Thursday, September 01, 2011

token time in the moronic inferno

There’s a passage in Control, John A. Mills history of behavioralism in America, that strikes me as a key to American capitalism as it goes through the autoimmune disorder that is so rapidly destroying the middle class.

Because behavioralism did not have a place for the mind, it was very dependent on experiments on animals, where one could supposedly see everything – such as the rats in the maze work that was so popular in American universities from the 30s until the 70s. It is from work with chimpanzees, according to Mills, that token economics developed into the ultimate control:

“Lindsley also conducted a study with Azrin on the effects of reinforcement on cooperation between children.47 They reported that cooperative behavior could be conditioned and extinguished without any verbal instruction regarding the tasks from the experimenters. Thus their study suggested that cooperation could be learned for the sake of reward, without recourse to

more complex explanations of the behavior.

Operant principles found their most ample application in token

economies. Token economies are staff-operated operant systems in

which the delivery of tokens controls the target population’s actions;

these economies are designed for use in institutional settings such as

mental hospitals, institutions for the mentally retarded, and schools.48

Versions of token economies were also used in jails. These systems

broke new ground in that the principles of behavioral science were applied

directly to nonlaboratory situations. As Kazdin commented, “it

is especially important to single out token reinforcement because it

has permitted a larger extension of programs than ordinarily is the

case with type [sic] of reinforcing events.”49 In institutions tokens are

awarded for the performance of basic social tasks, such as getting

dressed or helping to keep the ward tidy. In schools the usual “target behaviors” are the maintenance of an acceptable level of academic

performance or maintaining acceptable social behavior. Tokens can be

used to buy desirable items (e.g., cigarettes in mental hospitals) or to

gain access to social privileges (e.g., going to the cinema or gaining a

day pass in a mental hospital). Token economies provide us with a

paradigm for studying the role of operant reinforcement in the institution

and maintenance of acceptable patterns of social behavior.”

It is instructive to see the parallel between token economics and the Reagonomics/Neo-Keynesian paradigm under which the developed world has learned to accept the most absurd wealth inequalities and a lifestyle of decreasing reward for labor and increasing reward for shopping. In the world in which credit cards replace pay increases and zero down enters the bloodstream like the wickedest bit of cholesterol (was that your mortgage blowing up or a heart attack?), we are their chimps - in this moronic inferno, we have learned to keep the wards sparkly so long as we get a discount on the cell phone, plus some future flyer miles. The prob only really comes to a head when the scientists disband the lab, or the financial welfare queens disband some economy. Then all the tokens are worthless, because all the chimps have been guilty guilty guilty – in the eyes of the bond trader. Who, as is well known, is the only prophet we have left.

Sunday, August 28, 2011

Two cheers for industrial policy!

Jon Gertner’s NYT mag piece on Manufacturing and (oh so scary!) industrial policy gets it. And, incidentally, it summarizes the guru of Obamanomics, ‘neo-liberal’ Larry Summers, rather beautifully:

“As the former White House economic adviser Lawrence Summers put it, America’s role is to feed a global economy that’s increasingly based on knowledge and services rather than on making stuff.”

Jargon over objects, this is the echt neo-liberal style. Gertner doesn’t reference the source, but I imagine it was the Lizza piece on Summers in the New Yorker that contained all the information you needed to know that Obama’s administration was set on fail, two years ago. The funniest remark of the Obama four year term so far came in this article from Summers:

“Summers was equally doubtful of the idea that fairness required the government to bail out every struggling industry. He said, “The point that some of you made is one that, frankly, a number of the President’s more political advisers make with great frequency: how could you lend money to the big banks in New York and not lend money to regular folk who are employing a hundred people and are losing a hundred jobs?” But, he said, “just like occasionally in war there are unintended benefits, occasionally in bailouts there are unintended beneficiaries.” The bank bailouts, which, he noted several times, began under President Bush, “were directed at preventing a collapse that would have led millions of people to be out of work, not as support for those institutions.”

But to get to crowning Gertner’s article with a few laurel wreaths.

I liked how this article seems to get it. The manufacturing economy isn't "modular", but full of network affects. It is a root system, not a haphazard pile of building blocks. When you ship the manufacturing of an industry to another country, contra Larry Summers, you are shipping knowledge, you are shipping the increasing return on investment that comes with every next step in the industry. Not understanding this one bit, the economists as advisors and the political elite have truly helped bring the U.S. to this point of exhaustion. And they will continue, blindly, to work against the interests of the majority, because it is in the interest of the one sector that does hire economists - the financial sector. Notice that 60 percent of scientists and engineers are employed in the manufacturing sector, and notice that these aren't fake engineers - financial 'engineers". So far, the financial industry has been so successful that the trillions 'loaned' to it hasn't even emerged as an issue in the public space - because newspapers won't report on it (the GAO report on the Fed didn't even break into the back pages of the NYT) and the economists who reporters call up for the 'expert' quote are quite proud of themselves for managing to keep us from a 'depression'.

I liked the fact that the NYT mag piece didn't spend much time quoting any economists. In Lizza’s piece on Obama’s economic team in 2009, you could almost hear the disdain in Summers’ voice for the phrase “industrial policy.” How Un-Hayekian! How cruel to put impediments in the way of creative destruction!
Economists have the same view of the people who make ‘stuff’ as bug spray manufacturers have of bugs. They know enough about the way the bug’s nervous system works to get rid of em. But if you want to know how bugs really evolve, live, and reproduce, go to an entomologist. Obama hired Raid, when he shoulda been hiring Edward O. Wilson.


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