As a characteristic neoliberal, Bagwhati actually denies economics is a
science. If all that is objective about society is actual prices paid, and
if there is market uncertainty, then you can never really know what the
aggregate effects of market forces will be, and there can be no economic
laws, only individuals acting in the market place; and that is exactly Von
Hayek's idea. In an interview with Roeland Muskens of the Dutch magazine
Internationale Samewerking ("International Cooperation"; published by the
Dutch Foreign Affairs Ministry, p. 24), Bagwhati was asked by Muskens:"Does there exist a watertight economic recipe ? If things turn out different than the economists predicted, they always point to "unforeseen circumstances". Shouldn't economists admit for once that economics is to a great extent metaphysical ?" Baghwhati replied whorishly, in a very explicit way: "In a certain sense. Economics is not a science. It is an art. Luck plays a big role. You can help luck along a bit. Free trade is a precondition, but even then it can fail. And if there's a war, then of course you cannot achieve much anymore." There you have it. To get economic growth and reduce poverty, people have to "truck, barter and exchange", simple as that. Everybody has something they could sell, and if they can sell it, they can buy stuff, and this will induce people to produce more, because they have an incentive to do it: if both parties did not gain from trading with each other, they would not do it. So if everybody trades, then everybody gains. But what if the operation of the market creates gigantic disparities in wealth and povery, gigantic socio-economic inequality ? What if both gain, but some gain vastly more than others ? In that case, what they say is what ex-premier David Lange already said in New Zealand long ago: "inequality is the motor of the market economy". Inequality is not a problem, because inequality creates an incentive to get even, to get rich, an incentive that forces people to trade, and the more trade there is the ciher people will be. The problem is not that the rich are rich but that the poor are poor; the rich are rich because they are rich, i.e. they are rich in talent, rich in initiative, rich in entrepreneurship, rich in managerial ability, rich in negotiation skills and personal qualities and so on. If the problem is that the poor are poor, but why are they poor ? Because they are poor, i.e. poor in the sense they lack the personal qualities the rich have, they are deficient. The rich are just better people, that is all, and that is why they are able to make other people work for them. So then, what people really need to feel, is that urge to enrich themselves, to possess the personal characteristics required for enrichment, and to become cultured in this way, but that is not an economic question, but a cultural question. They should look up to their betters, not down to their inferiors, and that's the stairway to heaven. If it is all a cultural question, and if economics is not a science, then it is no longer legitimate to talk about the distribution wealth in society, at most you could talk about your own wealth or the lack of it. But if you lack it, the reasons why you lack it must be psychological, emotional, cultural, ethnic, etc. In New Zealand, David Lange started off his premiership in 1984 announcing that, having opened up the government books, it turned out that the public debt was unsustainably high, and required drastic action to correct it. And his Labour Government took drastic action, privatising and marketising everything as much as possible in the most radical neoliberal experiment tried anywhere in the world. In previous PEN-L posts, I have described briefly what the consequences of that were, for the New Zealand economy: - stagnating real production, - fast-increasing socio-economic inequality and concentration of wealth in fewer hands, - a foreign take-over of New Zealand assets and culture, - an increasingly servile population, - an increase in speculative activity (the greatest proportion of what little economic "growth" is recorded consists of real estate development, capital gains, and financial activity based on speculative trading). But the most interesting story is really the story of debt. The New Zealand Government got rid of its debt, and balanced the books to a great extent, using the techniques I have described in my previous PEN-L posts (17 July, 20 July, 20 August, 19 Sept 2003, 28 Sept 2003, 5 Oct 2003, 19 Oct 2003.). But what did the privatisation of debt actually mean, ultimately ? It meant that: (1) having divested itself from revenue-generating activities, the state was forced either to borrow and tax more or else reduce its activities more, and government debts ended up just like what they were before, i.e. prior to the "surgical operation" to sanitise public finance and balance the books. The New Zealand government became a means for foreign creditors to cream off New Zealand tax money levied by that government; instead of investing in real production, those creditors invested in the New Zealand government's ability to levy taxes. (2) private sector business domestic and foreign debt increased gigantically, because most restrictions on the ability to borrow anywhere in the world were abandoned. As long as you had some sort of asset, you could borrow, and the more assets you had, the more you could borrow. Conversely, the less assets you had, the less you could borrow. And these processes of course occurred cumulatively and simultaneously. (3) a vast increase in private household debt; in a sense, private household debt (mortgage loans, loans for durables, education etc.) began to substitute for government co-ordinated investment in economic development. What the analysis of this reveals, is that in modern financial capitalism, being an "expert player" in the market ultimately reduces to the art of transferring debts from one type of transactor to another type of transactor, and to do this, you have to be comunication rich, contacts rich, negotiation-skills rich. And that involves "playing the game", which culturally means, that somehow you have to transfer responsibility, culpability, guilt or blame to somebody else, and THIS is what "makes the market tick". That is to say, profits from debt management are based on a psychologistic ideology of transference or projection, backed up with legally sanctioned violence. In a recent film, Alexandrowicz depicts Israeli society as organized around "guile". The "guile" consists in the fact that while the justifiable right to private home ownership and to fuck is being asserted, this whole process is meanwhile occurring at the expense of other people (who are robbed and fleeced), against whom the home owners wall themselves off. First, the sexual body has to be fully socialised, touched everywhere, but after this, the humanised body has to be privatised and individualised, but this has to occur in such a way, that it completely conforms to the requirements of private capital accumulation. In turn, that private capital accumulation is based on getting something for nothing, and to justifying that requires a justifying moral ideology affirming positive intentions capable of continually injecting new themes. David Lange therefore was really wrong, when he said "inequality is the motor of the market economy". Rather, inquality is the process whereby the strong exploit and rob the weak, with a charitable ideology, the process whereby some nations and social classes exploit and rob other nations and social classes of their assets and their products. Inequality is the motor of private capital accumulation, no more, no less. What the story of indebtedness adds to the old story, is that you might engage in trade, not on the basis that "both gain from trade, but some gain more than others" but rather that you are forced to trade, even if you gain nothing, even if you lose more, or even if it kills you. Thus, there is a necessary connection between indebtedness, prostitution and slavery. Jurriaan There's a lady who's sure all that glitters is gold And she's buying a stairway to heaven. When she gets there she knows, if the stores are all closed With a word she can get what she came for. Ooh, ooh, and she's buying a stairway to heaven. There's a sign on the wall but she wants to be sure 'Cause you know sometimes words have two meanings. In a tree by the brook, there's a songbird who sings, Sometimes all of our thoughts are misgiven. Ooh, it makes me wonder, Ooh, it makes me wonder. There's a feeling I get when I look to the West, And my spirit is crying for leaving. In my thoughts I have seen Rings of smoke through the trees, And the voices of those who standing looking. Ooh, it makes me wonder, Ooh, it really makes me wonder. And it's whispered that soon if we all call the tune Then the piper will lead us to reason. And a new day will dawn for those who stand long And the forests will echo with laughter. If there's a bustle in your hedgerow, don't be alarmed now, It's just a spring clean for the May queen. Yes, there are two paths you can go by, but in the long run There's still time to change the road you're on. And it makes me wonder. Your head is humming and it won't go, in case you don't know, The piper's calling you to join him, Dear lady, can you hear the wind blow, and did you know Your stairway lies on the whispering wind. And as we wind on down the road Our shadows taller than our soul. There walks a lady we all know Who shines white light and wants to show How everything still turns to gold. And if you listen very hard The tune will come to you at last. When all are one and one is all To be a rock and not to roll. And she's buying a stairway to heaven. - Led Zeppelin
