Wednesday, November 04, 2009

Harnessing Hippogriffs

One of the more interesting aspects of writing these essays is that I can never predict in advance what will get me a flurry of outraged responses each week. It’s a fair bet that something always does; the collective conversation of the modern industrial world has become so overheated in the last decade or so that it’s difficult to say much of anything without getting somebody in a swivet; still, what it is that sets off the swiveteers routinely catches me by surprise.

Last week was no exception. Of all the things in that essay that might plausibly have launched the usual cries of outrage, the one that did so was an offhand reference to the free market fundamentalists of the Austrian school, many of whom insist that the proper solution to every economic problem is to let the market have its way. As it happens, in making that comment I was thinking specifically of Michael Shedlock aka Mish, whose blog is one of the handful I read daily.

Mish is among the most thoughtful and articulate proponents of the Austrian school in today's blogosphere, and he has an excellent eye for the economic news that matters – which is by and large exactly the economic news that the rest of the media avoids covering. Very nearly the only thing on his blog that makes me roll my eyes is his repeated insistence that the market is always right and government regulation is always wrong; no matter how berserk the market gets, its vagaries are for the best, and any problems should be corrected by privatizing even more government functions. Now of course Mish is hardly an official spokesperson for the Austrian school, as if there were such a thing, but he's not exactly alone in his insistence, either.

Enough people in the peak oil scene share similar views that it's probably necessary to say something about the free market and its potential for solving or creating problems during the twilight years of industrialism ahead of us. Any such comments need to be prefaced, though, by a reminder that a spectrum consists of something other than its two endpoints. Just as a great many people on the left have picked up the dubious habit of using labels such as "fascism" for any political system to the right of Hillary Clinton, a great many people on the right seem to have convinced themselves that any form of economic regulation at all is tantamount to some sort of neo-Marxist hobgoblin – a "socialist-communist-ecologist" system, to use a phrase that actually appeared in one of the comments fielded by last week's post.

Now it bears remembering that drowning is not the only alternative to dying of dehydration; there's a middle ground that is noticeably more pleasant than either. The same principle also applies in economics. The experiment of having government own all the means of production in an industrial society, along the lines proposed by Marx, received a thorough test at the hands of the Communist bloc and failed abjectly. At the same time, the experiment of having government keep its hands off the economy altogether in an industrial society, along the lines proposed by a great many free-market proponents these days, received an equally thorough test, and failed just as dismally. The test took place a little earlier; in America, it ran from the end of the Civil War into the first decade of the twentieth century, and the result was a catastrophic sequence of booms and busts, the transfer of most of the nation's wealth to a tiny minority of wealthy people, the bitter impoverishment of nearly everyone else, and a level of social unrest that included two presidential assassinations and so many bomb attacks on the rich and their families that bomb-throwing anarchists became a regular theme of music-hall songs.

Now it's always possible for theorists to contrast a Utopian portrait of a free-market economy against the gritty and unwelcome realities of extreme socialism, just as it's possible for people on the other side of the spectrum to contrast a Utopian portrait of a socialist economy against the equally gritty and unwelcome realities of unfettered capitalism. Both make great rhetorical strategies, since the human mind is easily misled by binary logic: if A is evil, it seems wholly reasonable to claim that the opposite of A must be good. The real world does not work that way, but this is hardly the only case in which rhetoric ignores reality.

The problem with the rhetoric, however, may be stated a bit more precisely: however pleasant they look on paper, free markets do not exist. Strictly speaking, they are as mythical as hippogriffs.

It occurs to me that some of my readers may not be as familiar with hippogriffs as they ought to be. (Tut, tut – what do they teach children these days?) For those who lack so basic an element in their education, a hippogriff is the offspring of a gryphon and a mare; it has the head, body, hind legs, and tail of a horse, and the forelimbs and wings of a giant eagle. Hippogriffs are said to be the strongest and swiftest of all flying creatures, which is why Astolpho rode one to the terrestrial paradise to recover Orlando's lost wits in Orlando Furioso, and why Juss rode one to the summit of Koshtra Pivrarcha to rescue Goldry Bluszco in The Worm Ouroboros. They are splendid creatures, no question; their only disadvantage, really, is the minor point that they don't happen to exist, and drawing up plans to use them as a new, energy-efficient means of air transport in the face of peak oil, for instance, will inevitably come to grief on that annoying little detail.

Free markets are subject to essentially the same little problem. There have been many examples of market economies in history that were not controlled by governments, but there have been no examples of market economies that were not controlled, and if one were to be set up, it would remain a free market for maybe a week at most. Adam Smith explained why in memorable language in The Wealth of Nations: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or some contrivance to raise prices." When a market is not controlled by government edicts, religious taboos, social customs, or some other outside force, it will quickly be controlled by combinations of individuals whose wealth and strategic position in the market enable them to maximize the economic benefits accruing to them, by squeezing out rivals, manipulating prices, buying up their suppliers, bribing government officials, and the like: that is to say, behaving the way capitalists behave whenever they are left to their own devices. This is what created the profoundly dysfunctional economy of Gilded Age America, and it also played a very large role in setting up the current debacle.

There's a rich irony here, in that the market economy portrayed in textbooks – in which buyers and sellers are numerous and independent enough that free competition regulates their interactions – is exactly the sort of commons that so many free market proponents insist should be eliminated wholesale in favor of private ownership. All commons systems, as Garrett Hardin pointed out in a famous essay a while back, are hideously vulnerable to abuse unless they are managed in ways that prevent individuals from exploiting the commons for their own private benefit. This year's Nobel laureate in economics, Elinor Ostrom, won her award for demonstrating that it's entirely possible to manage a commons so that Hardin's "tragedy of the commons" does not happen, and she's quite right – there have been many examples of successfully managed commons in history. Strip away the management that keeps it from being abused, however, and the free market, like any other commons, rapidly destroys itself.

This does not mean that the best, or for that matter the only, alternative to the unchecked rule of corporate robber barons is Marxist-style state ownership of the economy; once again, dying from heatstroke is not the only alternative to dying from hypothermia. It means, rather, that something between these two extremes might be worth trying, especially if it can be shown by historical evidence to work tolerably well in practice. Of course this is what history shows; broadly speaking, economies that leave the means of production in private hands, but use appropriate regulation to harness their energies to the public good, consistently produce more prosperity for more people than either unfettered capitalism or extreme socialism.

This being said, the midpoint between these extremes may not lie where today's conventional wisdom tends to place it. Consider an example from the not too distant past: a large industrial nation with a capitalist economy, but remarkably tough regulations restricting the growth of private fortunes and the abuses to which capitalist economies are so often prone. The wealthiest people in that nation paid more than two-thirds of their annual income in tax, and monopolistic practices on the part of corporations faced harsh and frequently applied judicial penalties. The financial sector was particularly tightly leashed: interest rates on savings were fixed by the government, usury laws put very low caps on the upper end of interest rates for loans, and hard legal barriers prevented banks from expanding out of local markets or crossing the firewall between consumer banking and the riskier world of corporate investment. Consumer credit was difficult enough to get, as a result, that most people did without it most of the time, using layaway plans and Christmas Club savings programs to afford large purchases.

According to the standard rhetoric of free market proponents these days, so rigidly controlled an economy ought by definition to be hopelessly stagnant and unproductive. This shows the separation of rhetoric from reality, however, for the nation I have just described was the United States during the presidency of Dwight D. Eisenhower: that is, during one of the most sustained periods of prosperity, innovation, economic development and international influence this nation has ever seen. Now of course there were other factors behind America's 1950s success, just as there were other factors behind the decline since then; still, it's worth noting that as the economic regulations of the 1950s have been dismantled – in every case, under the pretext of boosting American prosperity – the prosperity of most Americans has gone down, not up.

It makes a good measure of how far we have come as a nation – and not in a useful direction – that the economic policies of one of the most successful 20th century Republican administrations would be rejected by most of today's Democrats as too far to the left. A case could be made, in fact, that far and away the most sensible thing the US Congress could do today, in the face of an economy that has very nearly choked to death on its own bubbles, is to reenact the economic legislation in place in the 1950s, line for line. (When you're hiking in the woods, and discover that you've taken a trail that leads someplace you don't want to go, your best bet is normally to turn around and go back to the last place where you were still going in the right direction.)

Yet there's an interesting point that also ought to be made about the economic regulation of the 1950s. Outside of antitrust legislation, not that much of it applied to the economy of goods and services on any level, whether that of Mom and Pop grocery stores or big industrial conglomerates. The bulk of it, and very nearly all the strictest elements of it, focused on the financial industry. More broadly speaking, instead of regulating the production and consumption of goods and services, the economic policies of the Eisenhower era focused on regulating money: on ensuring that too much of it did not end up concentrated unproductively in too few hands, and on controlling its propensity to multiply as enthusiastically as rabbits on Viagra. The relative success of these measures points toward a distinction already made in these posts, and to practical steps that will be explored in next week's post.

65 comments:

BrightSpark said...

As usual, this is an insightful look into the distortions of economics, or maybe more importantly, the lack of historical understanding amongst economists. I don't know when the critical point was when economists (largely) disregarded history in favour of mathematics, but it probably began (at least in the US) around the 1960s.

My own country's experience / experiment with neo-classical economics is particularly sobering. New Zealand went from being one of the most equal (using a Gini measurement of inequality)societies on the planet to one of the most unequal in the space of 20 years, after adopting wholesale the policies of the Austrian and Chicago schools.

And now, as you say, the language of politics has been so firmly established that even talking about such concepts as reducing inequality and reasonable restraints on finance are perceived as incredibly radical, even in response to current financial woes.

But (and this is coming from a member of a large NZ political party), I'm also increasingly not sure that putting huge amounts of personal effort into politics to try to address this is worth it either, because the worldview is just so alien to the one expressed here.

Therefore, I'll keep one eye open to the political situation and the other one firmly on the ground, building and developing.

Joel said...

The internet seems to love Austrian economics right now.

I bet if you mention Ayn Rand, that will be the center of next week's angry letter storm.

I'm thinking some people this week will defend the gilded age, though. The Victorian era looks great to the steampunks and so forth...

John Michael Greer said...

Spark, one advantage of economic collapse is that when every other option has been tried and failed, every so often, common sense gets a look in. A simple comparison of what worked then to what isn't working now, repeated over and over, might just have an impact.

Joel, I'm a bit startled that I haven't had the Randroids down on me yet. All in good time, I suppose.

Still, Austrian economics has its good points; for example, its analysis of money as a commodity, and thus of inflation and depression as driven by mismatches between money supply and the goods and services it can buy, has helped me considerably. It's purely the way that so many people in that camp have put the market in place of the deists' watchmaker god that I find offputting.

pasttense said...

Your comments about the era between the Civil War and end of the nineteenth century surprised me as I don't remember that from my American high school history course of 45 years ago (I remember the course talking about Western expansion, defeating the Indians...). High school history courses are too much mythology.

Any suggested reading on the internet about this era?

E.G.Palmer said...

This is an interesting post, thank you.
I've been looking into economics for a few years now, and as I'm not trained or degreed, I have no allegience to any particular doctrine.
My criteria is simple. Does it work, or does it not work.
I like the Austrians because they have been correct in more cases than any other group.
I think this is probably due to the fact that free markets are darwinian. adapt and succeed, or die.
This is natural, and the closer to nature human action cleaves, the greater chance of success.
Of course we've never had, and never will have a truly free market. It goes against human nature not to interfere with the actions of others. People always seek to increase their own power,and that increase must come from the power of others.
That's where the endless manipulation of the market by government comes from.
Government creates nothing, but to increase it's power it must promise largess to various segments of the population. So, it interferes in the market to insure that it's favored persons receive rewards that it can't itself create.
It seems that no mater how open and free a market system is at it's inception, it is doomed to be overtaken and gradually overburdened by the state as it seeks to enrich it's hangers-on.
I don't at the moment see any way that this can be avoided.
It's an endless cycle, and I suppose, it's natural.
It's who we are.
There will never be a successful, permanent politcal and economic system which does not face human nature head on and accept it.
Whatever,"ism", that is promoted as the way of the future will only work as far as it recognizes the reality of human behavior vs the fool's hope that we will change if we all just believe hard enough.

I've read your blog here for some time JMG, and I've appreciated your forthright insighfulness.

thetinfoilhatsociety said...

Ayn Rand...ugh.

I read Atlas Shrugged...that was plenty enough beating a dead horse for me.

xhmko said...

As far as spectrums go, I much prefer using the analogy of constellations. No end points, just a bunch of places where you could be at any given time. All this fixed position stuff was made to look silly by Bruce Lee in his conglomerate martial arts style.
We have to see ourselves as a little bit more diverse than left and right, because as you say, there is a whole lot in between, like a brain, soul, heart and body just for starters.

In the words of Bradley Nowell

"We got a brand new dance its called, we's gotsta overcome"

Patz said...

The question is however, whether reverting to admittedly saner economic policies would do more than marginally, temporally and minimally affect our peak oil, peak everything induced trajectory. Personally, I doubt it.

Vic said...

JMG,the prosperity of the post-war era was among other things a result of massive drawdown and the use of ghost acreage. I suspect the scholarship of Elinor Ostrom points to ways of avoiding this when provisioning for a human population that has grossly overshot?

I agree that there is indeed a wide spectrum of debate and to cling to the far reaches is not desirable. The cultural managers (let's call them that for convenience)however,are not abiding by that wisdom. Where I reside if you can get people to even begin thinking about this as more than a financial crisis it's been a great evening. The vast majority however, believe there are guys in lab-coats shaking test-tubes and the new industrial elixir is just around the corner,then onward and upward once again. This type of purblind thinking makes for tumultuous times.

Danby said...

The best work of the Austrians is their analysis of the business cycle. Austrians understand exactly how the manipulation of credit markets exacerbates the natural cycles of the market.

Unfortunately they have no sense of politics or history at all. The Austrian approach to recession, best summarized as "let it burn" really is the best, fastest and most effective way to clear the markets and return to a more prosperous economy.

Essentially the Austrians teach that recessions are the market's way to equalizing the disparity between increases in productivity and debt. Debt always increases more than productivity, at an exponential rate (historically a 3% growth rate will typically yield a 5% interest rate). Since that disparity results over time in a parabolic curve, in which total debt becomes infinite, the gap must periodically be reset. The mechanism is Western economies to do so is bankruptcy.

By protecting our largest financial institutions from bankruptcy, we are essentially forcing the debt level further up the parabola. This ensures that when the unsustainable debt levels are no longer sustained, the amount of wealth wiped out will not simply bankrupt a single company, or a single industry, but the entire country.

That's how we get to 8, soon to be 12 trillion dollars of public funds pumped into the financial system and the upcoming choice between a currency collapse and hyperinflation.

Outside of Misesean analysis of the business cycle though, Austrian economics is largely rehashed "classical liberalism". We all know how well that worked for the common people during the Industrial Revolution.

Tunya Audain said...

I am very excited about Elinor Ostrom and that a good number of libertarian think tanks have made useful and congratulatory comments. See FEE http://fee.org/articles/elinor-ostroms-2009-nobel-prize/ Why those who value liberty should rejoice.

I wrote an essay on the application of her insights and research to education. I see schools as examples of common-pool resources which should be managed at the local level by parents and staff. Abolish school boards and other centralizing agencies. If there are to be unions involved, the rules evolved by the local subsidiary unit would prevent them from dominating or blocking.

Ostrom shows that self-governing, adaptive organizations follow these principles:
1. Balance of power (checks and balances)
2. Monitor performance, hold people accountable
3. Accept differences as healthy opportunities for examination/problem solving
4. Enforceable rights to check abuses of authority

She says, “Policy makers are reconsidering the consequences of past reforms and recommending charter schools, voucher systems, and other reforms to create more responsive schools.”

My essay on this topic is here: http://education-advisory.org/Involved/2009/11/04/nobel-winner-elinor-ostrom-offers-hope-for-responsive-schools/

Peter said...

Matt Taibbi gives a stunning example of the sort of propaganda that Goldman Sachs uses to justify their greed. It's quite humorous.

"Goldman One-Ups Gordon Gekko, Says Jesus Embraced Greed"

Here's the Goldman statement:

“The injunction of Jesus to love others as ourselves is an endorsement of self-interest,” Goldman’s Griffiths said Oct. 20, his voice echoing around the gold-mosaic walls of St. Paul’s Cathedral, whose 365-feet-high dome towers over the City, London’s financial district. “We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.”

and the link to Taibbi's piece:

http://trueslant.com/matttaibbi/2009/11/04/goldman-one-ups-gordon-gekko-says-jesus-embraced-greed/

Andy said...

Mr Greer,

There appears to be a typo in your latest post:

"There have been many examples of market economies in history that were not controlled by governments, but there have been no examples of market economies that were not controlled..."

Too many 'nots' spoil the sentence!

Great stuff otherwise!

Andy

Rick said...

Excellent post, once again. As I've listened to the free market advocates recently, I sense a parallel with religious meta-narratives that envision a future reality of eternal bliss once we humans shed our ...well, our human nature. The fact that we've evolved over millions of years and will probably not change in the foreseeable future (just as corruption will not miraculously disappear in some government-less economy) doesn't stop proponents of Utopia from trying to construct a Hippogriff. In most societies, the Austrian school's failure to acknowledge reality would be considered a form of psychosis. Now, they're often given considerable air time and viewed by many as wise but misunderstood prophets.

gaias daughter said...

Okay, if hippogriffs don't exist then how did Harry Potter rescue Sirius Black from the dementor's kiss? And please don't tell me Harry Potter doesn't exist!

Seriously, great post, JMG. I've often wondered when the free market became a religion and any attempt to regulate became heresy.

Yaacov said...

The quality of your ideas continues to be excellent, I learn something every time I read your blog. Unfortunately, the once top-knotch quality of your writing is dropping. The use of over-the-top metaphors, previously rare, is becoming common, as is a tone of condescension. Keep bringing the great thoughts, but please return to your clear, thoughtful writing style and leave the exaggerations and snarkiness behind.
Thanks for the great ideas, I look forward to reading the next post!

JimK said...

"Free market" is really an oxymoron, an absurdity. It's a "game without rules" - of course, it's the rules that define the game. A market is exactly a framework that allow folks to trade goods. Take away any rules - or any rule enforcement - and price collusion is the least of your worries. The most basic trouble is smash and grab, or maybe the thugs just kill the trader to be able to sort through the stock in a more leisurely fashion. Extortion is then a slightly more civilized use of violence than robbery. After those come all sorts of fraud. Actually, without any rules, there can't be fraud. If I sell you wheat, just how much gravel can be mixed in before it is not legitimate wheat? A meaningless question without rules. And of course there are no standard weights and measures without rules.

Gerontion said...

An interesting article but, having warned of the dangers of sinking into crude political stereotyping, it's a little depressing to see 'Marxist' used so unthinkingly as a synonym for Soviet-style state economies. I know it's an old, almost threadbare complaint, but the possibilities of Marxism were no more exhausted by the Soviet experience than capitalism was by Pinochet's Chile.

DIYer said...

JMG, another thought provoking essay, thanks.
I agree that a return to the regulatory environment of the '50s makes sense. But to continue that walk in the woods analogy, going back up the path to the '50s will not return us to the prosperity of that decade.
As you well know (and have extensively written about), while we were merrily getting lost in the political woods, the weather has changed. That fork in the path back there is no longer sunny and dry, it has turned cold and started to rain ... and looks like it will be changing to sleet soon.

John Michael Greer said...

Pasttense, I'm not at all surprised that your high school history classes didn't mention the problems with the Gilded Age. Still, you won't do much better on the internet, which is arguably the single worst place to do historical reading. The technology you need is called a public library; you can find any number of good histories of the period there.

Palmer, the one-sided description of government you've presented here is just as unbalanced as the one-sided liberal view that more government is the solution to all problems. Government is a tool, and it can be used skillfully or clumsily.

Tinfoil, no argument there. I think that horse was converted to puree by the time Rand got done with it.

Xhmko, and yet Lee was basically unable to transmit what he could do to anyone else; his achievements rose on the foundation of the very "classical mess" he thought he was rejecting. It's the same problem of thinking that the opposite of a bad thing must be a good thing; as Aristotle pointed out a long time ago, the opposite of one bad thing is usually another bad thing, and the good thing is in the middle ground between them.

Patz, of course a saner economic policy won't solve peak oil. It could, however, prevent a whole mess of additional trouble from being heaped on top of peak oil -- which is what current economic ideas, and policies based on them, are busy doing.

Vic, I mentioned in my post that there was more going on than good economic policies. My point is simply that in a crisis, good policies are likely to be more useful than bad ones.

Danby, no argument there. If they'd pry their very thoughtful analysis of money and the business cycle free from the free market ideology that encrusts them, the result would be more useful.

John Michael Greer said...

Tunya, the problem with strictly local control is that it, too, requires checks and balances -- think about how many local schools in the US would gladly make religious indoctrination part of the school day, for example. Still, you're right that Ostrom's work is extremely valuable; notice how many of her principles are present in American constitutional government, for example, and how many of them are absent from the allegedly more liberating systems proposed to replace it.

Peter, holy crap. I knew they were arrogant idiots, but this pretty much takes the cake. It is easier for a camel to pass through the eye of a needle than for whom to enter the kingdom of heaven?

Andy, no, there's the right number of nots. You could also phrase the second half of the sentence as "every market has been controlled."

Rick, most people are very glad to hear somebody tell them what they want to hear, no matter how big the gap between what they want to hear and the reality that's staring them in the face.

Gaia's Daughter, I'm a great fan of hippogriffs, though not much of a fan of Harry Potter, and even less of a fan of rehashes of 18th century deism disguised as economic theory. No argument there.

Yaacov, hmm. Glancing back over my previous writing, I find plenty of over-the-top metaphors and no shortage of attitude. Is it possible that more of the recent imagery and attitude have been aimed at your views than before?

Jim, an excellent point! Of course there are rules; the question is who sets and enforces them. Even an unregulated market, as you point out, depends utterly on the state to enforce laws protecting property.

Gerontion, from my perspective, Marx combined a very thoughtful critique of the capitalism of his time with a hopelessly unworkable Utopian scheme for replacing it. I don't think it's accidental that wherever strict Marxian socialism has been put into place, with total government ownership of the means of production, the results have been not too different from those in the Soviet Union, just as the results of completely unrestricted capitalism tend to approximate closely to the mess that was America's Gilded Age -- of which Pinochet's Chile was a later and more malevolent copy. I think Marx made some good points, and I'll be discussing him later on in these posts, but the Russian joke is apposite: "Everything Marx said about Communism was wrong, but everything he said about capitalism was right."

DIYer, no, restoring the regulations of the 50s won't bring back the prosperity of that decade, but it might just stave off the kind of abject economic collapse toward which current economic policies are pushing the US, and it might also prevent a great deal of unnecessary human misery. At this point, for reasons of fossil fuel depletion as much as anything else, the age of abundance is ending -- but that doesn't make mitigation impossible, or inappropriate.

JimK said...

"Even an unregulated market ... depends utterly on the state to enforce laws protecting property." - This needs to be strengthened a bit. The laws protecting property are exactly the laws that regulate the market. No market regulation = no lawful property. The whole question is, how does a person come to own a thing, and how does a person come not to own a thing? Property is the score, the market is the game.

OneCrazyMama said...

Excellent post and wonderful points about the mid-to-late 19th century. Westward expansion was in itself a boom/bust. First it went boom, and then it went bust. Similar things happened with mining. That's how my current home ended up with so many "ghost" towns.

Ironically, my current "ghost"- town-in-progress is situated not too far from a "ghost" town of the 1800's. :)

Also: Aren't Mish, Schiff, and Ron Paul all Austian economics people?

I found this clip linked on a futurist blog, but thought you might find it interesting:

http://vimeo.com/7426357

It's about cognitive bias and how people fail to accurately interpret risks. As a psychology major, it's not unfamiliar territory for me, but a good reminder that people are, at the heart of it all, extremely irrational.

From my vantage point, I tend to think the Peak Oil movement (or at least the more wingnutty members of it) fall under the "conjunction fallacy". I say this because the focus is too narrow.

Your point about the solutions existing somewhere in the middle is refreshing by contrast.

The truth of the matter lies in finding the middle, the center, the mean between the extremes. It always has been: think Nicomachean ethics and the golden mean.

PO extremists, dyed-in-the-wool dems/repubs, etc. are too far to the tailed edges of the Bell curve to be virtuous.

Anyone seeking the middle ground is seen as a dissenter, a kook, or someone lacking in the "strong moral fiber" to embrace one of the polar extremes.

The world needs more people in the middle looking for genuine solutions and not, as you rightly pointed out, hippogriffs.

A beast, which, by the way, was also a main form of transportation used by Harry Potter :)

(Having 3, almost 4 kids, I have to know these important things.)

Thanks for another great post! Keep up the good work!

Darius said...

Yeah, say what you like about the Austrian fetishization of market forces, at least they don't fetishize GDP growth the way some do. It's like somebody trying to sell you a painful but benign polyp, only to have somebody else break in and offer you a discount on metastatic cancer. Bewildering.

This year's Nobel laureate in economics, Elinor Ostrom, won her award for demonstrating that it's entirely possible to manage a commons so that Hardin's "tragedy of the commons" does not happen...

I think it's worth mentioning that in some other fields this was demonstrated -- and embraced -- a long time ago. Ostrom's prize (AFAICT, not having read too closely) was for documenting and analyzing actual economic instances of the very same self-organizing mechanisms which are the bread and butter of ecology, evo-bio, and some schools of sociology. Complexity folks and game theorists have been modeling the same processes in the abstract since the 70s.

There's really a huge volume of material now describing various principles and patterns which occur and re-occur in disparate types of self-organizing systems. In some respects I guess a lot of it is common sense expressed more rigorously, and a fair bit of it is just plain gibberish, as always. But there are plenty of genuinely new and useful insights as well.

Darius said...

You could also phrase the second half of the sentence as "every market has been controlled."

Mitch Kapor, who is no enemy of freedom, has a quote that I think expresses this very well:

"Inside every functioning anarchy there's an Old Boy Network."

Ana's Daughter said...

The Goldman Sachs quote reminds me of a bit from George MacDonald's novel The Princess and Curdie, where the author summarizes an eloquent sermon by the foremost moral preacher of a corrupt city: "The main proof of the verity of their religion, he said, was that things always went well with those who profess it; and its first fundamental principle, grounded in inborn invariable instinct, was, that every One should take care of that One. This was the first duty of Man. If every one would but obey this law, number one, then would every one be perfectly cared for --- one being always equal to one. But the faculty of care was in excess of need, and all that overflowed, and would otherwise run to waste, ought to be gently turned in the direction of one's neighbor, seeing that this also wrought for the fulfilling of the law, inasmuch as the reaction of excess so directed was upon the director of the same, to the comfort, that is, and wellbeing of the original self. To be just and friendly was to build the warmest and safest of all nests, and to be kind and loving was to line it with the softest of all furs and feathers, for the one precious, comfort-loving self there to lie, revelling in downiest bliss."

That was written in 1882. Plus ca change and all that.


Also, a comment on the drowning/dehydration metaphor, with reference to the moral gloss that many Austrian school types place on the supposed evils of a controlled market: rape is not the only alternative to celibacy.

J Gav said...

Nice post. I quite like your metaphors, so I'll add on a dollop, reaching back to Crete and their mythological creatures: Broadly in agreement with what you say about the Austrian School, could we not use the the image of the Minotaur here? Whatever bearishness or bullishness may be the flavor of the day concerning a given stock, it seems to be all BULL when it comes to market miracle-making.

But, however rich the 'bestiaires imaginaires' of our culture may be, the main take-away from this article for me concerns the difficulty societies have in trying times to reset the dial 'somewhere towards the middle.' Once the abuses which inevitably accompany excessive concentration of wealth and power in a society attain flagrant, massive, in-your-face heights, when the reaction comes it's liable to be a pendulum swing.

This is to say that, rather than digging into that society's "system recovery toolkit," the propensity might be to throw it all out and cross all ten fingers. "Yeah, right, let's just dump capitalism, what did it ever do for me?" That's where you're on the mark looking back to the 50s (60s and 70s still qualify too, to some extent in my book).

A final word on another of your metaphors: the tight leash on certain financial behaviors. The problem that anyone who tries to restore that will have, of course, is that the one who used to be standing upright and holding the loop is now the one on all fours with the collar around his neck.

David said...

One of the problems with pure free market economics that it doesn't include any concept of limits. If a resource becomes scarce it relies on the pricing mechanism to "solve" that problem. Ironically, there is no consideration of the net return on investment as the mining of ore bodies or oil well drilling becomes ever less productive. When the energy used to extract a barrel of oil gets closer to the energy within that barrel the price becomes irrelevant (at least to increasing production. Same with mining for metals - when the ratio of ore to metal becomes big enough it will be forced to stop.

Danby said...

I liked xhmko's metaphor of a constellation, rather than a spectrum of economic systems.

For instance, where would you put this on a spectrum from naked socialism to naked capitalism? The United Steelworkers have joined with the Mondragon Cooperative Corporation in Spain to adapt Mondragon worker-owned industrial system to the United States. As a Distributist, I find this tremendously exciting, but it is both/neither socialist or capitalist.

Mark said...

It seems only a matter of time will tell as far as realizing, at least in the mainstream, that the path that's been traveled for the past 50 years leads to a brick wall -- by that time it may well be too late for many. Catabolism will most likely lead the way back for those who don't end up with head trauma.

Jacques de Beaufort said...

This is totally off topic but I just wanted to say your new book is fantastic..reading it right now.

It would be amazing if KMO of C-Realm had you on again to talk about it. There's not enough Archdruid audio out there IMO..

tristan said...

Okay so given that rolling a critical hit is not the only option to rolling a critical failure or that dying from being crushed by a black hole is not the only alternative to having all of your molecules disperse until heat death (to use to even more ridiculous metaphors) - why is it that human beings tend to not keep the middle ground but head to the extremes? Is there something attractive out there on the edges - more opportunity for power?

T

Patz said...

Wow! Everyone's a critic. It ain't good enough to write good stuff, ya gotta write it good. I think you've got some Honors English majors in your audience JM.

E.G.Palmer said...

"Palmer, the one-sided description of government you've presented here is just as unbalanced as the one-sided liberal view that more government is the solution to all problems. Government is a tool, and it can be used skillfully or clumsily."

Certainly, JMG, Government is a tool, or at least theoreticlly, it is meant to be a tool. But, It is always, and I do mean always, co-opted, seized, or directed by a small elite, overtly or by subterfuge to serve their own ends at the expense of the majority.
There is no way around this.
There is no example in recorded history to show otherwise.
People act according to their nature. Those who crave power always use the tools available to them to gain it.
Everyone believes that once their man is in office, or their party is in control, paradise will suddenly be achievable.
One man's paradise is another man's hell.
Government the tool can be used to serve liberty, but only in the smallest ways. Government cannot increase freedom, it can only intrude on it.
And the fact is, Government is a treacherous tool that easily turns in your hand. And it's not always your hand that's holding that tool.
Whatever party is in power at the moment want's to increase the power of government to further it's agenda. When they're out of power, that increased government power is easily turned against them.
Government is not a thing which is in any way apart from the people who hold it's offices. Elected officials do not suddenly become selfless servants of the public good upon taking office.
They remain exactly the same people whos craving for power caused them to run in the first place.

Also, there's a large divide in the Libertarian community between the "Beltway libertarians" or "cosmopolitan libertarians", and the Rothbardian Libertarians.
I think Lew Rockwell is probably a better example of libertarian philosophy than Shedlock.

Raymond said...

Two responses.

Sheesh, Randthralls are hilarious at times. I always like to ask them if Rand ever paid back her relatives in America before she hit it big in hollywood. Most times you can hear the proverbial pin drop.

The "rich man" phrase is one of the greatest "good" biblical mistranslations ever.

Originally, it was "It is easier for coarse/frayed thread to pass through the eye of a needle than for a wealthy man to achieve heaven"

Nevertheless, the mistranslantion hammers home Yesho's point even further.

John Michael Greer said...

Jim, what I was trying to suggest is that those who talk about unregulated markets are being a bit hypocritical -- they want those rules that make a market possible, without those rules that make it, say, fair.

Crazy Mama, thanks for the link! And it's good to hear from anybody who can refer to the Nicomachean Ethics these days.

Darius, the fact that Austrians fetishize the market rather than GDP is not much of an improvement. The Mitch Kapor comment, though, is dead on -- what makes anarchy different from other systems is not that there's no power hierarchy; it's that the power hierarchy, being covert, has no checks or balances at all. The same is true of groups that use consensus and the like.

Ana's Daughter, I'd forgotten that bit of MacDonald. Nice.

Gav, there's certainly call for toreadors in today's economic world, and you're quite right that a pendulum swing to the other extreme is all too likely. I wish free market fundamentalists would realize that it was precisely the extreme human cost of unchecked capitalism in the 19th and early 20th centuries that gave Marxism its opportunity. If they want a repeat, they're going about it the right way.

David, you're quite right. Since these are 2000-odd word essays rather than full-length books, that wasn't a point I addressed here, but of course it's crucial.

Danby, the only reason I use the polarity between socialism and capitalism is that that's where most of the action is these days. Of course there's a dizzying array of other possibilities, and it's nice to see the steelworkers exploring one of them.

Mark, no argument there.

Jacques, thank you!

Patz, it's always interested me that the number of quibbles about my prose goes up whenever I post something criticizing a popular belief system.

Palmer, the cynical insistence that every political system is always corrupt, and every political leader is simply pursuing personal power, is as unproductive as any other kind of blanket assumption. I gather that you'd reject the claim that every capitalist is a ruthless oppressor who cackles at the thought of trampling the poor; why do you insist on an equally caricatured image of people in politics?

Raymond, I suppose there's some entertainment value in debating Randroids, but I can't say it's high on my list of interests. As for the mistranslation, most interesting; since Christianity isn't my religion, I can't claim to be up on the intricacies of translation, and so took the phrase as I'd heard it from the King James version.

All Things Wild said...

Very thought provoking post.

I agree with pasttense that high school does a poor job of teaching American history in anyway that is meaningful or helpful in understanding today's predicaments.

Like pasttense, any recommended reading would be appreciated. As a tangent to your post, it frightens me that today's ideological binary thinking may be another version the ideological split (economic + moral differences) that led to the Civil War.

Patz said...

Tristan said: " why is it that human beings tend to not keep the middle ground but head to the extremes? Is there something attractive out there on the edges - more opportunity for power?"

Err... because the middle is boring? Or because if all humans kept to the middle then the edges of the middle would be the extremes. Or more seriously it is only when you go to the edges that you get perspective on the middle.

More seriously yet, the middle moves. Consider what JMG said about the Eisenhower policies being considered radical left in todays political climate. The neo-liberal, rightist, economic theorists have succeeded in moving the goalposts inexorably rightward. Goldwater would be a lefty to this crowd.

Danby said...

Once the abuses which inevitably accompany excessive concentration of wealth and power in a society attain flagrant, massive, in-your-face heights, when the reaction comes it's liable to be a pendulum swing.

Unfortunately, those pendulae typically have about 100kg at the end of them hanging from a noose.

Palmer said:
Government cannot increase freedom, it can only intrude on it.

That is plain false. Think for a moment. Who is freer, a resident of Mogadishu, where there is effectively no government, or a resident of almost any Western city, even such socialist hell-holes as Copenhagen or Oslo? It matters very little to the subject whether he was killed for offending the government elite or the local warlord, or the thuggish guy in the alley who wants his money. The coffin is the same confined space.

Those subject to complete anarchy are in fact ruled very completely by the most violent among them. It has always happened thus. Which is why people spontaneously self-organize into communities. They do it to protect themselves from anarchy. And all of those communities have some form of government, usually starting with a tribal elder or chieftain.

The situation in Somalia is unresolved because it suits many outside powers (including the House of Saud, Iran, the US and even Yemen) to keep it without a government. By breaking up any consolidating power center, they can't win whatever they goal is, but they can prevent someone else from winning, which seems to be good enough.

Perhaps you recall this passage:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Well did Lee, Livingston, Sherman, Franklin, Adams and Jefferson know that without a government, such liberty as they had would be taken from them.

mthierauf said...

JMG - Hell hath no fury like an Austrian Economist scorned, huh

Another thought-provoking post. For the most part I agree with your analysis but I have to add my 2 cents.

Let me set the record straight regarding regulations in today's economy. Most regulation is set up to keep monopolies in place not break them up. Most regulation comes from lobbyists and special interest groups. What usually happens is that the regulation ends up barring entry into whatever business is being regulated, or it allows loopholes for big business. Ron Paul explains it here: http://www.ronpaul.com/2008-11-10/ron-paul-why-more-regulation-makes-things-worse/. This is why there is objection to regulation.

This Frontline episode about the regulation of Derivatives in the 90's helps to explain the "Crony Capitalism" that exists today: http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid.

Thanks for clarifying your views on Economics. I enjoy reading Mish's blog also but he certainly doesn't represent the Austrian School (which you alluded to).

I am still not convinced that we need to have a hybrid socialist/capitalist market. Here is my solution:

1. Eliminate the Federal Reserve.

2. Let the Big Investment Banks go bankrupt which is what would happen without the Federal Reserve giving them cheap credit. They would be shown to be essentially insolvent anyway if their books were kept according to rigorous accounting standards.

3. Set up a State Bank in each State modeled after the State Bank of North Dakota. Ellen Brown has written about this here: http://www.webofdebt.com/articles/cut-wallstreet.php.

4. Don't allow the National Government to run deficits. This would eliminate the expansion of the American Empire.

To put it in other words: We need to gut our current corrupt monetary system and install a Credit system. The monetary system that is run by central bankers is the root cause of economic/financial hardship for people.

OK, I admit, these measures are about as achievable as finding a Hippogriph but IMO this type of set up would allow Free Markets to prosper without the need for regulations.

I will leave you with this video http://www.youtube.com/watch?v=7KnGNOiFll4. I find it inspiring for the "interesting" times that we are cursed to live in.

ajmacey said...

Moving away from the ideology of how a market should or should not be regulated I was wondering going forward; given the nature of the problems that beset us of a shrinking energy base and retrenching economy, how do we maintain the basic functions of a working economy (the exchange of goods or services for consideration)?

All I can see is that a retrenching economy only accelerates existing trends eg more outsourcing and more indebtedness. As people get poorer they wont become more self reliant they will become more reliant on imported goods which will be even more competitive meaning more businesses moving offshore meaning more people, rinse and repeat. More poor people meaning more reliance on the government and reduced taxes. It seems the process we will go through is literally eating us alive.

I give an example, a local farmer I know on the urban fringe with excellent land and water can barely make a return on their property and will eventually sell meaning more houses will be built. So we may want local produce in an energy constrained world but current conditions demand that anything we destroy anything which could deliver on it.

In order to avoid complete collapse how do we stem the tide ie rebuild localised economies given the structure of the economy now so that not everything we have is abandoned like the ruins of Petra or Lepcis Magna?

maros.ivanco said...

Beautiful post. I am starting to think about sending this particular essay to all my friends with "must read" recommendation ;-). Bipolarity of thoughts is nowadays so common, that almost nobody is aware of it. Beautiful essay.

wylde otse said...

You gotta love a Hippogriff!

I love metaphors too - sometimes to help me see the obvious - they can even make sense of paradoxes (financial and political).

Continuing down our forked path in the sleet, we may find an imaginary beast at a corner of Wall Street: a bull and a bear - joined together at a very fat middle - but both heads pointed in opposite directions (regardless of which end of this tug-of-war you stand at it might be wise to jump out of the way).

The same forked trail may wend itself past capitol buildings presenting a rare view of yet another animal: half donkey and half elephant - again joined in the middle - only this time both back-ends point out (safer if you don't stand too close...but - either end - you'll know exactly what you're looking at).

Cash Gorman said...

Austrian School, Randians, Marxist, Left, Right... A pox on all their houses. All of them cherry pick data to back up their talking points, and as you say tend to demonize the balance point.

The big elephant in the room that's seldom mentioned by any of them is demographics. For example Reagan tax cuts causing a huge boom in the economy, when if fact it was the largest generation ( Boomers)coming of age and buying adult toys that did it, just as another spike occurred when Boomers were born and their parents bought a house, splurged on children's toys ,clothes , diapers etc.

The very idea that the market left to it's own devices will correct all problems is laughable. The Austrian school never mentions it by it's true name, the "Law of the Jungle"

hapibeli said...

Mitch Kapor, who is no enemy of freedom, has a quote that I think expresses this very well:

"Inside every functioning anarchy there's an Old Boy Network."

I think that we will find such a network in every human endeavor involving groups.

John Michael Greer said...

Wild, I'll see what I can come up with next time I visit the library. Really, though, your best bet is to visit your own local library, find the section on American history, and do some browsing.

Patz, I'll be doing a post in a while about why I think so many people are going to the extremes these days.

Danby, thank you. It's always irritating to watch people who have never lived outside the protections afforded by government, and would last about fifteen minutes in a world without them, insisting that government is evil by definition. That old Dead Kennedys number "Holiday in Cambodia" somehow keeps coming to mind...

Mthierauf, before there was any government antitrust regulation at all, in the late 19th century, vast corrupt monopolies dominated the American economy. Thus I have a hard time buying your claim that the main function of regulation is to foster monopolies.

AJ, I'll be getting to that in the next couple of posts. Still, my guess is there'll be a lot of ruins like Petra and Lepcis Magna in the not too distant future.

Maros, thank you!

Otse, nice. Very reminiscent of Dr. Doolittle's pushmi-pullyu -- though the Wall Street beast would probably be the cheetmi-cheetyu, and the name of the Washington beast won't bear printing in an all ages blog like this one.

Cash, nicely put. Add energy availability to demographics and you get a much firmer basis for economic history than the rise and fall of ideologies.

Hapibeli, the advantage of constitutional government is that there's something other than an old boy network to run things, and it can occasionally balance the covert power of the old boy network. The central folly of anarchism is the notion that you can abolish power relationships by abolishing the frameworks that control and delimit them, which makes about as much sense as trying to prevent rainfall by tearing off your roof.

John Michael Greer said...

Patz (offlist), the historicity (or lack of same) of Jesus of Nazareth is way off topic, and it's also as close to a perfect bit of flamebait as anything I can think of off hand. Thus the flutter of hippogriff wings carrying your comment off to the delete bin...

The Blogging Broker said...

Dear JMG,

after purchasing "The Long Descent" I want to compliment you on your book. While I don't agree with major portions of the premise, and while I feel a lot of the argument lacking in certain areas, I am very thankful that there is a discussion. Keep it up! Thanks, JS

zapoteca said...

Thank you for another wonderful post. I'm skeptical by nature, but I must hold some core beliefs in common with you, because I find your points of view reasonable, consistent and well articulated. Better stated than I can muster up on a moment's notice. And when the subject comes up, you really do need to have your powder dry. I cite your thinking monthly, with attribution.

Thank you very much for the Garett Hardin reference. It has been on my "B" list - for years - to delve into the resurgence of that concept. That term went out of my awareness for years once I got out of college. I heard it mentioned again in 2002. Since then, a dozen times more.

Can't adequately convey how invigorating it is to get my weekly history of ideas lesson. I'm sure that is not your intention, but hey, I already agree with what you're saying otherwise.

PS = I do buy your books, both for myself and to give as gifts.

Thank you for the spare elegance of your writing, and for the history of ideas you include each week. Since I agree with your own ideas, they must be correct! (j/k). Best to you and yours.

John Michael Greer said...

Broker, thank you!

Zapoteca, if I could come up with this stuff on a moment's notice, I'd be very impressed with myself! ;-) Thank you.

John Michael Greer said...

Ruben (offlist), er, I don't think this is a good place to get into disputes about the Christian scriptures -- or any others, for that matter. (You do not want to get my Druid readers arguing over the proper interpretation of Old Welsh mystical poetry!)

BTW, all, I've had a number of posts that apparently got eaten in the queue -- thought it was my fault originally, but it seems to have been some kind of Blogger glitch. If you posted something that didn't get through, and I didn't make an offlist comment here, please repost it and we'll see if it gets through the second time around.

Draco TB said...

The United Steelworkers have joined with the Mondragon Cooperative Corporation in Spain to adapt Mondragon worker-owned industrial system to the United States. As a Distributist, I find this tremendously exciting, but it is both/neither socialist or capitalist.

No, what it is is communist/anarchist but not communist or anarchist as the hierarchy has been removed.

before there was any government antitrust regulation at all, in the late 19th century, vast corrupt monopolies dominated the American economy. Thus I have a hard time buying your claim that the main function of regulation is to foster monopolies.

I don't but this is because things change. The anti-monopoly regulation may still be there but other regulation has come about that has removed the teeth that the anti-monopoly regulation once had. The example is Microsoft. There was nothing that could be done to break up it's monopoly as that was protected by law. So we got it's break up but it's monopoly remains intact. The solution for it's monopoly would have been to declare Windows to be an Open Standard that anyone could write to and not be taken to court over it but that would have been a breach of private property rights.

das monde said...

JMG, it is good to see rare acknowledgments how un-conservative are the “free market” forces, or that government can have both supportive and obstructing influence. But it is sad to notice reflection of a revisionist projection regarding “fascism” calling. (What particularly bothered recently?)

The formulation that “really” free markets are non-existent is not very instructive either. It allows for pushing for yet more “freer markets” and therefore yet deeper ideological and economic marasmus. Even communists did not insist that much that the particular history of their revolutions is little representative of their ideals, or that their power balance could have been much better. Beware of any ideological requirements of perfection, on any side.

The problem of identifying “free markets” is that one man’s freedom could be another man’s serfdom. When you look carefully what is really done in the name of freedom, you notice that it is the freedom to capture or grab as much wealth as possible that is religiously protected and strived for. Collection of property or privilege rents (however ridiculous) is an important freedom, while freedom from monetary constraints or bad fortunes is not important. The actually promoted freedom ideal is not much different from feudal freedom, or even slaveholder’s freedom. If money is the ultimate freedom, lack of money or debt must be slavery.

One freedom worth attention is freedom to cooperate. It is striking, when you give a thought, how much resources for cooperation the powerful and other beau monde have and utilize, compared to utter lack of cooperative drive between have-nots. I made a comment to the previous essay that ideologically accepted theories affect our understanding of the world (and myths about it) as profoundly as language. Ever since classical economy and Darwinian evolution were vulgarized to the view of cutthroat competition, the theoretical “impossibility” of cooperation became a tool to deprive the have-nots to find better life anywhere else but in selling out to multinational and financial powers. One insight of the cited Nobel SBMP laureate Elinor Ostrom is that the tragedy of commons perils are more dreadful in theory than in practice. Various human societies did manage to preserve their common good for long periods, with different levels of organization and individual concern. Similar observations are gaining acknowledgement in the evolution and ecology theories as well. One thing that will lighten up the global collapse is that people will allow more freely benefits of close and immediate cooperation to themselves, not only to the “best of the best”.

Tony said...

Some random thoughts, occasioned by reading a few of the comments here:

Regarding the evils of government, in general: I've been alive 27 years, yet the two times I've been robbed - once at knifepoint - were both in South Africa, one of the most paradoxical nations on Earth. The security situation there has a lot to do with the failings of the current regime.

Returning from SA, I had a much greater appreciation for the relative safety of life in the US than I'd had previously. Some of that is the lingering after-effects of centuries of colonialism and decades of apartheid, but then some also is from recent neo-liberal policies that place the welfare of corporations above that of average citizens.

On the subject of gov't corruption, though... I work in local gov't, as a planner, and have applied for two separate ARRA grants (the US stimulus bill), and can testify to the freakshow that is my state's handling of that money. A friend, working for the state, told me "they can't burn that money fast enough," and "I've been told to take all grant applications at face value... I'm not allowed to check any of the information I'm given... I really doubt that that many jobs are being created."

Kevin said...

Personally I'm not quite so dismissive of anarchist thinking as seems to be the case with most here. I wouldn't toss out the window the ideas of writers like Peter Kropotkin or J.H. Mackay, or even Stirner. Over a hundred years ago anarchist activists like Emma Goldman and Mikhail Bakunin were very serious about changing the world for what they saw as the better, often exhibiting great courage in that pursuit, and I have a certain respect for them. Anarchists played a significant role during Catalonia's regrettably brief republican period in 1936, as observed by George Orwell, who was most impressed by what he witnessed there. I gather anarchism was also an important component in the thinking of the Wobblies, who were very active in the United States until government and corporate goons effectively crushed their movement in 1919.

That said, it must be acknowledged that modern anarchists do seem to exhibit the traits you attribute to them. Their formerly vital movement has devolved into ideological squabbling which chiefly consists of claiming to be more-anarchist-than-thou, and of uncredibly claiming to have no ideology. Some seem to use it as a cloak for their authoritarian tendencies or personality structures. The worst I've seen are certain punker skinhead types who are basically just looking for excuses to beat up anyone they don't like, and figure that'll be easier if there aren't any cops or other civil authorities around to prevent them from doing that.

I've noticed that when leftists and right wingers criticize one another, they're generally right on. Marxists and capitalists do indeed possess the faults which each group attributes to the other, and each group is characteristically blind to its own flaws, each thus casting an unflattering but revealing light upon the other. In a somewhat similar sense, I think anarchism can be useful with respect to government. Anarchists may often be obnoxious and hopelessly impractical, but when they say that government has an innate tendency to expand its authority beyond its proper bounds, they're right. When they say that it typically ends up serving vested (usually moneyed) interests, this is no more than the truth. When they point out that bureaucracies generally become bloated self-serving fiefdoms of petty and not-so-petty tyranny, they're telling no lies. Authority unjustifiably takes for granted its presumptive right to exert power over public and individual. Even from the viewpoint of Jeffersonian democracy - that bourgeois democracy which anarchists profess to despise - I think it useful to have around some people who are militantly quick to point out that there is no innately legitimate authority, and that it exists on sufferance of the people only.

One model anarchist writers seem to be fond of is that of the voluntary association, examples of which are groups like the Freemasons, the Odd Fellows, the Boy Scouts, quilting bees, and even a good dinner party, all of which strike me as unobjectionable. If their ideas were of no value, I don't think that a smart writer like Ursula LeGuin would have put anarchist anti-propertarianism at the heart of one of her best novels, The Dispossessed. The human mind should be unafraid to push to the utmost boundaries of what is conceivable, and anarchy performs this function with respect to thinking about liberty.

J Gav said...

Kevin,

Thanks for mentioning the anarchists. Of course it wasn't always what people today think it was - the bomb-throwing assassin image - also so easily (mis)used in Islamic culture as regards the original "assassins." Another of those terms whose meaning changes with the times ...

I share your circumspection concerning today's manifestations of the phenomenon. But if you're interested I might provide a source or two worth pursuing from the 'core' movement: Voline and his remarkable history of Ukrainian anarchist Nestor Makhno in "La révolution inconnue" (English title, supposing it's been translated, might be: The Unknown Revolution. Alexander Skirda has something to say there too and Ida Mett is also worth a mention on Makhno as well as Cronstadt, as I suppose you know. To close, I'll speak of the French geographer-anarchist Elysée Reclus whose definition of was ""L'anarchie, c'est la plus haute expression de l'ordre." (My translation - Anarchy is the highest expression of order). This 'order, I believe, in their view, was meant to trickle UP, not trickle down. How times change, don't they?

Glenn said...

Wonderful essay and discussion. I look forward to reading your comments on Sen. Dodd's bank reform ideas once the legal jargon becomes summarized for normal consumption. The regulation of the 50s was dismantled to give us the unbridled bank feeding frenzy of the last decade.I loved they way you introduced it, then revealed it as Eisenhower's era. He also warned us of the dangers of the military industrial complex.

John Michael Greer said...

Draco, of course monopolists are getting past the laws, but they haven't achieved the sort of monopoly that existed in 1890. A modern equivalent would be if Microsoft, Intel, IBM, Apple, and the top dozen internet service providers were all the same company.

Das Monde, it amazes me that I can say something in so many words and have it interpreted in very nearly the opposite sense. Saying that free markets do not exist doesn't justify trying to make them "more free," any more than saying that perpetual motion doesn't exist is an argument for investing money in perpetual motion machines. Rather, the fact that free markets are as imaginary as hippogriffs means that, since all markets are controlled, we need to talk about what kind of controls on markets are beneficial and what kind are less so. As for the freedom to cooperate, I support this, as long as it's paired with the freedom not to do so.

Tony, I've been hearing much the same thing about the stimulus bill. The plan seems to be to flood the economy with money, not to do it in any useful or honest way.

Kevin, voluntary organizations such as the Masons and Odd Fellows are able to exist and function as they do because of the wider protection provided by government. The Masons, Odd Fellows, and other fraternal orders are quite aware of this; they thus include appropriate respect for the institutions of government among the values they expect to see in members and potential members alike.

Gav, well, all I can say is that in my experience, anarchism works only when there's a covert hierarchy behind the facade of equality, and not always even then. The historical record isn't too supportive, either.

Tony said...

To paraphrase some thinkers whose names I no longer remember, you can't expect a people unacquainted with freedom to understand it or know what to do with it - hence, perhaps, some of the misguided attempts at anarchism that you have witnessed or studied. I tend to be more sympathetic of anarchist thought than you, JMG, though I appreciate your thoughtful critiques. As you know from my previous comment, I'm a planner for local government, which is sort of... contradictory. But I consider myself a pragmatic person and, more to the point, spend my evenings working in the local Transition movement which, without saying so, is underlaid with some anarchic ideas (i.e., not waiting for gov't to "fix" problems).

Kevin and J Gav, thanks for your thoughts on the subject. What have anarchist thinkers had to say about how security, internal and external, ought to be provided?

J Gav said...

JMG,

For the record, I wouldn't pretend to put anarchism on the front burner for dealing present issues ...

But, historically, it wasn't what people think it was. Far from it. Selflessness never found more fertile ground in a few places at a few historical moments than in the name of anarchism.

There is no future for that movement today, I would agree, but that doesn't mean there is nothing to be learned.

Thardiust said...

I think the stimulus bill, wether it works or not, will be an interesting experiment for the public, and mad scientists in the United States and abroad, to observe how politicians with high positions and those below them spend it.

wylde otse said...

heey JMG

love your challengers.

Seriously I do.

It makes you more alert :o)

And, I have my most favorite of your 'adversaries', best balance.

das monde said...

JMG, I wish we would be less edgy about understanding each other's thoughts. In this discussion, it matter not only what you mean to say, but also what others can quickly understand of your essays (and eventually, how they would apply the understanding). I was not saying that you call for ever "more free" markets. I said that your formulation supports the excuse of digging deeper into the "free marketering" mess.

whblondeau said...

OK, thanks for the reminder about profanity. Because, left to my own devices, I might well blurt some out in sheer startlement.

"...and why Juss rode one to the summit of Koshtra Pivrarcha to rescue Goldry Bluszco in The Worm Ouroboros."

Um... not Koshtra Pivrarcha. They had to climb that unassisted. Goldry was held prisoner atop Zora Rach Nam Psarrion.

The metaphor is lovely, but I'm having a bit of a hard time trying to wrap my head around the recursive nature of having a factual error in a metaphor about factual error.

That said, I'm delighted to have discovered your blog. Thank you.

Kal said...

I suppose you already know that most of the links to your posts do not work? At least they do not work for me.

For example, I clicked on comments from (probably) The Human Ecology of Collapse and ended up in the Hippogriff comments. Yesterday I was looking for Hippogriff and could not get in.

Kal