Accelerating Contradictions: When and How

This post over at MyDD seems a bit wrong-headed to me. Obama, speaking in Nevada, said:

Because of the housing crisis, we are now in a very dangerous situation where financial institutions across this country are afraid to lend money. If all that meant was the failure of a few big banks on Wall Street, it would be one thing. But that's not what it means. What it means is that if we do not act, it will be harder for you to get a mortgage for your home or the loans you need to buy a car or send your children to college. What it means is that businesses won't be able to get the loans they need to open new factories, or hire more workers, or make payroll for the workers they have. What it means is that thousands of businesses could close. Millions of jobs could be lost. A long and painful recession could follow.

To which Jerome Armstrong responds:

But I thought the reason why this happened was because credit was too easy to get for those who could not afford it? But... nevermind.

Which in no way contradicts anything Obama said. The causes of the trouble and the effects of the trouble don't have to be identical. This is how crises work: overproduction leads to a glut leads to a decapitalization leads to underproduction. It's called a business cycle. Same principle applies here.

Armstrong's point in all this is:

Yea, I am mocking of Obama. The underlying attitude I have is: why he is abandoning his self-proclaimed skepticism of Bush here, why? Can anyone say with a straight face that his argument for why Democrats should go along with Bush and back this bill that he's presented is sound? I don't even see an argument. All that he's offered is a bit of fear mixed in with post-partisan and some language changes to go along with a few platitudes.

Presumably, Armstrong would rather see the sort of thing Digby (via a reader and Rick Perlstein) is calling "a progressive Shock Doctrine." That is, letting the crisis deepen to the point where people will welcome a new New Deal. Back in the olden days, this was called accelerating the contradictions (although this phrase has a more activist sense than the rather passive formulation given by Digby, doing things to make the crisis worse instead of simply waiting for it to deepen on its own).

All well and good. But does Armstrong really beleive that a Democratic presidential candidate is not only going to embrace such a strategy but going to declare in a public address that he is embracing such a strategy? Really?

Obama's statement seems to sit right in the middle of the concerned prognostications given by a pretty wide range of commentators. That's not an argument for the Paulson plan. But I don't take Obama to have been offering an argumant for the Paulson plan. In fact, he seems to be playing his cards pretty close to his chest when it comes to specific proposals. That's probably smart. If Obama's a Marxist, it's best to remain a crypto-Marxist for now.

The Future's So Bright...

Unemployed Negativity has a nice post up about neoliberalism and relational social ontology. Here's an excerpt:

Yann Moulier-Boutang has underscored the importance of grasping the paradoxical logic of externalities in contemporary capitalism. Traditionally defined externalities are the various impacts that a given transaction has on those who are not party to the transaction. Examples of this include such “negative” externalities as pollution and such “positive” externalities as the unintended cultural and social benefits of the formation of cities. In each case there are effects that are not paid for, not a part of anyone’s calculation. As Moulier Boutang presents it, “externalities are the representation of the outside of the economy acting on the economy.” One could push this a bit further to say that externalities are the way in which a neoliberal society imagines its constitutive conditions, they are everything that do not correspond to the strict calculation of cost for benefit. As such they represent the economy’s, or the market’s, attempt to represent its outside.

The problem is that these externalities have become increasingly difficult to ignore. This is especially true with respect to the environment, as a negative externality, and the knowledge involved in the production process, as a positive externality. There is a historical argument here about the transformation of capital, and it should be viewed critically, perhaps even dialectically, to recognize the continuities that underlie the changes, the complex mix of the new and old that constitutes any conjunction. It seems bizarre to say that the “environment” and “intellectual labor” are in any way new, but at the same time there is a certain manner in which they have recently become unavoidable. Capital’s negative effects on the environment go back to the very beginning, but have recently become unavoidable due to the density of population and intensity of accumulation; in other words, there are no new colonies left to exploit. At the same time capital has always put to work the accumulated knowledge of society, but for a long time it was able to work with the knowledge hierarchies that it found ready made, the medieval system of the university, the feudal system of guilds, etc, but now it must rewrite knowledge in its own image.

I'd like to compare this critical account with a triumphalist account of the same thing: an interview with Paul Romer from reason. Here's a degustation:

reason: In terms of real per capita income, Americans today are seven times richer than they were in 1900. How did that happen?
Paul Romer: Many things contributed, but the essential one is technological change. What I mean by that is the discovery of better ways to do things. In most coffee shops these days, you'll find that the small, medium, and large coffee cups all use the same size lid now, whereas even five years ago they used to have different size lids for the different cups. That small change in the geometry of the cups means that somebody can save a little time in setting up the coffee shop, preparing the cups, getting your coffee, and getting out. Millions of little discoveries like that, combined with some very big discoveries, like the electric motor and antibiotics, have made the quality of life for people today dramatically higher than it was 100 years ago. The estimate you cite of a seven-fold increase in income--that's the kind of number you get from the official statistics, but the truth is that if you look at the actual change in the quality of life, it's larger than the number suggests. People who had today's average income in 1900 were not as well off as the average person today, because they didn't have access to cheap lattés or antibiotics or penicillin.

Three cheers for positive externalities!

The understanding which most sharply distinguishes science from the market has to do with property rights. In the market, the fundamental institution is the notion of private ownership, that an individual owns a piece of land or a body of water or a barrel of oil and that individual has almost unlimited scope to decide how that resource should be used. In science we have a very different ethic. When somebody discovers something like the quadratic formula or the Pythagorean theorem, the convention in science is that he can't control that idea. He has to give it away. He publishes it. What's rewarded in science is dissemination of ideas. And the way we reward it is we give the most prestige and respect to those people who first publish an idea.

Here is some notion that the positive externalities cannot be internalized without endangering the whole project. Romer gets even more explicit about it.

There are very good theoretical reasons for thinking that market and property rights are the ideal solution for dealing with things, but there are also strong theoretical reasons for thinking that in the realm of ideas, intellectual property rights are a double-edged sword. You want to rely on them to some extent to get their benefits, but you want to have a parallel, independent system and then exploit the tension that's created between the two.

Thus, there must be a strong distinction made between things and ideas. For things, a system of absolute individual property rights is ideal. this means that there are no meaningful non-internalizable negative externalities of the sort environmentalists and neo-marxists are worried about. If every "thing" is given over to the market, that would solve our externalities problems. For ideas, however--the fruit of "intellectual labor"--there is an absolute need to maintain a realm of positive externalities, and to institutionalize this realm as the realm of scientific research, etc. So long as intellectual labor can be exploited in this manner, the negative externalities can always be managed and re-internalized.

It is hard to convey how amped up and optimistic both the interviewer and Romer are about all this, but I think it is worth noticing just how strange their rose-hued future is. They want us to get excited about the prospect of constant and ever-expanding intellectual labor for the sake of staving off ecological and resource-scarcity crises. Their optimism comes from their conviction that we will always succeed in doing so, or else recover from our failures to do so, or else be replaced by other societies that will succeed better than us in doing so.

Therefore, I'd like to propose a slogan for neo-liberalism, something Romer et al. could put on banners and posters: Maximize positive externalities for the sake of minimizing negative externalities!* Inspiring, no?

* Translation: We need more and more people spending more and more time and energy more and more frantically thinking up ingenious ways to save our asses!

Popular Justice

Synchronicity.

I taught Foucault's discussion of popular justice this last week, and then two things popped up on the radar screen to remind me of the continued relevance of this discourse.

1. The Wall Street Journal (via here and here) had a story about corporate health plans' efforts to recoup payouts by claiming any damages won in injury suits. The particulars of the article involve a woman severely injured in a wreck with a semi. She will require life-long medical care, which her family hoped to pay for with the $400,000 injury settlement. But her employer--Wal-Mart--claimed the entire settlement as recompense for the $470,000 that their health-plan had already paid out for her care. Now the woman is reliant upon Medicare and Social Security checks for all her care.
2. Another WSJ article (via here) is the latest account of retaliatory vandalism by home-owners going through foreclosures--they lose the house, and, before vacating, trash the place.

The latter story highlights a spontaneous and unorganized sort of popular justice. (Ironically, it seems to be conservative and business oriented media (like, say, the WSJ) that pays attention to these phenomena, publicizes them, and thereby acts as a vector for the transmission of the meme.) The former story lacks any act of popular justice, but seems to cry out for one. It seems to be precisely the sort of situation--large corporate actor decimates one worker's life in the name of its "fiduciary duty to the plan and the entire group of employees that are covered by it"--that, in 1970s France, or 1920s America, would have led to a Wal-Mart getting burned down.

The "economization" of justice, however, seems to militate against any action in the latter case, and shapes commentators' responses to the first case. After linking to the WSJ story, Megan McArdle--a self-professed libertarian--writes:

I don't get it. It's hardly the bank's fault that you can't make your mortgage payment. I mean, I understand the rage at fate that has pushed you out of your home and left your credit record in shreds--yea, even if you had a hand in that fate yourself. But I don't get pointless destruction.

Her commenters take the cue and run wit it:

Most people are quite reluctant to admit personal fault in these matters. It's so much easier to blame an external entity and then unleash rage as deemed appropriate.

A nation of victims means no one is responsible--except for the "evil" bank.

You probably also don't get buying houses you can't afford. People who do this are not overly endowed in the "dispassionate decision-mkaing" department.

I wonder about the "trashing people's lives." Isn't it more like corporations fail to enable the self-trashing of people's lives by insisting on responsibility and consequences? Hmmmm...sounds like a decent parent to me.

These people trash their former abodes for the exact same reason most of them are in the mess they're in: poor impulse control, arising from emotional immaturity.

I'm sorry, but it's not at all understandable. It's childish and, indeed, criminal. It's not the bank's fault that they're incapable of acting as adults either in financial or, as we have found out, behavioral, matters.

It's the bank's fault that the bank presumed it was dealing with adults who could make decisions for themselves, and didn't belong in an institution for the feeble-minded where decisions were made for them.

I am truly amazed at the number of individuals who think that because banks and mortgage companies acted greedily (that's the business they're in), it gives homeowners with poor judgment the right to default on loans that many of them are capable of making (California's jingle mail) or to even trash a home that will soon not be their property.

It is simple immaturity and lack of respect for the property of others. It is no different from puncturing someone's tires, or vandalizing a neighbor's property because of some dispute.

So, on the one hand, you have the business entity (bank, insurance company, Wal-Mart), which is greedy but rational. It behaves like an adult, honors its fiduciary responsibilities, and expects that everyone else will do so as well. On the other hand, you have the short-sighted, irresponsible, and immature individual (employee, borrower, renter), who lacks respect for others, is childish and incapable of controlling her/his impulses, and thinks of her/himself as a victim all the time.

Monetarized power is not power, on this analysis. Monetarized desire is not desire (i.e., it cannot be a childish impulse). Only those who are reduced to using their bodies as the only means available are guilty of victim-think. Legal power and monetary power are identical.

Fascinating stuff.

UPDATE: A smart analysis of the McArdle post can be found here.

The Primitive Accumulation of Academic Capital

I hadn't heard of 02138 Magazine before, but I ran across this fascinating story via EconoSpeak:

In September 2004, Charles Ogletree, a professor at Harvard Law School, found himself having to admit that his latest book, All Deliberate Speed, contained six paragraphs lifted verbatim from a book by Yale professor Jack Balkin, What “Brown v. Board of Education” Should Have Said. Equally surprising was the fact that Ogletree hadn’t known about the plagiarism, which occurred in a passage about the history of desegregation efforts, until he was told of it by Balkin himself.

“I accept full responsibility for this error,” Ogletree said in a statement. But some readers of that statement might have gotten a different impression: Ogletree attributed the plagiarism to two research assistants: “Material from Professor Jack Balkin’s book … was inserted … by one of my assistants for the purpose of being reviewed, researched, and summarized by another research assistant with proper attribution … Unfortunately, the second assistant, under the pressure of meeting a deadline, inadvertently deleted this attribution and edited the text as though it had been written by me. The second assistant then sent a revised draft to the publisher.”

It was a curious admission. In other words, at least some of Ogletree’s manuscript was sent to his publisher without having been read by the person supposed to have written it. Yet to Ogletree, the crime was not that someone else had written the material, just that it wasn’t the person Ogletree expected to write it.

But check the title page of All Deliberate Speed and the Library of Congress catalog information, and Ogletree’s name stands alone. An impressive total of nine students are listed in the acknowledgements as a “deeply committed group of researchers,” but there’s not a hint that their words appear verbatim in the book—or, at least, there wasn’t until something went wrong.

Derek Bok, one of the two professors appointed by the law school to review the episode, barely raised an eyebrow over the apparent use of uncredited ghostwriters. As he told the Boston Globe at the time, “There was no deliberate wrongdoing at all … He marshaled his assistants and parcelled out the work and in the process some quotation marks got lost”—a description that probably sounded flip to any author who has ever been plagiarized. Ogletree was “reprimanded,” but suffered no tangible consequences.

Which is probably why little seems to have changed with the way Ogletree creates the written work to which he assigns his name; a student familiar with Ogletree’s writing process on a current book, as well as op-eds and briefs for law cases, says that, three years after the plagiarism scandal, Ogletree still parcels out the work to a group of about 10 students on his payroll. The distinguished professor of law will review, but generally leave untouched, the writing of his most trusted researchers. He then puts his name on top of it.

And, to be fair, Ogletree is hardly alone: A growing number of books attributed to Harvard professors are composed in exactly this manner.

I'll have more to say about this later...