Saturday, February 02, 2008

the year of cooling the mark out

And Burn my shadow away…

Erving Goffman wrote an often referenced paper in 1952 entitled On Cooling the Mark Out. To understand this election year, LI advises our readers to read it.

The paper begins by describing the confidence game, which involves roping a mark, getting him to invest, financially, in some scheme or game, and clearing him out. At this point, the confidence gang has the option of simply leaving the mark behind. But…

“Sometimes, however, a mark is not quite prepared to accept his loss as a gain in experience and to say and do nothing about his venture. He may feel moved to complain to the police or to chase after the operators. In the terminology of the trade, the mark may squawk, beef, or come through. From the operators' point of view, this kind of behavior is bad for business. It gives the members of the mob a bad reputation with such police as have not. yet been fixed and with marks who have not yet been taken. In order to avoid this adverse publicity, an additional phase is sometimes added at the end of the play. It is called cooling the mark out After the blowoff has occurred, one of the operators stays with the mark and makes an effort to keep the anger of the mark within manageable and sensible proportions. The operator stays behind his team﷓mates in the capacity of what might be called a cooler and exercises upon the mark the art of consolation. An attempt is made to define the situation for the mark in a way that makes it easy for him to accept the inevitable and quietly go home. The mark is given instruction in the philosophy of taking a loss.”

This pretty much describes the two cases we have before us this election year. The ruinous Bush years involved two con games that were entwined one with the other. We have the con game that keeps us in Iraq, one fully supported by the ropers in – the governing elite – and we have the con game that is now busting, the full fruit of Bush’s economic policy, which involved minimizing regulation of the financial markets while maximizing the amount of money they had to play with. In this way, credit could fill up that hole where compensation from work used to be – and so productivity gains could be appropriated at a much higher rate by the richest, while home equity could be tapped, via mortgages, for the good life by the debtors.

Goffman points out that the mark’s psychology is a tricky one. To an economist, it might just look like utility maximization. But…

“In many cases, especially in America, the mark's image of himself is built up on the belief that he is a pretty shrewd person when it comes to making deals and that he is not the sort of person who is taken in by any thing. The mark’s readiness to participate in a sure thing is based on more than avarice; it is based on a feeling that he will now be able to prove to himself that he is the sort of person who can "turn a﷓fast buck." For many, this capacity for high finance comes near to being a sign of masculinity and a test of fulfilling the male role.”

Warmonger psychology unerringly follows this primitive but powerful gender program. This army of pissants shows all the signs of having had trouble emerging from the sack of their twelve year old selves, when, apparently, the separation anxiety produced by throwing out their G.I. Joe doll became frozen in place. A smaller contingent of this army – much smaller – forms the viewing core of financial porno tv networks, like CNBC. These people actually believe that they are part of the confidence game gang, which is how they came to mouth a rote optimism that had as little relation to reality as your average automobile ad has to how you would really drive an automobile.

“A mark's participation in a play, and his investment in it, clearly commit him in his own eyes to the proposition that he is a smart man. The process by which he comes to believe that he cannot lose is also the process by which he drops the defences and compensations that previously protected him from defeats. When the blowoff comes, the mark finds that he has no defence for not being a shrewd man. He has defined himself as a shrewd man and must face the fact that he is only another easy mark. He has defined himself as possessing a certain set of qualities and then proven to himself that he is miser ably lacking in them. This is a process of self﷓destruction of the self. It is no wonder that the mark needs to be cooled out and that it is good business policy for one of the operators to stay with the mark in order to talk him into a point of view from which it is possible to accept a loss.”

Goffman’s analysis of the mark points us to the form of the presidential election – that Halloween for grownups. Whoever the candidates are, they will represent wings of an established power that has made suckers of the vast majority of the population over the last four … eight… twelve…sixteen years. An established power that has assured America that the costs of running this empire will always be paid by third parties – whether these consist of tropical countries dealing with the forces unleashed by the American appetite for junking up the atmosphere with CO2, or Middle Eastern countries struggling with the yoke of American oppression in a more direct form – the soldier in their face, the mercenary who shoots them for fun in the traffic jam. Of course, this isn’t true. Those costs will come back here. The cost of the Middle East adventure can be seen in the run up of oil prices, a very small intimation of a much larger and connected group of problems that come with running out of prestige and power in a large area of the world while at the same time maximizing the number of people who hate you. As for CO2, it will turn out that melting the glaciers in the west during the drought cycle was not a good idea. The American west, overpopulated, overdeveloped, its water overpromised, is going to learn the lesson of the Hummer, too. This isn’t just something we can sluff off on Bangladesh.

“For the mark, cooling represents a process of adjustment to an impossible situation ﷓﷓ - situation arising from having defined himself in a way which the social facts come to contradict. The mark must therefore be supplied with a new set of apologies for himself, a new framework in which to see himself and judge himself. A process of redefining the self along defensible lines must be instigated and carried along; since the mark himself is frequently in too weakened a condition to do this, the cooler must initially do it for him.

One general way of handling the problem of cooling the mark out is to give the task to someone whose status relative to the mark will serve to ease the situation in some way. In formal organizations, frequently, someone who is two or three levels above the mark in line of command will do the hatchet work, on the assumption that words of consolation and redirection will have a greater power to convince if they come from high places.”

It is going to be an excellent year for spectators.

Friday, February 01, 2008


Ernst Kris was a Viennese art collector, historian, and psychoanalyst who taught Freud to the great Ernst Gombrich. When he died in 1957, he left behind a large reputation. Even in the seventies, when his papers came out, a review came out in the New Republic. One of his papers, from 1956, left a phrase that has been lifted, since, by many - especially Jungian analysts: the personal myth.

“Kris found that certain patients when routinely probed about their pasts were able to respond with detailed, fluent, and highly consistent autobiographies embracing all their past history. Now this is somewhat unusual because most people do not usually have ready access to a well worked out autobiography in which themes of different lifetime periods are highly consistent with one another and smoothly extend across the lifespan. During the process of analysis, Kris determined that these personal myth autobiographies were in fact being employed as part of the process of repression to keep from consciousness other traumatic autobiographical knowledge. For example, in one of his cases he eventually discovered that the myth, which included the patient leaving home when 16 years old, was in fact incorrect and the patient had actually left home when 18 years of age. The missing two years, it later transpired, referred to a period in which a sequence of events had repeated (repressed traumatic events from earlier in childhood and the myth, by editing out the memories of the repeated events, was able to maintain the repression.

Kris proposed that personal myths constitute a central part of the self but that in the nonpathological individual the myths are constantly changed and updated. (Collins, Theories of Memory, 113)

Of course, in the late eighties, this whole matter of repressed memories of trauma led to mythmaking in the moral panic mode. LI has no patience for that. Leaving aside the dubious claims of the repressed memories crowd, Kris’ notion does seem intuitively right: there are individuals who have the story of themselves down, and there are those who seem oddly unprepared for their own history, as if consisted of information that they hadn’t studied. As a writer, I hugely prefer the former type of person, and have always found the latter puzzling. Of course, as a quasi-pathological type of individual myself, I am ever ready to believe my own lies – but the interesting twist in Collins summary of Kris is that the non-pathological constant changing and updating of myth leads to – well, to those puzzling, inconsistent myths with which we are greeted whenever we look seriously into Greek or Indian or Egyptian or any kind of rich mythological data base. Or, for that matter, even into something as simple as the facts in Jesus’ case, which are shuffled differently in the different gospels.

A recent book by Sophia Heller, The Absence of Myth” takes a self consciously ‘deconstructive’ approach to personal myth:

“Personal myth represents a particular response to the collective loss of myth and religious meaning. Though it may profess otherwise, the personal myth approach does not and cannot seek to remedy this absence because it utterly depends on it. Its philosophy basically says that what the collective has lost, the individual can and should reclaim. And how one reclaims myth and meaning is through knowing and telling one’s personal story. However, what separates a personal myth from a mere autobiography, biography or memoirs is the underlying belief or hope that if a personal story is contextualized within myth, it carries an archetypal and numinous significance and, as such, is elevated and geared to replace the metaphysical void created by the departure and death of the gods.” – Sophie Heller, The Absence of Myth

For Heller, myth is myth – she is unwilling to countenance the metaphorical transfer of myth to a world view that depends on truth claims. “What makes a myth a myth is, in part, the fact that it is absolutely true because it is real.”

All of which has LI wondering about the emotional customs he is tracing. Are we dealing with myth when we deal with the capitalist discourse of happiness? Is happiness triumphant a sort of weaving together of personal myths into a collective one, where a ‘feeling tone’, a transient mood, is projected onto social circumstances and transformed into a judgment about life?

LI has been pursuing happiness as the central notion in the way in which emotions are interpreted socially, and thus as one of Mauss’ total social phenomena, like the gift-giving.

If we provisionally take it that Heller is right, and that personal myth is a sign of the breakdown of myth, then we have a different angle from which to look at what Engels called the uprooting of a population from ‘apathy’. And here we touch on a sore point in the radical tradition. Engels condemns the life of the factory worker, who is watched and beaten down worse than a slave, in no uncertain terms. Yet, he is, or at least his class is, finally thrown into the vortex of history by capitalism, and that is, in the long term, a good thing. The emancipation of the working class begins with the formation of the working class.

Gramsci, in an essay on the factory worker, writes:

The working class, on the other hand, has been developing towards a completely new nad unprecedented model of humanity: the factory worker, the proletarian who has shed all psychological traces of his agricultural or craft origins, the proletarian who lives the life of the factory, the life of production – an intense, methodological life. His life may be disorderly and chaotic where his social relations outside the factory are concerned, and his political relations within the system of the distribution of wealth. But, within the factory, it is ordered, precise and disciplined.

The working class has come to be identified with the factory, with production: the proletarian cannot live without working and without working in an orderly, methodical way. The division of labour has unified the proletarian class psychologically: it has fostered within the proletarian world that body of feelings, instincts, thoughts, customs, habits and attachments that can be summed up in the phrase: class solidarity. (Gramsci, Pre-Prison writings, 152)

Gramsci is, of course, sounding the modernist note. Engineering would not only be art – it would be the art of life. Modernity consists of knowing that things can be reduced to their parts, and that the parts can be put back together to make the things. In the chaos outside of the factory, this may not be true – and so much the worse for that chaos! If one can take apart and put back together the personal, then the mythic would seem to be on its last legs – here there will be no more fantasy or repressed trauma, but methodology, discipline and, of course, class solidarity.

But if class solidarity comes at that price, who wants it?

Sein Blick ist vom Vorübergehn der Stäbe
so müd geworden, daß er nichts mehr hält.

And... I can't stand the rain...

Thursday, January 31, 2008

Fun for the whole family

Ah, things LI loves! There’s nothing like the smell of the laissez faire lollipalooza collapsing in the morning!

Here’s an advertisement for a service that is roiling the business blogs. Here’s an interview with some people who are walking away. Of course, the interview, from 60 minutes, is all this is so immoral. Not a story they would ever run about a company that fired a mass of workers for no other reason than that the company wasn’t making a profit. Or a big enough profit. That, of course, is good clean fun!

All the style sections of papers and mags have had so much fun for the past decade with how we can now all act like millionaires that people are starting to act like millionaires – is that cool or what? Act like a bank and ‘write down’ your debt. Write it down on a piece of paper, scotch tape the key to the house you can no longer afford, and send it to the bank that holds the mortgage with best wishes on selling the sucker.

Last night, CBS' "60 Minutes" took a look at the "subprime loan crisis." You can find the full transcript here, but the following exchange between "60 Minutes" correspondent Steve Kroft and homeowner Stephanie Valdez is a highlight worth examining a bit closer; it's significant both from an economic and, more importantly, a socionomic point of view.

STEPHANIE VALDEZ: Why pay a $3,200 payment on a 1200-square-foot home? It makes no sense.

STEVE KROFT: That's what you agreed to do when you bought the house.

STEPHANIE VALDEZ: Fine. If the value is going up. But we're not going anywhere. The price or the value is going down. It makes no sense because we will never be able to refinance and get a lower payment. There's no way.

STEVE KROFT: You're saying, essentially, that you're going to stop making payments on it? You're just gonna let it go into foreclosure?

STEPHANIE VALDEZ: You know, that's the only advice we've gotten so far is walk away from the home. We don't want to do that to our credit. Why can't our mortgage company work with us?

Kevin Depew:

The issue Kroft is alluding to here is what one might call "the morality of contractual obligation." Without saying it explicitly, Kroft implies ("That's what you agreed to do when you bought the house,") that Valdez and her husband, by walking away from the house, are engaging in some vaguely immoral behavior. It's a promise. They are breaking their promise. Left dangling for the viewer to arrive at is the conclusion that people who break promises are immoral.

the aristocrats, the plutocrats, and other rats

From the perspective of the nineteenth century worker, there is something mocking, something a little satanic about freedom, as it was presented in the establishment discourse. Freedom, of course, comes with contracts – but what contracts! On the one side, the employer was in the position of seemingly having no limit to the things he could require of the laborer. On the other side, the laborer was blamed for not adhering to every tittle and jot of the employer’s dictate. From the perspective of the intellectual, society was making a Faustian pact with technology and industry. From the perspective of the worker, it wasn’t Faustian at all, but reeked of sulfur in the old, old way: the devil required infinite pain in this life, on penalty of losing life altogether without him. In the Position of the Working Class, Engels indicts the order of life required of the laborer in the factory by giving examples of the rules he or she had to follow, under threat of fine or dismissal:

“What a time the worker has of it, too, inside the factory! Here the employer is absolute law-giver; he makes regulations at will, changes and adds to his codex at pleasure, and even, if he inserts the craziest stuff, the courts say to the working-man:
"You were your own master, no one forced you to agree to such a contract if you did not wish to; but now, when you have freely entered into it, you must be bound by it."
And so the working-man only gets into the bargain the mockery of the Justice of the Peace who is a bourgeois himself, and of the law which is made by the bourgeoisie. Such decisions have been given often enough. In October, 1844, the operatives of Kennedy’s mill, in Manchester, struck. Kennedy prosecuted them on the strength of a regulation placarded in the mill, that at no time more than two operatives in one room may quit work at once. And the court decided in his favour, giving the working-men the explanation cited above. And such rules as these usually are! For instance: 1. The doors are closed ten minutes after work begins, and thereafter no one is admitted until the breakfast hour; whoever is absent during this time forfeits 3d. per loom. 2. Every power-loom weaver detected absenting himself at another time, while the machinery is in motion, forfeits for each hour and each loom, 3d. Every person who leaves the room during working- hours, without obtaining permission from the overlooker, forfeits 3d. 5. Weavers who fail to supply themselves with scissors forfeit, per day, 1d. 4. All broken shuttles, brushes, oil-cans, wheels, window-panes, etc., must be paid for by the weaver. 5. No weaver to stop work without giving a week’s notice. The manufacturer may dismiss any employee without notice for bad work or improper behaviour. 6. Every operative detected speaking to another, singing or whistling, will be fined 6d.; for leaving his place during working-hours, 6d.”

The notion that the owner has complete freedom to put anything in a contract he feels like putting in – that in fact, this is the alpha and omega of freedom, the unmediated power relationship between owner and worker - is still a powerful one in the U.S. Some states, notably Texas, have a fire at will clause that allows abusive leeway to the owners which is close to that allowed to the owners of serfs. As Engels notes about the lives of the working class – “these laborers are condemned, from their ninth year until their death, to live under the mental and corporal rod, they are more utterly slaves than Blacks in America, because they are more closely supervised – and then it is demanded, that they live like human beings, think like human beings, and feel like human beings!”

I am fascinated, myself, by the prohibition on singing – which I want to get back to, as I am interested in tracing a history of alienation in the evanescent fabric of song culture. One should point out that the Manchester factories represented, at the time, a classical liberal ideal – elsewhere, for instance in the U.S., custom weighed on the extent to which you could limit freedom on the laborer’s side by contract. Jack Beatty’s excellent but, for some reason, little noticed book on the Gilded Age last year, Age of Betrayal: The Triumph of Money in America, 1865-1900, is all about the triumph of the libertarian freedom of the owner, at the expense of the worker.

Beatty’s chapter of the Homestead strike is well worth reading for those who want to understand how slowly the attitude took hold that one’s place of work was not at all one’s own – that ownership was strictly limited by the contract one freely signed, thus conveniently carving out a domain of serfdom in the free society. This serfdom has now, of course, been so assimilated that we naturally segregate our work space from other spaces, and in fact obey the rules that now organize any public space – so much for the existential dimension of freedom. The contract still has this marvelous, magical property, operating to emancipate the contractor and enslave the contractee. There’s an interview with Beatty at the Atlantic site about the book. Beatty points to a turning point after the Civil War in which the Republican party converged with the business elite and turned its back on the ideal of ‘free labor’, in essence betraying its very reason for being:

“Even when Lincoln was advocating free labor, it was a nostalgic idea. As early as 1866, 60 percent of people worked for other people. Now, it’s 90-something percent. Then, of course, they worked in small units; it wasn’t the full-blown factory. But sure, Lincoln’s vision was at variance with the imperatives of the economy and with the necessities of the industrializing elites who came to power after the war. And then there was the railroad—and that changed everything….

Still, the free-labor ideal survives in farming as propaganda. Preserving the tiny number of "family farms" is a justification put forward by the farm lobby. The Homestead Act was put forth by the Republicans as a supposed cure for the class structure congealed by industrialism. The idea was that the eastern factory laborer would leave the factory behind for free land in the west. But that’s not the way it worked out. Why? Because the land was not free—$1,500 was the minimum needed to set up a farm as early as the 1840s. And that was three years pay for the skilled factory worker of 1900! Small farms weren't economically viable. So it wasn’t the factory laborer who went to the farm, but the factory itself. Women’s labor, child labor, seasonal labor—all the aspects of wage labor that the farm was supposed to cure became a part of farm life. That was a bitter social turn. There was no escape from industrial capitalism.”

Legends have grown up around the Homestead strike. John Commons, in 1918, wrote:

“In the Homestead strike, the labor movement faced for the first time a really modern manufacturing corporation with its practically boundless resources of war. The Amalgamated Association of Iran and Steel Workers in 1891 … was the strongest trade union in the entire history of the American labour movement.”

In 1892, the Carnegie Corporation, under the management of a well known opponent of Unions, H.C. Frick, decided to take on the Amalgamated Association by proposing a lowering of the wage for skilled labor in the steel mills and a new date for renewing contracts, January 1. The latter would make any future refusal of contract fall in the winter, when it would be harder to strike. The Union refused the terms – Frick sent a contingent of 300 Pinkerton men guarding a number of strikebreakers on barges down the Monongahela River. In response, the union barricaded the factory. Somebody fired a shot. A pitched battled ensued, in which the Pinkertons raked the crowd with rifle fire. Seven men died, but then the crowd returned fire until the Pinkertons had to go below deck. Certain of the guards lost heart, and the Pinkertons finally surrendered and were marched through a crowd that mauled them, and then sent back to Pittsburgh. Using the violence as an excuse and, of course, recognizing unlimited freedom of property only on the side of Carnegie, the state government sent in the militia, and to the Carnegie company sent in more Pinkertons. The strikebreakers gained access to the mills, and though the strike lasted until October, the power of the Union was broken.

This is what Carnegie’s latest biographer, David Nasaw, said, in 2006, in an interview with a Pittsburgh paper:

Q: Now that the mills are gone, do you think Carnegie has a lasting local influence other than the libraries and museums?

A: I did not get into a cab or have a conversation at a hotel when I didn't get a response -- a lively response -- after telling people why I was in town. Everybody had a story about Carnegie, and very few stories put him in a good light. He moved to New York in the 1870s and died in 1919. But his presence still seems to haunt the city.
Is that because of the famous 1892 Homestead Strike? Carnegie blamed that on his business partner, H.C. Frick.

Well, reading the local papers on microfilm, I discovered that while the rest of the world might have been surprised by Homestead, Pittsburghers weren't. This wasn't the first time he'd brought in the Pinkertons -- he'd done the same damn thing at [Braddock's] Edgar Thomson works. Homestead followed a script he'd already written.
Still, Carnegie had written articles about respecting the working man. And previously, he'd been way out in front negotiating with unions. So workers weren't just angry when he brought in the Pinkertons: They felt betrayed.”

Beatty’s account of the strike draws upon the sociological study of the Pittsburgh area financed by the Russell Sage foundation in 1912. One of the sociologists, Margaret Frances Byington (about whom there is an astonishing paucity of information) wrote the book about Homestead. I’m going to quote from her in the next post.

Wednesday, January 30, 2008

Take your hypnopaedia like a good robot

A post about Utopia at Culturemonkey, that does a nice rundown of some late nineteenth century utopias and the thread prompted by the post has made me think a bit about utopias. Obviously, the intersection between my project - tracking the triumph of happiness – and utopia is inevitable, but I have not mapped that out by any means.

I’ve been thinking about this all the more as I have been looking at Brave New World, lately. In fact, the review I just did of Comfortably Numb, a book that does a nice job of muckraking in the druggy ventricles of the Prozac Nation, begins with a Brave New World quote about soma.

Flipping through Brave New World again, it is funny how certain things startle the innocent, 2008 reader. For instance, this marvelous prediction of our computer game culture:

“The Director and his students stood for a short time watching a game of Centrifugal Bumble-puppy. Twenty children were grouped in a circle round a chrome steel tower. A ball thrown up so as to land on the platform at the top of the tower rolled down into the interior, fell on a rapidly revolving disk, was hurled through one or other of the numerous apertures pierced in the cylindrical casing, and had to be caught

"Strange," mused the Director, as they turned away [from some children playing a game], "strange to think that even in Our Ford's day most games were played without more apparatus than a ball or two and a few sticks and perhaps a bit of netting. imagine the folly of allowing people to play elaborate games which do nothing whatever to increase consumption. It's madness. Nowadays the Controllers won't approve of any new game unless it can be shown that it requires at least as much apparatus as the most complicated of existing games."

And, of course, there is the hypnopaedia, the sentences that are infinitely repeated by the inhabitants of the World Society that have taken the place of truth – which is pretty much the way elections are now conducted. It is a hypnopaedic orgy, with the winner condemned to smilingly utter hypnopaedia until the moment comes when they haul him – or, perhaps, this time, her – away to the Presidential library.

Happiness as a social criteria is naturally utopic. What Maurice Halbwachs wrote, in the Working Class and the Level of Life (1912), about class consciousness points to why, on each class level of the capitalist societies that arose in the nineteenth century, there was a corresponding utopic moment:

… by definition, there are classes only in a society that is hierarchized to some degree, and under whatever form that takes. To be conscious of itself, for a class, means to recognize at what social level it finds itself, and consequently to represent itself by relation to what kind of privileges, what rights, what advantages are measured out to these levels and that hierarchy is determined. Every representation of class implies a double judgment of value: the estimation of the most important good or goods and the most appreciated in the society considered – the estimation of the degree to which it is permitted to the members of the class to satisfy the needs that relate to them….

Now lets seek what are common to all these references [to different supreme goods in different societies], and if it is possible to express that whole set of judgment on the value of diverse activities and goods by means of one general formula. Whatever the type of society that we consider, the ideal, the supreme good, is without doubt a specific form of social life, but it is, at the same time, the most intense social life that one can imagine (se représenter). »

Halbwachs, here, is still operating in what Lukacs would call the bourgeois domain of sociology – that is, he assumes that all classes throughout history, no matter what the forms of production, have an equal chance of being conscious. There’s a strong Marxist tendency to claim that pre-capitalist societies were, for the most part, sunk in apathy – the idiocy of rural life. After all, this is why capitalism has a double aspect – both as a system of exploitation and as a system of emancipation.

However, the most intense social life that one can imagine is certainly the portal to utopian dreams and dystopian nightmares, depending of course on how you turn in the dream.

Monday, January 28, 2008

notes from the ice age

In the Postulates of the Political Economy, William Bagehot writes:

'In the Athenian laws,' says Demosthenes, 'are many well-devised securities for the protection of the creditor; for commerce proceeds not from the borrowers, but from the lenders, without whom no vessel, no navigator, no traveller could depart from port.' Even in these days we could hardly put the value of discounts and trade loans higher. But though the loan fund begins so early in civilisation, and is prized so soon, it grows very slowly; the full development, modern banking such as we are familiar with in England, stops where the English language ceases to be spoken. The peculiarity of that system is that it utilises all the petty cash of private persons down nearly to the end of the middle class. This is lodged with bankers on running account, and though incessantly changing in distribution, the quantity is nearly fixed on the whole, for most of what one person pays out others almost directly pay in; and therefore it is so much added to the loan fund which bankers have to use, though, as credit is always precarious, they can, of course, only use it with caution. Besides this, English bankers have most of the permanent savings of little persons deposited with them, and so have an unexampled power of ready lending. But ages of diffused confidence are necessary to establish such a system…

That diffused confidence reflects, among other things the power relationships within a society that have been imposed on the distribution of assets. So what has the ice age of the neo-liberal society established? We have been living on an unproven supposition, from which is derived a practical aporia. The supposition is that only by ensuring that the businessman can achieve the greatest possible real compensation can we motivate the capitalist system beyond its tendency to crisis. And the aporia is that the money made by that businessman will depend on the demand of a population which will otherwise have their own compensations squeezed, the natural consequence of guaranteeing the businessman the greatest compensation possible for his activity. Crushing the bargaining power of labor is always the first and greatest of the tasks of conservative government. So thoroughly was this accomplished during the last thirty years – the years of the Reagan economy – that we rarely see anybody write, anymore, about the bargaining power of labor. We have, bizarrely, decided that the power of to compensate should lie solely with those in management. Hence, the general shape of the new economy is indistinguishable from the drivers to increasing economic inequality. This should be distinguished from immiseration – it is possible for the working class in general to gain purchasing power over time in an economy in which their economic power vis a vis the top income tier diminishes. However, there are limits to how far this movement can take place. That’s the simple alpha and omega of the ‘new economy’.

Business Week has an interesting article that gently asks if we are at a reckoning point, or as the author, Michael Mandel, puts it, How real was the prosperity?

Here are some highlights:

“Personal Spending. The rule for a prudent individual is simple: Don't spend more than you make. For a long time, the U.S. economy obeyed that rule. As far back as the 1960s, personal spending, adjusted for inflation, has basically tracked the overall growth of the economy, as measured by gross domestic product. Sometimes consumers would get ahead of the economy for a few years, and sometimes fall behind, but never for very long.
That pattern changed in the 1990s. As of the third quarter of 2007, the 10-year growth rate for consumption was 3.6%, vs. GDP growth for the same period of 2.9%. This difference represents an enormous gap. If consumer spending had tracked the overall economy over the past decade as it has in the past, Americans today would be spending about $600 billion less a year. The extra spending has amounted to a total of about $3 trillion since 2001.

Consumer Lending. The past 10 years will go down as one of the greatest consumer-lending sprees ever. Adjusted for inflation, consumer debt—including mortgages—rose an average 7.5% per year since 1997, far faster than the 4.2% rate of the previous 10 years. The last time debt rose so fast was the 1960s, as the postwar generation bought homes and autos. If Americans had kept borrowing at their pre-1997 pace, they would have had about $3 trillion less in debt.

The extra debt also represents a formidable obstacle for banks and other financial institutions that might want to lend more to consumers. "Going forward, we're not going to see this credit-driven growth," says Alistair Milne, a professor and banking expert at City University in London. "Banks are saying, 'we have to be more careful here.'"

Corporate Earnings. Yes, there's been a profit boom in recent years. Corporate earnings, as measured by government statisticians, have averaged 8% of GDP over the past decade, up from a low of 6.5% in the early '90s. That has helped propel stocks upward.

But here's an unfortunate truth—the profit surge has been mainly in one area, financial services. Financial institutions have benefited from the consumer credit boom, the proliferation of new financial instruments, and relatively low rates. By contrast, the earnings of nonfinancial companies over the past decade have averaged about 5.3% of GDP, about the same since the mid-1980s. There are few signs of any acceleration, even after years of restructuring. “

Mandel’s figures speak for themselves. However, in an economy shot through with an ideology tailor made for the wealthy, but requiring an ever increasing level of demand from the not-wealthy, these are figures that dare not speak their name. So the job of weaving lies is left to political reporters and the like. Take this analysis of the Bush economy by Sheryl Stolberg, one of NYT’s Washington reporters (a pool from which we have gotten Judith Miller and Elizabeth Bumiller, whose very names echo all the freighted servilities and stupidities of the decade): “Echo of First Bush: Good Economy Turns Sour.”

“Mr. Bush has spent years presiding over an economic climate of growth that would be the envy of most presidents. Yet much to the consternation of his political advisers, he has had trouble getting credit for it, in large part because Americans were consumed by the war in Iraq.”

Notice how neatly the wisdom of 2004 is turned around, when the word from the governing class was that it was the popularity of Mr. Mission Accomplished that covered up the dissatisfactions with the economy. But now we have that ‘climate of growth’. In order to put the nail in, Stolberg quotes, of all people, Bruce Bartlett:

“From a strictly economic perspective, it is difficult to blame Mr. Bush for the current crisis. Even some economists who have been critical of the president, like Bruce Bartlett, who worked in the Reagan and first Bush administrations, say he cannot be held liable for the burst of the housing bubble or problems in credit markets.”

Well, is that precious or what? Why choose this particular economist who is critical of the president – why not, say, Paul Krugman? Because the first rule in political reporting is that a Republican who has criticized a Republican has been washed in the blood of the lamb – thus, anything that Republican says is as precious gold. The same rule applies to Democrats only to the extent that the Democrat doing the criticizing is Senator Lieberman. This is the code of the pack.

Anybody who looks at Mandel’s figures will note that the three trillion dollar lag is close to the two trillion dollar surplus, which came about due to the payroll tax increase put in by Reagan and the extremely mild increase on the marginal income of the wealthy by Clinton. They will further note that the swag was distributed by Bush to his wealthy buds. End of story.

Except it isn’t even the beginning of the story for birds like Stolberg, whose heart belongs to daddy.

“Once the stimulus package is passed, the president plans to turn his attention to making his tax cuts permanent, an approach that Joel Kaplan, the deputy White House chief of staff, said would provide “the foundation for continued economic growth.”
“And I think the historical record will reflect that,” Mr. Kaplan said.
Still, for the White House, there are obstacles ahead. Democrats are unlikely to agree to extending the tax cuts and, despite the seeming bipartisan enthusiasm for the stimulus package, it could run into trouble on Capitol Hill. Even if the package does pass, some economists — Mr. Bartlett among them — believe it will do little to improve the nation’s economic health, leaving Mr. Bush vulnerable to accusations that he did too little, too late.

Mr. Bush has roughly 51 weeks left in office. He had hoped to spend the time focused on creating peace in the Middle East and stability in Iraq. Now he has a new battle on the home front. And here in Washington, where finger-pointing is practically a pastime, the economic blame game has only just begun.”

The tears of things cry out for the President. We wonder what conservative shithead Stolberg is going to do her Plutarchian life with – Bumiller chose Condy Rice.

Come out of the cupboards, ye boys and girls…

Sunday, January 27, 2008


In Engel’s introduction to his The Situation of Labor in England, he gives a brief history of the displacement of the old, ‘detached’ rural farming and artisan system brought about by the new system of industrial production:

“The felt comfortable in their quiet plant life, and would never, save for the Industrial revolution, have been taken out of this clearly very romantic-cosy, but yet, for humans, unworthy existence. They were not humans, but simply working machines in the service of the few aristocrats, which up until now have lead history. The Industrial Revolution has thus only carried through the consequence of this when it made the laborers completely into a mere machines and took away the last remnant of independent activity from under their hands; but in doing so drove them to thinking and to the claims of a human situation. What politics effected in France, in England was effected by industry and the movement of bourgeois society overall; it pulled the last classes to be mired in the apathy against universal human interests into the vortex of history.”

Engels had already explained to his readers in the foreword what he means by the bourgeois:

“…I always used the word Middle Class in the sense of the English middle-class (or as it is almost always said, middle classes) where it means the same as with the French bourgeoisie the possessing class – the class, which in France and England directly, and in Germany as “public opinion” indirectly is in possession of state power.”

That is a pretty fascinating definition of class, linking it both to economic power and the power of the state even if – in backwards Germany – that power is possessed not by representatives, but by ‘public opinion’. The latter – the power of public opinion – is what fascinates me about the conflicts between ‘freedom’ and ‘the emancipation of the working class’. What, after all, does it mean for the workers to be uprooted from shameful apathy and thrown into the ‘vortex of history’ where they could think about the claims of the human situation except that the working class would have, among other things, an opinion?

This is the question that became very real to the generation of 1848 after the revolution failed. Herzen’s whole life has often been seen from the perspective of a before and after 1848 – he himself often wrote in those terms. Isaiah Berlin has noted that Herzen’s skepticism – about the people, and especially about progress – preceded the events of 1848. It is a shame that Berlin never really grappled with Lenin’s essay on Herzen, because Lenin makes an acute historical point:

Herzen's spiritual shipwreck, the profound scepticism and pessimism to which he fell prey after 1848, was the shipwreck of the bourgeois illusions of socialism. Herzen's spiritual drama was a product and reflection of that epoch in world history when the revolutionariness of the bourgeois democracy was already passing away (in Europe), and the revolutionariness of the socialist proletariat had not yet ripened. This is something the Russian liberal knights of verbal incontinence, who are now trying to cover up their own counter-revolutionariness by florid phrases about Herzen's scepticism, have not understood and cannot understand. With these knights, who betrayed the Russian Revolution of 1905, and have even forgotten to think of the great calling of a revolutionary, scepticism is a form of transition from democracy to liberalism to that servile, vile, infamous and brutal liberalism which shot down the workers in 1848, restored shattered thrones, applauded Napoleon III and which Herzen cursed, unable to understand its class nature.

Lenin’s notion was that bourgeois skepticism targeted the supposed incapacity of the working class to enjoy the cultural gains of progress. Ripped from their apathy, as Engels puts it, their minds were concentrated by their conditions on the material facts of life, making them great sniffers out of the web of self interest that underlies the industrial system, but contemptuous of the culture of the rentiers of that system. In Tom Stoppard’s Coast of Utopia, this is exactly how Herzen is portrayed:

“Being proved wrong has made them [the revolutionaries] cocky. They’re more certain than ever that the people are natural republicans waiting to be lead out of bondage. But the people are more interested in potatoes than freedom. The people think equality means everyone should be oppressed equally. They love authority. They’re suspicious of talent. They want a government to govern for them and not against them. To govern themselves doesn’t enter their heads. We thought we could educate the people like a horse doctor blowing a pill into a horse. We thought we could set the pace for social change. The emperors did more than keep their thrones, they pushed our faces into the wreck of our belief in the revolutionary instincts of the people.”

The luster and luxury of disillusionment – it has a standing, in the cold war mythology, with the metanoia of Saul in sacred history, except that it is conversion to the God that failed. There is an impulse in Herzen, embodied especially in the middle dialog in From the other shore, between a doctor and his lady companion before the house in which Rousseau wrote... something, which is full of phrases about the precarious civilization of people such as him and her, in the face of the inscrutable masses. But, as I pointed out in an earlier post, Herzen wrote dialog not because he wanted to represent himself in one speaker who cleverly undoes another, but because he felt the clash in himself of views. This, actually, is the liberal intellectual’s highest form of skepticism – the refusal to pretend that the clash has an easy resolution. Like Engels and Marx, Herzen was definitely one of the Ultras in 1848 – and like those two, he wasn’t stupid about it. But he didn’t quite have Marx’s moderation – for Marx was strongly of the opinion that the task at hand was democratic government, at least in Germany and Austria.

Stoppard’s picture of Herzen the sceptic is, as has been mentioned in many reviews, a bit too reliant on Berlin's picture of Herzen as the disenchanted liberal, kin to John Stuart Mill. Herzen doesn't see some elite, some cultured margin, as separate from and higher than the people and their potatoes. In reality, he was shrewder than this. In his letters to an old comrade [Bakunin] which have been used to make the case that Herzen turned to the right at the end - they were written in the late 1860s - he writes this:

“It is this pattern that the past, which we want now to leave behind, has followed. The forms, aspects, and rites have changed but the essence has remained the same. He who bowed his head before a Capuchin friar bearing a cross is no different from the man who bows his head to a court decision no matter how absurd it is.”

The man who bows his head to the court decision is, of course, the establishment liberal par excellence. He is bowing his head to his own system. It is only in seeing Herzen’s criticisms as total, directed not just at the people but at European society in general, that one understands how the sceptic and the revolutionary were joined.

Biden's foreign policy: let's bet everything on authoritarianism!

  And watch it all slip away (Por fin se va acabar) Or leave a garden for your kids to play (Jamás van a alcanzar)  --- The Black Angels, El...