The Economist, a “newspaper,” weighs in
Although for some reason I still subscribe to the thing, I’ve mostly stopped reading The Economist. If you read a good daily newspaper or three—I know, so old-fashioned—who needs all that attitude?
I was reminded of why I don’t read the thing by reading a post from one “W.W.,” responding to the great Yglesias-Henwood debate, as excellently amended by Henry Farrell. It includes this remarkable observation:
[F]rom my point of view the problem with jobs programmes, as compared to textbook monetary policy, is not that they increase the power of labour relative to capital. It’s that they do little to sustainably increase demand for labour. And nothing reduces the power of labour relative to capital more than low demand for labour.
This reminds me of the current undergraduate habit of arguing through feelings, not evidence. Why does W.W. hold this opinion? We don’t know, but presumably we should trust him, because he writes for a very important magazine that calls itself a newspaper.
Earlier in his lighter-than-air post, W.W. doubts there’s such a thing as a “neoliberal.” I’ve long had mixed feelings about the word. But insofar as it has a definition, it means something like an intensified form of capitalism that came into prominence throughout the world in the wake of the Reagan–Thatcher–Volcker counterrevolution with the undoing of the previous Keynesian–social democratic regime. Aside from the fact that the U.S. was never much of a social democracy, my reservation about the word is that it is a weak synonym for capitalism. The undoing of buffers against the harshness of the labor market is significant, but we’re basically talking about a system where 80–90% of the population in the richer countries lives has minimal savings and so essentially from one paycheck to the the next. In more social democratic regimes, this discipline is somewhat muted. But in many, if not most, richer countries, these buffers have been weakened.
But W.W.’s definitional confusion is a mere scenic overview on the way to this conclusion:
Liberal and social-democratic political theory both are marked by a peculiar hopeful naivete about the possibility of one day arriving at some sort of ideal self-equilibrating politico-economic system. But it’s never going to happen. Until the heat of all creation is spread evenly over the whole cold void, everything always will be unbalanced. Here in the hot human world, it’s certain that sooner or later someone will invent or say something that will make comrades enemies and enemies friends. All we can do is our best for now. If sound technocratic, monetary policy (or neoliberalism, whatever that comes to) is the best we can do for now, it doesn’t matter that it generates no long-run self-sustaining political constituency. Nothing does. So, for now, we should try to sustain it.
You’re going to die, but that’s no reason to stop eating.
My god. Who said anything about an ideology leading to some kind of self-sustaining institutionalization. Farrell’s point is that good politics (or bad politics, for that matter) requires some sort of “organized collective action.” There’s nothing automatic about it. Left neoliberals—by which Farrell et al mean the likes of Yglesias, who seem to want a somewhat more humane social order, but are rather confused about how to get there—seem to think that all we need is a better set of technocrats to take us there. Wall Street and the Fortune 500 have a very well organized and impressively sustainable set of institutions—among them The Economist.
Apparently W.W. doesn’t see himself as part of that machinery. But isn’t that hegemony for you? When you’re a comfortable cog, it all looks natural to you. Which, I suppose, is why he ends his post with a metaphor out of nature, not society.
LBO News from Doug Henwood 
Good point. I never read The Economist because I read the FT, which has a lot of former Economist reporters working for it, but seems more reasonable…
I am just curious, which three newspapers do you read? FT, NYT, and Wall Street Journal?
“W. W.” sounds Hayekian to me. There is a noxious hypocrisy at the center of market liberalism. (The market ethic is so central to the contemporary justification, I prefer that term to neoliberalism, but it describes the same thing.) Hayek, as Philip Mirowski said, “denied to others the very thing that gave his own life meaning: the imprimatur to theorize about society as a whole, to personally claim to understand the meaning and purpose of human evolution, and the capacity to impose his vision upon them.” It is “a theory to end all theories.”
“W. W.” is Will Wilkinson.
http://en.wikipedia.org/wiki/Will_Wilkinson
Anybody who takes Hayek and his anti-planning theorizing should skim “The Constitution of Liberty” and the three volume “Law, Legislation and Liberty.” All that guy did was dream up grand plans for society.
“This reminds me of the current undergraduate habit of arguing through feelings, not evidence. Why does W.W. hold this opinion?”
The numbers support this position. Unemployment is 14.1 (and that’s just the official number, the actual number is much higher) while the Federal payroll is about 4.5 million (including military–the civilian payroll is a mere 2.15). Even if the government could double its payroll, there would still be mass unemployment.
Even the WPA did not attempt to, or reach, full employment. That’s not to say that jobs programs aren’t a good idea. They just can’t solve even the majority of the unemployment problem, and they aren’t sustainable for long, as there’s only so much public sector work needed at any given moment. Any sudden expansion will quickly exhaust the list of chores the government has been putting off.
The nature-speak should be seen as more than a lazy metaphor:
Naturalizing the market on the road to revisionism
http://ideas.repec.org/a/cup/jinsec/v3y2007i03p351-372_00.html
[A tease from the Mirowski paper:]
[S]ometime after 1945 Hayek finally decided that he would employ natural science to ‘naturalize’ the Market and therefore paint socialist planning as ‘unnatural’; but, in opting for this stratagem, I would argue instead that Hayek was not at all innovative or imaginative in this regard. Rather, by jumping on someone else’s Natural Science bandwagon, he was finally conceding that all his earlier attempts at refutation of socialists had been for naught. I think this second intellectual transformation was comprised of at least three components:
(a) Hayek would now concede the portrait of a single ‘unified science’, which he had been resisting for at least a decade or more. There was no open renunciation of his prior position; instead, he simply began to rely upon Karl Popper to inform people on what ‘real science’ looked like.
(b) Hayek began to endorse various aspects of the ‘cybernetics’ project, which sought to reduce thought to mechanism. This was the source of his embrace of the ‘sciences of complexity’, which he derived from Warren Weaver.
(c) With a lag, Hayek began to appeal to ‘evolution’ to explain how an ineffable complex order, which he simply equated with The Market, could have come about. The onus for ineffability was thus shifted from Germanic philosophy to biologistic metaphor.
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“Liberal and social-democratic political theory both are marked by a peculiar hopeful naivete about the possibility of one day arriving at some sort of ideal self-equilibrating politico-economic system. But it’s never going to happen.”
Savvy leftists understand the difference between a constitutive principle and a regulative principle. One can make, say, radical social democracy a project while also recognizing that fully realizing that project may be impossible. The project would thus take radical social democracy as a regulative principle that governs the debate and actions of a movement. If a movement were to treat radical social democracy as a constitutive principle, it would need to develop a political program that would realize in toto and even quickly the radical social democratic idea. W.W. seems to conflate the two principles and, because of this, he commits a strawman fallacy.
Stephen: excellent point. I think if we are honest, we also have to note that many on the left are ready to commit this same fallacy. They are attempting to make the Marxist skepticism of money into a constitutive principle and, in the process, turning themselves into hard money cranks–exactly like Hayek, Paul Ryan, Ron Paul, etc.
$14 trillion USD later… no jobs. Why would the next $14 trillion be anymore effective?
It isn’t that hard to understand. Corporate profits are up, despite the ‘slow recovery’. More fiscal stimulus = higher corporate profits, and that means no permanent job creation because government money just subsidized iPods. While most of the economy was revised down in the latest GDP report, corporate profits were revised up by ~10% for 2009 and 2010.
It seems that whatever evidence Will Willkinson presented wasn’t enough to convince you of his assertion. Is the evidence sufficient now?
Unemployment will not go down until people change how they approach work.