Each is right to criticize the other.\u00a0\u00a0 The conclusion to be drawn is that indeed neither the TDEM proposal or the DIEM proposal makes sense.\u00a0 This conclusion in moves the conversation onto the terrain of the constitutive rules: their causal powers, their systemic imperatives, their homeostatic resistance to transformation.\u00a0 If we can get to that point, then we will be well-positioned to move on to designing strategies for what Margaret Archer calls morphogenesis.<\/p>\n
In a moment I will explain what the basic constitutive rules of society <\/em>(also sometimes called basic cultural structures or basic social structures) are.\u00a0 But first I will lead up to it.<\/p>\n Varoufakis points out that the TDEM plan for a green new deal is to be paid for by raising taxes on corporate profits, high incomes, great inherited fortunes and carbon emissions.\u00a0 Varoufakis argues that Europe is already tax-weary.\u00a0\u00a0 New and higher taxes, no matter who is to be obliged to pay them, are not likely to be approved.\u00a0 Varoufakis is right.\u00a0 He could also have gone on to say, citing Piketty\u2019s own reservations about his own proposals toward the end of Capital in the Twenty- First Century<\/em>, that as the world is now organized, raising taxes on wealth is just not in the cards.\u00a0 What is in the cards is tax competition.\u00a0 Every jurisdiction competes with 195 other jurisdictions to attract investment, to attract high net worth residents, and to discourage capital flight.<\/p>\n Piketty, for his part, criticizes the DIEM plan for financing its <\/em>green new deal by borrowing more money, driving governments even more deeply into debt than they already are. Piketty is more aware than anyone else that for centuries there has been an upper class that lends money to the government. For centuries it has been able to use the interest it collects on its government bonds, as well as income from its other investments, both to accumulate still more capital and to be able to live in leisure without working.\u00a0 \u00a0(Piketty finds that today most people able to live without working work anyway, apparently finding it morally unacceptable to live as gilded clochards.<\/em>)\u00a0 From Piketty\u2019s point of view Varoufakis\u2019 plan must seem like more of the same:\u00a0 going farther into debt, charging the taxpayer to pay the rentier, <\/em>to fund building a promised better tomorrow that decade after decade keeps being tomorrow and never becomes today.<\/p>\n In the light of the Hobson\u2019s Choice confronting TDEM and DIEM –tax or borrow– perhaps the reader is already beginning to see what I mean, even before I explain in a few words \u2013briefly and inadequately\u2014 what the constitutive rules of society are.<\/p>\n Nobody has defined them more clearly and succinctly than Karl Marx.\u00a0\u00a0 My brief explanation\u00a0\u00a0 will piggyback on his brief explanation.\u00a0\u00a0 There are four of them: freedom, property, equality and Bentham.\u00a0 I would add explicitly what Marx might be taken to imply:\u00a0 It would be more precise to call them the perversion of freedom, the perversion of property, the perversion of equality and the perversion of Bentham.<\/p>\n Marx glosses freedom <\/em>giving an example of buying and selling.\u00a0 The seller of labour power (the unemployed person seeking to become a worker) seeks a contract with the buyer of labour-power.\u00a0 Each is free to take it or leave it.\u00a0\u00a0 The fact that I need a job to feed my children, or just to survive, does not obligate anyone to hire me.\u00a0 All the potential employers who potentially might hire me (if they choose to do so) are free.\u00a0 I am also free.\u00a0 Free to lose.\u00a0 The contract, if I am hired, is justified, whatever its terms may be, as an expression of our common will \u2013of our freedom.<\/p>\n Marx glosses property <\/em>as something to sell, i.e. a commodity.\u00a0 The property the worker has to sell is his or her labour-power.\u00a0\u00a0 Even though meeting vital needs, including the needs of the worker\u2019s dependents, may depend on employment \u2013at a decent wage– for the basic constitutive rules of society <\/em>labour-power counts as property up for sale like any other property up for sale.<\/p>\n Equality <\/em>means formal equality.\u00a0 Each plays the same formal role.\u00a0 One is a buyer.\u00a0 The other is a seller.<\/p>\n Bentham<\/em>, according to Marx, refers to the principle that each individual pursues only his or her own self-interest.\u00a0 This was not actually the philosophy of the real flesh and blood Jeremy Bentham.\u00a0 Bentham ascribed to all of us a duty to work for \u2018the greatest good of the greatest number.\u2019\u00a0 But no matter.\u00a0 We know what Marx means.\u00a0 It is really true that the basic constitutive ethical and legal rules of what Karl Polanyi called our \u2018market societies\u2019 allow us to be indifferent to the fate of others if we choose to be indifferent.\u00a0 It is also true that market competition often forces us to be indifferent or callous even when left to ourselves guided by our cultural norms and our biological instincts we would choose to be kind.<\/p>\n Recently, Andr\u00e9 Orl\u00e9an has come up with an even briefer definition of the basic constitutive rules of a market society.\u00a0 It consists of just two words:\u00a0 s\u00e9paration marchande. <\/em>In a pure market society (and it is in a hypothetical pure <\/em>one that one defines the basic<\/em> rules) people are separated.\u00a0\u00a0 They are separated from each other.\u00a0 They are connected, if at all, by contracts.\u00a0 (Immanuel Kant, modernity\u2019s greatest moral philosopher, defined marriage as \u2018a contract by which each cedes to the other the exclusive use of the private parts.\u2019)\u00a0 Most people are also separated from their means of subsistence.<\/p>\n Another way to look at the constitutive rules of market society is to treat them as basic law, and then to trace out the consequences of having the basic law we have and not some other basic law.\u00a0 This is what Karl Renner, the first socialist chancellor of Austria, does in his book The Institutions of Private Law and their Social Functions.<\/em><\/p>\n As for Marx, after making a brilliant start, stating the key rules of the game in a few words, Marx blew his lead.\u00a0 Instead of taking these constitutive rules –so basic that they are often taken for granted and not even seen– as the ethical and legal foundation of the modern world-system, he reverts to seeing them as window-dressing.\u00a0 They are high-sounding words like \u2018freedom\u2019 cynically used to put a pretty face on bloody exploitation.\u00a0 The hard facts of exploitation happen in factories, not in markets. They happen wherever people work and produce value, only to have the difference between what they produce and what they are paid stolen from them by property owners.\u00a0\u00a0 The \u2018veritable Eden of the rights of man\u2019 whose praises are sung by the ethical\/legal quartet \u2018freedom, property, equality and Bentham\u2019 is bla bla.\u00a0 Thus Marx.<\/p>\n Marx makes a valid point.<\/p>\n But there are other points that are equally valid.\u00a0 Other points are especially valid today when the human being is rapidly becoming obsolete as a factor of production; when the market value of labour-power is plummeting toward zero; and when productivity increases \u2013when they occur\u2014are not caused by workers working harder and smarter.\u00a0 They are caused by scientific research and capital investments in technology.\u00a0 Today productivity increases usually result in layoffs as capital is substituted for labour (as Piketty shows in his book The Economics of Inequality<\/em>).<\/p>\n The civil law is not just window-dressing.\u00a0 It really does organize markets. \u00a0\u00a0As Amartya Sen shows in his studies of famines, it is really true that if you cannot sell something for enough money to buy enough food to stay alive, then the civil law says you have no right to eat and you must die.\u00a0\u00a0 Although the Irish famine and a number of famines in India were made worse by the dogmatic free market economics of their British rulers, the basic dynamics of famine are established at the level of jurisprudence, not at the level of economic theory.<\/p>\n As J\u00fcrgen Habermas (The Legitimation Crisis<\/em>), Karl Polanyi (The Great Transformation<\/em>) and others (like me and Joanna Swanger in The Dilemmas of Social Democracies <\/em>and in Gandhi and the Future of Economics<\/em>) have shown, markets are the primary institution.\u00a0 Governments are secondary.\u00a0 Markets govern governments.\u00a0 Governments do not control markets.\u00a0 The first imperative for any government is to make the economy work for the people.\u00a0 The government can only comply with that imperative \u2013to the extent that it can comply with it at all\u2014by pleasing the markets.\u00a0\u00a0 Governments must please investors.\u00a0 Therefore, even if DIEM or TDEM were to win elections and form governments, they would still not have real power.\u00a0 The markets would still have the main power, the decisive power, including but not limited to what Giorgio Agamben calls the power to enforce a state of exception.<\/p>\n Governments cannot simply invoke the principle of popular sovereignty, and then apply it to take control of markets.\u00a0 \u00a0\u00a0As the historical research of Michel Foucault has shown (see, for example, the last lectures in his Society Must be Defended<\/em>) for several centuries, at least since the Enlightened Despots, it has been a principle of jurisprudence that any government that does not respect freedom, equality, property and Bentham (especially property) is not a legitimate government.\u00a0 It violates the social contract.\u00a0 A state of exception is justified.\u00a0\u00a0 As Fareed Zakaria puts it today, speaking to a worldwide audience on CNN, democracy loses legitimacy when it becomes \u2018illiberal.\u2019<\/p>\n Jean-Claude Juncker recently let the cat out of the bag when he remarked that he and his colleagues know perfectly well what they ought to do.\u00a0 What they do not know, is how to do what they ought to do and get re-elected.\u00a0 Exactly.\u00a0 What they ought to do \u2013not just according to his worldview, but according to the way the world is presently organized– is obey the markets.\u00a0 Ethics, the call of duty, clashes with democracy.\u00a0 Such is the conceptual muddle in which Europe and all humanity is trapped.<\/p>\n This is why the disagreement between Thomas Piketty and Yanis Varoufakis is a splendid educational opportunity.\u00a0\u00a0 It is an opportunity to move the conversation to a deeper level.\u00a0\u00a0 It is an opportunity to take to heart the words of Albert Einstein: \u2018We\u00a0cannot solve\u00a0our\u00a0problems\u00a0with the same\u00a0level\u00a0of thinking that created them.\u2019<\/p>\n _____________________________________________<\/em><\/p>\n![\"\"](\"https:\/\/www.transcend.org\/tms\/wp-content\/uploads\/2016\/06\/howard-richards.jpg\")
<\/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