Archive for July, 2017

Culture, it seems, is back on the agenda in economics. Thomas Piketty, in Capital in the Twenty-First Century, famously invoked the novels of HonorĂ© de Balzac and Jane Austen because they dramatized the immobility of a nineteenth-century world where inequality guaranteed more inequality (which, of course, is where we’re heading again). Robert J. Shiller, past president of the American Economic Association, focused on “Narrative Economics” in his address at the January 2017 Allied Social Association meetings in Chicago. His basic argument was that popular narratives, “the stories and models people are talking about,” play an important role in economic fluctuations. And just the other day, Gary Saul Morson and Morton Schapiro—professor of the arts and humanities and professor of economics and president of Northwestern University, respectively—economists would benefit greatly if they broadened their focus and practiced “humanonomics.”

Dealing as it does with human beings, economics has much to learn from the humanities. Not only could its models be more realistic and its predictions more accurate, but economic policies could be more effective and more just.

Whether one considers how to foster economic growth in diverse cultures, the moral questions raised when universities pursue self-interest at the expense of their students, or deeply personal issues concerning health care, marriage, and families, economic insights are necessary but insufficient. If those insights are all we consider, policies flounder and people suffer.

In their passion for mathematically-based explanations, economists have a hard time in at least three areas: accounting for culture, using narrative explanation, and addressing ethical issues that cannot be reduced to economic categories alone.

As regular readers of this blog know, I’m all in favor of opening up economics to the humanities and the various artifacts of culture, from popular music to novels. In fact, I’ve been involved in various projects along these lines, including the New Economic Criticism, the postmodern moments of modern economics, and economic representations in both academic and everyday arenas.

And, to their credit, the authors I cite above do attempt to go beyond most of their mainstream colleagues in economics, who treat culture either as a commodity like any other (and therefore subject to the same kind of supply-and-demand analysis) or as a reminder term (e.g., to explain different levels of economic development, when all the usual explanations—based on preferences, technology, and endowments—have failed).

But in their attempt to invoke culture—as illustrative of economic ideas, a factor in determining economic events, or as a way of humanizing economic discourse—they forget one of the key lessons of Raymond Williams: that culture both registers the clashes of interest in society (culture represents, therefore, not just objects but the struggles over meaning within society) and stamps its mark on those interests and clashes (and in this sense is “performative,” since it modifies and changes those meanings).

In fact, that’s the approach I took in my 2014 talk on “Culture Beyond Capitalism” in the opening session of the 18th International Conference on Cultural Economics, sponsored by the Association for Cultural Economics International, at the University of Quebec in MontrĂ©al.

As I explained,

The basic idea is that culture offers to us a series of images and stories—audio and visual, printed and painted—that point the way toward alternative ways of thinking about and organizing economic and social life. That give us a glimpse of how things might be different from what they are. Much more so than mainstream academic economics has been interested in or able to do, even after the spectacular debacle of the most recent economic crisis, and even now in the midst of what I have to come the Second Great Depression.

I then went on to discuss a series of cultural artifacts—in music, film, short stories, art, and so on—which give us the sense of how things might be different, of how alternative economic theories and institutions might be imagined and created.

Importantly, economic representations in culture are much wider than the realist fiction to which some mainstream economists have turned. One of the best examples, based on the work of Mark Osteen, concerns the relationship between noncapitalist gift economies and jazz improvisation.* According to Osteen, both jazz and gifts involve their participants in risk; both require elasticity; both are social rituals in which the parties express and recreate identities; both are temporally contingent and dynamic. Each of them invokes reciprocal relations, yet transcends mere balance: each, that is, partakes of excess and surplus. Osteen suggests that jazz—such as John Coltrane’s “Chasin’ the Trane”—may serve as both an example of gift practices and a model for another economy, based on an ethos of improvisation, communalism, and excess.

I wonder if economists such as Piketty, Shiller, Morson, and Schapiro, who suggest we include culture in our economic theorizing, are willing to identify and examine aspects of historical and contemporary culture that point us beyond capitalism.

 

*Mark Osteen, “Jazzing the Gift: Improvisation, Reciprocity, Excess,” Rethinking Marxism 22 (October 2010): 569-80.

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Travel days

Posted: 25 July 2017 in Uncategorized
Tags: ,

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I’ll be traveling for the next few days. No posts then until I return. . .

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The Evolution of Trumpcare  198067

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We’ve all heard it at one time or another.

Why is the price of gasoline so high? Mainstream economists respond, “it’s the market.” Or if you think you deserve a pay raise, the answer again is, “go get another offer and we’ll see if you’re worth it according to ‘the market’.”

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And then there’s CEO pay, which last year was 271 times the average pay of workers. Ah, it’s what “the market” has determined the appropriate compensation to be.

“The market” explains everything—and, of course nothing.

Chris Dillow argues that invoking “the market” (e.g., to explain the gender disparities in pay for BBC broadcasters) serves to hide from view the role of power.

Talk of the “market” is therefore what Georg Lukacs called reification – the process whereby “a relation between people takes on the character of a thing and thus acquires a ‘phantom objectivity.’” It obfuscates the fact that wages are set by the power of one person over another. Such obfuscation serves a profoundly ideological function; it effaces the fact that the capitalist economy is based upon power relationships.

Not even neoclassical economists stop with references to the “the market.” That’s just the first step of the explanation. The next step is to analyze “the market” in terms of its ultimate—given or exogenous—factors determining supply and demand. Their story is that “the market” can finally be reduced to and explained by preferences, resource endowments, and technology. In other words, according to neoclassical economists, market prices—whether for gasoline, workers’ pay, and CEO compensation—reflect consumer preferences, households’ endowments, and human know-how, all of which are considered to be prior to and independent of the economy.

That’s the way formal neoclassical economics works. But mainstream economists are also content to let the myth of “the market” persist in the minds of their students and the proverbial person in the street because it protects markets from what they consider to be unwarranted regulation and intervention. “The market” is turned into an abstract entity that merely reflects human nature. And if anyone wants to change the results—to change, for example, the price of gasoline, workers’ wages, or CEO compensation—they face the daunting task of changing human nature.

But there’s another side to the myth of “the market.” It becomes symbolic of an entire system gone awry—and which therefore can be criticized and replaced.

Instead of “the market,” we might refer to individual markets—not just to markets for gasoline, workers’ ability to labor, or CEOs’ skills but to markets for different kinds of gasoline, different groups of workers, or CEOs in different industries. Or, alternatively, we might invoke the different roles producers, consumers, workers, corporate executives, government officials, and so on play in determining market outcomes. All of those individual markets and market participants might then be regulated to produce different outcomes.

But if it’s “the market” that is to blame, then it’s the entire system—not one or another market or market participant—that needs to be radically transformed.

If mainstream economists defend and celebrate “the market,” critics of market outcomes—of which there are many—can then move to a more systemic assessment, to become critics of the economy as a whole.

And once that happens, critics can then imagine and begin to create a different economic system, one that is not governed by “the market.” Such an alternative system might have markets, lots of different kinds of markets. But it would have a different logic, a different way of operating, with very different outcomes.

Such an alternative economy exists on the other side, beyond the myth of “the market.”