1. Why Government is Ruling-Class Conceit
2. The Appeal of Polanyi's "Double Movement"
3. Karl Polanyi: Capitalism as a Utopian Movement
4. Karl Polanyi: Great Depression Failure of the English System
5. Karl Polanyi: History of Exchange Prior to the Modern Market
6. Karl Polanyi: The Self-Regulating Market and Its Fictions
7. Karl Polanyi: Speenhamland and the Poor Law
8. Karl Polanyi: The Social Crisis of Poverty and Commodity Labor
9. Karl Polanyi: The Market Economy Means Annihilation of Land and People
10. Karl Polanyi: The Special Pleadings of the Laissez-faire Creed
11. Karl Polanyi: Land and Labor and the Resistance to the Market
12. Karl Polanyi: The Contradictions of Market vs. Self-Protection
13. Karl Polanyi: A World Without Markets in Labor, Land, or Money
14. Karl Polanyi: Critique of "The Great Transformation"
15. Perhaps the Wages of Liberalism is Cultural Death
16. What CAN We Do When Things Go South?
17. Is the Politics of "Crush or be Crushed" The Only Way?
18. McCloskey Again: 787 Pages For What?
19. Sorry Liberals, Protest is for People Outside the System
20. When a Lefty Comes to Visit
21. Blame Activism Culture for "Red Hen" Expulsion
22. Rich Kid Protesters are Not the Cry of the Oppressed
Showing posts with label polanyi. Show all posts
Showing posts with label polanyi. Show all posts
Wednesday, April 1, 2020
Karl Polanyi's Great Transformation - Contents
Analysis of Karl Polanyi's Great Transformation
Monday, October 8, 2018
Rich Kid Protesters are Not the Cry of the Oppressed
One of the hoariest memes of left-wing politics is the notion of the "protest," the excluded and the oppressed taking to the streets to express their plight and the injustice of their suffering at the hands of the ruling class.
I had an epiphany on this a year or two ago when reading semi-lefty Karl Polanyi's Great Transformation about the 19th century. Once the workers got the vote, he explained, and found that the political system was responding to their needs, they stopped the marching and rioting. People only take to the streets as a last resort, and usually in a hopeless reaction to wage cuts, unemployment and famine.
Oh really, I thought. Who knew?
Because of course in our age we have all been carefully taught that the woods are full of helpless victims, excluded from representation, for whom "protest" is the only way to advertise their wretchedness.
But when you hear of women activists wailing in the Senate gallery, and women activists dressing up as a wall, and so forth, you are not hearing the cry of the oppressed. You are hearing the supporters of the ruling class. This fact is obvious when you look at photos of the protesters. I'm sorry, but I know the difference between lower-class single women working marginal jobs and educated women doing a bit of "creative protest."
In fact, the very creativity of much of modern protest, with people dressed up as polar bears to protest climate change, tells the story. People of the Creative Self are the kind of people that feel that one must do something to make a protest original and creative rather than just march.
It is a fact that 97.2 percent of the "protests" you see on TV or read about on social media are merely the political stage-shows of the educated ruling class.
Put it this way. How would a bunch of the genuinely oppressed get into the Senate gallery? Access to the gallery is through the senators. So any activist group wanting to "protest" the Kavanaugh vote in the Senate gallery would have to go through a friendly Democratic Senator; it would have to have "connections." Get it?
So I believe that the fundamental thing to understand about "activism" and "protest" in these latter days is that the chances are 97.2 percent that you are looking at people supported by powerful interests closely allied to the ruling class.
And of course, these days Good Little Girls, well-born damsels, go to college to learn the theory and practice of "activism" and "protest." So when you see twentysomething girls with their cute protest signs and their cute dress-ups, you are looking at the naive stooges of the ruling class. You might say they are nostalgic reenactors, reenacting the glorious marches and protests of the workers back in the 19th century.
That would make sense, given my notion of the left as a Great Reaction.
But really, these folks are the cadet battalions of the ruling class, doing a spell in the activist trenches before taking their inherited places in the corridors of power. They are like midshipmen in a Napoleonic War novel. Yes, they rough it a bit, and get knocked about a bit by the bullies in the midshipmen's mess and by the officers if they don't learn their navigation, but in due course they will get their commissions and take their wine in the wardroom. While the ordinary seamen still suffer under ruthless naval discipline and once against it is all hands to witness punishment.
As you know, I explain this ruling-class "fake protest" politics with my "little darlings" theory. The left, starting with rich-kids Marx and Engels, has created a politics out of advocating for the oppressed and the exploited. But every group they discover eventually gets enrolled in the "system" and ceases to be useful and political rank-and-file for marchin' and protestin'. Because the warrant for "activism" is always a marginalized group outside the system for whom street protest is the only way to get the attention of the rulers.
Thus, at present, our fake protesters are advocating for illegal aliens and Muslims, because right now they are outside the gates, and not represented within the political system.
Oh and women, because upscale and educated women are the most appallingly exploited and oppressed victims in human history.
But the interesting thing is that once a group gets inside the system, the cadet battalion commanders lose interest in them. Thus, in the United States, the liberal activists lost interest in the working class in the Sixties, and for 50 years the white working class wandered in the political wilderness without someone to advocate for them in the councils of power.
Until Donald Trump.
Note to ambitious youngsters: I dare say that in the coming decades the sweet spot for political careerists will be identifying and then leading former "little darlings" of the left, groups that the left used to lead when they were not franchised and not of interest to elected politicians but are now abandoned because they are no longer outside the system but merely neglected.
Put it this way. Activists represent people "outside the system," because only outsider status warrants street "protest" and marching. Politicians represent people "inside the system" who may be courted and bribed for their votes in the ordinary process of elective politics. But there is always a political middle ground of voters that are nominally within the system but that the elected politicians have tended to neglect over the years.
Meanwhile the one thing to understand is that 97.2 of the protesters you see on TV are fake. They are well-born scions of the ruling class and they ought to be ashamed of themselves.
I had an epiphany on this a year or two ago when reading semi-lefty Karl Polanyi's Great Transformation about the 19th century. Once the workers got the vote, he explained, and found that the political system was responding to their needs, they stopped the marching and rioting. People only take to the streets as a last resort, and usually in a hopeless reaction to wage cuts, unemployment and famine.
Oh really, I thought. Who knew?
Because of course in our age we have all been carefully taught that the woods are full of helpless victims, excluded from representation, for whom "protest" is the only way to advertise their wretchedness.
But when you hear of women activists wailing in the Senate gallery, and women activists dressing up as a wall, and so forth, you are not hearing the cry of the oppressed. You are hearing the supporters of the ruling class. This fact is obvious when you look at photos of the protesters. I'm sorry, but I know the difference between lower-class single women working marginal jobs and educated women doing a bit of "creative protest."
In fact, the very creativity of much of modern protest, with people dressed up as polar bears to protest climate change, tells the story. People of the Creative Self are the kind of people that feel that one must do something to make a protest original and creative rather than just march.
It is a fact that 97.2 percent of the "protests" you see on TV or read about on social media are merely the political stage-shows of the educated ruling class.
Put it this way. How would a bunch of the genuinely oppressed get into the Senate gallery? Access to the gallery is through the senators. So any activist group wanting to "protest" the Kavanaugh vote in the Senate gallery would have to go through a friendly Democratic Senator; it would have to have "connections." Get it?
So I believe that the fundamental thing to understand about "activism" and "protest" in these latter days is that the chances are 97.2 percent that you are looking at people supported by powerful interests closely allied to the ruling class.
And of course, these days Good Little Girls, well-born damsels, go to college to learn the theory and practice of "activism" and "protest." So when you see twentysomething girls with their cute protest signs and their cute dress-ups, you are looking at the naive stooges of the ruling class. You might say they are nostalgic reenactors, reenacting the glorious marches and protests of the workers back in the 19th century.
That would make sense, given my notion of the left as a Great Reaction.
But really, these folks are the cadet battalions of the ruling class, doing a spell in the activist trenches before taking their inherited places in the corridors of power. They are like midshipmen in a Napoleonic War novel. Yes, they rough it a bit, and get knocked about a bit by the bullies in the midshipmen's mess and by the officers if they don't learn their navigation, but in due course they will get their commissions and take their wine in the wardroom. While the ordinary seamen still suffer under ruthless naval discipline and once against it is all hands to witness punishment.
As you know, I explain this ruling-class "fake protest" politics with my "little darlings" theory. The left, starting with rich-kids Marx and Engels, has created a politics out of advocating for the oppressed and the exploited. But every group they discover eventually gets enrolled in the "system" and ceases to be useful and political rank-and-file for marchin' and protestin'. Because the warrant for "activism" is always a marginalized group outside the system for whom street protest is the only way to get the attention of the rulers.
Thus, at present, our fake protesters are advocating for illegal aliens and Muslims, because right now they are outside the gates, and not represented within the political system.
Oh and women, because upscale and educated women are the most appallingly exploited and oppressed victims in human history.
But the interesting thing is that once a group gets inside the system, the cadet battalion commanders lose interest in them. Thus, in the United States, the liberal activists lost interest in the working class in the Sixties, and for 50 years the white working class wandered in the political wilderness without someone to advocate for them in the councils of power.
Until Donald Trump.
Note to ambitious youngsters: I dare say that in the coming decades the sweet spot for political careerists will be identifying and then leading former "little darlings" of the left, groups that the left used to lead when they were not franchised and not of interest to elected politicians but are now abandoned because they are no longer outside the system but merely neglected.
Put it this way. Activists represent people "outside the system," because only outsider status warrants street "protest" and marching. Politicians represent people "inside the system" who may be courted and bribed for their votes in the ordinary process of elective politics. But there is always a political middle ground of voters that are nominally within the system but that the elected politicians have tended to neglect over the years.
Meanwhile the one thing to understand is that 97.2 of the protesters you see on TV are fake. They are well-born scions of the ruling class and they ought to be ashamed of themselves.
Tuesday, June 26, 2018
Blame Activism Culture for "Red Hen" Expulsion
Everyone to the right of left-wing lunacy is talking about the expulsion of Trump Press Secretary Sarah Sanders from the Red Hen restaurant in Lexington, Virginia.
And the first thing that comes up are the gay wedding-cake incidents, where gays deliberately targeted Christian bakeries to force them to make cakes for their weddings.
The good old Double Standard.
But you may be asking: Why? Why do liberals do this?
And my answer is: the Activism Culture, about which I write from time to time.
There are two events in my life that have crystallized the left-wing activism culture for me. The first was when a liberal friend told me that she had always wanted to get into activism. Wat? I thought. Why would a nice liberal woman with conventional liberal ideas think that? The second was when I read in The Great Transformation by Karl Polanyi that after the workers got the vote in England they stopped marching. Why? Because now they were represented in the corridors of power.
Do you see the point here? It is that riot and revolution are the necessary tactics of those who are outside the system. In the mid-19th century, when Marx and Engels issued their Manifesto the workers, now coming into the cities for the first time, were not represented. This was a time of revolutions, marches, and disturbance. But 50 years later, the workers had the vote and the kind of legislation they wanted, a neo-feudal system of rigidly defined labor union rights, free education, and government-run administrative pensions and insurance had been legislated.
When in World War I the workers of Germany, and France, and Britain all fought for their countries, a basic faith of the activism left was exploded: the workers saw themselves as citizens first and workers second.
But leftism was and is a belief system on the holy quest of activism, activism by well-born activists in behalf of the disfranchised who are not represented by the political system. It is, of course, a battle of good against evil, and it makes perfect sense for a political class that has lost its Christian faith and the Christian enactment of the battle of good versus evil in every human heart.
The other thing to understand is this. The whole point of politics is to redirect the battle for justice from the streets and civil war to the election hustings. The point is that politicians, instead of leading their supporters in pitched battles on the street, now conduct their battles in Parliament, with the majority getting the right to tax the nation to deliver benefits to their supporters, instead of the military victors getting to loot and plunder the losers, as in olden times.
Thus I understand leftism and the activism culture as a constant search for new helpless victims outside the system for whom street action is the only option. And this was the genius of the Frankfurt School thinkers. It was they in the 1920s that realized that, with the working class now integrated into the political system, new clients for the well-born activist were needed, and this meant women and minorities.
Of course, by 1920 and the 19th Amendment the US already had universal franchise for men and women, and even minorities. But not exactly in the South. So the Civil Rights movement of the 1950s universalized the elimination of the Jim Crow system in the US South as a glorious liberation for all women and minorities.
But once women and minorities were brought into the system, what then? Well, the well-born activists had to find people who were still outside the system. By the 21st century, in the United States, this boiled down to Muslims and illegal immigrants.
So if you wonder why the left has its knickers in a twist over the unintended consequences of immigration law, in which the children of people applying for political asylum in the US become a custodial issue, understand that for them the whole point of life, the universe, and everything is to do activism for some disfranchised group outside the system. If ever there was no longer some group outside the system then life would lose its meaning for the activist believer.
Now, in my view the activism culture is problematic at several levels.
First, the basis of human life is no longer about access to a patch of food-growing land. When survival is dependent on your tribe's access to food-growing land then the bottom line is the military defense of that patch of land. In hunter-gather societies the entire male adult population is engaged in defense of the patch of land. But in feudal agricultural societies the defense of territory tended to devolve upon "marcher lords" on the "marches" between one feudal regime and another. If you want to know what a marcher lord looks like, think Shakespeare's Harry Percy, son of the Duke of Northumberland. If you look at a map of Britain you will discover that Northumberland butts right up onto the border between England and Scotland. Today, we call the people that used to live in those borderlands "rednecks." They have a reputation for being quarrelsome and aggressive. But today human life is about finding a way to contribute to the economy by exchanging your skills and your labor for wages; or exchanging your savings for dividends and interest; or starting a new business to make something completely new. And this new world does not seem to need so many marcher lords and other high-status folk to make us safe.
Second, it seems that the market and its prices do a pretty good job of regulating the economy. In other words, it is not usually necessary for political power to step in and decide what to do. Indeed, the record of the last 150 years is that politicians and activists are clueless about the needs of the economy, and usually do more harm and good in their interventions. In other words, the price system tells people what to do and, more important, what not to do. When the price system is telling you what not to do and you fail to pay attention, it is usually very annoying and expensive. People get really angry when the market tells them they have made a mistake, and they often resort to force to register their objection. Businessmen get the government to protect them from competition with tariffs and licensing and regulations; workers go out on strike to object to "give-backs."
Thirdly, given the reduced need to defend the patch of land and the evident self-regulating nature of the market economy, there is now a much-reduced need for political and military power. We humans have barely begun to address this fact. In fact I would argue that in general, political and military power are today both highly damaging, because they are systems of rigidity; their whole rationale is to stop change. And yet the point of the market economy is that its prices are signalling for change every day, and everyone should be responding to the price signals of the economy, every day. Obviously this is a problem. All down the ages, political and military chiefs have been indispensable and have dominated society, and they have dominated it for a reason, because fixed political relationships and defense of the border were the absolute requirements of any society that hoped to survive. But now everything has changed, and what will the robin do now, poor thing.
Let me reiterate: all down the ages, the one thing was to have a patch of food-growing land for your tribe and to successfully defend it. Now, the one thing is to have a skill that can be exchanged in the global economy for money. This is, to coin a phrase, a Great Transformation. To expect that everyone would change in a moment to adapt to the new system is, to say the least, unrealistic.
And so the lefty reactionaries are running riot, utterly unable and unwilling to accept that their old faith and its superstitions are being thrown onto the dust-heap of history.
They also find it impossible to understand how their activism culture and its peaceful protests visit monstrous injustices upon Americans less well educated and less well connected than themselves.
So of course the well-born owner of the Red Hen thinks it right and proper to expel President Trump's press secretary from her restaurant, and then go across the street and "peacefully protest" when the Sander party went to eat at another restaurant. Activism and peaceful protest are her religion.
But, as they say, those that won't listen and learn will eventually learn "the hard way."
And the first thing that comes up are the gay wedding-cake incidents, where gays deliberately targeted Christian bakeries to force them to make cakes for their weddings.
The good old Double Standard.
But you may be asking: Why? Why do liberals do this?
And my answer is: the Activism Culture, about which I write from time to time.
There are two events in my life that have crystallized the left-wing activism culture for me. The first was when a liberal friend told me that she had always wanted to get into activism. Wat? I thought. Why would a nice liberal woman with conventional liberal ideas think that? The second was when I read in The Great Transformation by Karl Polanyi that after the workers got the vote in England they stopped marching. Why? Because now they were represented in the corridors of power.
Do you see the point here? It is that riot and revolution are the necessary tactics of those who are outside the system. In the mid-19th century, when Marx and Engels issued their Manifesto the workers, now coming into the cities for the first time, were not represented. This was a time of revolutions, marches, and disturbance. But 50 years later, the workers had the vote and the kind of legislation they wanted, a neo-feudal system of rigidly defined labor union rights, free education, and government-run administrative pensions and insurance had been legislated.
When in World War I the workers of Germany, and France, and Britain all fought for their countries, a basic faith of the activism left was exploded: the workers saw themselves as citizens first and workers second.
But leftism was and is a belief system on the holy quest of activism, activism by well-born activists in behalf of the disfranchised who are not represented by the political system. It is, of course, a battle of good against evil, and it makes perfect sense for a political class that has lost its Christian faith and the Christian enactment of the battle of good versus evil in every human heart.
The other thing to understand is this. The whole point of politics is to redirect the battle for justice from the streets and civil war to the election hustings. The point is that politicians, instead of leading their supporters in pitched battles on the street, now conduct their battles in Parliament, with the majority getting the right to tax the nation to deliver benefits to their supporters, instead of the military victors getting to loot and plunder the losers, as in olden times.
Thus I understand leftism and the activism culture as a constant search for new helpless victims outside the system for whom street action is the only option. And this was the genius of the Frankfurt School thinkers. It was they in the 1920s that realized that, with the working class now integrated into the political system, new clients for the well-born activist were needed, and this meant women and minorities.
Of course, by 1920 and the 19th Amendment the US already had universal franchise for men and women, and even minorities. But not exactly in the South. So the Civil Rights movement of the 1950s universalized the elimination of the Jim Crow system in the US South as a glorious liberation for all women and minorities.
But once women and minorities were brought into the system, what then? Well, the well-born activists had to find people who were still outside the system. By the 21st century, in the United States, this boiled down to Muslims and illegal immigrants.
So if you wonder why the left has its knickers in a twist over the unintended consequences of immigration law, in which the children of people applying for political asylum in the US become a custodial issue, understand that for them the whole point of life, the universe, and everything is to do activism for some disfranchised group outside the system. If ever there was no longer some group outside the system then life would lose its meaning for the activist believer.
Now, in my view the activism culture is problematic at several levels.
First, the basis of human life is no longer about access to a patch of food-growing land. When survival is dependent on your tribe's access to food-growing land then the bottom line is the military defense of that patch of land. In hunter-gather societies the entire male adult population is engaged in defense of the patch of land. But in feudal agricultural societies the defense of territory tended to devolve upon "marcher lords" on the "marches" between one feudal regime and another. If you want to know what a marcher lord looks like, think Shakespeare's Harry Percy, son of the Duke of Northumberland. If you look at a map of Britain you will discover that Northumberland butts right up onto the border between England and Scotland. Today, we call the people that used to live in those borderlands "rednecks." They have a reputation for being quarrelsome and aggressive. But today human life is about finding a way to contribute to the economy by exchanging your skills and your labor for wages; or exchanging your savings for dividends and interest; or starting a new business to make something completely new. And this new world does not seem to need so many marcher lords and other high-status folk to make us safe.
Second, it seems that the market and its prices do a pretty good job of regulating the economy. In other words, it is not usually necessary for political power to step in and decide what to do. Indeed, the record of the last 150 years is that politicians and activists are clueless about the needs of the economy, and usually do more harm and good in their interventions. In other words, the price system tells people what to do and, more important, what not to do. When the price system is telling you what not to do and you fail to pay attention, it is usually very annoying and expensive. People get really angry when the market tells them they have made a mistake, and they often resort to force to register their objection. Businessmen get the government to protect them from competition with tariffs and licensing and regulations; workers go out on strike to object to "give-backs."
Thirdly, given the reduced need to defend the patch of land and the evident self-regulating nature of the market economy, there is now a much-reduced need for political and military power. We humans have barely begun to address this fact. In fact I would argue that in general, political and military power are today both highly damaging, because they are systems of rigidity; their whole rationale is to stop change. And yet the point of the market economy is that its prices are signalling for change every day, and everyone should be responding to the price signals of the economy, every day. Obviously this is a problem. All down the ages, political and military chiefs have been indispensable and have dominated society, and they have dominated it for a reason, because fixed political relationships and defense of the border were the absolute requirements of any society that hoped to survive. But now everything has changed, and what will the robin do now, poor thing.
Let me reiterate: all down the ages, the one thing was to have a patch of food-growing land for your tribe and to successfully defend it. Now, the one thing is to have a skill that can be exchanged in the global economy for money. This is, to coin a phrase, a Great Transformation. To expect that everyone would change in a moment to adapt to the new system is, to say the least, unrealistic.
And so the lefty reactionaries are running riot, utterly unable and unwilling to accept that their old faith and its superstitions are being thrown onto the dust-heap of history.
They also find it impossible to understand how their activism culture and its peaceful protests visit monstrous injustices upon Americans less well educated and less well connected than themselves.
So of course the well-born owner of the Red Hen thinks it right and proper to expel President Trump's press secretary from her restaurant, and then go across the street and "peacefully protest" when the Sander party went to eat at another restaurant. Activism and peaceful protest are her religion.
But, as they say, those that won't listen and learn will eventually learn "the hard way."
Friday, April 13, 2018
When a Lefty Comes to Visit
We have a friend of Lady Marjorie visiting next week: a really nice guy, but a lefty from way back.
The question is: what is the one thing I should communicate to this guy?
I think that the one thing would be my brilliant notion that the whole of left's world view is found in the justification of the left's revolutionary praxis.
My idea is that every new generation of well-born lefties, starting not later than son-of-a-lawyer Marx and son-of-a-businessman Engels, is looking for a reason, a justification, for revolution.
But how? What can justify bloody revolution, or at least "peaceful protest," accusing visiting conservatives of "hate speech" and condemning them to the seventh hell of racism, sexism, and homophobia?
The answer came to me while reading a center-left history of the 19th century, The Great Transformation by Karl Polanyi. Polanyi wrote that, once the working class in England had got the vote in the latter decades of the 19th century, they stopped rioting and demonstrating. Now, they understood, with the vote, they were inside the system, and the political system was paying attention to their political agenda. No need to take to the streets.
Do you see the point here? If you are a traditionally marginalized group, but you have the vote, then you don't need to riot in the streets, because politicians are interested in serving your interests to get your vote. In that case, there is no need for "activism" and "peaceful protest," enacting a proposed revolution. The politicians will take care of everything.
Oh no! What will the activists do then, poor things? The answer is simple. They will find a group that is still outside the system, and do activism and peaceful protest on its behalf. That is what the Frankfurt School realized back in the 1920s, when they recast Marxism as a movement not just to bring about a perfect world for workers, but for women and minorities. Thank goodness! The millennarian movement of the left could continue!
And so it goes. After blacks and women, Latinos. And gays, and transgender, and any gender non-binary. But the problem is that, even with transgenders, the left is getting its agenda through; that's because the average western citizen is really not that interested in politics. If someone feels aggrieved, maybe they have a point.
So who is left, outside the system? The answer is right before our eyes. Illegal immigrants and Muslims! Brilliant!
So that is what all the peaceful protesting and activism is about today.
But you can see that there is a bit of a problem where illegal immigrants are concerned. They take jobs away from the white working class, and lower the wages of everyone. Oh yeah! The working class! Whatever happened to those guys?
Well we know. Liberals did a number on the white working class back in the 1970s by showing, in Archie Bunker, that they were all racist, sexist bigots. Thanks Norman Lear!
The question for us normals and deplorables is: do we just fold like we did for workers, for women, for minorities, for gays, for transgenders. Or do we cry Enough?
That is the great question of our time, and that is what I will try to explore with my lefty visitor.
And the bigger question, after 200 years of attending to the grievances of just about everyone -- except fundamentalist Christians -- is it not time to say that the western world has proved beyond a shadow of a doubt that it listens, through normal political channels, to the grievances of the people. And the problem is really the activists that think that anything in this world can by solved by political power.
Is it not time to admit that the whole question of "activism" is more about the need for well-born lefties to explore the meaning of life, the universe, and everything -- for themselves -- and that the "little darlings" they constantly throw in our faces are doing just fine.
Except that the "little darlings" are not in such great shape these days: white working class dying of despair, women reporting less happiness than back in the 1950s.
The question is: what is the one thing I should communicate to this guy?
I think that the one thing would be my brilliant notion that the whole of left's world view is found in the justification of the left's revolutionary praxis.
My idea is that every new generation of well-born lefties, starting not later than son-of-a-lawyer Marx and son-of-a-businessman Engels, is looking for a reason, a justification, for revolution.
But how? What can justify bloody revolution, or at least "peaceful protest," accusing visiting conservatives of "hate speech" and condemning them to the seventh hell of racism, sexism, and homophobia?
The answer came to me while reading a center-left history of the 19th century, The Great Transformation by Karl Polanyi. Polanyi wrote that, once the working class in England had got the vote in the latter decades of the 19th century, they stopped rioting and demonstrating. Now, they understood, with the vote, they were inside the system, and the political system was paying attention to their political agenda. No need to take to the streets.
Do you see the point here? If you are a traditionally marginalized group, but you have the vote, then you don't need to riot in the streets, because politicians are interested in serving your interests to get your vote. In that case, there is no need for "activism" and "peaceful protest," enacting a proposed revolution. The politicians will take care of everything.
Oh no! What will the activists do then, poor things? The answer is simple. They will find a group that is still outside the system, and do activism and peaceful protest on its behalf. That is what the Frankfurt School realized back in the 1920s, when they recast Marxism as a movement not just to bring about a perfect world for workers, but for women and minorities. Thank goodness! The millennarian movement of the left could continue!
And so it goes. After blacks and women, Latinos. And gays, and transgender, and any gender non-binary. But the problem is that, even with transgenders, the left is getting its agenda through; that's because the average western citizen is really not that interested in politics. If someone feels aggrieved, maybe they have a point.
So who is left, outside the system? The answer is right before our eyes. Illegal immigrants and Muslims! Brilliant!
So that is what all the peaceful protesting and activism is about today.
But you can see that there is a bit of a problem where illegal immigrants are concerned. They take jobs away from the white working class, and lower the wages of everyone. Oh yeah! The working class! Whatever happened to those guys?
Well we know. Liberals did a number on the white working class back in the 1970s by showing, in Archie Bunker, that they were all racist, sexist bigots. Thanks Norman Lear!
The question for us normals and deplorables is: do we just fold like we did for workers, for women, for minorities, for gays, for transgenders. Or do we cry Enough?
That is the great question of our time, and that is what I will try to explore with my lefty visitor.
And the bigger question, after 200 years of attending to the grievances of just about everyone -- except fundamentalist Christians -- is it not time to say that the western world has proved beyond a shadow of a doubt that it listens, through normal political channels, to the grievances of the people. And the problem is really the activists that think that anything in this world can by solved by political power.
Is it not time to admit that the whole question of "activism" is more about the need for well-born lefties to explore the meaning of life, the universe, and everything -- for themselves -- and that the "little darlings" they constantly throw in our faces are doing just fine.
Except that the "little darlings" are not in such great shape these days: white working class dying of despair, women reporting less happiness than back in the 1950s.
Friday, November 18, 2016
Sorry Liberals, Protest is for People Outside the System
Because I'm a bourgeois, born and bred, I really don't get the protest culture. After all, if you have a political problem, you need to elect a representative and create a legislative majority and change the law.
But then a middle-aged woman friend that told me at lunch that she had always wanted to get into "activism." Hello? There was obviously something that I didn't understand, so I turned on my cultural antenna to search for an answer.
The next target on the radar plot was a young woman in a Philosophy of Hume class at the University of Washington here in Seattle. She spoke as though politics was a protest march to City Hall. So who filled that good little girl's head with that stuff? She was talking as though she was a disenfranchised serf, not a privileged young woman well on the way to becoming a candidate member in the professional class. Why would she think that politics was a question of peasants with pitchforks?
Then I read Karl Polanyi's The Great Transformation. Nominally a history of the modern era, it is really an apology for the elite-guided administrative state. It takes for granted that the top-down administrative state is a good thing that is fixing horrible problems with capitalism. But one thing accidentally shone through the educated-elite apology. It was that once the working class got the vote in the 19th century it stopped the riots and demonstrations. That's because once the workers got the vote the political process started to accommodate their agenda; no need to take to the streets.
Oh really.
So why then do the college students and professional protesters take to the streets after a perfectly normal presidential election hashtagging #NotMyPresident?
It's because good little girls in America are being taught in college that "activism" is the highest calling for a meaningful life.
Hillary Clinton learned that in college; that's why she became an Alinsky fan. That is also why President Obama is telling us that he is going to become a community organizer after he leaves the presidency.
All the social justice, environmental, LGBT activism is all part of this culture, that the way for a young sprout of the educated class to find meaning in life is to bend the arc of history towards justice through political action and peaceful protest.
Note the contrast with the conservative philosophy that politics is a necessary evil, that all political action should be leavened with the consent of the governed, and that major pieces of legislation, according to Pat Moynihan, should be passed with nothing less than a 70-30 vote in the US Senate.
Note the contrast with my sharpened notion that politics is division, deliberately separating Americans into two separate tribes; that government is force, so never forget that the vital and necessary agenda of "our side" is experienced by the folks on the receiving end as injustice.
Notice that the conservative and the Chantrill notions imply that you should be very careful about stirring up a hornet's nest when you poke around with political protest and government power.
Notice that the conservative and Chantrill notions imply that you should be putting yourself in the place of the "other" when considering some new political initiative.
It is clear from the actions of our liberal friends in the wake of the Trump election that they have no clue about this. The only reality is their reality and if you disagree you are a racist, sexist, homophobe, etc.
Here is my prediction. Either conservatives are right about this, or liberals are right. Either it is true that you really want to avoid riling up the opposition, or it is true that, in the quest of bending the arc of history towards justice, activism and political street action and peaceful protests and non-negotiable demands are the only way.
So who is right?
I think that the nearest example is the aftermath of the Sixties. In the Sixties the radical children of liberal parents thought they were changing America forever. They were intoxicated with the ideas of the New Left and the repressive tolerance of Herbert Marcuse.
But then the Democrats nominated not the kids' candidate Eugene McCarthy but old-time liberal Hubert Humphrey, and Americans elected Richard Nixon, who championed the Silent Majority that did not want to live the mobilized life of the political activist. Democrats knew what to do about that; they drove Nixon out of office for shenanigans that Democrats get in their mother's milk. So the American people elected Ronald Reagan, a B-movie actor, to make the point and underline it.
Will we have a repeat of the Sixties? Certainly not. History does not repeat itself, it merely rhymes.
But it would be glorious if the New Activism ended up sending not just the white working class but the black and brown and pink working class into the Republican Party.
But then a middle-aged woman friend that told me at lunch that she had always wanted to get into "activism." Hello? There was obviously something that I didn't understand, so I turned on my cultural antenna to search for an answer.
The next target on the radar plot was a young woman in a Philosophy of Hume class at the University of Washington here in Seattle. She spoke as though politics was a protest march to City Hall. So who filled that good little girl's head with that stuff? She was talking as though she was a disenfranchised serf, not a privileged young woman well on the way to becoming a candidate member in the professional class. Why would she think that politics was a question of peasants with pitchforks?
Then I read Karl Polanyi's The Great Transformation. Nominally a history of the modern era, it is really an apology for the elite-guided administrative state. It takes for granted that the top-down administrative state is a good thing that is fixing horrible problems with capitalism. But one thing accidentally shone through the educated-elite apology. It was that once the working class got the vote in the 19th century it stopped the riots and demonstrations. That's because once the workers got the vote the political process started to accommodate their agenda; no need to take to the streets.
Oh really.
So why then do the college students and professional protesters take to the streets after a perfectly normal presidential election hashtagging #NotMyPresident?
It's because good little girls in America are being taught in college that "activism" is the highest calling for a meaningful life.
Hillary Clinton learned that in college; that's why she became an Alinsky fan. That is also why President Obama is telling us that he is going to become a community organizer after he leaves the presidency.
All the social justice, environmental, LGBT activism is all part of this culture, that the way for a young sprout of the educated class to find meaning in life is to bend the arc of history towards justice through political action and peaceful protest.
Note the contrast with the conservative philosophy that politics is a necessary evil, that all political action should be leavened with the consent of the governed, and that major pieces of legislation, according to Pat Moynihan, should be passed with nothing less than a 70-30 vote in the US Senate.
Note the contrast with my sharpened notion that politics is division, deliberately separating Americans into two separate tribes; that government is force, so never forget that the vital and necessary agenda of "our side" is experienced by the folks on the receiving end as injustice.
Notice that the conservative and the Chantrill notions imply that you should be very careful about stirring up a hornet's nest when you poke around with political protest and government power.
Notice that the conservative and Chantrill notions imply that you should be putting yourself in the place of the "other" when considering some new political initiative.
It is clear from the actions of our liberal friends in the wake of the Trump election that they have no clue about this. The only reality is their reality and if you disagree you are a racist, sexist, homophobe, etc.
Here is my prediction. Either conservatives are right about this, or liberals are right. Either it is true that you really want to avoid riling up the opposition, or it is true that, in the quest of bending the arc of history towards justice, activism and political street action and peaceful protests and non-negotiable demands are the only way.
So who is right?
I think that the nearest example is the aftermath of the Sixties. In the Sixties the radical children of liberal parents thought they were changing America forever. They were intoxicated with the ideas of the New Left and the repressive tolerance of Herbert Marcuse.
But then the Democrats nominated not the kids' candidate Eugene McCarthy but old-time liberal Hubert Humphrey, and Americans elected Richard Nixon, who championed the Silent Majority that did not want to live the mobilized life of the political activist. Democrats knew what to do about that; they drove Nixon out of office for shenanigans that Democrats get in their mother's milk. So the American people elected Ronald Reagan, a B-movie actor, to make the point and underline it.
Will we have a repeat of the Sixties? Certainly not. History does not repeat itself, it merely rhymes.
But it would be glorious if the New Activism ended up sending not just the white working class but the black and brown and pink working class into the Republican Party.
Tuesday, May 24, 2016
McCloskey Again: 787 Pages For What?
The third volume of Deirdre McCloskey's Bourgeois Trilogy is out, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, all 787 pages of it.
And I am left wondering: what exactly is new in the third volume that had not been thoroughly thrashed out in the first two volumes, The Bourgeois Virtues and Bourgeois Dignity?
So I went back through my McCloskey Week blogs of 2010 to see what I had understood from reading the first two volumes.
OK, so the first volume was all about The Bourgeois Virtues, that, whatever the bourgeoisie says, it is not a Prudence Only operation, but a culture that embraces all the virtues, the four classical virtues of Prudence, Justice, Temperance, and Courage, and the three Christian virtues of Faith, Hope, and Love.
There is a lot of stuff in Bourgeois Equality about the limitations of Prudence Only, and a restatement of the need for all the virtues. Frequently.
The second volume was Bourgeois Dignity. Here McCloskey pointed out that the rise of the bourgeoisie coincided with the upvaluing of the middle class and the things that it did.
So what is left to say in Volume Three, Bourgeois Equality? I think what is left is to lay down a thundering World War I artillery barrage to assert without limit that McCloskey's ideas about the rise of bourgeois virtue and bourgeois dignity are right and everyone else's ideas about accumulation, about technology, about science, about capital markets, is wrong.
What is new is that McCloskey has come up with a new catchphrase to replace "capitalism," which has been a leftist pejorative at least since 1848. She calls our current way of life "trade-tested betterment." She means by that bourgeois entrepreneurs coming up with innovative ideas for betterment, such as, oh, smartphones, and then submitting them to the test of the market.
The villains of Bourgeois Equality are the people of the "clerisy." But the clerisy were marked out already in The Bourgeois Virtues, as the "opinion makers and opinion takers... readers of The New York Times... book readers... My people. Like me."
So I guess that explains the gratuitous swipes at conservatives as equally to blame for standing in the way of "trade tested betterment" as the post-1848 clerisy. You gotta throw some red meat out to the lefty intelligentsia or they won't read to the end.
But does it work? The New York Times reviewed The Bourgeois Virtues, damning it with faint praise. But Bourgeois Dignity didn't rate a review. However, The Wall Street Journal gave McCloskey a chance to write up Bourgeois Equality last weekend, so that's all right.
I get an eerie feeling, reading Bourgeois Equality, because McCloskey seems to have read the same books that I have. She's all over the Dutch for inventing the modern economy; she's all over the Dutch invasion of Britain in 1688. She takes a strong line against Karl Polanyi and his Great Transformation. She admits coming late to Willa Cather, as I did, and she's dipped into Charles Taylor, as I have.
But she seems to miss out on Hegel. Hey kids. I am talking about Hegel's Master and Slave (Herr und Knecht) thingy from his Phenomenology of Spirit, which I am reading from Alexandre Kojève's Introduction to the Reading of Hegel. The big point of the Master and Slave thingy, in my view, is the valorizing of work. The Master, according to Hegel, who wins the Fight to the Death, appropriates the work of the Slave, and lives a life of leisure. But the Slave, forced to work for the Master, learns to transform the world by his work, transforms what is given, and transcends himself and learns about personal autonomy. In other words, the Slave, through his work for another, learns to value freedom and autonomy and learns how to transform the world by his work. He is on the way to becoming a true bourgeois.
Of course, in the real world, men go to work not because they lost the Fight to the Death with the Master but because, as Willa Cather writes in The Professor's House, when a man is "very much in love and must marry at once" he needs a job. It is not the Master that enslaves him and puts him to work but his love for Lillian.
There is not a word of this in McCloskey, and this is a scandal. How is it that I, a mere racist, sexist, bigoted homophobe conservative, can find out that every serious lefty is supposed to have read Kojève and that I should too so that I can understand the mind of the left and at this very moment am reading it faithfully and learning it and inwardly digesting it while shooting star McCloskey completely missed out on it?
I guess it is back to the drawing boards for McCloskey, to get started on Volume Four.
Meanwhile, I am coming up to the last section of Bourgeois Equality and hoping that it will be a Battle of Kursk barrage on the "clerisy." But who knows?
And I am left wondering: what exactly is new in the third volume that had not been thoroughly thrashed out in the first two volumes, The Bourgeois Virtues and Bourgeois Dignity?
So I went back through my McCloskey Week blogs of 2010 to see what I had understood from reading the first two volumes.
OK, so the first volume was all about The Bourgeois Virtues, that, whatever the bourgeoisie says, it is not a Prudence Only operation, but a culture that embraces all the virtues, the four classical virtues of Prudence, Justice, Temperance, and Courage, and the three Christian virtues of Faith, Hope, and Love.
There is a lot of stuff in Bourgeois Equality about the limitations of Prudence Only, and a restatement of the need for all the virtues. Frequently.
The second volume was Bourgeois Dignity. Here McCloskey pointed out that the rise of the bourgeoisie coincided with the upvaluing of the middle class and the things that it did.
People stopped sneering at market innovativeness and other bourgeois virtues exercised far from the traditional places of honor [in religion, politics, and war].Instead people started to approve of innovation, at least until the clerisy started to badmouth it. And so we got the Great Enrichment of the last 200 years from $3 per day per person to $100 per day per person, and more.
So what is left to say in Volume Three, Bourgeois Equality? I think what is left is to lay down a thundering World War I artillery barrage to assert without limit that McCloskey's ideas about the rise of bourgeois virtue and bourgeois dignity are right and everyone else's ideas about accumulation, about technology, about science, about capital markets, is wrong.
What is new is that McCloskey has come up with a new catchphrase to replace "capitalism," which has been a leftist pejorative at least since 1848. She calls our current way of life "trade-tested betterment." She means by that bourgeois entrepreneurs coming up with innovative ideas for betterment, such as, oh, smartphones, and then submitting them to the test of the market.
The villains of Bourgeois Equality are the people of the "clerisy." But the clerisy were marked out already in The Bourgeois Virtues, as the "opinion makers and opinion takers... readers of The New York Times... book readers... My people. Like me."
So I guess that explains the gratuitous swipes at conservatives as equally to blame for standing in the way of "trade tested betterment" as the post-1848 clerisy. You gotta throw some red meat out to the lefty intelligentsia or they won't read to the end.
But does it work? The New York Times reviewed The Bourgeois Virtues, damning it with faint praise. But Bourgeois Dignity didn't rate a review. However, The Wall Street Journal gave McCloskey a chance to write up Bourgeois Equality last weekend, so that's all right.
I get an eerie feeling, reading Bourgeois Equality, because McCloskey seems to have read the same books that I have. She's all over the Dutch for inventing the modern economy; she's all over the Dutch invasion of Britain in 1688. She takes a strong line against Karl Polanyi and his Great Transformation. She admits coming late to Willa Cather, as I did, and she's dipped into Charles Taylor, as I have.
But she seems to miss out on Hegel. Hey kids. I am talking about Hegel's Master and Slave (Herr und Knecht) thingy from his Phenomenology of Spirit, which I am reading from Alexandre Kojève's Introduction to the Reading of Hegel. The big point of the Master and Slave thingy, in my view, is the valorizing of work. The Master, according to Hegel, who wins the Fight to the Death, appropriates the work of the Slave, and lives a life of leisure. But the Slave, forced to work for the Master, learns to transform the world by his work, transforms what is given, and transcends himself and learns about personal autonomy. In other words, the Slave, through his work for another, learns to value freedom and autonomy and learns how to transform the world by his work. He is on the way to becoming a true bourgeois.
Of course, in the real world, men go to work not because they lost the Fight to the Death with the Master but because, as Willa Cather writes in The Professor's House, when a man is "very much in love and must marry at once" he needs a job. It is not the Master that enslaves him and puts him to work but his love for Lillian.
There is not a word of this in McCloskey, and this is a scandal. How is it that I, a mere racist, sexist, bigoted homophobe conservative, can find out that every serious lefty is supposed to have read Kojève and that I should too so that I can understand the mind of the left and at this very moment am reading it faithfully and learning it and inwardly digesting it while shooting star McCloskey completely missed out on it?
I guess it is back to the drawing boards for McCloskey, to get started on Volume Four.
Meanwhile, I am coming up to the last section of Bourgeois Equality and hoping that it will be a Battle of Kursk barrage on the "clerisy." But who knows?
Wednesday, February 17, 2016
Is the Politics of "Crush or be Crushed" The Only Way?
I got an email yesterday from Sam, a long-time reader of my blog, and he wonders if the Left has it right after all, that "the ends ALWAYS justifies the means." He continues:
In other words Bastiat was at the center of what we might call "Second Wave" economics, that included the idea of marginal price and demolished the Marxian economics that was built upon a tendentious reading of classical economics and its dichotomy between use value and exchange value. It is because of chaps like Bastiat that Marxists, to this very day, cannot venture out of the fenced pasture of Marx's economic writings. To do so is to abandon the Marxian dream.
OK, great. So the science is on our side! That, and $7, will get you lunch at McDonalds. My reader Sam continues, noting that history doesn't care how the winner wins, but the fact of winning.
So if you are a lefty, capitalism is the most powerful force in human history, crushing everything in its path, and it is the bounden duty of all the Melissa Clicks of the world to shout F-words in the face of policemen and call for muscle at their glorious little peaceful protests and fight to protect those in the path of the capitalist Godzilla.
So who is right? How about everyone?
It is true that capitalism and freedom have increased per-capita human income by 30 times in 200 years, but it is also true that it has obliterated everything in its path, and utterly transformed the human experience. In other words, capitalism is transforming the world with almost brutal power, whatever we do or say.
It was completely understandable for the early Left to raise a banner against capitalism and predict that it would all end it immiseration. And it was worthy of the Left to protect and advocate for each new wave of migrants to the city. But it is also true that left politics has encouraged the migrants not to assimilate to the ways of the city and to surrender to the market as the bourgeoisie does. This has caused untold misery, from the death camps of communism and fascism to the predictable miseries of the Castro Brothers' Cuba and Chávez Venezuela, to the demoralization of the white working class where drug addiction and suicide are abroad, and the devastation of the western underclass where the women don't marry much and the men don't work much.
Capitalism and freedom are as inevitable as a Law of Nature. But it is also inevitable that people will fight being thrown into the deep end when they arrive in the city from the countryside, and it is inevitable that sauntering politicians will appear to lead those fighting against their dunking into the capitalist swimming pool.
My reductive Three Peoples theory is an attempt to make sense of this world. The People of the Subordinate Self are people that have not yet acculturated to the modern market economy. They look to a powerful patron or a strong leader as a means of support, and they get it. The People of the Responsible Self are people that has surrendered to the market economy and the radical idea that it is their job to find out how to be useful to the world, and then do it. The People of the Creative Self are people that have mastered the modern world and now they want something better. They want not just to adjust to the world but to amaze it. Thus art-for-art's-sake, progressive politics, the start-up culture, and, at the low end, work/life balance and "lifestyles."
If you are a creative person and you don't want the risks of the start-up culture and invent the next iPhone or the first viable nuclear fusion technology or work in some billionaire's space program, then advocating for those struggling to adapt to the market economy is a natural. The problem is that the creative people running things quickly learn to assume that everything they want for the marginalized is good and beneficial. They think of themselves as kindly librarians rather than ruthless power politicians. That is why AFL leader Samuel Gompers a century ago advised the workers to keep their distance from middle-class socialists. As a later politician put it: they are not interested in you, they are interested in your vote.
It is to deal with this issue, what we might call an instance of the "principal-agent" problem, that I have come up with my "little darlings" notion. If you are a member of a group favored by our current progressive ruling class and lovingly adored as little darlings, beware. One day the ruling class will tire of you, and it will find a new little darling to flatter with its favors. Once upon a time the progressives looved the working class, and lavished it with privileges and benefits. But then the progressives found a new love, African Americans and women, and so they left the working class out in the cold, even stigmatizing it as a bunch of racist, sexist, homophobic Archie Bunkers. In the end, the progressives care about their power, not about the people for whom they advocate. You can see that in the tactics of presidential candidate Hillary Clinton as of mid-February 2016. She thought she was going to cruise to the Democratic presidential nomination, but now that Bernie Sanders is showing form, she is resorting to race politics to stir up the African American voters in South Carolina.
So the white working class got left by the roadside, just like Joe Soptic. And far too many African Americans live in corrupt crime-ridden hellholes, fifty years after the Civil Rights Acts, courtesy of their liberal patrons that seem to be able to coexist with the murdering gangs that help them get out the vote. Women have been pitched out of suburban complacency into glittering careers only to find themselves hag-ridden by the impossible tradeoffs of the "work/life" balance.
Yes, but meanwhile the liberals are trashing the greatest country in the world and all we can come up with is Donald Trump! Isn't it time to take a page from the liberal playbook and crush them as they crush everything in their path?
We could, but I don't think it would do us any good. Our theory and our practice is built on the fundamental truth that the modern capitalist market economy cannot be run like a feudal estate. That is the meaning of Mises' argument for the impossibility of socialism, and Hayek's argument that the bureaucrat in Washington just cannot know enough to run the modern economy. We cannot resort to the bully-boy tactics of the left because that would destroy the economy and raise up a rebellion of people unjustly hurt by our bully-boy tactics. The argument for the market economy and limited government is not just that it is moral and right, not just that it works, but that it is both. The smaller the government, the less it is crushing its opponents and provoking them into a head of rebellion, and the more that nobodies get a chance to reinvent the world and surprise us with a new economic miracle.
If you are a member of the ruling class you almost certainly believe in power, and that means you worship the power of the state. So, how well is that working in Venezuela right now? There is not much glory and power in being the boss of a failing country. Now look at China. Mao Zedong plus the Communist Party plus socialism was a poverty-stricken wasteland. But Xi Jinping plus the Communist Party plus capitalism is growing into a global behemoth. Imagine what China could become if it junked the Communist Party bit.
So I am still keeping the faith. I believe that the progressives, far from preparing for their triumphal march at the Capitol breathlessly reported by TV personality Caesar Flickerman, are desperately patching up a failing dynasty. They thought they were going to sweep into power in 2009 and whip the economy into shape with a big stimulus, whip the banks into shape with Dodd-Frank, whip healthcare into shape with Obamacare, and save the planet with green energy. Oh, and clean up Bush's mess in the Middle East. They really did! Now they are like the Chinese mandarins around the emperor in the Forbidden City in the last decades of the 19th century. They don't know whether to double down on the progressive playbook, or...
Yes, just what do the progressives propose to do next? Free college? Free healthcare? $15 minimum wage?
That, and $7, will get you lunch at McDonalds.
[W]hile I debated how many Bastiats could dance on the head of an anarchistic needle the Left was busy owning education, passing socialist programs for over a century, wholly controlling the popular media sphere, co-opting judeo-christian religion, dominating every bureaucracy, writing every rule, setting every tone, winning and losing battles but nearly always the victor in culture wars.Frédéric Bastiat was the French economist who famously developed the notion of the Broken Window fallacy, "what is seen and what is unseen" and the modern idea of cost as the foregone opportunity.
In other words Bastiat was at the center of what we might call "Second Wave" economics, that included the idea of marginal price and demolished the Marxian economics that was built upon a tendentious reading of classical economics and its dichotomy between use value and exchange value. It is because of chaps like Bastiat that Marxists, to this very day, cannot venture out of the fenced pasture of Marx's economic writings. To do so is to abandon the Marxian dream.
OK, great. So the science is on our side! That, and $7, will get you lunch at McDonalds. My reader Sam continues, noting that history doesn't care how the winner wins, but the fact of winning.
When learning about a past war, no student cares if one or both sides followed the Geneva Conventions. They only care about who won, because that is all that matters. I now believe that it is not enough to win the argument, but to force it as well. The left wins because they have no compunction putting the boot heel to their opponents, so I now believe liberty lovers have to get the bigger boot. An unavoidable contradiction. After all, did the founding fathers content themselves with posting their grievances and accepting their lot through gritted teeth - as we do today - or did they rise up and double down on the violence inflicted upon them? What's one of the few culture wars that the Right has won? Gun ownership - the one right that the leftist government must get bloody to trample. Coincidence?Of course, to the Left, it is always the capitalists that strike first. The whole idea of "capitalism-and-imperialism" in one word is that capitalism grew across the world as much by force of arms as by exchange and markets. And in a milder vein, Karl Polanyi in his Great Transformation argued that the introduction of the exchange economy in the colonies more or less forced the locals out of their rural idiocy into the global exchange economy.
So if you are a lefty, capitalism is the most powerful force in human history, crushing everything in its path, and it is the bounden duty of all the Melissa Clicks of the world to shout F-words in the face of policemen and call for muscle at their glorious little peaceful protests and fight to protect those in the path of the capitalist Godzilla.
So who is right? How about everyone?
It is true that capitalism and freedom have increased per-capita human income by 30 times in 200 years, but it is also true that it has obliterated everything in its path, and utterly transformed the human experience. In other words, capitalism is transforming the world with almost brutal power, whatever we do or say.
It was completely understandable for the early Left to raise a banner against capitalism and predict that it would all end it immiseration. And it was worthy of the Left to protect and advocate for each new wave of migrants to the city. But it is also true that left politics has encouraged the migrants not to assimilate to the ways of the city and to surrender to the market as the bourgeoisie does. This has caused untold misery, from the death camps of communism and fascism to the predictable miseries of the Castro Brothers' Cuba and Chávez Venezuela, to the demoralization of the white working class where drug addiction and suicide are abroad, and the devastation of the western underclass where the women don't marry much and the men don't work much.
Capitalism and freedom are as inevitable as a Law of Nature. But it is also inevitable that people will fight being thrown into the deep end when they arrive in the city from the countryside, and it is inevitable that sauntering politicians will appear to lead those fighting against their dunking into the capitalist swimming pool.
My reductive Three Peoples theory is an attempt to make sense of this world. The People of the Subordinate Self are people that have not yet acculturated to the modern market economy. They look to a powerful patron or a strong leader as a means of support, and they get it. The People of the Responsible Self are people that has surrendered to the market economy and the radical idea that it is their job to find out how to be useful to the world, and then do it. The People of the Creative Self are people that have mastered the modern world and now they want something better. They want not just to adjust to the world but to amaze it. Thus art-for-art's-sake, progressive politics, the start-up culture, and, at the low end, work/life balance and "lifestyles."
If you are a creative person and you don't want the risks of the start-up culture and invent the next iPhone or the first viable nuclear fusion technology or work in some billionaire's space program, then advocating for those struggling to adapt to the market economy is a natural. The problem is that the creative people running things quickly learn to assume that everything they want for the marginalized is good and beneficial. They think of themselves as kindly librarians rather than ruthless power politicians. That is why AFL leader Samuel Gompers a century ago advised the workers to keep their distance from middle-class socialists. As a later politician put it: they are not interested in you, they are interested in your vote.
It is to deal with this issue, what we might call an instance of the "principal-agent" problem, that I have come up with my "little darlings" notion. If you are a member of a group favored by our current progressive ruling class and lovingly adored as little darlings, beware. One day the ruling class will tire of you, and it will find a new little darling to flatter with its favors. Once upon a time the progressives looved the working class, and lavished it with privileges and benefits. But then the progressives found a new love, African Americans and women, and so they left the working class out in the cold, even stigmatizing it as a bunch of racist, sexist, homophobic Archie Bunkers. In the end, the progressives care about their power, not about the people for whom they advocate. You can see that in the tactics of presidential candidate Hillary Clinton as of mid-February 2016. She thought she was going to cruise to the Democratic presidential nomination, but now that Bernie Sanders is showing form, she is resorting to race politics to stir up the African American voters in South Carolina.
So the white working class got left by the roadside, just like Joe Soptic. And far too many African Americans live in corrupt crime-ridden hellholes, fifty years after the Civil Rights Acts, courtesy of their liberal patrons that seem to be able to coexist with the murdering gangs that help them get out the vote. Women have been pitched out of suburban complacency into glittering careers only to find themselves hag-ridden by the impossible tradeoffs of the "work/life" balance.
Yes, but meanwhile the liberals are trashing the greatest country in the world and all we can come up with is Donald Trump! Isn't it time to take a page from the liberal playbook and crush them as they crush everything in their path?
We could, but I don't think it would do us any good. Our theory and our practice is built on the fundamental truth that the modern capitalist market economy cannot be run like a feudal estate. That is the meaning of Mises' argument for the impossibility of socialism, and Hayek's argument that the bureaucrat in Washington just cannot know enough to run the modern economy. We cannot resort to the bully-boy tactics of the left because that would destroy the economy and raise up a rebellion of people unjustly hurt by our bully-boy tactics. The argument for the market economy and limited government is not just that it is moral and right, not just that it works, but that it is both. The smaller the government, the less it is crushing its opponents and provoking them into a head of rebellion, and the more that nobodies get a chance to reinvent the world and surprise us with a new economic miracle.
If you are a member of the ruling class you almost certainly believe in power, and that means you worship the power of the state. So, how well is that working in Venezuela right now? There is not much glory and power in being the boss of a failing country. Now look at China. Mao Zedong plus the Communist Party plus socialism was a poverty-stricken wasteland. But Xi Jinping plus the Communist Party plus capitalism is growing into a global behemoth. Imagine what China could become if it junked the Communist Party bit.
So I am still keeping the faith. I believe that the progressives, far from preparing for their triumphal march at the Capitol breathlessly reported by TV personality Caesar Flickerman, are desperately patching up a failing dynasty. They thought they were going to sweep into power in 2009 and whip the economy into shape with a big stimulus, whip the banks into shape with Dodd-Frank, whip healthcare into shape with Obamacare, and save the planet with green energy. Oh, and clean up Bush's mess in the Middle East. They really did! Now they are like the Chinese mandarins around the emperor in the Forbidden City in the last decades of the 19th century. They don't know whether to double down on the progressive playbook, or...
Yes, just what do the progressives propose to do next? Free college? Free healthcare? $15 minimum wage?
That, and $7, will get you lunch at McDonalds.
Tuesday, November 10, 2015
What CAN We Do When Things Go South?
Everyone is writing about the poor bloody white working class this week. Including me at the American Thinker, where I blame liberals, and Victor Davis Hanson, who writes about how his bright white students couldn't get into elite colleges. I argue that liberalism, with its welfare, anti-marriage, pro-abortion, anti-responsibility agenda, couldn't have been better designed to demoralize cultural groups and remove them from an "overpopulated" world.
So women, minorities and the exquisitely insultable student activists at the university are next.
All this is very poignant to me after reading Karl Polanyi's Great Transformation where he makes the argument that the working class very sensibly pushed for "social protection" from the brutal market system and its commodification of land, labor, and money.
Year Zero for Karl Polanyi is the Elizabethan Poor Law in which the government acted to protect the poor that had been hurled off the land by enclosures and the agricultural revolution.
Only I am reading Marriage and the Family in the Middle Ages by Frances and Joseph Gies. It paints a rather deeper and more nuanced picture of life in Europe before the agricultural revolution.
In the first place, despite the attempt with primogeniture to keep aristocratic families dominant forever, even the best families never flourished for more than a century. Death, political shenanigans, and bad luck all acted to change the guard at the top. The same thing happened, to a lesser degree, lower down the social scale. And simply put, people without land or without a city occupation didn't marry and have children. They still hung around their family but they got exiled to Outer Slobbovia as swineherds or something. Karl Polanyi suggests the idea of a free-floating proletariat. But nobody lived in those days except in the context of a family.
Secondly, the Gieses write that already in the 15th century people were working for wages on the farm. It's difficult to be sure, but I get the impression that, for a lot of people, it was better to work for wages as an agricultural laborer, man or woman, than to have to deal with the risk and uncertainty of land ownership. This gives the lie to Polanyi's suggestion that wage labor was an invention of greedy capitalists in order to reduce labor to a market relation rather than the organic way in which people wrested their living from the soil. On the contrary, it seems more likely that then as now many, if not most, people liked the simplicity and risk avoidance of wage labor. You do your work and you get paid. Period.
Thirdly, I have come to understand the whole social protection idea as a recipe for disaster. The whole idea of modern social democratic politics is to shield the worker from the horrors of the naked marketplace, and provide a decent work and home environment for people that would otherwise be ruthlessly exploited. But the contrary argument is that this protection makes the worker singularly ill-prepared for any adversity. If you have spent your entire life just picking up a paycheck and letting your union leader do all the fighting, and let the government take care of your old age pension and healthcare, what happens if the music stops and the social protection system breaks down? What happens is that you suddenly discover that you don't have the minimum skills you need to survive in the turmoil of change.
The truth is that no matter what happens to you and me, the world carries on. The Gieses write about how that happened even in the aftermath of the Black Death in 1349 and thereafter. They quote from the heartbroken letters of people experiencing the death of all their loved ones. But then they look at manorial court records and discover that the abandoned farms and houses were pretty quickly taken up by relatives of the deceased. And life went on almost as if nothing had happened.
So here we are looking at the collapse of the good old white working class, wringing our hands about their pathologies and their early deaths. But the truth is that tomorrow nobody will care. Things may have gone south for the white working class, but the world carries on.
So if you want to wive and thrive in the world, you'd better not be tempted by any of that free stuff. The way to survival is to have survival skills, and make sure that you are one of the survivors.
So women, minorities and the exquisitely insultable student activists at the university are next.
All this is very poignant to me after reading Karl Polanyi's Great Transformation where he makes the argument that the working class very sensibly pushed for "social protection" from the brutal market system and its commodification of land, labor, and money.
Year Zero for Karl Polanyi is the Elizabethan Poor Law in which the government acted to protect the poor that had been hurled off the land by enclosures and the agricultural revolution.
Only I am reading Marriage and the Family in the Middle Ages by Frances and Joseph Gies. It paints a rather deeper and more nuanced picture of life in Europe before the agricultural revolution.
In the first place, despite the attempt with primogeniture to keep aristocratic families dominant forever, even the best families never flourished for more than a century. Death, political shenanigans, and bad luck all acted to change the guard at the top. The same thing happened, to a lesser degree, lower down the social scale. And simply put, people without land or without a city occupation didn't marry and have children. They still hung around their family but they got exiled to Outer Slobbovia as swineherds or something. Karl Polanyi suggests the idea of a free-floating proletariat. But nobody lived in those days except in the context of a family.
Secondly, the Gieses write that already in the 15th century people were working for wages on the farm. It's difficult to be sure, but I get the impression that, for a lot of people, it was better to work for wages as an agricultural laborer, man or woman, than to have to deal with the risk and uncertainty of land ownership. This gives the lie to Polanyi's suggestion that wage labor was an invention of greedy capitalists in order to reduce labor to a market relation rather than the organic way in which people wrested their living from the soil. On the contrary, it seems more likely that then as now many, if not most, people liked the simplicity and risk avoidance of wage labor. You do your work and you get paid. Period.
Thirdly, I have come to understand the whole social protection idea as a recipe for disaster. The whole idea of modern social democratic politics is to shield the worker from the horrors of the naked marketplace, and provide a decent work and home environment for people that would otherwise be ruthlessly exploited. But the contrary argument is that this protection makes the worker singularly ill-prepared for any adversity. If you have spent your entire life just picking up a paycheck and letting your union leader do all the fighting, and let the government take care of your old age pension and healthcare, what happens if the music stops and the social protection system breaks down? What happens is that you suddenly discover that you don't have the minimum skills you need to survive in the turmoil of change.
The truth is that no matter what happens to you and me, the world carries on. The Gieses write about how that happened even in the aftermath of the Black Death in 1349 and thereafter. They quote from the heartbroken letters of people experiencing the death of all their loved ones. But then they look at manorial court records and discover that the abandoned farms and houses were pretty quickly taken up by relatives of the deceased. And life went on almost as if nothing had happened.
So here we are looking at the collapse of the good old white working class, wringing our hands about their pathologies and their early deaths. But the truth is that tomorrow nobody will care. Things may have gone south for the white working class, but the world carries on.
So if you want to wive and thrive in the world, you'd better not be tempted by any of that free stuff. The way to survival is to have survival skills, and make sure that you are one of the survivors.
Monday, November 9, 2015
Perhaps the Wages of Liberalism is Cultural Death
I've been having something of an epiphany in the last couple of weeks, ever since reading Karl Polanyi's Great Transformation and running at the same time into Kevin D. Williamson's report on the Tudor war on the castles in his The End is Near.
Karl Polanyi dresses up in rather fine livery the left's central argument that the working class were cruelly treated in the heyday of capitalism in the early to mid 1800s owing to a cavalier rejection of an age-old social consensus that provided for the poor. In response to the cruel capitalist industrial revolution the workers naturally pushed for "social protection" against the ravages of the market and its commodification of their labor with market wages and the ruthless proposition that they work or starve.
This is all part of the left's standard narrative, arguing that the Manchester liberals cruelly broke up the old Poor Law that had protected the poor in England ever since the Tudors.
Kevin Williamson reports indirectly in The End is Near how the Tudor Poor Law came to be. In my view he rather damages the narrative about the old social compact. The Tudors, he relates, were engaged upon a project to build their monarchial power in a nation state. To do that they had to crush the power of the barons. We are talking about the powerful families that we've grown to know and love that appear in Shakespeare's Wars of the Roses plays: marcher lords of the north like the Percies; the Dukes of Buckingham, Earls of Worcester, and so on. The Tudors disarmed these folk and disbanded their private armies. And they demolished their castles. Thus ended the great age of medieval castles and also the end of the heyday of primogeniture in the nobility. It was the immense power of the castle, according to Frances and Joseph Gies in Marriage and Family in the Middle Ages, that induced the nobility of Europe to concentrate family power in the eldest son and the family castle.
But this is what occurred to me. Once the nobles were stripped of their castles and their private armies, who needed the useless mouths of peasants? Now the noble families would express their power through money: money for grand houses in the capital city, and money to influence and persuade.
Now exactly at the same time we experience the agricultural revolution: its enclosures, its sheep farming its drainage and improvements. The result of the revolution was to maximize the income from the noble or the gentry estate. They kicked out the peasants from their customary subservience that was useful to the lord only when he needed the peasants to form his army. The Tudors, naturally, were left holding the baby. Eventually, as governments will, they decided to "do something" about the poor, with the Poor Law and the Statute of Artificers.
So, on this view, the whole history of the Poor Law is not about a caring and humane society, but just politicians trying to patch up the latest disaster. The poor in the reign of Elizabeth I were a problem for the government, so the government "did something" to try and make it go away. It didn't go away, not until the industrial revolution 200 years after the Tudor bid for national, central power.
So now I am looking at the latest flap about the white working class, publicized in The Atlantic, about how the working class are dying off from alcoholism and drug dependency, and I am thinking that to the regime the working class, like the "useless retainers" of agricultural England, are just an embarrassment. Back in the 19th century the working class were useful soldiers to deploy in the political battles of the day, one in which the old landowners could stick one in the eye of the parvenu factory owners and capitalists and join with the socialists that were engaged in their own bid for political power.
Now that the working class doesn't enter into anyone's political calculations, what with the votes of blacks and women and Hispanics and gays being more useful to America's party of the left, the Democratic Pary, the white working class is toast. And since they have spent the last century sucking off the teat of government as little darlings of the liberals, they lack the fighting spirit that you need to make a difference in war and politics.
We sentimental conservatives have nurtured a daydream that one day the white working class would get a clue and join the Republican Party. But, writing over the weekend about the decline of the working class I suddenly had a thought. What if they don't hit bottom? What if they just subside deeper and deeper into despair and alcohol. What if they just keep going on down?
We don't like to think about it, but the truth is that it's the way of the world. They say that languages and cultures are disappearing every day. Here in Australia we just had a day with a tour guide, Bridget, who's an Australian indigenous. But she is living with a "white fellah." Bridget makes her living being a professional indigenous, telling us about how her grandmother was abducted from her parents and taken to a mission to be raised by the cruel nuns.
But Bridget is living with a white fellah, and you can see where that leads. Right now, she says, 78 percent of indigenous in Australia live in urban areas.
You can emote all day about the noble working class and the authentic indigenous experience. But the world is living in cities and people are offering their labor on the labor market. Liberals have told the working class and the indigenous that they are special people and have been cruelly treated and they care about them.
No doubt. But the only way to wive and thrive in the world today is to learn how to live and work in the market economy and make your peace with it. Anything else -- from the liberal politics of class to the liberal politics of race or the liberal politics of gender -- is liberal flim-flam, and the wages of liberal flim-flam is personal extinction, which is a lot different from the hard, but bearable, cultural separation from pre-industrial culture as you move and adjust to the city.
Like I say in my American Thinker piece this week, liberal politics encourages extinction. Liberal welfare encourages people not to work; liberal sexual revolution encourages people not to marry; liberal abortion encourages people not to have children. And the stirring up of grievance, like with the Black Lives Matter folks, funded in part by George Soros, encourages people not to be responsible. When you look at liberal politics that way you have to wonder: is all this deliberate? Are liberals actually trying to extinguish their political clients?
I have to believe that liberals are not evil, just stupid. The alternative is unthinkable.
Karl Polanyi dresses up in rather fine livery the left's central argument that the working class were cruelly treated in the heyday of capitalism in the early to mid 1800s owing to a cavalier rejection of an age-old social consensus that provided for the poor. In response to the cruel capitalist industrial revolution the workers naturally pushed for "social protection" against the ravages of the market and its commodification of their labor with market wages and the ruthless proposition that they work or starve.
This is all part of the left's standard narrative, arguing that the Manchester liberals cruelly broke up the old Poor Law that had protected the poor in England ever since the Tudors.
Kevin Williamson reports indirectly in The End is Near how the Tudor Poor Law came to be. In my view he rather damages the narrative about the old social compact. The Tudors, he relates, were engaged upon a project to build their monarchial power in a nation state. To do that they had to crush the power of the barons. We are talking about the powerful families that we've grown to know and love that appear in Shakespeare's Wars of the Roses plays: marcher lords of the north like the Percies; the Dukes of Buckingham, Earls of Worcester, and so on. The Tudors disarmed these folk and disbanded their private armies. And they demolished their castles. Thus ended the great age of medieval castles and also the end of the heyday of primogeniture in the nobility. It was the immense power of the castle, according to Frances and Joseph Gies in Marriage and Family in the Middle Ages, that induced the nobility of Europe to concentrate family power in the eldest son and the family castle.
But this is what occurred to me. Once the nobles were stripped of their castles and their private armies, who needed the useless mouths of peasants? Now the noble families would express their power through money: money for grand houses in the capital city, and money to influence and persuade.
Now exactly at the same time we experience the agricultural revolution: its enclosures, its sheep farming its drainage and improvements. The result of the revolution was to maximize the income from the noble or the gentry estate. They kicked out the peasants from their customary subservience that was useful to the lord only when he needed the peasants to form his army. The Tudors, naturally, were left holding the baby. Eventually, as governments will, they decided to "do something" about the poor, with the Poor Law and the Statute of Artificers.
So, on this view, the whole history of the Poor Law is not about a caring and humane society, but just politicians trying to patch up the latest disaster. The poor in the reign of Elizabeth I were a problem for the government, so the government "did something" to try and make it go away. It didn't go away, not until the industrial revolution 200 years after the Tudor bid for national, central power.
So now I am looking at the latest flap about the white working class, publicized in The Atlantic, about how the working class are dying off from alcoholism and drug dependency, and I am thinking that to the regime the working class, like the "useless retainers" of agricultural England, are just an embarrassment. Back in the 19th century the working class were useful soldiers to deploy in the political battles of the day, one in which the old landowners could stick one in the eye of the parvenu factory owners and capitalists and join with the socialists that were engaged in their own bid for political power.
Now that the working class doesn't enter into anyone's political calculations, what with the votes of blacks and women and Hispanics and gays being more useful to America's party of the left, the Democratic Pary, the white working class is toast. And since they have spent the last century sucking off the teat of government as little darlings of the liberals, they lack the fighting spirit that you need to make a difference in war and politics.
We sentimental conservatives have nurtured a daydream that one day the white working class would get a clue and join the Republican Party. But, writing over the weekend about the decline of the working class I suddenly had a thought. What if they don't hit bottom? What if they just subside deeper and deeper into despair and alcohol. What if they just keep going on down?
We don't like to think about it, but the truth is that it's the way of the world. They say that languages and cultures are disappearing every day. Here in Australia we just had a day with a tour guide, Bridget, who's an Australian indigenous. But she is living with a "white fellah." Bridget makes her living being a professional indigenous, telling us about how her grandmother was abducted from her parents and taken to a mission to be raised by the cruel nuns.
But Bridget is living with a white fellah, and you can see where that leads. Right now, she says, 78 percent of indigenous in Australia live in urban areas.
You can emote all day about the noble working class and the authentic indigenous experience. But the world is living in cities and people are offering their labor on the labor market. Liberals have told the working class and the indigenous that they are special people and have been cruelly treated and they care about them.
No doubt. But the only way to wive and thrive in the world today is to learn how to live and work in the market economy and make your peace with it. Anything else -- from the liberal politics of class to the liberal politics of race or the liberal politics of gender -- is liberal flim-flam, and the wages of liberal flim-flam is personal extinction, which is a lot different from the hard, but bearable, cultural separation from pre-industrial culture as you move and adjust to the city.
Like I say in my American Thinker piece this week, liberal politics encourages extinction. Liberal welfare encourages people not to work; liberal sexual revolution encourages people not to marry; liberal abortion encourages people not to have children. And the stirring up of grievance, like with the Black Lives Matter folks, funded in part by George Soros, encourages people not to be responsible. When you look at liberal politics that way you have to wonder: is all this deliberate? Are liberals actually trying to extinguish their political clients?
I have to believe that liberals are not evil, just stupid. The alternative is unthinkable.
Tuesday, November 3, 2015
Karl Polanyi: Critique of "The Great Transformation"
Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US. It is a ringing critique of the market economy.
We analyzed Polanyi's argument, chapter by chapter, starting wth "Capitalism as a Utopian Movement." But now it's time to critique the book.
The Great Transformation really amounts to a recapitulation of the moderate leftist argument made more argumentatively by Marx and his epigones.
Here is what Polanyi argues.
Back at the beginning of the agricultural revolution and its enclosures that started in around the 16th century, country folk started to get thrown off the land. Landowners found it more profitable to enclose the open fields of the medieval manor and often to raise sheep instead of crops. They needed less labor.
In the late 16th century in Britain the Tudors responded with legislation, the Poor Laws, that recognized the responsibility to take care of those thrown off the land. The Poor Law waxed and waned for the next 200 years, culminating in the Speenhamland Law of 1795 that created a right to existence -- and also collapsed the wages offered by employers, because the government would make up the difference.
But during the later 18th century a new utopian ideology grew up, that believed in the idea of the "self-regulating market." All the Poor Law stuff was rubbish to these people, and when they came to power in the Great Reform of 1832 they more or less abolished the Poor Law and forced workers to work in the labor market or die.
This capitalist ideology was founded on two ideas: first the idea that markets were self-regulating and didn't need the state to sort things out; second that labor, land, and money should be treated like commodities, bought and sold in the market.
But labor and land and even money, argued Polanyi, are not mere commodities; laborers are men, and land is nature, the source of life. And a market in money creates horrible panics and crashes. This ideology was based on the "commodity fiction" that labor, land, and money could or should be treated like goods offered for sale in the market.
The effect of the utopian economic liberalism on the workers and the farmers was so extreme that a counter movement arose to fight the utopian dreams of the economic liberals. Polanyi calls the clash of ideologies the "double movement." The opposing movement of "self-protection" was not organized or ideological. It just wanted social protections for the land-owners and the workers against the mechanical workings of the market and its sudden and periodic descents into economic crisis and unemployment.
The two opposing sides of the "double movement" were unable to compose their differences and so the world crashed into economic oblivion in the inevitable disaster of the Great Depression in 1929-33. Unfortunately the result of this was fascism, as people in their desperation chose strong charismatic leadership over either of the two sides of the "double movement."
So now what do we do, at the time that Polanyi was writing in the middle of World War II? What we needed to do was "planning and control," based on the idea of removing labor, land, and money from the market, and recognizing that you cannot make a "commodity fiction" out of things that are not really commodities in the first place.
OK, now let's take Polanyi's argument apart.
In the first place, the agricultural revolution wasn't the only thing going on in the 16th century in England. The other thing was the effort of the Tudor monarchs to build up the state and disarm the nobles. They demolished the castles and the private armies of the great lords, the colorful chaps that appear in Shakespeare's Wars of the Roses plays. This makes sense out of Marx's famous comment about "A mass of free proletarians was hurled on the labour market by the breaking-up of the bands of feudal retainers[.]" Of course it was. The nobles, stripped of their private armies, had no use for marginal retainers that could no longer be used as soldiers in the noble's feudal host. They would compete now in the capital city on the basis of their income, and their ability to afford extravagant display and to marshal political rather than military support as of old. In other words, the nobles needed cash, not men to demonstrate their strength and power. In this situation, the poor naturally became the charge of the folks that provoked their misery, the central government that was smashing up the old feudal order in its power project of centralization and nation-building. Needless to say, the government did the job very badly.
Now let's talk about the self-regulating market and the commodity fictions of labor, land, and money. First of all, let's concede the important thing. The market is not "self-regulating" like a steam engine with a governor. The market makes mistakes every day. John Kenneth Galbraith famously said that the stock market had predicted twelve of the last eight recessions.
I think it is incorrect to think of the market as self-regulating; on that I agree with Polanyi. The best way to think about it is to say that the markets (and businesses and consumers) learn from their mistakes. The market is not a machine; it is a daily learning process. As Kevin Williamson writes in The End is Near. Markets learn; governments don't.
It is also true that the idea of markets in labor, land, and money is a fantastical idea. It is indeed a "commodity fiction" to think of a market in labor, and every laborer's work time bought and sold as a stock or a bond. Who came up with that idea?
The answer is: everybody and nobody.
Let us get a clue from Eric Hoffer, the longshoreman philosopher. He writes that there are two options in deciding how the work of mankind gets to be done. Either the boss issues the orders, or the workers decide what to do on their own.
But hey! How in the world can an individual worker know what to do? Well, he can know if he pays attention to prices. Suppose there is a fracking boom going on in North Dakota. Guess what! The price of labor in North Dakota goes up into the stratosphere. So ordinary truck drivers get the idea that it would be a good idea to move to get a job in North Dakota. Suppose you are a steelworker represented by a labor union. Things aren't going too well for the steel company and it wants to cut wages. But the union bellows about "givebacks" and keeps your wages up until one day the steel company goes broke and you are out of a job. What do you think about "givebacks" now?
So the truth is that the "commodity fiction" of a market in labor is actually a brilliant idea that enables the world to work without a boss. How cool is that? The only thing it demands is that everyone submit to the hegemony of the market. For a lot of people, maybe for most people, that is a bridge too far. It's great to ride the wave of progress, but quite another thing to swallow your pride and take your losses when the market turns against you.
For Polanyi the story of the century between 1840 and 1940 is the story of the "double movement" between the movement towards markets and the self-protection movement against them. The disaster of 1929 he lays at the impossibility of a self-regulating market. The only solution, he writes, is to take the humans and nature out of the market and substitute "planning and control." Which means, of course the rule of people like Polanyi.
In your dreams, Karl.
We should not be too hard on Karl Polanyi. He was writing before the world recovered after World War II. Before the German Wirtschaftwunder. Before the Reagan Revolution. Before the wonders of electronics and computers and smartphones and Google Search, and kids in a village in Ethiopia learning English and how to hack the camera on a tablet without an adult to show them how. Before the curtain was drawn back on the unspeakable cruelties of the Stalinist Soviet Union and the Maoist Great Leap Forward. Before China decided to embrace the market economy and India too.
Polanyi's panacea of "planning" died not later than the "stagflation" of the late 1970s. Planning by political and intellectual elites does not work. It does not work because government does not learn. Not until it is way too late.
The bottom line is that before 1800, according to researchers like Gregory Clark in A Farewell to Alms, England experienced "downward mobility" as the poor had fewer surviving children and the younger children of the upper class moved in on the lower classes. After 1800 began the revolution in expectations we call "upward mobility" where parents across all classes expect their children to live better than they did. A lot better: per-capita income in the "West" is now 30 times the level of 1800. Deirdre McCloskey calls it The Great Enrichment, and writes that there has never been anything like it, ever.
In McCloskey's telling, and in George Gilder's, the reason for the Great Enrichment has not been capitalism, thought of as the patient accumulation of capital. It has been surprises, like the textile revolution, the steam revolution, the railroad revolution, the electrical revolution, the automobile revolution, the electronic revolution, the computer revolution, the communications revolution, the information revolution. And the fact that the unhampered market allowed these surprises, these revolutions, to elbow the old ways aside before they could get their political representatives to saddle up and protect them.
There is no doubt that the industrial or market revolution of 1800 was a cruel shock that changed the world and caused a lot of suffering. It forced everyone to work according to the dictates of the market or starve, as Polanyi argues.
We humans have to choose. Do we want to submit to the dictates of the market, the collective boss of all the producers and all the consumers, or to the individual human boss? Do we see the modern world as the Great Enrichment or the Great Transformation?
And the truth is that under the hegemony of the market we have lots of choices. We can go work for the government and get a lifetime job. The only problem seems to be that government workers are all miserable: talk to a public school teacher. We can go work for a big corporation and get a good salary and benefits. The only problem is that when the corporation gets old and sluggish it responds with layoffs. And that probably means you if you have been there for 20 years and have received regular step salary increases every year. Or we can work for a startup, or as an independent contractor. It's a lot more risky, day to day, but it keeps you awake and focused on upon the donut -- what am I worth in the labor market and what can I do about it -- and not upon the hole. When you are in the market you detect its smallest changes, and so you get to respond first. You have already responded while the corporate types and the government types are sitting in their cubicles absolutely clueless about what is coming down the road, whether it's a gentle evening breeze or a killer tornado.
We analyzed Polanyi's argument, chapter by chapter, starting wth "Capitalism as a Utopian Movement." But now it's time to critique the book.
The Great Transformation really amounts to a recapitulation of the moderate leftist argument made more argumentatively by Marx and his epigones.
Here is what Polanyi argues.
Back at the beginning of the agricultural revolution and its enclosures that started in around the 16th century, country folk started to get thrown off the land. Landowners found it more profitable to enclose the open fields of the medieval manor and often to raise sheep instead of crops. They needed less labor.
In the late 16th century in Britain the Tudors responded with legislation, the Poor Laws, that recognized the responsibility to take care of those thrown off the land. The Poor Law waxed and waned for the next 200 years, culminating in the Speenhamland Law of 1795 that created a right to existence -- and also collapsed the wages offered by employers, because the government would make up the difference.
But during the later 18th century a new utopian ideology grew up, that believed in the idea of the "self-regulating market." All the Poor Law stuff was rubbish to these people, and when they came to power in the Great Reform of 1832 they more or less abolished the Poor Law and forced workers to work in the labor market or die.
This capitalist ideology was founded on two ideas: first the idea that markets were self-regulating and didn't need the state to sort things out; second that labor, land, and money should be treated like commodities, bought and sold in the market.
But labor and land and even money, argued Polanyi, are not mere commodities; laborers are men, and land is nature, the source of life. And a market in money creates horrible panics and crashes. This ideology was based on the "commodity fiction" that labor, land, and money could or should be treated like goods offered for sale in the market.
The effect of the utopian economic liberalism on the workers and the farmers was so extreme that a counter movement arose to fight the utopian dreams of the economic liberals. Polanyi calls the clash of ideologies the "double movement." The opposing movement of "self-protection" was not organized or ideological. It just wanted social protections for the land-owners and the workers against the mechanical workings of the market and its sudden and periodic descents into economic crisis and unemployment.
The two opposing sides of the "double movement" were unable to compose their differences and so the world crashed into economic oblivion in the inevitable disaster of the Great Depression in 1929-33. Unfortunately the result of this was fascism, as people in their desperation chose strong charismatic leadership over either of the two sides of the "double movement."
So now what do we do, at the time that Polanyi was writing in the middle of World War II? What we needed to do was "planning and control," based on the idea of removing labor, land, and money from the market, and recognizing that you cannot make a "commodity fiction" out of things that are not really commodities in the first place.
OK, now let's take Polanyi's argument apart.
In the first place, the agricultural revolution wasn't the only thing going on in the 16th century in England. The other thing was the effort of the Tudor monarchs to build up the state and disarm the nobles. They demolished the castles and the private armies of the great lords, the colorful chaps that appear in Shakespeare's Wars of the Roses plays. This makes sense out of Marx's famous comment about "A mass of free proletarians was hurled on the labour market by the breaking-up of the bands of feudal retainers[.]" Of course it was. The nobles, stripped of their private armies, had no use for marginal retainers that could no longer be used as soldiers in the noble's feudal host. They would compete now in the capital city on the basis of their income, and their ability to afford extravagant display and to marshal political rather than military support as of old. In other words, the nobles needed cash, not men to demonstrate their strength and power. In this situation, the poor naturally became the charge of the folks that provoked their misery, the central government that was smashing up the old feudal order in its power project of centralization and nation-building. Needless to say, the government did the job very badly.
Now let's talk about the self-regulating market and the commodity fictions of labor, land, and money. First of all, let's concede the important thing. The market is not "self-regulating" like a steam engine with a governor. The market makes mistakes every day. John Kenneth Galbraith famously said that the stock market had predicted twelve of the last eight recessions.
I think it is incorrect to think of the market as self-regulating; on that I agree with Polanyi. The best way to think about it is to say that the markets (and businesses and consumers) learn from their mistakes. The market is not a machine; it is a daily learning process. As Kevin Williamson writes in The End is Near. Markets learn; governments don't.
It is also true that the idea of markets in labor, land, and money is a fantastical idea. It is indeed a "commodity fiction" to think of a market in labor, and every laborer's work time bought and sold as a stock or a bond. Who came up with that idea?
The answer is: everybody and nobody.
Let us get a clue from Eric Hoffer, the longshoreman philosopher. He writes that there are two options in deciding how the work of mankind gets to be done. Either the boss issues the orders, or the workers decide what to do on their own.
But hey! How in the world can an individual worker know what to do? Well, he can know if he pays attention to prices. Suppose there is a fracking boom going on in North Dakota. Guess what! The price of labor in North Dakota goes up into the stratosphere. So ordinary truck drivers get the idea that it would be a good idea to move to get a job in North Dakota. Suppose you are a steelworker represented by a labor union. Things aren't going too well for the steel company and it wants to cut wages. But the union bellows about "givebacks" and keeps your wages up until one day the steel company goes broke and you are out of a job. What do you think about "givebacks" now?
So the truth is that the "commodity fiction" of a market in labor is actually a brilliant idea that enables the world to work without a boss. How cool is that? The only thing it demands is that everyone submit to the hegemony of the market. For a lot of people, maybe for most people, that is a bridge too far. It's great to ride the wave of progress, but quite another thing to swallow your pride and take your losses when the market turns against you.
For Polanyi the story of the century between 1840 and 1940 is the story of the "double movement" between the movement towards markets and the self-protection movement against them. The disaster of 1929 he lays at the impossibility of a self-regulating market. The only solution, he writes, is to take the humans and nature out of the market and substitute "planning and control." Which means, of course the rule of people like Polanyi.
In your dreams, Karl.
We should not be too hard on Karl Polanyi. He was writing before the world recovered after World War II. Before the German Wirtschaftwunder. Before the Reagan Revolution. Before the wonders of electronics and computers and smartphones and Google Search, and kids in a village in Ethiopia learning English and how to hack the camera on a tablet without an adult to show them how. Before the curtain was drawn back on the unspeakable cruelties of the Stalinist Soviet Union and the Maoist Great Leap Forward. Before China decided to embrace the market economy and India too.
Polanyi's panacea of "planning" died not later than the "stagflation" of the late 1970s. Planning by political and intellectual elites does not work. It does not work because government does not learn. Not until it is way too late.
The bottom line is that before 1800, according to researchers like Gregory Clark in A Farewell to Alms, England experienced "downward mobility" as the poor had fewer surviving children and the younger children of the upper class moved in on the lower classes. After 1800 began the revolution in expectations we call "upward mobility" where parents across all classes expect their children to live better than they did. A lot better: per-capita income in the "West" is now 30 times the level of 1800. Deirdre McCloskey calls it The Great Enrichment, and writes that there has never been anything like it, ever.
In McCloskey's telling, and in George Gilder's, the reason for the Great Enrichment has not been capitalism, thought of as the patient accumulation of capital. It has been surprises, like the textile revolution, the steam revolution, the railroad revolution, the electrical revolution, the automobile revolution, the electronic revolution, the computer revolution, the communications revolution, the information revolution. And the fact that the unhampered market allowed these surprises, these revolutions, to elbow the old ways aside before they could get their political representatives to saddle up and protect them.
There is no doubt that the industrial or market revolution of 1800 was a cruel shock that changed the world and caused a lot of suffering. It forced everyone to work according to the dictates of the market or starve, as Polanyi argues.
We humans have to choose. Do we want to submit to the dictates of the market, the collective boss of all the producers and all the consumers, or to the individual human boss? Do we see the modern world as the Great Enrichment or the Great Transformation?
And the truth is that under the hegemony of the market we have lots of choices. We can go work for the government and get a lifetime job. The only problem seems to be that government workers are all miserable: talk to a public school teacher. We can go work for a big corporation and get a good salary and benefits. The only problem is that when the corporation gets old and sluggish it responds with layoffs. And that probably means you if you have been there for 20 years and have received regular step salary increases every year. Or we can work for a startup, or as an independent contractor. It's a lot more risky, day to day, but it keeps you awake and focused on upon the donut -- what am I worth in the labor market and what can I do about it -- and not upon the hole. When you are in the market you detect its smallest changes, and so you get to respond first. You have already responded while the corporate types and the government types are sitting in their cubicles absolutely clueless about what is coming down the road, whether it's a gentle evening breeze or a killer tornado.
Monday, November 2, 2015
Karl Polanyi: A World Without Markets in Labor, Land, or Money
Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US. It is a ringing critique of the market economy.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
The market destroys the traditional relationships, so the workers and the landowners demanding protection as we discuss in "Land and Labor and Resistance to the Market."
In "The Contradictions of Market vs. Self Protection" argues that the contradiction between the attempt to maintain markets in labor, land, and money in the 1920s to the crash of 1929. And the result was fascism, because people are nations before they are classes.
In Part III: Transformation and Progress, Karl Polanyi begins by reviewing the catastrophe at the end of the 1920s when, for him, the basic contradiction between the utopian economic liberal ideology and the self-protection movement ended in economic and political meltdown.
To Polanyi the events of the 1920s echo the events of early capitalism. Just as in the abolition of Speenhamland and the separation of economy and politics, in the modern crisis of the 1920s the reigning ideology, formalized in Montesquieu's separation of powers, ordered the separation of the people from the power over their own economic life. Nominally, the commodification of labor, land, and money removed politics from interference in economic questions. In the 1920s:
To the workers, it seemed natural that the markets should be subordinated to democratic society. But the accompanying specter of socialism undermines market confidence. So when markets collapsed and propertied people feared the seizure of their property,
For Germany, as a victim of the victorious powers in World War I, fascism was a useful tool. It enabled her to cut loose from the economic liberal system to "lessen the hold of the outer world upon her" and break the rules of the international order on her bid for world domination.
For Russia, now the Soviet Union, the deflation of the 1920s was ruinous to her export trade in "grain, timber, furs, and some other organic materials." This is what forced the Soviets into collectivization of agriculture.
The verdict on the meltdown of 1929-33 is this.
OK, so if labor and land and money are removed from the market, what will replace it? After a few pages about the importance of freedom and "the right to nonconformity as the hallmark of a free society" we come down to Polanyi's solution to the failure of the market economy: Planning.
Oh yeah. "Planning and control are being attacked as a denial of freedom... Yet the victory of fascism was made practically unavoidable by the liberals' obstruction of any reform involving planning, regulation, or control." But the economic liberal position is a fantasy, the idea that if you are "paying your way" and "in nobody's debt" you were "unentangled in the evil of power and economic value."
Thus "power and planning" are needed to steer between the fascist glorification of power and the fantasy that society can operate without it. But there is good news. If man resigns himself to the reality of society "he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality."
Nobody dares to advocate for "planning" today. Since World War II, when Polanyi was writing, we have seen where planning leads, both in the failures of European social democratic parties and the miserable train-wreck of the Soviet Empire and Maoist China. The problem is the old one: Quis custodiet ipsos custodes, or who will plan the planners?
No doubt the "self-regulating economy" fails to self-regulate; it is human after all. But the market learns from its mistake. The trouble with planners and politicians in general is that, in the words of Kevin D. Williamson, they fail to learn.
We will critique Karl Polanyi's "story so far" of the rise of the West and his proposed solution in the final exciting installment of this series.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
The market destroys the traditional relationships, so the workers and the landowners demanding protection as we discuss in "Land and Labor and Resistance to the Market."
In "The Contradictions of Market vs. Self Protection" argues that the contradiction between the attempt to maintain markets in labor, land, and money in the 1920s to the crash of 1929. And the result was fascism, because people are nations before they are classes.
In Part III: Transformation and Progress, Karl Polanyi begins by reviewing the catastrophe at the end of the 1920s when, for him, the basic contradiction between the utopian economic liberal ideology and the self-protection movement ended in economic and political meltdown.
To Polanyi the events of the 1920s echo the events of early capitalism. Just as in the abolition of Speenhamland and the separation of economy and politics, in the modern crisis of the 1920s the reigning ideology, formalized in Montesquieu's separation of powers, ordered the separation of the people from the power over their own economic life. Nominally, the commodification of labor, land, and money removed politics from interference in economic questions. In the 1920s:
Economic liberalism made a supreme bid to restore the self-regulations of the system by eliminating interventionist policies which obstructed the freedom of markets for land, labor, and money.What economic liberals insisted upon in the 1920s was deflation, and that policy created an unbearable strain that broke the self-regulating economy. And this weakened "the democratic forces which might otherwise have averted the fascist catastrophe."
To the workers, it seemed natural that the markets should be subordinated to democratic society. But the accompanying specter of socialism undermines market confidence. So when markets collapsed and propertied people feared the seizure of their property,
Fear would grip the people, and leadership would be thrust upon those who offered an easy way out at whatever ultimate price. The time was ripe for the fascist solution.Fascism provided for a forcible reform of the failed market economy "at the price of the extirpation of all democratic institutions."
For Germany, as a victim of the victorious powers in World War I, fascism was a useful tool. It enabled her to cut loose from the economic liberal system to "lessen the hold of the outer world upon her" and break the rules of the international order on her bid for world domination.
For Russia, now the Soviet Union, the deflation of the 1920s was ruinous to her export trade in "grain, timber, furs, and some other organic materials." This is what forced the Soviets into collectivization of agriculture.
The verdict on the meltdown of 1929-33 is this.
[T]he conflict between the market and the elementary requirements of an organized social life provided the century with its dynamics and produced the typical strains and stresses which ultimately destroyed that society.In the future, "the market will no longer be self-regulating, even in principle, because it will not comprise labor, land, and money." Not just conditions of work but the "basic wage" itself will be "determined outside the market". Land too, including "the homestead, the cooperative, the factory" and so on "are removed from the jurisdiction of the market." "The removal of the control of money from the market is being accomplished in all countries in our day." Really, with the destruction of the "commodity fiction" we are restoring "human reality."
OK, so if labor and land and money are removed from the market, what will replace it? After a few pages about the importance of freedom and "the right to nonconformity as the hallmark of a free society" we come down to Polanyi's solution to the failure of the market economy: Planning.
Oh yeah. "Planning and control are being attacked as a denial of freedom... Yet the victory of fascism was made practically unavoidable by the liberals' obstruction of any reform involving planning, regulation, or control." But the economic liberal position is a fantasy, the idea that if you are "paying your way" and "in nobody's debt" you were "unentangled in the evil of power and economic value."
But power and economic value are a paradigm of social reality... The function of power is to ensure that measure of conformity which is necessary for the survival of the group... Economic value ensures the usefulness of the goods produced... Any opinion or desire will make us participants in the creation of power and in the constituting of economic value. No freedom to do otherwise is conceivable.The root of the problem is the excessive individualism inspired by Christianity.
There are three constitutive facts in the consciousness of Western man: knowledge of death, knowledge of freedom, knowledge of society.Knowledge of death comes from the Old Testament; knowledge of freedom from the "discovery of the uniqueness of the person in the teachings of Jesus[.]" Knowledge of society comes "through living in industrial society." On this view Polanyi concludes the following:
The fascist answer to the recognition of the reality of society is the rejection of the postulate of freedom. The Christian discovery of the uniqueness of the individual and of the oneness of mankind is negated by fascism.The way of of the fascist ditch is to recognize, as Robert Owen did, that "the Gospels ignored the reality of society." Christianity enables a radical individualism that cannot work in a complex industrial society.
Thus "power and planning" are needed to steer between the fascist glorification of power and the fantasy that society can operate without it. But there is good news. If man resigns himself to the reality of society "he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality."
Nobody dares to advocate for "planning" today. Since World War II, when Polanyi was writing, we have seen where planning leads, both in the failures of European social democratic parties and the miserable train-wreck of the Soviet Empire and Maoist China. The problem is the old one: Quis custodiet ipsos custodes, or who will plan the planners?
No doubt the "self-regulating economy" fails to self-regulate; it is human after all. But the market learns from its mistake. The trouble with planners and politicians in general is that, in the words of Kevin D. Williamson, they fail to learn.
We will critique Karl Polanyi's "story so far" of the rise of the West and his proposed solution in the final exciting installment of this series.
Friday, October 30, 2015
Karl Polanyi: The Contradictions of Market vs. Self-Protection
Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US. It is a ringing critique of the market economy.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
The market destroys the traditional relationships between man and labor and between man and land, so it's not surprising that the workers and the landowners resisted, demanding protection from the market as we discuss in "Land and Labor and Resistance to the Market."
It wasn't just workers and landowners that couldn't take the heat.
The problem is commodity money, like gold and silver, which do not increase in step with production and thus tend to cause deflation. The solution, "token money", is difficult to use in a global economy because it "cannot circulate on foreign soil." Hence the need for the gold standard.
But the gold standard works by imposing credit restrictions and lowering prices on currencies facing depreciation, and that is "a standing danger to business." The solution was central banking; it could "avoid the wholesale dislocation of business" by absorbing the shock of deflation across an entire nation. But this cure could be worse than the disease and throw the whole economy into disorganization and unemployment.
There is a contradiction in an economy with both commodity money and token money. Commodity money is a means of exchange, while token money is merely purchasing power, guaranteed by the state. In the 19th century the world believed in commodity money, but actually mostly used token money. When the world went off the gold standard in the 1930s commodity money ceased to exist, and the purchasing power concept replaced it.
The problem with the gold standard was that it was one thing when the central bank acted to keep its currency value between the "gold points"; it was another when changes in the internal price level required much larger responses. At this point, central banking was drawn into the orbit of politics. Thus, although all educated people in the 19th century were nominally free traders and internationalists, after 1870 national governments started acting "on the impulses of nationalism and self-sufficiency."
Again, the problem with central banking under the gold standard was that in a mere liquidity crisis "reserves and foreign loans would tide over the difficulty". But if the imbalance were something more, then painful economic adjustment would be needed beyond the ability of central bankers and financiers to finesse. And politics would be needed to decide the who-whom question. And in 1929 to 1933 central bankers and the gold standard utterly failed, and the money sector of the market economy failed with it. And politics rushed into the gap.
So the contest between market and protection set off warring contradictions.
The strain was unbearable, and only when the final market mechanism, the gold standard, failed was the strain released.
Next, in Part III: Transformation in Progress, we will look at Polanyi' proposals, made in the 1940s in the middle of World War II, to solve the world crisis.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
The market destroys the traditional relationships between man and labor and between man and land, so it's not surprising that the workers and the landowners resisted, demanding protection from the market as we discuss in "Land and Labor and Resistance to the Market."
It wasn't just workers and landowners that couldn't take the heat.
Even capitalist business itself had to be sheltered from the unrestricted working of the market mechanism.In effect, central banking is capitalism's way of making sure that the market doesn't destroy "its own children, the business enterprises of all kinds" in financial panics and crashes. It is not just the vagaries of the financial markets that threaten business. There is also the problem that it is difficult for businesses to lower fixed costs, like wages for labor, when prices are falling for its products.
The problem is commodity money, like gold and silver, which do not increase in step with production and thus tend to cause deflation. The solution, "token money", is difficult to use in a global economy because it "cannot circulate on foreign soil." Hence the need for the gold standard.
But the gold standard works by imposing credit restrictions and lowering prices on currencies facing depreciation, and that is "a standing danger to business." The solution was central banking; it could "avoid the wholesale dislocation of business" by absorbing the shock of deflation across an entire nation. But this cure could be worse than the disease and throw the whole economy into disorganization and unemployment.
There is a contradiction in an economy with both commodity money and token money. Commodity money is a means of exchange, while token money is merely purchasing power, guaranteed by the state. In the 19th century the world believed in commodity money, but actually mostly used token money. When the world went off the gold standard in the 1930s commodity money ceased to exist, and the purchasing power concept replaced it.
The problem with the gold standard was that it was one thing when the central bank acted to keep its currency value between the "gold points"; it was another when changes in the internal price level required much larger responses. At this point, central banking was drawn into the orbit of politics. Thus, although all educated people in the 19th century were nominally free traders and internationalists, after 1870 national governments started acting "on the impulses of nationalism and self-sufficiency."
Again, the problem with central banking under the gold standard was that in a mere liquidity crisis "reserves and foreign loans would tide over the difficulty". But if the imbalance were something more, then painful economic adjustment would be needed beyond the ability of central bankers and financiers to finesse. And politics would be needed to decide the who-whom question. And in 1929 to 1933 central bankers and the gold standard utterly failed, and the money sector of the market economy failed with it. And politics rushed into the gap.
A new set of ruling ideas superceded the world of the self-regulating market... [U]nsuspected forces of charismatic leadership and autarchist isolationism broke forth and fused societies into new forces.The commodification of land and labor results in their annihilation, according to Polanyi. So people act in self-protection against the market. The commodification of money unleashes gales of panic and crashes. So governments institute central banking to ward off the chills; when there is an economic crisis, governments are expected to respond. Nationally and internationally, "political methods were used to supplement the imperfect self-regulation of the market." But political methods often did not resolve the problem, not while the gold standard reigned.
So the contest between market and protection set off warring contradictions.
The protection of man, nature, and productive organization amounted to an interference with markets for labor and land as well as for the medium of exchange, money, and thereby, ipso facto, impaired the self-regulation of the system.In other words, the protective measures to give men "some security of status" impaired the flexibility of the system. In international relations states acted to protect their citizens against foreigners, and within countries they acted to "transform competitive markets into monopolistic ones."
Economic adjustment became slow and difficult. The self-regulation of markets was gravely hampered.Unadjusted prices and costs prolonged depressions, and delayed liquidation of failing investments. Economic problems had to be solved by political means, yet politics and economics were supposed to be separate.
The strain was unbearable, and only when the final market mechanism, the gold standard, failed was the strain released.
Next, in Part III: Transformation in Progress, we will look at Polanyi' proposals, made in the 1940s in the middle of World War II, to solve the world crisis.
Thursday, October 29, 2015
Karl Polanyi: Land and Labor and the Resistance to the Market
Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US. It is a ringing critique of the market economy.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
What Polanyi really dislikes about the market in labor and in land is this:
You can see how the idea of a market for labor breaks up traditional society by looking at the (in the 1940s) colonies of the western powers.
(Really? Or did the landed gentry merely hate the upstart industrialists the way that Lady Glencora Palliser hated Mr. Bott.)
What the working people really wanted, according to Polanyi, was to "discover a form of existence that would make man the master of the machine," and that was the purpose of the Owenite Movement. It was "a religion of industry, the bearer of which was the working class." Then there was the Chartist Movement with its Six Points that "demanded an effective popular suffrage."
When the Industrial Revolution arrived in continental Europe it lured the peasants into the city with the promise of higher wages. And the peasants found there a lower middle class that could teach them "an urban tone." While the British working class left politics to his "betters" the European worker "became a political socialist." Social insurance, with the help of the reactionary elite, came earlier to Europe than to England.
The purpose of all the resistance to economic liberalism was to hinder the absolute rule of the market in labor, and that is what the "social legislation, factory laws, unemployment insurance... and... trade unions" achieved. They were intended to interfere with the laws of supply and demand, and they did.
No less weird than the idea of a market in labor was the idea of a market in land. Land is "tied up with the organizations of kinship, neighborhood, craft, and creed[.]" The market destroys these ties.
Really, the process was driven by the need of industrial towns for an unlimited supply of cheap food. Thus we get the "commercialization of the soil, mobilizing the feudal revenue of the land." Then comes the need to feed the towns in the industrializing nations. Then comes the extension of this system to the world, forcing everyone into the orbit of the market.
Common law and statute law sometimes encouraged, and sometimes slowed this process with respect to land. But the feudal and landed proprietors did what they could to slow down the commerce in land and slowing the migration to the city. And, with wars and rumors of wars, they could point to the importance of self-sufficiency in food.
Next, Polanyi shows how the conflict between the market ideology and peoples' instinct for self-protection created impossible economic and political contradictions and strains.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."
It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."
What Polanyi really dislikes about the market in labor and in land is this:
To separate labor from other activities of life and to subject it to the laws of the market was the annihilate all organic forms of existence and to replace them by a different type of organization , an atomistic and individualistic one.The idea of freedom of contract meant that the ties of "kinship, neighborhood, profession and creed were to be liquidated" as a restraint on the freedom of the individual.
You can see how the idea of a market for labor breaks up traditional society by looking at the (in the 1940s) colonies of the western powers.
The natives are forced to make a living by selling their labor. To this end their traditional institutions must be destroyed[.]The motivating idea to make the natives submit to the market is that in an individualistic market for labor the worker must either work or starve. In traditional rural society things are different. "There is not starvation in [traditional] societies living on the subsistence margin." (Really?)
The protection of society, in the first instance, falls to the rulers, who can directly enforce their will. However it is all too easily assumed by economic liberals that economic rulers tend to be beneficial, while political rulers do not.In the run-up to the Industrial Revolution it fell to the landlords to protect the people, and they did, in their way, with Speenhamland. And after the Poor Law reform in 1834 they continued to fight for the people with factory acts.
(Really? Or did the landed gentry merely hate the upstart industrialists the way that Lady Glencora Palliser hated Mr. Bott.)
What the working people really wanted, according to Polanyi, was to "discover a form of existence that would make man the master of the machine," and that was the purpose of the Owenite Movement. It was "a religion of industry, the bearer of which was the working class." Then there was the Chartist Movement with its Six Points that "demanded an effective popular suffrage."
When the Industrial Revolution arrived in continental Europe it lured the peasants into the city with the promise of higher wages. And the peasants found there a lower middle class that could teach them "an urban tone." While the British working class left politics to his "betters" the European worker "became a political socialist." Social insurance, with the help of the reactionary elite, came earlier to Europe than to England.
The purpose of all the resistance to economic liberalism was to hinder the absolute rule of the market in labor, and that is what the "social legislation, factory laws, unemployment insurance... and... trade unions" achieved. They were intended to interfere with the laws of supply and demand, and they did.
No less weird than the idea of a market in labor was the idea of a market in land. Land is "tied up with the organizations of kinship, neighborhood, craft, and creed[.]" The market destroys these ties.
Really, the process was driven by the need of industrial towns for an unlimited supply of cheap food. Thus we get the "commercialization of the soil, mobilizing the feudal revenue of the land." Then comes the need to feed the towns in the industrializing nations. Then comes the extension of this system to the world, forcing everyone into the orbit of the market.
Common law and statute law sometimes encouraged, and sometimes slowed this process with respect to land. But the feudal and landed proprietors did what they could to slow down the commerce in land and slowing the migration to the city. And, with wars and rumors of wars, they could point to the importance of self-sufficiency in food.
Next, Polanyi shows how the conflict between the market ideology and peoples' instinct for self-protection created impossible economic and political contradictions and strains.
Wednesday, October 28, 2015
Karl Polanyi: The Special Pleadings of the Laissez-faire Creed
Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement.
In "Great Depression Failure of the English System" Polanyi explains why the the "self-regulated market" and the gold standard failed in the years after World War I.
In "History of Exchange Prior to the Modern Market" Polanyi tells us that humans in the pre-market world lived perfectly happily without markets for everything.
In "The Self Regulating Market and Its Fictions" Polanyi talks about the commodification of labor, land, and money as "fictions."
In "Speenhamland and the Poor Law" Polanyi looked at how that the Speenhamland welfare law lowered wages in Napoleonic era England.
Then, with Speenhamland having demoralized the workers of England, along came the full-on commodification of labor in the national labor market, in "The Social Crisis of Poverty and Commodity Labor."
And according to Polanyi, "The Market Economy Means Annihilation of Land and People" because of commodification.
All this disaster, on Polanyi's account issues from the "utopian" creed of economic liberalism, the idea of the "self-regulating market." It is time, therefore, to inquire more deeply into the birth and development of the "liberal creed." For him, the "fanaticism" of economic liberalism arose in response to the "magnitude of the sufferings that had to be inflected on innocent persons" in order to realize a "fully deployed market economy." It had to be a fighting faith to push through to victory.
It is a mistake to date economic liberalism to the invention of the term "laissez-faire" in the 18th century. In England it initially just meant "freedom from regulation in production" rather than free trade in general.
Likewise in money: it was not until after the crash of 1825 and its "enormous number of financial casualties" that the "automatic steering mechanism of the gold standard" become holy writ. In fact, economic liberalism needed all three legs of its stool, a free market in labor, in land, and a rigid gold standard.
It was the "weaknesses and perils inherent in a self-regulating market" that called forth the spontaneous and practical movement of self-protection. He cites four main supports for his argument. First, there were numerous areas in which action was taken having nothing to do with collectivism, from water analysis to inspections to child labor to vaccinations. Second, legislation such as workmen's compensation acts make an employer as responsible for damage to his workers as to his customers. How collectivist is that? Thirdly, all governments did it, from Victorian England to Bismarck's Prussia. Fourthly, "liberals themselves advocated restrictions on the freedom of contract and on laissez-faire" in a number of instances.
The facts are clear. The movement of self-protection was natural and spontaneous. Its truth is emphasized by the similarities between the Marxist theory of the 19th century and the liberal theory. While economic liberals argue that protectionism was the result of "sinister interests of agrarians, manufacturers, and trade unionists," the Marxists argue that "protectionism was the result of class action... [serving] the economic interests of the members of the classes involved." No difference.
But these class arguments put the cart before the horse. Of course sectional interests battle for advantage, but "the ultimate cause is set by external forces... The 'challenge' is to society as a whole; the 'response' comes through groups, sections, and classes." Of course economic matters are important, but they are not as important as purely social matters such as "standing and rank... status and security."
For sure, the development of machine production meant that "trading classes" came to the fore. But it was also natural for the landed and working classes to act in defense of the "social fabric." And in an emergency -- in the frequent panics and crashes -- the landed classes looked to a return to martial virtues and the workers to "a cooperative commonwealth of labor."
Some economic historians are now arguing that the Industrial Revolution was not as bad as advertised. After all, were not the workers better off afterwards? But this misses the fact that great changes always involve cultural catastrophes. The Industrial Revolution transformed in half a century the rural "settled folk" of England into "shiftless migrants", their ancient way of life destroyed. We see this happening now across the world, from the disaster of the village community in India in the late 19th century to the injection of the market economy into Africa.
In the next installment, Polanyi looks at the specificities of the movement to resist the process of the commodification of labor into the labor market, and land into private ownership.
In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement.
In "Great Depression Failure of the English System" Polanyi explains why the the "self-regulated market" and the gold standard failed in the years after World War I.
In "History of Exchange Prior to the Modern Market" Polanyi tells us that humans in the pre-market world lived perfectly happily without markets for everything.
In "The Self Regulating Market and Its Fictions" Polanyi talks about the commodification of labor, land, and money as "fictions."
In "Speenhamland and the Poor Law" Polanyi looked at how that the Speenhamland welfare law lowered wages in Napoleonic era England.
Then, with Speenhamland having demoralized the workers of England, along came the full-on commodification of labor in the national labor market, in "The Social Crisis of Poverty and Commodity Labor."
And according to Polanyi, "The Market Economy Means Annihilation of Land and People" because of commodification.
All this disaster, on Polanyi's account issues from the "utopian" creed of economic liberalism, the idea of the "self-regulating market." It is time, therefore, to inquire more deeply into the birth and development of the "liberal creed." For him, the "fanaticism" of economic liberalism arose in response to the "magnitude of the sufferings that had to be inflected on innocent persons" in order to realize a "fully deployed market economy." It had to be a fighting faith to push through to victory.
It is a mistake to date economic liberalism to the invention of the term "laissez-faire" in the 18th century. In England it initially just meant "freedom from regulation in production" rather than free trade in general.
Not until 1830 did economic liberalism burst forth as a crusading passion and laissez-faire become a militant creed.And despite the warning from numerous pens that the "allowances" under the Poor Law should be reduced over a period of decades, the newly victorious middle class of 1832 abolished "outdoor relief" in one fell swoop.
Likewise in money: it was not until after the crash of 1825 and its "enormous number of financial casualties" that the "automatic steering mechanism of the gold standard" become holy writ. In fact, economic liberalism needed all three legs of its stool, a free market in labor, in land, and a rigid gold standard.
The expansion of the market system in the nineteenth century was synonymous with the simultaneous spreading of free trade, competitive labor market, and gold standard; they belonged together.And here Polanyi makes an unusual argument. Economic liberalism did not do away with intervention in the economy. On the contrary, it required an "enormous increase in the administrative functions of the state."
The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism... [It] was a most complicated affair.On the other hand, Polanyi writes, the reaction to laissez-faire was unplanned and spontaneous. The Liberal A.V. Dicey looked into the origins of "anti-lassez-faire" and "collectivism" in public opinion.
He was surprised to find that no evidence of the existence of such a trend could be traced save the acts of legislation themselves... The legislative spearhead of the countermovement against a self-regulating market as it developed in the half century following 1860 turned out to be spontaneous, undirected by opinion, and actuated by a purely pragmatic spirit.The epigones of laissez-faire, "Spencer and Sumner, Mises and Lippmann", do not dispute this. They just say that "protectionism was a mistake due to impatience, greed, and shortsightedness." But they are blind. Our age will see "the end of the self-regulating market." From the heights of its fame in the 1920s to its depths in the 1930s to its defeat in the 1940s, economic liberalism is over.
It was the "weaknesses and perils inherent in a self-regulating market" that called forth the spontaneous and practical movement of self-protection. He cites four main supports for his argument. First, there were numerous areas in which action was taken having nothing to do with collectivism, from water analysis to inspections to child labor to vaccinations. Second, legislation such as workmen's compensation acts make an employer as responsible for damage to his workers as to his customers. How collectivist is that? Thirdly, all governments did it, from Victorian England to Bismarck's Prussia. Fourthly, "liberals themselves advocated restrictions on the freedom of contract and on laissez-faire" in a number of instances.
The facts are clear. The movement of self-protection was natural and spontaneous. Its truth is emphasized by the similarities between the Marxist theory of the 19th century and the liberal theory. While economic liberals argue that protectionism was the result of "sinister interests of agrarians, manufacturers, and trade unionists," the Marxists argue that "protectionism was the result of class action... [serving] the economic interests of the members of the classes involved." No difference.
But these class arguments put the cart before the horse. Of course sectional interests battle for advantage, but "the ultimate cause is set by external forces... The 'challenge' is to society as a whole; the 'response' comes through groups, sections, and classes." Of course economic matters are important, but they are not as important as purely social matters such as "standing and rank... status and security."
For sure, the development of machine production meant that "trading classes" came to the fore. But it was also natural for the landed and working classes to act in defense of the "social fabric." And in an emergency -- in the frequent panics and crashes -- the landed classes looked to a return to martial virtues and the workers to "a cooperative commonwealth of labor."
Some economic historians are now arguing that the Industrial Revolution was not as bad as advertised. After all, were not the workers better off afterwards? But this misses the fact that great changes always involve cultural catastrophes. The Industrial Revolution transformed in half a century the rural "settled folk" of England into "shiftless migrants", their ancient way of life destroyed. We see this happening now across the world, from the disaster of the village community in India in the late 19th century to the injection of the market economy into Africa.
The competitive labor market hit the bearer of labor power, namely, man. International free trade was primarily a threat to the largest industry dependent upon nature, namely, agriculture. The gold standard imperiled productive organizations depending for their functioning on the relative movement of prices.It is hardly surprising that people rose up to protect themselves from this utopian scheme.
In the next installment, Polanyi looks at the specificities of the movement to resist the process of the commodification of labor into the labor market, and land into private ownership.
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