Friday, March 09, 2012

Mangle of inequality redivivus

Over at Economists View, there is a post disputing, to an extent, a new study by Michael Bordo and Christopher Meissner that disputes the idea that inequality caused the crisis. I can't resist reprising my mangle of inequality idea, with a few changes from the way I originally formulated it after my friend S.'s wedding.

As the discussion begins as one about cause, and I am all about conditions, I suppose I ought to say something about cause. Cause is difficult. Cause is an impossible quest. And it is made all the more impossible as economists bring a cumbersome machinery to the problem, which is pledged to a model forged from the idea of the market, of equilibrium, and of some kind of surreptitious base/superstructure idea - that is, one finds out the micro-foundations of macro-economic events, and we all go home then, to watch American Idol. I say nay, though, in bloggy thunder.

Rather, I want us to go back and understand what contemporary inequality in the developed countries, and particularly in the U.S., is about. The place to start, of course, is the seventies. After thirty years, we are starting to recognize the form of the shift that began to occur then. And let me be the harpooner that points out the shape of that beast, the main points of which are 1., the crushing of the bargaining power of labor; 2., the de-manufacturing of America – which was partly connected to the fact that manufacturing workers were the most militant, and partly the inevitable effect of the ability of capital to find other, cheaper regions in which to place factories; and 3, the dissolving of traditional constraints on credit.

These events occurred in response to the most serious crisis in capitalism since 1945. Galbraith’s New Industrial state, the liberal Keynesian economy, had created structures that were supposed to resolve such crises. These included the management of aggregate demand by the state, the moderation of labors’ older, utopian demands for a slice of the power in return for a steadily rising paycheck, and management’s movement away from optimizing profits in exchange for lessened volatility. The Keynesian moment unwound for a number of reasons – labour, with increasingly less interest in the political dimension that originally animated unions, became much more vulnerable; the government management of aggregate demand, combined with the government dependence on War, had finally unleashed inflation; and the ROI of the Fortune 500 corporations was finally causing an investor revolt. However, of the three factors I am listing in the shift to the new, Reagonomic paradigm, one and three seem oddly disjoint. How is it possible to diminish the bargaining power of labor – which results in the stagnation of wages – and at the same time dissolve traditional constraints on consumer and other credit?
Of course, from the neo-classical point of view, that makes a lot of sense. Instead of the government actively managing aggregate demand, the private sector, with a freer credit market, can take over. And in fact, even if wages stagnate, household incomes rise. The house itself as an asset appreciates, for one thing; more investment vehicles are made available to the public, for another thing; and finally, there is the great entry of women into the labor market.

Credit, then, is the keystone. It is from this moment on that the financial services sector, which had been relatively unimportant in the Keynesian regime, returns in force. It is what I would call the mangle of inequality – playing on Andrew Pickering’s term, mangle of practice. Contemporary capitalism in America has to effect a straddle – the economy depends on consumption, and yet, the majority of the consumers engross less and less of the productivity gains accrued by the system. Freeing the financial markets had two effects – one was to re-vamp the consumer’s financial horizon. Instead of worrying about making a wage sufficient to live the good life, the consumer worries about making a wage sufficient to have a good credit history – which is the magical key to the world of cars, plasma screen tvs, houses, and all the rest. The other was to make the consumer a shareholder in the system. For simplicity’s sake, call this the 401k world – that stands at the symbolic center of a system by which the ordinary person was hooked into the market. And the market could, consequently, use vast flows of capital to keep easing credit. A virtuous feedback, so to speak.
It had another, symbolically resonant significance. The triumph of the state in the 20th century was in providing for retirement. The state successfully created, within a capitalist economy, a mass ability to finish one’s life without poverty or utter family dependence. It was the template for the structural goods that the state, in a mixed economy, could provide – when the demands of distributive justice could not be aligned with the price creating market in a good or service. Consequently, social security has earned a special hatred from the right. The American system of encouraging private investment was meant, on the surface, to complement social security, but the ultimate aim was always to replace it.

The mangle of inequality, then, was not – as in Marx’s time – a head to head confrontation between classes. It is a more complex machine, in which class interests are blent so that head to head confrontation is systematically differed. The political triumph of the system is that the blending disenfranchised populism, since it became unclear who would really benefit from populist practice.

Given this context, we should be posing different questions about the housing bubble - not the question, what caused it, but the question, why was it necessary? It is not as if the policymakers consciously intended a housing bubble. But they did consciously intend returning the Clintonian surpluses to the investor class. And when the 2000-2001 recession happened, they consciously intended to find a way to respond to it that did not involve the government "interfering" in the economy. Luckily for the policy makers, by this time the neo-liberal program of guiding money from the wage class into financial assets was nearly complete - whether on the individual level of the 401k or on the aggregate level of pensions - and thus the neo-liberal machine could be played like a slot machine - there was plenty of money, the market in secondary mortgages as well as the housing market (two things which intersect, but which are not the same) could now provide a collective speedball, and everybody was happy. Otherwise, policymakers would have to face unpleasant alternatives to the neo-liberal version of capitalism. As we have seen in the O. era, they simply can't do that. The conceptual set seals off all solutions that might put in question the neo-liberal mindset. Hence, the mangle of inequality is both a cause and an effect of the neo-liberal economic paradigm.

Digression: a vitruvian theme


The second book of Vitruvius’ treatise on architecture begins by considering the origin of human building. That origin is, it turns out, connected with the origin of human speech, the origin of politics, and the discovery of fire – which form a sort of originary matrix:

“Mankind originally brought forth like the beasts of the field, in woods, dens, and groves, passed their lives in a savage manner, eating the simple food which nature afforded. A tempest, on a certain occasion, having exceedingly agitated the trees in a particular spot, the friction between some of the branches caused them to take fire; this so alarmed those in the neighbourhood of the accident, that they betook themselves to flight. Returning to the spot after the tempest had subsided, and finding the warmth which had thus been created extremely comfortable, they added fuel to the fire excited, in order to preserve the heat, and then went forth to invite others, by signs and gestures, to come and witness the discovery. In the concourse that thus took place, they testified their different opinions and expressions by different inflexions of the voice. From daily association words succeeded to these indefinite modes of speech; and these becoming by degrees the signs of certain objects, they began to join them together, and conversation became general.
 Thus the discovery of fire gave rise to the first assembly of mankind, to their first deliberations, and to their union in a state of society. For association with each other they were more fitted by nature than other animals, from their erect posture, which also gave them the advantage of continually viewing the stars and firmament, no less than from their being able to grasp and lift an object, and turn it about with their hands and fingers. In the assembly, therefore, which thus brought them first together, they were led to the consideration of sheltering themselves from the seasons, some by making arbours with the boughs of trees, some by excavating caves in the mountains, and others in imitation of the nests and habitations of swallows, by making dwellings of twigs interwoven and covered with mud or clay. From observation of and improvement on each others' expedients for sheltering themselves, they soon began to provide a better species of huts.”
As Erwin Panofsky pointed out in a famous and beautiful essay on a series of paintings by Piero Cosimo that were inspired by Vitruvius’ text, the story Vitruvius tells is related to other stories about Vulcan, the God of fire, and Aeolus, the God of the wind, that crop up in many classical texts. Vitruvius introduces no gods – Panofsky attributes this to his Lucretian naturalism. It is the wind that is in action here, not the god of the wind, and the fire that starts in the woods is not started by a god, but by the friction of the branches. The story of the discovery of fire, along Vitruvian lines, has had a long intellectual life, serving both as a model and a limit case of the logic of that vexed pair, discovery and invention. In turn, these terms seem to overlap the discourses of history and social science, in as much as these have to do with social collectives – aggregates – and individuals. The first sentence of Vitruvius’ second paragraph begins like this: “ergo cum propter ignis inventionem conventus initio apud homines et concilium et convictus esset natus…” The first impulse of we moderns is to lead these words back into the great dual categories under which modernity has proceded, nature and culture. However, it turns out that we cannot shoehorn these concepts into those categories without covertly applying the logic of the supplement so expertly defused by Derrida in On Grammatology  – for what nature is borrows on what culture is to be, and vice versa: it is a conman’s checking account. 
Which is not to say that it can’t be drawn on – on the contrary. After showing how the forest fire was seen as the predecessor and model for the first fires of man in the classical and Hellenistic epochs and from thence was lifted into the allegorical key to a series of three paintings about the origin of civilization by Piero di Cosimo, Panofsky writes, beautifully: “The ruling principle of this aboriginal state, namely, the unfamiliarity of man-kind with the use of fire, is conspicuously emphasized by what might be termed the " leitmotiv" of the whole series: the forest fire, which can be seen ravaging the woods and frightening away the animals in all three panels ;2 in two of them it even appears repeatedly. The persistent recurrence of this motif cannot be accounted for by mere pictorial fancy. It is, most evidently, an iconographical attribute rather than a whimsical " concetto,"fo r it is identical with the famous forest fire which had haunted the imaginations of Lucretius, Diodorus Siculus, Pliny, Vitruvius, and Boccaccio. It appeared regularly in all the illustrations of Vitruvius, and in the Renais-sance it was as characteristic of representations of the Stone Age as the tower of images of St. Barbara.”
I would like to argue that scorch marks from Vitruvius’ fire haunt that fabulous myth, Western man, and his sidekick, homo oeconomicus, long after Cosimo.  The semantic architecture of Vitruvius’ story of the origin of architecture can be traced not only in the way the history of technology is told, but in the way the social sciences have explained themselves – not just explained themselves in the internal dialogues of the disciplines, but explained themselves in collaboration with the ongoing mission of capitalist civilizations, which automatically divided the primitive and the civilized according to a Vitruvian measure – that of technology. That fire is both a natural and an artificial product blurs its definitional import – but the language that springs up from those huddle about the fire seems to take from the fire the decisive force that will, in one form or another, become the dividing line that justifies a global exercise of power. Writing, or, after the printing press, the book, becomes the civilizing technology par excellence, thrusting those ‘without writing’ into not only a different category, but even a different time zone, as though this lack had cut them off from  the zone of simultaneity which traverses and determines the way those who do write make sense of writing.  

Monday, March 05, 2012

News from the Zona: Ireland, Negri and Chérèque

I was in Ireland last week. Ireland, surely, is a posterchild and ward of the Zona: rolling in tax evasion wealth in the 2000s, constructing like mad and paying its chief officials, it turns out, like mad too, in 2008 it went off the cliff and has contracted and contracted since, all the while hocking its future to the plutocrats of the financial sphere, and cutting funding for normal life elsewhere. That’s Ireland then. But in Wicklow where I went, and then in Dublin where I went after, there was not a strong sense of disaster in the air. Rather, what was in the air was something more delicate, like the air whistling out of a punctured tire: there was a slumping towards lower expectations. And in fact expectations were well and truly privatized – one probably heard more about politics than is usual – and we did talk to a journalist who had very articulate ideas about politics – but on the whole, there was no sense of a collective project at all.

This is one of the remarkable successes of the neo-liberal era, and perhaps the secret of its apparent ability to spawn a Zona and yet keep its bony hands on the world’s throat. What it has exploited is the dialectic of vulnerability that was forged in the Cold War system, in which the power to destroy the world was granted to the political elites in return for a return on that power that traversed ordinary life – that is, the setting up of the conventions and circumstances of middle class life. I want to avoid assigning the responsibility for that set up to the state or to the private sphere, since it is a delusion that the state and private enterprise are opposed to each other in any essential way. The Cold War system, as I’ve pointed out before, owes a lot to the Hitlerian totalitarianism of the thirties – which, contrary to the ideologists, was anything but an epoch of total mobilization. Rather, it was an epoch of specialized mobilization in which the state did what it could to insulate the individual “authentic” German from any collective project that would require sacrifice on his or her part.

We are the heirs of that thinking. As long as the mass of people are not, individually, vulnerable, as long as no sacrifice is really required for a collective vision, the mass of people are content to operate individually, to think of their fates as having to do with their defects or virtues, their hard work or laziness, their propensity to save or spend – without really having any sense of the systems put in place from the point of view of which they, individually, are simply so many human products, and their tics and life experiences so much  bland margin of error that the models can easily deal with. The power of the masses has been given up without a shot – or, to put it more Adorno-esquely,  every time you turn on the tv set or computer, you surrender a little bit more. 

But you never surrender all the way – the systems of governance that have both produced the Zona and have managed it can’t accommodate complete surrender, although they don’t know it. The human economy, which puts holes and tunnels in even the most rational economic institutions and enterprises, is required for capitalism to exist.

Which brings me to the point of this post, the dialogue between Tony Negri and François Chérèque, the general secretary of the French union, The Democratic French Confederation of Labor, or Confédération française démocratique du travail (CFDT) in the February issue of Philosophie. The pdf can be found here:

The dialogue has not been given any attention, as far as I could tell, among the English speaking blogs. Too bad. Chérèque presents an empirical view of the condition of the wage class in France stemming from his interviews with that class. The project of interviewing the class was motivated by the self-immolation of an employee of France Telecom, a militant of the CFDT: why would one’s self-identity be so wrapped up on one’s work?
Negri opposes to Chérèque’s ‘old fashioned” promotion of the word and the concept, worker, his new fashioned notion of ‘immaterial labor’ – what I would call the triumph of the agent of circulation over the agent of production. For Negri, this signals the passing of a ‘figure’, the figure of the proletariat, who emerged in the 1840s and attenuated in social importance after the 1870s. Chérèque, jumps on him about this potted history:

F.C. I don’t wholly share your observation. It is true that the heroic figure of the proletariat concentrated in mass in the great industries has disappeared, but material labor hasn’t disappeared for all that… Firstly with globalisation: the Apple model of Steve Jobs is  “enterprise without factory”: on one side, immateriality, computers and information research, and on the other, the delocalized factory in China with the conditions of production that we know. But this process of dissemination is equally at work in Europe. There is a new segmentation of work with a massive recourse to temps, to the intermediares, to precarious labor to support difficult tasks. The farther you are from the profit center, the more you suffer. Do you know how much a supermarket employee lifts onto the shelves every day? A ton!

To which Negri replies, backtracking: One cannot efface the physical and corporeal dimension of work, you are totally right. Imagine that work can really become immaterial is stupid!”

However, Negri returns to the charge later: “One tends in fact to forget these workers, who, however, furnish out everyday meat. If I persist, however, in naming “immaterial labor”, it is in order to break out of the relation labor/created object and to show that it becomes principally a network, that its fundamental elements consist more and more in knowledge, the capacity to organize a cooperation. It equally becomes more and more affective and liguistic. One of the most important points, it seems to me, which is valid for all workers, is the mobilization  and the active imbrication of the set of knowledges (connaissances – skills) and the living time of the wage earners.”

Negri, here, is playing his strongest suit, for the penetration of labor into the private life is part of the social arrangement that makes the private life everything, and the public object nothing. It is a new form of moralization that destroys a certain cultural success of the 19th century – the creation of a higher, or more dialectically complex, narrative intelligence, one that links together disparate 19th century figures like Marx, Simmel, Durkheim, Mill, etc. with the novelists from Balzac through Mann.

It is the dissolution of that narrative skill that has led to the odd dualism between work and entertainment that seems, diabolically, to sit on our lives, and make it hard to utter a peep against the scandalous cretins who rule us.   

Lawrence's Etruscans

  I re-read Women in Love a couple of years ago and thought, I’m out of patience with Lawrence. Then… Then, visiting my in-law in Montpellie...