Psychoanalytic economics

Regular readers of this blog — both of them — will recognise that my favourite place to play is in the intersection between psychoanalysis and economics. Admitting that this intersection may well be imaginary, I am very pleased to advertise an upcoming conference organised by the irrepressible Andrew Dickson.

The conference is entitled Lacan and the Discourse of Capitalism: Perhaps it is rotten after all? A conference announcement and description is here. This being the modern age and all, the conference will also be presented on-line, so you don’t even have to be in Wellington.

It is very important to be working on this discussion. Economics and psychoanalysis are both about human behaviour, but they understand it completely differently. So differently, in fact, that I do wonder whether they are compatible. And yet, both claim to speak some truth about the human condition.

Researchers in both disciplines will sometimes dismiss the other, but that’s too easy. Economists will complain that psychoanalysis over-complicates the internal conversations that people have, and ignores the simplicity of revealed preferences and utility functions. Psychoanalysis — especially when married with Marxism — condemns economists as the priests of a secular religion, apologising for existing power structures rather than liberating individuals.

I hope that this conference is a chance for investigators of humanity — anthropologists? anthro-apologists? — to move beyond those disciplinary canards*. Pretty please?

I’m presenting a paper — fingers crossed it will be done in time. I hope to see you there, either really or virtually.

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* My mental image is a duck in bondage gear.

NZ’s environmental street cred

The last post considered the fetish of hand-crafted goods. Pondering this more yesterday, I wondered how this idea mapped onto environmental values. New Zealand trades on and worries about its environmental ‘brand’, and there seems to be a conflict between pretty green hills and contaminated streams.

Then I saw the news reports about Dr Mike Joy from Massey University:

Just nine days before Wellington’s world premiere of The Hobbit film, an environmentalist has launched a scathing attack on a tourism campaign depicting New Zealand as ’100% Pure’.

Senior Lecturer in Environmental Science at Massey University Mike Joy told The New York Times that New Zealand’s image as a clean, green nation is as “fantastical as dragons and wizards.”

“There are almost two worlds in New Zealand… there is the picture-postcard world, and then there is the reality,” Joy told America’s most well-read daily newspaper.

I can see how he has set this up. On the one had, we have reality — that which is really happening and we can show and demonstrate and measure. The rivers have X amount of nitrogen and Y faecal count. The greenhouse gas inventory is up to Z. On the other hand, we have the story we tell the world, the picture-postcards we send through blockbuster films and the post.

This description doesn’t account for the power of the New Zealand environmental brand. It doesn’t account for why we believe it. To do that, we have to understand how and why the brand functions. I really do think that the fetish provides a way to understand it.

We have imbued ’100% Pure’ with both the utopia of our one-ness — a time before the fall, before language, when we could live at peace with the world. If only we could be 100% Pure, we would be living rightly. We have also imbued it with the power of the destroyer — Shiva, or Yahweh who brought the flood. If we are forced to be 100% Pure, the our economy will be ruined.

But at the same time as we do not actually live it — and know that we do not — we also act as if it contains an essential truth about New Zealand. The rest of the world does, too. This isn’t a New Zealand fetish; it is a global fetish. The whole world wants New Zealand to be 100% Pure, or should I say ’100% Pure’. That fetish allows the industrialised world to recognise the power of industrialisation and mass production, while at the same time providing a place (an English-speaking place in a temperate climate) where we imagine it has not already happened.

As I am trying to describe this, it starts to sound like the logic of the feminine in Lacan’s Seminar XX/Encore: not all countries are subject to industrialisation, even while we know that there does not exist a country that is not subject to industrialisation.

’100% Pure’ is thus a fetish that resolves an economic hysteria. We ask the question, are we an industrial nation or not? The fetish allows us to answer, we are both and neither.

Fetishisation of the hand-crafted

Last night, while ironing my work shirts, myself, by hand, I caught TVNZ’s programme The New Old and its episode ‘The Artisan’. The blurb:

Presenter Wallace Chapman looks at the trend against mass-produced goods and the growing market for handcrafted objects.

Chapman interviewed several people who were somehow involved with hand-crafting. One couple were rescuing old bits of machinery, one woman effused about her hand-made leather couch, another woman talked about how she hand-designed embroidery patterns and then digitised them for mass production.

The show was clearly trying to position the narrative as the counter-argument to mass production. Hand-crafted items were superior because they lasted longer, showed the personality of the producer, or gave you a personal relationship with the artisan. But this narrative is false.

Economically, there is no outside of mass production. We live in an industrial world in which mass production provides. There are many examples that make this point: I, Pencil; The Toaster Project (via Tim Harford); Rivoli’s T-shirt. The examples provided in ‘The Artisan’ paper over the contribution of mass production and industrialisation in each example. The couch, for example, may have been assembled by hand. Where did the leather, wood, and filling come from? How were the hides stripped from the carcasses, tanned, dyed, and shipped? The machines that sewed the leather, where did their parts come from? The steel for the needles?

The economic value of the hand-crafted component is minor. If you toted up each person’s spending, the amount they spend on artisanal goods is minimal. Most spending, like most production, is on mass-produced products.

Hand-crafted goods are not economically important; they are psychologically important. They are fetishes. First, it is important to realise that they do not exist by themselves. They exist only in opposition to mass-produced goods. Each time we point to them — name them — we are singling out that important characteristic of them: they are the not-mass-produced goods. When we refer to them, we are also referring to their opposite. They therefore safely contain all the power of mass production.

Hand-crafted goods also keep a little distance between us and mass production. This is the other function of fetishes — providing some distance from the Real to provide a space for jouissance. These goods provide a little opening that mass production has not already filled (even though it has, because these specific hand-crafted goods could not exist without mass production).

The fetishisation of the hand-crafted is a way to live with mass production, to enjoy it while maintaining a psychological distance. If only I could convince myself that ironing shirts provided the same benefits.

Not being myself

Andrew Dickson over at Othersideofweightloss.org posted a brief reaction to some questions in the media about whether people are in denial over their weight. I posted a comment over there, but it started me down a track I want to pick up here. Yes, this is a Lacanian post. Skip to the next if you aren’t interested.

Dickson listed the comments from some expert quoted in the media. I commented (in part):

My favourite of those questions is:
- Does my body reflect who I really am?
The hard kernel that I take from Lacan is the split subject. The way I understand — which may be entirely wrong, but it is my wrongness — is that we are never who we ‘really’ are. In the process of becoming members of a human culture, we feel we have lost something of our true essence. Moreover, that feeling is an illusion of language, a figment of our imaginations, an ego conceit.

The more I read of Lacan and the more I am in the world, the more I find this foot-stamping, hold-breath-till-blue ‘I am myself’ fascinating. It seems to be behind so much of our trying to impose our preferences on other people, trying to impose our view of the world on other people. By trying to make the world bend to our wills, we are trying to assert our I-ness (I-nesses?).

(And then we can get into Lacanian language games, in which my I-ness wants to be my highness, and we are all little highnesses. Also, ‘I am myself’ takes us nearly to ‘I am who am’, and we get all Old Testament on ourselves.)

Economists can come off looking rather well-adjusted in all this. Some of them, at least, accept that other people have different preferences that lead to different choices that are equally valid. And they also accept that my choices create problems for your choices, that externalities are mutual, and this creates actual inter-individual (inter-subject?) conflicts that have to be resolved through some process or mechanism.

Here my big personal news: we bought a dog. A cute, fluffy, bichon frise of a dog. I’m really, really more of cat person. They look after themselves, give you a ‘hey, what up’ look in the morning, accept the occasional skritch when it’s on offer. Dogs, well, dogs are needy. And smelly.

But here’s the thing: my daughter loves dogs. Her face lights up when she gets to play with one. She’s been asking for one for years (and been pretty understanding about not getting one).

Even though I wouldn’t get a dog in my ‘I am myself’ world, we now have a dog in this world. And I’m okay with that. I even feel like it’s alright to have her preferences imposed on me, because my I-ness is just an illusion, anyway, and my we-ness (or wee-ness) is much closer to the Real of the matter.

So, no, my body doesn’t reflect who I am, any more than our new dog reflects who I am. But that’s a philosophical triviality. Next question?

Obligatory cute photo:

The return of society

One of the cornerstones of psychoanalysis — and it extends into social theory based on psychoanalytical theory — is the return of the repressed. That which is repressed doesn’t go away. It reappears in some other form, such as the famous ‘Freudian slip’.

It used to be we had something called ‘society’. There were arguments about its role and importance, memorably set to music in ‘Gee, Officer Krupke’ from West Side Story. Even as late as 1975, Dr Scott’s line in The Rocky Horror Picture Show (all hail Richard O’Brien) still made sense: ‘Society must be protected!’

Things changed. Thatcher could claim, with a straight face, ‘There is no such thing as society.’ There were individuals, and families, and neighbours — but there was no society. There is truly nothing like a Dame.

The problem, of course, was that saying it doesn’t make it so. This attempt to repress the idea of society didn’t make it go away.

We are now seeing the resurgence of the idea that we are connected to each other. We are taking to heart the idea that what I do affects you and what you do affects me. However, this return of the repressed fits the new ethos of individuality. Instead of ‘society’, we have ‘externalities’. ‘Society’ contains an idea of connection. Even when society is in strife and riven by internal factions, it is still a collective noun. ‘Externality’ is combative, each individual for the self. It tallies and totes up.

The debate over raising the superannuation age in New Zealand is formulated as the burden that retirees are imposing on the rest of us. The fight over other people’s diets — their fat and sugar intake — is couched in terms of how much it will cost taxpayers. Stricter smoking and alcohol laws are defended because of the costs we all bear for these vices.

So what has really changed? We still recognise that ‘No man is an island,/Entire of itself./Each is a piece of the continent,/A part of the main.’ We are just recognising it differently. Now, we are simply trying to keep everyone else off our lawns.

Profitable anxieties

Dr Andrew Dickson is getting some press for his thesis, and good on him. I’ve seen presentations from the research and think he is on to something with this work. Stuff says:

Fat is a moral issue, according to new research that says the multibillion-dollar weight loss industry profits from manipulating people’s anxieties.

We like to talk about science delivering value to New Zealanders, but we don’t spend enough time and money figuring out what ‘value’ is. Dickson’s work is trying to delve into that difficult and complex area of how people think of the world and themselves, and what we ascribe value to.

In addition, the links to both the recent attempt in New York City to ban super-sized soft drinks and the other attempts to control others (or is that the Other?) are obvious. While Dickson focused on the individual’s experience, I think the analysis could be extended to consider inter-subjective issues.

Anywhere, here’s a link to one of his articles. I haven’t found a conference paper on line, but I’m sure he’d send you one if you asked.

Some thoughts on Kent State

May 4 was the anniversary of the 1970 shootings at Kent State. Strangely, May 4 is also Star Wars Day, but I haven’t been able to think of a witty way to connect the two.

To review:

In May 1970, students protesting the bombing of Cambodia by United States military forces, clashed with Ohio National Guardsmen on the Kent State University campus. When the Guardsmen shot and killed four students on May 4, the Kent State Shootings became the focal point of a nation deeply divided by the Vietnam War.

I was a young child in 1970, so I don’t remember much of it. When I was older, my mother did talk about those days. We lived outside of Washington, D.C., and she was taking classes in the city. She stayed home (with two kids) when the protests broke out. Apparently, the police were rounding up people — not just protestors — and using anti-vagrancy laws to arrest them. She said they arrested people for not having a dollar on them. What I remember most about her story was the sense of disorder and unrest.

How can economics help us think about the Kent State shootings? And then, how can it help us think about the Occupy protests and the reactions? Here are some possibilities:

• They represent the limit of economics. One possibility is that economics doesn’t have much to say. These are political and social activities, not commercial ones, so must be analysed and understood from those perspectives. This isn’t satisfying for two reasons. First, economics has been happily colonising other social sciences for years, so there must be something economics can tell us. Secondly, protests and responses involve alternative uses of the same resources — land, labour, capital, management, natural resources — that are used in conventional economic production. That is, they involve trade-offs. They therefore have economic impacts.
• They are extra-market bargaining. We could take a law-and-economics approach, and suggest that individuals are seeking to maximise their welfare using the most efficient means. Sometimes, that involves going to a shop and buying something. In other cases, that may mean applying political/social pressure. Protesting is thus rent-seeking, just like flying an MP in a helicopter to your mansion outside Auckland, but for people without helicopters. Or mansions. What this doesn’t explain is the ferocity of the response. Why shoot people for rent-seeking?
• They are about institutions. Lacan famously said, ‘structures do not march in the street’. The same could be said of institutions. Institutions like property rights and legal rights don’t march in the street, but that doesn’t mean they are absent from these protests. These conflicts could be viewed as contests over the control and design of institutions: in the conflict between the property right to control activities on a college campus and the personal right to express oneself, where is the balance? And then, because economic activity flows from the specific configuration of property rights, these protests are ultimately about the shape of the economy. This possibility has a serious corollary: it means that institutions must be defended in order to survive.
• They are mistakes. One debate over the Kent State shootings was whether they were intentional or the acts of a few scared Guardsmen. They same thing has happened with the UC Davis pepper-spraying: the report says that the spraying was un-authorised. But this is a cop-out. This is bringing God or Fate into the equation. Appealing to ‘mistakes’ means that anything can be explained, and nothing.
• This is (a) production. Perhaps the two sides are mounting a production of Protest! One can think of it as a stochastic production system with an uncertain outcome. The two ‘sides’ are even somewhat co-ordinated, in the loose sense of co-ordination between the marketing and engineering departments in a Dilbert corporation. This raises the question, who is the consumer? Are these performances intended to demonstrate to ‘the public’ or some media audience that differences of opinion are still allowed, but in the end order will be restored? This possibility puts these events in the same register as a medieval carnival, temporarily upending the social order ultimately to preserve it. However, this seems a callous way to describe the deaths and injuries that result.

Ultimately, trying to use economics to talk about protest and response seems to raise two important issues often missing from economic analysis: governing and power. I need ways to include them in my work, models to help me make sense of them.

Re-establishing the European financial symbolic

In Zizek’s First As Tragedy, Then As Farce, he quotes Jacques-Alain Miller discussing the financial problems of 2008:

The financial universe is an architecture made of fictions and its keystone is what Lacan called a “subject supposed to know”, to know why and how. Who plays this part? The concert of authorities, from where sometimes a voice is detached, Alan Greenspan, for example, in his time. The financial players base their behavior on this. The fictional and hyper-reflexive unit holds by the “belief” in the authorities, i.e. through the transference to the subject supposed to know. If this subject falters, there is a crisis, a falling apart of the foundations, which of course involves effects of panic.

An agreement was reached on Greece’s debt this week. Note the passive construction of that sentence. I’m not really sure who reached the agreement. The troika (a word I always associated with folk dancing) of EC, ECB, and IMF was there; representatives from Greece and other governments were involved. Then there was the ISDA, who had to declare the event ‘an event’ in order to trigger insurance payments on the notes the creditors held. But who really inked the deal, and after which group gave their approval?

Also, the metaphors are again out in full force: a 75% haircut (what is that, a No. 2?), calm seas, turning pages, pulled triggers.

I’ve been wondering why it has taken so long. It was obvious months ago that Greece couldn’t pay, in the sense that there was no way they could raise the case and continue to have a functioning economy. Blood from a stone and all that. I realise there had to be negotiations about who would take the hit and how much, but that just seems such a technocratic question for all the proceedings we’ve witnessed.

This quote from Miller sheds some light on the problem. The agreement on Greece is an attempt to re-establish this subject-supposed-to-know. We thought this subject was firmly enthroned. ‘The markets’ know, ‘the markets’ decide; the judge’s decision is final. The voice of the authorities was the still point.

It wasn’t even the original financial problems in 2009 and 2010 that created this crisis of faith. Hey, stuff happens. Markets rise and markets fall (and you can make money both ways). Sometimes, people panic. That’s alright — we’ll just reset the timer and start again.

But it didn’t take. The original plan wasn’t enough. The smartest guys in the room didn’t pull it off.

I can hear the cry of the supplicant now: ‘Tell us, oh markets, what thou wouldst have us do to appease you!’ But the volcano kept erupting, the rains didn’t come, and Greece wasn’t fixed.

So here’s my metaphor for where we are now: after forty years in the desert, after forty days in the wilderness, trying to understand the will of the markets, we have written down the commandments of the subject-supposed-to-know. We fervently hope that if we abide by this agreement, we will be saved.

Interpersonal transactions

Crooked Timber has been hosting an on-line seminar on Debt: the first 5,000 years by David Graebers. I haven’t read the book, but I’ve been enjoying the commentary.

I haven’t seen reference to a work that affected my thinking about participation in the economy. The Triumph of Venus by Jeanne L Schroeder discusses law and economics from a Lacanian viewpoint. The crux of the economic analysis is that individuals want recognition of their person-hood from the other people in their transactions (and here I’m paraphrasing to avoid jargon). Each transaction is a relationship, a personal experience with emotional and psychological echoes.

Debt appears to be about economic relationships that get established and the rules that govern them. One thing that changes from pre-industrial to industrial transactions is the depth of the relationship implied in each transaction. ’Depth’ seems to mean, the extent to which the relationship is constrained by the past and circumscribes the future.

Daniel Davies says the following in his contribution to the seminar:

Perhaps the fact from the book that will end up resisting the longest against the onslaughts of late nights and Scotch whisky on my ability to recall, is that more or less every urban society in the world has ended up inventing an equivalent phrase to “Please”, and “Thank you”, terms which have the social function of asserting between parties to a commercial transaction that the transaction itself does not embed them in any deeper social relation.

This analysis says that these little words (which we stress when raising our little middle-class post-industrial children) limit the depth of the relation, ensuring that future potentials are not limited by the present contact (or contract).

Another way to think about it is that ‘please’ and ‘thank you’ are about interpersonal recognition. They indicate an equality in the relationship. They say, this is not about control. You are free to do as you like, and you have chosen to participate in this transaction. I am also free to do as I like, and I freely participate, too. We both choose this transaction from the universe of transactions. I will tickle your need for recognition, and you will tickle mine. We will come away from this exchange with our autonomous personhood validated.

The strength of a market economy — and perhaps the modern thrill of shopping — may come from this repeated reinforcement and validation. It also suggests that we value not only what we receive from an exchange, but the exchange activity itself.

An authentic cuppa with Key

I never got worked up over the tempest in a teacup, the pre-election meeting between John Key and John Banks. I wasn’t worried about it at the time, and the affair of the secret recording didn’t pique my interest, either.

Now comes Crooked Timber with a good explanation of why I couldn’t be bothered, although it focuses on Mitt Romney in the US. Describing the ‘fallacy of political authenticity’, Rich Yeselson writes:

All of this is a crock.  We—the astute writers noted above, and pretty much everybody else too—are fetishizing one of modernity’s most potent fantasies: that there is a deeply internalized “authenticity” which dramatically reveals our true, inner selves. Yes, we want to know, truly know, who these people are and who can blame us? And the task of excavating this “authenticity” seems especially urgent in the case of those few who wish to be our president.

It was the same with the two Johns. The media, and possibly the voters, wanted the tape to be the big reveal. They wanted to see the man behind the curtain. They wanted a nugget of authencity that would anchor the campaign in general and the Epsom race in particular.

Interestingly, the media focus was on Key. He was the enigma for which the tape would provide the clue. Banks, it seemed, was already understood, already known.

The reason we are searching for that authentic nugget is that we think it exists for each one of us. This is a key insight from Lacanian theory. We think that there is a ‘real’ us that we can’t quite access. We are cut off from it by all the miming and posturing and conventional behaviour that fills our daily lives. This idea permeates our culture.

Yesterday, Valentine’s Day, is dedicated to the idea. It promises us true happiness with the one who really knows us, who sees us for who we are (and loves us anyway). Exercise and weight loss programmes talk about the ‘real you’ inside, the skinny you, the healthy you. That is the authentic us that we believe exists as a sort of Platonic ideal, external to the world of experience. This myth of authenticity also allows us to do wrong without being bad. Sure, I may have jumped the queue, dinged someone’s car, or returned a broken DVD, but that doesn’t mean I’m a bad person.

The other curious Lacanian detail of the Epsom cuppa is that it all happened in the open. The men met in public and invited the press. The fight over the tape just highlighted their attempt to hide in plain sight. This is Poe’s story of The Purloined Letter, which was the basis for one of Lacan’s seminars. In fact, the purloined letter is basically a MacGuffin and so was the tape. It didn’t matter so much what was on the tape; only its existence as something to focus on and fight over mattered.

The search for the authentic Key is ultimately a waste of time. Politicians and parties are what they do. The National Party was very clear what its platform for the next three years would be. They were elected, and now they are pursuing their agenda. No reading of tea leaves required.