Stumbling and Mumbling

Author: chris dillow   |   Latest post: Tue, 29 Sep 2020, 4:14 PM


Technocrats & class

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Are centrists even more utopian than socialists? I'm prompted to ask by a passage at the end of Anne Case and Angus Deaton's Deaths of Despair. They write:

We believe that capitalism is an immensely powerful force for progress and for good, but it needs to serve people and not have people serve it. Capitalism needs to be better monitored and regulated, not to be replaced by some fantastical socialist utopia.

This comes after 260 pages in which they document how American capitalism has recently been a force not for progress and for good, but for mass social murder. They describe how the collapse of demand for unskilled labour has caused "the loss of meaning, of dignity, of pride, and of self-respect" and so led to tens of thousands of needless deaths of despair among the white working class - from suicide, alcoholism and drug abuse. The pharmaceuticals industry, they say, is "profiting by destroying lives" - not only through its over-prescription of opiods but because in forcing up the cost of health insurance it prices the low-paid out of the labour market.

How, then, can they believe in the face of their own evidence that capitalism is a force for good?

The answer is that centrists are prone to a form of utopianism, of wishful thinking.

They believe that reasonable policies and institutions could constrain capitalism's rapacious and murderous tendencies and so make it a force for good. What this fails to see is that the same rapacity that makes capitalism a force for bad also forbids such change. Any child could think of a better healthcare system than the US's; just look at any other advanced country. The US does not have such a system not because of a lack of intellect but because of the power of capital. As Case and Deaton show, the healthcare industry spends over £500bn on lobbying, and employs five lobbyists for every one Congressman.

Lobbying, though, is only one of several levers that capital has over the state. The prospect of well-paid jobs after they leave politics incentivizes politicians to do capitalists' bidding whilst in office. Blackrock isn't paying George Osborne a fortune for his expertise; it is doing so to show finance minsters around the world the rewards of playing by the rules.

There's also ideology. Capitalism (or indeed any social system) endogenously generates beliefs which help sustain its power structures, a process reinforced by the media: John Jost calls this system justification (pdf).

And then there's plain deference. As Adam Smith wrote:

We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous

And of course, there are also economic levers. Governments feel the need to preserve business confidence in order to create jobs, which of course constrains its policy-making.

Given all these channels, a finding (pdf) by Martin Gilens and Benjamin I. Page should not surprise us:

Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence

Pablo Torija Jimenez shows that this is true in most developed economies.

The power of capital over the state has not always been so malign. In the three decades after WWII, there was good evidence for Deaton and Case's faith. Capitalism did indeed deliver full employment and rising wages, and there was a modicum of equality: the share of US incomes going to the 1% was barely half what it is today.

The Golden Age of capitalism was not, however, the product of mere goodwill. It was the result of material interests. Fordist capitalism required domestic mass markets, which required highish wages and full employment. And the threat of communism forced capitalists to prevent discontent. Yes, the US never had a large socialist party. But it did once have something nearly as good - a fear of socialism. Capitalism was kept tolerably decent by what j.K. Galbraith called countervailing powers.

Today, though, this has changed. Capitalism has become more extractive and financialized, requiring high margins and cheap money more than mass markets. General Motors needed a large well-paid working class; Goldman Sachs, not so much.

The murderous power of the US healthcare industry and the vote for Brexit are both, in their different ways, signs of the victory of regressive capital. Micha-kalecki-843213aa-e86c-429b-b588-015d6539936-resize-750

Today's capitalism, then, rules out the humane policies favoured by Case and Deaton, and thus refutes their optimism. Jeremy Cliffe recently asked "why the Anglo-Saxon model keeps going so wrong." It's because the dominance of extractive capitalism over the state precludes good technocratic politics.

In saying this, I am not making an original point. I'm merely echoing what Kalecki said (pdf) in 1943. He noted that economists knew technically how to achieve full employment, but feared that capitalists would oppose such policies:

The maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders. Indeed, under a regime of permanent full employment, the 'sack' would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow...'Discipline in the factories' and 'political stability' are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist system.

"The assumption that a government will maintain full employment in a capitalist economy if it only knows how to do it is fallacious" he said.

Granted, he was wrong for 30 years after writing that. But the point is bang on today. Which is why Case and Deaton are missing something important. Good policy doesn't require merely technical know-how. It requires the right material conditions, the right power bases. It is these, rather than technical know-how, that are lacking.

Case and Deaton are of course not alone in this error. Let's take just two recent examples, though you can no doubt think of many more. Layla Moran calls for a universal basic income. Such an income - if meaningful - would empower workers to reject bad jobs. But Ms Moran does not ask whether this is compatible with an extractive capitalism which wants a mass supply of cheap and quiescent labour. And Nick Cohen rightly lambasts our government of charlatans and dilletantes without asking whether this is the product not merely of individual bad character but rather of the nature of British capitalism: it prefers incompetents to anybody who challenges the system.

But why is the error so common among highly intelligent people?

I suspect what we have here is an example of schools functioning inadvertently as what Louis Althusser called ideological state apparatuses. At impressionable ages we are brought up to believe that success comes from knowledge and intellect. We thus believe this even in contexts where it is wrong. We'd be better prepared for politics if teachers gave top marks not to the brightest students but to the school bullies.

It's in this context that many of us applaud Corbynism. It mobilised an albeit-modest countervailing force to extractive capitalism - a base of renters, public sector workers and immaterial labour. Whilst this wasn't sufficient for electoral victory, it did help pressurize the government into relaxing austerity.

The left realized that good, sensible decent technocratic policies require not just expertise but a material base in the form of particular types of class power and interests. And in the UK and US, this base is missing. In failing to realize this, centrists are too naïve.

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