21/01/2014 § 3 Comments
A bit gauche, perhaps, but I’m going to point you to an article I had published at the end of last year. It is my attempt to grapple with economics and the global financial crisis. Because of the nature of the explanation, it appeared in the International Journal of Zizek Studies.
The content will be familiar to regular readers of this blog — Zizekian philosophy and Lacanian psychoanalysis can help explain the economy. Given that it’s an article and not a post, it works through the arguments more fully and with better references.
The work started with two things I couldn’t understand:
- why were reputable economists and economics commentators spouting nonsense about the GFC? I don’t mean different interpretations of facts, or bringing different sets of values/preferences to bear on the evidence. I mean relying ‘evidence’ that was not true, developing explanations based on falsehoods
- why weren’t more economists concerned about the fraud revealed by investigations into the GFC? It seemed like the central players in the economy were cheating, brought down the economy, and then imposed the costs on other people.
A brief bit from the article:
In the response to the GFC, mainstream economic theory has acted as a prop or a magician’s wand, to be waved around as a distraction. What happened in the actual economy represented a turning away from standard, textbook capitalism, based on the idea of capital as a factor of production. Owners of capital should receive returns – get paid – because they own that capital. In addition, the more they take risks with that capital, the more they should be rewarded when they are successful. First, the fundamental principles of ownership and contract were replaced by a focus on smooth functioning of bureaucratic process. Secondly, the financial sector was able to decouple risk from reward; reward for taking risks no longer describes the origin of returns to capital.
Let me know what you think.
12/08/2013 § 5 Comments
Over the weekend, I ended up at a review of The Invention of Capitalism. The book’s author is Michael Perelmen, an economist in California who has stirred up controversy over the years. Apparently, he doesn’t disappoint in this book.
Disclaimer: I have no idea whether Perelmen is right in his history, or should I say ‘right’, as history is a matter of interpretation (written by the winners and all that). Having said that, I had two reactions:
1) Aren’t we still living with the attitudes described?
This quote from a pamphlet of the day caught my attention:
The possession of a cow or two, with a hog, and a few geese, naturally exalts the peasant. . . . In sauntering after his cattle, he acquires a habit of indolence. Quarter, half, and occasionally whole days, are imperceptibly lost. Day labour becomes disgusting; the aversion increases by indulgence. And at length the sale of a half-fed calf, or hog, furnishes the means of adding intemperance to idleness.
Here we have a peasant making a decision about work and leisure. He has a few animals and the wherewithal to maintain them, and that suffices. ‘Day labour becomes disgusting’ — well, or not worthwhile. Not worth the effort. And what does our peasant do to while away the time not spent working? He drinks! He is intemperant! Oh my stars and garters!
What is the problem with this? Well, he isn’t working. He isn’t being industrious. He isn’t being productive.
The review (and thus the book) suggests that the problem to the thinkers of the time was that these were potential labourers who could produce profits for the rich. They needed to be forced out of their traditional lifestyles, and hunger was the weapon.
What I noticed, though, was the command to be productive. It wasn’t up to the individual to make such decisions. They were clearly wrong. And alcohol was clearly part of the problem.
It is the same today. When the ‘social costs of alcohol’ are computed, lost productivity and lost worklife are often included. These are largely private costs, locally affecting the drinker and perhaps a few people around the drinker who are able to make local decisions about the problem (and thus force the drinker to internalise the externalities). Nevertheless, there is horror that these people aren’t working to their full potential. So, as much as this is a history book, that same command to work and produce is still apparent today.
2) What does the forced labour of those people mean for today?
We (the industrialised West) are rich. Fabulously wealthy by historical standards. Yes, there is poverty and want, but most people have enough. We have more food than we can eat. Most individuals have their own bed (or share by choice). Our farm animals don’t live in our houses in the winter. We have one room for sleeping, one for eating, one for sitting, etc.
We rarely convert this personal wealth into anything productive. It goes on consumer goods, so many that they don’t fit in our houses and we pay people to store them for us. My daughter was marvelling this weekend at the size of the Wellington Storage King.
Many of us could take all this wealth and buy back the lifestyle of the peasant or the ‘native Highlanders’ of Scotland. And yet we don’t.
So, even though as a matter of historical record the shift to factory work may have been achieved through a deliberate campaign of dispossession, and even though this is an excellent demonstration that property rights are socially constructed and enforced by rough men standing ready to do violence, how does that help us make sense of the consumer economy? Is it about understanding that we have options — that we choose to live like this? Is it about understanding the violence inherent in the system (Help! I’m being repressed!)? Or, is it nostalgia for a simulacrum?