frenchman, Thomas Piketty. The book, Capital in the Twenty-first Century argued that the return on capital was always bigger than the economic growth rate (expressed as r > g) and this would mean that the rich would forever get richer and richer.

Since the left is currently focused on "inequality" you know that this is a Bad Thing. How can we solve this problem? Easy. All it takes is higher taxes on high incomes and a global tax on capital.

I read the whole thing so you wouldn't have to and I blogged on the book with commentary on each chapter, starting with the introduction here. Broadly speaking, the book is balderdash. Of course r is greater than g. The rate of return on capital is connected to time preference whether or not there is any growth. If you want to borrow money you have to pay for it; you have to pay the capitalist for the fact that when you repay his money in a couple of years you need to pay him for the fact that right now money in two years is worth less than money in the hand right now. Because time preference.

Now Deirdre McCloskey, economist and author of the "Bourgeois Era" books celebrating bourgeois dignity and virtue, has weighed in with a long review of Capital in the Twenty-first Century. It will appear in the Erasmus Journal of Philosophy and Economics. Her judgment is scathing. Piketty set out, she observes, to write a book that surveyed the modern world with a view "at once economic and political, social and cultural".
But he has not achieved it. His gestures to cultural matters consist chiefly of a few naively used references to novels he has read superficially—for which on the left he has been embarrassingly praised. His social theme is a narrow ethic of envy. His politics assumes that governments can do anything they propose to do. And his economics is flawed from start to finish.
 Exactly. For instance he offers Balzac's Pere Goriot as a tableau of life in the accumulating rentier class. But Goriot is a novel about how people with money will gladly throw it all away for the chance to climb the social ladder. It also turns out that people without money are happy to throw other peoples' money away in order to climb the social ladder.

Now McCloskey's great virtue is her story-telling. Her "Bourgeois Era" books retell the economic miracle of the last 200 years as the Great Enrichment in which per capita income in real money went from $1 per day to $100 per day. But all the Left can think about is that there are still people that haven't got their share.
And yet the left in its worrying routinely forgets this most important secular event since the invention of  agriculture—the Great Enrichment of the last two centuries—and goes on worrying and worrying, like the little dog worrying about his bone in the Traveler’s insurance company advertisement on TV, in a new version every half generation or so.
What does the left (and sometimes the right) worry about? I'm glad you asked that. McCloskey has a little list:
[G]reed, alienation, racial impurity, workers’ lack of bargaining strength, women working, workers’ bad taste in consumption, immigration of lesser breeds, monopoly, unemployment, business cycles, increasing returns, externalities, under-consumption, monopolistic competition, separation of ownership from control, lack of planning, post-War stagnation, investment spillovers, unbalanced growth, dual labor markets, capital insufficiency (William Easterly calls it “capital fundamentalism”), peasant irrationality, capital-market imperfections, public choice, missing markets, informational asymmetry, third-world exploitation, advertising, regulatory capture, free riding, low-level traps, middle-level traps, path dependency, lack of competitiveness, consumerism, consumption externalities, irrationality, hyperbolic discounting, too big to fail, environmental degradation, underpaying of care, overpayment of CEOs, slower growth, and more.
And now, of course, net neutrality. The whole point is that "'capitalism' is doomed
unless experts intervene with a sweet use of the monopoly of violence [my bold] in government to implement anti-trust against malefactors of great wealth or subsidies to diminishing-returns industries or foreign aid to perfectly honest governments or money for obviously infant industries or the nudging of sadly childlike consumers or, Piketty says, a tax on inequality-causing capital worldwide.  
Like I said, McCloskey is great with words, and that's a good thing in an economist. It's also a good thing in a writer.

I could do on and on quoting her bon mots, but I won't. Instead I'll close with this.

A big problem in Piketty's book, according to McCloskey, is that he doesn't really tell us why inequality is a bad thing. He is no better than intellectual fluffball Glencora Palliser (nee M'Cluskie) who says in Phineas Finn that "Making men and women all equal. That I take to be the gist of our political theory."

Well, you can have your M'Cluskies (although we love our McCloskeys). But I'll take Madame Max Goesler, the incomparable rich young Viennese widow who in the end gets the hand of young Phineas, courtesy of Anthony Trollope. The only way to find out why is to read the book. But I will give you a hint: Character.

The best chap I've found that discussed freedom and equality intelligently is the German sociologist Georg Simmel. It just happens that I blogged on his analysis of equality and freedom in the 18th and 19th centuries last week.

Sunday, November 23, 2014

Georg Simmel: Numbers and Social Life

We moderns like to think that we invented numbers. Back in the old days life was organic and natural, centered around the family and the village collective. But Georg Simmel in The Sociology of Georg Simmel translated by Kurt. H. Wolff reminds us that enumeration was not an invention of the absolute monarchs and their bureaucracies. Numbers in social life go further back than that.

But the point of numerical subdivision is the one proposed in James C. Scott's Seeing Like a State. Numerical subdivision replaces subdivision by kinship and tribe. In the Germanic tribes, they divided the whole into Hundreds, that is 100 men, and this became a subdivision also in Britain. Even today, members of Parliament that wish to resign their seats are appointed steward to the Chiltern Hundreds.

The point is that in numerical subdivision a society starts to organize itself on abstract principles rather than kinship principles. It is the first step towards the abstract social structure that we have today.

Another interesting question is the numerical minimum for a social gathering we call a "party." When two or three people gather formally, it "never constitutes a 'party.' But we do have one when we invite say, fifteen of our closest friends." The number in question is the decisive factor, and society has recognized the importance of number when "sumptuary laws prescribed the exact number of persons" allowed to escort a couple at their wedding. And so the question arises:
How many soldiers make an army? How many participants are needed to form a political party? How many people make a crowd?
We think of our present age as uniquely obsessed with number. But number has been important for quite a while.

Friday, November 21, 2014

Georg Simmel: 18th and 19th century views of freedom

Society want to be an organic whole of which "individuals must be mere members." But the individual rebels against total absorption into the whole, writes Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt. H Wolf.
The individual strives to be rounded out in himself, not merely to help round out society.
This conflict between the whole and the individual is insoluble. The individual's striving for wholeness appears as egoism, compared to the altruism of serving society. But society itself "is an egoism that does violence to the individual". Thus comes freedom, to referee a boundary both for society and for the individual. The 18th century and the 19th century offered different ways in which freedom could be understood and implemented.

In the 18th century the old social forms -- the old aristocratic privileges, the "despotic control of commerce," the "still potent survivals of the guilds, the intolerant coercion by the church, the feudal obligations of the peasantry" -- seemed "an unbearable limitation" on peoples' energies. Thus it invented freedom from obligation and coercion and equality to level the ranks.

But the freedom of the individuals to pursue their energies immediately creates problems.  The 18th century idea of freedom assumed equality between individuals and the abolition of ranks, but individuals are not equal. Freedom allows the powerful to accumulate power, the moneyed to accumulate money, and the clever to outshine the stupid. This is what socialism was invented to cure.
"[S]ocialism" does not refer to the suspension of freedom. Rather, socialism suspends only that which, at any given degree of freedom, becomes the means for suppressing the freedom of some in favor of others. This means private property.
 There is an "antimony between freedom and equality" that only Goethe seems to have seen.
Equality, he said, demands submission to a general norm; freedom "strives toward the unconditional." "Legislators or revolutionaries," he pointed out, "who promise at the same time equality and freedom are fantasts or charlatans."
How then did the 18th century not grasp this problem? It is because of Kant, who posited an abstract and idealistic ego which is really identical in every man. And then there is Kant's categorical imperative:
Act in such a way that the principle governing your will could at the same time be valid as the principle of a general legislation.
The 18th century "based equality upon freedom, and freedom upon equality."

This ideal broke up in the 19th century into two tendencies: "toward equality without freedom, and toward freedom without equality." The first is obviously socialism.

The second tendency is a new individualism. The individual that had broken "the rusty chains of guild, birth right, and church" now wanted "to distinguish himself from other individuals."
The important point no longer was the fact that he was a free individual as such, but that he was this specific, irreplaceable, given individual...

This new individualism might be called qualitative, in contrast with the quantitative individualism of the eighteenth century... At any rate, Romanticism perhaps was the broadest channel through which it reached the consciousness of the nineteenth century.
Simmel summarizes all this in a majestic paragraph that still resonates unabated with us a century later.
[T]he doctrine of freedom and equality is the foundation of free competition; while the doctrine of differentiated personality is the basis of the division of labor. Eighteenth-century liberalism put the individual on his own feet: in the nineteenth, he was allowed to go as far as they would carry him. According to the new theory the natural order of things saw to it that the unlimited competition of all resulted in the harmony of all interests, that the unrestricted striving after individual advantages resulted in the optimum welfare of the whole.
Simmel looks to a higher form in which the two ideas of "personality as such and of unique personality as such, are not the last words of individualism."

Thursday, November 20, 2014

Georg Simmel: Social Humans at Play

If we think of humans as social animals, then our social actions can be considered as a deadly serious part of being human.

But Georg Simmel in a chapter on "Sociability" in The Sociology of Georg Simmel looks at social relations without a purpose, occasions when humans gather in social gatherings that have no purpose other than sociability. Simmel analyzes this sort of social interaction as "sociability as the play-form of sociation." You can think of the relation of sociability to sociation as "similar to that of the work of art to reality."

When people are engaged in the serious business of social cooperation with an objective purpose they restrain their personalities in the cause of furthering their interests, and so in business and commerce, rules of amiability, refinement, and cordiality apply.

But where no interest in involved, similar restraint or "tact" is still needed to regulate interpersonal relations. At a social gathering one is expected to leave behind "the purely and deeply personal traits of one's life" and things like "[w]eatlh, position, erudition, fame, exceptional capabilities and merits" are expected to be de-emphasized as a part of good manners.

Sociable man is a curious phenomenon. On the one hand he presents himself "only with the capacities, attractions, and interests with which is pure human-ness provides him. On the other hand, however, sociability also shies away from the entirely subjective and purely inwardly spheres of his personality." Displays of extremes of character are not appropriate. So pure sociability enacts "sociability thresholds," the one where individuals start to interact from objective motives and the other where "their entirely personal and subjective aspects make themselves felt."

There is, thus, an aspect of sociability that makes it a democracy of equals, and something that is played in a game where "the pleasure of the individual is closely tied up with the pleasure of others." It is a game where people act as if all were equal, and each honored in particular.

Simmel reviews specific examples of pure sociability, starting with "coquetry... the play form of eroticism", in which people play at eroticism without ever quite reaching an erotic acceptance or refusal. There is "conversation" where people "talk for the sake of talking" but without an object in view. There is the rehearsal of ethical questions, experiencing the friction between the individual and the collective and also the formation and splitting up of groupings, which can all be done in pure sociability without consequence.

Many social groupings start out with objective purposes and then relax into pure sociability, such as the brotherhoods of knights in the early German Middle Ages, that eventually relaxed into  "purely sociable aristocratic associations." And there was the courtly society of the French ancien rĂ©gime where the once-powerful French aristocracy was reduced at the court of Versailles to enacting a work of art: "imitating the reality of the models, of things outside of art itself."

Pure sociability, or "society," has a reputation of superficiality. 
Yet it is precisely the more serious person who derives from sociability a feeling of liberation and relief. He can do so because he enjoys here, as if in an art play, a concentration and exchange of effects that present all the tasks and all the seriousness of life in a sublimation[.]
No doubt that is why women have in recent centuries organized salons where serious people can go to enjoy sociable interactions without risking the dread consequence of real life. 

Wednesday, November 19, 2014

Georg Simmel: Individual and Mass

When we talk about human individuals, it is easy to think that we are talking about isolated humans in their non-social activities. We think that, of course, because a century and a half of left-wing thought is founded on that assumption, that individuals acting as individuals are not really social.

But Georg Simmel in The Sociology of Georg Simmel, discussing "The Social and the Individual Level," is quick to puncture that idea. If we are to think of an individual just doing the bare minimum, such as obeying the law and "obeying the norms adequate to secure the continuation of the group... he would be an ethical abnormality, an utterly impossible being." In other words, when we talk about humans we may talk of humans as individuals or as members of a group. But we are always talking about humans as social beings.

But there is an important difference between a human in the mass and a human considered as individuals.
The first part of his nature can evidently consist only in more primitive elements... [that exist] in all individuals.
Individual qualities, on the other hand, are those "which constitute his private property, as it were, and which lift him out of everything that he may have in common with others." The point is that both these qualities are human and social. The only reason we don't think of them that way is that the left has diligently worked to make individual qualities and actions scandalous.

Simmel then goes on for pages about the consequence of the mass interaction being "more primitive". The "necessity to oblige the masses... easily corrupts the character. It pulls the individual away from his individuality and down to a level with all and sundry." So humanity in the mass tends towards the lowest common level of its members.

Thus Simmel rounds his arguments with quotes from Schiller and Heine.
[I]n Schiller: "Seen singly, everybody is passably intelligent and reasonable; but united into a body, they are blockheads." The fact that individuals, in all their divergencies, leave only the lowest parts of their personalities to form a common denominator, is stressed by Heine: "You have rarely understood me, and rarely did I understand you. Only when we met in the mire did we understand each other at once."
You can immediately see why Simmel hasn't become the go-to sociologist for all and sundry. His analysis of the social consequences of individual social action and mass social action just do not square with the needs of the modern ruling class.

The modern ruling class, in its revolutionary or its rational expert model, wants to sequester all higher and evolved individuality into its own care. And it wants the masses to be obedient and dependent. The model of universal freedom and individual equality dispersed throughout the population, with individuals using their unique qualities that lift them out of the mass, cannot advance their power project.

The whole concept of the modern authoritarian welfare state is based on brilliant experts devising one-size-fits-all universal programs in which humans are reduced into the mass, mechanical cogs in the machinery of government, designed and implemented by the better sort. As we have seen in the rollout of Obamacare, the ruling class knows what's best and must do what it takes, in deceit and misdirection, to advance its goals in the teeth of opposition from the "stupid" voters.

On the other hand you can see that the conservative-libertarian model of responsible individualism really focuses on encouraging individuals to develop and utilize their better qualities, and they can only do that, as social beings, by contributing to society. Good ideas, good products, good services developed by superior minds are encouraged. Yet they are in fact mass products for mass consumption by the masses.

Imagine that. Modern organic developed society can blend individual and mass to benefit everyone: the superior individual with the idea that nobody else has thought of, and the ordinary mass man that just goes with the flow and gladly enjoys the achievements of the exceptional individual.

The point is that the achievements of individuals are not selfish; they almost always have a social component. For humans are social animals; almost everything that humans do is social.