Posts Tagged ‘utopia’

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The warnings about the consequences of global warming are becoming increasingly dire. And with good reason.

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Just last month, a report by a multidisciplinary research team published in the Proceedings of the National Academy of Sciences made the case that even fairly modest future carbon dioxide emissions could set off a cascade of catastrophic effects, with melting permafrost releasing methane to ratchet up global temperatures enough to drive much of the Amazon to die off, and so on in a chain reaction around the world that pushes Earth into a terrifying new hothouse state from which there is no return. Civilization as we know it would surely not survive.

Climate change during the Capitalocene (in its last stage?) has also spawned a new genre of science fiction novels—the so called cli-fi (climate change fiction) genre. It includes Octavia E. Butler’s The Parable of the Sower, Cormac McCarthy’s The Road, Kim Stanley Robinson’s the Science in The Capital trilogy, Margaret Atwood’s The Maddaddam trilogy, Nathaniel Rich’s Odds Against Tomorrow, Barbara Kingsolver’s Flight Behavior, and Jeff VanderMeer’s TheSouthern Reach trilogy.

Both the scientific and fictional literatures now paint a distinctly dystopian picture for planet Earth—unless, of course, radical changes are made to mitigate the effects and eliminate the sources of global warming.

It’s not clear to me which way the dystopian tenor of recent attempts to grapple with the consequences of climate change cuts. I know all kinds of people—students, friends, and neighbors—for whom the impending apocalypse generates intense and sustained activity to both publicize and push for changes to curtail global warming. However, Per Espen Stoknes, a psychologist and economist recently appointed to the Norwegian Parliament, warns that dystopian scenarios may overdo the threat of catastrophe, making people feel fear or guilt or a combination of the two.

But these two emotions are passive. They make people disconnect and avoid the topic rather than engage with it.

One group that does engage with climate change generates an equal amount of passivity: the technological utopians. They promise a kind of magical, technical fix to the problem of global warming.

We’ve all seen their proposals: Growing kelp. Cap-and-trade markets. Behavioral “nudges.” Also, nuclear fusion, supercapacitor batteries, lab-grown meat, carbon engineering, and smart cities. In fact, Bill Gates, along with some of the world’s richest people (such as Jeff Bezos from Amazon, Jack Ma from the Ali Baba group, and Richard Branson), has launched the Breakthrough Energy Coalition to invest in solutions driven by technology. It promises to bring together governments, research institutions, and billionaire investors to limit climate change.

As I explained back in June, few if any of the contemporary affluent, high-tech enthusiasts have even considered the possibility that, far from being innovative or unusual, their campaigns are part and parcel of a longstanding tradition of technological utopianisms.

They are merely the latest in a long line—starting with the late-sixteenth- and early-seventeenth-century Pansophists (such as Tomasso Campanella, Johann Valentin Andreae, and Francis Bacon) through the utopian socialists of the early nineteenth century (especially Henri de Saint-Simon) through the numerous technological utopians of the late-nineteenth- and early-twentieth centuries (including Edward Bellamy, Henry Olerich, Edgar Chambliss)—of prophets of progress and the possibility of achieving utopia through the introduction and expansion of new technologies.

Fortunately, people are beginning to sound the alarm about purely technological solutions to climate change. Adam McGibbon [ht: db], for example, warns that “geoengineering projects are fraught with unintended consequences”:

Scientists don’t know how spraying clouds with sea water would affect precipitation, potentially devastating the food systems. Dumping iron filings in the ocean would have unknown effects for marine life. Injecting aerosols into the atmosphere could cause droughts. Meddling with climatic systems we don’t understand, in the service of solving global warming, could just make the crisis worse.

But unintended consequences are associated with any attempt to radically change existing arrangements—or, for that matter, of not changing them.

As I see it, the biggest problem with technological utopianism is not unintended consequences (although they may be substantial), but that it takes politics out of the equation—whether in imagining solutions to economic and social problems or refashioning the role of technology in a radically different kind of economy and society. Technology thus becomes a substitute for politics. As Aleszu Bajak has recently explained with respect to finding a solution to climate change,

Relying on a technological fix that’s just over the horizon avoids the mountain moving required to wean ourselves off fossil fuels, bring hundreds of countries into agreement on how to limit and clean up emissions, and alter the consumption habits of an entire civilization. Those are systemic complexities ingrained in our economies and cultures. Propping up glaciers to limit sea level rise, sprinkling iron dust into the oceans to encourage plankton growth to absorb carbon, or spraying the skies to reflect the sun’s heat just seems simpler.

That doesn’t mean utopia is irrelevant to the problem of climate change. On the contrary. The dystopian consequences of current trends clearly invite a utopian response. But it needs to be of a different nature from the various forms of technological utopianism that are currently circulating.

It starts with a critique of the discourses, activities, and institutions that together, within the Capitalocene, have led to concentrations of carbon dioxide in the atmosphere that have reached (and, by some accounts, will soon surpass) the ceiling with regards to acceptable climate risk. What I’m referring to are theories that have normalized and naturalized the current set of economic and social structures based on private property, individual decision-making in markets, and class appropriation and distribution of the surplus; activities that have accelerated changes in the Earth system, such as greenhouse gas levels, ocean acidification, deforestation, and biodiversity deterioration; and institutions, such as private corporations and commercial control over land and water sources, that have had the effect of increasing surface ocean acidity, expanding fertilizer production and application, and converted forests, wetlands, and other vegetation types into agricultural land.

Such a ruthless criticism brings together ideas and activists focused on the consequences of a specific way of organizing economic and social life with respect to the global climate as well as the situations of the vast majority of people who are forced to have the freedom to try to eke out a living and maintain themselves and their communities under present circumstances.

Broadening participation in that critique, instead of directing hope toward a technological miracle, serves to create both a shared understanding of the problem and the political basis for real solution: a radically transformed economic and social landscape.

 

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We’re ten years on from the events the triggered the worst crisis of capitalism since the first Great Depression (although read my caveat here) and centrists—on both sides of the Atlantic—continue to peddle an ahistorical nostalgia.

Fortunately, people aren’t buying it.

As Jack Shenker has explained in the case of Britain,

one of the most darkly humorous features of contemporary British politics (a competitive field) is the ubiquity of parliamentarians, pundits and business titans who wail and gnash at our ceaseless political tumult but appear utterly incurious about the conditions that produced it. . .

Such stalwart defenders of a certain brand of “common sense” capitalism have watched in horror as ill-mannered upstarts — on both the right and the left — build power at the fringes. But these freshly emboldened centrists pretend that the rupture has no connection to their own dogma and seem to envision the whole sorry mess as some sort of administrative error that will be swiftly tidied away once the right person, with the right branding, is restored to authority.

Much the same is true in the United States, where centrists in the Democratic Party watch in horror as the Republican Party falls in lockstep with Donald Trump and the only energy within their own party comes from the Left. All the while, they ignore their own role in creating the conditions for the crash and the fact that their technocratic promises to American young people—university or community-college education leading to a stable and prosperous worklife, the dream of a thriving middle-class democracy, the claim for capitalism’s economic and ethical superiority—lie in tatters.

As it turns out, Jürgen Habermas sounded the warning of just this eventuality back in the mid-1980s.* His argument, in a nutshell, is that western cultures had used up their utopian energies—and for good reason, because

the very forces for increasing power, from which modernity once derived its self-confidence and its utopian expectation, in actuality turn autonomy into dependence, emancipation into oppression, and reality into the irrational.

In particular, the social welfare state—based on Keynesian economic policies and democratic politics (with a social basis in independent labor unions and labor-oriented parties)—had lost “its capacity to project future possibilities for a collectively better and less endangered way of life.”

The reactions to this crisis are well known: on the Right, the rise of neoliberalism associated with Margaret Thatcher and Ronald Reagan; on the Left, the celebration of non-party social movements. And, in the center? “Those who defend the legitimacy of industrial society and the social welfare state”—such as the more conservative wing of the Social Democrats (he mentions the Mondale wing of the Democrats in the United States and the second government of François Mitterand in France)—who “have been put on the defensive.”

I would make it even sharper: the center refashioned itself in the mould of the right-wing neoliberals, at least in part to isolate and contain the criticisms from the Left, by emphasizing individual (not collective) initiative and market-based (not social or solidarity) solutions to economic and social problems. As a result, the center lost its utopian impulse and settled for a meek defense of what remained of the social welfare state.

Habermas’s view is that society has been reoriented away from the concept of labor toward that of communication, which requires a different way of “linking up with the utopian tradition.” The alternative approach would be to rethink the concept of labor in terms of class and analyze the ways in which the forces of capital that were supposed to be regulated and contained by the social welfare state were left with both the interest and means to undo those regulations. And it’s the center that put itself in the position of responding to and representing the progressive dismantling of the economic side of the social welfare state—in deregulating finance, pursuing globalization, and helping to unleash new digital technologies. The result was, not surprisingly, the growth of obscene levels of inequality, increasing precariousness for large parts of the working-class, and finally the crisis that broke out in 2008, which has led not only to economic but also political breakdown.

However, as Shenker correctly observes, “the breakdown of any political order can be both emancipatory and revanchist.” And it now falls to the Left to reharness and reinvigorate the utopian impulses and energies that the center has squandered in order to chart a path forward.

*The English-language translation of Habermas’s article, “The New Obscurity: The Crisis of the Welfare State and the Exhaustion of Utopian Energies,” was first published in Philosophy & Social Criticism. The article, with a slightly different title (“The Crisis of the Welfare State and the Exhaustion of Utopian Energies”) and translation, was reprinted in On Society and Politics: A Reader. According to a friend and colleague who is a Habermas expert [ht: db], the essay is typical of his thinking that issued from what most people still consider Habermas’s most important work, The Theory of Communicative Action. “I would characterize Communicative Action as his middle period, which follows his earlier, more Frankfurt-styled emphasis on ideology critique (especially positivism) in books like Knowledge and Human Interests and Theory and Practice. In this middle period, he moved way from negative dialectics à la Adorno and Horkheimer toward developing a positive social theory of his own, one he would say was a “reconstruction” of Marxism but I would call a “replacement,” in which he develops a theory of communicative action to avoid what he sees as productivism and economism in the Marxist tradition.” And he adds:  “I find his means of doing so, evolutionary theory, unacceptable.”

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The argument I’ve been making during this series on utopia is that the utopian moment of the Marxian alternative to mainstream economics is critique.*

Let me explain. All modern economic theories have a utopian moment. In the case of mainstream economics, that moment is a full-blown utopianism—the idea that there is, or at least in principle can be, a perfectly functioning economic and social order. Such an order is both envisioned as a model within the theory (often by stipulating the minimum set of theoretical requirements) and advanced as the goal of economic policies (which move the economy to, or at least toward, the utopia). In this sense, utopia—of sovereign individuals, free markets, and private property—is the fundamental premise and promise of mainstream economic theory.

The Marxian approach is otherwise. Certainly Marxian economists (and social thinkers generally) imagine that the world can and should be radically different from what currently exists. They simply wouldn’t engage in their intellectual and political work if that weren’t the case. But, instead of drawing up a blueprint of what such an alternative might look like, Marxists are engaged in a “ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.” It is a ruthless criticism of both mainstream economic theory and of the economic and social system celebrated by mainstream economists.

This is an argument I’ve made many times, in different ways, over the course of my various talks (e.g, here), papers (e.g., here and here), and posts on utopia in recent years. Here, I want to take the argument one step further. What distinguishes Marxian theory from both mainstream economics (and, for matter, from other criticisms of mainstream economics) is that is based on a materialist critique. That is its utopian moment.

As I see it, the method of materialist critique is both dialectical and historical.** It is dialectical to the extent that it involves the interpretation of economic categories—such as value, productivity, profit and much else—precisely as they are grounded in, deployed and disseminated within, the existing intellectual and social order. It takes those concepts as its own. But it doesn’t simply accept the existing interpretations of those categories but, instead, transforms them into their opposites. In other words, the critical acceptance of those categories is simultaneously their condemnation.

Let me offer a concrete example of what I have in mind. Both mainstream economic theory and capitalism operate on the basis of a notion of free and fair exchange. Each transaction is seen to be a voluntary exchange of goods and services between individuals who offer or receive a sum equal to the value of the commodity in question. A materialist critique starts from that category, not because every transaction holds to the rule of free and fair exchange in the real world (there are many exceptions to that rule, such as monopoly power, which even mainstream economists and defenders of capitalism will acknowledge), but because it is the stated premise of both mainstream economic theory and capitalism (it is their shared utopianism, in the sense I discuss above). Even presuming we’re referring to a system in which every exchange is free and fair, it is possible to show that a tiny minority at the top (the members of the boards of directors of corporations) is engaged in a social theft from workers (who perform but do not appropriate their surplus labor), with all the attendant conditions and consequences of a system based on class exploitation. Therefore, a materialist critique, which starts from the prevailing idea of free and fair exchange, arrives at the opposite conclusion—that capitalist exchange forms part of an economic and social system that is anything but free and fair.***

The method of materialist critique also has an important historical dimension. It focuses on the ways both economic ideas and economic systems change over time, often with radical disruptions between them. Thus, for example, the theories used by economists today (and not only, if we allow for everyday economic representations) are radically different from themselves (in the sense that the terrain of economics is defined by multiple, diverse and incommensurable, concepts and methods) and from theories that have existed in the past (beginning with classical political economy and including the theoretical revolutions within mainstream economics as well as their heterodox counterparts). Similarly, capitalism has changed over time—both within its own history (capitalism today is different from what it was in the middle of the nineteenth century) and as it represents a break from other, noncapitalist systems (such as feudalism, slavery, and so on). A materialist critique focuses on such disruptions and divergences over time, thereby creating the possibility of other radical changes, such as an end to capitalism and the emergence of new, noncapitalist ways of organizing economic and social life.

The most famous example in the Marxian tradition is the transition from feudalism to capitalism. Notwithstanding the wide-ranging debate about the causes and consequences of that transition (among such figures as Maurice Dobb, Paul Sweezy, Robert Brenner, and Stephen Resnick and Richard Wolff), the fact is capitalism had a definite beginning as it emerged from the crises of feudalism in Western Europe (and therefore didn’t always exist, as mainstream economists often presume and proclaim), which also makes it possible to imagine an end to capitalism (based, of course, on the accumulation and aggregation of political and social forces that are opposed to capitalism and imagine and seek to create the conditions for noncapitalist economic and social institutions). Much the same is true in economic thought: mainstream economics today (neoclassical microeconomics and Keynesian macroeconomics) represents a radical break from previous mainstream economic theories (such as the classical political economy of Adam Smith and David Ricardo), as well as the various alternatives to mainstream economics that have emerged alongside it from the very beginning (which are often overlooked in “official,” mainstream histories of economic thought). A materialist critique therefore highlights the absence of history—the history of ideas as well as the history of economic systems—within mainstream economics and capitalism itself.

In the way I am defining materialist critique, it does not represent a simple opposition to contemporary thought and society. On the contrary, it is grounded in them, using their categories as starting points with the aim of substantially and radically transforming them.

If materialist critique represents the utopian moment of Marxian theory, it stands opposed to the specialized knowledge of mainstream economics (and, by extension, of the rest of the modern social sciences) as well as to traditional interpretations of Marxian theory. It differs from contemporary mainstream economics in that it seeks to transform—both dialectically and historically—the existing set of categories instead of accepting them as the given parameters of economic and social life. It of course uses those knowledges as raw materials but only for the purpose of turning them into their opposites. And it is distinguished from the precepts and protocols of dialectical and historical materialism in that it is rooted in the categories that pertain to mainstream economics and capitalism, in order to do battle on that terrain, not a set of sui generis categories (often governed by a humanist anthropology or rational discourse) to establish a new and different science comparable to mainstream economics.

And to be clear, materialist critique is not the same thing as economism (with which materialism is often conflated). On the contrary. In fact, materialist critique represents a ruthless criticism of economism not because it gives too much importance to the economy, but because it gives it too narrow a scope. Economism takes the economy as a given, transmitting its effects to individuals and to the rest of the social structure—instead of focusing on the problem of the complex, changing relationship between the economy and individual and social lives.

In the end, the goal of a materialist critique is to denaturalize and thus disrupt the existing common sense—within both economic thought and capitalism—with the aim of radically transforming the existing theoretical and social reality. It doesn’t accomplish this alone, of course. Those who are engaged in a materialist critique as well as their specific objects form a dynamic, dialectical unity with the exploited classes as both an expression of the concrete historical situation and a force to stimulate change. Nor are there any guarantees, from either side of the relationship or in the often-tense unity itself.

Notwithstanding its aleatory nature, the process of materialist critique starts with the categories that dominate economic thought and the economy itself in order to transform them into their opposites, thus creating new intellectual and political possibilities. The new openings created by materialist critique represent the utopian horizon of Marxian theory.

 

*The series, thus far, consists of posts on the Bitcoin bubble, the right to be lazypopulism, the economics of controlutopian socialisminequalityinternational trade, healthcare (here and here), the disaster in Puerto Ricoepistemologyvalue theorymacroeconomicseconomic developmentmarketstechnology, work, and mathematics.

**Besides Marx’s own writings, an essay that serves as the catalyst for some of my ideas in this post is Max Horkheimer’s “Traditional and Critical Theory” [ht: db], reprinted in his Critical Theory: Selected Essays, trans. Matthew J. O’Connell and others (New York: Continuum, 2002).

***Moreover, such a system is neither free nor fair for both capitalists and workers. Each is subject to the compulsions and coercions embedded in such a system, albeit in a different way.

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In a recent article, Dan Falk [ht: ja] identifies a fundamental problem in contemporary physics:

many physicists working today have been led astray by mathematics — seduced by equations that might be “beautiful” or “elegant” but which lack obvious connection to the real world.

What struck me is that, if you changed physics and physicists to economics and economists, you’d get the exact same article. And the same set of problems.

Economists—especially mainstream economists but, truth be told, not a few heterodox economists—are obsessed with mathematics and formal modeling as the only correct methods for achieving capital-t truth. Mathematical modeling for them represents the best, most scientific way of producing, disseminating, and determining the veracity of economic knowledge—because it is logical, concise, precise, and elegant.* In that sense, mathematics represents what can only described as a utopia for the practice of modern economics.**

Mathematical utopianism in economics is based on elevating mathematics to the status of a special code or language. It is considered both a neutral language and, at the same time, a language uniquely capable of capturing the essence of reality. Thus, economists see mathematics as having both an underprivileged and overprivileged status vis-à-vis other languages.

Let me explain. On one hand, mathematics is understood to be a neutral medium into which all statements of each theory, and the statements of all theories, can be translated without modifying them. Mathematics, in this view, is devoid of content. It is neutral with respect to the various theories where it is applied. Partial and general equilibrium, game theory, and mathematical programming are concepts that serve to communicate the content of a theory without changing that content. Similarly, mathematical operations on the mathematized objects of analysis are considered to be purely formal. Thus, as a result of the conceptual neutrality of the methods and procedures of mathematical formalization, the objects of analysis are said to be unaffected by their mathematical manipulation. On the other hand, mathematics is considered to be uniquely capable of interpreting theory in its ability to separate the rational kernel from the intuitional (vague, imprecise) husk, the essential from the inessential. It becomes the unique standard of logic, consistency, and proof. Once intuitions are formed, mathematical models can be constructed that prove (or not) the logical consistency of the theory. Other languages are considered incapable of doing this because the operations of mathematics have an essential truth value that other languages do not possess. Mathematical statements, for example, are considered to be based on the necessity of arriving at conclusions as a result of following universal mathematical rules.

It is in these two senses that mathematics is considered to be a special language or code. It is more important than other languages in that it is uniquely capable of generating truth statements. It is also less important in that it is conceived to have no impact on what is being thought and communicated.

The notion of mathematics as a special code is linked, in turn, to the twin pillars of traditional epistemology, empiricism and rationalism. The oversight of mathematics implied by its underprivileged status is informed by an empiricist conception of knowledge: mathematics is considered to be a universal instrument of representation. It is used as a tool to express the statements of a discourse that already, always has an essential grasp on the real. It is the universal language in and through which the objects (and the statements about those objects) of different economic and social theories can all be expressed. In other words, the role of mathematics is to express the various “intuitive” statements of the theorist in a neutral language such that they can be measured against reality. The underprivileged position of mathematics that is linked to an empiricist epistemology contrasts sharply with the overprivileged status of mathematics. This overprivileged conception of mathematics is associated with a rationalist theory of knowledge wherein the subject-object dichotomy is reversed. Here the subject becomes the active participant in discovering knowledge by operating on the theoretical model of reality. In this sense, the logical structure of theory—not the purported correspondence of theory to the facts—becomes the privileged or absolute standard of the process of theorizing. Reality, in turn, is said to correspond to the rational order of thought. The laws that govern reality are deduced from the singular set of mathematical models in and through which the essence of reality can be grasped.***

The conception of mathematics as a mere language contains, however, the seeds of its own destruction. The notion of language as a simple medium through which ideas are communicated has long been challenged—since language is both constitutive of, and constituted by, the process of theorizing. The use of mathematics in economics thus may be reconceptualized as a discursive condition of theories, which constrains and limits, and is partly determined by, those theories. Mathematical concepts—such as the equilibrium position associated with the solution to a set of simultaneous equations, the exogenous status of the rules of a game, or the definition of a series of overlapping value functions to optimize an overall goal—partly determine the notions of relation and causality among the theoretical objects designated by the theories in which the means of mathematical formalization are utilized. They are not the neutral conceptual tools to which the propositions of different theories can be reduced. Similarly, the rationalist idea of abstraction, of simplification, also leads to a fundamental problem. It implies that there is a noise that ultimately escapes the “fictional” mathematical model. It implies an empirical distance between the model and its domain of interpretation, the empirical concrete. And that distance is conceived to be part of the empirical concrete itself. There is a part of reality that necessarily escapes the model. Thus, rationalist deductions from the model cannot produce the truth of the real because something is always “missing.”

So, what’s the alternative? As I see it, there is a double movement that involves both the rejection of mathematics as the discovery of an extra-mathematical reality and the critique of the notion that mathematics merely expresses the form in which otherwise nonmathematical theories are communicated. Thus, for example, it is possible (using, e.g., the insights of Ludwig Wittgenstein and Edmund Husserl) to argue that mathematics is a historical, social invention, not a form of discovery of an independent reality; it is not discovered “out there,” but invented and reinvented over time based on rules that are handed by mathematicians and the actual users of mathematics (such as economists). By the same token, we can see mathematics as introducing both new concepts and new forms of reasoning into other domains, such as economics and for that matter physics (which is exactly what Gaston Bachelard has argued).

This double movement has various effects. It means that there are no grounds for considering mathematics to be a privileged language with respect to other, nonmathematical languages. There is, for example, no logical necessity inherent in the use of the mathematical language. The theorist makes choices about the kinds of mathematics that are used, about the steps from one mathematical argument to another, and whether or not any mathematics will be used at all. Different uses (or not) of mathematics and different kinds of mathematics will have determinate effects on the discourse in question. Discourses change as they are mathematized—they are changed, not in the direction of becoming more (or less) scientific, but by transforming the way the objects of the discourse are constructed, and the way statements are made about those objects.

Ultimately, this deconstruction of mathematics as a special code leads to a rejection of the conception of mathematics as a special language of representation. The status of mathematics is both more representational and less representational than allowed by the discourse of representation. More, in the sense that mathematics has effects on the very structure of the mathematized theory; mathematics is not neutral. Less, to the extent that the use of mathematics does not guarantee the scientificity of the theory in question; it is merely one discursive strategy among others.

One alternative approach to making sense of the use of mathematics in economic theory is to consider mathematics not in terms of representation, but as a form of “illustration.” For economists, mathematical concepts and models can be understood as metaphors or heuristic devices that illustrate part of the contradictory movement of economic and social processes. These concepts and models can be used, where appropriate, to consider in artificial isolation one or another moment in the course of the constant movement and change in the economy and society. Mathematics may be used, then, to illustrate the statements of economic theory but, like all metaphors (in economics as in literature and other areas of social thought), it outlives its usefulness and then has to be dismantled.

As I see it, this conception of mathematical models as illustrative metaphors does not constitute a flat rejection of their use in economic theory. Rather, it accords to mathematical concepts and models a discursive status different from the one that is attributed to them in the work of mathematical economists. It accepts the possibility—but not the necessity—of using mathematical propositions as metaphors that are borrowed from outside of economic theory and transformed to teach and develop some of the concepts and statements of one or another economic theory.

Deconstructing the status of mathematics as a special code has the advantage of transforming both the way economics is done within any particular theory and the way the debate between different economic theories itself is conducted. It undermines the Truth-effect associated with mathematical utopianism and focuses attention, instead, on the conditions and consequences of different ways of thinking about the economy.

That debate—about the effects of different languages on economics, and the effects of different economic theories on the wider society—has its own utopian moment: transforming economics into a space not of blind obedience to mathematical protocols, but of real theoretical and political choices.

 


*From time to time, there have been a few admonishments from among economists themselves. Oskar Morgenstern (e.g., in his essay “Limits to the Uses of Mathematics in Economics,” published in 1963) and, more forcefully, Nicholas Georgescu-Roegen (especially in his 1971 Entropy Law and the Economic Process), Philip Mirowski (e.g., in More Heat Than Light, in 1989), and Paul Romer have indicated some of the problems associated with the wholesale mathematization of economics. However, even their limited criticisms have been ignored for the most part by economists.

In recent years, students (such as the members of the International Student Initiative for Pluralism in Economics) have been at the forefront of questioning the fetishism of mathematical methods in economics:

It is clear that maths and statistics are crucial to our discipline. But all too often students learn to master quantitative methods without ever discussing if and why they should be used, the choice of assumptions and the applicability of results. Also, there are important aspects of economics which cannot be understood using exclusively quantitative methods: sound economic inquiry requires that quantitative methods are complemented by methods used by other social sciences. For instance, the understanding of institutions and culture could be greatly enhanced if qualitative analysis was given more attention in economics curricula. Nevertheless, most economics students never take a single class in qualitative methods.

Their pleas, too, have been mostly greeted with indifference or contempt by economists.

**As I see it, the current fad of relying on randomized experiments and big data does not really undo the longstanding utopian claims associated with mathematical modeling, since the formal models are still there in the background, orienting the issues (including the choice of data sets) taken up in the new experimental and data-heavy approach to economics. Then, in addition, there is the problem that others—such as John P. A. Ionnidis et al. (unfortunately behind a paywall)—have discovered: most economists use data sets that are much too small relative to the size of the effects they report. This means that a sizable fraction of the findings reported by economists are simply the result of publication bias—the tendency of academic journals to report accidental results that only appear to be statistically significant.

***Economists often move back and forth between the two otherwise diametrically opposed conceptions of mathematics because they represent two sides of the same epistemological coin: although each reverses the order of proof of the other, both empiricism and rationalism presume the same fundamental terms and some form of correspondence between them. In this sense, they are variant forms of an “essentialist” conception of the process of theorizing. Both of them invoke an absolute epistemological standard to guarantee the (singular, unique) scientificity of the production of economic knowledge.

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The goal of mainstream economists is to get everybody to work. As a result, they celebrate capitalism for creating full employment—and worry that capitalism will falter if not enough people are working.

The utopian premise and promise of mainstream economic theory are that capitalism generates an efficient allocation of resources, including labor. Thus, underlying all mainstream economic models is a labor market characterized by full employment.

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Thus, for example, in a typical mainstream macroeconomic model, an equilibrium wage rate in the the labor market (Wf, in the lower left quadrant) is characterized by full employment (the supply of and demand for labor are equal, at Lf), which in turn generates a level of full-employment output (Yf, via the production function, in the lower right quadrant) and a corresponding level of prices (P0, in the upper quadrants). If the money wage is flexible it is possible to ignore the top left quadrant, because, in that case, the equilibrium real wage, employment and output are Wf, Lf and Yf, respectively, whatever the price level. With flexible money wages, the aggregate supply curve is independent of the price level and is represented by YFYF.

That’s the neoclassical version of the story. The Keynesian alternative is that the aggregate supply curve is relatively elastic below full employment and the wage rate is fixed by institutions, and therefore is not perfectly flexible. In such a case, aggregate demand determines the level of output, which will normally fall below the full-employment level.

And so we have the longstanding argument between the two wings of mainstream economics—between the invisible hand of flexible wages and the visible hand of government spending. But, equally important, what the two theories of macroeconomics have in common is the ultimate goal: full employment. In other words, both groups of economists presume that the aim of capitalism is to generate full employment and that, with the appropriate policies—free markets for the neoclassicals, government intervention for the Keynesians—capitalism is capable of putting everyone to work.

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But the argument also goes in the opposite direction: capitalism works best when everyone is working. That’s because capitalist growth (e.g., in terms of Gross Domestic Product per capita, the green line in the chart, measured on the left) is predicated on the growth of the labor force (the the red line, measured on the right).

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Mainstream economists also argue that a low work rate is an important cause of low incomes and high poverty. They argue that, when considering different policy interventions for this population—including improving educational attainment, raising the minimum wage, and increasing the number of two-earner families—the most beneficial intervention for improving incomes is to assume that all household heads work full-time.

Finally, mainstream economists argue that, in addition to increasing incomes and decreasing poverty, work has an additional benefit: it gives people dignity and a sense of self-worth. The idea, as articulated for example by Brad DeLong, is that having a job gives workers an honorable place in society, which presumably they are deprived of if they receive some kind of government assistance—whether in the form of payments from one or another anti-poverty program or a universal basic income. “Just giving people money” (according to Eduardo Porter) disrupts the incentive to work and undermines the “social, psychological, and economic anchor” associated with having a job.

That’s why there’s such an intense debate these days over the participation rate of U.S. workers. Even though the unemployment rate has fallen to historically low levels (and now stands at 3.8 percent), the lack of participation—whether measured in terms of the labor force participation rate (the blue line in the chart) or the employment-population ratio (the red line)—remains much lower than it was a couple of decades ago.* According to mainstream economists, that’s why rates of growth in output and incomes have slowed. There simply aren’t enough people working.

Once again, there’s an ongoing discussion among mainstream economists about the causes of that decline and what to do about it. More conservative mainstream economists tend to focus on the supply side of the labor market and the unwillingness of workers to make themselves available—mostly because they’re benefiting from some part of the social safety net (such as disability insurance, welfare, or government health insurance). Liberal mainstream economists also worry about the supply side (especially, for example, when it comes to women, who might not be able to work because they don’t have adequate childcare) but put more emphasis on the demand side (for example, the elimination of specific kinds of jobs based on international trade, automation, or the effects of economic downturns). Underlying this debate is a shared presumption that more people working will be better for them and for the economy as a whole.

Even portions of the Left accept the idea that the goal is to move toward more work. Thus, for example, both modern monetary theorists and Bernie Sanders argue in favor of a government job guarantee. The idea is that, if private employers can’t or won’t make the decisions to hire workers and create full employment, then the government needs to step in, as the “employer of last resort.” Again, the presumption—shared with those in both wings of mainstream economics—is that the goal of the current economic system and appropriate economic policy is get more workers to work more.

The utopianism of full employment is so entrenched, as a seemingly uncontested common sense, it’s difficult to imagine a different utopian horizon. But there is one, which emerges from at least three different theoretical and political traditions.

In the Marxian tradition, more work also means more surplus labor, which benefits all those who manage to get a cut of the surplus—but not workers themselves, who fall increasingly behind their employers and others in the small group at the top. That’s because, as employment increases, more workers are performing both necessary and surplus labor. Therefore, even assuming the rate of surplus extraction remains constant, the total amount of surplus created by workers increases. But, of course, the rate itself often increases—for example, as a result of competition among capitalists, who find ways of increasing productivity, which tends to lower the amount they have to pay to hire their workers (as I explain in more detail here). So, what appears to be an unalloyed good in the mainstream tradition—more jobs and more workers—is an economic and social disaster from a Marxian perspective. More workers produce more surplus, which is used to create a growing gap between those at the top and everyone else.

Then there’s the broader socialist tradition, which attacked the capitalist work ethic and claimed “The Right to Be Lazy.” Here’s Paul LaFargue back in 1883:

Capitalist ethics, a pitiful parody on Christian ethics, strikes with its anathema the flesh of the laborer; its ideal is to reduce the producer to the smallest number of needs, to suppress his joys and his passions and to condemn him to play the part of a machine turning out work without respite and without thanks.

And LaFargue criticized both economists (who “preach to us the Malthusian theory, the religion of abstinence and the dogma of work”) and workers themselves (who invited the “miseries of compulsory work and the tortures of hunger” and need instead to forge a brazen law forbidding any man to work more than three hours a day, the earth, the old earth, trembling with joy would feel a new universe leaping within her”).

Today, in the United States and around the world, the capitalist work ethic still prevails.

Workers are exhorted to search for or keep their jobs, even as wage increases fall far short of productivity growth, inequality (already obscene) continues to rise, new forms of automation threaten to displace or destroy a wage range of occupations, unions and other types of worker representation have been undermined, and digital work increasingly permeates workers’ leisure hours.

The world of work, already satirized by LaFargue and others in the nineteenth century, clearly no longer works.

Not surprisingly, the idea of a world without work has returned. According to Andy Beckett, a new generation of utopian academics and activists are imagining a “post-work” future.

Post-work may be a rather grey and academic-sounding phrase, but it offers enormous, alluring promises: that life with much less work, or no work at all, would be calmer, more equal, more communal, more pleasurable, more thoughtful, more politically engaged, more fulfilled – in short, that much of human experience would be transformed.

To many people, this will probably sound outlandish, foolishly optimistic – and quite possibly immoral. But the post-workists insist they are the realists now. “Either automation or the environment, or both, will force the way society thinks about work to change,” says David Frayne, a radical young Welsh academic whose 2015 book The Refusal of Work is one of the most persuasive post-work volumes. “So are we the utopians? Or are the utopians the people who think work is going to carry on as it is?”

I’m willing to keep the utopian label for the post-work thinkers precisely because they criticize the world of work—as neither natural nor particularly old—and extend that critique to the dictatorial powers and assumptions of modern employers, thus opening a path to consider other ways of organizing the world of work. Most importantly, post-work thinking creates the possibility of criticizing the labor involved in exploitation and thus of creating the conditions whereby workers no longer need to succumb to or adhere to the distinction between necessary and surplus labor.

In this sense, the folks working toward a post-work future are the contemporary equivalent of the “communist physiologists, hygienists and economists” LaFargue hoped would be able to

convince the proletariat that the ethics inoculated into it is wicked, that the unbridled work to which it has given itself up for the last hundred years is the most terrible scourge that has ever struck humanity, that work will become a mere condiment to the pleasures of idleness, a beneficial exercise to the human organism, a passion useful to the social organism only when wisely regulated and limited to a maximum of three hours a day; this is an arduous task beyond my strength.

And there’s a third tradition, one that directly contests the idea that participating in wage-labor is intrinsically dignified.

According to Friedrich Nietzsche (in his 1871 preface to an unwritten book, “The Greek State”), the dignity of labor was invented as one of the “needy products of slavedom hiding itself from itself.” That’s because, in Nietzsche’s view (following the Greeks), labor is only a “painful means” for existence and existence (as against art) has no value in itself. Therefore, “labour is a disgrace.”

Accordingly we must accept this cruel sounding truth, that slavery is of the essence of Culture; a truth of course, which leaves no doubt as to the absolute value of Existence.  This truth is the vulture, that gnaws at the liver of the Promethean promoter of Culture.  The misery of toiling men must still increase in order to make the production of the world of art possible to a small number of Olympian men.

And if slaves—or, today, wage-workers—no longer believe in the “dignity of labour,” it falls to the likes of both conservatives and liberals to ignore the “disgraced disgrace” of labor and create the necessary “conceptual hallucinations.” And then, on that basis, to suggest the appropriate government policies such that the “enormous majority [will], in the service of a minority be slavishly subjected to life’s struggle, to a greater degree than their own wants necessitate.”

Nietzsche believed that, in the modern world, the so-called dignity of labor was one of the “transparent lies recognizable to every one of deeper insight.” Apparently, neither wing of mainstream economists (nor, for that matter, many today on the liberal-left) has been able to formulate or sustain such insight.

Contesting the utopianism of full employment with a different utopian horizon creates the possibility of imagining and creating a different world—in which work acquires different meanings, in which the distinction between necessary and surplus is redefined and perhaps erased, and for the first time in modern history workers are no longer forced to have the freedom to sell their ability to work to someone else and achieve the right to be lazy.

 

*The Bureau of Labor Statistics calculates the labor force participation rate as the share of the 16-and-over civilian noninstitutional population either working or willing to work. Simply put, it is the portion of the population that is currently employed or looking for work. It differs from both the unemployment rate (the number of unemployed divided by the civilian labor force) and the employment-population ratio (the ratio of total civilian employment to the 16-and-over civilian noninstitutional population).

 

Block chain network concept on technology background

Forget Bitcoin. It’s the underlying technology, blockchain, that is generating the most excitement. Even utopia!

Bitcoin is a digital currency that was invented in 2009 by a person (or group) who called himself Satoshi Nakamoto. His stated goal was to create “a new electronic cash system” that was “completely decentralized with no server or central authority.” After cultivating the concept and technology, in 2011, Nakamoto turned over the source code and domains to others in the bitcoin community, and subsequently vanished.

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While Bitcoin (and other so-called cryptocurrencies, such as Ethereum, Ripple, and the other 1500 or so other such currencies) have generated a great deal of media attention (for their novelty, their ability to permit transactions beyond government surveillance and control, and their wild gyrations in price), it’s blockchain, the technology behind Bitcoin, that carries the utopian promise of remaking the economy and society.

At its most basic, blockchain provides a decentralized database, or “distributed digital ledger,” of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.* The technology can work for almost every type of transaction involving exchange-value, including money, goods, and property. It can also serve as the basis for a variety of other functions, from distributed cloud storage and the recording of property titles to authenticated voting and decentralized social media platforms.

For some (such as Brendan Markey-Towler), blockchain technology makes it possible not only to envision, but to establish a viable pathway toward, a utopian alternative to contemporary society.

On the face of it a mundane and boring technology for bookkeeping, blockchain is actually revolutionary because it makes the anarchist utopia a more realisable dream than has ever before been possible. At the very least it provides the strongest challenge ever posed to the monopoly of the state over the promulgation, formation, keeping and verification of institutions and the public record. The purpose of this essay is to investigate the conditions under which this might occur, and the dynamics of a society organised using blockchain technologies.

According to Markey-Towler, blockchain can serve as the basis for organizing an anarchist utopia—”a society which is composed of groups formed entirely by mutual association and absent violence and coercion.” The idea is that the keeping of verifiable records via blockchain technology allows for the creation of a public record that is kept by everyone and updated by collective consent, which means there is no nexus of power (such as the state or monopoly corporations) that can be exercised to corrupt or use the public record as a tool of extortion.** Even more, the existence of blockchain technology makes it possible to exit from existing economic and social relations and to practice, if only in a selected domain, a different way of organizing economic and social transactions. Thus, it permits a “sort of competition” for adherents between the two systems—one organized in and by the state, the other via decentralized distributed ledgers—and creates the possibility for individuals to choose the set of institutions associated with the alternative, blockchain technology.

I have no interest here in exploring either the feasibility or desirability of such a blockchain utopia (although I have elsewhere, e.g., here and here). My focus for the moment is otherwise—on the fact that the claims about blockchain from the latest example of a long series of “technological utopianisms.”

Many will remember this 2012 iPhone commercial claiming the device is the most used camera in the world. Light piano music twinkles and images of people living their best lives flit past. It is utopic desire, crystallized: the ad says that the gadget will make us happy, and that, through its lens, we’ll all evolve into a better version of ourselves. Facebook (like other social media) promised to give “people the power to share and make the world more open and connected.” And there’s Uber, which pledges “to make transportation safer and more accessible, helping people order food quickly and affordably, reducing congestion in cities by getting more people into fewer cars, and creating opportunities for people to work on their own terms.”

Many will recognize these as pledges that technology will usher in the new utopian society. But, as Howard P. Segal reminds us,

few if any of the high-tech zealots of our own day have even considered the possibility that, far from being original, their crusades fit squarely within a rich Western tradition of technological utopianism. It is not likely that very many of them realize how old-fashioned they really are when celebrating technology’s prospects for transforming the nation and, in due course, the world.***

They are merely the latest in a long line—starting with the late-sixteenth- and early-seventeenth-century Pansophists (such as Tomasso Campanella, Johann Valentin Andreae, and Francis Bacon) through the utopian socialists of the early nineteenth century (especially Henri de Saint-Simon) through the numerous technological utopians of the late-nineteenth- and early-twentieth centuries (including Edward Bellamy, Henry Olerich, Edgar Chambliss)—of prophets of progress and the possibility of achieving utopia through the introduction and expansion of new technologies.

Technological utopianism, as I am using it here, refers to one or more of the following three claims:

  1. Technology is the means for creating a perfect society.
  2. The perfect society itself is modeled on technology.
  3. The perfect society is one that promotes the development of new, better technologies.

Clearly, Markey-Towler’s enthusiastic claims for blockchain technology meets the definition. So, as it turns out, does contemporary mainstream economics.

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Mainstream economists treat technological innovation as the sine qua non of economic and social progress—the key to economic growth and the achievement of global prosperity. It is introduced in the production function as y, the “recipe,” whereby capital (K) and labor (L) can be combined to produce output (Y). Thus, even without changes in the amount of capital and labor, output will be increased as new technologies are introduced. Thus, when they move from an individual firm’s production function to economy-wide economic growth, mainstream economists claim that the key is the increase in productivity due to technological change, which is generally referred to as the “Solow residual” (named after Nobel laureate Robert Solow).****

The mainstream argument is that the level of production and the rate of economic growth can be increased by the introduction of new technologies, which lead to higher levels of productivity. More goods and services are thus made available to satisfy human wants, thus solving the problem of scarcity.*****

Moreover, mainstream economists claim, an economic system based on free markets is the best way of encouraging the development and application of new technologies. At a microeconomic level, profit-maximizing firms have an incentive choose the best, more efficient technologies, for themselves and for the economy as a whole. And free international trade is the best way of increasing the pool of research and development experiments, from which the best technology is chosen. Thus, technology trade increases national income in each country and raises the total gains from trade.

Contemporary mainstream economics thus combines market utopianism with technological utopianism.

As I see it, the biggest problem with technological utopianism is that it takes politics out of the equation—whether in imagining solutions to economic and social problems or envisioning the role of technology in a radically different kind of economy and society. Technology thus becomes a substitute for politics. As Aleszu Bajak has recently explained with respect to finding a solution to climate change,

Relying on a technological fix that’s just over the horizon avoids the mountain moving required to wean ourselves off fossil fuels, bring hundreds of countries into agreement on how to limit and clean up emissions, and alter the consumption habits of an entire civilization. Those are systemic complexities ingrained in our economies and cultures. Propping up glaciers to limit sea level rise, sprinkling iron dust into the oceans to encourage plankton growth to absorb carbon, or spraying the skies to reflect the sun’s heat just seems simpler.

Much the same can be said of obscene inequalities in the distribution of income and wealth, the “diseases of despair” that now afflict a large portion of the U.S. population, or the prospect that new forms of automation will eliminate jobs and make workers redundant. In each case, a technological fix is promised—tax-rate changes for inequality, the expansion of healthcare insurance for increasing levels of addiction, a universal basic income for labor-substituting robots—when the problem itself is political, not technical.

And that means the solution has to be political—organizing people to criticize the existing set of institutions, in order to imagine and create new ways of organizing the economy and society. New technologies may even have a role to play in enabling people to see such a “virtual reality.”

Tackling problems as deeply ingrained as the ones humanity faces right now will require facing a question that technology alone cannot address: are we willing to band together to criticize and change the existing set of economic and social institutions?

 

*To carry out a transaction a party needs two things: a wallet (public key) and a private key. A wallet is a string of digits and letters, also called a public key. It is an address that appears each time a transaction is done. The private key is a string of random digits that should be kept in secret. When someone enables a transaction it is signed with a private key, which is only visible to a sender. Then a network of nodes carries that transaction making sure that it is valid. Once it confirms its validity the transaction is put into a block where, because it has been “hashed,” it is virtually impossible to change without being detected.

**Technically, blockchain fulfills three requirements: (a) it guarantees a certain degree of reciprocity and security with respect to exchange and property; (b) it is sufficiently easy to interact with and to keep records; and (c) it permits a certain degree of freedom to use one’s property, that is, it is secure from theft, corruption, and manipulation.

***Howard P. Segal, Technology and Utopia (American Historical Association, 2006), p. 66.

****Solow (1957) started with a neoclassical production function where Yt = At•F(Kt, Lt), where Yt is aggregate output in time period t, Kt is the stock of physical capital, Lt is the labor force and At represents productivity growth due to technology. Solow then estimated the variables for the U.S. economy for the period 1909-49, where output per labor hour approximately doubled. According to his estimates, about one-eighth of the increment in labor productivity could be attributed to increased capital per person hour, and the remaining seven-eighths to the residual.

*****This is one of the reasons why Robert Gordon’s work on the slowing-down of U.S. productivity growth has been met with such concern.

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Maarten Vanden Eynde, The Invisible Hand (2015)*

We hear it all the time. On a regular basis. Having to do with pretty much everything.

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’.”

Alternatively, if you want to solve a particularly pressing problem—such as climate change, widespread unemployment, or Third World poverty—mainstream economists’ usual answer is “let markets handle it.”**

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Markets have a magical, quasi-mystical status within mainstream economics. They are both the original starting-point and far-reaching conclusion of mainstream economic theory. What I mean, first, is markets are there at the very beginning, without any explanation of where they come from or how they are formed—although there may be an occasional nod to Adam Smith (who famously invoked a natural “propensity to truck, barter, and exchange one thing for another”) or Robinson Crusoe (which presents, on one reading of Daniel Defoe’s novel, the model of two individuals who trade to their mutual benefit under conditions of equality, reciprocity, and freedom).*** Otherwise, markets are just there, with the requisite price and quantity axes and supply and demand schedules, as the starting point for economic analysis. Then, after a great deal of theoretical work (concerning the underlying determinants and the final consequences), markets are declared to be the best solution to the problem of scarcity (in finding a perfect balance between limited means and unlimited desires).

After min. wage

The “proof” of the superiority of markets often occurs in two steps (although today, in the usual sloppy teaching of mainstream economics, the second step is left out). At the level of individual markets, mainstream economists’ argue that economic welfare—consisting of the sum of consumer and producer surplus—is maximized at equilibrium. “Consumer surplus” is the extra benefit enjoyed by consumers in a market who pay less for goods and services than they were willing and able to pay for it (areas A + B + C, in the diagram above). Meanwhile, “producer surplus” is the difference between what producers are willing and able to supply a good for and the price they actually receive (areas E + D). At the equilibrium, the sum of the two is at its maximum. In contrast, when the market is not at equilibrium (such as when there’s a minimum wage, a wage rate above the market equilibrium wage rate, the green line in the diagram), there’s a “deadweight loss” (consisting of C + D). As far as mainstream economists are concerned, each market in equilibrium (whether for oranges or labor) creates the most total welfare for market participants.

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What about the market system as a whole? Here, the argument is somewhat different. It’s a theory about efficiency, not welfare.**** Mainstream economists claim that, when taken together (in what is referred to as general equilibrium), markets can generate a set of prices that finds a point—for example, A, B, or C, in the diagram above—on the “production possibilities frontier.”***** That’s the maximum amount an economy, given its technology and resources, can produce. Any point inside the frontier (such as D) represents an inefficient allocation of resources (more can be produced of either or both goods without the kind of tradeoff that occurs on the frontier). Importantly, Pareto efficiency means that no one can be made better off without making someone worse off.

That’s the remarkable, counter-intuitive conclusion of the mainstream theory of markets: everyone—every individual and society as a whole—benefits in a world in which all households and firms make decisions based solely on their own self-interest.

Thus, mainstream economists’ celebrations of the market and market solutions for all economic and social problems rely on both the presumption of markets as the given starting-point of analysis and their sweeping conclusions, concerning individual markets and the market system as a whole.

It is, of course, easy to criticize one or another of the assumptions underlying the celebration of free markets, many of them formulated by mainstream economists themselves. For example, markets may have “negative externalities,” that is, social costs that are greater than private costs (pollution is a common example). Under such conditions, more of a good or service will be produced than is socially beneficial. Monopoly power also distorts markets, since with market power firms will produce less, at a higher price, than if they operated according to the model of perfect competition (and, as mainstream economists are now discovering, it’s likely they will pay lower wages).****** Imperfect and asymmetric information, too, will lead to inefficient market outcomes—such as, for example, when conflicts of interest arise between a principal and an agent in a firm or banks are able to sell more financial products (such as derivatives) if they can conceal the true level of risk.

Thus, we can understand the two poles of debate within mainstream economics. Economists within the conservative or libertarian free-market wing celebrate free markets and criticize any and all forms of government intervention, while those in the more liberal wing focus on market imperfections and call for more government regulation of markets. Once again, it’s the invisible hand versus the invisible hand.

But underlying and informing the debate between the two wings of mainstream economics is a shared utopianism of markets as the best, natural and most efficient way of allocating goods and services—including labor, money, and natural resources. They may and often do disagree about the necessity and effectiveness of freeing-up or regulating markets, which comes down to whether or not they “see” exceptions to the basic model of perfect markets. But they share a belief that the logic of decentralized private markets is the appropriate way of thinking about and organizing the “world of goods.” In other words, mainstream economists debate, often intensely and with no small degree of sneering and sarcasm, the best way of getting markets to operate correctly—but that’s only because they utilize the same basic theory according to which a properly functioning market system is the only appropriate foundation and goal for theory and policy. Market fundamentalism thus represents the utopian horizon of mainstream economics.

The critique of market fundamentalism starts where mainstream economics leaves off—with the idea that the world of goods can and should be organized by markets.*******It highlights the hidden ground of the mainstream theory of markets and calls into question the very possibility of market exchange. The result is a different utopian horizon, which both refuses the self-suturing conception of market value and opens up the realm of possibility for other ways of organizing economic and social life.

When mainstream economists blithely draw the diagram or write down the equations for a market, what they’re doing is presuming—while failing to mention, let alone discuss—a whole host of conditions. Callari focuses on mainstream economists’ “image of the economy as a world of goods, and of the world of goods as a homogeneous field.” Such an image serves as the foundation for the positing of calculable “interests,” which thus become the central code of the economy and society. Within the homogeneous field of goods, every action can be connected with every other action in a measured (that is, analytically calculable) way. Once all the appropriate calculations are completed, “the market”—both individual markets and the market system as a whole—finds its equilibrium, the self-suturing reconciliation of all the competing interests. It also closes off the field of goods to any inspiration or influence other than self-interested rationality—be they traditions, social obligations, or ethical commitments.

Taking up on and extending that point, Amariglio argues that many of the features of non-market transactions involving goods and services (such as the gift) also haunt market exchanges.

There is nothing at all “certain” about any act of exchange, and nothing in it less symbolic or less “about” power, responsibility, meaning, and so forth. Likewise, there is something fundamentally “constituted” and “constituting” about identities and subjectivities in every act of exchange. Leaving aside the question of the multiplicity within selves who enter into trades, the fact remains that exchange is a very overloaded activity, and trading partners not only may be of several different minds about the transaction, but are often uncertain as to what exactly such transactions “mean” in terms of their own or others’ wealth and property, the effects on their well-being, who or what subject positions they occupy, what exactly is being traded, and so forth.

Market exchanges are therefore crosscut—just like any other allocative transaction, be it the gift, planning, or plunder—with a whole host of perturbations and undecidables. Both markets and the interests they are said to represent rely on “external” (historical and social) conditions and are, in different times and spaces, characterized by considerable uncertainty and indeterminacy. And once we begin to investigate those conditions, once we begin to analyze the “openness” of markets, we are forced to confront the ability of any act of exchange—and, for that matter, any economic discourse about markets—to successfully suture itself, at least in any kind of “permanent” act of closure.

The impossibility of market exchange, in general, suggests the need to recognize and attend to the historical and social specificity of individual markets—without any overarching, general theory of price or exchange-value. It also opens the door both to other commitments, whether ethical or political, and to other means of transacting goods and services, as they imply different conditions and consequences for society, for the social relations among persons, things, and nature.

Imagining and enacting those possibilities represent the utopian horizon of the critique of markets and mainstream economists’ theory of the market system.

 

*The Invisible Hand is a rubber copy of the right hand of Leopold II, taken at night from the 1926 sculpture by Thomas Vinçotte, located at the Regentlaan in Brussels, Belgium. The mould was taken to a former rubber plantation in Kasai-Occidental in the Democratic Republic of Congo and filled with natural rubber. The rubber hand was presented at Art Brussels 2015. It refers both to Adam Smith’s theory (as elaborated in the Theory of Moral Sentiments and The Wealth of Nations) and to Leopold II’s use of the International African Association (1877-79) and later the Congo Free State (1885-1908) to pillage the available natural resources. The grotesque result is that, by doing so, he “unwittingly” instigated local economic growth but at a high price: more than 10 million people are estimated to have died as a consequence of Leopold’s “Invisible Hand.” The Invisible Hand also points to the custom of chopping off the hands of enslaved people to ensure the rubber quota. To paraphrase Marx, markets come “dripping from head to foot, from every pore, with blood and dirt.”

**With one notable exception: healthcare.

***The Robinson Crusoe story has been read in a radically different vein by many heterodox economists, including Stephen Hymer and Ulla Grapard.

****Mostly because of Kenneth Arrow’s “Impossibility Theorem,” which challenged the idea that there’s a procedure for deriving a collective or “social” ordering—a Social Welfare Function—based on individual preferences.

*****While mainstream economists can claim to have solved the problem of “existence” (i.e., that there is such a set of prices consistent with overall efficiency), much to their consternation they have not been able to prove either “stability” (that prices, if away from the equilibrium set will move toward the equilibrium) or “uniqueness” (in other words, there may be many such sets of prices).

******That’s why, as I teach my students, there is such a thing as a free lunch: just abolish monopolies and oligopolies, and the economy can increase production (technically, the economy can move from inside to the production possibilities frontier without any additional resources or new technology, just by eliminating imperfect competition).

*******The critique I present here is inspired by two key essays—Antonio Callari’s “The Ghost of the Gift: The Unlikelihood of Economics” and Jack Amariglio’s “Give the Ghost a Chance! A Comrade’s Shadowy Addendum—both published in The Question of the Gift: Essays Across the Disciplines, edited by Mark Osteen. It is also informed by research that appeared in Postmodern Moments in Modern Economics, by Amariglio and myself.