August 06, 2008

posted by Thomas Crocker

Wonderful stuff...thanks.

I suppose it's rhetorically prudent to speak of a "totalizing market system," but I admit to preferring to name the system for what it is: capitalism. But then that prompts one to imagine--God forbid--that there might be alternatives to capitalism (or, if you will, 'the cultural logic of late capitalism'). Heady stuff, and most folks, academic or othewise, intellectuals or not, are not up to the task these days of thinking beyond this totalizing system. In fact, I suspect utopian thought and imagination (cf. http://ratiojuris.blogspot.com/2008/07/utopian-thought-imagination-part-1.html) is the principle vehicle for conceptualizing alternatives, especially if one considers the political philosophy of cosmpolitanism (or Simon Caney's 'global political theory'), global models of distributive justice, Basic Income proposals, and recalcitrant yet ethical visions of a socialist society to be emblematic of utopian thinking and today at least, the primary examples of articulate responses to the totalizing market system.

Corey Robin’s article had some notoriety among some conservatives because it was the first we had heard (to the extent we had ever heard of them) that Luttwak and Gray were conservatives of some note. I wouldn't attach too much significance to the Buckley quote - not sure of the tone in which it was uttered and I do't recall any subsequent writings of his that picked up that leaning.

But even if a modern-day youthful William Buckley were to embrace socialism or communism (probably just a reflection of a poor undergraduate education) he'd still be much to bright to remain one for long

One of the reasons that the market is such a totalizing idea, at least in American thought, is that there are at least two strands of market thinking that get conflated. There's a mathematical strand (MIT/Coles) and an ideological strand (Chicago). Many people think the former lends authority to the latter, including the notion that the superiority of markets has been proved. (The proofs of the First and Second Welfare Theorems -- variously from Hotelling, Lange, Allais, Arrow & Debreu -- all came from outside the Chicago school.)

Though you'd never guess it from reading anything about Law & Economics, there are actually some deep mathematical issues even with some basic notions like aggregation of demand, and the simple curves in the early pages of Econ 101 textbooks. Even some of the A-list neoclassicals like Debreu acknowledged these. See generally the works of Philip Mirowski, the essays in Mirowski & Hands, eds., "Agreement on Demand: Consumer Demand Theory in the 20th Century," (Duke UP 2006), Wong's recently re-issued work in Samuelson's revealed preference theory, etc. These are in addition to the usual objections about rationality, about whether the conditions of the Welfare Theorems are even satisfied in fact, and about whether relying on mathematical proofs qualifies a study as a science, among others.

Lacking any scientific foundation, "the market system" American-style is just as ideological as communism. Its intellectual base rests in large measure on Hayek's revulsion against socialism, and on the self-serving outlook of the corporations who funded the Chicago School. This isn't necessarily a political ideology in the left/right sense, but it's an ideology nonetheless. Why shouldn't it be totalizing? -- especially since the mathematical trappings give it the veneer of being scientific and neutral. (Some readers may recall the scientific moniker being applied also to Marxism.) BTW, for readers or contributors to this blog who draw demand curves in class, how much do you know about where those curves come from? How are demand curves created? How are they updated? How does aggregation work? Do you just assume these are all kosher? L&E is particularly prone to this ideology. It's also a dangerous vector of it: economists don't usually become judges or Justices, but law professors can.

I don't think one necessarily needs to turn to utopian theories to get away from this; there are people in other parts of the world, like much of Western Europe esp. in the pre-Sarkozy era, who are open to some limited uses of markets where they can work adequately, without being totalized. The "totalized market system" is a particularly American illness, albeit one that folks in the US government and academy are trying their darndest to spread.

I agree with the proposition that the "totalized market system" is a particularly American illness," although I suspect it has become something of a global pandemic, infecting the ideological orientation of G-8 countries (including the European Union), as well as being the operative economic assumption animating the International Monetary Fund (IMF), the World Bank (the IBRD), and the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) (i.e., after Robert Hockett, and 'taking minimal license,' 'the Bretton Wood Institutions'), hence one reason "the life prospects of persons are dramatically unequal depending upon one's place within the institutional scheme of the global economy" (Thomas Pogge argues that because, as citizens of affluent nations, we are 'implicated in shaping and enforcing the social institutions that produce [the immense deprivations inflicted upon the global poor], and are moreover benefiting from the enormous inequalities these unjust institutions reproduce, we have much more stringent duties to seek to reform these social institutions and to do our fair share toward mitigating the harms they cause.'). In other words, the Neo-Liberal ideology that motivates the "ten commandments" of the Washington Consensus is rooted in *Anglo-American* capitalism, and until such time as both the aforementioned institutions and the nations of the world have assimilated, negated and superseded the Washington Consensus, the "totalized market system" will define the nature of the economics and dialectic of globalization. In that sense, it is utopian (in a non-perjorative sense), for example, to imagine the Bank, the IMF, and the WTO as "potential pillars of transnational economic justice" (Hockett).

Recall, for instance, as Meghnad Desai has recently reminded us (in Marx's Revenge, 2002), and here in the words of Darrel Moellendorf, that both Marx and Lenin "were supporters of free trade in part at least on efficiency grounds. Marx, as is well known, was impressed with the efficiency gains of capitalism achieved through the constant revolutionizing of the means of production. He took these gains as a necessary precondition for socialism." Yet, as Mollendorf further explains,

"If it is the case that free trade produces efficiency gains, this does not clinch the case for free trade on egalitarian grounds. For two equally optimal distributions may be appraised very differently with respect to distributive justice. Market distributions alone cannot realized the aims of egalitarian justice [as the works of Richard Arneson, G.A. Cohen, Ronald Dworkin, John Roemer, or Amartya Sen make clear in their respectively different ways]. One reason for this is that those who are lucky at birth will receive advantages deriving from their family circumstances and citizenship status, whereas others will not. Without institutions that remedy this, market advantage will result in inequalities for apparently morally arbitrary reasons. Additionally, egalitarians criticize market inequality as productive of other severe social evils, such as exploitation and inequality of political influence. So, even assuming the market liberalization serves the goal of efficiency, mere market liberalization is insufficient for realizing egalitarian goals" (for one argument about why we should be committed to realizing such goals, see Simon Caney's Justice Beyond Borders: A Global Political Theory, 2005).

A WTO and international monetary arrangements not beholden to Anglo-American capitalism can, in principle, more fully cohere with the interests of global justice, but that will involve an Hegelian-like transcendence of the ideology and economics of the "total market system" that currently dominates and defines the economics of globalization and thus the cultural logic of late capitalism. And thus the cosmopolitan ideal, i.e., "a world in which some principles of justice govern relations between all persons in all places," remains at the same time, the substance of utopian hope.

I might have mentioned that among the reasons for sustaining hope in an Hegelian-like transcendence of the "total market system" are not only the existence of those who, as A.J. notes, "are open to some limited uses of markets where they can work adequately, without being totalized," but the fact that dissent has emerged from among the ranks of the best and brightest among the transnational capitalist class (TCC) (e.g., Jeffrey Sachs, Paul Krugman, George Soros and Joseph Stiglitz), canalized into the promotion of a "post-Washington consensus" (William I. Robinson) or an "as yet ill-defined global neo-Keynesianism." Of course Neo-Keynesian economics does not amount to such transcendence but it may help open up and consolidate possibilities and opportunities for same much like the Welfare State and social democracy did in the last century.