Sunday, June 19, 2011

The Emergence of Capitalism

Yanis Varoufakis, Joseph Halevi, Nicholas J. Theocarakis, 2011, Modern Political Economics: making sense of the post-2008 world, London: Routledge.

That modern economics is in some sort of crisis is a regular theme at Lost Legacy. Hence, I had high hopes that the authors of this newly published text would provide an authoritative account of what was wrong and from whence its problems originated, while awaiting my copy from Amazon, (originally set for 1 July, but out of the blue it arrived at my retreat in rural France on 16 June). After the introduction and chapter 1, I am more intrigued than disappointed, wondering where their argument is going to go.

Reading the introduction, I have concerns that the authors (VHT) are determined to do what the title says, give a firmly political account of the problems as they see them from their mainly tendentious leftish perspective. I say ‘tendentious’ not as a hasty judgement on the merits of their analysis but as how I expect many modern economist readers will react to it.

For myself that political problem is not decisive (I long ago was convinced that attempts to orchestrate improvements in the world seem always to make things worse – we cannot really trust the necessary implementers of change), so I shall continue reading it with my usual critical mind.

But what of mainstream modern economists, trained in the arrogant verities of the one-dimensional mathematical Homo Economicus, invisible hands, and all jazz? Anything worthwhile that YHT say may be lost in the negative reaction of the many who really need to persevere and consider its contents rather than dismiss them a few pages into the text.

Of course, there is a fair-sized minority of dissidents that might provide a market for the thoughts of YHT’s heavy thinking, and perhaps a similar number of open-minded others disturbed enough by recent global events to persevere through their anxious curiosity. But of the self-appointed elite, is there enough of them to go past their early reaction?

I assume that Routledge considered these aspects of the academic market, perhaps believing that the rightish perspectives of the elite make them confident enough to ride trenchant criticism and select those bits of YHTs’ views amenable to absorption into the mainstream paradigm (as Thomas Kuhn showed us was the early line of defence of the old against the new).

For YHT, their stage is global and their historical perspective is played at a rapid tempo, so rapid that centuries and decades go by in the blink of an eye. One moment they contemplate Adam Smith and the next paragraph we are in the ‘dark satanic mills’ of what is known now as the (power driven) 19th century industrial ‘revolution’, as if Smith was as aware of it (he died in 1790) as we are now, and some think he ought to have been.

In their outline of their theory of ‘surplus’ they add colour to Adam Smith’s somewhat greyer account in his Lectures in Jurisprudence (1762-3) of the four Ages of man - hunters, shepherds, farmers, and (‘at last’) commerce. With “humanity’s Great Leap Forward” (p21), came inevitably, and inexorably, that of property (not played up by YHT). This was the most significant essence of that ‘great leap’. From the ‘free’ forest and its produce, including humans, humanity discovered (invented) property without needing (or caring) to know the significance of what they did (unintended consequences?).

No property, no surplus. A male hunter was confined to what he could carry – while near invisible women (from all accounts of those early millennia) gathered and carried the bulk of their own and their children’s nutrition; they still do among those few remaining people still in the forests. Without property – ‘yours, mine’, later, ‘ours not yours’ – competition for nutrition would have made even a short-term surplus unlikely.

From the surplus, all that followed became possible. YHT call this ‘socialised production’ (without explanation – they seem to write for an existing consensus even as early as page 21). They call the surplus the ‘foundation of civilisation’. Surplus certainly was critical and took 10-12 millennia to end pre-history and bear such fruit, if we may describe it thus, in memory of its forgotten victims and in respect of today’s victims (incidentally, YHT would help their case if they acknowledged that modern corporations were not uniquely evil as compared to their ruling predecessors in all of history – scientists should rise above infantile student leftism).

Smith saw the emergence of the state as a means to protect the rich from the poor. It certainly had that role, but I think we can accept that the rich feared their rich rivals possibly even more than the unarmed poor (though it was possibly not politic to address such ideas to the literate sons of dukes and such like in his 18th-century classroom).

In “Condorcet’s secret” (that ‘real power lies not with the oppressors but with the oppressed’) it reads well until you ask what was secret about it if its secret was known to the oppressors – and known to their instruments of power in the overseers, agents and enforcers? Demonstrably, resistance was always publicly crushed (Sparticus and all). A Roman legion in battle order was a formidable persuader of very visible power.

The ‘Second Great Leap forward’ is credited with transforming feudal societies into ‘fully fledged market societies (p 23). Again, YHT leap over an important historical event and its aftermath: from the fall of Rome in the 5th century, Western Europe was ruled first by warlords (holding their land against all comers) and its economies were in ruins. The emerging commercial societies of classical times were wasted and such opulence that they shared was destroyed. As dynastic feudal regimes curbed war-lord power, commercial societies re-emerged, albeit slowly and the monarchist regimes in alliance the flaky towns, finally, and silently put an end to feudalism with the incessant temptation of traded luxury goods (not just for Lords but also for their ladies), from the labour of artisans and former peasants.

As important was the emergence of an educated strata, wrestling free from the grip of the church on knowledge. This aspect of the prevalence of ‘pusillanimous superstition’ (Adam Smith) is a missing core aspect in VHT’s account. They go to what they call the ‘ideology’ of ruling groups, politicising what were more basic ideas with a long pedigree in human societies.

Early humans created weird explanations of the irregular events in nature, using invisible gods, demons, and fairies to ‘sooth the fears’ of early humans long before the shamans made room for the more intense and more coherent thoughts of ‘philosophers’ (Smith) who did nothing else in societies moving from mere subsistence towards minimal diets (‘observed everything, did nothing’). But superstition remained a potent (and often dreadful) force from which religion did not provide a refuge – in fact Christianity absorbed it).

Except for the collapse of Rome, commercial societies would have matured for a further thousand years to around the 15th century, which may have brought about the ‘second great leap’ much earlier. YHT’s explanation, sans the affects of the fall of Rome, would benefit from some exposure to Adam Smith’s arguments about the ‘missing millennium’, but this might depoliticise the case that they seem determined to make – one great (secret?) capitalist conspiracy reaching its fruition in 2008.

However, I shall press on and my strong recommendation for readers of Lost Legacy to buy YHT’s book and study it remains undiluted. I shall comment on other chapters as time and obligations to visiting grandchildren tomorrow permit for the rest of this holiday.



Post a Comment

<< Home