Neo-Feudal Political Division
November 7, 2017 11:12 PM   Subscribe

Finance isn't just an industry. It's a system of social control - "A system for constraining the choices of other social actors."
Our way of thinking about it starts from the idea that the logic of the market doesn’t enforce itself — the logic of the market has to be enforced. And one way of looking at the role of finance is that it enforces the logic of the market and ensures that a whole range of decisions that could potentially be made in many different ways in fact end up being made according to the logic of commodities and of accumulation...

The only real argument for this system of production is that it encourages innovation and it encourages reorganization of production, because capitalists constantly have the threat of being undercut by their competitors if they don’t adopt the newest, best, most effective technologies and if they don’t embrace new products and new processes. They’re going to get left behind.

If you take competition out of the mix, it’s unclear what function private ownership is supposed to accomplish. If the evolution of finance gets you to a situation where you have a single set of institutions — or in the long run, maybe a single institution — that owns all of these firms, then pressure from shareholders is going to be against competition. They don’t want to see these firms trying to gain market share or anything else at each other’s expense...

But sometimes the issue is that if you can’t conceive of social life organized in any terms except commodities, if you can’t conceive of any right that isn’t a property right, if you can’t conceive of any sort of goal or organizing principle of collective productive activity except maximizing profit or some kind of stand-in for profit, then the term neoliberalism isn’t going to make much sense to you... you could say that neoliberalism is broader than financialization in the sense that the growth of finance is about enforcement of market logic on other domains of human activity. But it’s not the only instrument for that. You can imagine and you can point to other methods of enforcing that logic that don’t really consist of anything you would call financial institutions or the development of financial markets or anything like that.

That’s what I was thinking of while reading your article. Once financialization succeeds, once you accept that there will be greater financial discipline to ensure that all domains of society are following the logic of markets and profit maximization, it will create a whole series of disruptions in society. Every type of institution, even nonmarket institutions, will have to adjust to it. People are going to have to adjust their lives, even at an intimate scale.
Big data meets Big Brother as China moves to rate its citizens - "The Chinese government plans to launch its Social Credit System in 2020. The aim? To judge the trustworthinessor otherwise – of its 1.3 billion residents." Google's plan to revolutionise cities is a takeover in all but name - "Parent company Alphabet would provide services in response to data harvested." This is the new 'giant sucking sound' you hear. It's changing the economy and disrupting politics - "A fascinating new analysis from the Demographics Research Group at the Weldon Cooper Center for Public Service in the University of Virginia quantifies a stunning demographic and economic transformation of the nation's largest metropolitan areas over the past quarter century."

Our Biggest Economic, Social, and Political Issue The Two Economies: The Top 40% and the Bottom 60% - "Average statistics camouflage what is happening in the economy, which could lead to dangerous miscalculations, most importantly by policy makers."

Yanis Varoufakis on the EU - "Every time they saved the bankers, they alienated themselves from their electors, from the actual citizens. They had to couch their actions in false narratives and cover up previous crimes with new crimes. They became prisoners of their own devices, trapped in a cage they had all built."

Capitalism is ending because it has made itself obsolete, Varoufakis says - "So now there is no doubt capital is being socially produced, and the returns are being privatised. This with artificial intelligence is going to be the end of capitalism."

Public Policy after Utopia - "The idea that a vision of an ideal society can serve as a moral and strategic star to steer by is both intuitive and appealing. But it turns out to be wrong. This sort of political ideal actually can't help us find our way through the thicket of real-world politics into the clearing of justice." Faster Growth Begins With a Land Tax in U.S. Cities - "If cities are going to avoid becoming nothing more than nest eggs for lucky landowners and playgrounds for the rich, Henry George's tax should be a weapon in their arsenals." Trading economics: a new theoretical system - "Wang Zhenying, director-general of the research and statistics department at the PBoC's Shanghai head office and vice chairman of the Shanghai Financial Studies Association, summarises the arguments in his new Chinese-language textbook on economics."
In this way, a huge and complex system is reduced to a world where everyone is driven by one single motivation: price. This is a dull and mechanical picture that mainstream economics conjures up, out of tune with the colorful world we live in and failing to tell the stories of the true world. Trading economics chooses a different path. Everyone participating in economic activities is put in a specific organisational structure. As a result, their behaviour becomes affected by culture, morality, property, and system. There is no “economic person” like Robinson Crusoe in trading economics. Trading economics only has organizations with specific internal structures: households and enterprises. This is the first step to bring economic theory back to the reality.
Why we pretend to know things, explained by a cognitive scientist - "Ask why people favor a policy → they dig their heels in. Ask how the policy works → their views become less extreme."

Longing for the divisible within the invisible - "What these thinkers had not done, Hirschman writes, was to distinguish between varieties of conflicts: 'those that leave behind a positive residue of integration and those that tear society apart.' "
Historically, market societies have been associated with the divisible, more-or-less kind of conflict. Think of the typical debate between Republicans and Democrats that positions tax cuts against social spending. Compromise might never be easy, but in this kind of debate compromise is at least possible. The participants can theoretically split their differences because the very thing they are arguing over — money, in this example — is itself measurable and divisible...

Divisible conflicts differ from the either-or, nondivisible conflicts “that are characteristic of societies split along rival ethnic, linguistic, or religious lines,” Hirschman writes... The exclusionary-populist question of which specific identities represent a country’s “real” people would obviously fall into this category...

Hirschman rightly anticipated the increasing complexity of these conflicts. We are experiencing them now. How well are we mapping them? ... The divisible, economic conflicts that dominated the Cold War decades are now entangled with the nondivisible conflicts of identity that attend exclusionary populism... The divisible and nondivisible are not the necessarily separable. The very challenge of the present era is that they have become more and more inseparable.

One subset of nondivisible conflicts is identity politics, which is much debated these days. Yet within identity politics it’s important to mark an obvious but crucial distinction. Identity politics as practiced by legitimately disadvantaged groups can hasten the expansion of liberty. It is often messy but has a noble history. But identity politics as practiced by the majority to defend its historically elevated position above the minority very much does not; instead it has been “a constitutive fact of the illiberal expansion of statepower”, as Jacob Levy writes in a great essay...

The increasing complexity of modern social conflicts that Hirschman anticipated makes understanding them more complicated. Because these conflicts have a heavier component of nondivisibility, the persistent threat to social cohesion is more serious than when Hirschman wrote Social Conflicts — and the work of experiencing and mapping them is harder now.

Hirschman avoided triumphalism, but he could find hope within the trends that led others to despair. He preferred reform to revolution. He preferred open channels to intransigence. He was sceptical of general principles that could apply across differing times and circumstances, instead seeking frameworks for better understanding each unique moment in history. He was sceptical of certainty, and of Utopian thinking — and he believed that such scepticism could be liberating, revealing an infinity of possible outcomes, including the chance for society to learn from terrible events. Such a disposition is quite possibly too naive. But it also seems a lovely and, given the tenseness of the present moment, perhaps essential way to be.
posted by kliuless (16 comments total) 105 users marked this as a favorite
 
Thank you!
posted by Ice Cream Socialist at 2:56 AM on November 8 [2 favorites]


Wow, that's a lot to read, is there any mention of the concept of the "physical economy" (real goods and services) in there? It's my particular meta-hobby horse, and I want to cheer it on. ;-)
posted by MikeWarot at 4:18 AM on November 8 [2 favorites]


Plus, lets not forget the marginalization of the so called informal economy.
posted by infini at 5:40 AM on November 8 [1 favorite]


How much can you get for a hobby-horse in this economy?
posted by lazycomputerkids at 5:41 AM on November 8 [1 favorite]


kliuless, deeply grateful for the PboC link to trading economics.
posted by infini at 6:04 AM on November 8


There are plenty of alternatives to organizing society around the impersonal, sometimes random, markets, property and commodities.

You could make, say, spiritual values your primary consideration and have someone like, say, a pope or imam or something, be the one who sets the priorities and status systems for the society.

Or you could have some charismatic political figure who is able to marshall patriotic memes and the support of the military issues diktats on the relative status of groups.

Or you could have some kind of central planning commission that would compel all farmers, industrial workers and others to join collectives, and you'd run the society on something call, oh, I don't know, "scientific socialism".

Or we could make everybody equal using big data to adjust social priorities, incomes and production. There are lots of ways to "take charge" of things in an effort to smooth out the bumps. Unfortunately, the world is too complex to be controlled by any single person or group of individual human minds. So far, the impersonal market, sending signals through prices, is the most efficient and (in its way) fairest means of allocating social status and resources.

It's not perfect. We are all victims of the frustration of being able to imaginatively conceive of a perfect society, while being unable to achieve it in reality. That gap between what we can imagine, and the limited aims we in reality can achieve is where politics occurs.
posted by Modest House at 6:04 AM on November 8 [1 favorite]


A bunch of the links demolish the foundation of this thinking.
posted by infini at 6:16 AM on November 8 [1 favorite]


Ah, yes, the two genders: poorly-regulated financier aristocracy and [insert oppressive autocracy here].
posted by tobascodagama at 6:17 AM on November 8


Plus, lets not forget the marginalization of the so called informal economy.

People say it doesn't exist
'Cause no one would like to admit
That there is a city underground
Where people live everyday
Off the waste and decay
Off the discards of their fellow man
--Subcity, Tracy Chapman, 1989

I'm tempted to qualify my appreciation of Ray Dalio's The Two Economies: The Top 40% and the Bottom 60% from LinkedIn the way MeFites used to some of Gawker's investigative pieces, but given how few hyper-current while substantiated sources remain, may LinkedIn's implausible existence against CrimsonFriendFinder and Twoot-twoot be heralded.

And the FPP's framing with the Jacobin article spurred me on to keep digging through such a comprehensive and expansive survey of considered technical analysis. I'm going to tape Hamilton's denomination to a dart-board and tally some index funds until news of replacing Jackson's portrait deadens my optimism completely.
posted by lazycomputerkids at 6:28 AM on November 8 [2 favorites]


We have at least two tools, now, that could help us break away from the historical two poles that commenters above reference:

Ah, yes, the two genders: poorly-regulated financier aristocracy and [insert oppressive autocracy here].

(See also ModestHouse's list of terrible alternatives)
Here are the two main tools I've found interesting:

1) Behavioral Economics. This entire field can be seen as describing, quantifying, and legitimising all the ways that people don't behave like soulless money processors. The field explores things like meaningfulness, creative drive, and the mechanisms that make non-monetary experiences important.

2) Elinor Ostrom's work on common pool resources. She explored the ways that shared resources did _not_ succumb to the "tragedy of the commons" effect, based on real-world models. The communities where sharing resources was most successful had traits that are spelled out on her Wikipedia page; things like graduated sanctions (punishing small violations in smaller ways, punishing worse transgressions in worse ways), and nested levels of control. This is real research that argues against oversimplification, and she won a Nobel Prize for it. I hope her work is being carried forward.
posted by amtho at 7:19 AM on November 8 [14 favorites]


Oh a land tax would be so delightful, especially if it replaced other taxes. Like it's fine to leave existing suburbia as is for now, but we've got to realign incentives when it comes to property in large cities. We're drowning in shit because we not only let people make out like lottery winners due to everyone else's investments, but we actively subsidize bad behavior and then wonder why rent is so high and only luxury condos and suburban tract homes get built.
posted by wierdo at 8:59 AM on November 8 [4 favorites]


(Just to clarify, my "two genders" quip was intended as extreme sarcasm.)
posted by tobascodagama at 9:32 AM on November 8 [1 favorite]


i keep rereading Modest House's comment and trying to respond but i don't even know where to begin @-@ maybe tomorrow
posted by LeviQayin at 12:28 AM on November 9 [3 favorites]




i keep rereading Modest House's comment and trying to respond but i don't even know where to begin @-@ maybe tomorrow


Seems like a clear case of TINA (there is no alternative)
posted by The River Ivel at 8:28 AM on November 10


-Law & Neoliberalism
If you are looking to identify neoliberal forms of argument, look first for four overlapping kinds of claims. The first and simplest is an efficiency-based view, sometimes called (by its critics) “market fundamentalism,” holding that strong property rights and private contracting are the best means to increase overall welfare, and that law should promote these except when it intervenes to “correct market failures.” Second is a more explicitly moral line of argument (though of course promoting overall welfare is an intensely moral project) that property and markets best protect the freedom and dignity of individuals, so a market society is the most decent social order possible. The third line of argument adopts a tragic register to deny that democratic politics and public institutions can ever successfully discipline and shape economic life. This pessimistic position tends to serve as a backstop when it is clear that market arrangements are failing to deliver overall welfare – because of intermittent crises and runaway inequality, let us say. “That may be so,” the neoliberal argument now runs, “but the alternatives are always worse – corruption, abuse of power, utopian tyrannies.” The last line of argument is the subtlest, often implicit, and also often the most important: the exclusion of certain kinds of ideas and proposals from any place at the table.
-Economics for good
-The Token Handbook
-Growth & Redistribution
-How to defend capitalism
-In praise of the wealth tax
-Standing up for economists
-OK, kids, let's talk about Georgism.
-Macroeconomics: Religion or Science?
-An economist's guide to the real world
The way information is dispersed determines which policies work and which don’t, and can explain phenomena as varied as regulatory capture, financial crisis, inaction about climate change and the paucity of worker-led companies... “The proper functioning of the market depends on the proper functioning of the state,” Tirole writes. “Conversely, a defective state can neither contribute to the market’s efficiency nor offer an alternative to it.” Illuminating how this proper functioning can be achieved, we are led to understand, is how the economist can contribute to the common good.
-The Moral Identity of Homo Economicus
-Rescuing Economics from Neoliberalism
-Trade Deals with Real Gains: A Path Forward
-Banking the Unbanked: The Indian Revolution
-The Dismal Science Remains Dismal, Say Scientists
-Free-Market Failure Has Been Greatly Exaggerated
-The long-term consequences of short-term incentives
posted by kliuless at 9:20 PM on November 19 [1 favorite]


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