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Saturday, January 28, 2012

on to the sovereign consumer II

In 1948, Mary Jean Bowman wrote an article concerning the rise and relative decline of the consumer in economic theory: The Consumer in the History of Economic Doctrine. Phillip Mirowski has shown that the enormous powers of control systems such as were put into operation by U.S. during World War II had left an impress on the economics profession at that time. It was an impress deepened by the merger of mathematical economics and Keynesian ideas about demand management in the Anglosphere in the years after the war. There was never, in that period, any real threat that the private enterprise system would be taken over by the state – but there was enormous confidence in the state’s ability to direct the economy. Against this background, Bowman’s history seems to be an exercise in antiquarianism. For readers who have experienced the collapse of confidence in the state’s ability to direct the economy – at least on the surface of economic thinking – and the dominance of the neo-liberal framework, it is the antiquarianism that is antiquated.

Bowman divides into four the approaches to the consumer in economics. Her third approach is closest to what would be called the idea of the sovereign consumer: “The consumer is viewed as the originative and active agent in determining the allocation of resources. .. Since the late 19th century the normative stress has been mainly on realizing consumer preferences, but a resource allocation analysis has been applied in other normative contexts…” (1)

For Bowman, Say was “probably the first economist to become an unqualified exponent of the normative postion that the satisfaction of consumer preferences, whatever those preferences might be, was an end in and of itself.”

But in Bowman’s history,  Say was a little to early to have been able to exploit the subjective turn that came about with the marginal utility approach. Furthermore, if Say were to reach for a physics model of the economy, it would have had to have been Laplace – whereas by the late nineteenth century, better statistical tools and and models of physics gave economists a sense that mechnics could be transferred to the matter of exchange. Wicksteed, for Bowman, is the key figure in this history (which, as she admits, is skewed towards England and America):

“Wicksteed was the first of the British economists explicitly to join the utility and cost approaches through opportunity cost. The concept was applied in both the allocution of resources among different uses and the margin of choice between leisure or idleness of resources and income. In the former application consumers’ rule was carried back through the economy by imputation.”

So Bowman’s history stands as a tale of events unfolding in a particular department of knowledge. The motives, here, are generated, or so we are to believe, by the structure of science – although it is already a question of whether this is the science of discovery, or whether the experimental and the empirical are being pre-processed in a gesture of scientific aspiration. The economist’s understanding of themselves as scientists was expressed by Mill, and repeated by Carl Menger, one of the important pioneers of the marginalist school, in his Investigations (1883):

‘The will of men are lead by countless and in part contradictory motives; in this way, any strict law-likeness of human action in general and economic in particular is excluded from the beginning. Only when we think of man in his economic activity as being continually guided by the same motive, i.e. his self-utility, does the mmoment of arbitrariness appear excluded, and every action strictly determined. Only under the above presupposition is accordingly the laws of political economics and even national economics thinkable.” [My translation, 73]
The language of determination leads us into the logic of economic indvidualism, which presents itself firstly as a methodological norm. The individual’s motives may be granted free reign – but as far as the economist is concerned, they must be formally enveloped in a modality that will make them calculable and determinant.

Character is never the rubric under which the economist goes about his business. Rather, at the heart of the subjectivist move was an oddly vacuous subject – the ‘individual’, or the consumer.  In mainstream economics, the decisive rupture with the classical school centers on the replacement of the laborer, the producer, by the individual consumer, the preferer. But this change of focus creates an oddly dysymmetric picture of economic activity, as though individuals existed in some series, isolated from one another, the realization of their choices cut off from any interference one with the other.  continually chosing goods and services, an eternal monologue of want. One imagines them as Beckett characters, buried up to their necks in purchases, balancing costs and benefits. Far from being a choice of method, a choice of connection within a network of connections as in Simmel, a choice for salvation that leads to a new life, the choice of believing in the eternal return of the same that leads to the transcendence of the human, the choice of revolution that throws off the yoke of alienation, the choice of the economic agent has a curiously muffled, a passive aggressive nature. It is a choice of, as economists like to put it, one bundle of goods over another, with the world of supply, of production, of creation, absolutely subservient to choice.

The inversion of the economist’s protagonist – from producer to consumer – follows the logic of individualism in as much as it clears a space in which economics can be a social physics, or mechanics. The individual shoppinng is a distinct unit. The individual producing, on the other hand, is a collaborator. The steelworker does not make a fleck of steel distinct from the fleck of steel made by his fellow steelworker. The classical economists made great strides in abstracting to gain a sense of economic objects as produced, by postulating a fully substitutable abstract labor time – the time that is represented in the time card. But Marx revealed that there was an unconscious total social fact following upon this way of analysis: producers were exploited within the class stratified social whole. This would bother few in a world in which the servant/master relationship was assumed, but it did bother a world in which that relationship had to be justified. And yet, of course, in a further paradox, the first world, by depending on non-liberated labor, could never bring about the  industrial and financial system  of capitalism – capitalism must free the laborer if the laborer is to be exploited in a proper capitalist manner.

Moreover, the genesis of value, following the classical route, created insuperable problems of quantification – and could only be approximately quantified from surface indices. That this may just be the way the economy functions was not a good answer for an economics that wanted to be not simply a social science, but the most scientific social science.

Still, the turn in economics from the producer to the consumer, from labor value to marginal utility, was not received in the social sciences or among policy makers without skepticism and outright resistance. Among the paths of that resistance was: the sociology that took as its primary units certain collectives; the path of therapeutic nihilism; and the positive pather of socialism. The first took collectives to be, at least for the purposes of explanation, agents  – crowds, public opinion, class, etc. The second exploded the notion of the unified individual, with his unified consciousness, from within –a move which was variously made by William James, Nietzsche and Freud. This path eventually led, in the twentieth century, to another notion of the person in terms of sovereigny and abjection. And the third path centered upon the idea that the individual’s consciousness of himself was always mediated by class, a state of affairs that could only be changed by revolution.


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