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What Happened To The Cultural Elites: The Capitalist Celebration
Posts in this series
What Happened To The Cultural Elites: Changes In The Conditions of Production
David Swartz says that Pierre Bourdieu thought that the economic elites know the importance of cultural power. Culture and Power: The Sociology of Pierre Bourdieu, p. 127, 220. Cultural capital provides a justification for their exercise of economic power; it legitimizes the economic elites. Economic elites also found it valuable for their children to acquire cultural power through educational credentials and acquisition of the skills needed to manage businesses and fortunes. Bourdieu thinks that the cultural elites and the economic elites compete for power in society. In the US in the 1950s, the economic elites and the cultural elites reached a Truce. See this post for more detail and a discussion of the breakdown of the Truce.
The form of the Truce was that the cultural elites would dominate the discussion of what we now call social issues and the economic elites would dominate management of the economy. Before the Truce, the cultural elites included Marxists, Communists, socialists, and others who seriously questioned or even denied the legitimacy of the exercise of power by the economic elites. These groups were purged from the cultural elites, partly because of McCarthyism and partly by individual changes of mind. The Democratic party also dumped those groups. Republicans accepted many of the premises of liberalism, making a contested liberalism the dominant ideology. C. Wright Mills saw this Truce.
He challenged what he called the “Great Celebration” among liberal intellectuals who praised the return of prosperity and the rise of the nation to global superpower status.
The Great Celebration is a nice way to describe the Truce. The terms of the Truce required the cultural elites to accept capitalism as the one true economic faith. That had a number of bad results.
1. Conventional wisdom says that the Democratic Party is the party of the working class and the middle class. This connection is based on a political policy of shared prosperity. As neoliberalism rose to dominance, this policy was shed in favor of a market-based allocation of prosperity, with the economic elites controlling the way the market handled that allocation. When the Democrats capitulated to this policy, they broke the link between the working and middle classes and the cultural elites, a point commenter Lefty665 raised.
As I read Swartz, Bourdieu questioned why the cultural elites felt connected to the working class at all. Their habitus is completely different from that of the working class, and much more like that of the bourgeoisie especially in tastes and education. Bourideu suggests several reasons, including the fact that the working class and the cultural elites are in dominated positions in their segments of society, but that seems like resentment, and it seems weak.
I think the more likely explanation as to why cultural elites feel an affinity to the working and middle classes is a sense of fairness, of equity, and even a deep faith in the idea that all people are created equal and are entitled to equal dignity. Marxism may offer a framework for understanding the role of the proletariat in society, but there are others that don’t rely on historical materialism, for example the ideas of John Rawls in A Theory of Justice. In any event, it may be a better question to ask why so many of the cultural elites at least claim a connection to the working class.
Regardless of why, once the economic link is broken, the cultural elites have no base of support in society. Their incomes depend on their continued employment in the systems described in the first post in this series. That dependence undercuts their independence, even their intellectual autonomy. The claim to represent the interests of the working and middle classes became hollow.
2. Joining the Great Celebration required cultural elites to stop the study and advocacy of alternatives to capitalism, especially Marxism, but also socialism. Then the cultural elites slowly lost interest in the entire area of economics, and did not generate new alternatives or better ways to operate a capitalist system. As a result, neoliberal economists became the dominant force in the field of economics. When financial crises arose, the solutions considered mostly tracked the views of neoliberal economists. Later crashes were dealt with on neoliberal terms: government help for the financial sector, more free markets, less regulation and an abandonment of the reforms of the 1930s.
When the Great Crash came, there was no alternative. A short burst of Keynesian stimulus was followed by the usual neoliberal remedies, this time including austerity, privatization efforts (charter schools, Obamacare), and more emphasis on deregulated markets. Also, none of the economic elites were punished , and neither were neoliberal economists, because, after all, it was merely capitalist greed and some exuberant animal spirits, nothing malicious, let alone criminal. Millions of people were hammered, especially the working and middle classes, who lost an enormous part of their wealth while the economic elites were bailed out. The Democrats did not even recognize any of this as a problem largely because they had no alternatives to neoliberalism. That was the fault of the Cultural Elites.
3. The acceptance of capitalist economics meant that social issues connected to the economy were ignored, especially the effects of wealth inequality and income inequality, and the dangers of concentration of market power through consolidation and the crushing of small businesses. Liberal economists claimed to be interested in the problems of wealth and income inequality, but did nothing about it, either in their work or in their public statements. Paul Krugman wrote at least one paper on rising inequality in the late 1990s, but there was no follow-up in the economics community. Krugman offered this explanation:
The other [issue one might model] involves the personal distribution of income and wealth. Why are investment bankers paid so much? Why did the gap between CEOs and the average worker widen so much after 1980?
And here’s the thing: we really don’t know how to model personal income distribution — at best we have some semi-plausible ad hoc stories.
Krugman says he agrees with this article by Justin Fox. Fox describes the explanation of a sociologist, Dan Hirschman, who argues that the study of inequality dried up because no one was interested. Hirschman says it wasn’t a “deliberate suppression of knowledge”, it was “normative ignorance.” Fox tries to justify this as normal because there are limited resources and so on.
The plain fact is that although inequality is a central issue in politics and economic life, economists didn’t study it. Neither Krugman nor Fox gets to the root of the problem: why didn’t economists think this was an important problem? After all, making a living and accumulating wealth are the most important economic issues for every single member of society, and they know that politics matters. So why weren’t there dozens of competing models working off tons of data? I can’t think of an explanation that doesn’t make economists as a group complicit in the basic neoliberal program of transferring wealth and power to the economic elites. Ignoring motive, I’d say the most plausible explanation has to do with the Great Celebration, and the shift away from criticizing capitalism.
There were gains from the Truce, but these are ugly consequences.
” Bourdieu questioned why the cultural elites felt connected to the working class at all.”
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Victorian era charity derived from Christianity. The men managed/made the money and the women headed social causes. In this time, there was a thread of humility- recognition of the elites good fortune. And, a reasonable explanation for poverty- illiteracy, slum conditions, sweat shop labor, etc. Thus in the example of Jesus, there was a felt sense of “responsibility” for those more fortunate to help those less fortunate.
How the evangelicals of post WWII embraced abject capitalism and placed the blame for societies inequalities on the poor, I’ll never understand. Have they read the Gospels?
I would say too, that the early 1900’s Progressive movement empowered labor and the working class for the first time in history, and they found a voice for themselves- no longer needing the “cultural elites” to speak for them.
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“Then the cultural elites slowly lost interest in the entire area of economics, and did not generate new alternatives or better ways to operate a capitalist system.”
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Yes, I wholeheartedly agree. Labor groups and working class communists probably usurped the anti-capitalist flag and replaced “intellectualism” with “militancy.” The working class likely could not distinguish between the “cultural elites” who were sympathetic to them vs. the “economic elites” who saw them as chattel.
Labor empowered themselves thank you very much and started long before “progressive” was a word. History is written by the victors and since I was there I don’t need to read some hubris BS. So I don’t have a good source for you to educate yourself. You could start here however. https://en.wikipedia.org/wiki/List_of_strikes Just a couple of US milestones in the last 100 years, https://en.wikipedia.org/wiki/Battle_of_the_Overpass https://en.wikipedia.org/wiki/Davis%E2%80%93Bacon_Act_of_1931 https://en.wikipedia.org/wiki/Labor_Management_Relations_Act_of_1947
Maybe you didn’t read “early 1900’s” Progressive movement in my comment. I don’t believe that labor unions had a political voice in the US before this time. But, If I’m wrong, please educate me.
Thanks, Ed. Another fine piece of work. I think a religious analogy is appropriate.
A particularly severe form of fundamentalist orthodox capitalism became dominant in America in the twentieth century, especially after the Second World War. Its high priests were Business Leaders, CEOs and scions of great family wealth.
They were supported by various colleges of priests and vestal virgins. The closest to the temple were academic economists. Their cousins were the slightly more heterodox faculty at business and law schools and their more fundamentalist relatives at the new think tanks. Lobbyists were the soldier-clerics. Their duties ranged from ridding their kings of meddlesome heretics and assembling ransoms for the return of congresscritters to their rightful homes on Capitol Hill to writing sonnets to capitalism, known as de-regulatory and anti-labor bills, and purifying with fire legislative infidelity.
The Truce pervaded the government run by representatives of the Business Leaders. It energized its foreign policy and intelligence services. That, in turn, justified wide-scale American intervention across the world. Election interference in Britain, France, Germany and Italy, coups in Latin America, overt wars in Asia.
It’s the celebration of Markets that is the original sin. Neoliberalism infected liberal elites and destroyed Liberalism.
The word capitalism has no real meaning. War against it if you will. It won’t mean a thing. Put down the European theory and learn what Neoliberalism is. Fighting Capitalism is fighting a war that time has passed by.
Especially Mirowski
https://www.youtube.com/results?search_query=philp+marowski+neoliberalism
The devil’s greatest coup was convincing the masses he does not exist or that his time has passed by. He has many names, capitalism, liberalism, neoliberalism, wherever accumulation of capital is prized as a holy grail and the needs of people are dismissed as “unaffordable.”
Analogies aside, neoliberalism arose from the theory of European scholars in service to the great houses of capital and in fervent opposition not just to Soviet communism, but to democratic socialism and populist government of all kinds. All communal activity, that is, barring the enduring, lavishly funded trade associations of neoliberalists and the business run by them.
Or, you know, that that ridiculous orange combover is real……
Worn by the Comb-over Caudillo?
(h/t Thomas Frank)
President Cadet Bone Spurs Amber Waves of Combover
The postwar Evangelicals in the late 1940s (through, well, now) swelled with the same inflated-ego sense of hubris and glommed onto the same newfound prosperity as the United States did as it leapfrogged into economic supremacy in the world. What comes with such a thrust into mega-prominence? The swelled heads of a prideful people now suddenly born on second base and thinking they hit a home run. The evangelicals were/are further self-deluded, moreso than non-fanatics, due to the irrationalities and delusions inherent to their peculiar religious ideologic beliefs. Average folks were just proud of their country. Religious fanatics tended to deeply believe without question that Jesus had just returned and was making them all rich and also simultaneously confirming and forgiving their biases and vain judgments against others.
…which is why Billy Graham was financed by J Edgar Hoover, to foster anti-communist sentiment and nationalism…
Graham and the TV evangelists that followed also changed Christianity from a Left leaning, social cause supporting institution to the weird bedfellow of the Right that it is today.
I lived in the town of Sonoma for ten years. I left twenty years ago. My daughter lives there now and I often visit.
The first time I visited, it was in the mid 70’s. It was still an ag town with just a hint of the wine industry. It was plain and ordinary but surrounded by natural beauty. I was in my 20’s and not very impressed because I was young.
After my first husband died, I moved my family there and made a life. At that time, it was a full-on wine town with just a hint of ag. But the small town was intact and lovely.
Now, when I go back to visit I see massive, “tasteful” homes everywhere. Most of the landmarks I counted on have disappeared. A 3 bedroom, 2 bath 1960’s house can sell for a million dollars. The best neighborhood is mostly dark at night because it holds so many second homes of the wealthy. I know that this is the norm in many towns and cities across the globe.
My closest friend who has Parkinson’s has been kicked out of the home she rented for 40 years. She and her partner have been vanquished to a trailer park in Marin County where they will pay $1000 a month to rent the lot. She is 82. It will kill her.
The only reason I visit is because my daughter and her family are there. I don’t know how long they can stay. It is not reasonable to stay. She told me that every week she hears of someone leaving.
Sonoma is neoliberalism at its finest.
House for sale in Sonoma
You are so right.
Thanks, Mary. I echo bmaz. You are so right.
There are many Sonomas. There are many more teachers and Oklahomas, Kentuckys and Central Valleys, places where people still regard themselves as part of a whole, and need and want to do more than maximize their personal wealth.
Neoliberalism, like social Darwinism (which is neither social nor darwinian), is an elaborate excuse for the ruthless, unbounded, selfish accumulation of wealth.
I believe it might swing back to a moral, rational way of living but it will be just in time for climate change to kick in big time. The POS trumpians are making sure of that. Some days I feel murderous.
I feel somewhat fatalistic. The only likely solutions to the climate crisis will take two to three hundred years to begin to be felt. They are going to be very hard sells. We are going to see a lot of snake oil panaceas sold first and they are going to take years to be seen to fail. For example, South Africa got a one-year reprieve because by chance it started raining. I’ll bet they don’t do anything now to improve their chances next time the rains fail (next year?) We’ve been warned the whole Western U.S. is at risk for years-long droughts. If they are doing anything to find new sources of water I haven’t read about it. Large populations already have insufficient safe drinking water, and a couple of huge international enterprises have locked in contractual rights to fresh water sources at pennies on the cubic yard. Not many more years, it’s going to get very ugly. Michigan has already announced they are ending the provision of bottled water to Flint, although the water delivery system there is still poisoned. Oh, they also just sold more of the water in the Great Lakes to Nestle.
With respect to your final question about Krugman et al. I would point out that their perch atop the econ pyramid depended in part on their ability to please the elites who judged their analyses and who funded their work so they are hardly disinterested. And to that point I will (yet again) quote a deeper thinker:
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
– Upton Sinclair.
i agree…
thanks for the article ed.. it is a worthy subject ignored regularly, so it’s refreshing to see others thinking about the great inequality that would seem to be a byproduct of this same neo-liberalism or ”late stage” capitalism..
and what is the regular vehicle for paul krugman airing his views? none other then the nyt and u of ny, which regularly dispenses a view that pushes an particular agenda for anyone willing to see.. whether one agrees with it or not – i am sure it isn’t coincidental wall st isn’t far away.. and as life would have it – the world trade centre was attacked for some reason – apparently according to bush jr – because ‘they hate us for our freedom’… perhaps another answer would work too, but you won’t be reading about any alternative view in the nyt, wapo, or wsj… this explains why some view these sources as the only official script allowed.. it is why some are given over to referring to them as the modern version of pravda..
This piece, while obviously a generalisation, seems unaware that wealth inequality has always been a major study of economists, simply because arguments for prosperity maintained their benefits for the common good.
The Gini coefficient measures income inequality and pretty much every economist recignises that high levels of inequality are bad for the economy as a whole.
That’s why the Laffer curve was ruled ‘voodoo economics’, the assumption that wealth would trickle down benevolently.
Dialog about National Income and Income Distribution has been relegated to the sidelines of economic discourse since the 1930’s. Prosperity seems to be measured by GDP and Market gains which have no correlations to most peoples level of “prosperity.”
That does conveniently obscure who gets how much of the pie. When a few named individuals take recognizably sized portions, and the many get less than half of what’s left, it’s doesn’t do to document it for their reading pleasure. Closing the schools helps too. Ask Puerto Ricans, who will shortly have nearly 300 fewer public schools.
Avoiding too close an analysis of distribution is among the reasons that, compared to Europe, Americans are taught so little about geography or sociology.
Right, GDP and “the Market” could be through the roof… but in no way does that translate to prosperity in the form of working class incomes and social infrastructure like education and healthcare.
The Gini Coefficient is your idea of studying inequality? Here’s the FRED chart of the Gini Coefficient in the US https://fred.stlouisfed.org/series/SIPOVGINIUSA. What can you tell us by looking at it?
I believe it has also to do with the paradigm of power and control, vs a paradigm of equality. Whether we realize it or not, the power and control paradigm, (using, inflicting emotional and/or physical pain to control and persuade people) has huge implications for humanity, the human being. We are born, hard wired to love, bond and connect. We are pack animals at the core. Power and control at its peak, destroys the capacity for compassion, emotion regulation, attachment and love. In my mind this is the biblical battle between Old Testament and new. The God of authority vs the God of love and compassion.
The authoritarian paradigm invalidates compassion. It invalidates love. It validates Power over instead collaboration. The power and control paradigm destroys our capacity to love. Add war, that traumatizes, add abuse and this further complicates attachment. We have all internalized in varying degrees, this way of interacting with one another. When we lose our attachment to each other, we lose compassion. The power and control paradigm while indirectly confronted in our constitution, continued in our interpersonal interaction. There is research today done with MRIs that shows scars in the human brain even just from yelling at a child. That moment when compassionate care taker becomes threatening. It messes with the brain. A little bit of this may be tolerated but too much of this behavior literally forces a child to disconnect from self and attend to the authorities emotions. In doing so we divorce from our own finely tuned perceptual system and focus almost exclusively outward. In this outward focus we detach from pur emotion, we lose touch with ourselves, we suppress our own emotions and in varying degrees focus our energy on regulating others (very inefficient) on the lowest levels of power and control all the way to full out power and control that enslaves “others”. We lose our compassion as we are invalidated, we invalidate others. Somewhere this paradigm shift needs to be confronted and brought out of the darkness to light if we are ever going to take care of one another socially and effectively. It’s psychological and sociological.
I love your work Ed.
Meanwhile China, which is aiming for moral leadership of the world and which has much lower inequality than ours, has announced that the period 2020-2035 will be devoted to dramatically reducing inequality.
Like it or not, the world will be watching…
Nice shout out to Ed from Naked Capitalism.
Link?
https://www.nakedcapitalism.com/2018/04/links-4-7-18.html
At the end of the list of recommended articles, just above the photograph of the antidote du jour.
Thank you!
https://www.wilmerhale.com/pages/publicationsandNewsDetail.aspx?NewsPubId=90463
Our problem here in the US is our reluctance to support labor law in favor employees instead of management.
At Will employment a something that’s been done away with in other countries.
Thank you Ed for this thread. Hopeful perspective; for counties with public schools, amidst rush to further de-educationalize us a new AP class “Human Geography” is studying where people live, how they live, where they may be moving-living next, where they were living- moving from. From peacerme ” A little bit of this may be tolerated but too much of this behavior literally forces a child to disconnect from self and attend to the authorities emotions.” Educators in Atlanta, during child-murder-spree 1980 learned children disconnected from self emotionally during this crisis and needed specialized pre-school education to re-establish emotional self connection. Generational/Societal mental illness grows until healing occurs. Common reflection is one therapeutic approach to heal inequality abuse arising from Neoliberalism endemic today.
What follows may or may not be relevant to Ed’s post above. But I’m thinking about how there must be personality factors that (a) buy into “capitalism” or this “neoliberalism” that’s being bandied about (I’m not a fan of intellectual abstractions, because they can be so slippery, so I’ve put them in quotes). Or (b) don’t buy into them! Are willing to pay a price for that. People like Marcy, as an example of the latter, relying on donations (and spousal trust in her values, I’m assuming.). I’m thinking that things like compassion – as “peacerme” (above) mentioned – and altruism and personal dedication to a cause or a “calling” or simple opposition to that “money-driven mindset” must operate for many of us who read or write here. So I’m fascinated with people – able/willing/supported by others – who defy this cancer that has spread everywhere – oligarchs and sycophants and lovers of power and money, willing to subject or enslave or disempower human beings in pursuit of things I think of as Evil.
So, bear with me. Or not… As I ponder this a bit:
Not everyone “works” for a financial reward. Some people shy away from being “owned” – whether by the powerful or those who hold the purse strings of jobs. Other things motivate them. Sometimes their own pride. Other times a feeling of freedom in choosing how to go about doing their job. Or the people they get to interact with. Or a sense of what I’d call “knowledge authority/expertise” which is different from the authority of wielding power or money. Or compassion, altruism. (I’ve seen some do it also out of envy or rage – but that doesn’t seem to lead in positive directions as well as virtuous personality traits – at least not in my experience.)
I recall being in grad school in clinical psychology – which I saw as a “calling” – to help people. Of course I knew I could make a living ultimately. But money was not my motivator. I recall talking to someone who was looking to apply to my grad program (or whoever would admit her) and being horrified when that that she blithely expressed a desire to get the degree to “make a lot of money.”
On the other hand my spouse has spent the better part of the last 46 years working on a medieval manuscript in Spanish literature. He has accumulated a massive (important) data base, you could call it, of all his ideas and suppositions and theories, a huge trove of research he has never shared, because he wanted “to understand it all” before he disseminated it.
Not publishing, because he believed it wasn’t “complete,” was antithetical to the “publish or perish” mindset in the US, but accorded with his European education in addition to his resistance to anything which reminded him of growing up in a dictatorship, where one is effectively “owned” by a dominant “ideology” – its power brokers bent on controlling you, doling out job security and other benefactions, depending upon one’s willingness to be comply. Like any abusive authoritarian system, it’s “best” when those trapped in it, comply willingly – of their own “free will” – no matter how nonsensical. So I’m thinking of Academia, the capricious tenure system, but also our currrent White House ‘resident’ or all the ways capitalism makes willing slaves of people. And my insight of the morning, regarding my spouse’s 46 years of “financially uncompensated” but nevertheless very valuable work, now gives me a view of the Academy’s capitalistic valuing of time and effort and ultimately “one’s worth” via # and type of publications.
He was a wonderful teacher; students revered him. But illness was also catching up with him; so he stopped teaching but continued to find his joy in his scholarship for the past 18 years, punctuated by various surgeries or diagnostic procedures.
But now, as his death approaches, suddenly he must face passing all this learning on somehow. And I’m learning something new about him. He’s willing to let go of it, knowing he doesn’t have to deal with the judgment of others. Knowing he did this for himself – not to please a system, but for some Ultimate Values which matter to him. (He apparently never wanted fame. He’d be embarrassed by that. So if it comes he’s glad he’ll be dead and not have to deal with it.)
I envision a tiny subset of scholars, able to comprehend what he’s done, people who can make use of all his time and efforts. This tiny subset may be quietly stunned. (But he’ll die in peace. Maybe even knowing that his scholarship has a good home in a Temple of Learning that never even knew about him.)
I’m not sure what points I’ve made here. Or whether Ed or others can fit them into whatever “economy” or “culture” operates outside capitalism or neoliberalism.
But some people choose to live outside the dominant powerbroker systems that now misuse that power. These “resisters” play on different chessboards (that these power brokers cannot even “see” or comprehend). They cannot be bought; they may suffer as a consequence. We see this throughout history. Mystics and saints and crazy people. Artists. Creative thinkers. Truth-tellers. Imperfect humans driven by compassion, idealism, altruism or other ultimate values.
I hope this makes sense to somebody…
Thanks for this comment: your husband shows us a good way to live and to be in the world. I’ve been thinking a lot about the basic assumption behind Bourdieu’s thinking, that everyone competes for power and prestige in their fields of interest. I don’t think that’s true. I use ideas like critical distance from authority, or intellectual autonomy, but they don’t describe the love and joy that come from the free exercise of the intellect, the body or the spirit as you have.
I’ve restarted this reply a few times already and I find I don’t know where to start.
John Merryman: Thank you, and thank you to your husband for his example.
I think that I know what you mean about both a calling and working outside the structure. One of my most inspiring teachers did both and ultimately did pay a price for it but that was different. I was thinking of him as I read your piece and I was wishing in some ways that he had been as blessed as your husband to be able to be with someone who saw him for what he was all the way to the end, and beyond.
Like you I am never quite sure what to make of some of these abstractions. My central beef with economics is that it assumes that all value in the world can be rendered to a single unit, money, and that everyone has a price. The same goes I would say for Bordeau who, if I am reading Ed right, makes the same assumption about power as some ephemeral unit of all value. Clearly your husband, you, and my best teacher see things differently. That is an example to live by.
I hope that your Husband’s work is eventually published. Something that meaningful is definitely meant to be shared and to be, as a “gift for all times” rather than a “performance for the moment” to paraphrase Thucydedes.
The problem for economists is that they are fundamentally wrong.
To TheraP. Thank you for sharing your heart and I’m sorry for your loss and your spouses decline. I think each of us holds destiny in our own hands. Right lively hood is very important for the courage you bring to your chosen occupation or choosing another occupation with less encumbrances to Neoliberalism. Thoughts leading to words leading to actions shape your individual internal growth and ripple to your family and community shape and growth. Healing yourself and then family and then community being on the pinnacle of Maslow’s Hierarchy. Fighting inequality while participating in this positive cashflow society is possible and therapeutic the more your values and principles are defined. “Even a dead fish can go along with the flow”. Jim Hightower. When we stand up together the boat starts rocking.
Some of us are fortunate (or courageous enough or foolish enough) to “hold destiny in our own hands.” But too many in this world are so oppressed by geographic location or war or skin color or gender or illiteracy or other types of disempowerment/outright enslavement that they can barely get enough to eat or clothe themselves or have a roof over their head. I am so disheartened by those refugees, fleeing one set of bad circumstances only to fall into another. All the world’s “people on the move” and the very, very poor, barely surviving. Yet I am also heartened by the dignity of so many of these poor, doing virtual slave labor to support themselves and their families, but somehow retaining their humanity and values.
I’m saying this in response to your opening sentence but also as an addition to what I wrote. We all must die. Somehow or another. But poverty, illiteracy, lack of education, healthcare or decent living conditions, these are NOT inevitable. They are in a different category from death, which comes to all without exception and when it occurs under conditions of compassion and wisdom can be growth-enhancing and meaningful.
But Injustice and Inequality and all that goes along with them are NOT meaningful and should be indicted. Not celebrated, as some seem entitled to do.
Right Livelihood, I like that term. I like the idea of skills/expertise you can give away, not just make a living from. And also the idea that your livelihood be Just and Virtuous. I truly believe that the good one does, no matter how unknown or unsung, matters and benefits the cosmos, which is to say, I have hope – as irrational as that may appear when I survey the suffering in this world.
Is Trump the last stand of the 31 percent US white male patriarchy? For children under 18, it is 25.5 percent non Hispanic white male. The US trends in inequality are intertwined with demographics as well as changes in economic organisations. See page 8. https://www.census.gov/content/dam/Census/library/publications/2018/demo/P25_1144.pdf
Ed,
When societies were small, economics was reciprocal, as it was more efficient to share, than store assets. As they grew though, accounting became necessary, thus money. As such money is the social contract quantized. The medium that allows the market to function, as its functionality is in its fungibility. We own money like we own the section of road we are on.
The problem is that we, rich and poor alike, are weaned on the assumption it is a commodity to be mined from the community and any we can get, we are naturally entitled to. Given we individually experience it as hope and security, the tendency is to save and store it, but a store is static, while a medium is dynamic. For instance, in the body, blood is the medium and fat is the store. Or for cars, roads are the medium and parking lots are the store.
If the heart and arteries tried to hold onto blood, we would have fat clogging arteries and the heart, poor circulation to the extremities and high blood pressure to compensate(QE).
When it is pulled from circulation, more money has to be added to keep the system flowing, but excess money is non-existent contributions to the overall account. So the banking system encourages keeping money stored with them and in circulation with interest and threats of inflation.
Government is analogous to the body’s central nervous system, as executive and regulatory function, while finance is analogous to the circulation system, carrying resources to where they are needed. As such, they both serve the entire body, but for distinct and separate purposes.
Government was originally private, but as monarchs lost sight of their larger purpose, it eventually became a public function. Banking is suffering a similar situation, but we exist in this either/or situation of public versus private. Finance under government control is invariably corrupted by the tendency to inflate the money supply and give a false and temporary sense of prosperity.
On the other hand, private control of the financial system makes the entire economy subject to value being siphoned off to those managing it, which turns the function from the efficient circulation of value throughout the entire economy, to the manufacture of notational wealth as an end in itself, as that is the bottom line for those focused on the management of the money.
Much of this stored value is in government debt. The government doesn’t actually budget, which is to prioritize and spend according to ability. Instead, enormous bills are drawn up and the president can only pass or veto them. Some years ago the line item veto was put up as a solution, but it would have gutted the power of the legislature over spending priorities.
One way to correct this would be to break the bills into their various items, have every legislator assign a percentage value to each item, put it back together in order of preference and then the president draws the line. “The buck stops here.” This would retain legislative control over prioritizing, while the executive is directly responsible for the amount of potential debt or savings incurred.
To the extent this would reduce deficit spending, it would destroy a significant amount of “savings” potential and the bubble of stored notational wealth would be seriously deflated.
As a strictly hypothetical idea, what if the government were to threaten to tax excess money out of the system and not just borrow it? People would quickly find other ways to store value.
Most of us save for the same basic reasons, from housing and raising children, to healthcare and retirement. So if we were to invest in these as community assets directly and not try to save for them individually, it would mean storing value in society and presumably a more healthy environment, rather then treating them as resources to be mined. Consequently we would have to work together more and hopefully have a less atomized and more reciprocal society.
We would also have a more manageable financial system, that isn’t storing the wealth and hopes of the entire society.
Shout out to NC.
You bring up some good points. Interest on money privately owned entices the wealthy (and the banking establishment that depends on them) to create evermore “financial instruments” to store excess wealth. The more income is distributed to the wealthy, the more it is excluded from the economy, and the less robust the economy becomes, measured by employment and consumer consumption.
Also, the evolution of financial instruments have made it more profitable to store money in “the Market” than to “put it to work” building product or service businesses. The more wealth is concentrated the bigger this problem becomes… until the reality that the stock market is a giant empty bag will become apparent to its last “piece of the pie” holders. Owning most of the market does no good for the wealthy as they cannot shift risk and losses to the small shareholders.
Silvo Gessel had an interesting idea- that money should loose value over time- this would allow each productive years money (national income) to circulate completely and remove the incentive for “hording” the money supply. Of course, this creates an issue for “saving” for legitimate purposes like education, real capital investment, and retirement. Which is why some have suggested different types of money for different purposes.
Of, course this is heresy for the orthodox economic and banking establishment- the temple priests of neoliberalism that will extinct the human species in a century if they don’t get their heads out of their asses and their paws of all the money.
Matt,
Inflation is a bit of an official policy, to keep money in circulation.
Yes, there is an enormous feedback loop, where wealth gravitates into ever greater concentrations and as you point out, this is destructive of the very system supporting it in the first place. Which means the greatest threat to capitalism are capitalists.
Though the wealthy are quite good at shifting risk to the public sector. The next step will be disaster capitalism coming home. When the Treasury can no longer issue more debt at low interest rates, Warren Buffet and friends will kindly offer to trade their 100’s of billions in Federal debt for public assets. Like interstates, parks, water systems, etc. I just read some venture capitalists offered to buy many of Connecticut’s state buildings to pay off state debt. So the cycle can continue down the rabbit hole a good deal further.
As Ed points out, what is really needed is to introduce different economic models to discuss and debate. Frankly socialism amounts to the loyal opposition to capitalism, since it still assumes wealth should be abstracted and extracted from society and the environment, but just distributed more evenly by the state. I think we really need to examine the whole process, from the bottom up.
We could definitely have different kinds of money, credit systems, vouchers, etc, because that would reenforce the understanding of money as forms of social contracts, not just some commodity to be mined or manufactured, like gold, or bitcoin.
Obviously the current system would view any such discussion as a threat to its control, but the impeding crash should offer up some space for discussion. As the neoliberals like to say; “Never waste a good crisis.”
I think you’re, right… studying/experimenting with alternative currencies could help either rebuild after a crash or offer a means to develop alternative sub-economies.
I forgot the name of the program, but in Japan a younger/middle aged person can do work (care taking, shopping, home maintenance) for a elderly person and receive vouchers (equal to the time they volunteered) in an account that can be “saved” for use when they are retired. No money changes hands, but the net effect is to provide service to senior citizens without raising taxes- everybody wins.
matt,
When the big tree falls, it leaves more sunlight for the saplings.
no doubt, some big trees will be falling…
This distinction between cultural and economic elites, and distance from the working class, seems to be the crux of the income inequality the is worsening. At the same time as many more people have the opportunity to enter academia, ironically, opportunity means less than it used to. As academic institutions are operating like businesses, graduates are numerous and work is increasingly scarce. University is becoming the de facto option, and many who attend are not scholars by nature- by which I mean the drive to understand the world, to amass knowledge for its own sake and not for the number of one’s publications. I feel as though there is something to this point that I can’t quite articulate, not being an economist- but in essence, it is the capitalization of academia which is producing a culture of “academic businessmen” for whom the fundamental quest for notoriety and fame reigns supreme. As the public at large begin to see the cracks in the facade, it is, in part, responsible for declining trust in these institutions and fueling the anti- intellectualism that is becoming rampant. I realize there are a lot of thoughts tangled up in there- the interconnectedness of academia and economics is difficult to untangle, and please excuse any thoughts here that are not fully clear.
One of the reasons why the cultural elites relate to the working class is that, for many, their exit from the working class has been the amassing of knowledge and degrees, which automatically confer prestige and raise someone into a different social class. However, they still relate to the class struggle, a class which many of their families are still firmly a part of, and which they have been driven to “escape from”- but this is an economic reason, not one of scholarly pursuit for its own sake, which is drastically changing the make-up of the academic population from scholars to businessmen or politicians. Of course, the PhDs of yore were not a homogenous group, but they were far more likely to see things similarly and to value the pursuit of effort and time into attaining a degree for the sake of attaining more knowledge.
To close, I would just like to reiterate that learning and the resultant cultural elitism may in part be explained by a desire to escape the working class, hence the sense of connection. It also seems as though we are seeing the phase of capitalism that occurs when it has overstayed its usefulness as a country’s economic model (is there a term that describes this phenomenon?), and that for a first-world country, wealth redistribution (in some fashion) should be prized as a method to give everyone a decent quality of life. We are no longer struggling to amass wealth as a lower income country would, for which capitalism may be a better model, and perhaps we need to see a corresponding change in values (the US and Canada, plus the EU would be included here generally). I don’t know what needs to change in our society, but I do feel that we need to solve this economic crisis fairly soon, or we will collapse under the weight of our capitalization of every major industry, especially those, like education and health care, which fundamentally do not thrive on a “wealth accumulation” model. Perhaps someone can chime in on a view of what happens when capitalism no longer works for a mature society? Using the elites as a yardstick, as the economic elites outpace the cultural ones in wealth (as cultural elites are still often beholden to their organizations for work and will be increasingly left behind as the wealth travels upwards), is this a signal that we are on the brink of a change in economic landscape?
To TheraP, I wanted to reflect on your answer. It really resonated with me, your spouse’s desire to learn for his own sake. He is one of the precious few legitimate scholars left, and I am so sorry for you and your family during this time. You are clearly an empathetic person- indeed, your ideas are often defined by a psychological or behaviorist lens. As someone who has worked in neuroscience, I can understand having that lens through which you view the world. I don’t really know what I’m trying to say, other than a recognition that your husband’s work has resulted from a lifetime of genuine curiosity, a sense that scholars view the world the way children do, in some ways. Wanting to know “why” something works without caring what it means for those around them or how much money they can get from an impeccably-timed discovery (and publication, of course). The luckiest of us never have that curiosity extinguished, and that pursuit will always matter more than finances for those who live to learn. I would also make the argument, though, that the pursuit of knowledge comes with other personality traits that generally make someone prone to introspection and the resulting emotional sensitivity, so it is only a good thing depending on how you view this. The phrase “ignorance is bliss” was coined for a reason. (One final note: I meant to reply to your response in the previous post but couldn’t get around to it in the past few days. Your points there are very accurate regarding academia and I suppose being in Canada makes me slightly luckier in that respect- but capitalism has a hold on us as well, and it seems that we are quickly entering an age where unbridled interest in financial gain has allowed exploitation of every industry. It’s a sense that nothing is sacred anymore, not even the hallowed institutions of learning. As a result, they no longer function like they used to, and we are seeing the sun set on a beautiful tradition, the search for objective truth, and as I am new to the ranks of academia, I hope that it is somehow reversible. I don’t know what will happen if it gets worse, since I am trying to hold on to my view of a certain purity inherent in dedicating oneself to a lifetime of studying, a calling of being always a student in many ways).
I wish you and your spouse the best for the future, or at least a peacefulness for what is to come. I am very sorry to hear that you are going through this.
Thank you Ed. Your post addresses the question you first posed several threads ago, what happened to the cultural elites. You flatter me, and while I appreciate that, all I attempt to do is try to keep my nose to the ground of the rape of workers and the middle class by the elite neoliberals with the acquiescence of the cultural elites.
In response to your point 1), The Dems abandoned the working and middle class in their McGovern Commission “reforms” following the 1968 debacle. They traded the New Deal concept that workers deserve to share in the fruits of their labor for meritocracy, and if you don’t get your share then you are by definition not meritorious. There is a good documentation of this, who, what, where, why and how in historian Thomas Frank’s book “Listen Liberal”. You make the point that that the economic elites controlled the way the market handled the allocation of prosperity, in simpler terms, merit. For the better part of the last 50 years we have had the exploitation of working Americans by the economic elites, with enough scraps thrown to the the cultural elites to keep them from yapping too loudly. That also serves to ensure the cultural elites remember where the largess they have become accustomed to comes from, and that it can stop.
re 2) It helps to remember the relative scales of the Keynesian stimulus and the neolib remedies, and the disparity between them. The stimulus enacted was something over $800B. In another embrace of the Repubs, Obama made roughly half of that stimulus tax cuts that do not provide even a dollar of stimulus for each dollar cut after 3 years. The neolib remedies largely in the form of low or no interest loans and bailouts, many to Wall St organizations miraculously transformed into banks overnight, are harder to quantify. Legitimate estimates run closer to $30T, that is approaching 2 years of GDP. Just as income has flowed to the neolib elites over the last 40 or more years, so so went the bailouts. As Deep Throat told Woodward “Follow the money”. But we have not focused on that, even as Treasury Sec. Timmy Geithner’s egregious abuse of mortgage abatement and millions of middle class families as “foaming the runways for the banks” received little attention. That was Obama neoliberal economic policy at work.
re 3) Ten years after the crash we have the monthly trumpeting of phony unemployment numbers at close to record lows around 4% while buried in the statistics is the labor participation rate, the percentage of people counted in the labor force that hovers near record lows. That is neoliberal economists at work embedded in the BLS, right along with the op ed pages of the NYT and the academic cultural elite worlds. There are other measures of inequality both of and within the middle class. Median family net worth for whites dropped by about a third after the crash to around $100k. Black families net worth fell to $0. There was a report in the Wash Post last week that minority home ownership has fallen to levels last seen before fair housing laws were enacted decades ago. Those are simple measures of economic inequality that would not be hard to study. They demonstrate the depths of Krugman’s elite neoliberal depravity as exemplified by your Krugman quote: “we really don’t know how to model personal income distribution — at best we have some semi-plausible ad hoc stories.” Bullshit.
There are consequences of profound income inequality, they come under the heading of political instability. The US is currently experiencing the initial stages of that, and for cause. We have the highest level of income inequality since the late 1920s, and unlike the ’30s and the New Deal we have done nothing to correct it. In fact we have made it worse. That does not bode well for our future.
I take exception to the conflation of elite neoliberalism with religion. Religion is what keeps the abused masses from coming to slit our throats in the middle of the night while they redistribute our wealth, while elite neoliberalism is greed combined with the power to exploit the vulnerable.
Thank you again Ed for your articles and elucidation of the intellectual underpinnings of our current state of affairs.
If religion is only useful to keep the masses from sharpening their pitchforks, we should all be atheists. It may be the opiate of the masses, but it does offer relief, optimism and hope, without which sustained efforts toward improvement would be impossible.
Often misused for exclusion and personal gain, religion is also an expression of community, which we need to reinforce in the face of the onslaught of neoliberalism’s cultural message that people are nought but a set of skills, some of little market value. Homo economicus is an invention, a straight jacket meant not to keep the uncontrolled from harm, but to keep communal needs from being met, because that would make it harder to accumulate capital in ever fewer hands.
Neoliberalism is a form of religion. It is based on faith more than science, and heretics are profoundly unwelcome. It is not a religion of the masses, but of princes.
Apropos of cruel selfishness causing public harm, Mr. Trump orchestrated the construction of Trump Tower on Fifth Avenue in Midtown Manhattan. A fire broke out there recently on the 50th floor. It killed one and injured half a dozen firefighters. More than two hundred fought the fire for over two hours. More than a kitchen blaze perhaps. It was the second fire in the building so far this year.
The 58 floor, 664 foot high structure was built, in part, by undocumented immigrants (largely unpaid until years later). It was built, in part, with high-cost concrete, sourced from firms with significant alleged mob connections. Mr. Trump, always wanting to save costs when he could impose them on others (and to recoup the extras paid to his concrete suppliers), lobbied hard to avoid the cost of installing fire sprinklers on the residential floors. He called it a luxury whose only purpose was to make people feel good.
He succeeded. Trump Tower doesn’t have sprinklers on its residential floors. (They weren’t mandatory in new construction until years later, thanks in part to intense lobbying by developers like Trump.) One dead man and two hundred fire fighters might disagree with Trump’s choices. Thankfully, Mr. Trump’s penthouse remains intact. Mr. Trump’s priorities appear not to have changed.
Saving the rich from the rage of the ravaged poor may not be the only thing religion is good for, but it is certainly something it has been used for over the millennia. Relief, optimism and hope, yes indeed. Do not go slit the throats of the rich (neoliberal elites) and take back what they have stolen from you, you’ll get your reward in heaven. Relief, optimism and hope in the service of preserving the status quo. The rich get richer and the middle class and poor get poorer, at least that how it works in the good old USA.
I would suggest that you are wrong about Neoliberalism being a form of religion, but on second thought perhaps you are right. All thieves from the poor to further prosper the rich may be birds of a feather.
Surprisingly, Jared Kushner and family have obtained new financing that will enable them to refinance their $1.2 billion mortgage on their white elephant property at 666 Fifth Avenue. Who is playing Daddy Warbucks to Jared’s Orphan Annie has not been disclosed. The older building, which a 27-year old Jared Kushner bought in 2007 for $1.8 billion, is apparently worth less than $1 billion and has a high vacancy rate.
Who might Daddy Warbucks be? Qatar sovereign wealth fund, a Russian, a Chinese, or a Panamanian one? Maybe time will tell. Given who his daddy-in-law is, we ought to.
https://thinkprogress.org/the-kushners-mysterious-1-2-billion-bailout-92f6c12de50c/
Santa Claus?
Ho, ho, ho!
OT
I’m sure EW will have an appropriate post up tomorrow. I’m sickened by the US feigning outrage by an alleged “chemical attack” on 40+ women and children in Syria. Sure, after 25 years of unjust war (hundreds of thousands of casualties) with Iraq, which displaced refugees and militants into Syria destabilizing that region… and causing MILLIONS of Syrian refugees… we’re going to drum up the battle cry to escalate war on account of a handful of pictures of sad suffering cute children? Newsflash! stupid Americans- the men, women, and cute children of Syria have been suffering and dying every day in equally tortuous ways for SEVEN years!
McCain is claiming that Trumps mandate to withdraw troops “emboldened” Assad? As if Assad (and his evil supporter Putin) said to themselves, “hey we’re winning the war, and the American president said he’s going to withdraw troops… hurry get the helicopters loaded up with chemical weapons barrel bombs to drop on women and children!!”
And, looks like the American or Israeli bombs are already dropping:
http://abcnews.go.com/International/wireStory/latest-russia-denies-reports-syrian-chemical-attack-54318060
Yeah “OT” – Always swell when short time commenters think they can and should dictate what should be posted on this website.
I apologize. Other commenters often interject OT’s having to do with breaking news. As the war in Syria escalates and intertwines with the two biggest foreign influences on the Trump administration, Russia and Israel, I think other EW participants would like to discuss the developing events.
Donald J. Trump seems to have caught his tiny thumb in Michael Avenatti’s wringer. Avenatti filed today a motion to compel expedited discovery and for a jury trial on the issue of the Clifford NDA’s existence. His arguments seem beyond Michael Cohen’s ability to refute them. We’ll see what Blakely (for Essential Consultants/Cohen) and Harder (Trump) can do.
Avenatti’s arguments are ones we’ve discussed before. The existence of the NDA, and its arbitration provision, are in question. Absent a valid agreement, the arbitration provision has no validity. Under the Federal Arbitration Act, determining the original existence of the overall agreement is for the federal district court to determine. Avenatti has requested a jury trial, two-hour depositions from Trump and Cohen, and abbreviated document discovery. EC/Cohen contend that no discovery should be permitted.
Avenatti, of course, references Trump’s April 5th Sgt. Schultz statement to reporters on Air Force One that he knows nussink. Avenatti wants to put him under oath in a deposition so that whatever Mr. Trump has to say can be submitted as evidence. Ditto Mr. Cohen. CNN’s legal experts don’t think that will happen, which isn’t a big enough hook to hang a keychain on.
The precedents seem in Avenatti’s favor. The contract wasn’t signed by Trump and he disclaims knowledge of it. If Trump and Cohen stick to their implausible stories and repeat them in deposition, it should dispose of Trump’s status as a party or as a third-party beneficiary. Absent that, it’s hard to see how the contract survives, given that the “mutual release” and other obligations meant to have come from Trump would not be coming from anybody, which would mean Clifford could never get what she bargained for. Ordinarily, that means the contract never existed.
Trump is all bluster, but would he fold and agree that Clifford is not bound by this supposed NDA? I don’t see how that keeps a lid on anything, including any evidence of Trump’s time with Clifford that she forgot to hand over to Cohen and the claims that whoever paid the $130,000 made an illegal campaign contribution to Trump’s bid for the presidency.
Nice of Trump not to prejudge what his DoJ and FBI are doing to maintain and enforce the rule of law, as they enforce a search warrant on the offices of his personal attorney,
Tom HagenMichael Cohen. The president of Panama could take lessons from him.@Lefty
Denying the improvements in employment numbers may fulfill some inner commie negativism you need but the reality seems more positive. The BLS interview data I saw showed most of this group were retiring and other large numbers were returning to family responsibilities with only about 2% claiming problems related to the economy. The labor participation rate is about what it was in the ’70s and earlier.
Trump’s improving popularity rating is a reflection of improving conditions among working people.
Trying to fight neoliberalism with an near empty bag of old commie new-deal failures didn’t fool anyone back then and it won’t now.
Interesting, you do realize that Trump’s isolationist/Bannon/working class platform is anti-neoliberal?
Only in appearance. It’s a marketing gig.
Purity of Essence. Deny it to others. And avoid fluoride, it’s a commie plot.
@Matt
I don’t think isolationist is evident in anything Trump does unless you mean he seeks to isolate us from the commies of the NWO and their Stalinist rule of men.
Trump has taken a strong America first position which rejects the extremes of neoliberalism and globalism but neoliberalism is the economic order of today with no other replacement available so it needs to be controlled.
I hate to break it to you but you cannot “reject the extremes of neoliberalism” and “claim that it needs to be controlled.” These are contradictions in terms to neoliberal philosophy. You might be a closet believer in social democracy, after all.