The Wikipedia article on Economism is relatively brief and sets out three contexts to explain the use of the term. Firstly:
Economism is a term in Marxist discourse. The charge of economism is frequently brought against revisionists by anti-revisionists when economics, instead of politics, is placed in command of society; and when primacy of the development of the productive forces is held over concerns for the nature and relations surrounding those productive forces. This debate was most notable upon Deng Xiaoping assuming leadership of the Communist Party of China, criticising the Maoist line as ultra-leftist and accusing them of building socialism before the economy was ready. In turn, Maoists criticised Deng Xiaoping for abandoning socialism in favour of opening up the Chinese economy to capitalist reforms in a needless pursuit of expertise and recognition from capitalist nations to fuel growth.Secondly:
For bourgeois capitalist economists, "economism" is reduction of all social facts to economic dimensions. The term is often used to criticize economics as an ideology in which supply and demand are the only important factors in decisions and outstrip or permit ignoring all other factors. It is believed to be a side effect of neoclassical economics and blind faith in an "invisible hand" or laissez-faire means of making decisions, extended far beyond controlled and regulated markets and used to make political and military decisions. Conventional ethics would play no role in decisions under pure economism, except insofar as supply would be withheld, demand curtailed, by moral choices of individuals. Thus, critics of economism insist on political and other cultural dimensions in society.And, thirdly:
Old Right social critic Albert Jay Nock used the term more broadly, denoting a moral and social philosophy "which interprets the whole sum of human life in terms of the production, acquisition, and distribution of wealth", adding: "I have sometimes thought that here may be the rock on which Western civilization will finally shatter itself. Economism can build a society which is rich, prosperous, powerful, even one which has a reasonably wide diffusion of material well-being. It can not build one which is lovely, one which has savor and depth, and which exercises the irresistible power of attraction that loveliness wields. Perhaps by the time economism has run its course the society it has built may be tired of itself, bored of its own hideousness, and may despairingly consent to annihilation, aware that it is too ugly to be let live any longer".It is this second context and use of the term economism that informs the LODE and Re:LODE projects, an economism that leads to the absurd value system where the economy takes precedence over population.
In 1992 the journeys to each of the places where the LODE cargo was assembled were organised in the context of logistics rather than a continuous space and time sequence, and that is why the newspaper stories datelines are as they are. In returning to Europe from Colombia in early May 1992, the next journey following the LODE Line to the west coast of Ireland took place in late June and early July 1992.
The video representation of the LODE Line below begins a digital journey over Google Earth in Hull and crosses the continents of Europe, Asia, Australia and South America, returning to the physical geographic western boundaries of Europe at a place known as Slea Head, or in Gaelic, Ceann Sleibhe.
The LODE line girds the planet from Philip Courtenay on Vimeo.
The contextualisations for the LODE Artliner pamphlets followed on from the journeys along the LODE Line from the west coast of northern Germany to Szczecin in northern Poland, and that took place during August 1992, were to lead to the recognition of patterns that emerged from all the previous journeys and the 22 places for making cargo and film documentation along the LODE Line. However, the search for a contemporary story to carry this recognition to any audience of the LODE Artliner project, the only newspaper text that proved capable of encapsulating this understanding was a letter to THE NEW YORK DAILY TRIBUNE, written by Karl Marx and published on 22 March, 1853.
Offshore
across the Blasket Sound lie the uninhabited Blasket Islands. The last
islanders were moved to the mainland in 1953. The life of the island
used to include a rich tradition of the telling of stories, Gaelic
folktales. Now, the Great Blasket is a national historic park, but only
the ruined buildings are being restored.
This text (see below) was found in the book Marx Engels Ireland and the Irish Question published in 1971 by Lawrence and Wishart (pages 64-68), whilst researching background historical analysis of the situation in Ireland that led to the vast numbers of Irish who were forced by circumstance to emigrate to far distant shores and the likes of Canada, the United States and Australia. One of the many Irish ports of embarkation for Irish emigrants was Tralee's old port of Blennerville. Blennerville is shown on the Ceann Sleibhe film documentation towards the end of the Super8 film sequence (see above - YouTube Ceann Sleibhe 1992 and look out for the white windmill by the Tralee - Blennervile canal). It was this connection that led to this text and further supported by the fact of recent historical periods of significant emigration and the de-population of the Blasket Islands visible from the beaches beside the headland of Slea Head (see the Super8 film looking out to the Atlantic from the LODE compass assemblage).
"Begin with pauperising the inhabitants of a country, and when there is no more profit to be ground out of them, when they have become a burden to the revenue, drive them away, and sum up your Net Revenue!"
"It is not population that presses on productive power; it is productive power that presses on population."
Karl Marx, THE NEW YORK DAILY TRIBUNE, 22 March, 1853.
Tralee,
the county town of County Kerry, was the port of embarkation for
thousands of people leaving Ireland for the very reason given above.
If there is a pressing upon population, then the emigration of population will follow.
The abiding story of the emigration of hundreds of thousand of Irish people across the world is well known, and especially in those societies where those connected to the Irish diaspora maintain a sense of identity in the re-telling of this story.
The phenomenon of migration from Ireland is recorded since early Medieval times, but it is only possible to quantify it from around 1700: since then between 9 and 10 million people born in Ireland have emigrated. This is more than the population of Ireland at its historical peak in the 1840s of 8.5 million. The poorest of them went to Great Britain, especially Liverpool; those who could afford it went further, including almost 5 million to the United States.
After 1840, emigration from Ireland became a massive, relentless, and efficiently managed national enterprise. In 1890 40% of Irish-born people were living abroad. By the 21st century, an estimated 80 million people worldwide claimed some Irish descent, which includes more than 36 million Americans who claim Irish as their primary ethnicity.
Writ large in the story of the Irish diaspora is the Great Famine.
The Great Famine (Irish: an Gorta Mór, [anˠ ˈgɔɾˠt̪ˠa mˠoːɾˠ]) or the Great Hunger was a period of mass starvation, disease, and emigration in Ireland between 1845 and 1849. It is sometimes referred to, mostly outside Ireland, as the Irish Potato Famine, because about two-fifths of the population was solely reliant on this cheap crop for a number of historical reasons. During the famine, about one million people died and a million more emigrated from Ireland, causing the island's population to fall by between 20% and 25%.
The proximate cause of famine was potato blight, which ravaged potato crops throughout Europe during the 1840s. However, the impact in Ireland was disproportionate, as one third of the population was dependent on the potato for a range of ethnic, religious, political, social, and economic reasons, such as land acquisition, absentee landlords, and the Corn Laws, which all contributed to the disaster to varying degrees and remain the subject of intense historical debate.
The famine was a watershed in the history of Ireland, which was then part of the United Kingdom of Great Britain and Ireland. The famine and its effects permanently changed the island's demographic, political, and cultural landscape. For both the native Irish and those in the resulting diaspora, the famine entered folk memory and became a rallying point for Irish nationalist movements. The already strained relations between many Irish and the British Crown soured further, heightening ethnic and sectarian tensions, and boosting Irish nationalism and republicanism in Ireland and among Irish emigrants in the United States and elsewhere.
The madness of trade, pricing and the market
Perhaps the most shocking aspect of this historic humanitarian crisis is that during the famine Ireland was a next exporter of food.
Throughout the entire period of the Famine, Ireland was exporting enormous quantities of food. In the magazine History Ireland (1997, issue 5, pp. 32–36), Christine Kinealy, a Great Hunger scholar, lecturer, and Drew University professor, relates her findings: Almost 4,000 vessels carried food from Ireland to the ports of Bristol, Glasgow, Liverpool, and London during 1847, when 400,000 Irish men, women, and children died of starvation and related diseases. She also writes that Irish exports of calves, livestock (except pigs), bacon, and ham actually increased during the Famine. This food was shipped under British military guard from the most famine-stricken parts of Ireland; Ballina, Ballyshannon, Bantry, Dingle, Killala, Kilrush, Limerick, Sligo, Tralee, and Westport. A wide variety of commodities left Ireland during 1847, including peas, beans, onions, rabbits, salmon, oysters, herring, lard, honey, tongues, animal skins, rags, shoes, soap, glue, and seed. The most shocking export figures concern butter. Butter was shipped in firkins, each one holding 9 imperial gallons; 41 litres. In the first nine months of 1847, 56,557 firkins (509,010 imperial gallons; 2,314,000 litres) were exported from Ireland to Bristol, and 34,852 firkins (313,670 imperial gallons; 1,426,000 litres) were shipped to Liverpool, which correlates with 822,681 imperial gallons (3,739,980 litres) of butter exported to England from Ireland during nine months of the worst year of the Famine.
The problem in Ireland was not lack of food, which was plentiful, but the price of it, which was beyond the reach of the poor.
The Economist magazine opposed the provision of aid to the Irish during the Great Famine of 1845-49. The Economist argued for laissez-faire policies, in which self-sufficiency, anti-protectionism and free trade, not food aid, were in the opinion of the magazine the key to helping the Irish live through the famine which killed approximately one million people.
The Economist was founded to oppose the British Corn Laws. The Anti-Corn Law League was a large, nationwide middle-class moral crusade with a Utopian vision; its leading advocate Richard Cobden promised that repeal would settle four great problems simultaneously:
First, it would guarantee the prosperity of the manufacturer by affording him outlets for his products. Second, it would relieve the Condition of England question by cheapening the price of food and ensuring more regular employment. Third, it would make English agriculture more efficient by stimulating demand for its products in urban and industrial areas. Fourth, it would introduce through mutually advantageous international trade a new era of international fellowship and peace. The only barrier to these four beneficent solutions was the ignorant self-interest of the landlords, the "bread-taxing oligarchy, unprincipled, unfeeling, rapacious and plundering."The landlords claimed that manufacturers like Cobden wanted cheap food so that they could reduce wages and thus maximise their profits, an opinion shared by socialist Chartists.
Karl Marx's letter
From the accounts relating to trade and navigation for the years 1851 and 1852, published in Feb. last, we see that the total declared value of exports amounted to £68,531,601 in 1851, and to £71, 429, 548 in 1852; of the latter amount £47,209,000 go to the export of cotton, wool, linen and silk manufactures. The quantity of imports for 1852is below that for the year 1851. The proportion of imports entered for home consumption not having diminished, but rather increased, it follows that England has re-exported, instead of the usual quantity of colonial produce, a certain amount of gold and silver.
The Colonial Land Emigration Office gives the following return of the emigration from England, Scotland, and Ireland, to all parts of the world, from Jan 1, 1847 to June 30, 1852: English 335,330; Scotch 82,610; Irish 1,200,136. "Nine tenths" remarks the Office "of the emigrants from Liverpool are assumed to be Irish. About three-fourths of the emigrants from Scotland are Celts, either from the Highlands, or from Ireland through Glasgow." Nearly four fifths of the whole emigration are, accordingly, to be regarded as belonging to the Celtic population of Ireland and of the Highlands and islands of Scotland.
The London ECONOMIST says of this emigration: "It is consequent on the breaking down of the system of a society founded on small holdings and potato cultivation"; and adds "The departure of the redundant part of the population of Ireland and the Highlands of Scotland is an indispensable preliminary to every kind of improvement. The revenue in Ireland has not suffered in any degree from the famine of 1846-47, or from the emigration that has since taken place. On the contrary, her net revenue amounted in 1851 to £4,281,999, being about £184,000 greater than in 1843."
Begin with pauperising the inhabitants of a country, and when there is no more profit to be ground out of them, when they have grown a burden on the revenue, drive them away, and sum up your Net Revenue! Such is the doctrine laid down by Ricardo in his celebrated work, The Principles of Political Economy. The annual profits of a capitalist amounting to 2000, what does it matter to him whether he employs 100 men or 1,000 men? "Is not," says Ricardo, "the real income of a nation similar?" The net real income of a nation, rents and profits, remaining the same, it is no subject of consideration whether it is derived from ten millions of people or from twelve millions. Sismondi, in his Nouveau Principes d'Economie Politique, answers that, according to his view of the matter, the English nation would not be interested at all in the disappearance of the whole population, the King (at that time it was no Queen, but a King) remaining alone in the midst of the island, supposing only that automatic machinery enabled him to procure the amount of Net Revenue now produced by a population of twenty millions. Indeed, that grammatical entity, "the national wealth", would in this case not be diminished.
In a former letter I have given an instance of the clearing of the estates in the Highlands of Scotland. That emigration continues to be forced upon Ireland by the same process you may see from the following quotation from THE GALWAY MERCURY:
"The people are fast passing away from the land in the West of Ireland. The landlords of Connaught are tacitly combined to weed out all the smaller occupiers, against whom a regular systematic war of extermination is being waged. the most heart-rending cruelties are daily practised in this province, of which the public are not at all aware."But it is not only the pauperised inhabitants of Green Erin and of the Highlands of Scotland that are swept away by agricultural improvements, and by the "breaking down of the antiquated system of society". It is not only the able bodied agricultural labourers from England, Wales, and Lower Scotland, whose passages are paid by the Emigration Commissioners. The wheel of "improvement" is now seizing another class, the most stationary class in England. A startling emigration movement has sprung up among the smaller English farmers, especially those holding heavy clay soils, who, with bad prospects for the coming harvest and in want of sufficient capital to make the great improvements on their farms which would enable them to pay their old rents, have no alternative but to cross the sea in search of a new country and of new lands. I am not speaking now of the emigration caused by the gold mania, but only of the compulsory emigration produced by landlordism, concentration of farms, application of machinery to the soil, and introduction of the modern system of agriculture on a great scale.
In the ancient States, in Greece and Rome, compulsory emigration, assuming the shape of the periodic establishment of colonies, formed a regular link in the structure of society. The whole system of those States was founded on certain limits to the numbers of the population, which could not be surpassed without endangering the condition of the antique civilisation itself. But why was it so? Because the application of science to material production was utterly unknown to them. To remain civilised they were forced to remain few. Otherwise they would have had to submit to the bodily drudgery which transformed the free citizen into a slave. The want of productive power made citizenship dependent on a certain proportion in numbers not to be disturbed. Forced emigration was the only remedy.
It was the same pressure of population on the powers of production, that drove the barbarians from the high plains of Asia to invade the Old World. the same cause acted there, although under a different form. To remain barbarians they were forced to remain few.they were pastoral, hunting, war waging tribes, whose manner of production required a large space for every individual, as is now the case with the Indian tribes in North-America. By augmenting in numbers they curtailed each other's field of production. thus the surplus population was forced to undertake those great adventurous migratory movements which laid the foundations of the peoples of ancient and modern Europe.
But with modern compulsory emigration the case stands quite the opposite. Here it is not the want of productive power which demands a diminution of population: it is the increase of productive power which demands a diminution of population, and drives away the surplus by famine or emigration.
It is not population that presses on productive power; it is productive power that presses on population.
Now I share neither in the opinion of Ricardo, who regards "Net Revenue" as the Moloch to whom entire populations must be sacrificed, without even so much as complaint, nor in the opinion of Sismondi, who, in his hypochondriacal philanthropy, would forcibly retain the superannuated methods of agriculture and proscribe science from industry, as Plato expelled poets from his Republic.
Society is undergoing a silent revolution, which must be submitted to, and which takes no more notice of the human existence it breaks down than an earthquake regards the house that it subverts. The classes and the races, too weak to master the new conditions of life, must give way.
But can there be anything more puerile, more short sighted, than the view of those Economists who believe in all earnest that this woeful transitory state means nothing but adapting society to the acquisitive propensities of capitalists, both landlords and money-lords? In Great Britain the working of that process is most transparent. The application of modern science to production clears the land of its inhabitants, but it concentrates people in manufacturing towns.
"No manufacturing workmen," says The Economist "have been assisted by the Emigration Commisioners, except a few Spitalfields and Paisley hand-loom weavers, and few or none have emigrated at their own expense."The Economist knows very well that they could not emigrate at their own expense, and that the industrial middle-class would not assist them in emigrating. Now, to what does this lead? The rural population, the most stationary and conservative element of modern society, disappears while the industrial proletariat, by the very working of modern production, finds itself gathered in mighty centres, around the great productive forces, whose history of creation has hitherto been martyrology of the labourers. Who will prevent them from going a step further, and appropriating these forces, to which they have been appropriated before? Where will be the power of resisting them? Nowhere! Then it will be of no use to appeal to the "rights of property". The modern changes in the art of production have, according to the Bourgeois Economists themselves, broken down the antiquated system of society and its modes of appropriation. They have expropriated the Scotch clansman, the Irish cottier and tenant, the English yeoman, the hand-loom weaver, numberless handicrafts, whole generations of factory children and women; they will expropriate, in due time, the landlord and the cotton-lord.
On the Continent heaven is fulminating, but in England the earth itself is trembling. England is the country where the real revulsion of modern society begins.
Karl Marx, THE NEW YORK DAILY TRIBUNE, 22 March, 1853
The sacrifice of populations to a Moloch
Metropolis by Fritz Lang 1927
The absurdity of the ideas of Ricardo and Sismondi regarding the nature of wealth and the nation is just one of the elements Marx was highlighting. The fact that then, and now, actually existing capitalism increases in productive power inevitably ends up pressing on population is because it is a topsy-turvy, upside down version of social reality, an inverted, deformed state of affairs. Instead of making the prime purpose of the economy about benefiting population, the reverse is the case, then and now. Fritz Lang's Metropolis includes this scene where the "power plant" is transformed into a monster Moloch and the productive workers consumed and/or "sacrificed" to the needs of productive power, and the wealth outcomes consumed as the particular and individual "properties" of a select elite.
Q. What about those who hold the belief that "free trade" is better than food aid during a famine?
A. "Well," they say, "leave it to us".
During a meeting that took place around 1681 between the powerful French Controller-General of Finances Jean-Baptiste Colbert and a group of French businessmen headed by M. Le Gendre, the eager mercantilist minister asked how the French state could be of service to the merchants and help promote their commerce.
Le Gendre replied;
"laissez-nous faire" ("leave it to us")
This anecdote provided the phrase laissez-faire, and that became a maxim for a new enterprise, the development of economic theory, and those who practice this theory, the economists. It was the Physiocrats in France who came up with this notion, a notion that, as in the etymological source of Physiocratie from the Greek, economy was a natural form of organising, and that control of the economy should be let go, and the economy set free, and left to business and businessmen.
Laissez-faire, a product of the Enlightenment, was "conceived as the way to unleash human potential through the restoration of a natural system, a system unhindered by the restrictions of government". In a similar vein, Adam Smith viewed the economy as a natural system and the market as an organic part of that system. Smith saw laissez-faire as a moral program and the market its instrument to ensure men the rights of natural law. By extension, free markets become a reflection of the natural system of liberty. For Smith, laissez-faire was "a program for the abolition of laws constraining the market, a program for the restoration of order and for the activation of potential growth".
However, Adam Smith and the notable classical economists, such as Thomas Malthus and David Ricardo, did not use the phrase. Jeremy Bentham used the term, but it was James Mill's reference to the laissez-faire maxim (together with "pas trop gouverner") in an 1824 entry for the Encyclopædia Britannica that really brought the term into wider English usage.
With the advent of the Anti-Corn Law League (founded 1838), the term received much of its English meaning, and which brings us back to The Economist.
LODE 1992 and Re:LODE 2017 A Cargo of Questions - Gwalior from Philip Courtenay on Vimeo.
The Information Wrap for the LODE location Gwalior in India, as found on A Cargo of Questions webpages, has a page headed:
State planning versus liberalisation - Economic policies in modern India
Here, you will find, The Economist Magazine is quoted by Ajit Singh in his 2008 paper THE PAST, PRESENT AND FUTURE OF INDUSTRIAL POLICY IN INDIA: ADAPTING TO THE CHANGING DOMESTIC AND INTERNATIONAL ENVIRONMENT for the Centre for Business Research, University of Cambridge. The paper takes a considered overview of industrial policy in India from the time India gained independence from British colonial rule in 1947, to 2008. Things have changed over the last ten years but the analysis of industrial policy and economic performance in this period is very helpful in contextualizing liberalisation of the Indian economy in the early 1990's.
The Economist judges the first four decades of economic policy in modern India since independence from British rule thus:
‘The hopes of 1947 have been betrayed. India, despite all its advantages and a generous supply of aid from the capitalist West (whose ‘wasteful’ societies it deplored), has achieved less than virtually any comparable third-world country. The cost in human terms has been staggering. Why has Indian development gone so tragically wrong? The short answer is this: the state has done far too much and far too little. It has crippled the economy, and burdened itself nearly to breaking point, by taking on jobs it has no business doing.’Is The Economist right?
Ajit Singh references The Economist quotation from 1991 to help us understand what had actually been happening with the Indian economy in a globalized economic context, and this is somewhat different than The Economist's version of events that was being used in a way that amounted to a clearly ideological tirade. In fact, as Ajit Singh points out that in a long-term view of Indian economic development over the last four decades as a whole, contrary to The Economist quote, the record was far from being disastrous. His judgement is the following:
It was clearly not outstanding - it was about average for the developing countries of Asia (the most successful of the three developing continents). Importantly, further analysis suggested that the mediocrity of the outcome was mostly due to the extraordinary and far-reaching economic shocks sustained by the economy during the decade 1965-75. These shocks included the effects of the two wars with Pakistan in 1965 and 1971, suspension of foreign aid for various periods following each of the wars in 1965 and 1971, the economic effects of the earlier war with China in 1962, drought in the late 1960s, maxi-devaluation of the rupee around the same time and oil price-rise in 1973-74. In this context, it is a credit to the Indian system that these shocks were contained by prudent macro-economic policies even though it resulted in slower long-term growth for almost ten years, 1965-75. India ended the 1970s with low inflation and a healthy balance of payments position. Indian economic management of these shocks compares favourably with the experience of Latin American countries during the debt-crisis of the 1980s.
So, yes, The Economist is right, but "right" rather than "left", and just can't bear the fact that the Indian state had up until the early 1990's attempted to manage the economy in the interests of India's population. The Economist is a great place to go for information, but it is governed in its economic and political positioning by right-wing libertarian ideology.
Art and ideology are, to some extent, always intertwined, and that is why in this art project there is a purpose and an attempt to reveal the connections rather than hide them, or invert them, as for example in British artworks of the 18th and 19th centuries where we can see a depiction of the rural poor where a reality is presented that denies other realities.
The Cornfield, by John Constable (1826) National Gallery, London
The depiction of the realities for the rural poor, the rural dispossessed, the rural homeless, on their way to the slums of industrial urban centres, was for many artists a depiction constrained by the requirement to accommodate the tastes and interests of those who could afford to purchase such artworks. John Barrell's book The Dark Side of the Landscape: The Rural Poor in English Painting 1730-1840 looks at why the poor began to be of such interest to painters, and examines the ways in which they could be represented so as to be an acceptable part of the décor of the salons of the rich. His discussion focuses on the work of three painters: Thomas Gainsborough, George Morland and John Constable.
To quote Althusser on ideology, and to reflect on what The Economist publishes, and/or, what an artist represents, is part of the purpose and methodology of this particular art project:
Those who are in ideology believe themselves by definition outside ideology: one of the effects of ideology is the practical denegation of the ideological character of ideology by ideology: ideology never says, ‘I am ideological’. It is necessary to be outside ideology, i.e. in scientific knowledge, to be able to say: I am in ideology (a quite exceptional case) or (the general case): I was in ideology. As is well known, the accusation of being in ideology only applies to others, never to oneself (unless one is really a Spinozist or a Marxist, which, in this matter, is to be exactly the same thing). Which amounts to saying that ideology has no outside (for itself), but at the same time that it is nothing but outside (for science and reality).So, here we are!
However it is fair and reasonable to insert a "caveat lector" at this point, Latin for "let the reader beware".
G. A. Cohen, in his essay 'Complete Bullshit', has cited the 'Althusserian school' as an example of 'bullshit' and a factor in his co-founding the 'Non-Bullshit Marxism Group' or otherwise known as Analytical Marxism. He says that
'the ideas that the Althusserians generated, for example, of the interpellation of the subject, or of contradiction and overdetermination, possessed a surface allure, but it often seemed impossible to determine whether or not the theses in which those ideas figured were true, and, at other times, those theses seemed capable of just two interpretations: on one of them they were true but uninteresting, and, on the other, they were interesting, but quite obviously false'
And, it is the case that Althusser had mental health issues and suffered from schizophrenia and bipolar disorder.
Outside of ideology:
"The free market doesn't exist."
Ha-Joon Chang says in the introduction to his book:
23 THINGS THEY DON'T TELL YOU ABOUT CAPITALISM:
We do not live in the best of all possible worlds. If different decisions had been taken, the world would have been a different place. Given this, we need to ask whether the decisions that the rich and the powerful take are based on sound reasoning and robust evidence. Only when we do that can we demand right actions from corporations, governments and international organizations. Without our active economic citizenship, we will always be the victims of people who have greater ability to make decisions, who tell us that things happen because they have to and therefore that there is nothing we can do to alter them, however unpleasant and unjust they may appear. (p. xvii)
And the first "Thing" he tells the reader is:
Thing 1.
There is no such thing as a free market
What they tell you
Markets need to be free. When the government interferes to dictate what market participants can or cannot do, resources cannot flow to their most efficient use. If people cannot do the things they find most profitable, they lose the incentive to invest and innovate. Thus, if the government puts a cap on house rents, landlords lose the incentive to maintain their properties or build new ones. Or, if the government restricts the kinds of financial products that can be sold, two contracting parties that may both have benefited from innovative transactions that fulfil their idiosyncratic needs cannot reap the potential gains of free contract. People must be left 'free to choose', as the title of free-market visionary Milton Friedman's famous book goes.
What they don't tell you
The free market doesn't exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How 'free' a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined 'free market' is the first step towards understanding capitalism
The madness of economic reason
David Harvey's recent book Marx, Capital and the Madness of Economic Reason was reviewed by Stuart Jeffries in The Guardian 1 November 2017. He says of Harvey:
Harvey has long been a critic of capitalism’s inhumanity. In his 2014 book Seventeen Contradictions and the End of Capitalism, he yearningly imagined that the system is under threat as never before, just as the likes of Paul Mason and Slavoj Žižek regularly do. Global warming, habitat and species destruction, water scarcity and environmental despoliation suggested to him that it was in danger. So too did the fact that it was proving harder to find profitable investment opportunities.
Ever since 2008, sales of Das Kapital have risen, as some hope to find in its pages answers to our current woes. Just possibly, copies sit unread, forbidding rebukes to good intentions. Harvey’s book, like the now half-century-old Reading Capital by Louis Althusser and others, lays out the main arguments and insists on the relevance of Marx’s Victorian tome to a global capitalism very different from the one Marx analysed.Let us turn to the last chapter in David Harvey's book, Marx, Capital and the Madness of Economic Reason, to see where this "madness" of "economic reason" is leading to;
This book is also, however, when necessary, a creative betrayal of Marx. For instance, he imagined (apparently without irony) that the creation of new wants and desires was part of capitalism’s civilising mission. Harvey takes that endless manipulation to be our spiritual degradation as do the heretical neo-Marxists of the Frankfurt School.
Harvey still uses his grandparents’ knives and forks, while the rest of us assure market growth by consuming ephemeral products for instant gratification. He cites Netflix, though how Amazon, Apple and Facebook got off the hook is anybody’s guess: “Rapid transformations in lifestyles, technologies and social expectations multiply social insecurities and increase social tensions across generations as well as between diversifying social groups.”
We’re all familiar – aren’t we? – with the queasiness attendant on such rapid changes in how we live, changes that seem to have nothing to do with us, but to which we are forced to adjust, even on pain of losing what we belatedly realise is not an expendable commodity, namely our dignity. Or as Žižek puts it in Less Than Nothing: the “logic of exchange-value follows its own path, its own mad dance, irrespective of the real needs of real people”.
"the insane and deeply troubling world in which we live."Harvey begins the chapter on The Madness of Economic Reason pointing to the difference in the way commodities, when they are consumed drop out of circulation whilst money which goes on for ever. However, the disappearance of a commodity when consumed is contingent on;
"the prior conversion of value from the commodity into the money form and money has the capacity to remain in circulation in perpetuity. 'In the case of money,' writes Marx, 'it becomes madness; madness, however, as a moment of economics and as a determinant of the practical life of peoples.' (1) Daily life is held hostage to the madness of money. But wherein lies this madness?
Money in a world of exchanges simply facilitates the exchanges. But in the world of capital and surplus value production money takes on a quite different character. Value here 'preserves itself through increase; and it preserves itself precisely only by constantly driving beyond its quantitative barrier . . . Thus, growing wealthy is an end in itself. The goal determining activity of capital can only be that of growing wealthier, i.e. of magnification, of increasing itself.' Money, insofar as it works as a measure of wealth, must likewise engage in 'the constant drive to go beyond its quantitative limit; an endless process. Its own animation consists exclusively in that; it preserves itself as a self-validated exchange value distinct from use value only by constantly multiplying itself.' This is what distinguishes money under capitalism from all its multifarious pre-capitalist forms. 'Money as a sum of money is measured by its quantity. This measuredness contradicts its character, which must be oriented towards the measureless.' (2) It can never be contained or restrained.
This is what Hegel refers to as 'bad infinity'. This the form of infinity that has no ending and which, like God's wisdom, surpasses all human understanding. The number sequence is its paradigmatic form. For every number there is always a larger one which goes beyond. The world's money supply, absent the constraint of any material gold base, is a bad infinity. It is simply a set of numbers. Contemporary capitalism is locked into the bad infinity of endless accumulation and compound growth. In Marx's interpretation, Wayne Martin suggests, 'capitalism is essentially oriented to an incompleteable infinitude, an orientation grounded in the ontology of capital itself.' (3) Money can accommodate to the infinite need for the expansion of value simply by having the central banks add zeros to the money supply, which is what they do through quantitative easing. This is bad infinity, the spiral that gets out of control, run riot. We used to speak in terms of millions, then it became billions and trillions and soon, doubtless, we will speak in terms of quadrillions of dollars in circulation, a number which passes any real understanding.
Hegel's virtuous infinity is the circle, the Möbius strip or the Escher staircase in which motion can continue for ever but where everything is calculable and knowable in advance. In the first two volumes of Capital, Marx devotes lengthy chapters to simple reproduction that might be possible in a non-capitalist world of zero accumulation. The trouble starts with the production of surplus value and the necessity of its perpetual expansion, which entails the shift from a cyclical virtuous infinity to a spiral of endless accumulation. It is this shift that forces the perpetual pursuit of an 'incompleteable infinitude' on the part of capital. Use values, though clearly limited by material constraints, are not, as we shall see, immune to this madness. There are 'attempts to raise consumption to an imaginary boundlessness' while much else 'appears as limitless waste' in which the accelerating degradation of the environmental commons feature so prominently. (4)David Harvey continues this argument thus:
Pages 172-73
Our understanding of the world is held hostage to the insanity of a bourgeois economic reason that not only justifies but promotes accumulation without limit while pretending to a virtuous infinity of harmonious growth and continuous and attainable improvements in social well-being. The economists have never confronted the 'bad infinity' of endless compound growth that can only culminate in devaluation and destruction. Instead they laud the virtues of a bourgeoisie who have triumphantly 'subjugated historical progress to the service of wealth'. (9) They steadfastly evade the question of whether crises are inherent in the system. Crises, they say, are due to acts of God or nature or to human errors and miscalculations (particularly those attributable to misguided state interventions). Any or all of these can derail the supposedly immaculate machine of endless free market capitalism. But the machine in itself, the economists hold, is the epitome of perfection. When confronted with a crisis, the economists can only claim 'that if production were carried on according to the textbooks, crises would never occur'. 'Every reason which they (the economists) put forward against crisis is an exorcised contradiction, and therefore a real contradiction. The desire to convince oneself of the non-existence of contradictions, is at the same time the expression of a pious wish that the contradictions, which are really present, should not exist.' (10) Contemporary economic science is contradiction-free.
It is in this context that Marx decided to dedicate so much of his intellectual effort and working life to the critique of political economy and the madness of economic reason. In the process, he uncovers deeper and deeper irrationalities and 'insane forms' in the systemic thought and political programme that is supposed to guide us to a utopianism of everyday life. The contradictory laws of motion that he identifies solely advantage a capitalist class and its acolytes, while reducing whole populations to exploitation of their living labour in production, to paltry possibilities in their daily life and debt servitude in their social relations.
The madness of economic resaon, Marx discovers, is further magnified by the growing antagonisms between value and its monetary representations. As money is necessarily cut free from any material base (such as that of the money commodities of gold and silver) so its idealist constructions (as numbers of dollars, euros, yen etc.), and even more importantly its increasing appearance as forms of credit money, become vulnerable to the vagaries of human judgements, open to excesses and manipulations by whoever holds the reins of power. 'From its servile role . . . as mere medium of circulation, (money) suddenly changes into the lord and god of the world of commodities' that can be 'tangibly brought into the possession of a particular individual.' Money is an individualised claim upon the social labour of others in exactly the same way that debt is a claim over the future labour of those others. Money gives its possessor 'a power over society, over the whole world of gratifications, labours, etc.' (11) The gap between the proliferation of such claims and the value base upon which such claims might be based has widened enormously since Marx's day. If everyone in the world went to the banks to demand cash equal to their deposits then it would take several months if not years to print the notes required. Two trillion dollars a day change hands on foreign exchange markets.
But this is only the tip of the iceberg of phenomena within the financial world. The flows of credit moneys, of that form of anti-value which capital itself creates, have increased enormously since the 1970's. (12) In the first instance these flows lubricate activities within the field of distribution itself. The latter more and more appears as a black hole into which a mass of value disappears in the name of debt redemption, without any security that it will ever re-emerge. Inter-bank lending is at an all-time high as are the interchanges between financial institutions and the central banks. Banks have long lent to governments against the state's power to tax. The power of the state to tax is reciprocally used to bail out banks in trouble. The escalating national debts of the leading states have not the faintest hope of ever being legally retired. But significant flows of tax revenues into debt redemption become normalised within the field of distribution as a whole. Much of the effective demand derived from state expenditures, on the other hand, is fictitious capital (anti-value) generated within the credit system and lent to the state. The claims to future value production endlessly expand. Consumer credit (some of it of a predatory sort) is made available to everyone (including workers and students) and typically escalates as it circulates. the fantasy of 'an imaginary boundlessness' in consumption is avidly pursued. Credit flows to land and property owners. It fuels speculation in rents and other asset values that then have the power to magically increase without limit. Merchants and industrialists borrow even in the face of the potent power of anti-value that may destroy them at some future date. Merchants, land and property owners, states and anyone else who saves (including more privileged sectors of the working classes) deposit surplus funds in financial institutions in the expectation (sometimes deceived) of a rate of return.
Marx recognised the importance of fictitious capital formation and asset speculation while highlighting the madness of their economic reason. He understood full well that these inter-distributional relations constitute acute 'moments of economics' affecting 'the practical life of peoples'. But, as everyone knows, this is a notoriously opaque and mystified arena of capitalist activities that eludes any easy summary or even superficial description.
To study capitalist economic history is to study this madness in action.
Pages 174-78Harvey then proceeds to identify patterns of this craziness in the recent post-financial crisis of 2008 context, especially the global impact of the Chinese economy in a "globalised" world. He then looks at how the relative spaces of the global economy are being revolutionised, and, as he says; "yet again";
. . . not because it is a good idea or desperately wanted and needed in itself, but because this is the best way to stave off depression and evaluation. The absorption of surplus capital is the aim. Marx understood this all too well. 'Next in urgency, perhaps, to the desire to acquire money, is the wish to part with it again for some species of investment that shall yield either interest or profit; for money itself, as money, yield neither . . . Enterprises which entail a large capital and create an opening from time to time for the excess of unemployed capital . . . are absolutely necessary . . . so as to take care of the periodic accumulations of the superfluous wealth of society, which is unable to find room in the usual fields of application.' (31) The result of this particular case is a wholly new material base of space relations for the reconstruction of the world's divergent value regimes.Harvey ends this remarkable chapter in this remarkable book thus:
Capital is not the only agent involved in this spatial restructuring. Mas migratory movements are bringing labour forces together into competitive configurations. This has also happened before but it is now, like the case of Chinese cement (see Note below), at an unprecedented scale. It is not only the volume of migratory movements that counts. The labour forces of the world have been brought into a competitive relation with each other by declining transport and communication costs, organisational technologies and changing speed (rather than costs) of movement as well as through the development of complex commodity chains. Time-space compression in both capital and labour force relations produces a range of political stresses and responses varying from anti-immigration movements, the rekindling of nationalist fervours or, on the positive side, the willing embrace of multiculturalism as a harbinger of a different human future.
Capital 'as a special kind of commodity' has always 'had a special kind of alienation peculiar to it'. (51) 'The entire immense extension of the credit system, and credit as a whole, is exploited by the bankers as their private capital. These fellows have their capital and revenue permanently in the money form or in the form of direct claims to money. The accumulation of wealth by this class may proceed in a very different way from that of actual accumulation, but it proves in any case that they put away a good proportion of the latter.' (52) The problem is that finance typically 'gives rise to monopoly in certain spheres and hence provokes state intervention. It reproduces a new financial aristocracy, a new kind of parasite in the guise of company promoters, speculators and merely nominal directors; an entire system of swindling and cheating with respect to the promotion of companies, issues of shares and share dealings.' (53) Furthermore, 'if surplus value is conceived in the irrational form of interest, the limit is only quantitative' and the consequences of this , Marx adds, 'beggars all fantasy'. (54) Bad infinity raises its ugly head. The bonuses the Wall Streeters gave themselves during the years of collapse 'beggared all fantasy'. This was what outraged the Occupy movement that suddenly appeared in 2011 in Wall Street's Zuccotti Park.
The disciplining effect of debt encumbrances is vital to the reproduction of the contemporary form of capital. Debt means we are no longer 'free to choose', as Milton Friedman in his paean to capitalism supposes. Capital does not forgive us our debts, as the Bible asks, but insists we redeem them through furure value production. The future is already foretold and foreclosed (ask any student who has $100,000 in student loans to pay). Debt imprisons within certain structures of future valuie production. Debt peonage is capital's favoured means to impose its particular form of slavery. This becomes doubly dangerous when the power of the bondholders subverts and seeks to imprison the sovereignty of the state. it is for this reason that the only mode of capital's survival is through the coherence and fusion achieved through the state-finance nexus. With this, the alienation of whole populations from any real influence and power is complete. Neither state nor capital can offer any relief to deprivations and disempowerments. Athens is traditionally celebrated as the cradle of democracy. Today it is merely the cradle of debt peonage, the full and complete demolition of any democracy whatsoever.
The corrupting and alienating power of money - which, when it takes the form of interest acts like 'love possessed' - is part of the problem. It was not only Marx who recognised the alienations involved. Even Keynes, a deep defender of the bourgeois order but on occasion a trenchant critic, weighed in on the matter:
When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money motive at its true value. The love of money as a possession - as distinguished from the love of money as a means to the enjoyments and realities of life - will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting accumulation of capital, we shall then be fre, at last, to discard. (55)That human wealth, which should have all manner of social meanings, is increasingly imprisoned in the unique metric of money power is in itself problematic. 'When the limited bourgeois form is stripped away,' writes Marx,
what is wealth other than the universality of individual needs, capacities, pleasure, productive forces etc., the absolute working out of . . . creative potentialities? . . . Where he does not reproduce himself in one specificity, but is in the absolute movement of becoming. In bourgeois economics - and in the epoch of production to which it corresponds - this complete working out of the human content appears as a complete emptying-out, this universal objectification as total alienation, and the tearing down of all limited one-sided aims as sacrifice of the human end in itself to an entirely external end. (56)This is what 'beggars all fantasy'. This is the insane and deeply troubling world in which we live.
Pages 204-206
Note: To study capitalist economic history is to study this madness in action. Consider the following astonishing but all too concrete fact. Between 1900 and 1999, the United States consumed 4,500 million tons of cement. Between 2011 and 2013, China consumed 6,500 million tons of cement. In two years, the Chinese consumed nearly 45 per cent more cement than the United States had consumed in the whole of the preceding century. (14) Those of us who live in the United States have seen plenty of cement used over our lifetimes. But what has happened in China is extraordinary. The increase in the scale of spreading cement around is unprecedented. It provokes worrying questions. What might the environmental, political and social consequences be? there seems to be more than a touch of madness about it. Is this the 'imaginary boundlessness' of which Marx speaks?
Cement is used in construction. This means a massive investment in the creation of built environments, in urbanisation and the construction of other physical infrastructures (transport systems, dams, container terminals and airports). It is not only cement that is used. there has been an enormous expansion of steel production and use. In recent years, more than half of the world's steel output and use has taken place in China. A lot of iron ore is required to make that steel. It comes from faraway places like Brazil and Australia. Many other materials, like copper, sand and minerals of all sorts, have been consumed at unprecedented rates. In the the last few years, China has been consuming at least half (and in some instances 60 or 70 per cent) of the world's key mineral resources.
1. Marx, K., Grundrisse, London: Penguin Books, 1973.p. 269.
2. Grundrisse, pp. 270-71
3. Martin, W., 'In defense of Bad Infinity: A Fichtean Response to Hegel's Differenzachrift,' mimeo, Department of Philosophy, University of Essex; Arthur, C. The New Dialectics and Marx's Capital, Leiden: Brill, 2004, pp. 137-52.
4. Grundrisse, p.270.
9. Grundrisse, p.590.
10. Theories of Surplus Value, Part 2, London: Lawrence and Wishart 1969. pp. 468, 549. Most economists recognise market imperfections that arise from externality effects and imperfect information (and even study them as 'market failures'). Those with Keynesian inclinations recognise a state role for proper aggregate demand and supply management mainly directed at dampening business cycles in the hope of eliminating crises and depressions. But their aim is to correct imperfections and to define optimal policies for state involvement which will restore the concept of harmonious equilibrium to its rightful historical place. None of them, even those like Paul Krugman, Joseph Stieglitz and Jeffrey Sachs, who lay claim to progressive political positions, have any conception of the internal contradictions of capital or the dangers of the 'bad infinity' of endless compound growth.
11. Grundrisse, p.221.
12. Federal Reserve Bank of St Louis, Economic Reports.
14. 'Towering Above', National geographic, 229(1) 2016'
31. Capital, Volume 3, London: New Left Review, 1981. p. 595.
51. Capital, Volume 3. p. 470.
52. Capital, Volume 3. p. 609.
53. Capital, Volume 3. p. 569.
54. Capital, Volume 3. p. 595.
55. Keynes, J.M., Essays in Persuasion, New York: Classic House Books edn, 2009, p. 199.
56. Grundrisse, p.488.
