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Neoliberalism as Reactionary

Yesterday’s post worried the question of (in Lear’s words) whether there is “any cause in nature that makes these hard hearts”?  Seeking the answer in psychology, in some persistent, albeit not universal, set of motivating impulses (ambition, the quest for status, envy, and resentment) is one way to go.

Another possibility is to refuse to personalize things in that way—and to look instead to structural causes.  That path is suggested by Hardt and Negri’s insistence that neoliberalism is reactionary.  (I am reading their latest tome, Assembly [Oxford UP, 2017].)

Here’s my reconstruction of the argument: The Keynesian welfare state compromise worked well enough from 1950 to 1965, but the social upheavals of the sixties revealed the deep discontent produced by capitalism even in its most benign form.  Neoliberalism—starting with Reagan and Thatcher—was a direct move to reign in the students, union workers, and other malcontents who had shaken things to the core in the 60s.  Turning the economic screws down tighter went hand-in-glove with various strategies to diminish democratic input, heighten the power of elites, and demonize both dissenters and those who agitated for continued and even increased welfare (such as provisions for health care).

This analysis has more than a little plausibility going for it.  Oddly, it is not accompanied in Hardt and Negri (who, when all is said and done, are Marxists) with an economic analysis focusing on the economic woes of the 1970s.  Certainly, it is true that today’s conservative economists are continually refighting the wars of the 70s, where inflation is the dragon to be slain—despite the fact of almost non-existent inflation for over twenty years now.  Similarly, the zombie of the welfare queen and, more generally, of the undeserving poor has proved unkillable—perhaps even more as the danger conservatives must continually work against than as a figure in the public imagination.  Neoliberalism is the set of nostrums meant to control the hungry masses who are coming after the plutocrat’s and the nation’s wealth.

Ironically, of course, the traditional fear that in a democracy the masses will plunder the public treasury has been turned on its head over the past forty years in America—and around the globe.  It is the rich, through privatization primarily but also through the state abetting more predatory business practices, that has plundered the collective wealth of the nation.  Hardt and Negri are good on this score, even if their way of describing it—namely, as “extraction of the common”—is rather different than mine.

In short, don’t look for the evil in men’s hearts—or even for the errors their passions lead them into.  Look instead to whom they identify as their enemies, what they understand as the threats to their well-being.  It’s a conflict ridden world—and the key is to see where and how the lines are drawn.  Then identify on which side someone stands.

Still, what happened in the 1970s beyond the counter-revolution against the radical forces of the 1960s?  What produced inflation accompanied by stalled economic growth—the combination that led to the belief on the part of many elites that the largesse of post-war Keynesian state was no longer sustainable?  Yes, there were tax revolts etc., just the niggardly refusal to pay the bill any longer.  So we could say that cutting off the funds led, predictably, to a recession caused by a lack of demand—in other words, a classic capitalist downturn.  When you don’t pay the workers enough, when you extract excessive profits that immiserate the many, you end up with a crisis of over-production and need to shut down the factories for a while, which means laying off the workers, which impoverishes them even further, and thus deepens the crisis because demand is depressed even further.  The classic viscous circle.

But that doesn’t explain inflation, which (just as classically) occurs when too much money is chasing too few goods.  Inflation should be the result of under-production.  Except—and here comes the rub. The other source of inflation is the result of open, globalized trade relations as contrasted to the kind of closed system analysis that explains inflation through under-production.  Inflation in a globalized system occurs when the national currency no longer buys as much on the world market.  The “oil shock” meant the American dollar went into the tank.  In 1972, a three week visit to England and Scotland (not counting the airfare) cost me $200.  Yes, I was doing it on the cheap, but still . . .  Another three weeks in England in 1978 cost me $1200.  The change in the almighty dollar was that drastic and that fast.

The eventual response to this shift in America’s position in the global economy was to outsource manufacturing to other lands and to have America concentrate on finance capital rather than industrial capital.  Neoliberalism—and its imperatives—can’t be understood without taking this transformation into account.  Here, again, Hardt and Negri are useful.  And maybe even help to answer a puzzle that goes back to the hard hearts of our Republican legislators.

The puzzle is a familiar one: if capitalism depends on consumers to fuel continual growth (i.e. if capitalism is always in need of new markets or in ways of exploiting existing markets more efficiently), then why does capitalism, especially in its neo-liberal and globalized form, seek so relentlessly to drive down wages.  It’s the opposite of the Henry Ford principle of paying his workers enough so they could buy his cars.  It takes the soft-hearted liberals from FDR to Bernie Sanders to save capitalism from the fate Marx predicted for it.

BUT . . . maybe the logic of finance capital makes that view of things a misunderstanding of the forces currently in play.  Finance capital is not seeking profits from people buying produced goods.  Instead, finance capital finds its profits in ROI (return on investment).  Think of how private equity firms work.  They swoop in to buy up a company, they then use those company’s assets to take out loans, and then (in many cases) drive the company into bankruptcy because of that high debt.  The game here is not to get people to buy things.  They just need people (usually other financial institutions) to buy debt.  The profits are the result of “extraction,” as Hardt and Negri say.  So long as someone places a value on something, that thing can be leveraged—and money made.  Who needs consumers?  Who needs the people?  It’s just a self-enclosed world of financial dealings, only related in incredibly abstract and distant ways to anything “real.”

This might seem far-fetched, but Hardt and Negri offer a great example: gentrification.  Properties in the most desired cities—New York, Vancouver, London, San Francisco etc.—spiral upward in price not just because people wish to live there, but also because they are seen as both safe and incredibly lucrative investments.  Money just chases money, with nothing “real” (except perhaps the “upgrades” to granite countertops and glass brick showers) changing.  Of course, such spirals lead, inevitably, to bubbles and collapses.  An odd term: bubble.  Because you can’t know it’s a bubble because it isn’t a bubble until the moment when confidence collapses, when the hive mind decides everything is overpriced.  Overpriced in relation to what?  There is no measure, no standard, beyond that mysterious collective sense of what is sensible.  Of course for most of us—those not in 1% or 5%–“sensible” prices were left behind four or five years ago.

Critiques of speculation as disconnected from anything real are as old as the Tulip craze and the South Sea Bubble of the 1700s.  As is the use of debt—both taking it on and forcing it upon others—to gain wealth.  (If we believe David Graeber, debt goes back 5000 years.)  What seems to distinguish neoliberalism is the orientation of capitalism (and of the political, legal, and social institutions that enable it) away from production of goods and towards the profits to be made through finance.  In other words, financial speculation was always there—but social and political policy was not constructed to aid and abet it since the conventional wisdom remained that the production of goods was the primary road to wealth—both personal and national.

Trump offers a good case for how hard it is to think about this shift.  The man never produced a single thing in his life, yet seems to think that wealth comes from the production of goods.  He even seems to think that he has produced some things.  In any case, his rhetoric is all about restoring prosperity through a return to industrial capitalism.  But most of his actions (his anti-immigration policies are an exception here) are directed toward enabling finance capitalism.  In other words, the full import of the shift hasn’t registered yet for many people.

A full-scale economic determinism, then, would tell us not to look for motives for hard-heartedness within the Republicans, but look instead to the changed nature of capitalism to explain their actions. Causes are external, not internal. The masses—defined here as those with no money to invest—are no longer relevant to prosperity, so should be ignored on that account.  And if democracy can be contained, then the masses need no longer be feared either.  The legislator will prosper by knowing who his true master is: not the voters, but the plutocrat.

So, for the determinist, neliberalism is reactionary in another sense: it is a reaction to this shift from industrial to financial capitalism.

Life and Death

The Senate passed, by a vote of 89 for, 9 against, a 700 billion dollar defense bill yesterday, giving the Trump administration more to spend on the military that it had asked for.  At the same time, that august body contemplates (and is within one or two votes of passing) a bill that would take away health care from millions.  Truly, we have a political system in love with death and remorseless in its attacks on life.

This from Tolstoy’s late essay (1900), “Thous Shalt Not Kill”:

“That nations should not be oppressed, and that there should be none of these useless wars, and that men may not be indignant with those who seem to cause these evils, and may not kill them–it seems that only one small thing is necessary.  It is necessary that men should understand things as they are, should call them by their right names, and should know that an army is an instrument for killing, and that the enrollment and management of an army–the very thing which kings, emperors, and presidents occupy themselves with so self-confidently–is a preparation for murder.”

If only it were a question of calling thing by their right names!  Not that I underestimate the will to obfuscation, the will that led us to rename the Department of War the Department of Defense.  I have a hard time describing–and dealing with–how dispirited I currently feel about the state of our nation and our world.  Must humans be worshipers of death?

Unorthodox Reflections on Charlottesville

New York Times article, with video, of shot fired during the Charlottesville rally.

As everyone has commented, the right wing marchers in Charlottesville were heavily armed, thereby making a mockery of any notion of free speech in the public square.  Dahlia Lithwick in Slate has that angle nicely covered.

I want to focus in on the fact that, so far as I can discern, the only shot actually fired that day is the one captured in the video embedded in the New York Times article.  That’s a miracle.  Impressive, really.  All accounts suggest that was some fairly strenuous fighting going on.  Yet no one pulled the trigger, except that one guy, and he fired into the ground.

That’s relevant to my current obsession with the impediments to violence and, from the opposite side, with what incites violence.  All the evidence suggests (the best place to review this evidence is Randall Collins’s book, Violence: A Micro-Sociological Theory [Princeton Universioty Press, 2008]) that the impediments to violence are very strong.  Famously, studies done after World War II discovered that in most cases 75% of troops in combat never even fired their weapons.

My supposition is that people need to be authorized to commit violence–except in cases where they are responding directly to violence against them.  And even when authorized–as the World War II case shows–the reluctance to be violent is still a strong impediment.

Clearly, the right wingers don’t think of themselves as reluctant to use violence.  Maybe that’s bluster, and maybe that’s true.  Collins suggest that there are virtuosos of violence just as there are virtuosos in other endeavors.  But my suggestion is that even the virtuousos need to be given permission.  Violence always must justify itself against the assumption that it is wrong.  It must have a story to tell about why it was necessary.

So my thought is: the Charlottesville show of force was a message.  We are armed and we are ready to resort to force if you do certain things, i.e. take down Confederate monuments.  So one question is: what actually would move all these right-wing militias to the actual deployment of force.  They are clearly threatening force, but what would actually move them to use it.

This is also why, it seems to me, these militias are addicted to arcane, hair-splitting interpretations of the Constitution.  They need the law to be on their side to justify their resorting to force.  That is certainly how the two Bundy escapades worked.  They provided themselves with crackpot legal justification.

If we think back to the street fights in 1930s Germany, we have a case where violence from both sides was one instigator, but also where the state quite simply unleashed the thugs.  Similar instances (in Egypt for example or in China during the Cultural Revolution) can also be cited. The violence against blacks in the South was socially sanctioned from 1870 to 1965–and Kennedy’s reluctance to intervene in the early 1960s allowed Southerners to still count on the fact that local justice systems would wink at their violence while their social cohorts would approve of it.

That, of course, is why Trump is so dangerous.  He hasn’t gone so far as to designate certain people enemies of the nation, but he hasn’t exactly embraced the equal right of everyone to be here (to put it mildly).  Still, he hasn’t openly endorsed violence, even as he has winked at it.  What he has done so far is enough justification for the outliers and loners, but not enough to swing the militias into concerted action.  In short, we have not seen any organized violence as of yet, although we have had these organized rallies that are built around the threat of violence.  If we reach a point where the courts refuse to prosecute, watch out.  (Just as the courts’ absurd interpretation of the 2nd amendment has given us people parading with assault rifles on our streets.)

Is there really something, some political event, that would push the militias into action? That possibility is certainly less remote than left-wing violence in the contemporary US.  But it still seems pretty remote to me.  The two Bundy stand-offs were the closest we’ve gotten there–and they never came close to being wide-spread movements.


Recent Events at UNC

After a series of baffling and upsetting events at my university, the University of North Carolina at Chapel Hill, I was moved to write the following letter to our campus newspaper.  I will, doubtless, have more to say on this subject going forward.

What’s Going On?

The University was handed a get out of jail free card by Governor Roy Cooper—and declined to use it.  WTF?

Even more baffling is the fact that we requested the card.  Spurred by a letter from Chapel Hill mayor Pam Hemminger, someone (I assume it was our Chancellor, Carol Folt, but do not know what transpired behind the scenes) managed a feat of unalloyed diplomatic brilliance: a letter to the governor co-signed by Margaret Spellings, president of the UNC system, Carol Folt, Lou Bissette, chair of the system’s Board of Governors, and Haywood Cochrane, chair of the UNC, Chapel Hill Board of Trustees.  That letter, citing safety concerns, asked for a ruling about excepting Silent Sam from the 2015 law forbidding the removal of historical monuments on public land.

The Governor responded swiftly and unambiguously, authorizing Silent Sam’s removal.  I fully expected to arrive on campus Tuesday morning and find that UNC, in a move echoing recent actions at the University of Texas, had removed the statue during the night.  Instead, the statue was surrounded by a double row of fences and a sign was posted stipulating proper behavior in its presence. And then the university, later in the day, turned its back on the ruling it requested, and stated it didn’t agree with the Governor’s interpretation of the law, even while agreeing that campus would be safer without the Confederate memorial.

The mind reels.  The chief Executive officer of the state tells you that a certain action is legitimate and lawful.  But you decide he might be wrong.  What could motivate such a decision?  Clearly, if the Governor gives you the go ahead, you are not going to be prosecuted by his branch’s attorney general if you proceed.  The legislature will, doubtless, be unhappy, but they have no prosecutorial powers.  True, the university could, I guess, be sued over the matter, and could suffer at the hands of a vindictive legislature somewhere down the line.  But should such possible ill effects over-rule immediate safety concerns, not to mention the poisonous message the statue sends every day?  I don’t think so.

Meanwhile, the administration is engaged in a petty squabble with the Campus Y over the posting of political banners.  The Chancellor’s initial communique in response to events in Charlottesville included an appended statement that declared an absolute right to free speech on this campus.  Yet now her administration is relying on invoking bureaucratic minutia to take down the Y’s signs.

Finally, as one last demonstration of a determination to act in mysterious and secretive ways, we get the announcement of a new provost.  The move took everyone on campus by surprise.  What’s worse: we get a new provost with a complete abrogation of any procedure for his appointment.  No naming of an interim, no formation of a search committee, no public meetings with finalists for the position, no consultation with any one on campus.

The Chancellor is acting like a tinpot autocrat.  On the one hand, afraid of her own shadow, she can’t act decisively when she is handed a green light by the Governor. On the other hand, she has isolated herself from the university community, interacting with us through statements that it takes a Talmudic scholar or a Kremlinologist to decipher, and embracing non-transparency.  What’s going on?  Damned if I know.

Here’s my message to Carol Folt.  We–the faculty, students, and staff—of this university are your partners in the educational mission of this great university.  We are not dangerous, unruly, and unpredictable subjects who need to be managed.  Stop being afraid of us and start working with us.