Thursday, September 28, 2017

There is no free trade. But there is a free lunch.

Along the lines of "let no crisis go to waste", the neo-libs are attacking the Jones act, which protects American shipping, as the enemy no. one that has sunk Puerto Rico. Lefties who are "anti-trade" are of course assistants to the undertakers of Puerto Rico. 
This discovery has the additional hedonistic weight that it makes neo-libs the champions of people of color, and the lefties the opponents. 
Now being one of those "anti-trade" lefties, I have to ask myself what I think about the Jones act, of which I was not aware until a week ago. And my response is: the Jones act is suspended in emergencies. And the whole basis of the "anti-trade" lefty opinion is that economic policy should respond to place and circumstances instead of to economic "laws" laid down in Econ 101 books. Ceteris paribus is the equivalent to: how things really are. 

It is interesting that neo-libs have adopted "free trade" as their slogan, and regional trade pacts as their real policy. Thus, discussions of Nafta or the TPP are caught up in the discourse of free trade, when they are exactly the opposite of classical free trade, privileging nation partners. I guess "regional trade pact" sounds a little too much like Warsaw Pact or Axis to make a good slogan.

Freedom has an interesting connotative weight in the popular discourse of economics. If you go to a blog site about economics, you will find that any long comment thread will eventually reveal to you the amazing truth that there "is no free lunch." This old chestnut was often used by Milton Friedman to explain why the government can't do things. On the other hand, everything "free trade" is wonderful. 

Myself, I think Friedman and his ilk got it backasswards. In fact, not only are there free lunches, but all those full faced white econ professors profited enormously from them when they went from their nappies to the first year in college. Yes, Virginia, there is a free lunch. As for free trade, it is far from free - its costs to laborers, and ultimately to society itself (including consumers) as it eats away at the industrial and technical base, is enormous. What it gives to consumers, that lovely group, is conditioned on where those consumers live and what the state of the economy is at that time. Chinese consumers have long "suffered' from the tariffs the Chinese put on foreign goods, and what have they got in exchange? An economy that has grown faster than any economy in history. Poor guys!

Sunday, September 24, 2017

What effect do economists have on the economy

A little Sunday reading from the Archives

We can easily imagine DNA replicating itself without molecular biologists, and the planets revolving around the sun without astronomers. But can we imagine capitalism without economists?

On the one hand, we are always identifying proto-forms of capitalism without contemporaries making a formal theory of it. On the other hand, would the kind of capitalism we know, that which appears in the 17th and 18th century in Europe and America, have developed as it did without the appearance, at the same time, of the political economists? And as political economists developed their discourse – as economics began to regard itself as a science – was capitalism merely a parallel development, one that they studied, or was it a development in which they played a role?

Marx, in the Grundrisse, working in the shadow of the disputes in Germany about theory and ‘materialism’, wrote:

daß die einfachre Kategorie herrschende Verhältnisse eines unentwickeltern Ganzen oder untergeordnete Verhältnisse eines entwickeltem Ganzen ausdrücken kann, die historisch schon Existenz hatten, eh das Ganze sich nach der Seite entwickelte, die in einer konkretem Kategorie ausgedrückt ist. Insofern entspräche der Gang des abstrakten Denkens, das vom Einfachsten zum Kombinierten aufsteigt, dem wirk||16|lichen historischen Prozeß…

“…the simpler categories can express the dominant relationships of an undeveloped whole or the subordinate relationships of a developed whole, which historically already exists, before the whole has developed towards the side that is expressed in a concrete category. Just in so far may the course of abstract thought, which ascends from the simplest to the combined, be correspondent to the real historical process.” – Marx, Grundrisse

I take it that the intellectual space, here, is opened up by the uncertain position of the ‘categories’ by which social life is understood vis-à-vis the dominant relationships of the social whole. Marx doesn’t seem to believe that there is a natural tendency within the social whole to move in a given direction – in this way, he does not have a classically liberal view of progress – but instead, given the presence of subordinate and dominate relationships, posits conflicts in which some agent figures.

Boldly, I take the concrete categories to be expressed in character-making. Or as all the boys and girls like to say now, in the construction of the subject. However, for reasons that have to do with my incorrigibly literary temperament, I prefer the vocabulary of the character to the subject.

Southern California Death Trip

    “He was kind but he changed and I killed him,” reads the caption of the photo of a woman in an old tabloid. She was headed to ...