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"The bottom line here is simple. Both capitalists and workers have cause for complaint. Capitalists have lost pricing power - the degree of monopoly has fallen - which has tended to depress the profit share. But this has not benefited workers because instead the "wedges" of other incomes and higher imports have depressed their share. "
"Philosophically, the Brooks and Rajan essays are interesting for the way they awkwardly combine an old-fashioned style of conservatism (the poor will always be with us, accept your lot) with a more modern form of inclusive neoliberalism (accept deregulation, and you too can be rich!) By itself, the first style of argument is simply intolerable to modern sensibilities, but the crisis has rendered the second increasingly implausible. Together, however, the two arguments add up to nonsense.
The simplest response is that self-styled critics of “structural” economic problems are not being structural enough. The existence of a hyper-polarized wage structure is not a fact of nature but is itself a structural problem, and one that has been facilitated by specific policy choices. What we need is not “human capital” but a shift away from protecting rentiers and toward strengthening the bargaining position of labor."
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There is an odd dissonance in these accounts, however, one that’s more obvious in Rajan’s version than in Brooks’. First, we are told that the stagnation of wages and the disappearance of jobs is an unchangeable structural fact: globalization and technology dictate that the demand for labor will be split between a handful of high-skill, “superstar” jobs and a mass of menial, poverty-wage service work. Yet we are also told that we face a deficit of “human capital”, implying that adequate education is all that anyone needs to escape the trap of unemployment or low wages.
"As recently as the 1960s there was a wave of literature arguing that the prison was becoming obsolete. Now the prison stands as a key mechanism for how the government has dealt with its own powers, and this has reconfigured the role of government. The law-and-order movement invokes a radically different role of the state in relation to its citizens than the one of the post-New Deal era. Though an incomplete project, the New Deal had a model of the state as a guarantor of economic security and freedom. Now the state primarily interacts with society as a maintainer of order. For those hoping to rebuild freedom through the state, finding a new vision of how government works needs to be at the front of the agenda."
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An alternative account holds that our policy of mass incarceration reconfigures both the idea of the state and the way it carries out its duties. In this story, a government that creates mass incarceration is the obvious result of the ideologies of neo-conservatism and neo-liberalism that have come to dominate in the wake of the New Deal liberal order’s collapse.
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This view of policing as less a practice of rules than a perpetual struggle to properly administer violence and maintain hierarchy echoes the link between conservatives and violence that political theorist Corey Robin establishes in his book The Reactionary Mind. Conservatives display “a persistent, if unacknowledged, discomfort with power that has ripened and matured.” Rule that has become complacent and assumed has become weak and debilitating. Robin shows how conservatives have always looked for ways to struggle to renew their dynamism. He argues that many conservatives view “American decadence, traceable back to the Warren Court and the rights revolutions of the 1960s, [as the result of] the liberal obsession with the rule of law.” The supposed liberal imagining of the police–as boring rule administrators or competent investigators–is anemic compared to the reinvigorating struggle of police as a force against disorder.
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"In this sense, what is in one way a parallel between now and the 70s is also a difference. Both eras brought into doubt a dominant economic paradigm - Keynesian social democracy is the 70s and neoliberalism now. However, because neoliberalism serves the interests of capitalists in a way that Keynesianism (by the 70s) did not, there’s less of a rush among the ruling elite to look for an alternative.
But this merely raises the question. Why - given that its living standards are falling now in a way they did not in the 70s - is the working class so quiescent compared to then?"
"Colin Crouch – The Strange Non-Death of Neo-Liberalism "
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Instead of governments taking on debt to stimulate the economy, individuals and families did so, including some rather poor ones.
Crouch argues that this explains why workers in the Anglo-American world were willing to maintain consumer confidence when their equivalents in many continental European countries were highly unwilling to spend. Rising house prices allowed the former to borrow money. At first this was accidental – it soon became a necessary condition for governments to do what they wanted to do. In a key paragraph, he argues:
The dependence of the democratic capitalist system on rising wages, a welfare state and government demand management that had seemed essential for mass consumer confidence has been withering away. The bases of prosperity shifted from the social democratic formula of working classes supported by government intervention to the neoliberal conservative one of banks, stock exchanges and financial markets. Ordinary people played their part, not as workers seeking to improve their situation through trade unions, legislation protecting employment rights and publicly funded social insurance schemes, but as debt-holders, participants in credit markets. This fundamental political shift was more profound than anything that could be produced by alternations between nominally social democratic and neoliberal conservative parties in government as the result of elections. It has imparted a fundamental rightward shift to the whole political spectrum, as the collective and individual interests of everyone are tied to the financial markets, which in their own operations act highly unequally, producing extreme concentrations of wealth.
More succinctly financial “irresponsibility became a collective good,” albeit a perverse one – no-one wanted the party to stop or the bezzle to be revealed.
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From one point of view, there is no hard-and-fast distinction between late capitalism and neoliberalism, and in many ways neoliberalism is simply late capitalism made conscious, carried to extremes, and having more visible effects. The real break is generally agreed to have been between the kind of capitalism in place in the U.S. from about the 1940s to the 1970s (there is no established term for this; Lash and Urry [1987] call it “organized capitalism”), and what came after (i.e., late capitalism or neoliberalism). This break involves two somewhat interrelated shifts. The first is a shift from a so-called Fordist to post-Fordist framework defining the relationship between capital and labor: under Fordism there was a kind of truce between capital and labor, and (organized) labor did fairly well in terms of pay and job security; under post-Fordism, the truce is over, and labor has become dispensable, disposable, and replaceable. The second is a shift from a Keynesian theory of the relationship between the government and the economy, to a post-Keynesian (“neoliberal”) theory: under Keynesianism, the government was expected to play a role in regulating the economy and in sustaining social programs for the general well-being; under post-Keynesianism/neo-liberalism the government is supposed to do neither
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Harvey offers a clear definition of neoliberalism as a system of “accumulation by dispossession,” which has four main pillars: 1) the “privatization and commodification” of public goods; 2) “financialization,” in which any kind of good (or bad) can be turned into an instrument of economic speculation; 3) the “management and manipulation of crises” (as above); and 4) “state redistribution,” in which the state becomes an agent of the upward redistribution of wealth (159-164 passim)
"This is what Haiti is both victim and symbol of—this new, rapacious stage of capitalism. A cannibal stage where, in order to power the explosion of the super-rich and the ultra-rich, middle classes are being forced to fail, working classes are being re-proletarianized, and the poorest are being pushed beyond the grim limits of subsistence, into a kind of sepulchral half-life, perfect targets for any “natural disaster” that just happens to wander by. It is, I suspect, not simply an accident of history that the island that gave us the plantation big bang that put our world on the road to this moment in the capitalist project would also be the first to warn us of this zombie stage of capitalism, where entire nations are being rendered through economic alchemy into not-quite alive. In the old days, a zombie was a figure whose life and work had been captured by magical means. Old zombies were expected to work around the clock with no relief. The new zombie cannot expect work of any kind—the new zombie just waits around to die. "
Zombie Economics
How Dead Ideas Still Walk Among Us.
By John Quiggin.
The Crisis of Neoliberalism
By Gérard Duménil and Dominique Lévy.
in list: Economic Crisis
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Something rankles about Quiggin’s plainspoken conclusion, despite the able history of ideas and the enjoyable skewering of some disingenuous beliefs. His book doesn’t seem to take its lovely, lurid starting point as anything more than a hook. There is a rich tradition of zombies as figures of capitalism, perhaps most gloriously in George Romero’s film Dawn of the Dead. Lumbering automatons stripped down to the most ingrained habits, his living dead recall nothing but ceaseless consumption. They can only return to the mall’s torpid palace of commodities: they are blank, mindless, their arms outstretched for sustenance. The disease that has captured them is not a local phenomenon; as with countless other versions of the allegory, it is everywhere. Dawn of the Dead was made in 1978 and cannot be adduced either to the Keynesian or neoliberal era; it is not a withering critique of one importunate variant of modern economics but a total allegory.
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The book’s other seductively lucid schema concerns the history of structural crises, which follow an alternating pattern. The authors count four in the “long twentieth century”: the first “great depression” in the 1890s, the Great Depression, the 1970s collapse and the current morass. The first and third they identify as crises of profitability; the second and fourth, crises of “financial hegemony.” In these periods the profit rate is relatively stable, but the unchecked power of the upper echelons allows for unsustainable demands. They are gilded ages, perhaps; yet every such age gilds not the lily but the tulip: they are built out of bubbles. With the wealthy unwilling and the poor unable to support the mountain of social debt, the bubble eventually pops. This is, for our authors, the nature of the present crisis, and it is from here we must seek a way forward.
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"Which is why I'm ending this post as I ended the last post I made on this topic by invoking Marc Bousquet, who sees the central challenge we face not as public hostility to the humanities nor our unwillingness to mount a vigorous enough defense of our intellectual specialties, but rather as the deteriorating conditions of our employment and our inability--or unwillingness--to successfully oppose these changes. Rather than simply reiterating our claims to specialness--which we are much better at and more willing to do than Dames thinks we are--humanities professionals in the academy need to understand that we are becoming victims of the same economic forces that are affecting other professionals and working people throughout our society and around the world. "
"That is an interesting question because it assumes that neoliberalism produces despair. I wish it did but I am not convinced that it does. I think that the process that some of us have called neoliberalization actually seizes on something that is just a little to one side of despair that I might call something like a quotidian nihilism. By quotidian, I mean it is a nihilism that is not lived as despair; it is a nihilism that is not lived as an occasion for deep anxiety or misery about the vanishing of meaning from the human world. Instead, what neoliberalism is able to seize upon is the extent to which human beings experience a kind of directionlessness and pointlessness to life that neoliberalism in an odd way provides. It tells you what you should do: you should understand yourself as a spec of human capital, which needs to appreciate its own value by making proper choices and investing in proper things. Those things can range from choice of a mate, to choice of an educational institution, to choice of a job, to choice of actual monetary investments – but neoliberalism without providing meaning provides direction."
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I’ve been thinking a lot about anxiety lately and it is partly because I am so aware of how much anxiety is a feature of everyday discourse in the US when people are just describing their personal state. One of the things I’ve been trying to think about – it is not quite related to the walls question but we will go back to that – is whether the sheer level of anxiety in human beings has been increasing in ways that are commensurate with the loss of certain kinds of boundaries, the denigration of defining features of communities, all that we associate with globalization. I think the answer is probably yes, and I hope somebody will do a study on this: historicizing anxiety and thinking about the history of the human subject in terms of a more anxious subject today than ever before. There are lots of reasons that students, for example, are anxious in ways that I don’t remember being anxious as a college student. There are concerns about performance and job markets, but I am really talking about a world of anxiety that is quite disseminated and quite general and does not simply pertain to the high ambition end of the American middle class.
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Obviously, a strong conception of a global citizen, a cosmopolitan ideal, could have that global citizen actually living and connecting to a particular place, but most theories of the global citizen and of the global village insignificantly honor the need for a human-scale sense of place. A nation-state is too big for that sense of place but human communities provide it, and so do slightly larger or even non-human ways of bounding what and who we are. I do think that is really important and I don’t think that political theory will get us very far if it can’t acknowledge and attend to that particular dimension of being human.
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The point of all this economic history is that this decline wasn’t an accident – it was a matter of trade, monetary, and domestic economic policy. Some administrations accepted and promoted the decline in exports as a Cold War measure, others struggled to reverse it; finally, it was simply replaced by inflation as an policy goal.
"But what if all the dilemmas above are really different faces of the same beast? It's a deeper dilemma that I call, in my book, the Capitalists' Dilemma. We've reached a place where generating more of the same old "prosperity" requires more and more economic harm — real and relentless damage to people, communities, society, nature, and the future, whether in the form of McJobs, rising inequality, chronic mass unemployment, declining trust, or a missing sense of personal meaning."
"When Americans begin routinely complaining about how they hate their government and don't trust their leaders, it may be time to look warily at the homicide rate."
"Dr Steve Hall and Dr Craig McLean, claim in the latest international journal Theoretical Criminology that homicide rates are significantly higher in nations in neo-liberal politics where free market forces are allowed free rein, such as the USA, but are significantly lower in nations governed by social-democratic policies which still characterise most Western European nations."
by Brad DeLong
This is part 2 of a two-part diary on two new articles that provide insight into the newly visible weakness of Obama's politics
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What's Missing From Lind's Analysis
First of all, Lind fails disastrously to comprehend the role of race. Chris has written about this before, and I'll be writing about this tomorrow again, but there's a clear correlation between racial homogeneity and support for the welfare state. It was neither accidental nor peripheral that the New Deal was a form of massive affirmative action for the white working class, much of it on its way to becoming part of the largest middle class ever known. By keeping agricultural workers and domestics outside the realm of coverage for Social Security and minimum wage protections, the New Deal effectively created the black underclass as a separate entity, while whites in very similar circumstances at the time (1935) went on to decades of steadily increasing incomes and various forms of government assistance.
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Indeed, the New Deal system repeatedly proved incapable of dealing with rightwing demonization. In addition to kowtowing to Southern racism, they were driven from power by McCarthyism in the early 50s, and Johnson initiated full-scale war in Vietnam precisely because he thought a repeat was inevitable if he were to withdraw instead.
Furthermore, the system of national industrial development and landuse developed during this period directly served to undermine the New Deal system. As described in The Rise of the Gunbelt: The Military Remapping of Industrial America , the Cold War era saw a massive disinvestment in the Rustbelt, as military production shifted dramatically outward, to the West Coast, Sunbelt and East Coast. This was reinforced by the Interstate freeway system, at the same time that urban cores were disinvested in, while segregated suburbs were heavily subsidized. Amazingly, it was as if the entire New Deal establishment was utterly blind to how it was committing economic/demographic suicide.
Review of Firing Back: Against the Tyranny of the Market
By Pierre Bourdieu, Translated by Loïc Wacquant. Retrospective on Bourdieu's work.
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The intellectual, in French terms, is what Americans often call a "public intellectual" -- someone who not only works with intellect but intervenes authoritatively in political life on the basis of the central values of art, culture or scholarship. Intellectuals, Bourdieu always argued, don't just bring to the table relevant expertise or skill at public presentation. They import the moral norms of another social field.
Presumption is the intellectual's strength and weakness. Zola and Sartre are the two outstanding protagonists in this figure's development in France. Over the course of his career, Bourdieu had plenty to say about both. Zola created the modern image of the intellectual in 1898, when he famously came to the defense of a Jewish army officer, Alfred Dreyfus, falsely accused of treason. He used the bohemian writer's studied indifference to money and power -- and, indeed, to ordinary politics -- to make a political stand. The consequences were not all good. Zola's example instilled in artists the determination to speak up for public causes, but his gambit also suggested that intellectuals must be still somehow above the reach of day-to-day affairs, superior and aristocratic.
The villain in Bourdieu's history of the intellectual was Sartre, who claimed to inherit the mantle of the "omnipotent intellectual." According to Bourdieu, Sartre had yoked together mediocre versions of several previously separate intellectual vocations: academic philosopher, avant-garde writer and Marxist, among others.
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