I recently decided to follow up my study of Bill Clinton's record in office as President of the United States with a study of Obama's administration. I approached the matter somewhat differently in his case. Rather than tracking down authoritative listings of major policy actions and systematically working through that, I focused more tightly on what were indisputably the key three areas of policymaking in his administration--Obama's handling of the Great Recession, his energy policy and his health reform.
I was struck by the curious echoes of the Clinton record in Obama's.
Clinton promised economic stimulus, infrastructure spending and health care reform. All of these initiatives fell by the wayside early in the Clinton administration. By contrast Obama realized something of them, but consistently underdelivered, with an undersized, brief, tax cut-reliant stimulus aimed only at avoiding completely "catastrophic failure" rather than getting the country over the crisis; a small portion of the work that the American Society of Civil Engineers has consistently pointed to as needed after decades of neglect; and a health care reform limited to requiring everyone to buy private care (an approach Obama himself earlier compared to eliminating homelessness by requiring everybody to buy a house), with a mix of consumer protections and government subsidies sweetening the deal (but still leaving 30 million uninsured).
Where Clinton proved a deregulator of finance Obama proved a pseudo-regulator, with Dodd-Frank taking the obsequiously business-friendly spirit of Clinton's Reinventing Government initiative to parodic extremes, even after enabling the continuation of the largest financial bailout operation in history.
Clinton, despite much rhetoric about the environment, presided over an extraordinary, heavily government-subsidized expansion of fossil fuel production and consumption as he signed an international agreement regarding the curbing of climate change that, in spite of its mildness, the Senate never ratified, and Obama, while directing a measure of government resources toward renewable energy and energy efficiency, by and large did the same (the U.S. adopting the 2015 Paris agreement by executive order, not Senate ratification).
Yet, if Obama produced more in the way of results than Clinton, the situation also demanded more than it did in Clinton's time. The crash of 2008 was far more severe than the recession of the early 1990s. In 2015 the necessity for action on the climate crisis was far more apparent than in 1997. And the burden of the health care system weighed still more heavily on America's economy and people in 2010 than it did in 1993 (up from 13 to 17 percent of GDP, while thanks to wage stagnation, per capita health expenditures rose from 11 to 17 percent of median household income).1 And needless to say, the goal and means were, on each occasion, consistently, deeply neoliberal.
1. In 1993 it was 13.4 percent of GDP and $3,400 per capita; in 2010, 17.3 percent of GDP and $8,400 per capita. This made for a 29 percent jump in health care's share of GDP, and a still bigger jump in its share of household income. Health spending figures from the Kaiser Family Foundation, household income figures from the U.S. Census Bureau.
Thursday, April 4, 2019
Saturday, March 23, 2019
Remembering the Kosovo War
The Wars of the Yugoslav Succession (1991-1999) are little remembered today in the United States, and this may seem to go especially for NATO's intervention in the Kosovo War, which began twenty years ago (on March 24, 1999). Part of it would seem to be that they did not fit in with the more general focus on the Middle East, the larger, more intense, more precedent-breaking conflicts in which overshadowed them (the 1991 Gulf War fought just a few years earlier, the near-continuous action against Iraq ever since, the wars that followed from 2001 on); did not involve the boots on the ground that raise the specter of high U.S. casualties and public questioning; did not ever command much enthusiasm among the American public.
Still, in hindsight, the conflicts seem a watershed, in ways extending far beyond the war's hugely important local consequences. The wars in the Balkans, along with the contemporaneous wars in Central Africa (Rwanda, and the two Congo Wars), sounded the death knell for those short-lived, early '90s, post-Cold War visions the mainstream held of multilateral humanitarian interventions setting the world to rights.
Looking back, the conflict between the West and Russia over the action, which entailed the denial to it of United Nations authorization, and a measure of nuclear saber-rattling many would seem to prefer not to remember, and the confrontation between their forces at Pristina airport that came so close to a shooting war (one of the odder legacies of which is the idea some have that singer James Blunt SAVED THE WORLD FROM WORLD WAR III), seem less a last gasp of the Cold War than a foreshadowing of NATO's disregard for Russian opinion bumping up against a renewed Russian assertiveness--of what we have since seen in Georgia (2008), in Ukraine (2014-), in Syria (2015-). Likewise, the bombing of the Chinese embassy in Belgrade by a B-2 bomber during the campaign was also far from the last worrisome incident in Sino-American relations, which have similarly become more adversarial.
It also seems that the manner in which the 1999 war was fought--that style of slow-motion, drawn-out, gradually escalating, all-aerial warfare campaign conducted in support of one side against another in another country's internal conflict without the American public paying much attention to it--has been routinized in the years since. Libya is perhaps the most obvious case, but one can say the same of Syria as well, and Somalia, and Pakistan, and wherever else the drones fly.
This past not even being the past, we overlook it at our peril.
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Still, in hindsight, the conflicts seem a watershed, in ways extending far beyond the war's hugely important local consequences. The wars in the Balkans, along with the contemporaneous wars in Central Africa (Rwanda, and the two Congo Wars), sounded the death knell for those short-lived, early '90s, post-Cold War visions the mainstream held of multilateral humanitarian interventions setting the world to rights.
Looking back, the conflict between the West and Russia over the action, which entailed the denial to it of United Nations authorization, and a measure of nuclear saber-rattling many would seem to prefer not to remember, and the confrontation between their forces at Pristina airport that came so close to a shooting war (one of the odder legacies of which is the idea some have that singer James Blunt SAVED THE WORLD FROM WORLD WAR III), seem less a last gasp of the Cold War than a foreshadowing of NATO's disregard for Russian opinion bumping up against a renewed Russian assertiveness--of what we have since seen in Georgia (2008), in Ukraine (2014-), in Syria (2015-). Likewise, the bombing of the Chinese embassy in Belgrade by a B-2 bomber during the campaign was also far from the last worrisome incident in Sino-American relations, which have similarly become more adversarial.
It also seems that the manner in which the 1999 war was fought--that style of slow-motion, drawn-out, gradually escalating, all-aerial warfare campaign conducted in support of one side against another in another country's internal conflict without the American public paying much attention to it--has been routinized in the years since. Libya is perhaps the most obvious case, but one can say the same of Syria as well, and Somalia, and Pakistan, and wherever else the drones fly.
This past not even being the past, we overlook it at our peril.
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Thursday, February 28, 2019
The Cowardice of Consumer-Bashing; or, Neoliberal Environmentalism
The environmental movement has taken numerous forms, and indeed, just about every conceivable form with regard to ideology, so much so that one must be careful in generalizing about it. But it seems safe to say that mainstream environmentalism, like mainstream everything else today, emerged in the neoliberal era, and accommodated itself to that era. Despite the unavoidable clash between the demands of environmentalism and the prerogatives of capitalism (not least, the impossibility of infinite economic expansion on the basis of a finite resource stock), it has been neurotically fixated on not appearing even mildly critical of the existing socioeconomic system.
Indeed, rather than radical critique, it has preferred to couch its criticism of society's thrust in terms of a vague "we"--as in "We failed to heed the warnings," or "We went on with our wasteful ways"--that blurs together all of humanity, drawing no distinction between the chief executive officers of ExxonMobil and BP and starving children in the Sahel. This explicitly asserts the "sociological nonsense and political irresponsibility" that "we all possess equal powers to make history," making them accessories, often quite knowing accessories, to the irresponsibility of those who actually hold the levers of power.1 Only the most obtuse, ill-informed or shamelessly dishonest can claim that the key political decisions regarding energy and climate, for example, were made by the public, or even represented it--when these institutions went to such great lengths to lie to the public, to confuse and distract it, to combat even the principle of its having a say (what neoliberalism, after all, has been about in the end), and then when that public voted for sane policies, frankly refused to deliver those policies. (In 2008 Americans elected a President who promised an end to fossil fuel subsidies, cap-and-trade, a Green Jobs Corps. Instead they got the "all-of-the-above" energy policy that put into practice his opponent's running mate's cry of "Drill, baby, drill!")
Indeed, where it has been more targeted in its criticisms, environmentalism has emphasized the subjective and individual--looking away from the fact that over seventy percent of greenhouse gas emissions are generated by the operations of just one hundred corporations, thinking about which not only takes us far closer to the root of the problem given those corporations' practical control over what gets made and how, but because of their size, organization and resources generally are better able than anyone else to change all that, and in the small number of organizations involved an excellent focus for thought and action about solutions; in preference for talking up the carbon footprint of seven billion individuals. It is, they make very clear, incumbent on the individual consumer to sacrifice by choosing carefully, paying more--rather than incumbent on the manufacturer to provide the greenest products available at any given price (and the thought of regulation to that end, anathema), ignoring the realities of power, and equity. The consumer has already lost a major option when, the political system having failed them by refusing to provide adequate public transport, they are forced to buy a car and drive many, many miles in it just to have a job. When buying that car they are restricted to buying what they can afford from the models that an oligopolistic car industry is prepared to market--something it has done in line with its preference for selling not just old-fashioned gas-burners, but more vehicle per customer. But it is the consumer that it lambastes.
In it all one can see a retreat of environmentalism into an austere, misanthropic, religiosity which thunders against the consumer, "You have had it too good for too long!" (especially naked where it seems to positively gloat over the idea of civilization's crashing down and a Great Die-Off taking most of humanity with it and taking the rest back to the Dark Ages). The attack on the consumer, too, can appear a sort of compensation for their complete lack of success in relation to the genuinely powerful--or shabbier still, their taking their frustrations out on those in no position to resist. It bespeaks real failure. Hopefully, rather than bespeaking it, environmentalism will admit it, abandon what has not worked, and think of what might--intellectual and moral courage rather than cowardice, in a readiness to admit that realizing its goals may not always allow for complete accommodation of the preferences of every last powerful interest out there, and a preparedness to think big. I, for one, am convinced that at this late stage, nothing less than a 100 percent-renewable-energy-and-large-scale-geoengineering moonshot can save us from catastrophe, and the sooner we see the obvious taken for granted, and properly acted upon, the better.
Indeed, rather than radical critique, it has preferred to couch its criticism of society's thrust in terms of a vague "we"--as in "We failed to heed the warnings," or "We went on with our wasteful ways"--that blurs together all of humanity, drawing no distinction between the chief executive officers of ExxonMobil and BP and starving children in the Sahel. This explicitly asserts the "sociological nonsense and political irresponsibility" that "we all possess equal powers to make history," making them accessories, often quite knowing accessories, to the irresponsibility of those who actually hold the levers of power.1 Only the most obtuse, ill-informed or shamelessly dishonest can claim that the key political decisions regarding energy and climate, for example, were made by the public, or even represented it--when these institutions went to such great lengths to lie to the public, to confuse and distract it, to combat even the principle of its having a say (what neoliberalism, after all, has been about in the end), and then when that public voted for sane policies, frankly refused to deliver those policies. (In 2008 Americans elected a President who promised an end to fossil fuel subsidies, cap-and-trade, a Green Jobs Corps. Instead they got the "all-of-the-above" energy policy that put into practice his opponent's running mate's cry of "Drill, baby, drill!")
Indeed, where it has been more targeted in its criticisms, environmentalism has emphasized the subjective and individual--looking away from the fact that over seventy percent of greenhouse gas emissions are generated by the operations of just one hundred corporations, thinking about which not only takes us far closer to the root of the problem given those corporations' practical control over what gets made and how, but because of their size, organization and resources generally are better able than anyone else to change all that, and in the small number of organizations involved an excellent focus for thought and action about solutions; in preference for talking up the carbon footprint of seven billion individuals. It is, they make very clear, incumbent on the individual consumer to sacrifice by choosing carefully, paying more--rather than incumbent on the manufacturer to provide the greenest products available at any given price (and the thought of regulation to that end, anathema), ignoring the realities of power, and equity. The consumer has already lost a major option when, the political system having failed them by refusing to provide adequate public transport, they are forced to buy a car and drive many, many miles in it just to have a job. When buying that car they are restricted to buying what they can afford from the models that an oligopolistic car industry is prepared to market--something it has done in line with its preference for selling not just old-fashioned gas-burners, but more vehicle per customer. But it is the consumer that it lambastes.
In it all one can see a retreat of environmentalism into an austere, misanthropic, religiosity which thunders against the consumer, "You have had it too good for too long!" (especially naked where it seems to positively gloat over the idea of civilization's crashing down and a Great Die-Off taking most of humanity with it and taking the rest back to the Dark Ages). The attack on the consumer, too, can appear a sort of compensation for their complete lack of success in relation to the genuinely powerful--or shabbier still, their taking their frustrations out on those in no position to resist. It bespeaks real failure. Hopefully, rather than bespeaking it, environmentalism will admit it, abandon what has not worked, and think of what might--intellectual and moral courage rather than cowardice, in a readiness to admit that realizing its goals may not always allow for complete accommodation of the preferences of every last powerful interest out there, and a preparedness to think big. I, for one, am convinced that at this late stage, nothing less than a 100 percent-renewable-energy-and-large-scale-geoengineering moonshot can save us from catastrophe, and the sooner we see the obvious taken for granted, and properly acted upon, the better.
Sunday, December 23, 2018
Three Reviews: David Graeber's Debt, The Utopia of Rules and Bullshit Jobs
I have only recently discovered the work of anthropologist David Graeber--and wish I had done so earlier. Books written for general audiences about social science subjects that read like anything more than a drawn-out magazine article are rare these days, but Graeber certainly delivers the goods in the three titles I have just reviewed, Debt: The First 5,000 Years; The Utopia of Rules: On Technology, Stupidity and the Secret Joys of Bureaucracy; and Bullshit Jobs: A Theory (the latter, I was pleasantly surprised to find, issued by publishing giant Simon & Schuster!). Rich in original, bold, conventional wisdom-smashing ideas that turn upside down much of what we (falsely) think we know about our social world (from the moral significance of debt to the efficiency of capitalism), they are not merely of intellectual interest, but relevant to our present day troubles, and like all really worthwhile research, a basis for a great deal of further thought and inquiry. It's a nice bonus that they manage to set forth their ideas as lucidly, as readably, as they do.
Besides the books I also recommand Graeber's essays for Thomas Frank's magazine, The Baffler, freely available here. Of particular relevance to his line of argument in these three works, it seems to me, is "Flying Cars and the Falling Rate of Profit" where Graeber makes it very clear that, contrary to the dismissals of Silicon Valley cheerleaders and the like, that we never got the future symbolized by the flying car does reflect something unhealthy and deeply consequential--a fear of change as destabilizing, combined with a bureaucratization and privatization of scientific research, which the Cold War's end actually encoureaged). I specifically recommend, too, his piece "Despair Fatigue: How Hopelessness Got Boring", which makes the case that, perhaps, the day of the "end of history" conservatives and postmodernist pseudo-leftists is drawing to a close, and a great movement for positive change in the world lies ahead of us.
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Besides the books I also recommand Graeber's essays for Thomas Frank's magazine, The Baffler, freely available here. Of particular relevance to his line of argument in these three works, it seems to me, is "Flying Cars and the Falling Rate of Profit" where Graeber makes it very clear that, contrary to the dismissals of Silicon Valley cheerleaders and the like, that we never got the future symbolized by the flying car does reflect something unhealthy and deeply consequential--a fear of change as destabilizing, combined with a bureaucratization and privatization of scientific research, which the Cold War's end actually encoureaged). I specifically recommend, too, his piece "Despair Fatigue: How Hopelessness Got Boring", which makes the case that, perhaps, the day of the "end of history" conservatives and postmodernist pseudo-leftists is drawing to a close, and a great movement for positive change in the world lies ahead of us.
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Review: The Utopia of Rules: On Technology, Stupidity, and the Joys of Bureaucracy, by David Graeber
David Graeber's Debt: The First 5,000 Years is a densely written, densely documented, conspicuously scholarly (if also highly readable and colorfully written) study, with four hundred pages of densely packed main text followed by sixty, twin-columned pages of even more densely packed footnotes and another forty pages of bibliographical entries after that, befitting its ambitious object--a thorough revision of a very large part of our understanding of the history of human civilization. By contrast, his book The Utopia of Rules, weighing in at less than half the earlier book's length, more sprightly in tone and "think piece" in feel, brings together three previously published essays with new material in what is not a scholarly reconstruction of a big chunk of human economic history and history more generally, but rather a series of meditations tending toward the ideal, the symbolic, the abstract, which merely share certain themes--bureaucracy, and its relations with violence (especially "structural" violence), imagination and rationality.
The introductory piece, "The Iron Law of Liberalism and the Era of Total Bureaucratization," points to the oft-overlooked contribution of the private sector to bureaucratization (it was the U.S. Federal government which was shaped by the corporations, not the other way around); the limitations of the left's critique of bureaucracy (alas, leaving this ground to the growling right-wing populist); and the tendency to underestimate the role of violence, overestimate the role of technology and misrepresent rationality as an end rather than a means in considering the issue of bureaucracy.1 "Dead Zones of the Imagination: An Essay on Structural Stupidity" considers the bureaucracy-violence-"stupidity" nexus, and what he regards as the curious aversion of contemporary social science to the study of bureaucracy; "Of Flying Cars and the Declining Rate of Profit," the failure of "tomorrowland" to arrive as expected, the overhyping of information technology, and the connections of these with the neoliberal project he argues was about preserving the status quo through quashing alternatives, rather than efficiency, technological innovation or growth; and "The Utopia of Rules; or Why We Love Bureaucracy After All," which stresses the human need for regularity and transparency, which bureaucracy promises (even if it rarely delivers them in ideal fashion). Finally the book includes in an appendix "On Batman and the Problem of Constituent Power" which is, actually, about comic book superheroics (particularly Christopher Nolan's 2012 The Dark Knight Returns, which he watched in the wake of the "Occupy" movement with which he had been involved), and their connections with the preceding themes.
By and large, the themes struck me as well worth exploring, and the case he made for his principal ideas for the most part persuasive, and in cases even necessary. (Too often the complex relationship of private to public is simplified into the tidy opposition existing only in libertarian fantasy. Too often the degree of coercion involved in the minutiae of daily life is overlooked. Too many commentators are intimidated by the ridicule that cheerleaders-for-things-as-they-are heap on those who ask why we aren't living more like the Jetsons, and exalt their cell phone as the telos of the universe from the Big Bang forward.) They were also enriched by numerous smaller observations, sufficiently so that the supporting arguments, the offhand observations, the anecdotes (recollections of his field work in Madagascar, for example), provided much of the book's interest--enough so as to make forgivable his tendency to go off on tangents, and his misses as well as hits. (In his frequent resorts to pop culture for explanations, I found him more convincing when writing about Batman than Star Trek, for instance.) That said, much of what he had to say here (regarding the corporatization of finance and financialization of the corporate, the fusion of public and private, the thrust of information technology, etc.) has been further developed in Bullshit Jobs, so that a reader interested in a fuller exposition of his analysis of bureaucracy and its implications would do well to look to that book, but the wealth of material here is more than ample to justify a look from those already familiar with his other works.
1. As Graeber already noted in Debt, just as states called markets into being, they must also sustain them in being, "an army of administrators" required "to keep them going"--and cites Von Mises on this. Where the case of the U.S. specifically is concerned the bureaucratized corporation preceded the expansion of the Federal government, and corporate functionaries played a significant role in building up the New Deal bureaucracy; while the masses of regulation imposed by government are, after all, largely designed by and lobbied for by business.
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The introductory piece, "The Iron Law of Liberalism and the Era of Total Bureaucratization," points to the oft-overlooked contribution of the private sector to bureaucratization (it was the U.S. Federal government which was shaped by the corporations, not the other way around); the limitations of the left's critique of bureaucracy (alas, leaving this ground to the growling right-wing populist); and the tendency to underestimate the role of violence, overestimate the role of technology and misrepresent rationality as an end rather than a means in considering the issue of bureaucracy.1 "Dead Zones of the Imagination: An Essay on Structural Stupidity" considers the bureaucracy-violence-"stupidity" nexus, and what he regards as the curious aversion of contemporary social science to the study of bureaucracy; "Of Flying Cars and the Declining Rate of Profit," the failure of "tomorrowland" to arrive as expected, the overhyping of information technology, and the connections of these with the neoliberal project he argues was about preserving the status quo through quashing alternatives, rather than efficiency, technological innovation or growth; and "The Utopia of Rules; or Why We Love Bureaucracy After All," which stresses the human need for regularity and transparency, which bureaucracy promises (even if it rarely delivers them in ideal fashion). Finally the book includes in an appendix "On Batman and the Problem of Constituent Power" which is, actually, about comic book superheroics (particularly Christopher Nolan's 2012 The Dark Knight Returns, which he watched in the wake of the "Occupy" movement with which he had been involved), and their connections with the preceding themes.
By and large, the themes struck me as well worth exploring, and the case he made for his principal ideas for the most part persuasive, and in cases even necessary. (Too often the complex relationship of private to public is simplified into the tidy opposition existing only in libertarian fantasy. Too often the degree of coercion involved in the minutiae of daily life is overlooked. Too many commentators are intimidated by the ridicule that cheerleaders-for-things-as-they-are heap on those who ask why we aren't living more like the Jetsons, and exalt their cell phone as the telos of the universe from the Big Bang forward.) They were also enriched by numerous smaller observations, sufficiently so that the supporting arguments, the offhand observations, the anecdotes (recollections of his field work in Madagascar, for example), provided much of the book's interest--enough so as to make forgivable his tendency to go off on tangents, and his misses as well as hits. (In his frequent resorts to pop culture for explanations, I found him more convincing when writing about Batman than Star Trek, for instance.) That said, much of what he had to say here (regarding the corporatization of finance and financialization of the corporate, the fusion of public and private, the thrust of information technology, etc.) has been further developed in Bullshit Jobs, so that a reader interested in a fuller exposition of his analysis of bureaucracy and its implications would do well to look to that book, but the wealth of material here is more than ample to justify a look from those already familiar with his other works.
1. As Graeber already noted in Debt, just as states called markets into being, they must also sustain them in being, "an army of administrators" required "to keep them going"--and cites Von Mises on this. Where the case of the U.S. specifically is concerned the bureaucratized corporation preceded the expansion of the Federal government, and corporate functionaries played a significant role in building up the New Deal bureaucracy; while the masses of regulation imposed by government are, after all, largely designed by and lobbied for by business.
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Review: Debt: The First 5,000 Years, by David Graeber
New York: Melville House, 2012, 534 pp.
David Graeber's Debt: The First 5,000 Years does precisely what its title promises, offer a history of its titular subject, and in a broader sense than this reader might expect--not least, because of how much more the word can mean than they might guess, which is in fact Graeber's starting point, as Graeber goes on to show. The first half of the book is a meditation on the idea of debt itself--both how deeply the idea suffuses our moral and religious ideas, our social relationships and language, all around the world; and at the same time, how varied and how (to modern people) strange the thinking about it has been. Indeed, much of it consists of lengthy discussions of comparatively exotic cultural notions about it, and in particular the idea of a "human economy" as manifested in societies ranging from the Irish to the Tiv.
Still, rather than just cataloguing this variety Graeber does advance a number of bold theses. Particularly important among them is that indebtedness, rather than the unfortunate and disreputable position we now think of it as being, may have been regarded as a normal, natural condition, and even a cement holding society together by connecting individuals together, an attitude reflected in the protections traditionally afforded debtors--like the Biblical "Year of Jubilee" which periodically canceled debts. Important, too, is his subversion of the most basic thinking about markets, money, debt. Where conventionally (in Adam Smith, for instance) a "natural" human tendency to exchange for comparative advantage is held to have made markets intuitive, and these are supposed to have led to money, and money to debts, with states generally outside the process, he contends that it was the rise of large, complex institutions--the temple complexes of ancient Mesopotamia identifiable as its state structures--that led to debt. By way of the need for units of account debt led to money, rather than the other way around, while it was states that fostered markets for the sake of mobilizing economies behind military endeavor, and the same rationale led to the transformation of by that point long familiar precious metal-based money into coinage--the standardized little pieces of those metals being handy for paying soldiers on the move.1
The second half of the book, building on many of these ideas, shifts to a systematic history of the development of debt across what might be thought of as the Eurasian "rimlands" over the past three millennia--the Mediterranean region, southern Asia, China, and eventually Western Europe. As noted earlier, Mesopotamia, and southern Asia more generally, were crucial scenes of the development of thinking about debt, and provide early examples of its abuses (like debt slavery) and the revolt against such abuses (in the form of the flight or rebellion of the victims, with profound implications for personal relations, quite observable in such works as the Bible).
That conflict between rapacious creditors and more humane policies, came together strikingly in the "Axial Age" (which he treats as roughly extending from 600 BCE to 600 CE). Conventionally thought of as an era of moral progress, because of its foundational ethical and religious developments (this was the crucial formative era for the Abrahamic and Dharmic faiths, from the Biblical prophets to Buddha, as well as the speculations of Greek and Chinese philosophers), Graeber emphasizes that this was in substantial part a reaction to another dimension of the era, its ruthless materialism, in economic matters above all, where society shifted away from a reliance on credit, toward "hard cash," commodity, typically metallic, money. This was epitomized by the vast empires that prevailed across most of the continent's more densely peopled spaces--the Roman, Mauryan and Han Empires especially--which functioned as expanding military-slavery-coinage complexes (where armies were used to make conquests and capture slaves and mines, the former to work the latter, to pay for more armies and more conquests in an ongoing cycle). Unsurprisingly this period saw creditors obtain substantial legal and political advantages relative to debtors, on whom debt burdens weighed much more heavily; and whose disadvantages were at times moderated by reformers (often, a matter of the spoils of empire relieving the poorer members of a dominant group, like Rome's citizens) but never eliminated.
Such a change awaited the end of the period, and of its empires. As these exhausted the possibilities of their expansion within the limits set by geography and their technological bases, they simply collapsed, eventually resulting in less militarized societies where slavery was of less economic importance, with the same going for metallic money--increasingly, a virtual matter in what were in general less materialistic, more idealistic societies (in the epistemological sense of the term, of course). Emblematic of the shift was the way in which much of Eurasia saw usury banned outright in what he characterized as not merely the Western, but the Eurasian, "Middle Ages."
However, if the Medieval era was not exclusively Western, the West was an outlier in important respects--in the depth of its imperial collapse (this was no Dark Age elsewhere), and the extent of its embrace of the "corporate" type of institution in the aftermath--pioneered a return to the old stress on tangible, metallic money; and on imperial military-slavery-coinage complexes designed to maximize the supply of it. The very rationale underlay the era's mercantilism and associated voyages of discovery and colonization efforts, which once more produced a worldwide system of empire. This was, of course, the Europe-centered colonial system, turbo-charged by the emergence of full-blown, labor time-commodifying, M-C-M-circit-running capitalism that defined Modernity.
This prevailed until what had become the leading Western and world power, the U.S., abandoned the gold standard in 1971, which Graeber identifies as a return to virtual money. Curiously the era has so far seen creditors retain their advantage, and indeed, become central to the system, their trading in debt and their use of debt forcing governments to accept their program at the core of the neoliberal project dominating the last half century (ironically, as the bailing out of insolvent financial institutions testifies to the extraordinary leniency toward the biggest debtors of all), with the contradictions all too apparent in the confusion, unease and dissent of the moment.
As the description just given shows, Graeber sets the nature and implications of debt and indebtedness, the advent of those most basic economic concepts and institutions, the significance of the Axial Age, and our grasp of the ancient-Medieval-modern division of history, all on their heads. Often I was reminded of Karl Polanyi's classic debunking of the "myth of the market" so beloved by free-market theorists, but Graeber's work is grounded in a far greater wealth of data, and its argument is more intricate and wider in scope (while along the way, enriched by numerous, fascinating smaller theses--like the idea that the chivalric knight-errant in seach of fortune and glory was a Medieval sublimation of the merchant's activity into that of the feudal warriors it sung).
In fairness, much of Graeber's reconstruction of the politico-economic history of Eurasia and the world struck me as counterintuitive. However, that our ingrained assumptions about such matters are historically contingent is partly Graeber's point--the reason why he spends so much of the first half of the book lingering on (to contemporary Western readers) obscure and bizarre customs and beliefs, past and present; while on continued reflection I saw nothing to show the basics of his argument were really implausible, or inconsistent with the known facts. In fact, some of his more seemingly radical statements fit quite well with what we know. (For instance, while I reserve judgment on the matter in regard to China and India, whose histories I know less well, the Roman Empire, as described by Joseph Tainter, among others, accords well with his model of a military-slavery-coinage complex.) And the longer I thought about his case, the more, not less, sense it made.
All this is a very great achievement, enough so as to amply justify the work, though as might be expected given the note on which the history ends--that strange and uncertain phase into which we have entered in the past half century--Graeber is not merely explaining the past, but explicitly interested in the implications of this reading of history, this understanding of economic and social life, for the economic and social life of the early twenty-first century. That extends as far as the harsh and punitive conventional wisdom regarding the repayment of debt as one of the most basic moral obligations, in the name of which politicians have in recent decades inflicted enormous misery on populations from Mexico to Malaysia.
Reflecting on all this Graeber makes clear that an older way of understanding and living in the world is, if you will forgive the unintended pun, bankrupt, but a new one yet to emerge. Indeed, he suggests that contrary to the much maligned and yet (in the mainstream) virtually uncontested "end of history" school, we may be looking at the end of not just a particular attitude to debt, but capitalism itself, perhaps within a generation. That a book presenting this thought, so heretical to orthodox opinion that it has not had a real mainstream hearing for generations, is getting the attention it has (even contemptuous attention from the guardians of that orthodoxy) would seem to say a great deal about how the range of ideas that can be spoken in public has widened. By and large, it has been the right that has been more conspicuous, raising the profile of overt racism within the mainstream as talking heads treat the likes of Steve Bannon with deference on their shows. Still, however resistant elites remain to the ideas of the left, it is undeniable that much of the public does not regard the word "socialism" as the anathema it seemed such a short time ago.
That said, one need not accept Graeber's position regarding our contemporary political and economic life to find interest or value in his understanding of the past. However, those willing and able to at least engage with his ideas about them may be interested to know that in discussing our present discontents in this book he introduced an idea he developed at geater length in an article in Thomas Frank's The Baffler, "Flying Cars and the Declining Rate of Profit,". Specifically he holds that neoliberalism has not been about a more efficient, fast-growing capitalism, but mere preservation of that system's social relations--an idea he has since developed even further in his essay collection The Utopia of Rules (reviewed here), and further than that in his more recent Bullshit Jobs (reviewed here).
1. Lest the simple-minded get confused--as one reviewer of this book who (clearly devoted to the old myth of the market) foamed at the mouth with hostility and intent on treating Graeber's argument as a straw man did--money, and its use as a unit of account, is one thing; and physical money handled and transferred by one to another as a matter of course in daily economic transactions still another thing; with the advent of coinage still not necessarily implied in even the latter. Equally, it is one thing to speak of barter or exchange, another to speak of private exchange in markets as a central organizing principle in economic life.
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David Graeber's Debt: The First 5,000 Years does precisely what its title promises, offer a history of its titular subject, and in a broader sense than this reader might expect--not least, because of how much more the word can mean than they might guess, which is in fact Graeber's starting point, as Graeber goes on to show. The first half of the book is a meditation on the idea of debt itself--both how deeply the idea suffuses our moral and religious ideas, our social relationships and language, all around the world; and at the same time, how varied and how (to modern people) strange the thinking about it has been. Indeed, much of it consists of lengthy discussions of comparatively exotic cultural notions about it, and in particular the idea of a "human economy" as manifested in societies ranging from the Irish to the Tiv.
Still, rather than just cataloguing this variety Graeber does advance a number of bold theses. Particularly important among them is that indebtedness, rather than the unfortunate and disreputable position we now think of it as being, may have been regarded as a normal, natural condition, and even a cement holding society together by connecting individuals together, an attitude reflected in the protections traditionally afforded debtors--like the Biblical "Year of Jubilee" which periodically canceled debts. Important, too, is his subversion of the most basic thinking about markets, money, debt. Where conventionally (in Adam Smith, for instance) a "natural" human tendency to exchange for comparative advantage is held to have made markets intuitive, and these are supposed to have led to money, and money to debts, with states generally outside the process, he contends that it was the rise of large, complex institutions--the temple complexes of ancient Mesopotamia identifiable as its state structures--that led to debt. By way of the need for units of account debt led to money, rather than the other way around, while it was states that fostered markets for the sake of mobilizing economies behind military endeavor, and the same rationale led to the transformation of by that point long familiar precious metal-based money into coinage--the standardized little pieces of those metals being handy for paying soldiers on the move.1
The second half of the book, building on many of these ideas, shifts to a systematic history of the development of debt across what might be thought of as the Eurasian "rimlands" over the past three millennia--the Mediterranean region, southern Asia, China, and eventually Western Europe. As noted earlier, Mesopotamia, and southern Asia more generally, were crucial scenes of the development of thinking about debt, and provide early examples of its abuses (like debt slavery) and the revolt against such abuses (in the form of the flight or rebellion of the victims, with profound implications for personal relations, quite observable in such works as the Bible).
That conflict between rapacious creditors and more humane policies, came together strikingly in the "Axial Age" (which he treats as roughly extending from 600 BCE to 600 CE). Conventionally thought of as an era of moral progress, because of its foundational ethical and religious developments (this was the crucial formative era for the Abrahamic and Dharmic faiths, from the Biblical prophets to Buddha, as well as the speculations of Greek and Chinese philosophers), Graeber emphasizes that this was in substantial part a reaction to another dimension of the era, its ruthless materialism, in economic matters above all, where society shifted away from a reliance on credit, toward "hard cash," commodity, typically metallic, money. This was epitomized by the vast empires that prevailed across most of the continent's more densely peopled spaces--the Roman, Mauryan and Han Empires especially--which functioned as expanding military-slavery-coinage complexes (where armies were used to make conquests and capture slaves and mines, the former to work the latter, to pay for more armies and more conquests in an ongoing cycle). Unsurprisingly this period saw creditors obtain substantial legal and political advantages relative to debtors, on whom debt burdens weighed much more heavily; and whose disadvantages were at times moderated by reformers (often, a matter of the spoils of empire relieving the poorer members of a dominant group, like Rome's citizens) but never eliminated.
Such a change awaited the end of the period, and of its empires. As these exhausted the possibilities of their expansion within the limits set by geography and their technological bases, they simply collapsed, eventually resulting in less militarized societies where slavery was of less economic importance, with the same going for metallic money--increasingly, a virtual matter in what were in general less materialistic, more idealistic societies (in the epistemological sense of the term, of course). Emblematic of the shift was the way in which much of Eurasia saw usury banned outright in what he characterized as not merely the Western, but the Eurasian, "Middle Ages."
However, if the Medieval era was not exclusively Western, the West was an outlier in important respects--in the depth of its imperial collapse (this was no Dark Age elsewhere), and the extent of its embrace of the "corporate" type of institution in the aftermath--pioneered a return to the old stress on tangible, metallic money; and on imperial military-slavery-coinage complexes designed to maximize the supply of it. The very rationale underlay the era's mercantilism and associated voyages of discovery and colonization efforts, which once more produced a worldwide system of empire. This was, of course, the Europe-centered colonial system, turbo-charged by the emergence of full-blown, labor time-commodifying, M-C-M-circit-running capitalism that defined Modernity.
This prevailed until what had become the leading Western and world power, the U.S., abandoned the gold standard in 1971, which Graeber identifies as a return to virtual money. Curiously the era has so far seen creditors retain their advantage, and indeed, become central to the system, their trading in debt and their use of debt forcing governments to accept their program at the core of the neoliberal project dominating the last half century (ironically, as the bailing out of insolvent financial institutions testifies to the extraordinary leniency toward the biggest debtors of all), with the contradictions all too apparent in the confusion, unease and dissent of the moment.
As the description just given shows, Graeber sets the nature and implications of debt and indebtedness, the advent of those most basic economic concepts and institutions, the significance of the Axial Age, and our grasp of the ancient-Medieval-modern division of history, all on their heads. Often I was reminded of Karl Polanyi's classic debunking of the "myth of the market" so beloved by free-market theorists, but Graeber's work is grounded in a far greater wealth of data, and its argument is more intricate and wider in scope (while along the way, enriched by numerous, fascinating smaller theses--like the idea that the chivalric knight-errant in seach of fortune and glory was a Medieval sublimation of the merchant's activity into that of the feudal warriors it sung).
In fairness, much of Graeber's reconstruction of the politico-economic history of Eurasia and the world struck me as counterintuitive. However, that our ingrained assumptions about such matters are historically contingent is partly Graeber's point--the reason why he spends so much of the first half of the book lingering on (to contemporary Western readers) obscure and bizarre customs and beliefs, past and present; while on continued reflection I saw nothing to show the basics of his argument were really implausible, or inconsistent with the known facts. In fact, some of his more seemingly radical statements fit quite well with what we know. (For instance, while I reserve judgment on the matter in regard to China and India, whose histories I know less well, the Roman Empire, as described by Joseph Tainter, among others, accords well with his model of a military-slavery-coinage complex.) And the longer I thought about his case, the more, not less, sense it made.
All this is a very great achievement, enough so as to amply justify the work, though as might be expected given the note on which the history ends--that strange and uncertain phase into which we have entered in the past half century--Graeber is not merely explaining the past, but explicitly interested in the implications of this reading of history, this understanding of economic and social life, for the economic and social life of the early twenty-first century. That extends as far as the harsh and punitive conventional wisdom regarding the repayment of debt as one of the most basic moral obligations, in the name of which politicians have in recent decades inflicted enormous misery on populations from Mexico to Malaysia.
Reflecting on all this Graeber makes clear that an older way of understanding and living in the world is, if you will forgive the unintended pun, bankrupt, but a new one yet to emerge. Indeed, he suggests that contrary to the much maligned and yet (in the mainstream) virtually uncontested "end of history" school, we may be looking at the end of not just a particular attitude to debt, but capitalism itself, perhaps within a generation. That a book presenting this thought, so heretical to orthodox opinion that it has not had a real mainstream hearing for generations, is getting the attention it has (even contemptuous attention from the guardians of that orthodoxy) would seem to say a great deal about how the range of ideas that can be spoken in public has widened. By and large, it has been the right that has been more conspicuous, raising the profile of overt racism within the mainstream as talking heads treat the likes of Steve Bannon with deference on their shows. Still, however resistant elites remain to the ideas of the left, it is undeniable that much of the public does not regard the word "socialism" as the anathema it seemed such a short time ago.
That said, one need not accept Graeber's position regarding our contemporary political and economic life to find interest or value in his understanding of the past. However, those willing and able to at least engage with his ideas about them may be interested to know that in discussing our present discontents in this book he introduced an idea he developed at geater length in an article in Thomas Frank's The Baffler, "Flying Cars and the Declining Rate of Profit,". Specifically he holds that neoliberalism has not been about a more efficient, fast-growing capitalism, but mere preservation of that system's social relations--an idea he has since developed even further in his essay collection The Utopia of Rules (reviewed here), and further than that in his more recent Bullshit Jobs (reviewed here).
1. Lest the simple-minded get confused--as one reviewer of this book who (clearly devoted to the old myth of the market) foamed at the mouth with hostility and intent on treating Graeber's argument as a straw man did--money, and its use as a unit of account, is one thing; and physical money handled and transferred by one to another as a matter of course in daily economic transactions still another thing; with the advent of coinage still not necessarily implied in even the latter. Equally, it is one thing to speak of barter or exchange, another to speak of private exchange in markets as a central organizing principle in economic life.
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Neoliberalism and Technological Slowdown
The possibility that the rate of technological change slowed after the mid-twentieth century has interested me for over a decade--as has the correlation of that slowdown with the neoliberal turn, about which I have had occasion to write much. Of course, the neoliberal decades have been decades of weak growth with what came before--perhaps even very weak growth.
Gerard Dumenil and Dominique Levy in Capital Resurgent contend that the technological slowdown led to slower productivity growth and slower growth generally, which helped prompt the neoliberal turn.1 Yet, one could argue that the relationship has been the other way around--that neoliberalism contributed to a technological slowdown. It is not at all difficult to think up reasons why this might be the case--the neoliberal preference for speculative over productive investment, a "short-termism" in management (fixated on quarterly balance sheets, the highest possible share prices and dividend payouts at a given moment, and the excuses they provide for preposterous executive compensation, and to hell with everything else) that wreaks havoc with genuinely productive work and especially R & D, an IP system run amok that has innovators getting in each others' way.1
There is, too, the disincentive of the ample, cheap labor supply opened up by convenient offshoring and the collapse of the Communist bloc for the development of labor-saving technologies, and the encouragement that the concentration of global sectors in a few, oligopolistic hands provides for sustaining rather than breakthrough technologies, and the opportunities corporate colossi have for defending themselves against disruption. (Consider how long and successfully Big Oil has warded off the challenge from renewable energy technologies.) And there is the austerity that has proceeded from all of it, leading to the trimming of research budgets (often, in unintelligent ways), while discouraging not just the speculation-mad but anyone from investing to the degree they otherwise might.
It seems to me that any serious discussion of the rate of progress, whether a case for its having slowed down, sped up or anything else, needs to take account of all that.
1. In Capital Resurgent the fuller reading of the history is that technological advance slowed in the '60s, encouraging finance's efforts to get the upper hand in economic life, the essence of the neoliberal turn; but that technological progress did resurge later in the century, despite which finance remained dominant, and neoliberalism endured. In fairness, the original edition of the book appeared about the turn of the twenty-first century (2000), when the argument for revived progress seemed more plausible. (To go by Robert Gordon's work, the 1996-2004 period did see strong advance, which petered out again.)
Gerard Dumenil and Dominique Levy in Capital Resurgent contend that the technological slowdown led to slower productivity growth and slower growth generally, which helped prompt the neoliberal turn.1 Yet, one could argue that the relationship has been the other way around--that neoliberalism contributed to a technological slowdown. It is not at all difficult to think up reasons why this might be the case--the neoliberal preference for speculative over productive investment, a "short-termism" in management (fixated on quarterly balance sheets, the highest possible share prices and dividend payouts at a given moment, and the excuses they provide for preposterous executive compensation, and to hell with everything else) that wreaks havoc with genuinely productive work and especially R & D, an IP system run amok that has innovators getting in each others' way.1
There is, too, the disincentive of the ample, cheap labor supply opened up by convenient offshoring and the collapse of the Communist bloc for the development of labor-saving technologies, and the encouragement that the concentration of global sectors in a few, oligopolistic hands provides for sustaining rather than breakthrough technologies, and the opportunities corporate colossi have for defending themselves against disruption. (Consider how long and successfully Big Oil has warded off the challenge from renewable energy technologies.) And there is the austerity that has proceeded from all of it, leading to the trimming of research budgets (often, in unintelligent ways), while discouraging not just the speculation-mad but anyone from investing to the degree they otherwise might.
It seems to me that any serious discussion of the rate of progress, whether a case for its having slowed down, sped up or anything else, needs to take account of all that.
1. In Capital Resurgent the fuller reading of the history is that technological advance slowed in the '60s, encouraging finance's efforts to get the upper hand in economic life, the essence of the neoliberal turn; but that technological progress did resurge later in the century, despite which finance remained dominant, and neoliberalism endured. In fairness, the original edition of the book appeared about the turn of the twenty-first century (2000), when the argument for revived progress seemed more plausible. (To go by Robert Gordon's work, the 1996-2004 period did see strong advance, which petered out again.)
Mass Technological Unemployment Has Already Happened
The renewed vibrancy of progress in the areas of artificial intelligence and robotics has revived interest in the possibility of rapid, near-term automation eliminating vast numbers of jobs in the coming years. I will not here concern myself with the plausibility of the prediction. Rather what interests me here is the fact that this has already happened.
The claim is less shocking or original than it might appear. In fact, I first came across such a claim just as I was beginning to take a serious interest in matters of economics, Jeremy Rifkin's The End of Work (1994). The "end" of work he predicted did not prove so imminent as he thought, but his argument regarding mass technological unemployment as already having happened stuck with me.
Basically, the Industrial Revolution in fairly short order exploded productivity, and displaced labor at a very rapid rate. However, all this has been concealed by three factors.
1. The first, most direct, but least noticed is that people are working less. The school-leaving age is later, higher education is bigger than ever, and people expect to retire. In between people work shorter weeks than they used to (the 12, even 10 hour day a thing of the past). There has also been an increasingly minimal definition of what it means to be employed, whether one thinks in terms of the expansion of part-time, temporary and other irregular employment, or the propensity of governments to fudge the figures in an attempt to show that things are better than they really are. (In Britain, one hour worked in the last week counts as employment.) This conceals a great deal of unemployment, and even more underemployment.
2. A massive amount of labor has been soaked up in marginal or even wasteful uses. Bluntly characterized as "bullshit jobs" by David Graeber, this includes such activities as advertising and marketing, the hypertrophy of the finance-insurance-real estate complex (to twenty percent of U.S. GDP), and the blooming of a health care bureaucracy (explicitly defended on the grounds that while it is wasteful, it is a major employer). There is even make-work of this kind in manufacturing, thanks to built-in obsolescence and product differentiation. And many genuinely productive jobs contain an increasing bullshit component, so that more people end up working them than might otherwise be the case. All this has multiplier effects--as an "unnecessary" financial firm will still need office space necessitating construction, utilities and janitorial services.
(Of course, that one can discuss work in this way is enough to make a market fundamentalist seethe. In their view if someone is willing to pay for something, that is sufficient proof of its value according to neoclassical thinkers' use of marginal utility. But these same people also say unemployment doesn't really exist and you can't run out of resources, so we know what their theories are worth, don't we?)
3. Massive state action, which takes two forms. One is the dramatic expansion of the state, paid for with high and progressive taxation, deficit spending or both, with the money going to such things as enlarged military-industrial complexes, and welfare programs. All of these generate further employment quite directly, while by way of transfer payments, welfare systems put purchasing power in the hands of people who would not otherwise have it, yet again contributing to consumption and employment. The other, related form is the expansion of credit in an age of fiat money, especially explosive after the end of the gold standard. Governments, businesses, households borrow money and spend it, again keeping the economy going.
David Graeber, in his recent take on the issue, suggests that if just some of this were taken into account we might find the real unemployment rate is a mind-boggling fifty, even sixty percent.
We might respond in unconstructive ways--with more statistical manipulation, with more bullshit jobs, with dubious credit expansions. (Alas, I think we're already pushing the limit there.) We might respond in constructive ways--for example, with shorter work days and weeks and years, with works schemes addressing real problems (we sure could do with a rebuild of our infrastructures, in the U.S., anyway), a strengthened system for supporting human beings (for instance, a Universal Basic Income scheme). But whatever we do, the fact remains that mass technological unemployment is something with which we already live today.
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The claim is less shocking or original than it might appear. In fact, I first came across such a claim just as I was beginning to take a serious interest in matters of economics, Jeremy Rifkin's The End of Work (1994). The "end" of work he predicted did not prove so imminent as he thought, but his argument regarding mass technological unemployment as already having happened stuck with me.
Basically, the Industrial Revolution in fairly short order exploded productivity, and displaced labor at a very rapid rate. However, all this has been concealed by three factors.
1. The first, most direct, but least noticed is that people are working less. The school-leaving age is later, higher education is bigger than ever, and people expect to retire. In between people work shorter weeks than they used to (the 12, even 10 hour day a thing of the past). There has also been an increasingly minimal definition of what it means to be employed, whether one thinks in terms of the expansion of part-time, temporary and other irregular employment, or the propensity of governments to fudge the figures in an attempt to show that things are better than they really are. (In Britain, one hour worked in the last week counts as employment.) This conceals a great deal of unemployment, and even more underemployment.
2. A massive amount of labor has been soaked up in marginal or even wasteful uses. Bluntly characterized as "bullshit jobs" by David Graeber, this includes such activities as advertising and marketing, the hypertrophy of the finance-insurance-real estate complex (to twenty percent of U.S. GDP), and the blooming of a health care bureaucracy (explicitly defended on the grounds that while it is wasteful, it is a major employer). There is even make-work of this kind in manufacturing, thanks to built-in obsolescence and product differentiation. And many genuinely productive jobs contain an increasing bullshit component, so that more people end up working them than might otherwise be the case. All this has multiplier effects--as an "unnecessary" financial firm will still need office space necessitating construction, utilities and janitorial services.
(Of course, that one can discuss work in this way is enough to make a market fundamentalist seethe. In their view if someone is willing to pay for something, that is sufficient proof of its value according to neoclassical thinkers' use of marginal utility. But these same people also say unemployment doesn't really exist and you can't run out of resources, so we know what their theories are worth, don't we?)
3. Massive state action, which takes two forms. One is the dramatic expansion of the state, paid for with high and progressive taxation, deficit spending or both, with the money going to such things as enlarged military-industrial complexes, and welfare programs. All of these generate further employment quite directly, while by way of transfer payments, welfare systems put purchasing power in the hands of people who would not otherwise have it, yet again contributing to consumption and employment. The other, related form is the expansion of credit in an age of fiat money, especially explosive after the end of the gold standard. Governments, businesses, households borrow money and spend it, again keeping the economy going.
David Graeber, in his recent take on the issue, suggests that if just some of this were taken into account we might find the real unemployment rate is a mind-boggling fifty, even sixty percent.
We might respond in unconstructive ways--with more statistical manipulation, with more bullshit jobs, with dubious credit expansions. (Alas, I think we're already pushing the limit there.) We might respond in constructive ways--for example, with shorter work days and weeks and years, with works schemes addressing real problems (we sure could do with a rebuild of our infrastructures, in the U.S., anyway), a strengthened system for supporting human beings (for instance, a Universal Basic Income scheme). But whatever we do, the fact remains that mass technological unemployment is something with which we already live today.
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Physics Envy: A Victorian Legacy
Reading Stanley Jevons' founding work of neoclassical economics, Theory of Political Economy, I found it redolent of that Victorian faith that not only was precise, certain, final systematization and mathematization of every field possible, but that they were necessary, and near at hand. Jevons, explicitly holding up physics as the standard, declared in his preface that
Time has not been kind to such views. I, for one, think that it has been too unkind, going too far in the other direction, with the flourishing of postmodernist hatred of reason, knowledge, understanding and thoughtful action. The irony is compounded by the fact that, among the social sciences, it is the adherents of Jevons' faith who have been least touched by that trend. While a hundred and fifty years on mathematical economics has fallen far short of proving its validity, relevance and utility in the way mathematical physics has, the proponents of an adapted version of his views remain in control of the economics departments, such that, as they marginalize dissenters from Marxists to institutional economists, they continue to reduce the whole of economic life to microeconomic models presented in the form of formulas.
The obvious reason is that where the systematizers had few champions in the "real world" in most fields, the vision of economics Jevons presented (pointedly economics rather than political economy, with all the disquieting implications of the "political") has been attractive and convenient for those less concerned with whatever intellectual appeal the idea may have than its political implications. After all, if economics is a science, well, then what it says is just how the world works--and the math intimidates a good many people who would otherwise criticize it.
1. Building on Jeremy Bentham's utilitarian philosophy, Stanley Jevons took the position that people act according to their expectations of pleasure and pain, its intensity, duration, likelihood, proximity, looking to maximize the former and minimize the latter, and that this is reducible to discrete units--what one might call "quanta" of pleasure and pain, of utility and disutility. Such anticipations are not measurable in direct fashion, of course, for no one could know the mind of a person, but could be measured indirectly by their readiness to pay.
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The Theory of Economy thus treated presents a close analogy to the science of Statical Mechanics, and the Laws of Exchange are found to resemble the Laws of Equilibrium of a lever as determined by the principle of virtual velocities. The nature of Wealth and Value is explained by the consideration of indefinitely small amounts of pleasure and pain, just as the Theory of Statics is made to rest upon the equality of indefinitely small amounts of energy.And just like mechanics, he concluded that it "must be a mathematical science," and endeavored to treat it as such, lest anyone think that he was being merely poetic.1
Time has not been kind to such views. I, for one, think that it has been too unkind, going too far in the other direction, with the flourishing of postmodernist hatred of reason, knowledge, understanding and thoughtful action. The irony is compounded by the fact that, among the social sciences, it is the adherents of Jevons' faith who have been least touched by that trend. While a hundred and fifty years on mathematical economics has fallen far short of proving its validity, relevance and utility in the way mathematical physics has, the proponents of an adapted version of his views remain in control of the economics departments, such that, as they marginalize dissenters from Marxists to institutional economists, they continue to reduce the whole of economic life to microeconomic models presented in the form of formulas.
The obvious reason is that where the systematizers had few champions in the "real world" in most fields, the vision of economics Jevons presented (pointedly economics rather than political economy, with all the disquieting implications of the "political") has been attractive and convenient for those less concerned with whatever intellectual appeal the idea may have than its political implications. After all, if economics is a science, well, then what it says is just how the world works--and the math intimidates a good many people who would otherwise criticize it.
1. Building on Jeremy Bentham's utilitarian philosophy, Stanley Jevons took the position that people act according to their expectations of pleasure and pain, its intensity, duration, likelihood, proximity, looking to maximize the former and minimize the latter, and that this is reducible to discrete units--what one might call "quanta" of pleasure and pain, of utility and disutility. Such anticipations are not measurable in direct fashion, of course, for no one could know the mind of a person, but could be measured indirectly by their readiness to pay.
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Review: The Hidden Wealth of Nations: The Scourge of Tax Havens, by Gabriel Zucman
In a slim book just a little over a hundred widely spaced pages long, French economist Zucman endeavors to offer a systematic account of the development of the tax haven system, the manner of its functioning, the scale of its activity, and possible remedies for the problem.
As Zucman explains, the post-World War I spike in taxation across war-depleted Europe sent the rich looking for havens for their wealth, and neutral Switzerland stepped forward to fill that role. Since then, the limited, essentially regional service has, along with the increasing volume, speed and convenience of financial flows, and the integration of the world economy at all levels, grown into a global system of tax havens across Europe, Asia and the Caribbean, each with their own specialties (Luxembourg for mutual funds, Ireland for monetary funds, the Cayman Islands for hedge funds), still largely Swiss-centered (via strategically located overseas branches of those Swiss banks at the key locations).
In endeavoring to compute the extent to which household wealth is offshored in that system, Zucman sets aside for the time being banknotes, insurance contracts and nonfinancial assets like paintings (admittedly, comprising a significant share of the world's wealth), and focuses solely on financial assets, which he assesses through a check of the global balance sheets. He totaled up the listed household liabilities as greater than assets ($96 trillion to $89 trillion), to the tune of $7.6 trillion, a guess he substantiates with another, more solid figure: Switzerland's admitted holdings of $2.3 trillion in foreign wealth, a one-third share of the total that he considers reasonable.
Altogether the total offshore wealth comes to some 8 percent of household wealth worldwide, with Zucman figuring that the proportion is higher for some nations than others--high-tax Europe than the United States, and commodity-producing developing nations rather than industrialized powers (in the case of Russia and Middle East oil producers, perhaps as much as fifty percent).
In an age of endless and steadily worsening inequality, deficits and austerity, this tax evasion would seem a significant problem, especially for those developing states most in need of the resources, while the current system adds to it by facilitating subtler forms of evasion. (Where assets do not "disappear," it enables corporations to shift assets and earnings to low-tax zones on paper, adding yet again to the losses.)
Naturally, there have been attempts at redress of the problem, but as he notes, they have been limited and full of holes--alas, like tax policies in general--leading him to propose a comprehensive package of reforms as an alternative. This would begin with the folding of the current system of multiple, regional registers for financial assets into a single, global register easily accessible to the world's tax authorities; a global wealth tax on undeclared wealth "at the source" (before any interest or dividend payouts) that would be reimbursable only when the owner declares themselves; and the taxation of corporations on overall income with taxes apportioned according to territory. Recalcitrant tax havens would be forced to comply through trading and other sanctions.
As Zucman describes it, the plan appears eminently logical in its mechanisms, in the sense that it would work if enacted; but its enactment is very difficult to picture in anything resembling the prevailing political climate. Even at the height of progressive taxation in the mid-twentieth century, it is arguable that such arrangements were tolerated only because the rich had their opportunities for evading the full weight of that taxation. It may well be that, in these times of crisis and backlash, such opportunities for evasion are looking more rather than less important than before (as demonstrated by the spectacle of the wealthier residents of traditionally capital-friendly Britain panicking over the mere prospect of a Labor government, and responding in, among other ways, a transfer of their assets offshore to precisely such locations).
They can be counted on to oppose any such measures. Especially given the need for a fairly high degree of international cooperation, this would seem to make any such move easier to frustrate. Moreover, even if such a program were implemented, the problem of major governments enforcing the program's dictates would remain--with the conduct of regulatory states in regard to the wealthy, again, doing little to inspire confidence in anything like today's political atmosphere. Still, if the evidences of popular protest around the world are anything to go by, things may be changing in that regard--and even if one is not yet to credit Zucman with devising a feasible plan, he can still be credited with providing considerable insight into this significant subject, while making it easily accessible to a general audience.
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As Zucman explains, the post-World War I spike in taxation across war-depleted Europe sent the rich looking for havens for their wealth, and neutral Switzerland stepped forward to fill that role. Since then, the limited, essentially regional service has, along with the increasing volume, speed and convenience of financial flows, and the integration of the world economy at all levels, grown into a global system of tax havens across Europe, Asia and the Caribbean, each with their own specialties (Luxembourg for mutual funds, Ireland for monetary funds, the Cayman Islands for hedge funds), still largely Swiss-centered (via strategically located overseas branches of those Swiss banks at the key locations).
In endeavoring to compute the extent to which household wealth is offshored in that system, Zucman sets aside for the time being banknotes, insurance contracts and nonfinancial assets like paintings (admittedly, comprising a significant share of the world's wealth), and focuses solely on financial assets, which he assesses through a check of the global balance sheets. He totaled up the listed household liabilities as greater than assets ($96 trillion to $89 trillion), to the tune of $7.6 trillion, a guess he substantiates with another, more solid figure: Switzerland's admitted holdings of $2.3 trillion in foreign wealth, a one-third share of the total that he considers reasonable.
Altogether the total offshore wealth comes to some 8 percent of household wealth worldwide, with Zucman figuring that the proportion is higher for some nations than others--high-tax Europe than the United States, and commodity-producing developing nations rather than industrialized powers (in the case of Russia and Middle East oil producers, perhaps as much as fifty percent).
In an age of endless and steadily worsening inequality, deficits and austerity, this tax evasion would seem a significant problem, especially for those developing states most in need of the resources, while the current system adds to it by facilitating subtler forms of evasion. (Where assets do not "disappear," it enables corporations to shift assets and earnings to low-tax zones on paper, adding yet again to the losses.)
Naturally, there have been attempts at redress of the problem, but as he notes, they have been limited and full of holes--alas, like tax policies in general--leading him to propose a comprehensive package of reforms as an alternative. This would begin with the folding of the current system of multiple, regional registers for financial assets into a single, global register easily accessible to the world's tax authorities; a global wealth tax on undeclared wealth "at the source" (before any interest or dividend payouts) that would be reimbursable only when the owner declares themselves; and the taxation of corporations on overall income with taxes apportioned according to territory. Recalcitrant tax havens would be forced to comply through trading and other sanctions.
As Zucman describes it, the plan appears eminently logical in its mechanisms, in the sense that it would work if enacted; but its enactment is very difficult to picture in anything resembling the prevailing political climate. Even at the height of progressive taxation in the mid-twentieth century, it is arguable that such arrangements were tolerated only because the rich had their opportunities for evading the full weight of that taxation. It may well be that, in these times of crisis and backlash, such opportunities for evasion are looking more rather than less important than before (as demonstrated by the spectacle of the wealthier residents of traditionally capital-friendly Britain panicking over the mere prospect of a Labor government, and responding in, among other ways, a transfer of their assets offshore to precisely such locations).
They can be counted on to oppose any such measures. Especially given the need for a fairly high degree of international cooperation, this would seem to make any such move easier to frustrate. Moreover, even if such a program were implemented, the problem of major governments enforcing the program's dictates would remain--with the conduct of regulatory states in regard to the wealthy, again, doing little to inspire confidence in anything like today's political atmosphere. Still, if the evidences of popular protest around the world are anything to go by, things may be changing in that regard--and even if one is not yet to credit Zucman with devising a feasible plan, he can still be credited with providing considerable insight into this significant subject, while making it easily accessible to a general audience.
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