Category Archives: Economy

Bye Bye Middle Class

22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America.

Although this link doesn’t do much more for me than to validate what I already know, it nicely puts all the stats into one spot so that I can come back to them. Not coincidentally, I would add, the number of tenure and tenure track jobs has been cut in half over same 35+ year period  these statistics track. The decline of tenure was pointed out in this Chronicle of Higher Ed story a few weeks back.

Adam Smith, Deleuze, and Compositionalism

Adam Smith is often held up as the darling and founding father of neoclassical economic theory, and by extension neoliberal attitudes towards the market, Smith does indeed question the effectiveness of state intervention within the market. Beginning with the premise that ‘No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain,’ (Wealth of Nations, p. 453). Smith will conclude that ‘trade which, without force or constraint, is naturally and regularly carried on between any two places, is always advantageous, though not always equally so, to both.’ (ibid. p. 489). Rather than regulate markets, one ought instead to allow the ‘invisible hand’ of market dynamics to operate, for by virtue of this invisible hand ends may be promoted that were not part of the intentions of the market participants. In the Theory of Moral Sentiments, for example, Smith argues that since the rich ‘consume little more than the poor’ of the bounty produced from their land, a bounty produced ‘by their own vain and insatiable desires, they divide with the poor the produce of all their improvements,’ rather than let it go to waste. Consequently, as Smith concludes, the rich ‘are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made had the earth been divided into equal portions…[thereby] advanc[ing] the interest of the society…’ (Theory of Moral Sentiments, pp. 264-5). For Smith, therefore, it would seem that it is the market that maintains, by an invisible hand, its own self-sufficiency and autonomy, and it is the state that undermines this autonomy when it forces markets to comply with its own demands.

But Smith is far from being a laissez-faire capitalist. In a famous passage Smith laments how as a consequence of the inexorable ‘progress of the division of labor’ men have generally become ‘as stupid and ignorant as it is possible for a human creature to become…unless [Smith adds] government takes some pains to prevent it.’ (Wealth of Nations, pp. 781-2 [emphasis mine]). What precisely Smith believes is to be avoided, therefore, is the dissolution of autonomy. On the one hand the autonomy of the market is threatened by government intervention and on the other the autonomy and self-sufficiency of the individual is undermined by the unfettered powers of the division of labor. To state this argument in terms I have developed elsewhere, the passions and desires –  our ‘own vain and insatiable desires’ as Smith puts it – are the multiplicity/virtuality that comes to be actualized as two divergent tendencies (following through on a point Deleuze makes in an early essay on Bergson: virtuality ‘actualizes itself as it dissociates itself; it must dissociate itself to actualize itself’ [Desert Islands, p. 40] . The passions can be actualized as nomadic violence, as the lawless, irrational, and immoral outburst of the passions that undermines the autonomy and self-sufficiency of the self and society. The passions can also be actualized as institutional violence, as a force above the law, the transcendent power that acts upon passions and keeps them in check. In The Theory of Moral Sentiments Smith’s  theory of the impartial spectator can be seen to be an attempt to maintain the dynamic tension of these divergent tendencies while resisting actualizing them. By examining ‘our own conduct as we imagine any other fair and impartial spectator would examine it,’ (Theory of Moral Sentiments, p. 129) Smith is calling upon the passions themselves, but a polite and polished passion as this was widely understood in the eighteenth century. At the same time the impartial spectator, ‘the demigod within the breast’ as Smith puts it, does not transcend the law but rather reflects its general contours, nor does the impartial spectator abolish or excessively restrain the passions. A ‘polished person,’ for Smith, is ‘accustomed to give way, in some measure, to the movements of nature,’ whereas ‘Barbarians,’ by contrast, ‘being obliged to smother and conceal the appearance of every passion, necessarily acquire the habits of falsehood and dissimulation.’ (Theory of Moral Sentiments, p. 244). What is key for Smith in understanding how the impartial spectator functions is precisely that it function as an abstract impersonal man, a ‘substitute of the Deity’ that allows for a dynamic movement and tension between the two divergent tendencies without allowing either one to be actualized. The impartial spectator thus prevents one from sliding into the blind pursuit of one’s passions and self-interests, in contrast to Bernard de Mandeville, and yet it allows for a lawful politeness without relying upon the transcendent powers of the state.

Deleuze and Guattari follow a similar path. In the nomadology chapter of A Thousand Plateaus DG discuss the ‘two poles of the war machine.’ On the one hand, there is the war machine that ‘takes war for its object and forms a line of destruction prolongable to the limits of the universe.’ (TP 422) When the state captures the war machine and yet allows the war machine to take over the functions of the state then what one ends up with is the suicidal trajectory of totalitarianism (and there is more than a passing similarity to Hannah Arendt on this point). This aspect of the war machine is thus not to be confused with the functions of the state, with royal science and the other disciplines (in the truest sense of that word) that seek to preserve various forms of identity. Although the state has its forms of violence—police, law, bureaucratic institutions, etc.—that foreclose the improper and the nomadic, it is not a suicidal violence. The other pole of the war machine occurs when it ‘has as its object not war but the drawing of a creative line of flight, the composition of smooth space and of the movement of people in that space.’ (ibid.) This creative line of flight entails its own violence for it will break with and undermine established patterns in order to create, as Whitehead puts it, ‘novel togetherness.’ When this creative line of flight is successful it will manage to avoid the violence of the state, the policing and repression that maintains the forms of identity that are nonetheless necessary; and it will avoid the suicidal violence of the war machine that simply destroys all forms of identity and composition. And it is this last term, ‘composition,’ that is key. For Deleuze to be creative is not to become beholden to an either/or mandate: either you abandon established forms of identity, break all the rules, or you are not creative. To the contrary, one finds between the two poles, between the ‘organization and domination’ of state violence and the suicidal destruction of the war machine a multiplicity of elements that are to be organized, composed, and set in motion such that they result in processes that are irreducible to either of the two poles, even though they forever risk collapsing into them. Deleuze and Guattari are thus compositionalists, much like Latour.

BP, the Real, and Aristotle

Taking advantage of some time off – even if in an airport – I read Mark Fisher’s Capitalist Realism. This small little book – really a long essay at 81 pages – is an excellent example of a text that actualizes Zero Books’ goal of publishing books that are ‘intellectual without being academic, popular without being populist.’ A strong case is made for this agenda in the main body of the text. Fisher is also able to merge many of the arguments of Deleuze and Guattari and Žižek in a way that is delightfully accessible. This is indeed a book worth reading. There was one paragraph, however, that got me thinking about the current oil spill in the Gulf of Mexico. In the context of praising Žižek for giving Lacan’s Real-reality distinction much of the contemporary currency it has garnered, Fisher argues that

For Lacan, the Real is what any ‘reality’ must suppress; indeed, reality constitutes itself through just this repression. The Real is an unrepresentable X, a traumatic void that can only be glimpsed in the fractures and inconsistencies in the field of apparent reality. So one strategy against capitalist realism could involve invoking the Real(s) underlying the reality that capitalism presents to us…Environmental catastrophe is one such Real. (p. 18).

As a resident of south Louisiana one might think that if anyone would be getting a good hard glimpse of the Real that is ‘suppressed’ by capitalist realism, Louisianians would be the ones. But that is not the case at all. All one hears on television news and talk radio, from Governor Jindal on down to the very fishermen and oil workers whose lives are impacted, is that the six-month moratorium on deep-water drilling is a huge mistake and ought to be abandoned. Even if the moratorium was a knee-jerk reaction to the spill and other, more efficient solutions are possible without shutting down the drilling industry and the economic livelihoods of those connected to this industry, the priority is clearly economic rather than environmental. I suspect a reason why the oil spill has not led to a glimpse of the Real is that the Real is not ‘an unrepresentable X, a traumatic void’ that is suppressed in order to maintain the naturalness and unquestioned realism of capitalism. The very distinction between the Real and reality smacks to me of what Davidson refers to as the third dogma of empiricism. Despite the fact that Quine, in his famous “Two Dogmas of Empiricism” essay, broke with one of the cherished cornerstones of the Kantian and post-Kantian tradition – the analytic-synthetic distinction – Quine nonetheless continued with another unquestioned dualism—namely, the conceptual scheme and content dualism. In order to make sense of the notion that there are incommensurable worldviews or conceptual schemes, Quine and others rely on the assumption that there is a content independent of all conceptual schemes (for Quine these are sensory firings) and our resulting knowledge and worldview is a result of this content somehow coming to be processed by the scheme. In the same way, if reality depends on a Real that needs to be suppressed, then it would seem the Real is autonomous of the acts of suppression that are inseparable from and constitute contingent, historical realities. There’s a similar criticism of Žižek in Butler. Žižek, Butler argues, sees all social formations as following upon the same necessary constitution of an outside, or as being ‘reduced to a “lack” with no historicity, the consequence of a transhistorical “law”.’ (from her essay “arguing with the Real”). In other words, there is the constitutive outside, the Real, that is independent of the historical formations and realities that are ‘real-ized’ and constituted when the Real is suppressed.

How do we explain the reaction (or better, non-reaction) of people in south Louisiana to an environmental catastrophe if not for the fact that there is serious denial and suppression of the Real going on? Fisher gives us two suggestions in his book. The first, which one also finds in Aristotle, is that ‘the fantasy structure on which capitalist realism depends [is] a presupposition that resources are infinite, that the earth itself is merely a husk which capital can at a certain point slough off like a used skin, and that any problem can be solved by the market.’ The second suggestion follows from Spinoza: ‘I believe that it is Spinoza who offers the best resources for thinking through what a ‘paternalism without the father’ might look like.’ I couldn’t agree more with the second suggestion. It is with Spinoza that we can think through politics without the third dogma, without correlationism; or, with Spinoza we have the possibility of political realism (à la speculative realism). I’ll deal with the first suggestion and save the second for another day. In his Politics Aristotle distinguishes between ‘a certain natural kind of property-getting’ that is limited to the needs of a self-sufficient household or state and an unnatural ‘“acquisition of goods [Chrēmatistikē]” where there is ‘no limit to wealth or property.’ These two modes are frequently confused and there is a very important reason for this. First, the confusion results when there is a failure to distinguish the property itself from the fact that ‘Every piece of property has a double use.’ To use Aristotle’s example, a shoe may be used either to put on your foot or to offer in exchange.’ In itself offering the shoe in exchange is not unnatural, for the ‘exchange [of] one class of useful goods for another … is not contrary to nature and is not a form of money-making [Chrēmatistike] and it keeps to its original purpose: to re-establish nature’s own equilibrium of self-sufficiency.’ (emphasis mine). On my reading of Aristotle on this point, and developing a political theory I think can be teased out of Latour, exchanges are acceptable and natural if they enhance the systematic connection and networks of humans and nonhumans. This is a form of universal, as Latour admits in We Have Never Been Modern, but one that is a consequence of an expanding network of humans and nonhumans that establish a degree of systematic equilibrium. Social and cultural formations are thus to be understood as dynamic systems of humans and nonhumans at the edge of chaos, and the chaos is not a Real distinct from these formations but rather is the excess that each formation presupposes and which are taken up by other dynamic systems (think of Whitehead here). There is thus no pure chaos, but only chaosmos. On the other hand, there is money-making, and for Aristotle when it is money itself rather than the goods necessary for ‘nature’s own equilibrium and self-sufficiency,’ then ‘there is no limit to the amount of riches to be received from this mode of acquiring goods, and as a result it becomes an unnatural and unsustainable mode of acquisition. Capitalism is thus unsustainable by its very nature, and yet we continue to call for it – we want the moratorium to end so the drilling can continue, so the economy can move along, and since we cannot do without the petroleum which is part of so much of what I buy, including the laptop I write this on. Aristotle gives a very good reason for why we want and clamor for the relentless pursuit of capitalism, even if we recognize its unsustainability: the reason, Aristotle claims, is that while many ‘are eager for life but not for the good life; so, desire for life being unlimited, they desire also an unlimited amount of what enables it to go on.’ By confusing our unlimited desire for life with the goods necessary for the ‘good life,’ we are led to believe we need an unlimited amount of goods or wealth. The presupposition upon which capitalist realism depends – namely, that ‘resources are infinite’ – is not the result of an ironical, cynical attitude brought about by suppressing the traumatic Real, but rather it is the very unlimited desire for life that has been abstracted from the dynamic equilibrium system of humans and nonhumans, from the ‘good life’ as Aristotle understands it. It is the incommensurability of human and nonhuman, the pervasive belief that there are mute, ahistorical facts and speaking historical humans, humans who speak on behalf of the facts, that more than anything has fostered the continuing attitude that natural resources are in the end not connected to our human lives. Yet this contemporary attitude, the neoliberal worldview, is its own dynamic system of humans and nonhumans, but it’s a system that is almost unthinkable today, or at least unthinkable as a system of humans and nonhumans, politics and nature, and it is unthinkable not because it is an unrepresentable X, but because we have been told in so many ways and in so many different contexts that facts are facts and that’s that. It is precisely thinking what has been largely unthinkable that is so desperately needed now, and perhaps the economic crisis of 2008 (and its continuing aftermath) will serve to hasten such thinking. And Fisher is certainly right: we can turn to Spinoza as a source for developing, thinking, and engaging a political realism.

Perhaps the Mayan calendar is right…

As Niall Ferguson argues in this clip (from CNBC [I know, bublevision as Bill Fleckenstein called during the bubble years of the late 90s]), we’re headed for a major fiscal crisis, a death spiral, in two years. What is interesting, but perhaps wishful thinking on Ferguson’s part, is that he calls for a return to relationship banking as opposed to the current form of algorithm, microsecend transaction banking we have today. In case the video doesn’t embed (being new to wordpress and blogs), here’s the link to the video.

Creative Destruction or Creative Stimulus, or …?

With the ECRI index pointing lower, an index that has quite accurately correlated with previous recessions, and with budget cuts and austerity measures being enacted across Europe (most recently Britain), we may very well be headed for another recession. This doesn’t bode well for higher education, of course, and especially the humanities which has seen its relevance decline in an environment where measurable (primarily economic) benefits reign supreme. The recent controversy and outcry over the closing of the philosophy program at Middlesex is symptomatic of the current thinking among administrators. So if we are heading for a double dip things may only get worse, and with there being very little political will for ‘spending’ the austerity measures will likely make matters worse rather than better, as Krugman has argued repeatedly. So if there is a double dip recession there will likely be a resurgence as well of the heated debate between having another stimulus or allowing for, as Schumpeter argued and as much of the Austrian school seconds, the creative destruction that sweeps away the inefficiencies and weaknesses in the economy so that it can rebuild on a more solid footing.

One thing that is not likely to be debated, however, is the faith in the self-regulating market. Even Krugman is secure in this faith. As one who thought the financial crisis of 2008 might lead to an undoing of the neoliberal faith, government bailouts have if anything heightened the sense that the government is to blame and that if its spending isn’t reduced the market will be ultimately undone as a consequence of the collapse of credit (as is the fear in Europe).

It might be helpful to return to Hume. As Hume was writing his famous essay, “On the Jealousy of Trade,” Hume noted that ‘Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbors with a suspicious eye.’ In short, the mercantile system was the norm. Similarly, we could equally argue that today nothing is more usual, among states and the public in general, than to have faith in the self-regulating market and to look upon government with a suspicious eye. Hume opposes the dominant view of the time and asserts, as an alternative view, that ‘the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbors.’ The question, then, is what will replace the faith in self-regulating markets. The subtitle to Mark Fisher’s recent book, Capitalist Realism, asks the same question: ‘is there no alternative?’; and the title of his first chapter drives the point home: ‘it’s easier to imagine the end of the world than the end of capitalism.’ Hume had a ready alternative, and Adam Smith, in many ways Hume’s intellectual heir on economic matters, legitimized this alternative. Do we have a ready alternative? I don’t have a ready answer to this question, but it does seem that the declining value of the humanities, and philosophy in particular, within the contemporary scene only undermines our capacity to answer this question. How can there be this generation’s Hume if Hume, and the philosophy that was his passion, isn’t deemed worthy of teaching to this generation?