The Invisible Fist (Part II)

June 27th, 2012 | 9 comments

In response to my letter to the CBC’s new show on (neoliberal) economics, here is a thoughtful letter from host Mathew Lazin-Ryder. I certainly appreciate his response, though I’d like to emphasize, he appears to believe that “governments don’t exist.” Ponder carefully what he has to say. My response, which seeks to clarify his neoliberal position — that “markets” exist before governance — is below. We’ll see if he has the time to reply further. / tV

From: Invisible Hand <invisiblehand AT CBC.CA>
Date: Wed, 27 Jun 2012 15:20:03 -0400
To: “tobias c. van Veen”
Subject: Re: Economic Examples without Consequence

 

Hello Tobias,

Thank you for your email. Yes, things are always more complicated than time allows. As for economists not being one solid lump, that is quite true. Our research did find a broad consensus amongst mainstream economists about the economic principles behind anti-price gouging laws. There certainly are things over which economists disagree, but I’d put anti-price gouging laws below many others on the list.

I also understand that our simulation was an over-simplified version of reality, which is exactly as we intended it to be. Sure, there are what-if, and comparisons of laws and economic structures, which is why we reduced the variables. 1 city, 1 law. Price-gouging, non-price gouging. We also, of course, removed the variable of personal wealth. While this is indeed a simplification of reality, we found the judgement that if a person had 1 dollar, they might also have 10 dollars, an acceptable one.

Indeed, I heartily agree that there are better scenarios – an efficiently run government that operates purely in the interest of the populace. Unfortunately for the world, I’m not sure that government exists – it certainly did not in our simulation. There are deeper implications, there are further considerations, there are caveats and what-ifs. The idea behind our show is that before we can even begin to talk about those as a society, we need to know how the basics are supposed to work – or at least, what a significant, if not major portion of an academic field believes to exist.

All the best,

Matthew Lazin-Ryder
CBC Radio Vancouver

================

 

From: “tobias c. van Veen”
Date: Wed, 27 Jun 2012 12:52:28 -0700
To: Invisible Hand <invisiblehand@CBC.CA>
Conversation: Economic Examples without Consequence
Subject: Re: Economic Examples without Consequence

dear Mathew,

Thanks for your response, indeed.

> Indeed, I heartily agree that there are better scenarios – an efficiently run
> government that operates purely in the interest of the populace. Unfortunately
> for the world, I’m not sure that government exists – it certainly did not in
> our simulation.

This is troubling. Your entire model of economics is dependant upon *not having a government* ?

Who provides the currency in your model, then?

> There are deeper implications, there are further considerations, there are
> caveats and what-ifs. The idea behind our show is that before we can even
> begin to talk about those as a society, we need to know how the basics are
> supposed to work – or at least, what a significant, if not major portion of an
> academic field believes to exist.

I’m in that field, and many of us would say that what exists first are social relations of power, and thus the primacy of politics, over economics. That is why policy is set by governments.

Of course, I effectively understand what you are saying is the opposite: that the “basics,” for you, means economy before government, capitalism before democracy. That governance is secondary to finance, in short.

In short, you are a neoliberal capitalist and an anti-democrat, correct?

Ie, you believe that “society” exists in the “market” before there is political organisation or representation of the “society” in a State?

I’m just curious, as this is, of course, a basic tenet of neoliberalism, which privileges the “market” before governance. (As the radicals would put it money before human rights, profit before people.)

I’d say many people would find the idea that we should imagine economic scenarios without governance deeply problematic. As deeply problematic as imagining that people all have the same amount of money. It all sounds like a fantasy to me. The question is, who does this fantasy benefit?

I think it’s fairly easy to see whom: those with the most amount of money.

At least, unlike Thatcher, you find that there is such a thing as “society.” However, in your example, there was none. Only individuals — with money. So I take this as a bit of an error on your part.

If governments “don’t exist,” why should “society”?

I look forwards to further shows either questioning these troubling, anti-democratic assumptions, or, more likely, continuing to espouse neoliberalism as “basic tenet” — a core ideological operation if there was one.

You don’t mind if I quote you in an article saying that “governments don’t exist,” do you?

best,

tobias.

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    9 Responses to “The Invisible Fist (Part II)”

    1. Duckrace2000 says:

      By “that,” I’m sure he means ”
      an efficiently run government that operates purely in the interest of the populace.” This, however, does not stop the argument from being claptrap. The free market is probably the best method of delivering crap you don’t need. When it comes to life or death, however, it fails miserably.

      • tV says:

        Yes, you are correct, the “that” does refer to a perfectly run government (as two other commentators pointed out whose comments were lost in the transition from Disqus to WP Comments). However the relation between the singular/general here, ie between government-in-general as lacking from the experiment/model and a specific, assumably “perfect” government, is irrelevant, because the model itself assumes no government whatsoever. None was present. And by that I mean: the crisis experiment itself did not allow or admit its actors to organise collectively, which *is* precisely the formation of the political, ie of democracy, of governance, at a local, ad-hoc level. This is why this crisis experiment is so dangerous as somehow explanatory of crisis reality — it assumes people never negotiate, speak to each other, and assume systems of governance when our larger, representational systems fail (such as in times of crisis). And that — that assumption that base individual interests trump communal and collective organisation — is precisely the point of neoliberal ideology: to eradicate all possibilities of sharing, of organisation for the common good, of relations that would establish priorities, especially those that privilege the impoverished, needy, sick, and poor over those of wealth and oligarchy.

        This is what MLR doesn’t seem to grasp in my initial email, actually: that it’s not the absence of specific, big-level governance that matters, but the absence of communicative, ad-hoc governance at the local level. The experiment, and his show, continue to operate on the basis that economics trumps ethics, environmental concerns, and equality, and that so-called rational actors don’t talk nor communicate to each other about what constitutes an economic priority. The show goes out of its way to eliminate all discussion of collectivity and community from the discussion of economics — which is not surprising, insofar as it presents an uncomplicated and ultimately childish view of neoliberal economics as constituting the total thought of the discipline as a whole, which is why the show is a perfect example of neoliberalism marketing itself. The easiest way to convince people of the mechanisms of their own oppression is to sell it to them as “the way things are,” as normal reality already in operation, when the truth of the matter is that this model is being hotly contested all over the planet — just peek your head out and witness the protests and rallies against neoliberal policies and against the impoverishment of the many to pay off the criminal dealings of the few (the bankers etc) in Spain, Brasil, Montreal, Greece, London, Chile… many, many people are revolting against precisely this economic order, which is oligarchy, but you wouldn’t know it from MLR’s show, indeed.

    2. tV says:

      Indeed, an intriguing discussion resulted on good ol’ Facebook in regards to the general versus the particular. But the base ideological assumption is the same within the economic model provided: (a) there is no governance within the model and (b) the model does not present any options of forming one. It is not that no “perfect” governance exists in this model; it is that this model leaves no room for governance — collective decision-making — whatsoever.

      What I mean is that the base ideological assumption is that in this scenario all actors act as individuals. Had I participated in such an economic model, I would’ve suggested negotiating with other buyers, and/or forming a collective decision-making process to best allocate resources in a time of crisis.

      Just because there is no “big gov’t” or “perfect government” doesn’t mean there can’t be ad hoc local governance in such situations. What neoliberal economics assumes is that humans do not collectively organise or form communal systems of resource sharing. Neoliberal economics assumes that all are individuals (in what is called Rational Actor Theory) and only acting in the pursuit of self-interest. In short, neoliberal RAT assumes all humans are inherently selfish and dumb — and even in a crisis situation. This then provides justification for “the free market” system as under neoliberal economics, it and it alone, as “the invisible hand,” will control the dumb, selfish interests. However this conclusion is only possible if you render humans blind and dumb, unable to communicate with each other and assume localized or generalized decision-making that prioritizes certain economic/social values and functions above others (which is how we actually operate).

      My point here is that this radio show buys into this neoliberal ideological manoeuvre of assuming isolated individuals *as* constituting economics at its base level rather than assuming that economics at its core is collective, and that in such situations, not only trade occurs but the negotiation of collective values and shared goals — ie, in this case, the shared resource of local health (the hospital).

      Moreover this economic example has little to no bearing on reality in actual disaster scenarios. In such scenarios (which have been extensively studied) ad hoc resource sharing and governance is precisely what guarantees survival. If everyone “goes alone,” they die.

    3. Duckrace2000 says:

      “My point here is that this radio show buys into this neoliberal ideological manoeuvre of assuming isolated individuals…”

      It does more than that. It actively censors dissenting views that disprove its arguments. I posted a comment on episode 2′s webpage pointing out that Pierro Sraffa’s 1926 work destroyed neo-classical economic’s model of the firm, neo-classical economist H. R. Varian disproved the model of the consumer, and the Cambridge Controversies debunked the model of capital. It initially made it past the moderators. Someone – and my money is on the host – came in and deleted that comment.

      • tV says:

        Thanks for raising those various points — yes the issue I have with the show is that it presents “economics” as a fait accompli of neoliberalism, as if the theory of the invisible hand was some kind of absolute, eternal truth of “economics” as a whole. Not only is capitalist economics replete with debate on these subjects, but there is not even a hint in this show of critique, of contrasting points of view, in short, of the demanding arguments made by environmental, socialist, feminist, and radical democratic economists.

        How sad that the show’s comments page is being moderated in such a fashion. However I do applaud Mathew, as he did write me back, and engaged me in discussion. I lack the patience to continue the facade of debate, however. The deception being played out in this show is occuring at a level that I do not think the host himself fully understands, which is precisely the nature of neoliberal ideology: it makes a fantasy — of individuals and a deity-like invisible hand — appear as normal, when the savage truth is that it is a fiction designed to mask the systems of power and violence that actually makes that hand a fist, smashing all attempts at collectivity, community, equality.

        Thanks again for your comment… I will publish my comments on the third show shortly…

    4. [...] I’m afraid I have more to say — and critique — concerning the CBC’s radio show The Invisible Hand, a tour-de-force of neoliberal ideology masking as “economics.” In its second show, it looked at the question of the apocalypse, following its first show on economic decision-making in times of crisis (see posts, part 1 & part 2). [...]

    5. Duckrace2000 says:

      The latest show seems to be a love letter to the false dichotomy.

      • tV says:

        Indeed. I was going to post something but figured this one was so obvious that I needn’t bother. Justifying economic exploitation as the only means to the wealth of the middle classes is the worst kind of self-serving argument. I gather this justifies slavery too. There are so many fallacies it is difficult figuring out where to begin. Perhaps, then, by starting with questioning the history of the West as the only possible model of economic development? We’re talking about, after all, the history of capitalism, specifically constructed upon the genocide of First Nations peoples, the import of pan-African peoples into generations of slavery, and the destruction of the environment. Is this show seriously saying that this is the only way for today’s third/fourth world nation-states to develop the wealth of the middle classes? Horrendous. Absolutely horrendous.

    6. 3 parts by @futigivephilo on CBC's Planet Money knock-off The Invisible Hand http://t.co/SUtvetOq http://t.co/uVbzeiQH http://t.co/GdY0k8jK

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