Home > Uncategorized > Not with a bang but with a (prolonged) whimper

Not with a bang but with a (prolonged) whimper

from Jayati Ghosh

It is probably obvious to everyone that global capitalism is in dire straits, notwithstanding the brave talking up of output recovery that now characterises almost every meeting of the international governing elite. Even so, discussions of the end of capitalism still typically seem overstated and futile, not least because those hoping and mobilising for bringing in an alternative system are everywhere so scattered, weak and demoralised. In effect, capitalism is the only game in town, which is why even in its current debilitated and even decrepit state, it fears no rivals.

But maybe that is really not the point. Maybe economic systems can die without actually being killed by other competing systems. “How will capitalism end?” is the title of a brilliant book by the German thinker Wolfgang Streeck. (Verso, London 2016, published in India by Juggernaut Books.) It provides a cogent and persuasive critique of the nature of contemporary capitalism, and describes its ongoing extended demise, without surrendering to any optimism that as it fails to deliver even in terms of its own logic, all the nastiness and injustice it has generated must inevitably change for the better.

As may be fitting for a work with this combination of scope and profundity, it is difficult to pigeonhole either the author or the book into simple disciplinary categories. It straddles economics, politics and sociology, with forays into moral philosophy: in other words, political economy at its best. But even if it is beautifully written, it makes for tough reading – simply because the message is so stark, at once depressingly dystopic and terrifyingly plausible.  

Streeck’s basic argument is this: capitalism is disintegrating, but without anything to replace it. As an economic regime, it is increasingly unable to deliver on its own promise of continuous expansion within a largely stable society. This disintegration is coming about not because of any external threat or combined socio-political opposition to it, but because it has been too successful for its own good, and so has to confront the contradictions generated by its success. In effect, contemporary globalised capitalism has managed to overrun and conquer its opponents (such as associations of workers that could reduce capital’s bargaining power, democratic accountability that might give rise to regulatory structures that limit or constrain its activities and its profits, collectivities that voice the requirements of the larger social good, and so on) to the point where it is now almost completely untrammelled. So there are no checks and balances of the kind that in various periods in the past have generated both less economic volatility and more social stability.

In purely economic terms, this “success” means less expansion of demand for products that the system must keep coming up with in terms of its own logic. It also means less ability to create new sources of demand, as financialisation and credit bubbles also appear to have run their course, despite almost endless injections of synthetic liquidity through very loose monetary policy. In socio-political terms, this generates more widespread despair, alienation and individualised responses that threaten the very basis of functioning societies. In an almost textbook extension of the biological argument of the prey-predator relationship, capitalism has killed off all its prey, to the point that its own very existence is now threatened.

This is particularly evident in global capitalism’s ability to encroach onto and incorporate the three areas that Karl Polanyi had described as “fictitious commodities”: labour, land (or nature) and money. Polanyi described these as fictitious because laws of supply and demand cannot fully apply to them and so complete commodification will destroy them or make them unusable. Yet these are precisely the areas in which recent capitalist expansion has been most “dynamic”. As the institutional safeguards that had earlier prevented them from being fully commodified have been eroded, the process has reached a critical threshold that must generate crises of different kinds: economic, social and political.

This reflects a deeper concern: at least for the advanced capitalist societies of the west, the shotgun marriage between capitalism and democracy that was performed in the middle of the 20th century after the Second World War, now appears to have ended. Streeck speaks of “an endemic conflict between capitalist markets and democratic societies” in the longer term, (page 73) which was only briefly overcome during that period. The conflict is now resolved in capital’s favour, as that social contract is now effectively being transformed into one in which economic power is political power, with one-dollar-one-vote replacing one-citizen-one-vote. Associated with this, there has been a shift in the nature of states in developed countries (Streeck spends much time on those in Europe in particular) from the classical “tax state” that taxes the rich to redistribute downwards and provide essential services to the people; to the “debt state” that loses some of its ability to tax and seeks to provide services through enhanced public debt; to the “consolidation state”, for which fiscal austerity is the driving force, and which is fundamentally antithetical to democracy. It is now almost commonplace to note that “turning the economy over to a combination of free markets and technocracy makes political participation run dry” (page 141) – and it provides easy explanations for the rout of social democracy and the rise of rightwing anti-establishment forces. But despite these reactions, “the arenas of distributional conflict have become ever more remote from popular politics” (page 93).

This weakening of social, political and institutional constraints on capitalist advance has generated five systemic disorders, according to Streeck: stagnation, oligarchic redistribution, the plundering of the public domain, corruption and global anarchy. In turn, the symptoms of this decay are exemplified in the advanced capitalist countries in three broad tendencies. First, there is a persistent decline in rates of economic growth, often described as “the new normal” or “secular stagnation” – which matters crucially because capitalism exists in order to expand in economic terms. Second is the fact that this decline is accompanied by a concomitant and persistent increase in indebtedness, across households, companies and governments, because so much of the relatively anaemic growth of the recent past has had to be generated by credit expansion. These two features are strongly related to the third: the massive increases in income and wealth inequality within capitalist societies across the world. Falling growth, rising debt and increasing inequality are hardly news any more, but taken together they point to a morass from which the system cannot extricate itself without fundamental transformation.

But as there is no new social order, or groups able to mobilise to provide an alternative order, waiting in the wings to succeed it, what humanity will experience instead is an age of entropy. “Before capitalism will go to hell, then, it will for the forseeable future hang in limbo, dead or about to die from an overdose of itself, but still very much around, as nobody will have the power to move its decaying body out of the way” (page 36). This long period of systemic disintegration will be one “in which social structures become unstable and unreliable… devoid of reasonably coherent and minimally stable institutions capable of normalising the lives of its members and protecting them from accidents and monstrosities of all sorts” (page 36).

So the end of capitalism is a process, not an event – and it is likely to be a long process, possibly even spanning centuries. The individualised societies of this unhappy interregnum must generate survival strategies of people who are forced to improvise to fill the gaps that are created by the absence of a meaningful social contract, to ensure what is then valorised as “resilience”. Streeck identifies four such responses: coping, hoping, doping and shopping. “Coping” involves individual exertion rather than organising collective action – and “tends to come with a social construction of life as an ongoing test of one’s stamina, inventiveness, patience, optimism and self-confidence” (page 42) in the face of increasingly insecure and fragile material conditions. “Hoping” must accompany this, but is once again an individual attempt to imagine a better life for oneself eventually – even when this hope is imposed on the collective as in the “American Dream” (or perhaps in the more recent evocation of the “Chinese Dream”). When these are not enough, “doping” or substance abuse becomes significant – not just in the more obvious performance-replacing consumption of those designated as failures, but in the performance-enhancing dependence of the achievers, whether in sports or the finance industry. Finally, the importance of “shopping” in capitalism is well known, as is the strategy of expanding markets by creating wants beyond needs. But socially obligatory hedonistic consumerism does more than fulfil this economic function; it also fits in with these societal responses by making an individual’s status and social interactions dependent on consumption in various forms.

Streeck presents what is essentially a very Northern perspective, rooted in the recent history and milieu of advanced capitalism. There are those who would argue that capitalism in emerging markets – particularly in Asia – still have the scope to achieve something of the dynamism that prevailed in the core countries a few decades ago. Certainly, the form of “Xi Jinping Thought” so recently sanctified in China appears to rely on the optimism that state-led authoritarian capitalism can overcome these deficiencies. Streeck dismisses such a possibility without further elaboration. But it is also true that many of the most disconcerting features of advanced capitalism, especially the commodification of land, labour and money, are increasingly evident in such emerging markets, and are likely to play similarly negative roles even for capitalist accumulation in future.

Given this unsparing critique, it is somewhat surprising to find that, among others, the Financial Times of London (widely perceived as the voice of the global financial elite) awarded it as the best book of 2016.  But self-knowledge need not always lead to self-consciously driven change. Certainly, nothing in the behaviour of major international financial players or large global companies generally suggests that there has been a rethinking of their actions simply in order to ensure survival into the future.

So it is a bleak picture indeed, which can only be leavened for readers of this book with the knowledge that structures and institutions that are created through human agency can also be dismantled by them, and that even the full knowledge of current processes can contribute to wider social demands to reverse them.

(This article was originally published in the Frontline Print edition: November 24, 2017.)

  1. November 18, 2017 at 3:25 am

    Streeck’s basic argument is this: capitalism is disintegrating, but without anything to replace it.

    Based solely on this review, I would describe Streeck’s book is an extended reflection on his sad conclusion that no politically plausible alternative to Capitalism exists—or can be envisioned—that could be expected to limit the excesses of capitalist-owned governments + economies.

    I am of the opinion that an alternative to cynical capitalism can be envisioned—a reformed capitalism, if you will—that would be much more successful in optimizing the welfare of the lower classes than Socialism has been able to achieve through its many hard fought political battles over the determined opposition of The Oligarchy’s educated minions.

    I am speaking of an alternative that would depend less on fighting for control of the government than it would on promoting an “enlightenment” movement within the upper class, itself. Not so much “class warfare” as a Smart Rich vs. Stupid Rich argument between different factions within the billionaire/millionaire class, ending in a reformed and redeemed Leadership Class making society’s most important economic decisions.

    The emphasis would not be on seizing political control of the “free market” to force it to improve the incomes/welfare of the lower classes, but rather on a government “participation” in the economy which would end up generating the sort of “natural market forces” that would result in a true optimization of the material welfare of those on the bottom and middle rungs of the economic ladder, at the same time that the material welfare of The Privileged Class is also optimized.

    In advancing this thesis, I emphasize the fact (?) that many, if not most, of the “socialist” political reforms that occurred in 19th Century Britain were initiated not by angry mobs in the streets, but rather by an enlightened and sympathetic gentry that was able to win the day over the objections of those voices in government who were more cynically inclined.

    Sure, it would take a hell of a lot of educating to turn this alternative into a reality, but I find it a much more hopeful prospect than any of those wistful dreams that are often voiced re: the possibility of “the masses” taking collective action to force the Bad Guys to stop doing bad things (or else…)

    • robert locke
      November 18, 2017 at 6:30 am

      James, but where did all this enlightenment among the British upperclasses, end? In the failure of socialism and Thatcherism. Streeck is a German who believed in Germany’s third way as an alternative to US capitalism and soviet socialism. He is disillusioned because, when the collapse of socialism occurred 1990s it was not replaced in Europe by the German third way, but by the ffinancialization of the world coming out of Wall Street and the City. Perhaps in the maelstrom of this now collapsing international finance capitalism, the silos of local capitalism, community rooted, can reappear. But that can only be done if the empowerment of local communities is brought about in Europe. America globalized investor capitalism is fighting hard to be able to roam the world and cherry pick places where exploitation of local populations will not be resisted. Germany’s third way of co-determination, was very popular before 1990. Streekt was one of its spokesman; which we would all know if we had not lived in the prison of US=UK economic thought. The answer is community based capitalism, grass roots, which has a strong tradition outside the United States in very successful countries. Give an economic voice to communities and things would quickly change. It is the finance capitalists who should be scared shitless because they have not future.

      Br

      • November 18, 2017 at 1:38 pm

        Perhaps in the maelstrom of this now collapsing international finance capitalism, the silos of local capitalism, community rooted, can reappear.

        I’m sorry, but I’m afraid that I see no evidence that international finance capitalism is anywhere close to collapse.

        If anything, I think their handling of the 2008 crisis amply demonstrated both their ability—and their self-awareness of their ability—to bail themselves out of their missteps whenever they feel like it, given their total control of government (thanks to their endless “lobbying” efforts).

        The answer is community based capitalism, grass roots, which has a strong tradition outside the United States in very successful countries.

        I confess to having never seen much promise in the idea of relying on “all communities everywhere” looking after their own best interests. (Soviets?) The education challenge that must be met in order for this paradigm to work has always been beyond the abilities of those who champion it.

        Quite simply, the vast majority of economic participants understand nothing about economics and are quite utterly dependent upon educated “advocates” to come up with policies that protect their interests.

        I’ve never believed the problem is “bigness” or “hierarchy” but only stupidity.

        I think it is far more realistic to hope that sympathetic educated souls within the upper class can be educated to a higher wisdom, than it is to hope that a sufficiently high number of “average folks” can be educated to the point where they could wisely direct community efforts in a direction that would optimize their own well-being. (See Dave Taylor’s comment)

      • robert locke
        November 19, 2017 at 9:48 am

        I live in a German community where US led finance capitalism does not control people’s lives. It is a community which has succeeded very well outside the Anglosaxon orbit. Can you imagine why?

      • November 19, 2017 at 4:24 pm

        I live in a German community where US led finance capitalism does not control people’s lives. It is a community which has succeeded very well outside the Anglosaxon orbit. Can you imagine why?

        I have no doubt that “pockets” of prosperous communities can occur across a diverse economic landscape; we see them all the time.

        But the question in my mind is whether or not all communities will experience the same success, if they simply emulate the practices of one of these successful communities?

        I can’t help but see a similarity between this “solution” and the oft-repeated nostrum advanced by the Republican Party in America that if everyone were work hard and save their money, everyone could end up at the top of the economic ladder. In truth, no such outcome is possible.

        Almost always, fallacies of composition lie at the heart of the specious reasoning these “solutions” are based on. It’s something we always need to guard against.

    • November 18, 2017 at 11:05 am

      Basically, I agree here with James, because educating the masses to understand the need for Robert’s community economics is unfeasible compared with re-educating not the 1% but the even fewer “Smart Rich vs. Stupid Rich”. I must say the struggle between Good and Evil is necessarily an on-going one, because each generation starts off knowing nothing and so is vulnerable to cynics enlisting the innocent with myths of fictitious money generating wealth from the renting out or sale of what Polanyi called “fictitious commodities”. I am therefore not not-picking when I say Ghosh (the blogger) was wrong to say “The conflict is now resolved in capital’s favour”, and likewise Robert wanting to know “where did all this enlightenment among the British upperclasses, end?” The Keynesian battle may have been lost, but the war is on-going. That said, Ghosh and Locke do have answers which (if one thinks back to the world before canals and railways) amount to much the same thing: going back, or localisation.

      “[S]tructures and institutions that are created through human agency can also be dismantled by them, and that even the full knowledge of current processes can contribute to wider social demands to reverse them”. [Ghosh]

      “The answer is community based capitalism, grass roots, which has a strong tradition outside the United States in very successful countries.” [Locke]

      If any of the “Smart Rich” is reading this, I can demonstrate the problem from the Big Bang to the evolution of human control systems which leave freedom to accomodate variations only when the control is not complete, as when steering the ship of state limits passenger destinations insofar as the whole population is on board. The mechanism needs reducing to a time-sharing method which can be freely shared; i.e. the whole financial control system aimed at “making money” needs reducing to an accounting system aimed at showing us whether the work that needs doing, whatever that is, is actually being done. We then would have less excuse for not doing it!

      Never mind; what can be learned from the history of Capitalism? May I suggest to James that “the enlightened and sympathetic gentry that was able to win the day over the objections of those voices in government who were more cynically inclined” were initially the Quakers, once accepted as “gentry” by their successes in business; and later the more orthodox Christians, once an Anglican convert got Catholic pope Leo XIII on-side by bringing to his attention a lock-out of dockers who had only struck because their wages were not enough to feed their families; hence Anglo-Catholic Distributism and Anglican Archbishop William Temple’s support for a Christian socialism. I won’t say the post-World War II success of Keynesianism was caused by the support of the Anglican gentry, but here in 1941 Temple held an economics conference here in Malvern, which I only heard about 50 years later when another was held to celebrate it. Part of its inspiration had been Dorothy L Sayer’s 1940 book advising oldies like most of us to “Begin Here”. Strangely, the influential Temple had died before the Labour government of 1945, in which those who don’t just dismiss Socialism as Marxism can see Temple’s influence at work in the leadership of Attlee. The Anglicans are of course sneeringly referred to as “the Conservative Party at prayer”. Sadly, less Conservatives now pray.

      • November 18, 2017 at 11:28 am

        PS. not “not not-picking” but “not nit-picking”. [Apologies, but enjoy the stringing of nots! Apologies likewise for “here” in 1941 as well as Malvern]. More significantly, Leo XIII came on-side in 1891, just before Gladstone’s welfare reforms.

      • robert locke
        November 19, 2017 at 2:49 pm

        Dave, it is not “unfeeasiible” to educate people in economics within organizations and communities. The German system of co-determination has existed for almost 70 years, it is codified in German law and through decades of practice runs smoothly in local German communities and firms. I discuss it in chapter 2 of my book.The Collapse of the American Management Mystique 55-103. OUP, 1996. The laws on co-determination in Germany were institutionalized over decades in German society. The fact that you think only elites can run things is a mistake that any person would correct if he/she lived in a society. German business schools teach courses on co-determination, German unions do, too, I have never heard in public discussions in Germany representatives of employer groups or conservative politic groups say that employees are not part of firms and should not share governance. Germany and Ms Merkel have just been selected as no. 1 country at head of the free world. Employees who sit on works councils and supervisory boards of German firms are well informed about the co-determination rights and are not bamboozled by a lot of hot shots graduates from business schools. In my article on Trumpoeconomics, firm governane, and prosperity in the rwer, I discuss differences between Germany and the US in firm governance.

      • November 19, 2017 at 3:56 pm

        Thanks, Dave…I knew I could count on one of the historians here to fill in the context of my speculative claim about the British gentry. :)

        BTW, I never did have a chance to respond to your extended comments on 20 October re: “honest money.”

        Your focus does reflect the rather widespread concern in many intellectual circles re: the questionable “value” of money. Will my dollars/pounds/euros buy for me as much as I’m hoping they will?

        It is the reason why many people are obsessed with their perception that inflation is corrosively stealing purchasing power from them.

        Your proposal seems to address at least one aspect of this concern by granting the holders of debt obligations something of real value: actual services provided, an alternative which would seem to be unquestionably acceptable to most folks.

        One thing we know for sure: people are always going to be willing to trade some of what they have for something they don’t have. Their constant hope is that something they’ve traded for previously—money, for example—will be willingly accepted by those whom they wish to buy from, and that they will value it as much as we hope they will.

        My analytical focus takes a few steps back from this “individualistic” concern and emphasizes the fact that what is ultimately important from a real economy perspective.

        What I consider to be a far more important matter is whether or not everybody is producing something of value that either they can consume for themselves, or can trade to others for other things of value that have been produced by others.

        If goods and services and “experiences” are being produced at optimal levels, and they are being traded to people who value them, then “everyone” is benefiting optimally from their productive efforts. The production and consumption of real wealth is being optimized.

        I don’t really care if every participant in the market obtains the optimal purchasing power shehe hopes to obtain from hiser trades; if the production of real wealth is being optimized , and it is being sold/traded, then you can’t do any better than that, in real terms.

        Any time we accept “money” as payment for our services, we have no way of knowing with certainty “how much it is going to buy” a week or month or year from now.

        That the production and transactions occur at all is the only thing that matters.

        Yes, incomes inflation can affect how much our pile of dollars will buy in particular markets, but so can a number of other factors, like relative scarcity.

        Looking for assurances that our dollar/pound/euro holdings will never lose purchasing power over time is an intellectual waste of time, in my opinion…

      • November 20, 2017 at 12:16 am

        Robert, it is not a fact that I think only elites can RUN things. I do think maybe only they can CHANGE things, so that people who can see well enough what they will need to do will find themselves doing something different. Keynes and Roosevelt changed the world; Hayek, Friedman and Thatcher changed it back. It was the elites, not the locals, who made the changes – though the time had to be ripe.

        James, on honest money I’m not talking about maintaining value for money, I am saying money doesn’t have value in itself, being merely a representation of value (and not a reliable one at that). It is also ambiguous: it seems the sun goes round the earth every day, and what represents a cost to the buyer represents a profit to the seller. In fact, however, the earth goes round the sun and turns on its own axis, while bank money is created as credit and recycled as debt to the bank rather than as the bank’s IOU: a mere representation of the seller’s debt to nature and his community, which have given the seller something to sell. Honest money is thus equivalent to a credit card where one [individual or business] has to earn one’s credit-worthiness and use credit to maintain oneself while one earns one’s living.

        We are talking about an honest, non-inflationary way of funding Citizen’s Income from the real (not monetary) wealth which is already available, and repaying one’s debts by earning one’s keep. Which is what most of us do anyway: this is just, like the Copernican Revolution, just inverting the way of looking at it. You will find the roots of the idea in John Ruskin’s “Unto This Last”, 1863, discussing a junior clergyman with a very modest stipend/salary working his socks off doing good. All around me I see people on pensions doing work voluntarily, which amounts to much the same thing.

  2. November 19, 2017 at 6:18 pm

    Sorry to be arriving a bit late to this fine exchange. First things first: Jayati – that’s a first rate review of a very interesting book which is going on my reading list. Many thanks.

    I am about to, over the next month, sit down and write an essay on the economic difficulties and prospects of rural Red State America, that is, Trumplandia. I’m in the middle of it in the mountains of Western Maryland, (which is still a blue voting state in national elections, but has elected Republican conservative governors in two out of the last four races).

    At the heart of my essay is the tension which is addressed both by the book review, and even more directly by the commentators: the response of local red state progressives and libertarians in West Virginia and rural Maryland has been to go local, back to the land, small is beautiful, farm to table, weave your own clothes, in other words, this is the non-statist response to all the forces of globalization which leave them frustrated, puzzled and in ways they do not quite admit, politically powerless, many, but not all actually are “de-politicized” in an intellectual sense.

    In our Red State part of Maryland, and even more tragically in West Virginia, the public air-waves and public discussions, limited as these discussions are, have been stripped of competing forms/fragments of alternative political economies. These have been historically extractive economies, built on coal and timber, although in their late phase of the end of the 19th and through the mid-twentieth century, there was a decent industrial base too, especially in Cumberland Maryland (and West Virginia too) . That now has collapsed.

    But here are the truths which the “back-to-the-land(ers)” don’t want to admit: our region stays alive, on the life support of the remaining New Deal and Great Society governmental programs: Medicare and Medicaid support the local hospital systems, as well as public money for West Virginia’s medical school and its private sector offshoots; there is a vast prison system, federal and state, run with tax money but pressured by the Neoliberal ideas and practices of “privatization” – I don’t want to dignify this aspect of Mass Incarceration at all, but it does create jobs and pump money into the depressed local economies; and the citizens who are the drivers of the green businesses – wineries, organic green groceries, wilderness schools, organic/farm to table restaurants – are almost exclusively middle class to upper middle class people who have made their money and continue to earn from the institutions of the Neoliberal economy; there is almost no working class participation of the leadership movements (successful against proposed natural gas fracking). Its libertarian bias was shown by not advancing bills for alternative economic programs when fighting natural gas fracking. And of course, how could I forget the governmental tax supported higher education system, some 7,000 students in a branch of the state college system, plus a junior college. Whatever practical job skills have been learned there have not translated into political enlightentment: Trump carried West. Maryland 2:1 and West Virginia the same.

    This tension between progressive localism and the hopes for a revived social democracy should not be, do not have to be an either or proposition. But the local memory has been stripped of New Deal institutions which intervened into the labor markets: many CCC/WPA legacies exist, and to meet the drug crisis, so aptly characterized by Streeck’s formulations, a right to work “Right” and new updated CCC/WPA programs are going to be necessary, because the private sector is never going to employ those who have served their time in either prison or drug treatment programs, and there are not even the beginnings of adequate bed treatment spaces to meet the vast demand.

    The localists also forget the it is federal tax money which supports the Appalachian Regional Commission which Trump wants to zero out of the budget, despite it being the actual seed money source – public capital- for new small businesses, green and alternative as well as conventional. To the extent that their are alternative energy projects floating around, including weatherization and energy efficiency, the money that is broken up in 10-12 different programs, has come from successful progressive lobbying at the state and federal levels to wring small $$ concessions from the great Neoliberal movement of the 1990’s to deregulate energy markets, splitting generators off from transmitters and local retailers. Thus many of the green localizers have forgotten all the existing local-state-federal private sector/governmental institutions and funding sources. It is hardly Helen and Scot Nearing self-sufficiency.

    Remember this from the American New Deal: it was federal tax money, with a small local match, but local projects which created the successful dynamic of the CCC and WPA. Many of our state parks in Western Maryland were built by the CCC, and public works by the WPA abound. All buried by Amity Shlaes types…

    And my challenge to localizer Gar Alperovitz of the Democracy Collaboration, is to remember that the greates construction of American co-ops occurred via the New Deal funding of rural electrical co-operatives, which first brought power to rural Red State America when the private sector thought it was too expensive for low density rural “customers.”

    I’m afraid though, that the intellectual and political economy dynamics have a long way to go: the green “small is beautiful and local” gives the Republican and Libertarian anti-government bias silent affirmation, intended or not, and these back to the land folks hate most of all the public forums where all the alternatives can be discussed, and even further, want to avoid the necessary heated clash of ideas that are inevitable under the conditions which Streeck has correctly described…a milder version of the U.S. in the 1850’s, and Germany in the 1930’s.

    Thus there is a very strong anti-intellectual bias in the small is beautiful localists I see around me. They have bluntly told me to stop talking, discussing and “built it, they will come.”

    Meanwhile, the working class is totally out of the picture, and they have gone elsewhere with their frustrated aspirations. Therefore, what I see unfolding before my very eyes 110 miles from the Atlantic coast mirrors far too much of what is happening in Western Europe, the 60,000 attendees to a Neo-fascist march in Poland being only the most dramatic illustration of ugly trends.

    • November 20, 2017 at 12:26 am

      Hi, Gracchibros, I hope my latest response to Robert and James will take you back to James’s original point about aiming to convert the tiny number of the intelligent among the elites, rather than persuade locals from using their own judgement to opt out.

      • November 20, 2017 at 12:36 am
      • robert locke
        November 20, 2017 at 7:09 am

        Dave. It does no good to tell you how other societies are different and to point to my 40 years of experience and study living in a country different from yours and mine. Nor does it do any good to tell you as an historian about the anatomy of revolution, since you believe that the world is changed by great men and ideas. .The great change occurred in the French revolution when the people overthrew the state, on the streets. Then the very idea of monarchy crashed.

        Graccchigbros’ description of Maryland and West Viriginia is not of a community, but a failed one. And it stands in stark contrast to the one I live in in Germany. I bought a house in Goerlitiz in 2002. Over the past fifteen years, I have witnessed the transformation of this small city from a run down, very neglected Communist ruin, into a flourishing, beauftiful, almost manicured, tourist city. The streets are clean, not because every German is keeps the trash barrels full, but because, every morning, owners of street facing properties are required to sweep the sidewalks in front of their property, or shovel the snow, promptly. That is not individidualism, but community spirit. And it is backedup with fines. People give up a little of their liberty to keep the city safe and running well.

        Trade unions, local schools, employees, work closely to keep the apprenticeship system, for which Germany is renown,,operating (60% of high school, 10 graders, go into these programs). The universities and subuniversities serve locaitiesl and regions. Unlike in the UK and the US what you study is more important than where = all those great ideas from Princeton, Yale, Harvard, Cambridge, Oxford, we hear constantly about can’t happen here. That great school mentality does not exist. The public savings banks finance SMEs, and provide excellent financial support for real estate development (I used them to renovate my home, with financial support from city, state, and federal funds). Germany spent a lot of money in the new Federal States (former East Germany) renovating its superstructure, roads, buildings, sports facilities. The quarter in which I live has been totally transformed in the few years I’ve been here. It isn’t West Viriginia and depressed rust belt America.

        All this is going on while the migrants have been pouring into Germany, arousing lots of opposition.. We have them here in Goerlitz, too, but the city adminisitratiion is working hard to train and house them.

        I, my wife, who is of Polish origins, choose to live in this Gerrman town because it is a safe community, with lots to offer people who live here. My daughter in California, who was educated in Germany (no costs) is thinking of moving here when she retires. Goggle Goerlitz on the internets, and you’ll see what local initiative has achieved in the midst of geopolitical transformations on a dramatic scale (end of Communism, mismanaged European union and national politics, in which the UK part is shameful. The so-called Brussels bureaucracy, about which Britis complain endlessly, has not hurt the development of this place.

      • November 20, 2017 at 11:03 am

        Robert Locke: “Nor does it do any good to tell you as an historian about the anatomy of revolution, since you believe that the world is changed by great men and ideas. .The great change occurred in the French revolution when the people overthrew the state, on the streets.”

        I wonder, Robert, how you account for the fact that the ending of the Communist Party’s rule in Russia in 1990-1901 was initiated by the Communist Party’s leaders, themselves, and not by the pressure of millions in the streets of Moscow?

        It was exactly the opposite of what all the geopolitical experts here in America were predicting, who fervently believed that when change comes, it comes from the bottom up. Gorbachev was “elected” by the Central Committee to initiate change, so it wasn’t just his idea, alone…

  3. November 20, 2017 at 9:56 am

    Robert, I’m happy for the blooming of your East Germany, but desperately sad about the dereliction of Greece and the turmoil in Spain and Britain. Let me remind you the EEC had its architects in the likes of Pius XI and Maritain, Adeneur and Schumann; my problem is with a global banker-run EU, the architects of which have been from the school of Rothschild, which was the real winner of the French revolution. Let me remind you also of Maritain’s and my own favourite social architect, G K Chesterton, who in his heterodox “Orthodoxy” of 1908 advocated for a run-down district of London what you are witnessing now in Goerlitz:

    ” Let us suppose we are confronted with a desperate thing – say Pimlico. If we think what is really best for Pimlico we shall find the thread of thought leads to the throne of the mystic and the arbitrary. It is not enough for a man to disapprove of Pimlico: in that case he will merely cut his throat or move to Chelsea. Nor, certainly, is it enough for a man to approve of Pimlico; for then it will remain Pimlico, which would be awful. The only way out of it seems to be for someone to love Pimlico: to love it with a transcendental tie and without any earthly reason. If there arose a man who loved Pimlico, then Pimlico would arise into ivory towers and golden pinnacles; Pimlico would attire herself as a woman does when she is loved. For decoration is not given to hide horrible things; but to decorate things already adorable. … A lover does not give a girl a necklace to hide her neck. If men loved Pimlico as mothers love children, arbitrarily, because it is THEIRS, Pimlico in a year in two might be fairer that Florence. Some readers will say that this is a mere fantasy. I answer that this is the actual history if mankind. This, as a fact, is how cities did grow great. Go back to the darkest roots of civilisation and you will find them knotted round some sacred stone or encircling some sacred well. … Men did not love Rome because she was great. She was great because they had loved her”.

  4. November 20, 2017 at 2:55 pm

    I think this is a great dialogue following upon a stimulating book review of a must read, at least for me. I’m going to write about this at the Daily Kos, another forum I participate in as “billofrights.”

    To davetaylor1: FDR’s New Deal did win over just enough of the enlightened 1% to give him some cover; I’m thinking of Henry Kaiser of shipping building and much else, and the Filene family famous for their department stores in New England…but I think the broader truth is that the American economic establishment was so demoralized by 1929-1932 that they abdicated intellectual leadership to the various strands of Progressivism that made up the elements in government…although many of the older Progressives from the 1890-1914 era jumped ship: the New Deal’s statism went too far for them. Of course, then the Liberty League got organized and the reaction set in by 1937-1938, an alliance of white southern Democratic segregationists and “liberty loving’ oligarchs (think DuPonts) …it’s not hard to see the shape of today’s Republican Right in that alliance which thwarted the Second Bill of Rights from ever coming to life. The Mont Pelerin Soceity and the rise of the Libertarian Right was a later development, post World War Two, a story well told by Kim Phillips-Fein in “Invisible Hands,” and now we have Nancy MacLean’s “Democracy in Chains” to explain the importance of James Buchanan and Charles Koch at three Virginia seed beds of radical Libertarian thought – and sheer propaganda: the Univ. of Virginia, Virginia Tech and George Mason University. You’ve all heard of Tyler Cowen, right? MacLean gives the background.

    Robert Locke: I really appreciate your first hand account of the importance and success of community building in Germany, where government seems to be more of an ally than demon to the more decent human impulses. But Germany is a conundrum to the West these days. Do not Yanis Varoufakis and Heiner Flassbeck tell a very different tale of the financial and labor institutions of contemporary German society? That doesn’t negate what you experience at the local level but what they relate about the broader world speaks to levels of contradiction on where Germany is headed as a whole: labor markets, financial markets and in its relationship to the rest of Europe. Ghosh’s review of Streeck’s books hints at more turbulence to come, with Germany perhaps sitting atop a slowly descending pile of sand which may or may not turn into an avalanche…Streeck’s view is a slow slide…Germany has the “best” view from atop the downhill slope…

    I couldn’t help but think of Streeck’s direction for capitalism along the lines of J. Huizinga’s famous (well, maybe at one time in the social sciences; I don’t hear it mentioned too often in Western Maryland) 1926 book “The Waning of the Middle Ages.” There it was, the late, decayed semi-sweet institutions of the Medieval World in the 14th and 15th century, on the verge of the Renaissance, but not yet having perished. And I would add that the late great American historian of ideas, Perry Miller, saw more than a few vestiges of Medieval life and thought carried over into the Puritans of the 17th Century and their City upon a Hill. One of the highlights of his work was the description of how the ministers of Massachusetts, struggling to keep community alive amidst the secular wave of successful merchants and all their wolrdly temptations, worked and sweated to maintain – wait – “the just price” notion from Medieval thought…but gave it up to what the markets of the merchants would bear…and of course, they traded with the slave societies of the Caribbean and the contending mercantile nations of Europe…the famous Triangle Trade.

    More hopefully, but with no guarantees, I can see the outlines of a new green New Deal for both the US and Europe, tempered by Streeck’s observations that nowhere has that outline broken through the defenses of the old Neoliberal order. But who could have predicted the actual New Deal from the depths of 1929-1932? Certainly FDR’s campaign of 1932 was a vast intellectual and economic contradiction…perhaps only gaining a window of momentary clarity in his speech to the Commonwealth Club of San Francisco in the fall of 1932. And where would the Congressional stalemate of 1937-1938 have ended without the great mobilization of American society, spurred on by the foreign events of 1939-1941? Jayati’s Ghosh’s review hints at the ecological crisis looming today: “capitalism has devoured all its prey” and references to the thought of Karl Polanyi’ especially the “land” market…but she does not flesh it out, that part of the foundation for a successful green New Deal must be based on facing the crisis of global warming; that alone might supply the moral and practical force necessary to rework all of capitalism’s most contradictory and destructive features. But its new Social Contract must find a way to re-integrate the working classes, the bottom 60% into the society, better emotional outlets than torchlight parades at the foot of Confederate “heroes.”

    • robert locke
      November 21, 2017 at 10:40 am

      In an article rwer, 2014, I wrote

      “Within the EU only in Germany did the other two pillars of banking (423 savings banks and 1,116 cooperative banks) remain a “special case in which no substantial changes [occurred] during the last decades” (Bübül et al, 3). The savings banks have remained local and public and cooperative banks have not become essentially profit oriented institutions seeking to enhance shareholder value; nor has either been turned into centrally located stock-exchange listed corporations. Since each sector had a system of joint and several liability even before the financial crisis began, no individual member bank was allowed when it came to go bust. They came through the crisis with barely a scratch and, their spokesmen argue, their business model, working for the public or mutual good rather than for shareholders, has proved to be well-suited to the mixture of households and small companies (known as the Mittelstand) that they serve (Gerada & Netessine,1).

      This statement is borne out by their lending record since 2007. Private German commercial banks reduced their medium- and long-term lending to companies and households between 2007 and 2012 in favor of short-term loans, while the German savings and cooperative banks did the reverse. The savings banks and cooperative banks currently provide about two-thirds of all lending to Mittelstand companies and 43% of lending to all companies and households.

      Most people now agree that “the amazing resilience of the German economy” can be attributed to its reliance on the small to medium size enterprises of Mittelstand companies: Seventy percent of Germans are employed by them in the private sector. Inasmuch as private and cooperative banks have financed these flourishing Mittelstand firms, judgments about these two pillars of German banking have changed from those of the pre-financial crisis era. Petra Dünhaupt notes that locally rooted banks “compared to private commercial banks,” performed well before and after the crises, (18) and that the modern view that “capital markets, in which banks are large, private, purely shareholder-oriented and exchange-listed corporations has been severely discredited by experience from the recent financial crisis.”
      real-world economics review, issue no. 68.

      (19). The best business model, she writes, is “being firmly rooted in the local economy and aspiring to strike a balance between the need to make a profit and the aim of serving members and clients, and the appropriate institutional structure is being embedded in a decentralized and dense network of affiliated financial and non-financial institutions” (19).”

      What is the use of talking about Germany to people on this blog, when they insist on being ignorant.

      • November 21, 2017 at 4:40 pm

        Robert:

        I’ve taken in all you have written here, and don’t have the detailed knowledge to refute it, but also, and in addition, I have commented here and at other forums that Germany is a very difficult read for Americans of any political stripe, but in my view, especially progressives.
        Here’s why: I would have to ignore the whole public discourse of the past three years of Yanis Varouvakis, which I am not about to do, and he speaks primarily about the several large German banks, including the most famous and largest one, who lent as wildly as American mortgage firms in the run-up to 2008-2009, lent to the periphery including Greece. Varouvakis has written about how conservative the German banking standards are in their domination of the Euro’s most powerful institutions, the Troika. Those standards are so conservative that the American New Deal model put forth to help Greece in pre-2015 days, entitled “A Modest Proposal,” was ignored, (written with the help of James Galbraith and a British author) and clearly beyond the pale, despite its modest ideological “placement” on the spectrum of economic thought.

        I also have been reading at Heiner Flassbeck’s site various authors who have written in depth about the German wage situation, and the “Hartz Reforms” which began in 2003. And found this at the Global Labour Univ. by Bea Ruoff: “…German labour market developments should not be regarded as a role model for other countries because it leads to instability instead of stability, inept work instead of decent work and inequality instead of equality.”

        Here is Flassbeck at an American-Canadian alternative news site: http://www.flassbeck-economics.com/an-interview-with-heiner-flassbeck-germanys-model-and-its-growing-class-of-working-poor/ (The REAL News Network).

        I should add that one policy arena where Germany is heavily criticized by intellectuals like Varoufakis and Flassbeck has been its running up of a huge trade surplus, which is trouble for the European economy just as China’s is for the world’s surplus of capital sloshing around, Varouvakis is commenting in public that there is international economic anarchy, and by that he means we are at the polar opposite of Keynes’ unfulfilled dreams at Bretton Woods to have re-balancing mechanisms for international trade surpluses, since the U.S. is no longer capable of playing that role, despite its currency status. Varouvakis points out that Germany is tied to China more than its European neighbors in terms of investing its surplus.

        In these matters, I defer to the parties I have cited and named, and are merely pointing out that Germany is a complex read in matters of political economy, even for experienced hands. I also went to Flassbeck’s site to hear some dissenting opinion’s about Germany’s green alternative energy economy model, and came up with this, which has been very useful to me in vetting the directions for solar and wind in the U.S.

        http://www.flassbeck-economics.com/interview-with-gregor-czisch-renewable-energies-in-germany-europe-and-beyond-part-2/

        Gregor Czisch was an entirely new name to me; part of his schema for an alternative energy program, relying on North African solar and wind and wind from the great steppes of Eurasia – seem to be naive given the location of dramatic international tensions (which in part his proposals might work to alleviate) , but his critique of Germany’s scale also condemns America’s house-by-house and business-by-business model of building alternative energy generation, and also how we are or aren’t rebuilding our grid: my takeway is American will never get “there” (beating global warming in the emissions/temperature race) “in time.” Thanks to “alternative” reads from Germany for that.

      • robert locke
        November 21, 2017 at 6:12 pm

        Yanis Varouvakis, which I am not about to do, and he speaks primarily about the several large German banks, including the most famous and largest one, who lent as wildly as American mortgage firms in the run-up to 2008-2009, lent to the periphery including Greece”.

        James, if you read my piece on Germany, you would notice that I wrote German large commercial banks bought into the financialization of the world. I was talking about the 2nd and 3rd pillar of German banking, public and cooperative banks, which did not. I am one of the more vocal critics of German commercial banking (in 1990s the big three, Deutschebank, Dresdner bank, and Commerzbank joined Wall Street and the City, in the financial rape of the world) Nor have I been anything but insensed about how the German politicians, led by Wolfgang Schaeuble, treated the Greeks and Varoufakis in particular in the soverign debt crisis. But that crisis originated in Goldmann Sachs and the hucksters in the US and UK; they are the archtects of our current financialization disasters; the German commercial banks were sucked into the system they created; but German public and cooperative banks were not. who were taken over by US & UK financial institutions. The point is that local and regional banks successfully resisted being financialized to the benefit of the German SMEs. I know, I bank with them.

        A lot has been written about clean energy in Germany, and the problem of price. Energy is very expensive in Germany, which is something Germans accept to avoid pollution. I live on the Polish-German border, city of Goerlitz. If you drive along that border South towards Zittau, about 25 miles, on the German side you will drive along a large artificial lake, that was filled over a periods of years from water of the Neisse River, to become a large recreational lake. The source of the lake was the huge lignite pits that supplied fuel to an electrical energy in the region. Germans developed a hundred years ago. They are gone, replaced by this reactional area. On the Polish side of the border, one finds a huge brown coal pit still being exploited for electric power plants.

        All this complaining about Germany while on the Polish side of the border, the lignite open pit mines are polluting the regions continually.

        I don’t like to pay the high energy prices in Germany either. Those high costs put a burden on the citizens and industries of Germany in their ability to compete. But long term we need to do something.

        Why do you ignore what I am saying. I have spent forty years writing about how Germans manage their educational system and local nonfinancial and financial institutions differently. It is nothing new. Maybe I am one of the experts you should quote. Never heard of me. Where have you been the last forty years.

    • robert locke
      November 21, 2017 at 11:14 am

      James, my wife, was on a Polish delegation (secretary) sent on a visit to the Don coal mining region, when the wall came down in 1990. She carried secret messages from Polish solidarity to the miners in the Ukraine who were trying to organize against the regime. If she had been caught, she would have been shot or imprisoned. When the communist party members heading her company in Poland asked her what was going to happen, she told them, that the game was up. Every time you have had a crisis, you have gotten through it with promises for improvement. But this won’t work any more, because they people don’t accept your promises. Its over.” Like the soldiers defending the Bastille against the mob, they sided with the people at crunch time. I tell this story in the biography Discovering Vera.

      • November 21, 2017 at 6:07 pm

        Robert: Like the soldiers defending the Bastille against the mob, they sided with the people at crunch time.

        What you are pointing out here, I believe, is that elites—like the USSR’s Central Committee—do not act proactively to help the powerless masses unless they are prompted to do so by pressure from below. Generally speaking, I agree.

        Seldom…very seldom…have elites throughout history taken action on behalf of their ‘lessers’ without noticing growing discontent from below that they want to address before it generates some kind of cataclysm.

        But the point I am emphasizing is that when significant change on behalf of the lesser classes has occurred, it has almost always been ‘enabled’ by a very significant amount of help coming from within the upper class, itself.

        Without that help from affluent, educated sympathizers, very few if any popular uprisings have been successful.

        I am not arguing that agitation from below is not necessary for change; I’m simply saying that it is not usually enough. You’ve also got to win over a significant, outspoken minority of rich people to defend your cause in order to provoke change without civil war.

        Another example I like to mention: African-Americans in the 1960’s began to make serious headway in advancing their cause only when significant numbers of white Americans began to outspokenly add their voices to the cause of racial equality.

        I argue that when a power-wielding elite loses its sense of solidarity, as an interest group, because many of “their own” are beginning to question their moral standing, they then begin to lose their grip within the realm of political posturing and big changes then become a possibility…

      • robert locke
        November 21, 2017 at 6:31 pm

        It is all very complicated James. In a free and open society like the US, it was not too dangerous to agitate and resist. In a totalitarian regime it could cost people their lives, by the millions== As in Czarist Russia, the Soviet Union, Putin’s Russia, Nazi Germany, Fascist Italy and Spain. We enjoy the freedom to discuss on this blog. I have some Ukranians working for me right now; what they say about their country is heartrending. How far is the Ukraine from where I am. Only one country separates us, Poland, and its a political mess.

  5. Edward K Ross
    November 21, 2017 at 12:11 am

    I am only an 81 year old of limited education and one of the disadvantaged mass who has had a life with a varied experience and observation, that has caused me to understand how culture and education affects ,attitudes motivation and thinking Thus when the subject turns to capitalism, from my experience I have to acknowledge that some people are motivated to make an effort and some are not On the other hand realistically one has to acknowledge that there are always powerful greedy pigs, who will always grab all they can regardless of who they deprive of just share of the spoils. Therefore from this observation I seriously think the answer is not to reject capitalism, but to find ways to limit the exploitation of the week by the elite , and restore through democratic conversations. Bearing in mind “(F D Roosevelt’s 1944 State of the Union Speech where he stated that “a basic element of world peace is a decent standard of living for all individual men and women in all nations … peace depended on”… freedom from fear which is eternally linked with freedom from want (Roosevelt (1944)
    Furthermore I find all the above comments very interesting however my personal opinion from experience on education is that in a democracy all citizens have a right to voice their concerns on political economic policies that effect them. Logically this requires education that encourages people how to think and evaluate spurious political economic rhetoric designed to placate them. .

  6. robert locke
    November 21, 2017 at 11:28 am

    “I couldn’t help but think of Streeck’s direction for capitalism along the lines of J. Huizinga’s famous (well, maybe at one time in the social sciences”

    So did I, since Medieval History 1050-1350 was one of my doctorate fields. But my son tells me that we have to be careful in our generalizations. The black death, for example, hardly affected Poland. Since history does not repeat itself, we do not know if, after the waning of the American hegemon, a renaissance could replace it. If so, why not a Chinese one.

    As for Streeck, read what he said about German Labour in his 1984 book. He thought the third way had a chance to replace US managerrialism and soviet communism. He was wrong for a lot of reasons, not because we had the US brand of capitalism wrong, but because of the collapse of communism open up a wave of investor capitalism that was unforeseen, even if of doubtful longevity.

  7. November 23, 2017 at 12:45 pm

    Human society is mythology. Generally, we call this mythology culture. Unlike the genetic component of human life, culture can change quickly under the right circumstances. “In 1789 the French population switched almost overnight from believing in the myth of the divine right of kings to believing in the myth of the sovereignty the people.” (Harari) In other words, capitalism was always temporary. Always on shaky ground. And Robert is correct. It’s clear from history that direct revolution is not only the quickest way to make such changes, but also the least destructive in terms of collateral damage. Revolution also provides a strong push for people to learn and get involved in building community life that really knows no geographic boundary. Second, this dichotomy between “educated elites” and local (non-elites) is a mythology like the divine right of kings that needs to be questioned, not just accepted. And certainly not accepted as unquestionably the only way forward. It can be “changed overnight” under the right circumstances. Figuring out what those circumstances are is important. One example might help. Is Donald Trump an elite? If yes, why? He’s not intelligent, either formally from schooling or innately. He’s a failure in terms of problem solving, and in the general measure of capitalist elites, making money. Is it correct to apply the term dotard to Trump? So why is Trump an elite? Or is he one of the non-elites? Shows in my view the limitations of this dichotomy. Finally, another myth that’s in my view at the heart of our problems today is society vs. individual. Many of the comments and even to some extent Streeck’s book rest on the assumption that individuals exist apart from society and that they have rights superior to society. The US is the poster child for this assumption. The alternative is that individuals and society are two sides of the same coin. One cannot exist without the other. In 1969 just back from Vietnam and still an active duty Marine I debated (as opposed to street fights) a minister in San Francisco on the morality of the draft. I held that society has a right to interfere with individuals’ lives and require the individual to do things that are not voluntary. The issue I asserted was the circumstances under which this should occur. We obviously didn’t settle the issue that night. But I still assert this. Elites and ordinary citizens are made so by the requirements of the society in which they live. Society’s needs must be met, accepting that all citizens must have a full voice in that society. Today it seems most citizens reject society and society’s rights regarding the individual. Whether elite or ordinary this leaves them no common ground for debate or civilized engagement. They are either enemies or allies, nothing more. Soldiers and Marines are taught their job is to kill the enemy. It’s not a good sign for the longevity of humanity if that becomes the basis of all human relationships. We’d better fix this, and soon!

    • November 23, 2017 at 6:02 pm

      Ken says “Human society is mythology. … this dichotomy between “educated elites” and local (non-elites) is a mythology like the divine right of kings that needs to be questioned, not just accepted.”

      Mythology is a representation of appearances. Human society is actually a reality, which has the appearances mythology may represent – well or misleadingly. The mythology is misleading, that the dichotomy Ken is representing is what we have been discussing, .

      James was talking about the much smaller number of “smart” [as against educated] than “dumb” elite and suggesting we target them, which I agreed was much more feasible [for the relatively few smart members of the non-elite who have questioned the divine right of kings] than trying to convert a much larger electorate which, being human, is proportionately dumb. However, the divine right of kings is itself mythology, and questioning it turns up analogies like trying to run a committee without a chairman. In society the problem in decision making is trying to get yourself heard, and a chairman as king is not expected to make the decisions but he is expected to listen to the alternatives and guide discussion to a consensus. So the myth of the divine right of kings is not unreasonable, but the idea that kings have a right to what they like is. (Which was not what Charles I lost his head over – he wanted the revenue necessary for him to do his job – but it was the myth put about him by those who didn’t want to pay taxes). Having questioned the divine right of kings, therefore, my conclusion is that the negative connotations of the myth of the divine right of kings needs to be questioned. I’m reminded of another quote from Chesterton’s “Orthodoxy”:

      ” Tradition is the democracy of the dead. … Democracy tells us not to neglect a good man’s opinion, even if he is our groom. Tradition tells us not to neglect a good man’s opinion, even if he is our father”.

      Personally, I think Britain’s constitutional monarchy has got the role of kingship about right. What I would like to see is it extended to Prime Ministers and Presidents. Given its experience of Trump the US might do well to look at the role of President in Eire.

      • November 24, 2017 at 4:07 am

        Dave, if you prefer we can use Noah Harari’s term, “make-believe” instead of mythology. Regarding French society before the revolution, Harari writes, “The imagined orders sustaining these networks were neither neutral nor fair. They divided people into make-believe groups arranged in a hierarchy. The upper levels enjoyed privileges and power, while the lower ones suffered from discrimination and oppression.” Harari gives this further example, “Hammurabi’s code, for example, established a pecking order of superiors, commoners, and slaves. Superiors got all the great things in life. Commoners got what was left. Slaves got a beating if they complained.” The divine right of kings, popular sovereignty, and Hammurabi’s code are all make-believe – made-up by humans. They certainly have consequences for peoples’ lives, positive and negative. Revealing and examining these is a large part of the work of historians and social scientists. After all, none of us can know in advance the results of the ways of life humans create. Trial and error, and learning from history is usual here. The quotes you cite are asking questions about these some of our make-believes. Not a bad thing, in my view. I dislike monarchy in any form, so cannot go along with your comments about British monarchy. But if I had to choose a form for monarchy, I’d choose the Norwegian version. Monarchs get to keep the titles, but none of the land, money, or power. Figure head only, given a living wage by the Norwegian parliament.

      • November 24, 2017 at 8:38 am

        If that’s the way Norwegian monarchy works, sounds good! But my point is that one does not have make-believe without someone to do it, and the issue then is the strategy being used to make the bricks the edifice is made of. Does one join up the dots on experiments confined to one issue (Hume), or does one first have undirected experiences in many diverse issues and then unexpectedly realise there is a common pattern in them (gestalt?. This is the difference between Left and Right, i.e. right-brain and left-brain dominated thinking, Conservative (following agreed tradition, which may have originated in either right or left-brain thinking) and Radical (which may have been other- or “what’s in it for me” centred: emotionally directed by on the one hand adult modesty born of experience of failure and on the other by childish superman fantasy). This itself is a pattern, perceived intuitively by Chesterton before Jung, but evaluated in the Humean manner in the researches of Isobel Briggs-Myers. The explanation lies in brain structure, wherein neurons grow synapses from chemical materials released by motivation when sparked by experience (given time for the materials to set), in the same way as electrical contactors grow pips on their spark gaps when opened to cause sparking in petrol engine spark plugs. It doesn’t actually matter where the perceived pattern comes from: the important thing is to check it out, not just to reject it because your left-brained peers and teachers weren’t already agreed on it.

      • November 25, 2017 at 7:26 am

        Dave, too much psychologicism for me. When the hemispheres are connected, they don’t share all the information and operate in a unified fashion. They do operate in tandem but differently in some ways. This is mostly because they physically cannot. Human evolution favored this form of brain, as the hemispheres back up and play off one another. Giving humans two brains, sort of. It’s more correct to say human brains have specialized sections. First, we mapped these sections. Now we’re studying localized areas of the brain. We’ve also begun to figure out the complexity of the brain. For example, different areas of the brain with similar functions and structures at times respond quite differently to the same stimuli. We’ve also learned that human brains are not identical, either genetically, functionally, chemically, or structurally. Sometimes the differences are subtle. Sometimes quiet striking. This has led neuroscientists to understand the brain and its work as networks. According to cognitive neuroscientist, Kara D. Federmeier, “I believe that cognitive functions arise from dynamically configured neural networks. On this view, the role played by any given brain area is different depending on the state of the network of which it is currently a part, and how activity unfolds over time often matters more than where it is in the brain.” I agree.

        But humans are more than brains. In fact, imagination, cognition, and perception don’t just happen in or because of the brain. For example, Maurice Merleau-Ponty emphasized the body as the primary site of knowing the world, a corrective to the long philosophical tradition of placing consciousness as the source of knowledge, and maintained that the body and that which it perceived could not be disentangled from each other. His expression of the primacy of embodiment profoundly affected neuroscience and medicine generally. It’s not uncommon now for physicians, therapists, and care givers generally today to reference muscle knowledge or flesh perception. In past times this would be called tacit knowledge or even wisdom.

        All this and more makes up the process through which human lives and societies are created. The more includes interpersonal and human-institution networks, history, passions, and the endlessness of human imagination.

    • November 25, 2017 at 1:21 pm

      Ken, this is all interesting even in your Humean, “this is what we can see” type of science, but that takes us no further than looking into the back of a computer without knowing how all the components and intercommunication channels work. HOW it works is what I was discussing.

      There is an arrangement in computing known as virtual memory, and more to a computer than it having twin memory discs so that if one fails the other can take over, or if a bit of one fails its memories can be rewriitten elsewhere on either. There is also a central processor (in us, our emotional system) which doesn’t have much memory but activates logic programs which can be stored in either disc, or in an input-output cashe memory (in us, round the top of the spine). With virtual memory one can start off with, say, sound information on one disc and visual on the other, efficiently manipulating the small amount of information conveyed by sound to index the large amount of information in visual memory, which is copied into the input/output cashe much like Windows restores a program display after an interrupt, e.g. to check some data.
      Whether we are left-handed or right-handed, or think predominantly in words or in pictures, depends on our emotional inheritance and physical nourishment. I know about all this not just from working with computers but because fifty years ago one of my children turned out to be left handed and not so much dislexic (having difficulty translating word symbols into sounds) but word-blind (having difficulty connecting words – whether in sound or visual form – with their meaning). The diagnosis at the time was “cross-lateral” development, with the sound having to go the long way round via visual memory; more recent science concerning the connections between the hemispheres (the corpus callosum) suggests compensatory neural growth bypassing a problem there.

      The significance of this in discussing science and economics, anyway, is not how the brain works so much as why university elites trained to think efficiently with the wordy side of their brains are so often disinterested in what actually happens. It is as if they are skimming books via their indexes and rarely looking at the pages. Chesterton has of course discussed this in the chapter of his heretical “Orthodoxy” called “The Maniac”, though I have to confess it took me about twenty years to understand what he was on about. DSGE models missing the point?

      • November 26, 2017 at 1:23 pm

        Dave, my point is this. Human actions and thoughts are both complex themselves and come from complex sources. Much of the time humans don’t really know why they speak, act, and understand as they do. For example, beginning in 2011 psychologists carried out a series of experiments based on the question: can conservatives be to turned liberals. The conclusion was yes, they can be.

        “…this effect [is] based on the idea that our modern-day social motives and attitudes are built upon, and are ultimately in the service of, our unconscious evolutionary goals: in this case, our supremely powerful motivation to be physically safe. Satisfying that basic need for physical security through the genie imagination exercise therefore had the effect of turning off, or at least reducing in strength, the need to hold conservative social and political attitudes, much the same as turning off the gas flame under a pot of water causes the water to stop boiling.”

        Humans act to serve many evolutionary goals, both genetic and cultural of which they are not aware. And these goals, in turn are based on the history of biological or cultural evolution. Humans are their past, their history. And no human remembers history entirely or knows how history effects what they do or don’t do today. But this can be remedied, as the psychologists’ experiments shows, with the correct approaches.

      • November 26, 2017 at 10:36 pm

        Ken, you are still completely missing the point of PID control of the achievement of aims, to say nothing of free will. Man are not just their past. They are also their present, overlapping with the past in respect of errors they can still correct, and with a future in which dangers and alternatives will become evident in time to allow a choice of strategy, e.g. fight or flight.

      • November 27, 2017 at 9:18 am

        Dave, to paraphrase William James, free will is a choice we make. And that choice is embedded in the species’ genetic and cultural history. And per Yogi Berra, “The future ain’t what it used to be.” The future is always uncertain and unpredictable. We can sometimes prepare for it, but not live in it till it’s here.

  8. robert locke
    November 24, 2017 at 5:25 am

    “Second, this dichotomy between “educated elites” and local (non-elites) is a mythology like the divine right of kings that needs to be questioned, not just accepted”

    In Germany, people talk about Fachkompetenz and Leistung. The workplace is not a democracy, but one where people have to know their stuff.and perform. It is not assumed, as in French management, that the boss is all knowing and hence because of his intelligence, understands the kompetenz of his underlings better than the underlings do. So if in Germany a firm wants to buy a piece of equipment, it sends along the person who is going to operate it to buy it, just as Japanese firms, in the 1920s when they were learning scientific management from America, sent workers in their delegaions since they would be involved in implementing it. Elitism in US management led to inefficiency.and the Collapse of the American management mystique. That’s the title of my 1996 book.

    • robert locke
      November 24, 2017 at 12:29 pm

      A propos of the dichotomy between “educated elites,” of which American managerialism is a prime example, and local “nonelites” I wrote in the introduction to The Collapse of the American managerial mystique (1995):

      “Management is an American term and an American creation. Although American management has always hankered for universality, it is nothing more than a cultural peculiarity. It has never played the role in economic success that managers believed, and its irrational persistence in America threatens this nation’s role in the new world economy, the American standard of living, and even domestic stability. This is the thesis of the book.”

      How is that for getting things right? Go back 22 years and see what you were thinking and writing at the time.

      • November 25, 2017 at 7:58 am

        Robert, highlights that the path created by Americans is not the only possible one. And certainly, has some significant downsides that need to be considered before continuing it at home or around the world. Unfortunately, other parts of American culture make such self-examination difficult to carry out in practice. Look at the Monroe Doctrine, American exceptionalism, the American Century, how we won the west, the American frontier, cowboy, gunslingers, American capitalism (related to but different from American business), and what I can only call amiable arrogance, etc. Yes, American management is one of these cultural peculiarities, backed up by the richest and most well-armed nation in the world. But honest and smart American historians cite it more often as a problem American businesses and labor have had to overcome. A problem that is making it today ever more difficult for America to participate in the emerging energy, resource, and services sectors that cross not just geographic but ideological barriers across the world.

      • robert locke
        November 25, 2017 at 9:45 am

        In the collapse, I cast my net wider than just some ideas about elite management, by comparing US ideas about managerialism to the phenomenon of militarism. I write in the introduction.:

        “Throughout most of this study both the form and goals of American management have been subsumed under the rubric ‘managerialism.’ As used here this expression is juxtaposed with the term “management’, much like the historian Alfred Vagts over fifty years ago juxtaposed the terms militarism ‘ and the ‘military way.’ The military way means setting a goal and developing the most efficient organizational means to see to its accomplishment. ‘Militarism’, on the other hand, has a much different connotation. As Vagts wrote, it

        ‘present a vast array of customs, interests, prestige, actions, and thought associated with armies and war and yet transcending true military purposes. Indeed, militarism is so constituted that it may hamper and defeat the purposes of the military way; its influence is unlimited in scope. It may permeate all society and become dominant over all industry and arts… Militarism displays the qualities of caste and cult, authority and belief.”

        Managerialism has the traits of militarism. It represents ‘a vast array of customs, interests, prestige, actions and thought’ associated with but nonetheless transcending the needs for the efficient running of commercial and industrial organizations; its influence is almost unlimited in scope, extending into almost every kind of organization in America, profit and nonprofit, commercial and educational, governmental and military. Managerialism as it grew up in America came to exhibit the ‘qualities of caste and cult, authority and belief.’ And it will be argued throughout this book that American management and the mystique it generated developed into a system that ‘defeated and hampered the purposes’ of management itself; that is, denied organizations the means needed to formulate and effectively reach goals.” p. 3, Collapse of the Ameridan Management Mystique”.

        Goggle managerialism and see that this idea has gained some traction

      • November 26, 2017 at 1:36 pm

        Robert, sociologists call such systems “totalizing institutions.” They control, or attempt to control every aspect of each human’s life, from cradle to grave. Some modern welfare systems are such institutions. Also included – some cults and religions, some professions (e.g., science), and some militaries. Such institutions not only mostly fail to exercise the total control they’re set up for, but create multiple problems and ancillary failures due not just to their basic failure to control but also their continued efforts to assert control. Human life, history, and society is simply too subtle and too complex for such institutions to be successful, except for short periods

      • robert locke
        November 26, 2017 at 7:25 pm

        Managerialism is a “totalitizingg institution,” and in the historical context in which we live the new managerialism not only has permeated commercial and industrial life but educational institutions, medical centers, the military, indeed every aspect of our life. Alfred Chandler really believed the management caste essentially to a well run modern industrial society. So do Americans, like Trump, who believe we have the best CEOs in the world, which is all that matters. The fact that managerialism is the source of our industrial decline and social dislocation cannot penetrate into the consciousness of people existing in such aa totalizing institution. . .

      • November 27, 2017 at 9:23 am

        Robert, that’s it in nutshell.

  9. November 27, 2017 at 11:21 am

    Managerialism i associate with buerocracy and standardization—something which is neccesary but also can have disasterous results (ie its a way of living that can be outdated—possibly like fossil fuels, or the kind of expert advice that led to the vietnam and iraq wars.

    And of course alot of the problems of academia such as economics are due to buerocracy—‘old boy networks’ etc.
    ‘Science advances one funeral at a time’ .

    • robert locke
      November 27, 2017 at 5:31 pm

      I first wrote about managerialism in the mid1990s. I defined it in the article published in the rwer (2009) as follows:

      Managerialism — “What occurs when a special group, called management, ensconces itself systemically in organizations and deprives owners and employees of decision-making power (including the distribution of emoluments) – and justifies the takeover on the grounds of the group’s education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of organizations”

      Since then Thomas Kilkauer has written a book on Managerialism as ideology and there has been a lot of information about managerialism in higher education and in hospital administration, and the military.

      Managerialism is linked to the rise of business schools, MBAs, critically assessed in such book as Duff MacDonald’s on The Golden Passport, a history of the Harvard Business school.

      Goggle “managerialism” for more information.

  10. Rob Reno
    December 2, 2017 at 6:10 pm

    I cannot profess to have the requisite background to follow everything you fellows share, but I sure enjoy reading your essays and comments.

    Robert Locke defines Managerialism as:

    “What occurs when a special group, called management, ensconces itself systemically in organizations and deprives owners and employees of decision-making power (including the distribution of emoluments) – and justifies the takeover on the grounds of the group’s education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of organizations.”

    This sounds pretty accurate given our experience in the corporate world. In fact success in this world requires expertise in managing the culture of “managerialism.”

    Mart Malakoff’s comment, “‘Science advances one funeral at a time’,” sure rings true too. I remember studying the history of plate tectonics and one of the overriding themes was that science doesn’t progress ultimately by discovering truth but by the older leading professors in the field dying off and younger scientists who view the body of evidence through different critical assumptions replacing them. I see the same in economics. I just wish the old neoclassical mainstream economists would hurry up and die off a little faster for my children and grandchildren’s sake.

  11. robert locke
    December 3, 2017 at 10:26 am

    “In fact success in this world requires expertise in managing the culture of “managerialism.””

    A very good point, and because the managerial caste is so good at it, we’ll have the devil of a time loosening its grip on power.

  12. December 4, 2017 at 4:10 am

    According to former GM CEO Jeff Immelt, business managers must have “domain knowledge” –craft knowledge –to be successful. The MBA programs destroyed all this, and more, he says. MBA professionals were free to take any actions necessary in managing a business to maximize both shareholders’ and their own compensation. But often in practice MBA managers could not help placing themselves ahead of shareholders in compensation, since they also had been taught that satisfying their own self-interest came first and that their just compensation should be virtually boundless. These practices by MBAs often lead to less productive and effective companies, that expected ever larger profits, but with a large share of employees feeling mistreated; declines in democratic government; and an increase in ineffective policies, confusion, and tension all round. In the end MBA programs ended up producing many unqualified technicians who could manage virtually nothing effectively and had no ethical yardstick against which to measure either their management actions or a fair level for their monetary compensation. MBAs manage companies (and everything else) simplistically. Based on a company’s balance sheets, departments and managers that bring in the greatest revenue are expanded and promoted. Those that don’t are reduced and demoted. To explain this approach simple rules became paramount –e.g., the only motive for humans is self-interest, being decisive is more important than knowledge. And the foundation of all this is “uncritical confidence” (narcissism, if you will). This is a picture of US business companies since 1980.

    • robert locke
      December 4, 2017 at 10:13 am

      And with the shift under MBA managerialism from viewing employees as a firm “asset” to viewing them as a “cost,” the relentless pursuit of the US managerial caste, to reducing this “cost”, through the elimination of private pension schemes and employee benefits, so that in our time the employees get less and less from the private sector and must rely on government pensions and benefits that Republicans are cutting now to increase middle class penury.

      • robert locke
        December 4, 2017 at 10:22 am

        Remedy: Establish compensation committees in firms in which employee representatives have a voice when setting wages, bonuses, and other emoluments.

      • December 5, 2017 at 9:31 am

        Robert, agree 100%. Nobody in US businesses (except for smaller ones and some larger but unusual ones) today is a craftsperson. Neither the “managers” nor the “workers” feel any commitment to either a craft or the use of that craft to meet patron needs. It’s only about the money. I still remember what the President of BMW said in an interview almost 20 years ago. “BMW builds fine automobiles. The money will take care of itself.” I like your proposed solution. I just don’t know how you get these changes past the current political elites.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.