Monday, October 06, 2008

And God said

What the hell were you thinking? That you would improve people by flogging, abusing, starving, and neglecting them? How is that supposed to work?

Well, Lord, we figured that we must be morally superior because, well, we have all the stuff. And that other people would become more like us - morally upright - if we made 'em work really hard and suffer.

You mean like this:

The group that bridled most against these pessimistic elements of Smith [yes, Wealth of Nations Smith] and Ricardo [The Theory of Moral Sentiments] was the evangelicals. These were middle-class reformers who wanted to reshape Protestant doctrine. For them it was unthinkable that capitalism led to class conflict, for that would mean that God had created a world at war with itself. The evangelicals believed in a providential God, one who built a logical and orderly universe, and they saw the new industrial economy as a fulfillment of God’s plan. The free market, they believed, was a perfectly designed instrument to reward good Christian behavior and to punish and humiliate the unrepentant.

At the center of this early evangelical doctrine was the idea of original sin: we were all born stained by corruption and fleshly desire, and the true purpose of earthly life was to redeem this. The trials of economic life—the sweat of hard labor, the fear of poverty, the self-denial involved in saving—were earthly tests of sinfulness and virtue. While evangelicals believed salvation was ultimately possible only through conversion and faith, they saw the pain of earthly life as means of atonement for original sin. These were the people that writers like Dickens detested. The extreme among them urged mortification of the flesh and would scold anyone who took pleasure in food, drink, or good company. Moreover, they regarded poverty as part of a divine program. Evangelicals interpreted the mental anguish of poverty and debt, and the physical agony of hunger or cold, as natural spurs to prick the conscience of sinners. They believed that the suffering of the poor would provoke remorse, reflection, and ultimately the conversion that would change their fate. In other words, poor people were poor for a reason, and helping them out of poverty would endanger their mortal souls. It was the evangelicals who began to see the business mogul as an heroic figure, his wealth a triumph of righteous will. The stockbroker, who to Adam Smith had been a suspicious and somewhat twisted character, was for nineteenth-century evangelicals a spiritual victor.

That's it, exactly, Spotty.

Stay in character, grasshopper.

Sorry. That's it exactly, Lord.

So you think that just abandoning them to their fate is the way to save them? I can't believe I gave you morons free will. Consider this, from the same article that I just read from:

Looking back two centuries at these early debates, it is clear that a pure free-market ideology can be logically sustained only if it is based in a fiery religious conviction. The contradictions involved are otherwise simply too powerful. The premise of the unpleasant workhouse program was that it would create incentives to work. But the program also acknowledged that there were multitudes of people who were either unable to work or unable to find jobs. The founding assumption of the program was that the market would take care of itself and all of us in the process. But the program also had to embrace the very opposite assumption: that there were many people whom the market could not accommodate, and so some way must be found to warehouse them. The market is a complete solution, the market is a partial solution—both statements were affirmed at the same time. And the only way to hold together these incommensurable views is through a leap of faith.

Victorian evangelicals took a similar approach to the crisis in Ireland between 1845 and 1850—the Great Hunger, what came to be known as the potato famine. In office at the time of the first reports of starvation, the Tory administration of Robert Peel responded with a program of food supports, importing yellow cornmeal from the United States and selling it cheaply to wholesalers. Corn was an unfamiliar grain in Ireland, but it provided a cheap food source. In 1846, however, a Whig government headed by Lord Russell succeeded Peel and quickly dismantled the relief program. Russell and most of his central staff were fervent evangelicals, and they regarded the cornmeal program as an artificial intervention into the free market. Charles Trevelyan, assistant secretary of the treasury, called the program a “monstrous centralization” and argued that it would simply perpetuate the problems of the Irish poor. Trevelyan viewed the potato-dependent economy as the result of Irish backwardness and self-indulgence. This crisis seemed to offer the opportunity for the Irish to atone. With Russell’s backing, Trevelyan stopped the supply of food. He argued that the fear of starvation would ultimately be useful in modernizing Irish agriculture: it would force the poor off land that could no longer support them. The cheap labor they would provide in towns and cities would stimulate manufacturing, and the now depopulated countryside could be used for more profitable cattle farming. He wrote that his plan would “stimulate the industry of the people” and “augment the productive powers of the soil.”

There was no manufacturing boom. Roughly a million people died; another million emigrated. The population of Ireland dropped by nearly one quarter in the space of a decade. It remains one of the most striking illustrations of the incapacity of markets to run themselves. When government corn supplements stopped, and food prices rose, private charities and workhouses were overwhelmed, and families starved by the sides of roads. When British leadership put its faith in the natural balance of an open market to create the best outcome, the result was disaster. Evangelicals like Trevelyan didn’t look smart and pious after the famine; they looked blind to human reality and desperately cruel. Their brand of political economy, grounded in evangelical doctrine, went into retreat and lost influence.

But I guess we're back, right Lord?

Yep. Just a dumb as ever. Only now, you've got a new mumbo jumbo:

Economics departments around the world are overwhelmingly populated by economists of one particular stripe. Within the field they are called “neoclassical” economists, and their approach to the discipline was developed over the course of the nineteenth century. According to the neoclassical school, people make choices based on a rational calculation of what will serve them best. The term for this is “utility maximization.” The theory holds that every time a person buys something, sells something, quits a job, or invests, he is making a rational decision about what will be most useful to him, what will provide him “maximum utility.” “Utility” can be pleasure (as in, “Which of these Disney cruises will make me happiest?”) or security (as in, “Which 401(k) will let me retire before age eighty-five?”) or self-satisfaction (as in, “How much will I put in the offering plate at church?”). If you bought a Ginsu knife at 3:00 a.m., a neoclassical economist will tell you that, at that time, you calculated that this purchase would optimize your resources. Neoclassical economics tends to downplay the importance of human institutions, seeing instead a system of flows and exchanges that are governed by an inherent equilibrium. Predicated on the belief that markets operate in a scientifically knowable fashion, it sees them as self-regulating mathematical miracles, as delicate ecosystems best left alone.

I'm talking to you, Davey Strom, Captain Fishsticks, and King Banaian, in particular. This is a world you people made up, but nobody lives there. But you wield your pseudo-scientific theory like it was theology. But some people are starting to wake up:

“Post-autistic economics” (PAE) is the name now taken by those few economists who hope to rescue the discipline from the neoclassical model; the name is an homage to the dissident French students [described earlier in the article], whose manifesto called the standard model “autistic.” It is a hilariously apt (albeit mildly offensive) diagnosis, and it could be just as well applied to Homo economicus himself, the economic actor envisioned by the neoclassical theory, who performs dazzling calculations of utility maximization despite being entirely unable to communicate with his fellow man. Not all PAE economists oppose the premises of the dominant neoclassical school, but they all agree that neoclassical theory cannot stand on its own. In other words, they agree that economics must begin to recognize the social—what the dissident economist Edward Fullbrook calls “intersubjectivity”—and, in the process, give up its pretense to scientific completeness.

Until it does, generations of college students will continue to have their worldviews irreparably distorted by basic economics courses, whose right-wing ideology hides behind a cloak of science. The first evangelicals fought for free trade because they thought it would encourage virtuous behavior, but two centuries of capitalism have taught a different lesson, many times over. The wages of sin are often, and notoriously, a private jet and a wicked stock-option package. The wages of hard moral choice are often $5.15 an hour. Free markets don’t promote public virtue; they promote private interest. In this way they are neither “free” (that is, independent of human influence) nor uniformly helpful in promoting freedom. Market trends are not truly indicative of the kind of society that Americans wish to create for their children. Consumer demand—for gated homes, exurban sprawl, or fluorescent-dyed sugar titration kits called cereal—does not reflect democratic political choice. If indeed economics is this society’s most authoritative version of its own story, ours is a notoriously unreliable narrator.

"Free markets don't promote public virtue; they promote private interest." Got it? It's not that difficult a concept.

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