Philip Mirowski isn’t a conspiracy theorist, but I am

The global austerity response, made in full knowledge that it will worsen the problem, still strikes me as ideological and political rather than just bumbling economic incompetence. From Reagan to Bush to the present, bankrupting the state has been the goal (“starve the beast”).

If you can destroy your competitors and gain firm control, the fact that you’re controlling a smaller economy won’t bother you much. 60% of $80 is more than 40% of $100, even absolutely, but in addition 60% means control whereas 40% doesn’t quite, and the winner will control the recovery. That’s a very crude analogy but you can see my point. Someone’s waiting to pick up the pieces.

Chicago schoolers and wingers all claim that Keynesianism has been scientifically refuted, but I don’t think that they all believe that. Some of them are just playing a sabotage game and do not want a Keynesian rescue. Of course, not all of the players are in on the game. Some are just clueless, perhaps because they’re being manipulated by smarter people.

Economic rationality cannot be assumed, especially at the highest levels. Some of the biggest players (especially in international resource extraction, above all in oil) are high-stakes adventurers whose game is economic, ideological, political, and military all at once. Michael Lind thinks the oil billionaires are the heirs of the slave-state filibusterers in 19th century Latin America.

If someone’s worth a billion and wants to increase it to two billion, he’ll do one thing. If he wants to convert his wealth into power and ideological triumph, he’ll behave entirely differently. And extraction billionaires have always been gamblers in the high-stakes political-military power zone, rather than shrewd investors in the incremental production and sales zone.

Why Europeans are doing this is unknown to me, but they have their extraction industries too — look at the history of the Congo — and for all I know some of them have decided that the wrong side won WWII. After all, the Europeans only became nice little boys and girls in 1956, and it wasn’t voluntary.

The book to read is The Road from Mont Pelerin, by the fully accredited academic economist Philip Mirowski. Mirowski is not a conspiracy theorist, but I am. Mirowski shows that primary goals of the neoliberals and the Chicago school economists were political and ideological rather than scientific, and that their central idea was that democracy and civil liberties must often be suppressed  if the free market and “freedom” (TM) can thrive.

Look up Nelson Bunker Hunt, a member of the John Birch society and, in his day, a big political player. Starting out as a billionaire, he bankrupted himself with an illegal,  improbable scheme to corner the silver market. (The poor man even had to sell his $46,000,000 worth of race horses). It was a long shot and his behavior wasn’t economically rational, but maybe his game was different.

He also might have had the commonsense awareness that no one needs a billion dollars. It’s not like he starved after he went bankrupt. He enjoyed high-stakes gambling, including high-stakes political gambling, and for him that’s what the billions were for.

 

Obama has blown his Presidency

It wasn’t liberals who didn’t vote in 2010. It was the new Democrats who Obama suckered with empty slogans and then betrayed. No hope, no change. In Justice, Foreign Policy, and Defense Obama has continued Bush’s policies. His environmental policies and economic policies are almost as bad.

Before the 2010 election, when Obama should have been telling people why they had to vote for Democrats, he was talking bipartisanship and begging on his knees for the Republicans to be nice to him —  the same Republicans whose main goal was to destroy his Presidency.  Until about three  months ago he was not concerned about unemployment, even though the economists and hippies had been shouting in his ear about the problem for two years. It’s almost impossible to win a Presidential election when unemployment is 8%-9%.

Mainstream Democrats are no good for anything but making excuses and blaming others. They can’t beat the Republicans, but they can and do beat the liberals and the Democratic constituencies. Now they seem to have decided that you can win an election by insulting voters. (Actually, they probably don’t think that. They probably know that Obama can’t win and are just getting ready to shift the blame).

The hippie-bashing Democrats have to try to straighten out their man in the White House, because he’s sure not listening to us hippies. Something has to change there. It’s funny how he’s the only one who isn’t being pushed.

 

Why Does Anyone Read the Wall Street Journal Editorial Page?

People read the WSJ editorial page because it supports their political agenda or because they’re dupes.

Our adversaries are not making gross intellectual errors. They are spreading disinformation in the service of a retrograde political agenda. To all intents and purposes they’ve won, and we should be preparing ourselves for survival the new neoliberal world.

Academics, especially economists but including political scientists, have developed models of society within which political action is either epiphenomenal, imaginary, and unreal, or else bad, harmful, irrational, and destructive. Academics have extraordinary power within the Democratic Party and among liberals, and as a result, liberal Democrats are unable to recognize politics when it bites them on the ass — much less do politics themselves. If a liberal ever tries to do something politically effective, the rest of them mob him and peck him to death.

90% of all Political Science PhDs are Democrats, whereas Karl Rove had one undergrad year at a third-rate school.  Isn’t there a lesson there?

Yeah, I’m a conspiracy theorist (and a populist know-nothing). I have failed to realize that there is no such thing as a “political agent”. We know that events really just emerge from the pluralist welter of conflicting purposes. And I’m not being charitable toward the vicious, lying, Mellonist, neo-Confederate neoliberals who have won the game. Camus, Gandhi, Orwell, Niebuhr and Jesus would rebuke me. Hofstadter, Shils, and Bell would sneer at me. We know that consensus reigns, and that there are no classes and no class conflict, and that everyone who says otherwise is  a Nazi or a Communist.

This has been like watching an ad hoc, scattered hodgepodge of tribal militias battling the concerted efforts of an imperial power. The Republicans have been trying to destroy the New Deal ever since 1932, and it’s now a fait accompli.

THIS JUST IN:

Liberals don’t act like conservatives and while we might certainly engage in our share of group-think, the standards of evidence are much higher on our side. 

 

Learn not to think like an economist

“Learn to think like an economist” gets about 11,000 Google hits. “Learn NOT to think like an economist” gets 5 (now 7), and every single one of them is by me.* This is cutting-edge stuff. Clearly an endowed chair should be established somewhere so that I can teach the science of non-economic thinking.

* “Learning not to think like an economist” just teaches economists to adapt their language in order to convey basic economic concepts to stupid people. 

 

If you’re not a conspiracy theorist some of the time, you’re a sucker

 But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security….. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States.

In political science the distinction between the politics of governance and the politics of consent is universally accepted. In practice two different groups of people do these two jobs for any given team, and the campaign people often have little idea what the candidates and their appointees really plan to do once in office. It’s also taken for given that many of the goals proclaimed during the campaign will be forgotten once the election is won.  If this bothers you, you’re an untrustworthy idiot who just doesn’t get it.

Most of the liberal heavies agree that direct democracy is a bad thing and that public opinion should have essentially no influence on actual policy;  ideally, the electorate should just choose betwen two competing slates of experts.  E. g., Walter Lippmann and Richard Hofstadter; Karl Popper, Daniel Bell, Edward Shils and the other technocrats; Strauss and the neocons; Hayek and the bipartisan neoliberals (per Mirowski: The Road from Mont Pelerin) — who did I leave out? Anti-democracy is liberal dogma*. The whole argument for the Federal Reserve System is that it will shield financial policy from democratic politics. The range of expert opinion on foreign and military policy is confined to different flavors of liberal interventionism.

Being a political insider always involves being able to tell when X really means not-X.  But most people are outsiders, and every once in awhile they find out that insider games that they didn’t know about have ruined their lives. And they tend not to be good sports about this — though their understanding of what just happened can be wildly wrong, and often they blame the wrong people.

So while the exotic conspiracy theories are usually crap, in a democratic society anyone who takes what their political leaders say at face value is a chump and a likely victim. Everyone in the biz knows this. Especially, above all, more than anyone else, the people who ridicule conspiracy theorists know this, because they’re almost always insiders and almost always have a stake in the insider game.

The anti-conspiracy theory message is “Sit down and shut up. You don’t understand, you’ll never understand, trust us!”

As it happens, I’m an admirer of the American Populists, the original conspiracists smeared by Hofstadter et al. As far as I can tell the Populists were mostly right. For almost two decades there really was a deliberately deflationary policy (“sound currency”), and the tariffs really were rigged against them, and the rail monopolies really were cheating them, the milling monopolies really were cheating  them, and the federal, state, and local governments really were  part of the scam.

Now, every once in awhile an insider will slip and let give the game way. In the case of the Populist wheat and cotton farmers,  it is sometimes argued that this exploitation was a good thing, since by squeezing the farmers until they croaked, the US was able to industrialize instead of becoming an agricultural colony of Britain.

But this isn’t a refutation of the conspiracy theory, it’s a justification of the conspiracy. Sometimes denying that something is happening amounts to supporting it. There are contemporary examples of this.

* Conservatives are anti-democratic too, of course, but liberals have tipped their hand so blatantly that conservatives are able to pick up cheap populist votes for almost nothing.

Adapted from a comment I made at Dsquared Digest

“The Value of Conspiracy Theory”. Ed White. American Literary History, Vol. 14, #1, Spring 2002, pp. 1-31

 

“Is Academia Eating Its Young?”

In thinking about the issue I was struck by one thought: it’s pointless to try legitimating blogging in the current academic world. Of course I think blogging is a valid intellectual pursuit,; that’s not an issue. The current academic world is too far gone to be able to accommodate blogging in a robust way. Just why I think that would require some explaining, which I don’t want to at the moment. Let’s just say that I’ve been deeply skeptical about academic institutions for some time, and this is just another reason to despair of them.

Bill Benzon, The New Savannah

 

I have been interviewed

I have been interviewed.

 

Quit messing with my password

Let’s just go our separate ways.

 

Exceptionalism

With a messy form of federalist direct democracy, four official languages, two dominant religions, and a topography dissected by lofty mountain ranges, the continued existence of Switzerland is quite doubtful. In a long run of trials, Switzerland-type-nations are highly unstable. Of those that there ever were, the overwhelming majority have ceased to exist, and an even greater number of these states never came into existence at all. To a real scientist, the Switzerland on our maps is merely anecdotal.

Link

 

From Naked Capitalism

Read the whole thing

The core claim of Academic Choice is that valid economic theories are an underprovided public good, due to a combination of academic entrepreneurship and rational public ignorance. Is this merely a prediction of the mathematical models, or is there real world evidence of this claim?

Originally I did arrive at this result as a logical consequence of the theoretical model; however, the prediction has since been corroborated through empirical investigations.

Consider the following seven propositions. All of them have been effectively promoted and publicized by academic economists:

P1. (e.g. Greenspan) It is unnecessary to worry about deception in financial markets since market discipline will make sure that dishonest agents are permanently ostracized.
P2. (Clarke) A person whose income is 100 times as large as that of another person has contributed exactly 100 times as much to the general welfare.
P3. (First Welfare Theorem) Corporations, if left to themselves, will always provide employment to everyone and produce an economy featuring constant recession-free growth.
P4. (Arrow-Debreu) A necessary condition for this ideal economy is the availability of arbitrarily complicated securities that reference cash flows in all times, in all places, and in all ways imaginable.
P5. (Borrowing at the Risk-Free Rate) Economic institutions should be designed under the assumption that whenever a firm or bank tries to obtain a low interest loan, it succeeds.
P6. (1997/2008) If a Third World country has a banking crisis, bedrock principles of economics dictate that its largest banks should be allowed to fail and be acquired by U.S. and European banks. However, if the U.S. has a banking crisis, bedrock principles of economics dictate that its largest banks should be saved through massive subsidies from the public.
P7. (EMH, etc.) It is impossible for investment funds to beat the market. However, the current capital market system centered around funds trying to beat the market is this most perfect system conceivable by human beings.

As a bright high school student like yourself can clearly see, the list consists entirely of statements that are obviously wrong, and several of them are internally inconsistent. If economists were simply confused, we would expect to find no pattern in these statements. Instead, as predicted by Academic Choice, statements P1-P7 all directly enable rent-seeking by certain influential minorities (financial sector employees and corporate executives). Moreover, P1-P7 have also helped to generate market discontinuities with significant public costs, among which the recent global financial crisis.