{"id":125742,"date":"2019-01-21T12:00:04","date_gmt":"2019-01-21T12:00:04","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=125742"},"modified":"2019-01-10T14:27:13","modified_gmt":"2019-01-10T14:27:13","slug":"what-is-the-question","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/01\/what-is-the-question\/","title":{"rendered":"What Is the Question?"},"content":{"rendered":"

\u201cThe question is whether finance will promote economic growth and rising living standards or create unproductive credit and use government to enforce creditor claims by imposing austerity and reducing large swathes of the population to debt peonage.\u201d\u00a0 <\/em><\/p><\/blockquote>\n

This pr\u00e9cis of the pickle that is our prison was written by Michael Hudson.\u00a0\u00a0 It could have been written by Yanis Varoufakis; or, perhaps slightly altered, by Joseph Stiglitz, Robert Reich, Bernie Sanders\u2019 advisor Stephanie Kelton, or any of the distinguished scholars committed in their hearts to serving the common good, which I shall call \u201cthe Economists on the side of the Angels.\u201d (EA)<\/p>\n

Let me start by fleshing out the sort of point of view I take the quote to epitomize with a seven-point telegram.\u00a0\u00a0 It aspires to highlight typical elements of an EA rap:<\/p>\n

    \n
  1. The history of economics is no longer part of the curriculum, because if it were taught the students might learn something.<\/li>\n
  2. Steady social progress was being made in some of the old days, where \u201cold\u201d designates, for example, the thirty glorious years of social democracy in Europe after World War II, the Progressive Era in the USA, and the first-generation post-colonial regimes headed by progressive intellectuals (Kwame Nkrumah, Milton Obote \u2026.)<\/li>\n
  3. Since around 1980 (when Ronald Reagan, Margaret Thatcher and Helmut Kohl were elected) the rentier class has succeeded in rewriting the rules of the economic game in its own favour.<\/li>\n
  4. The global economy has been deliberately (and often secretively) designed to lower wages and to extract rents.<\/li>\n
  5. A neoliberal ideological juggernaut has been imposed on the world, privatizing public assets and decimating human social rights, seeking to reshape virtually every institution in the service of an ultra-individualist political and ethical philosophy, and at a practical level in the service of what Karl Marx called fictitious capital (i.e. bankism, finance capital with no productive function). The juggernaut has been imposed by force and fraud, elaborately and pretentiously disguised as reason.<\/li>\n
  6. The economics justifying unlimited accumulation by the few, austerity for the many, often militarism, and often ecological irresponsibility, has been in the best cases bogus. In the worst cases it has been non-existent.\u00a0 In the worse cases it has sometimes been pure fabrication, not supported by any credible research or by any credible theory.<\/li>\n
  7. A moral imperative flows from the sort of point of view I am telegraphically sketching, prescribing what we should do to right a world governed by wrongs. It is: \u00a0Throw the thieves out of the temple!\u00a0\u00a0 Usher in the angels!\u00a0\u00a0 Democratize Europe!\u00a0 Political Revolution!<\/li>\n<\/ol>\n

    Now I will send a second seven-point telegram. \u00a0\u00a0\u00a0It does not pretend to express anybody\u2019s point of view other than my own.\u00a0 However, it also does not pretend to say anything new that others have not said better sooner.\u00a0 It summarizes what I have concluded so far from my reading of other people\u2019s writings and my experience (perhaps most importantly my experience living in Chile before, during and after the military coup that deposed Salvador Allende on September 11, 1973).<\/p>\n

      \n
    1. In the old old old days (per Marcel Mauss) humans could relate to each other as friends or as enemies, but it took many centuries of cultural evolution for us to learn to relate to each other as customers and vendors. The creation of the deep structure of market society (per Karl Polanyi) has been slow, uneven and painful, proceeding at different paces in different places.<\/li>\n
    2. Once established, simple exchange (the starting point in Chapter 1 of Marx\u2019s Capital<\/em>) leads inexorably, speeded or slowed by the causal powers of many other structures, to a physical organization (k\u00f6rperliche Organisation<\/em>) of the production of the means of subsistence driven by capital accumulation, extracting surplus (Mehrwert<\/em>) and repeatedly re-investing it to produce more surplus. (Chapter 25)<\/li>\n
    3. The basic deep structure, simple exchange is called la s\u00e9paration marchande <\/em>by Andr\u00e9 Orl\u00e9an, \u201cinstitutionalized irresponsibility\u201d by E.F. Schumacher, and das<\/em> Tauschprinzip <\/em>by Theodor Adorno — echoed by Charles Taylor\u2019s characterization of modern society as \u201cbargaining society\u201d and anticipated by Sir Henry Maine\u2019s (1861) definition of the principle of modernity as \u201ccontract.\u201d\u00a0 It is the e = mc2 <\/sup>of the social sciences.\u00a0\u00a0 Its consequences never stop.<\/li>\n
    4. In a regime of accumulation every institution must serve the overriding objective of attracting capital by making investment profitable. Accumulation trumps justice and ecology. \u00a0The path from simple exchange to regimes of accumulation is illumined by Alfred Marshall\u2019s \u201claw of substitution.\u201d It states that more efficient methods for making products (and therefore for making money by selling them) drive out and eliminate the older less efficient methods.\u00a0 The path is illuminated by Eugen von Bohm-Bawerk\u2019s law of the superiority of roundabout production.\u00a0\u00a0 It entails that more highly capitalized production with more sophisticated technology and marketing usually ends up winning in the marketplace.\u00a0\u00a0 The path is illumined by John Locke\u2019s observation that wealth and power reinforce each other.\u00a0 With more wealth you can hire more soldiers and build bigger fleets.\u00a0 You can use military power to acquire more wealth.\u00a0 Per Paulo Freire and Leo Tolstoy:\u00a0 behind economic exploitation, guaranteeing it when not directly creating it, there is always violence.<\/li>\n
    5. The post World War II social democracies (per J\u00fcrgen Habermas) were never stable or sustainable. They could not reconcile a welfare state with the need to cut taxes to attract capital.\u00a0 Such defeats of justice at the hands of the imperatives of accumulation have a deep structural cause, namely das Tauschprinzip.<\/em><\/li>\n
    6. Contemporary bankism is built on the ruins of social democracy. The preceding regime of accumulation, based in part on raising wages to make investment profitable by increasing consumer demand, has been replaced by a new regime emphasizing turning money into more money by extending credit.\u00a0 The transition from one regime to the other was driven by the structural need to make investment profitable so that the vital processes of life could continue \u2013quite apart from any economic theory or political victory or deliberate plan.<\/li>\n
    7. The war economies featuring government deficit spending that finally brought the world out of the depression of the 1930s have become permanent under post-war social democracy and under bankism. Permanent deficit public spending\u2019s (and spiralling private debt\u2019s) initial deep cause was the depression; the cause of depressions (per Hyman Minsky) is the inherent instability of the system; the cause of the system\u2019s inherent instability is its deep structure: institutionalized irresponsibility.<\/li>\n<\/ol>\n

      My second telegram suggests amending the first, adding another key question.\u00a0 Per Bucky Fuller the new question might be: \u201cCan humanity graduate from class-two (entropically selfish) evolution into class-one (syntropically cooperative) evolution?\u201d<\/p>\n

      _____________________________________________<\/em><\/p>\n

      \"\"<\/a><\/em>Prof. Howard Richards is a member of the TRANSCEND Network for Peace Development Environment<\/a>. He was born in Pasadena, California but since 1966 has lived in Chile when not teaching in other places. Professor of Peace and Global Studies Emeritus, Earlham College, a school in Richmond Indiana affiliated with the Society of Friends (Quakers) known for its peace and social justice commitments. Stanford Law School, MA and PhD in Philosophy from UC Santa Barbara, Advanced Certificate in Education-Oxford,\u00a0 PhD in Educational Planning from University of Toronto. Books:\u00a0 <\/em>Dilemmas of Social Democracies with Joanna Swanger,\u00a0<\/em>Gandhi and the Future of Economics with Joanna Swanger, <\/em>The Nurturing of Time Future, Understanding the Global Economy (available as e-books),\u00a0<\/em>The Evaluation of Cultural Action (not an e book).\u00a0 <\/em>Hacia otras Economias with Raul Gonzalez, free download available at www.repensar.cl<\/a>.\u00a0<\/em>Solidaridad, Participacion, Transparencia: conversaciones sobre el socialismo en Rosario, Argentina. <\/em>Available free on the blogspot lahoradelaetica.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

      \u201cThe question is whether finance will promote economic growth and rising living standards or create unproductive credit and use government to enforce creditor claims by imposing austerity and reducing large swathes of the population to debt peonage.\u201d This pr\u00e9cis of the pickle that is our prison was written by Michael Hudson but could have been written by Yanis Varoufakis, Joseph Stiglitz, Robert Reich, Bernie Sanders\u2019 advisor Stephanie Kelton, or any of the distinguished scholars which I shall call \u201cthe Economists on the side of the Angels.\u201d (EA)<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-125742","post","type-post","status-publish","format-standard","hentry","category-editorial"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/125742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=125742"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/125742\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=125742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=125742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=125742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}