Inconceivable!

economics, politics, , , , , , ,

Good news, everyone: finance is getting more democratic, because technology.

You know how democracy works, right? It means that a service that was previously only sold to some people gets sold to everyone now. It used to be that only finance dudes got to have finance, but now everyone does. Hooray! Let’s watch a video of democracy happening.

What were we talking about? Oh yeah: today’s breathlessness about the democratizing potential of financial institutions comes from Mohammed Al-Erian, who, as “Chair of Barack Obama’s Global Development Council,” apparently has a job whose sole requirement is an uncriticial embrace of the Silicon Valley doctrine of social policy, i.e. the best way to deal with the social problems caused by deterministic technological change and inevitable laissez-faire economic governance is just let them keep happening.

He assures us that this creeping expansion of financial logic into all areas of our lives isn’t just democratic, it’s also disruptive. I mean, what could be more disruptive than just letting faceless, inevitable social processes (“innovations suddenly appear…mechanisms emerge… business models face challenges”) proceed without any attempt to manage their social consequences at all?

Tackling these claims to disruption, democratic potential and to brand-new, never before-seen processes can get pretty tiring. Jill Lepore at The New Yorker has done a pretty devestating take-down of the disruption discourse, attacking head-on the idea that economic change proceeds in big leaps rather than incremental steps. Peter Frase at Jacobin points out that those most committed to “disruption” get cold feet when the disruptions aren’t derived from a tech-enabled business model. Evgeny Morozov has made his career skewering those with a growing religious faith that “more tech means everything is better for everyone” and, if he can be accused of throwing out the baby with the bathwater, part of the reason is that there is just so, so much dirty bathwater.

There are lots of reasons to be happy about increased access to certain financial services. Bringing down the prices of life insurance and small business loans could put them within the reach of people who didn’t otherwise have access to them. That could make their lives better. Al-Erian may be right that technological change will “reduce the cost of financial intermediation while providing for fairer risk-pooling outcomes and better credit underwriting.”

But here’s the thing: cell phones are now within the reach of almost everyone, and it hasn’t made society more democratic. Buzzfeed may have displaced community newspapers, but I can’t see how that makes things more democratic. The last 40 years of financial innovation brought us near-unprecedented levels of wealth inequality and the largest economic crisis since the 1930s. Why would anyone believe that the next 40 years of financial innovation are going to automatically create a utopia of equal democratic citizenship? How can Al-Erian keep using this word “empowerment”  to describe things like kickstarter, Kiva and bitcoin? It’s inconceivable.

Do not pass Go, do not collect $200

The End of Capitalists

economics, politics, , , , , ,

Do not pass Go, do not collect $200Now, I am not sure I totally agree with his reading of the politics, for reasons I’ve tried to spell out elsewhere. But JW Mason does a good job of making a point that has occasionally come up with since the economic crisis drove down interest rates, namely i. that there is no reason to think that real interest rates should be above zero, and ii. when real interests rates are very low, capitalists (qua money owners) have no real function:

Under capitalism, the elite are those who own (or control) money. Their function is, in a broad sense, to provide liquidity. To the extent that pure money-holders facilitate production, it is because money serves as a coordination mechanism, bridging gaps — over time and especially with unknown or untrusted counterparties — that would otherwise prevent cooperation from taking place. [1] In a world where liquidity is abundant, this coordination function is evidently obsolete and can no longer be a source of authority or material rewards.

Back in 2007, Cory Doctorow wrote a short story whose basic conceit was a future in which capital–liquid capital–had truly become obsolete, especially relative to the available human ingenuity, inventiveness and the capacity to make stuff (sigh: yes, yes, i.e. human capital). Low interest rates is one way to make that world happen.

Its easy for egalitarian leftists to get excited about this prospect. Real interest rates that stay consistently below (even very low) economic growth rates would mean the refutation of Piketty‘s grim prophecies. The idea of monocled, top-hatted plutocrats getting crushed under the wheels of history offers the schadenfreude of class enemies losing, with the added zest of partially confirming certain strains of Marxist historicism, in form if not in function.

The defeat of the capitalists, however, doesn’t mean permanent victory for humanity (or the working class, or the multitude, or whatever your favourite representative of eschatological emancipation happens to be). There’s no reason to believe, in a world of low returns on cash, that there won’t be political efforts to hoard the relatively scarce resources that were the source of wealth in Doctorow’s world – education, skills, networks, the preternatural ability to interact with robots. If the last 5000 years are any indication, there are likely to be intellectual movements to justify limited access to the new sources of wealth, as well.

The end of capitalists may mean the end of capitalism as we know it, but it won’t be the end of politics.

“The Danes do it better”

politics, , , , , ,

https://www.youtube.com/watch?v=bz_SyOXB1kM

There’s a lot of noise in Chris Maisano’s long critique of Lane Kenworthy‘s work, but in his key claim he’s on the nose and pithy to boot, calling out Kenworthy for adopting the “Danes do it better” argument.

Kenworthy, a professor of sociology and political science at the University of Arizona, has followed the popular “Ted Talk” strategy for academic notoriety: make a controversial claim about a well-known subject in easy-to-understand terms. Kenworthy’s particular brand, which appears to be paying off, is “America’s future is social democratic.”

The core of Maisano’s critique is that Kenworthy gets it right right on policy, wrong on politics. He has no quarter with the normative content of Kenworthy’s policy proposals, but serious doubts about their value as prophecy:

Like a good empirical social scientist, Kenworthy assumes that politics is fundamentally a rational, evidence-based pursuit and that good policy will eventually win out over bad politics. But his appeal to reason and evidence is almost touching considering how patently deranged U.S. political culture can be, particularly when it comes to questions of welfare and social spending. The rhetoric of reaction that Kenworthy dismisses as a gradually weakening obstacle to reform will not be defeated by the force of evidence-based, reasoned argumentation alone.

As a social theorist, I of course have great sympathy for Kenworthy’s entreaty to Consider the Evidence. But pleading does not make it so and evidence doesn’t make policy. Changes happen only after the issues reflected in that evidence have been prioritized over others, and translated into practice through political action.

The great majority of people, if they were to look at the evidence, might conclude that the Danes are better off than Americans. A social democratic United States, however, would require that political institutions and constituencies be organized in a way allows those opinions to be translated into policy change. This is a point that is too often missed by liberals, legal scholars, and policy wonks. Part of the problem may lie, too, in fictional depictions of politics (we might also call it the “West Wing” problem). When it comes to illustrating the politics of political change, it turns out that the Danes really do do it better.

“Project, Opposition, and most Embarrassingly, Truth”

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cross-posted from EUI Global and Transnational Perspectives Working Group

credit: McHugh-Russell

Over at n+1, an editor’s essay on the fragmented pasts and fraught promise of World Literature has spawned a small collection of thoughtful responses. In trying to capture a sense of what weltliteratur might be for, and why the contestants always seem to have fallen short of the mark (“Alas, Rushdie; alas, Naipaul.”), the editors string together an impressive array of traditions and examples, showing how each contributes to a synthesis that fails as much as a whole as in its individual parts.

Steeped as it is in the altogether modern desire to express the universal in the particular—i.e. to not only craft a particular voice, but to somehow choose voices that can stand in for the whole— the editors conclude that perhaps the disappointments of the genre arise not from the particular attempts that have been made of it, but in the shape of the ambition itself.

One of the responses, from Poorva Rajaram and Michael Griffith, dismisses the essay as a lament for a “right kind of universalism” that is not only unrealized, but unrealizable. They end by suggesting to those unsatisfied with the output of the spirit of capitalism as embodied in the publishing houses of northern capitals that they might simply “read more to their taste.”

Is the complaint fair? The essay is an attempt to investigate not what literature should be consumed, but how those engaged in its curation, can support human connection across difference (what Rorty would call the “education of the sentimental imagination”) and stay founded in a commitment to the political value of aesthetic freedom, without becoming Global Literature, i.e. “an empty vessel for the occasional self-ratification of the global elite.”

Joshua Cohen’s letter responds clearly to this ambition. In his view, the problem isn’t with the ends, but with the means. Literature relevance has passed: “Social consciousness has become the new beauty. The political has usurped the aesthetic.” Be that as it may, it’s not clear how much this differs from the essay’s own conclusions, which lay out, by reference to Trotsky (!), a blueprint for an alternative, “internationalist” literature.  Rather than an aesthetic practice with universalist pretensions, the concept here would be an explicit project that beats the path to freedom and solidarity by countering prevailing politics and tastes, rooted in the effort to articulate truths.

The important thing that Rajaram and Griffith seem to have forgotten is that the essay’s authors are not anonymous readers of the stuff put out by those northern-capital publishers, but rather a group of 20- and 30-somethings who edit a surprisingly influential literary journal published just down the street from them. When those editors provide the outline of a project for literature, the curious reader might, instead of suggesting sources that fit the bill, inquire into what exactly those editors have been printing for the last ten years. Because when one starts to look at the diversity, anger, curiosity and honesty that one finds between the journal’s pages, one can only conclude that the essay is neither reading guide, nor lamentation.

It’s a manifesto.

Wolves in Women’s Clothing

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Not a word here about using trans imagery as the symbolic palette humiliationIn a (damning, though fair) review of Corey Robin’s 2011 book painting conservative ideology as united only by the revanchist urge to maintain rule (and a slightly less controversial text from a grinning TV posterboy of the American left, Chris Hayes), Andrew Seal argues that placing affect/feeling of individuals at the centre of their analysis—as he claims both authors do—means consistently mistaking hegemony for hierarchy, missing the forest for the trees, and forgetting that, if there is a ruling class, that it then needs to be addressed as a class.

It’s a mesmerizing, superb piece of writing, more than enough to scare me away me from either of his sources. Invoking Tony Soprano and Jay Gatsby, he writes that “Robin’s vocabulary of feudalism…rhymes with preconceptions not yet articulated except as myths.”

Yet, in focusing away from affect and shining the spotlight instead on an amorphous “class interest,” Seal might be cutting off too much. It may well be that the maintenance of power structures results from instincts more complex than the monarchical pretensions of individual autocrats (an idea I give some credit), but to ignore instinct, affect and feeling entirely in favour Seal’s call to conceptualize “how the group acts” risks throwing the baby out with the bathwater.

Every time another layer of the Koch brothers’ global empire of misdirection, astro-turfing and white-washing is unpeeled, each new insight into the revolutionary plot hatched at Mont Pellerin to enthrone market-friendly ideas, each time money flows from powerful hands into the palms of key US decision-makers, it becomes easier to imagine power in the form of a cabal or a clan, as a clandestine conspiracy united not only in interest but in strategy to maintain their lordship over the suffering plebes.

Of course tracing and tracking these strategies matters, and responding to them needs to be a part of everyday politics. Yet, it’s also important to pay attention to the way in which feelings, and especially in-group feeling, play a part in perpetuating power structures. A recent piece by Sam Polk, a lapsed Wall Street insider, does something similar, and it’s gotten a fair bit of attention. Polk treats the industry’s pathology in terms of addiction. Most interesting about the piece, however, is not the soulless drive for ever more money and power (it’s always odd to me that people are surprised by capitalists acting, as Marx predicted, “as capital personified”), but with the picture he paints of industry politics. It’s true that the industry hates both financial regulation, and taxes on the rich, but when Polk put the systemic advisability of certain measures in question, the response from his boss was that he didn’t “have the brain capacity to think about the system as a whole. All I’m concerned with is how this affects our company.”

It’s not that the US financial class is uninterested in politics, but many of them nonetheless have an unsophisticated view of politics, backed up by fear and selfishness, not a desire to rule per se.

All this provides proper context for a recent exposé in New York Magazine detailing the hazing rituals of Kappa Beta Phi, an exclusive club for powerful Wall Street types.  What is most striking about this soirée for billionaires (and those making due with only hundreds of millions) is not simply the fact of their gathering, but how much closer their hijinx come to the crude embarrassments of a freshman fraternity rush than a secret meeting of the Illuminati. It’s a wonder, reading the KBP piece next to a recent investigation into real college fraternities, that more Wall Street types aren’t falling off things to their death.

It’s easy to look at the incredible power that has been accumulated by Wall Street over the last 30 years and assume that its ascendance was by design, that it could only have resulted from a clandestine, concerted scheme. It’s doubly so, given that much of the still-powerful neoliberal orthodoxy is not only the brainchild of an intellectual revolution, but the result of a concerted political project. Fine. But strategy to respond has to take into account as well, how much “the smartest guys in the room” are far from it, and how much the structures of power are self-reinforcing, with or without concerted efforts by anyone. If there’s one thing Wolf of Wall Street can help make clear, it’s that.

Sleepwalking

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cross-posted from EUI Global and Transnational Perspectives Working Group

It's not like you can stop themWhen you spend every day up to your chin in the quagmire of post-national social structures, its easy to lose sight of how much power – and violence – is still exercised by states. This may in some sense be true in no area more than it is in questions of immigration and residency.

For example, it turns out that, if you’re in a coma in the United States because you got hit by a car and that means, say, that you’re no longer attending classes in the program for which you got your visa, that means your visa is no longer valid. So now you are in the country without authorization, right? So the state is within its rights to deport you, right? Sigh…yes. It’s not like you can stop them!

Sleep-walking through the ethical dimensions of these questions might allow this response to be cast as “reasonable.” Yet people working on the question, like the EUI’s Rutger Birnie, for example, might ask whether getting into a country legally, and then spending time in that country, and then getting hit by a car in that country might – might! – be the kind of thing that entangles you in the state’s ethical universe, questions of international law aside.

For some, situations like this are best resolved by thinking about the proper content state power. Yet they inevitably lead others to welcome post-national social structures with open arms, and to wish for state power that wasn’t sleepwalking, but already in a coma.