Week-end Wrap – Political Economy – April 25, 2021

 Week-end Wrap – Political Economy – April 25, 2021

by Tony Wikrent

Strategic Political Economy

Plato, Aristophanes and Aristotle on Money-Lust, 399-380 BC
Michael Hudson, April 23, 2021 [Naked Capitalism]

Delphi’s warning that lust for monetary silver (philarguria) was the only thing that could destroy Sparta was echoed by Plato, Socrates and other philosophers accusing wealth addiction of leading to greedy and hubristic behavior that impoverished society at large. Creditors were singled out for reducing debtors to bondage and taking their land.

Near the outset of Plato’s Republic (1 at 331c-d, written c. 380 BC), Socrates (who was put to death nearly twenty years earlier, in 399) discusses the morality of repaying debts in circumstances where this would lead to anti-social consequences. Cephalus, a businessman living in the commercial Piraeus district, states the typical ethic that it is fair to pay back what one has borrowed. Socrates asks if it would be just to return weapons to a man who has become a lunatic. If a madman is intent on murder, Socrates asks, will not returning his weapon to him enable him to commit unjust acts? In view of the likely adverse social consequences, paying back such a creditor would be the wrong thing to do. It all depends on what creditors will do with their returns, and how their actions affect society. Book 8 of the Republic elaborates upon this discussion, describing how wealth leads its owners to act in ways detrimental to society.

Howard University’s removal of classics is a spiritual catastrophe

Cornel West and Jeremy Tate, April 19, 2021 [Washington Post]

Academia’s continual campaign to disregard or neglect the classics is a sign of spiritual decay, moral decline and a deep intellectual narrowness running amok in American culture. Those who commit this terrible act treat Western civilization as either irrelevant and not worthy of prioritization or as harmful and worthy only of condemnation.

Sadly, in our culture’s conception, the crimes of the West have become so central that it’s hard to keep track of the best of the West. We must be vigilant and draw the distinction between Western civilization and philosophy on the one hand, and Western crimes on the other. The crimes spring from certain philosophies and certain aspects of the civilization, not all of them.

‘Divisive’: How Corporate Media Dismiss Ideas Unpopular With Elites 

[FAIR, via Naked Capitalism 4-19-2021]

The carnage of mainstream neoliberal economics

Capitalism as a Suicide Cult 

[CounterPunch, via Naked Capitalism 4-24-20]

...the problems causing such widespread social misery are systemic, means that the solutions need to be so as well. To understand why, the difference between socialism and social welfare liberalism is that socialism requires a redistribution of power— from corporate executives and capitalist owners, to workers. A transfer of power, if not ownership, is what the New Deal accomplished. Conversely, welfare state liberalism subsidizes capitalism. One third of the recipients of food stamps (SNAP) who work, work at Walmart. Seventy percent work. SNAP is a subsidy of low wage employers, not its recipients.

The transfer of power of the New Deal was accomplished 1) through reforms that constrained business in its ability to rob people and crash the economy, and 2) through building public institutions that redistributed power from oligarchs and executives to workers. The Glass-Steagall Act of 1933 separated investment from commercial banking, thereby leaving investment banks to speculate with their own money. This effectively ended the financial mania that cascaded into the forced sales of bank ‘assets’ in the early years of the Great Depression. As readers know, Glass-Steagall was repealed in 1999. The result: a world-historical residential real estate bubble and the Great Recession.

Week-end Wrap – Political Economy – April 18, 2021

 Week-end Wrap – Political Economy – April 18, 2021

by Tony Wikrent

Strategic Political Economy

Michael Hudson: America’s Neoliberal Financialization Policy vs. China’s Industrial Socialism
Michael Hudson, April 15, 2021 [Naked Capitalism]

US West prepares for possible 1st water shortage declaration

[Associated Press, via Mike Norman Economics, April 17, 2021]

The Pandemic

India’s health system has collapsed
[Hindustani Times, via Mike Norman Economics, April 16, 2021]

The Biden Transition and the Fight for Real Hope and Change This Time

Shifting Balance of Power?
Barry Ritholtz, April 16, 2021 [The Big Picture]

A massive shift is occurring in the labor market today, one that has been misinterpreted by economists of all stripes…. fear of the virus is a valid reason keeping people from low paying jobs requiring interaction with potentially deadly, infectious members of the public. “Who the hell wants to risk their lives for $8 an hour before taxes?” 

….I suspect it is something broader, more than merely the economic recovery being impacted by Covid. Maybe more of a significant change, perhaps even a secular reversal of the longstanding power dynamic between capital and labor.

“Investors lament being frozen out of Biden infrastructure plan” [Financial Times, via Naked Capitalism Water Cooler 4-13-21] “President Joe Biden’s ‘American jobs plan’, unveiled last month, calls for $2tn of investment in highways, electrical grids and other basic infrastructure. At the same time, the White House put forward corporate tax reforms that it said would generate enough money to pay for the investment spree within 15 years. That has disappointed some investors and asset managers who once expected public-private partnerships would be a lucrative financing opportunity.”

...By the late 1960s/early 70s, the economy began shifting. Rising inflation and the collapse of unions were but two factors impacting this once idyllic economy. The next the next half century saw an ongoing increase in corporate power, both politically and economically. There is a longer discussion to be had about how the Supreme Court of the United States made some truly boneheaded WTF?!? decisions – Corporations are people; money is speech? – as part of that ideologically driven shift. You can debate the jurisprudence or ideology behind these, but the results were a widespread decrease in the standard of living for many Americans. Political donations and lobbying that were once seen as corrupt graft became the norm. Thanks, SCOTUS!

Week-end Wrap – Political Economy – April 11, 2021

 Week-end Wrap – Political Economy – April 11, 2021

by Tony Wikrent

The Biden Transition and the Fight for Real Hope and Change This Time

Podcast: Are We Winning A New Political Era? (Exclusive for Subscribers) Discussion with Anand Giridharadas

David Sirota [Daily Poster April 5, 2021]

Grassroots pressure has forced Joe Biden to discard parts of his past record — and may finally be ending the Reagan Era.

Beginning at 21:20: 

Having a debate about new bills, not being consumed by deficit anxiety… is a profound cultural turning point [that] augers en entirely different era…. We have to be mindful of how cultures change [and] hat it looks like when what you’ve been fighting for begins to bloom….

Four Ways of Looking at the Radicalism of Joe Biden

Ezra Klein [New York Times, April 8, 2021, via The American Prospect 4-9-2021]

Most discussions of the renewed ambitions of the Democratic Party focus on ideological trends on the left. The real starting point, however, is the institutional collapse of the right…. The long campaign against the ideological compromise that was the Affordable Care Act is central here, but so too was then-Speaker John Boehner’s inability to sell his members on the budget bargain he’d negotiated with President Barack Obama, followed by his refusal to allow so much as a vote in the House on the 2013 immigration bill. And it’s impossible to overstate the damage that Mitch McConnell’s stonewalling of Merrick Garland, followed by his swift action to replace Justice Ruth Bader Ginsburg, did to the belief among Senate Democrats that McConnell was in any way, in any context, a good-faith actor. They gave up on him completely.
The result is that Obama, Biden, the key political strategists who advise Biden and almost the entire Democratic congressional caucus simply stopped believing Republicans would ever vote for major Democratic bills….
The backdrop for this administration is the failures of the past generation of economic advice. Fifteen years of financial crises, yawning inequality and repeated debt panics that never showed up in interest rates have taken the shine off economic expertise. But the core of this story is climate. “Many mainstream economists, even in the 1980s, recognized that the market wouldn’t cover everyone’s needs so you’d need some modest amount of public support to correct for that moderate market failure,” Felicia Wong, the president of the Roosevelt Institute, said. “But they never envisioned the climate crisis. This is not a failure of the market at the margins. This is the market incentivizing destruction.”
…. Even beyond climate, political risks weigh more heavily on the Biden administration than they did on past administrations. This is another lesson learned from the Obama years. The Obama team had real policy successes: They prevented another Great Depression, they re-regulated the financial sector, they expanded health insurance to more than 20 million people. But Democrats lost the House in 2010, effectively ending Obama’s legislative agenda, and then they lost the Senate in 2014, and then Donald Trump won the White House in 2016, and then Democrats lost the Supreme Court for a generation.…
Even when Biden was running as the moderate in the Democratic primary, his agenda had moved well to the left of anything he’d supported before. But then he did something unusual: Rather than swinging to the center in the general election, he went further left. And the same happened after winning the election. He’s moved away from work requirements and complex targeting in policy design. He’s emphasizing the irresponsibility of allowing social and economic problems to fester, as opposed to the irresponsibility of spending money on social and economic problems. His administration is defined by the fear that the government isn’t doing enough, not that it’s doing too much.

Civic republicanism - The Puritan Ethic and the American Revolution

Umm, no, I’m not talking about the damn Republican Party here: I think it’s more accurate to start labeling that cabal of cravenly corrupt clowns the "(not)Republican Party." To promote this relabeling, let us ask: What is a republic? And, what type of economy should a republic have? To that end, here is one suggested reading. 

The Puritan Ethic and the American Revolution 

Edmund S. Morgan, “The Puritan Ethic and the American Revolution,” The William and Mary Quarterly, Vol. 24, No. 1 (Jan., 1967), pp. 3-43

One note before the excerpt: the transition, under liberalism, from political economy to economics and politics as two separate bodies of intellectual pursuit involved removing the questions of morality (ethics) from economic considerations: only market forces were the acceptable means for judging economic outcomes.

“The Ethic conveyed the idea of each man’s and woman’s “calling” in life. “The emphasis of [work or labor] was on productivity for the benefit of society. In addition to working diligently at productive tasks, a man was supposed to be thrifty and frugal. It was good to produce but bad to consume any more than necessity required. A man was but a steward of the possessions he accumulated. If he indulged himself in luxurious living, he would have that much less with which to support church and society. If he needlessly consumed his substance, either from carelessness or from sensuality, he failed to honor the God who furnished him with it.”

….

“The calling of a ruler, as the colonists and their Puritan forebearers saw it, was like any other calling: it must serve the common good; it must be useful, productive; and it must be assiduously pursued.”

….

The Puritan Ethic whether enjoined by God, by history, or by philosophy, called for diligence in a productive calling, beneficial both to society and to the individual. It encouraged frugality and frowned on extravagance. It viewed the merchant with suspicion and speculation with horror. It distrusted prosperity and gathered strength from adversity…. The merchants actually had more than a short-range interest at stake in their reluctance to undertake nonimportation. The movement, as we have seen, was not simply a means of securing repeal of the taxes to which merchants along with other colonists were opposed. The movement was in fact anticommercial, a repudiation of the merchant’s calling. Merchants, it was said, encouraged men to go into debt. Merchants pandered to luxury. Since they made more on the sale of superfluous baubles than on necessities, they therefore pressed the sale of them to a weak and gullible public. What the advocates of nonimportation demanded was not merely an interruption of commerce but a permanent reduction, not to say elimination, of it. In its place they called for manufacturing, a palpably productive, useful calling.

Is there a path here by which the evangelical christianists might be saved by prompting them to engage in an opposition to consumer culture and in favor of a more responsible stewardship of resources? 

Week-end Wrap – Political Economy – April 4, 2021

Week-end Wrap – Political Economy – April 4, 2021

by Tony Wikrent

Strategic Political Economy

The Biden Stimulus: If You Think Inflation is the Problem, Just Wait

[YouTube, March 1, 2021]

Very informative part is Blyth’s reply beginning at 4:06.

x

x

So essentially what we're doing is a 2 trillion dollar experiment in different theories of inflation. Why does that matter? The progressive side of the Democrats think of the world in this way: the fundamental problem [is that] wages for 60% of Americans haven't moved almost since the 1970s.  And up to the 50th percentile of the income distribution Americans earn $20 an hour or less. You can't run this country with that degree of working poverty.  That's what's behind the anger; that’s what’s behind the populism. We need to spend a lot of money to make the economy run hot. We don't need to worry about inflation because interest rates are low for a lot of reasons and there's been no inflation for 40 years. We can boost wages—and if we do, we stabilize the situation, and a lot of the bad shit we've been dealing with for the past several years will not come back.

On the other hand you have the deficit hawks, the Republicans, the centrist economists saying, no no , you'll have terrible inflation. They're essentially saying things are okay, and the reason you have populism is: yeah, there’s been some people who have been left behind, but there's a lot of racism there, and this is a cultural struggle. Really the economy is doing fine and this is far too much stimulus.

Now what you see there are basically people using economic arguments to bolster their priors. So if you think populism and the ills of the US is about low wages, you will say inflation is not a problem. If you don't think that then you don't say that it is a problem. I doubt that it’s really about people worried about inflation. But I worry because I buy the argument that wages matter. And I worry that if we don't try this in this moment you're not going to get wage growth—and if you don't get consistent wage growth over the next couple years the Democrats are dead when it comes around to the mid terms.

The minimum wage would be $44 per hour if it had grown at the same rate as Wall Street bonuses 

[Business Insider, via Naked Capitalism 3-30-21]

Abolitionists, Political Economists, and Capitalism

Abolitionists, Political Economists, and Capitalism 

James L. Huston

Journal of the Early Republic , Autumn, 2000, Vol. 20, No. 3 (Autumn, 2000), pp. 487-521

(resides on JSTOR)

The relationship between abolitionism and capitalism in the United States remains for historians a contentious subject. At the moment four general interpretations dominate. Neomarxists argue that abolitionism was the key movement that legitimated market social relations in the United States, in particular the supremacy of wage labor as the institutional means of fixing the economic position of manual labor. In this interpretation, the abolitionists wittingly or not paved the road for the conquest of industrial capitalism and oppression of the working class. Thomas Haskell offers a second approach, ideologically opposite the neomarxists, that found human sensitivity to others originating in market transactions: because individuals in a commercial economy learned to obey their promises when written down in legal contracts, they learned to deal with others without resorting to physical coercion, thereby inculcating a humanitarian sensibility. A third rendition emphasizes republicanism in abolitionist thought. Abolitionists were heirs of the American Revolution and republican thinking; their attack on slavery was based on denial of selfishness and an advocacy of public virtue. From this perspective, the abolitionists were anticapitalists because they denied the role of self-interest that lay at the core of capitalist thought and behavior. Finally, the evangelical interpretation insists that the abolitionists were Christian zealots and moralists, opposed to capitalism either because morality superceded the economic process or because they would not place the worship of mammon above worship of the deity. [1]

The main contenders at the present seem to be the neomarxist and evangelical renditions. In 1998 the publication of two important works showed how vividly these two interpretations clashed. Amy Dru Stanley insisted that abolitionists trumpeted the key doctrines of liberal capitalist doctrine: self- ownership, voluntary economic arrangements, social relations governed by contract, and the correctness of wage labor. "Legitimating wage labor was a central part of the abolitionist project, but never its sum total," she argued; "for most abolitionists, the autonomy expressed in wage labor was but an offshoot of the underlying right of property in the self that constituted the taproot of contract freedom." At the same time, the late Paul Goodman portrayed abolitionism as a reaction against capitalism (or the market transformation). "Abolition," he wrote, "was a struggle to impose on social and economic relations the moral principles that were rooted in Christian teachings." [2] This article seeks to refine historical understanding of the ties between abolitionism to the emerging capitalism of the United States in the nineteenth century and generally sides with Goodman's perspective. Abolitionists possessed a biblical political economy, not a classical liberal one....

[1] For the emphasis upon abolitionists' role in legitimizing wage labor in capitalism, see John Ashworth, Slavery, Capitalism, and Politics in the Antebellum Republic: Vol. I: Commerce and Compromise, 1820-1850 (New York, 1995), 82-84,131-81; David Brion Davis, The Problem of Slavery in the Age of Revolution, 1770-1823 (Ithaca, 1975), 45-47; and Davis, "Reflections on Abolitionism and Ideological Hegemony," American Historical Review, 92 (Oct. 1987), 797-812. For Thomas Haskell, see Haskell, "Capitalism and the Origins of the Humanitarian Sensibility," parts 1 and 2, American Historical Review, 90 (Apr. 1985) 339-61 and (June 1985), 547-66. For a treatment of abolitionism utilizing the republican synthesis, see Daniel J. Mclnerney, The Fortunate Heirs of Freedom: Abolition and Republican Thought (Lincoln, 1994). On the abolitionists and religion, consult John R. McKivigan, The War Against Proslavery Religion: Abolitionism and the Northern Churches, 1830-1865 (Ithaca, 1984); also, James Brewer Stewart, Holy Warriors: The Abolitionists and American Slavery (New York, 1976; 2d ed., 1996). A recent synthesis of work on reformers has reduced the stress on modernization that filled earlier works: Steven Mintz, Moralists and Modernizers: America's Pre-Civil War Reformers (Baltimore, 1995), xiv-xx, 9-10. 

[2] Amy Dru Stanley, From Bondage to Contract: Wage Labor, Marriage, and the Market in the Age of Slave Emancipation (New York, 1998), 20; see also 105, 160; Paul Goodman, Of One Blood: Abolitionism and the Origins of Racial Equality (Berkeley, 1998), xiv, 140.

Read entire article on JSTOR (Requires a subscription, which your local library might have. Most college and university libraries have subscriptions--you can go there and download it through their wireless internet connection.)