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Introduction To New Series: The Public And Its Problems by John Dewey

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In my first post at this site, I said I’d write about neoiberalism. I have held to that for the most part, as you can see from my archive. I’d say that first post held up pretty well substantively (please ignore the ugly typos). My first big step was to read Thomas Kuhn’s The Structure of Scientific Revolutions, which I applied to a number of economic textbooks and papers. Then I looked at the history of the rise of neoliberal economics, mainly through books by Hannah Arendt, Karl Polanyi, and Thorstein Veblen, Eventually I shifted to a somewhat broader viewpoint, looking at books about the ideas of the sociologist Pierre Bourdieu and the Frankfort School, and ultimately read a book by a contemporary Marxist and a student of capitalism.

Along the way I looked at the work of William Stanley Jevons, the inventor of marginal utility theory. Jevons was a follower of Jeremy Bentham, and his work was explicitly intended to produce a calculus of utility for human beings. He invented marginal utility as a way to implement Utilitarianis. Marginal utility is a building block of neoclassical economics. Over time, economists and the rest of us forgot Jevon’s intention, and Bentham’s philosophy was buried under a dome of math and amusing little word pictures in textbooks. Much of economics works this way. People notice some correlation and turn it into a law. For a typical example, look at my posts on the Phillips Curve.

One idea I have repeated many times came from Philip Mirowski’s book, Never Let A Serious Crisis go To Waste: neoliberalism has a specific view of the nature of the person. Human beings are isolated utility maximizers, and nothing more. This view the logical extreme of utilitarianism. We get a good look at this view of the person when economists pitch Pareto optimality and Kaldor-Hicks optimality as justifications for market allocation of resources. Eventually I concluded that neoliberalism is simply the logical culmination of capitalism. Capitalism no longer serves society, society serves capitalism.

Along the way I suggested that we need a different economic theory, and a new political theory, I suggested the possibility of using FDR’s Four Freedoms as a starting place for a theory of political economy, and Modern Monetary Theory as a plausible form of economic theory. I turned to discussions of freedom and equality focusing on the work of Elizabeth Anderson. Most recently I read another current thinker, Bruno Latour. I gave a short primer on Pragmatism, on the ground that Elizabeth Anderson identifies as a Pragmatist. I see Latour as a pragmatist too, though I doubt he does. For what it’s worth, I also identify as a pragmatist. It’s the framework I use to evaluate these texts: do they offer useful tools for thinking about the human condition.

The Current Situation

In this election cycle, two of the Democratic Candidates stated their explanations of the causes of the problems facing this nation. Sanders blames the violently rich, the .1%, for the bulk of our problems. Warren blames corruption, using the term in the way Zephyr Teachout used it in her book Corruption In America. Warren meant that too many of us see leadership as an opportunity for personal gain, either directly, as with Trump, or indirectly, as with John Bolton’s “book” or some other grift. For me, it includes corporate officials who work against corrective legislation to maintain their profits, and who condone or ignore violations of law by the corporations they lead, knowing they won’t be punished personally. These central assertions explain the policies of the two candidates. These explanations are distinguishable, but certainly they don’t conflict.

Their explanations did not penetrate the fog of media coverage of the horse race and the 24-hour news cycle, even though both repeated their theory in every debate, every stump speech, every TV appearance, and every press conference. It’s as if the reporters and talking heads couldn’t conceive of a coherent discussion of causes of problems, or why certain issues were important, and why the candidates propose the policies they endorse. It’s no wonder the average voter couldn’t tell you what either stood for.

I think the deep problem is that people believe things that aren’t true. The government is not like a household. Taxes are not necessary for revenue. The market does not pay people what they are worth. There is no trickle-down. Balanced budgets are not an ideal. The economy does not tend towards equilibrium in the short or long term. There is no separation of the economy from politics. I suggested that part of the problem is that these are all ideas that are drummed into us by teachers, mentors, parents and politicians. These ideas form a barrier preventing most people from understanding the way things actually work.

Once upon a time we thought the internet would give people a platform on which we could as a group address our problems seriously, discuss the issues they raised, and come up with possible solutions. You can find some flashes of discussion among the voters on social media, but for the most part, that’s gone. Worse yet, the idea that good ideas might float up from the voters is gone. Warren and Sanders centered the experience of actual voters in their stump speeches; but those stories never penetrate the fog either. None of this is a reason to give up.

Coming Attractions

I plan to address parts of this problem. I’m going to start with a discussion of a seminal work by John Dewey, perhaps the most well-known Pragmatist. The book, The Public And Its Problems, is available online here. Here’s the Wikipedia entry, which will help explain the context.

Here’s a link to an important paper by Elizabeth Anderson, What Is the Point of Equality, which I discussed in several posts. In one way, this paper helps us see our way to a different future, and I’ll rely on it in future posts.

Personal Note

The pressing issues of this moment, COVID-19 and its repercussions in the economy and our personal lives, are a harsh reminder of our fragility. They drain a good bit of the pleasure out of life. I have had trouble focusing on the kinds of books I usually enjoy, and have been thinking of switching to beach reading even though Spring has yet to reach Chicago. The insane incompetence of this administration is getting to me, and seriously hurting millions of us. There’s no point in writing rage posts, or yelling at the kids to get out of the bars and into Netflix and vitamin C. I hope that having promised to take up this book, I will get past the 12 pages I’ve read so far.

Principles Of Business Enterprises Part 8: Conclusion

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The general plan of The Principles of Business Enterprises by Thorstein Veblen is to state several ideas about the way business operated in the Gilded Age, with explanation and examples, and then to examine the logical outcomes of the operation of these principles. There is no grand theory, just observation, description and discussion. Two of the principles are that businessmen operate solely to generate a profit, and that to achieve efficiency, the entire social life of working people had to be remade in the image of the ideal production worker.

Veblen identified the basis for the operation of business as the concept of property as applied to industrial production. The idea is that just as the products of the blacksmith and the cooper belonged to them to do with as they saw fit, factory owners were entitled to all of the production of the factory to do with as they saw fit. The entire system of the US is devoted to the protection of property, so naturally businessmen dictate government policies in all areas that affect their profits.

These ideas manifest themselves in our society. Businesses cooperate to insure efficient operation, and in the process help make sure they all profit. Education is focused on preparing the human capital to find a job, because the alternative is to starve. The press devotes itself to the maintenance of the illusion of democracy, while the actual practice is that federal and state legislatures and courts protect the property claims of capitalists and pave the way for increased profits from operations both in the US and around the world. Businesses charge whatever they can get away with, free from interference by government or enforcement of antitrust laws. If it creates more profit, businesses stop producing, and stop hiring, regardless of the impact on the community.

What Veblen saw in 1904, we see today. The debts of corporate persons are easily discharged in bankruptcy, but the debts of human beings are pursued by armies of lawyers and government officials. Banks are bailed out, but homeowners are ruined. Private schools cheat people, but those people have to pay student debt till they die. No one goes to jail for wrecking the economy or any other elite crime, but heaven help the guy caught with a bit of pot.

This is all the logical outcome of an understanding of the idea of property. Locke said that when artisans mixed their labor with physical things, they were entitled to own the finished product. In exactly the same way, Veblen says, the factory owner is said to be entitled to own the goods produced by the factory. But Veblen is quite clear that Locke’s theory doesn’t explain why this should be, because the industrial age requires most people to work in a coordinated system and a supporting social structure; and the amount produced in this system is orders of magnitude larger than any individual artisan could produce.

His line of thinking leads naturally to questions about distribution of the profits of production. Why exactly is the owner of a factory entitled to all the profits? Why exactly is the owner entitled to pay the workers as little as possible? After all, the owner of a steel mill can’t produce anything without coordinating with many other manufacturers, miners, farmers, transportation companies, and an army of workers all of whom show up and work cooperatively in each of these enterprises, and a social structure that supports all of this action. The owner cannot produce anything unless society is organized for industrial production. In today’s terms, app developers have nothing to do if there is no electricity or no city wired for cable. This is what Elizabeth Warren was talking about when she said

There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Neither Warren nor Veblen pushes forward into talking about ownership of property. But that isn’t true of everyone. One of the things that confounds the defenders of the neoliberal consensus of pundits and mainstream economists it the apparent willingness of younger voters to consider socialism as a logical alternative to unregulated capitalism. Most explanations are based on the experience of the young with neoliberal capitalism. Here is Anis Shivani via Salon:

But millennials, in the most positive turn of events since the economic collapse, intuitively understand better. Circumstances not of their choosing have forced them to think outside the capitalist paradigm, which reduces human beings to figures of sales and productivity, and to consider if in their immediate lives, and in the organization of larger collectivities, there might not be more cooperative, nonviolent, mutually beneficial arrangements with better measures of human happiness than GDP growth or other statistics that benefit the financial class…
…

The idea is to move beyond money, interpreted in particular ways by capitalism, as the sole means of determining what is valued in human activity. Just because the means of production can be owned collectively does not mean—and indeed should not mean—that the state should be the owner.

Well, maybe. Cities own water systems and the pipes and sewage systems that provide us with water and sewage disposal. No one really believes it would be good to let the private sector suck profits out of us for something as important to staying alive as water. Why shouldn’t cities own other necessary and useful things, like electrical and cable lines? When you think about the willingness of private businesses to squeeze more money out of us in their relentless pursuit of profits at any cost, it’s easy to see why public ownership of specific companies might be a good idea.

Locke and his adherents, including the Founding Fathers, claimed that Locke’s idea of property rights was a Natural Law, a Natural Right. It was designed by the Almighty to direct humans along the path of righteousness. Today we don’t think like that. Veblen called Locke’s theory metaphysical, by which I think he meant philosophical as opposed to practical. Many of us demand certainty about such things and find it in bibles of one kind or another, including Locke, but many of us are more open to other ways of thinking. Veblen has a much more worldly manner, and I think he had a strong touch of the American philosophy of pragmatism, the school exemplified by John Dewey.

I don’t think I fully understand this book, not just because the language is sometimes difficult, but because I don’t think I understand the tone correctly. For example, he seems dismissive of socialism, but accepting of the trade union movement, and of the attitude of the workers whose acceptance of unbridled property rights was weakening. He notes several times that businessmen with their archaic natural law ideas control the nature of social life for workers, and exercise outsize influence on government, and their utter amorality. He mentions the bad effects each of these has on the community. Some books are like that; you have to read several works by the author and scholarly commentary to understand them fully.

Nevertheless, I plan to soldier on to the next book, Security, Territory and Population, a group of lectures by Michel Foucault. I’ve already read some of his works, including Discipline and Punish and The Birth of Biopolitics, so I at least have a running start.