Howard Richards
Professor, Peace and Global Justice Studies, Earlham College
Understanding the Global Economy
The citizen who seeks to understand the global economy is faced with a bewildering variety of scientific theories which purport to explain it. The phenomena to be explained are often painful: for example, the diminishing number of union jobs with benefits in New York, apparently due to competition with low-wage labor in places like Indonesia and Mexico, the loss of high technology jobs in Massachusetts due to high technology imports from Japan, the stagnation of economies like Haiti and the Dominican Republic with rates of unemployment near 50%. The effects on global politics are profound: they include the rise of the power of China and Southeast Asia, and the corresponding decline of the power of the West. Indirect effects to which global trading patterns are thought to contribute as causal factors are even more profound: the burning of the jungles of Brazil; the breakdown of the social order in Somalia, along the coast of West Africa, and in other regions; unstable families, violence, drugs, and mental depression; and the worldwide penetration of American popular culture, accompanied by the worldwide revival of religious fundamentalism as traditional cultures fight back against materialistic individualism.
Today people throughout the world are aware that they depend for their daily bread on something called "the economy," and they are aware that they are vulnerable because "the economy" is vulnerable. People are aware that their local economies are somehow inserted in international trading patterns, and that what happens to them personally in their daily lives is affected by distant commerce. I would argue, however, that in spite of such widespread and growing awareness, the importance of the global market for contemporary society is often underestimated.
This underestimation happens for a conceptual reason.
Statistics show that about 8% of goods consumed in the United States are imported. But statistics of this kind, for the U.S. and for other nations, do not show the full effect of living in an international market. A market is a place where goods are displayed and offered for sale. The buyers and sellers in a market decide what sales to transact (and at what prices) by deliberating in the light of the alternatives that the market offers to them. Hence the full effect of being in a large marketplace (the whole world) is not evident from physical facts such as goods crossing docks in cargo containers. The full effect includes the consequences of prices being influenced by the potential availability of alternatives not (so far) in fact chosen. Ferdinand de Saussure, the founder of modern linguistics, relied on the conceptual point just made when he explained synchronic meaning by analogy with the relative values of goods for sale in a market. The values of words, like the values of coins, depend on what they can be exchanged for and compared to.
In the light of the world's unrealized possibilities for trade, it can be seen that a person can live in the global economy without actually seeing any foreigners or foreign goods. One might, for example, spend one's entire working years earning low wages at a small factory in New Hampshire without ever leaving New Hampshire, and without ever seeing a foreign factory worker; and yet one of the causal factors playing a part in determining the amount of one's take home pay might be the mere existence of millions of able workers elsewhere willing to do the same work for even lower wages.
Besides emphasizing the pervasive influence of the global marketplace in contemporary human life, the possibility of thinking of a language as a market implies a corollary --that a market can be thought of as a language. This suggests that the scientific explanation of economic phenomena, including international trade, might proceed by considering a market as a system of meanings. For the moment, however, let us leave this suggestion in abeyance, and proceed to consider some of the scientific explanations of global economic phenomena which students of international trade have heretofore offered.
Seven, somewhat overlapping, types of theories of international trade will be considered here. They are:
1. Neoclassical trade theory, that is to say, the theory of comparative advantage.
2. The globalization of production, and the new international division of labor.
3. Theories that regard choices of what kind of technology to use as the creators of the global economy.
4. Kaldor's account of "circular and cumulative causation" as an explanatory principle for the strategic trade practices of firms and nations, most notably Japan, and his neo-Keynesian explanations and prescriptions.
5. Theories of the longue duree, or historical discontinuity, as explanations of the genesis and nature of the global economy.
6. Marxist theories and the feminist theory of Maria Mies.
7. Post-structuralist theories.
Roughly speaking, what makes the theories to be reviewed scientific are their efforts to provide testable and demonstrable explanations of phenomena, which relate causes to effects. Once causes and effects are linked by a true explanation, the way is open to make policy recommendations which promise to lead to achieving desired effects, through taking actions that will cause them. (I preface this paragraph with the caveat "roughly speaking" because the concept "scientific" is an essentially contested concept if ever there was one, and every one of the concepts in terms of which "scientific" is explicated is itself also essentially contested.)
Neoclassical trade theory is an application of neoclassical economics to the field of international trade. It argues that the optimal economic strategy for a nation is to exploit its comparative advantages as efficiently as possible. The most effective way to do this is through the free operation of factor and product markets and open competition among firms. Extended to the global economy, neoclassical theory implies that free mobility of products and factors of production across national boundaries will maximize efficiency. All economic actors will specialize in what they do best, both within nations and between nations. All resources will be allocated to their highest rate of return. As a result, resources will be optimally allocated. Once the most efficient or optimal allocation of resources is achieved, no one can be made better off through further exchange without making someone else worse off.
Productive efficiency is also achieved by the exploitation of comparative advantages as firms are forced by competition in the market to use the most efficient production techniques available. Since the wider the market, the greater are the possibilities for specialization, it follows that the most efficient market is the global market; an intergalactic market would be even more efficient if beings to trade with were to be discovered in other galaxies, or if earthlings were to colonize planets of other suns in outer space.
Comparative advantage is conferred by a nation's natural endowment of factors of production. The nation that has abundant labor, relative to capital, will specialize in the production of labor-intensive goods. Nations whose high savings rates make capital abundant relative to labor will specialize in the production of capital-intensive goods. Countries endowed with natural resources will produce resource-intensive goods.
The classical articulation of the theory of comparative advantage was written by David Ricardo in 1817. Ricardo used the concept of comparative advantage to explain why Portugal exported wine, while England exported cloth. "To produce the wine in Portugal might require only the labor of 80 men for one year, and to produce the cloth in the same country might require the labor of 90 men for the same time. It would therefore be advantageous for her to export wine in exchange for cloth."
The explananda, those things which are to be explained, are the facts of trade. Central among those facts are facts about which nations export which products.
Although which nations export which products may be taken as the clearest and simplest type of fact to be explained, another type of fact is often commingled with it: namely, facts about who succeeds in achieving export-led economic growth. This latter type of fact can be broken down by regions, by nations, by industries, or by firms. The facts to be explained can be, for example, why growth in Europe is slow in the 1990s; why Japanese economic growth was fast in the 1970s; why Germany is successful in chemical exports; or why Merck has grown to be a leading pharmaceutical firm. Neoclassical theory gives a name to the explanans, that which explains: "comparative advantage." Portugal exports wine because it has a comparative advantage in wine. England (in the early 19th century) exported cloth because it had a comparative advantage in cloth. Europe's exports grow slowly because it lacks comparative advantages; while Japan had a comparative advantage in many product markets in the 1970s, Germany still has a comparative advantage in chemicals, and Merck has a comparative advantage in several pharmaceutical lines.
Like several other well-known theories, the theory of comparative advantage is in danger of becoming true by definition, i.e. a tautology, a verbal formula which is compatible with any an all facts which have been and may yet be discovered --and which therefore tells us nothing about the real world. The risk of emptiness because of being a name for whatever happens is similar to the risk run by "positive reinforcement." If people do whatever they do because they find it positively reinforcing, then positive reinforcement motivates even the masochist; it just happens that the masochist is positively reinforced by pain. Comparative advantage, like positive reinforcement, runs the risk of being compatible with any evidence, of being true whatever happens.
In David Ricardo's original examples, comparative advantage was saved from being true by definition because Ricardo referred to certain physical facts: namely, the soil and climate of Portugal. Portugal exports wine because its soil and climate are suited to growing the kinds of grapes that make good wine. These facts could be further refined by specifying the molecular and crystalline structures characteristic of Portuguese soil, the temperatures at which desirable chemical reactions inside growing grape cells most rapidly occur....etc. The phrase "comparative advantage" could then be cashed out in Ricardo's original context as a name for certain physical facts that might and might not be true at any given time and place --which would make their being true in the early 19th century in Portugal a significant fact.
Facts about the physical characteristics of "factors of production" belonging to nations can be regarded as the home turf of the concept of comparative advantage. The concept can then be construed narrowly or broadly depending on how few or how many other sorts of reasons why trade flows as it does are brought under its umbrella. One can explain which nations export which products by calling it "comparative advantage" when labor costs are cheaper, when technology is more advanced, when environmental regulations are less expensive to comply with, when the government subsidizes exports, when a firm or a nation has a reputation for reliable and high quality products, when the seller has a superior marketing organization, when the selling firm is able to export because it bribes (or intimidates) officials in the purchasing nation, when the buying firm is a foreign subsidiary wholly owned by the selling firm .... etc. In the limiting case, one can admit that one has no clue why nation X exports product Y successfully, but nonetheless assert that the explanation of its success is that X has a comparative advantage, because whatever the reason for the phenomenon to be explained may be, the name of the reason is "comparative advantage."
But more is required for a scientific explanation, a causal explanation, than an explanandum to be explained and an explanans proposed to explain it. Disregarding for now some weaker senses of the term "cause," let us take the term in two of its standard strong senses and postulate that to say that A causes B is to say:
(1) The existence of A is a sufficient condition for the existence of B; thus if A exists B must exist.
And,
(2) A produces B.
When we put "comparative advantage" in the place of A, the explanans, that which is supposed to do the explaining, and "the facts of trade" in place of B, the explanandum, that which is supposed to be explained, we get:
1. The existence of comparative advantage is a sufficient condition for the existence of the facts of trade, and
2. Comparative advantage produces the facts of trade.
Now we have a choice, already suggested by the discussion above, concerning what kind of meaning to give to "comparative advantage."
[1] We can think of "comparative advantage" as a concept, an economic theory, or
[2] We can think of it as a name for the facts, in the clearest case physical facts, said to explain the facts of trade (whatever those facts may be in any given case.)
If we choose [1], then the concept/theory in question is pretty clearly open to the objection that it is a theory which offers a more-or-less plausible story purporting to explain whatever facts are observed. Once the facts to be explained are known, it is possible to spin any number of theories from which they can be deduced or predicted. For example, if we already know that Detroit has become a rustbelt city, characterized by poverty, crime, and vice, then anybody with a little imagination can produce a theory about the comparative advantage of Japanese automakers, or a theory about the breakdown of American family values, or any of many other theories, for which the observed facts can be offered as confirmation --since the theory will predict the facts observed. The very generality of a concept/theory like "comparative advantage" makes it vulnerable to the charge that it can be easily manipulated to make it true whatever the facts may be.
If we choose [2] we give "comparative advantage" some specific content. But then it becomes clear that the facts it names are not complete explanations. Even in the simplest case, Ricardo's Portuguese wine, it is clear that in addition to the soil and climate of Portugal, many other things must be the case before barrels of wine actually move over the docks of Lisbon into the holds of ships bound for foreign climes. The "comparative advantage," thus specified is not a sufficient condition for wine export; you could not produce wine export by relying only on the factors of production Ricardo cites as giving Portugal a comparative advantage.
(The converse point is also valid. That is to say, just as the existence of a natural comparative advantage is not sufficient to cause international trade, conversely the existence of international trade does not necessarily reflect a natural comparative advantage. Here is one example among very many that might be cited: "The large quantity of grain that Poland exports every year, a dictionary of commerce explains (1797) would give the impression that this country is one of the most fertile in Europe. But those who know it and its inhabitants will judge otherwise, because even if there are fertile and well-cultivated regions there, elsewhere there are more fertile regions which are even better cultivated and which still do not export grain. The truth is that the nobles are the only landowners there, and the peasants are slaves, and the former, in order to maintain themselves, appropriate the toil and products of the latter, who form at least seven eighths of the population and are reduced to eating barley and oats. Whereas the other peoples of Europe consume the major part of their best grains, the Poles retain only a small portion of their wheat and rye so that one might think they only harvest it for foreign lands."
Thus, regarded as an explanation of the observed facts of international trade, "comparative advantage" is either too broad, or too narrow, or somewhere in between. When it is too broad it is a superfluous comment on whatever happens; when it is too narrow it is not a causal explanation. When it is somewhere in between it lacks substance to the extent that it is a broad theoretical construct, and it lacks explanatory power to the extent that it is specific.
Neoclassical prescriptions for international trade appeal to at least three types of ethical principles:
1. The natural law principle that what is natural is good.
2. Roughly speaking, the utilitarian principle that whatever brings the greatest happiness to the greatest number is right.
3. The deontic (Kantian) principle that respect for liberty is required by the moral imperative to respect persons.
(One might object that here I am reading history backwards. One might say that historically capitalism developed first, and then it produced ideologies to justify itself, including neoclassical economics, the relevant versions of natural law theory, utilitarianism and its successors, and Kantian ethics. I will for the moment ignore this objection, and treat arguments that advocate following the principle of comparative advantage in international trade as grounded in ethical principles, rather than treating modern ethical principles as themselves part and parcel of the ideology of our commercial civilization.)
The natural is good.
Above it was suggested that physical facts like soil and climate are the home turf of comparative advantage regarded as an explanatory principle. Then I suggested a list of other factors explaining trade flows that might or might not be brought under its umbrella. One of them was that nation X exports commodity Y because the government of X subsidizes the export of Y. That suggestion should have stood out as one of the odd items on the list.
What is odd about counting export subsidies as a comparative advantage is that it is often said that subsidies interfere with the natural play of comparative advantages. Government intervention in the market is said to distort the market, and to create artificial prices. Although it is true that the concept "comparative advantage" can be broadened to include a competitive advantage created by a government subsidy, it is also true, and more common, to narrow the concept in order to say that the subsidy violates the natural principles of trade. Such an allusion to nature (sometimes explicit, sometimes implicit) illustrates the general tendency of neoclassical economics to make an invidious distinction between certain practices and institutions viewed as natural and others viewed as unnatural. Those viewed as natural (private property, the market, freedom of contract, trading shares in stock markets, taking security for loans....) are endowed with a positive moral halo. Practices and institutions viewed as unnatural (social ownership of the means of production, tariffs, subsidies, labor unions, rent control, cancellation of debt.... ) are stigmatized with a negative moral shadow.
It should be mentioned, however, that neo-classical policy prescriptions have often drawn strength, not from the view that what is natural is good, but from the rather different view that human nature is bad. It is argued that the decisions made by the market are better than those made by governments because governments are made up of people. Competitive markets are not made up of people in quite the same way that governments are. Competitive markets are impersonal. Markets impose a discipline that is said to make humans behave, although not perfectly, better than they would otherwise behave; and, on the whole, markets manage to harness selfishness and make it work for human welfare. Given that human nature is bad, any deliberate policies designed to improve society by interfering with market mechanisms will necessarily be flawed because of power politics, corruption, dishonesty, influence-peddling, prejudice, and so on. Similarly, any appeals to higher motives will be less effective than the appeal to lower motives that market competition makes.
Utilitarianism and its successors.
Neoclassical economics revises and restates the propositions of classical economics which were articulated in late 18th and early 19th century England and France. In those optimistic days, leading thinkers expected freedom and the advancement of science to lead to happiness for all humanity. It was the task of the science of political economy to show what a free economy would lead to, i.e. to happiness. It was the task of the philosophy of utilitarianism to justify the expected outcome of free markets and free trade, by showing that happiness was the goal for humans to pursue.
One of those optimistic thinkers, Jeremy Bentham, defined happiness as pleasure. Bentham advocated evaluating legislation (in order to decide whether to enact it or to repeal it) by measuring how much pleasure it produced. Jean-Jacques Rousseau suggested a way to measure happiness even cruder than Bentham's schemes for measuring the quantity of pleasure produced by any given law. Rousseau suggested measuring happiness by counting the population. What he had in mind was that under unhappy conditions of extreme misery most infants do not survive. Whether children survive, and hence whether the population grows, was therefore taken by Rousseau to be a measure of how much happiness there is.
Mainstream economics was at first allied with utilitarianism in maintaining that the specialization of labor guided by the law of supply and demand, and its international corollary, free trade guided by the principle of comparative advantage, would lead to the greatest happiness of the greatest number. John Stuart Mill refined the concept of happiness so that educated tastes and perhaps even spiritual regeneration would count among the desirable outcomes the wonderful economic quasi-machine was expected to produce.
However, mainstream economics later backed away from the happiness principle. It became clear in many ways that free markets sometimes did and sometimes did not lead to happiness. This became clear, for example, in the proposition of welfare economics that an extra dollar for a poor person buys more happiness than the same extra dollar would buy for a rich person --which implies that sharing the wealth, rather than free markets, would maximize happiness. Mainstream academics discovered that happiness was a vague and unscientific concept; economics could and should be rewritten without it. Instead of taking happiness as the aim, one could rewrite, for example, the law of supply and demand, starting with schedules (i.e. lists) of people's "revealed preferences." Preferences were simply people's choices. They became revealed whenever people walked into markets and took one product off the shelf instead of another --with an economist standing by to observe the phenomena of choice and to count them.
The move from happiness to preferences made economics more rigorous, and at the same time insulated it from criticism. Having given up utilitarianism's happiness principle, mainstream economics retained utilitarianism's premise that an optimum is always a maximum or a minimum. It continued to borrow from physics and pure mathematics tools for calculating maxima and minima --in general, the optimum prescribed was to maximize preferred choices (benefits) and to minimize costs. That the principle of comparative advantage ought to be followed became a mathematically precise tautology. A society in which everybody reveals all their preferences will be a society in which there is a maximum of preferences revealed. Similarly, whenever there is international trade, whoever traded revealed that they preferred what they got to what they gave. The conclusion "the more trade the better" does not require any premises once the definition of "better" has become "preferred," because "trade" is just a name for bargains that people, firms, or nations choose to make.
In the practice of economic research, the magnitude of the preferences revealed is measured by how much money changes hands, and it follows from A = A that the more people buy the more people buy. Measures of "welfare" such as gross domestic product per capita are established for the most part by counting how many dollars worth of goods and services are produced, which depends, in turn, on how much people are willing to pay for what they acquire. Thus ensued an oft-noted paradox. Where traditional cultures are being monetized, people are becoming pauperized by being separated from their means of production and dependent on unstable opportunities for wage labor for their subsistence. At the same time they are becoming normless (suffering from what Durkheim called "anomie") because of the dissolution of the traditional social structures. For these two reasons among others people are becoming more miserable. Nevertheless the standard statistical tools of mainstream economics (for example, per capita income measured in dollars per year) report that welfare is increasing.
Critics of neoclassical economics have called for measures of economic performance with a basis in physical reality. Hazel Henderson, for example, favors measuring such things as longevity, air quality, nutritional adequacy, water purity, and sustainability. In a sense she proposes to restore the division of tasks between the science of political economy and the utilitarian philosophers. The successors to the political economists are the Hendersonian social scientists, who study what combinations of markets and planning, what distributions and forms of property, what institutions for organizing work, what processes of international exchange.... lead to what outcomes. The successors to the utilitarian philosophers are the Hendersonian evaluators and social critics, who provide the rationales for the measurements used to assess the outcomes. In such a framework, questions about the merits of following the principle of comparative advantage, however broadly or narrowly the concept might be construed, would become once more empirical questions, to which it would be relevant to offer physical and psychological facts as evidence in order to answer them.
Deontic ethics.
The advocates of free trade have backed away from trying to prove that when each nation specializes where it has comparative advantages, the result is to make people happier or better.
They have not backed away from the claim that consumers are better off when they have more access to inexpensive foreign goods, but they have backed off from claiming that this makes consumers happy. Now it is enough to say that they get what they want. The moral case in favor of free trade thus relies less on a theory about what is good for people. It relies more on an appeal to freedom per se, regardless of its consequences.
The appeal to the freedom of the consumer to choose what to buy, and therefore the case for free international trade guided by comparative advantage, finds philosophical support in those theories of ethics, like Kant's, which make right and wrong independent of the consequences or results of actions. Such theories typically enshrine freedom as an overriding value that ought to be respected, come what may.
Similarly, the same overriding value is applied to the distribution of wealth, in the principle known as "Pareto optimality." This principle holds that the distribution of goods in society is optimal when all voluntary trades have been made and there are no longer any two parties willing to exchange what one has for what the other has (even if the rich are still rich and the poor still poor); the possibility that the distribution of the world's goods could be further improved by compelling someone to give something up involuntarily is ruled out as ethically unacceptable.
The theory of comparative advantage can be regarded as the application to international trade of neoclassical economics. Neoclassical economics, in turn, can be regarded as the application to a particular social science of the metaphysics of economic society. The general presuppositions of economic society form the background from which implicit and explicit premises of neoclassical economics are derived.
My choice of the term "metaphysics," instead of the more familiar terms "ideology" or "worldview" has several motives. One of them is optimism. "Metaphysics" is the name of a traditional deliberate activity of philosophers, which has contributed to the construction of western ideas generally and of economic ideas in particular. I want to emphasize the extent to which social reality is deliberately discursively constructed, because I want to encourage efforts to reconstruct it. I share the romantic optimism of the early nineteenth century because I expect the right combination of ethical philosophy and advancing social science to lead to happiness for all humanity. Calling the presuppositions of neoclassical economics "metaphysical," is, among other things, a way of saying that economics can be improved, and even superseded, by deliberately constructing a better social reality.
What I prefer to call "the metaphysics of economic society" is what Louis Dumont calls "economic ideology." Dumont compares the ideology (the metaphysics) of modern economic civilization to the ideologies of other great human civilizations. He sees similarities between the central concept of his own work, "economic ideology," and a number of well-known concepts and theories in social science: "We verge here on the forceful demonstration by Karl Polanyi in The Great Transformation of how exceptional the modern era is in the history of mankind with regard to the segregation of the economic aspects and the sacrosanct role of the market and its concomitants in the "liberalism" that dominated the nineteenth century and the opening decades of the twentieth. I am only proposing a somewhat wider view, while at the same time building on an old sociological tradition. The holism/individualism contrast as it has developed from my study without any conscious imitation is in line with Maine's Status and Contract, and with Tonnies Gemeinschaft and Gesellschaft."
That neoclassical economic theory begins with and presupposes "the market and its concomitants," viz. private property, rational economic actors, competition ... is old news. What may be somewhat novel here is relating the institutional structure of modern society, and its ideological reflection in economic theory, to the concept of scientific explanation; and to ethics; and to a tradition called "metaphysics."
What can be called a "metaphysical shift" can challenge some ways of thinking of scientific explanation, and promote other ways. In his seminal essay "Interpretation and the Sciences of Man," Charles Taylor proposes what I would call a "metaphysical shift." He argues that social science is now in a position to improve the quality of its explanations by taking a more perceptive view of the regularities observed in social behavior. After Wittgenstein, social science can improve its accounts of social phenomena by acknowledging and exploiting the relationship of human action to language depicted (shown) by Wittgenstein in his later works. Wittgenstein thought of human action as governed by the constitutive rules of "language games" (Sprachspielen) in which discourse and practice are inextricably connected. A great deal of social science, in contrast, and in particular neoclassical economics, has taken the machine rather than the language game as its implicit and sometimes explicit metaphysic. Thus much of the vocabulary of economics is borrowed from the science of mechanics, in such terms as "equilibrium," "stability," "elasticity," "expansion," "inflation," "contraction," "flow," "force," "pressure," "resistance," "reaction," "movement," and "friction." Human behavior is simplified in order to analyze it in terms of mechanical metaphors.
In an effort to dissolve and dispel metaphysics in general, and in particular mechanistic metaphysics (the kind by which he was himself most tempted), Wittgenstein wrote that to think of reality in terms of machines presupposes --what is frequently not the case- - that it is made of parts which function consistently in standard ways. Wittgenstein wrote: "If we know the machine, it seems that everything it will do, namely the movements it will make, are already exactly determined. We speak as if the parts could only move in a certain way, as if they could not do anything else. Why is it that we forget the possibility that they might bend, break, melt, etc.?"
Wittgenstein's machine-with-unstable-parts that fails to produce the usual product (output) from the usual "factors" (inputs) sheds light on the failure of mainstream neoclassical economic theories to provide accurate predictions of economic behavior when the "parts" do not function as expected. Samuel Huntington provides an example: "The easy assumption by Western economists in the 1980s that devaluing the dollar would reduce the Japanese trade surplus proved false.... As the yen appreciated to less than 100 yen to the dollar, the Japanese trade surplus remained high and even increased. The Japanese were thus able to sustain both a strong currency and a trade surplus. Western economic thinking tends to posit a negative trade off between unemployment and inflation, with an unemployment rate significantly less than 5 percent thought to trigger inflationary pressures. Yet for years Japan had unemployment averaging less than 3 percent and inflation averaging 1.5 percent.... Japan's uniquely low level of manufactured imports, one careful study concluded, `cannot be explained through standard economic factors. The Japanese economy does not follow Western logic.'"
The unstable parts that falsify explanations and predictions offered by social theories rooted in the image of the machine are human beings, members of that species whose adaptation to its ecological niche is culture. Since economic culture is only one form of culture, the kind of culture whose metaphysics is that of economic society, social change projects conceived and planned as exercises in economics do not fit non-modern cultures. Thus Larry Naylor reports on Operasi Koteka, a major development project undertaken in Indonesia: "For example, Operasi Koteka provided for the introduction of new agricultural practices, cash crops, and the wearing of clothing. Without the development of a market-exchange system, wage-labor jobs, and knowledge of money, these changes had little chance of being implemented. The requirement that the local people wear new styles of clothing was clearly out of step with economic reality. It simply did not fit with local conditions, let alone traditional culture. Clothing had to be purchased and cared for, both things requiring money. Although the concept of money had been brought by the Dutch, Indonesian money was a recent introduction into the lives of the Dani. As their traditional culture had neither markets nor money, the Dani had little understanding of money, and, just as important, they had little of it, and even fewer opportunities to acquire it."
I noted above in connection with Ricardo's classic example of comparative advantage, the export of Portuguese wine, that comparative advantage (when it is not a tautology) is an incomplete causal explanation. The sun shone on Portugal, and microbes beneficial for viticulture thrived in its soil, for many years before a single keg of "porter" crossed a Lisbon dock bound for England. Metaphysics (institutional structures reflected and articulated as logical ideology) supplies some of the additional conditions needed to complete the causal explanation of the wine trade. There had to be a market, money, rational economic actors, accumulated capital devoted to business for profit, a government disposed to encourage and protect trade .... It follows that metaphysics have causal powers. Where a different metaphysic prevails, different human behavior will result.
The term "metaphysics" has traditionally designated a system of fundamental concepts which frames an outlook and provides basic premises for both epistemology and ethics. In such a framework epistemology and ethics support each other. I have argued elsewhere that such was the character and social function of the first book to bear the name, the Metaphysics of Aristotle. That the market and its concomitants provide a common root and mutual support for a certain version of scientific knowledge and for a certain version of ethics is another reason for thinking of the theory of comparative advantage as embedded in a metaphysic. Thus, when the market appears to produce a result that is ethically unacceptable --for example, when, as Frances Moore Lapp?¹ puts it, the peasants of El Salvador who have no money are left voiceless at the dinner table-- neoclassical science rescues the market from ethical indictment. The answer to the indictment is: that's just the way it is; there is no effective demand for rice and beans in rural El Salvador; rural El Salvador has a comparative advantage in the production of cotton to use in manufacturing clothing for export; so, naturally, the land is used to produce textiles for export while the people who live there go hungry. The scientific theory of the market is used here to explain how the world works, whether we like it or not.
On the other hand, there are occasions when it is ethics that rescues science, by permitting the desired conclusion to be drawn, by denying that the facts as they are must simply be accepted. For example, when Japan declines to import American TV sets, the hard facts flicker and grow dim in the shadows of terms that rely for their connotations on ethical criteria: the Japanese market for television sets is distorted, its prices are artificial, the government interferes with its free operation --here the "market" reappears again, but this time not as brute inescapable fact, but rather as a normative ideal which has been violated. The market and its concomitants thus bridge the is/ought divide in a most remarkable way --a way that provides conceptual foundations both for statements of fact and for value judgments. This is another reason for calling neoclassical economics a metaphysic.
A logical extension, but with different consequences, of the theory of comparative advantage, is found in a group of recent theorists who since the late 1970s have developed a focus on the "new international division of labor" and "the globalization of production." According to these theorists, conditions in the late 20th century have made it possible to realize the rationalization of production on a global scale. Firms can now transfer advanced technology to countries with low labor costs, and simultaneously exploit the advantages of cheap capital in capital-rich countries. As in the theory of comparative advantage, relative production costs determine global patterns of trade.
As a consequence of enhanced global mobility, a new capitalist world economy has emerged. Its main feature is a massive migration of capital from the industrialized countries to low-cost production sites in the third world. Because of capital mobility, capital- rich countries have no economic rationale for producing where the capital is; it is more logical to produce where the well- disciplined, inexpensive labor is.
Central among the explananda which globalization of production theorists seek to explain are a set of interrelated phenomena which can be summarized as: (1) the "deindustrialization" of traditional first world manufacturing areas, due to plant closings and other forms of capital disinvestment; and (2) the shifting of production activity overseas, often to third world countries with low labor costs; while (3) continuing to market the products in the first world, and indeed (4) expanding marketing to create a truly global market, corresponding to a (5) "global factory."
In a study titled Capital and Communities: the causes and consequences of private disinvestment two leading exponents of this type of theory, Barry Bluestone and Bennett Harrison, outline an explanandum which "makes sense" of these phenomena by explaining why they happen.
Under capitalism, the means of production are for the most part owned by private owners. These means of production, machinery and equipment of all kinds, are needed in order for society to be able to produce more than the simplest and most minimal subsistence for its members. To some extent the ability to produce depends on the skills of employees; to some extent it depends on the capital, i.e. the tools and the money used to purchase the tools, that the employees work with. When the products are sold, the revenue is divided between people who earn wages and salaries ("workers"), and the owners. The owners have, Bluestone and Harrison say, "every incentive" to keep employee compensation down.
Their point survives, I believe, the objection that it is often possible to make high profits by paying high wages, because high wages attract highly skilled employees who are loyal and enthusiastic. Such exceptions prove the rule because if it were possible to buy the same skill, the same loyalty, and the same enthusiasm, while paying lower wages, then profits would be even higher. Bluestone and Harrison write, "...employers must keep their costs of production down, which requires them to coax as much productivity out of their employees as available technological conditions will allow."
Managers, representing the owners, use a variety of means to hold down labor costs in their firms. At the same time, they are in constant competition with other firms.
Workers, on the other hand, use a variety of means to bring wages up. Notable among these means in Europe and America in recent decades have been actions taken through labor unions and through the use of the ballot box. Through the ballot box workers are able to force owners to pay a portion of revenue as taxes to support social programs. Besides higher wages and overtime pay, labor victories have included unemployment insurance benefits, pension rights, public assistance, disability insurance, minimum wage laws, health and safety regulations, seniority rights, and some degree of job security. Thus a "social wage" and "fringe benefits" augment wages narrowly so-called.
In their never-ending battle to counter the efforts of workers to bring wages up, the owners are driven by necessity as well as by ambition. They are forced by circumstances, i.e. by the basic structure of the economic system, to keep the costs of production down. Markets have their ups and downs; technology changes and it is expensive to keep up with it; aggressive competitors are tireless in their efforts to sell a better product at a lower price. Every crisis drives many employers out of business, especially the smaller and weaker ones. There is intense, and now global, competition among the survivors.
The never-ending battle to lower production costs is a battle owners must wage in order to survive; those who win expand commercial empires and amass wealth; those who lose go out of business. Against the heavy artillery of the workers, their organizing drives, their strikes, and their right to vote en masse for pro-labor candidates, the owners have even heavier artillery. "...the employers' legal right to move their property from one place to another, to open and close stores, factories and offices, and to seek out friendlier governments and cheaper labor, becomes a tool to be used against both workers and other competitors. Trade unionists are especially concerned with how firms use capital mobility to keep labor off guard, to play off workers in one region against those in another, and how the threat of capital relocation is used to weaken labor's ability to resist corporate attacks on the social wage itself."
Thus Bluestone and Harrison outline an explanandum (i.e. an entity that does the explaining). The explanandum produces, and therefore explains, the phenomena observed. The explanandum is a socially constructed quasi-mechanism. The input going into the quasi-mechanism (opportunity for profit) leads to the production of its output (relocation to low wage production sites). The causal mechanism producing the result is the "market force" driving firms to locate production at low-cost sites; the enabling condition is property ownership, which gives the firms the legal right to move.
There is nothing new in Bluestone and Harrison's account. Its main elements were stated by Ricardo in 1817, and before him by Adam Smith in 1776. Bluestone and Harrison simply extend the classical logic of comparative advantage to the contemporary international division of labor.
Ever since economics began, almost three centuries ago, its quasi-mechanisms have been compared to the mechanisms-properly-so- called of physics. Galileo's law of freely falling bodies (s = 1/2 g t2) can be compared to Bluestone and Harrison's explanation of industry relocation. Galileo's driving force is gravity. (Compare to economics' market forces.) The enabling condition is the free space the body falls in. (Compare to private property.) The values of just a few variables permit Galileo to calculate the location of a body freely falling in space at any given time. In Bluestone and Harrison's quasi-mechanism, the values of more variables enter into the calculation, but the result is similar: knowledge of where industries will move from, and where they will move to.
Perhaps most important, the economic quasi-mechanism and the Galilean mechanism are alike in that they are scientifically valid even though from a superficial viewpoint they sometimes contradict experience. If you hold a feather up in the air and let it fall, its trajectory, seen from a superficial viewpoint, will not conform to Galileo's law. Nevertheless, Galileo's law is valid. When you correct for friction, for wind, for air pressure .... you will, in the end, explain the trajectory of the feather. And without Galileo's law you will not be able to explain its trajectory.
Similarly, Ricardo, in 1817, already realized that classical economics' description of market forces implies that capital will move wherever higher profits are to be made. Ricardo already recognized that greater profits can be achieved by lowering production costs, notably (exclusively, he thought) by lowering wages. Aware that the economic mechanisms he was analyzing implied that capital would pursue profit around the globe, he asked himself why the phenomena predicted by the theory did not (in his day) occur more often. He answered: "Experience, however, shows that the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination which every man has to quit the country of his birth and connections, and intrust himself, with all his habits fixed, to a strange government and new laws, check the emigration of capital. These feelings, which I should be sorry to see weakened, induce most men of property to be satisfied with a low rate of profits in their own country, rather than seek a more advantageous employment of their wealth in foreign nations."
The explanandum for Ricardo, for Bluestone and Harrison, and for Galileo, threatens to prove too much. It threatens to stultify itself by postulating a cause with simple and uniform results, contradicting the complexity of the phenomena actually observed. To be true to reality, the causal quasi-mechanisms that have been discovered must be supplemented by accounts of the various kinds of "friction" that modify the effects that the causes produce.
For Ricardo, the major source of "friction" that impedes the globalization of production was the capitalist's fear for his security and that of his property. Bluestone and Harrison agree, and suggest a corollary: when the world becomes better policed, so that investors everywhere can feel assured that their property will not be stolen anywhere, the inherent tendency of market forces to bring about the globalization of production will come to the fore and assert itself. Describing the first great wave of globalization, the expansion of American industry overseas after World War II, Bluestone and Harrison recount the political and military policies of the era that contributed to making the world safe for American capital, and, in the end, for anybody's capital. In retrospect the many third world civil wars of the era, in which right-wing regular armies put down left-wing guerrillas, can be viewed as pacification paving the way for investment. The guerrillas, even when they had Soviet support, tended to promote traditional and ethnic values; it was the regular army, with American and sometimes European support, that was revolutionary. The army was preparing the way for the massive social change which in fact came to pass -- the McDonaldization of the world.
About this era Bluestone and Harrison write: "U.S. military policy and American foreign aid were vitally important in extending the global reach of American industry. Whatever their manifest military purposes, American troops, military advisors, offshore cruising naval vessels, strategic long-range bombers, and, eventually, long-range ballistic missiles, all helped at least indirectly to protect and extend U.S. business abroad. During these years, the U.S. government made commitments to a whole network of antidemocratic dictatorships, whose leaders seemed dedicated, along with keeping themselves in power locally, to promoting the entry of American business enterprise into their economies. In this context, many of America's new third world allies --South Korea, Taiwan, Brazil, and Argentina-- courted U.S. firms by offering terms that were unbelievably tempting, especially low wages and prohibitions on free union activity."
Bluestone and Harrison distinguish between a "cause" and a "reinforcement." A cause, like Galileo's gravity, is a fundamental operating factor; but the cause can be mitigated or reinforced, slowed down or speeded up, as the force of gravity is slowed by friction or accelerated by a downward push. Thus they find that American tax laws after World War II accelerated globalization, mainly because they favored big business, which was the kind of business that was in the process of becoming multinational. Similarly, technical improvements in communication and transportation were important reinforcements of the trend toward globalization --but not important enough to be bumped up to the status of "cause." Bluestone and Harrison write, "As with the new technologies in production, transportation, and communications, it is not the case that the preferential tax and tariff treatment of foreign investment caused U.S. corporate managers to shift their capital abroad. Rather, these public policies reinforced corporate decisions that were based on more important factors: markets, labor costs, and political security."
Those who praise globalization attribute to it ethical merit. It is said to proceed according to sound moral principles, to maximize that-which-ought-to-be-maximized, and to spread throughout the world modern ideals of liberation and toleration.
In addition to positive value judgments grounded on principle, praise for the new international division of labor sometimes appears not to rely on any principle, but nevertheless to express a sense of satisfaction or triumph, such that globalization is cast in the glow of a favorable light. Rehman Sobhan, for example, advocates, "labor services being treated as a commodity like any other commodity," (p. 116). "South Asia," he writes, "remains the principal source of global trade in labor." (id.) The colonial tradition of labor export, "...only showed the way to the post- colonial generation, who, in response to their limited opportunities for employment at home and the greater opportunities open to enterprising young men willing to work long hours at low wages in the most inhospitable terrains, sustained this flow in even greater numbers throughout the 1950s and 1960s, as improved communications contracted the global village." Like those scholars from Malaysia and Taiwan who proudly set forth statistics showing the growth of their nation's economies, Sobhan celebrates a global labor market that creates new opportunities for the most impoverished and desperate, while it confers a new status on nations and regions previously neglected which are now preferred by investors because of their plentiful supplies of willing labor.
The principled justification of globalization begins with the ethical underpinnings of the quasi-mechanism that causes it. The market and property rights. Market forces and property rights are the essential elements of Bluestone and Harrison's scientific explanation of the phenomena observed. Freedom is the ethical ideal embodied in the market. The classics of modern ethical philosophy --Jean-Jacques Rousseau, John Locke, Benedict Spinoza, Jeremy Bentham, John Stuart Mill, Immanuel Kant ...-- are alike in establishing principled moral foundations for economic society, i.e. for freedom and for property. The logical apparatus used to derive the conclusions differ from author to author, but the main conclusions are the same: the basis of moral legitimacy is free consent, respect for property rights is a moral imperative -- a "categorical imperative" in Kant's version, i.e. one that (along with respect for other people's freedom and keeping promises and contracts) is a moral command valid for all rational beings.
As long as the elements of the quasi-mechanism producing it (market forces and property rights) are intact, globalization will move forward, and as long as modern liberal ethics defines the moral rules, it can move forward legitimately. This is not to say that globalization always moves forward legitimately. History is made of lies and violence, and the history of the globalization of labor and capital markets is no exception. It is to say that a great deal of ink and a great deal of breath is wasted in printing and shouting matches attempting to establish whether the partisans of grassroots local self-sufficiency or the partisans of free trade, the left wing dictators or the right wing dictators, have lied more, tortured more, or massacred more.
Globalization, on its best behavior and dressed in its Sunday clothes, is a faithful student of Ethics 101 as it is taught in western and western-influenced universities around the world. When, for example, electronic assembly factories move across the border from the United States to maquiladoras in Mexico, the maquiladoras can be justified by appealing to standard ethical principles. The young Mexican women hired to assemble television sets freely consent to their employment, to their wages, and to their working conditions. Further, the property rights of the owners of the factories authorize them to locate their assembly operations wherever they choose to locate them.
Capitalism is a western institution that has become a global institution, and to some undetermined extent wherever it goes it carries western values with it. Sometimes when incorporation into the global economy means that work for wages replaces household work or feudal forms of labor, the result is to liberate the wage earner (the wife, the young girl, the young man, the sharecropper....). In this way the globalization of production sometimes gets credit for liberating the oppressed and thus morally improving traditional societies; at other times, and sometimes simultaneously, globalization is condemned for spreading materialism everywhere; while at still other times international or local capitalists organize sweatshops or patriarchal forms of production that effectively combine the worst of the old with the worst of the new.
Similarly, any increase in the use of money to govern human relationships and practices can be seen as an increase in tolerance. Money is a cipher, a neutral medium, a pure abstraction consisting entirely of quantity with no qualities. Money is exactly the same whether it is received from a Jew, a black, a woman, a man, a Muslim, a Japanese, or a Catholic. Money is wholly indifferent to the personal qualities of the people who use it to enter into commercial transactions with each other; and for that very reason it draws together people of the most diverse ethnic backgrounds from all parts of the globe, makes them acquainted with each other, and gives them an opportunity to appreciate the richness of each other's cultures.
The internationalization of production, with the free flow of capital and labor across national boundaries, guided only by the principle of profit-seeking, i.e. by money, can therefore be seen as the fulfillment of the ideal of tolerance. Nobody with money is discriminated against, whatever their other qualities may be.
Thus the globalization of production has an affinity with the best modern ideals: freedom, personal autonomy, independence, tolerance, multiculturalism, and in some respects equality. Free trade is considered by many to be a corollary of the ideals of the Enlightenment. Those of us who are offering constructive alternatives to globalization work under the handicap that we may be perceived as opposed to the moral progress of the last three centuries.
On a more technical level, globalization is justified by mainstream economists as "efficient." William Baumol prescribes as a criterion of efficiency: "Never take resources out of a use where they bring in (say) 9 percent in order to utilize them in a manner which yields 6 percent!" Thus maximizing the rate of return is clothed with a moral imperative derived from society's need to be sure resources are used efficiently.
Progressive economists criticize the mainstream's efficiency criteria with examples like this: Suppose Ford Motor Company gradually lets technology become obsolete at a plant in Michigan and eventually closes it. Instead Ford builds a plant in Brazil. The move is "efficient" according to Baumol because the yield on investment goes up from 6% to 9%. It is a profitable move for Brazilian workers, who now make $2 an hour instead of $1 an hour. It is unprofitable for American workers, who suffer from psychic depression, move their kids to new schools in new towns, and eventually, on average, end up making $10 an hour instead of $20. In addition, communities are torn apart, buildings are at least temporarily abandoned, real estate values fall, the tax base falls, social services are cut back .... and when all the pluses are added and the minuses subtracted, the net result is that the move was socially inefficient, even though from the point of view of Ford's shareholders it was efficient. Otherwise put: if Ford had "internalized," all the "external" costs it was imposing on others by its decision, it would have made a different decision.
I believe that the economists on both sides of such debates have the best of intentions, but I suggest that Hazel Henderson's approach is a better ethical framework for evaluating international trade institutions and policies. The term "efficient" has no meaning until the objective to be pursued is specified. To be "efficient" means to achieve the objective at the least cost (or to achieve it to a higher degree at the same cost). For starters, in terms of my Ford Motor Company example, I, for one, would agree with Buckminster Fuller that manufacturing automobiles of the kinds usually made is not an ethically defensible objective at all; hence whether they should be made in Brazil or in Michigan ought to be a moot question. We should be making light rail and bicycles.
The term "efficient" seems meaningful to economists because they treat revealed preferences (and therefore sales, and therefore revenues measured in dollars) as if they indicated that something worthwhile were being achieved. They excuse themselves from asking what or why. Seen in this light, the claim that globalization is "efficient" has no meaning. Allocating resources by market criteria is a form of ethical skepticism. Not knowing what "good" means, and consequently not being able to define a good objective, the economists settle for calculating how to allocate resources to maximize profits. They hope that profits reflect making-whatever- people-with-enough-money-to-buy-our-products-want well enough to justify considering profits to be some sort of indication of how "efficiently" resources are allocated, which hopefully in some indirect way reflects how much "welfare" was derived from the resources consumed, where "welfare" in turn, is defined as an ethical skeptic would define it: as people getting whatever they appear to want.
Henderson's approach, ecology, and the wisdom of the world's great spiritual traditions (which are elements of the approach to ethics I have advocated elsewhere) show ways to make a concept like "efficient" meaningful. "Efficiency" is a concept that (if it is going to have any prescriptive force) logically requires justifying the goals to be pursued.
However, even with legitimate Hendersonian objectives specified, the concept of "efficiency" is still defective because it implies, as a general rule, that there is one best way to do something (subject to any given set of constraints) and that the one best way can be calculated mathematically as a maximum or a minimum. Nature, Aristotle, and the traditional wisdom of East and West agree that the good is characterized by redundancy, not by putting all eggs in the basket of the "one best way;" and that the good is characterized by moderation, not by any extreme.
Apart from its association with the enlightened morals of modern times, and apart from its specious claim to be efficient, the globalization of production is convincingly advocated on the grounds that its opponents have no superior alternative to offer. Do you want to compel capital to stay forever where it is? Are you for prohibiting imports? If you want the government to manage trade and to slow down the rate of capital mobility, what criteria will determine its policies? And how will it enforce its policies without simply driving capital to secret Swiss bank accounts? Should peasants be compelled to give up cash crops and go back to producing for use? Should each nation produce mainly for itself? Is it feasible for labor unions to organize multinationally to be a countervailing power to that of the multinational corporations? How could Japan survive with less trade? Should we go back to barter? How would you enforce a law against the mobility of capital? Should all international trade be state trading? Should we go back to the potlatch, replacing trade with gift giving? Or to self-sufficient medieval manors? Would it be possible for all corporations to be nonprofit, and would it do any good if they were? Such questions challenge those who complain about the global economy to show that there is a better way.
"Metaphysics" has not become a less controversial term since I suspended my discussion of it a few pages back at the end of section 1c. It is for many a synonym for meaninglessness, for nonsense, for words without content. For others "metaphysics" denotes an abstract form of religion, a withdrawal from the world to contemplate ultimate reality; its concerns are so distant from the sorrows of life that they could not possibly be relevant to the price of bread, or to any other practical issue.
Strangely, however, while it is the consensus of many 20th-century minds that metaphysics is an irrelevant nothing, nevertheless our century has seen a number of philosophers build their careers on attacking it, as if it were a ghost that needed to be buried over and over again. Some of these anti-metaphysicians, such as Rudolf Carnap and Sir Alfred Ayer, are willing to grant that a metaphysic may express the subjective attitude of the person who believes it, provided that it is understood that metaphysics has no cognitive content. For others, such as Jacques Derrida and Ludwig Wittgenstein, metaphysics is a harmful error that humans can hardly avoid; we are constantly tempted to it by language, as we are constantly tempted to lust by our bodies.
Two decades ago the general educated public found a use for the word "metaphysics" when critics of the Vietnam War attributed to advocates of the war a "military metaphysic." Because of their "military metaphysic" they could not see the reality of the suffering in South East Asia. Their perceptions were filtered through the lenses of a general way of viewing the world, such that everything was interpreted in military terms.
Similarly, I am arguing that people today do not see the reality of the suffering in South East Asia, or anyplace else, because of economic metaphysics.
Here I will resume my discussion of metaphysics and make two points: that the globalization of production is the consequence of the metaphysics of economic society, and that it is useful in practice to regard mainstream economics as a metaphysics.
The cause of the globalization of production has been shown to be market forces and property rights. These are metaphysical concepts.
They are metaphysical for a reason already given. They are fundamental ideas from a matrix which generates both explanation and prescription. In answer to the question, "Why?" both mainstream economists and progressives like Bluestone and Harrison say, "Because of market forces." In answer to the questions, "With what right? By what authority?" the classical philosophers and jurists of economic society answer, "By the authority of contracts freely entered into, by the consent of the parties." And then these contracts freely entered into (sales, leases, hirings, currency exchange transactions, investments ....) turn out to be just the phenomena whose behavior is described by economists in terms of market forces. The same is true of property; property is a fact. It is a fact which serves as a premise for Bluestone and Harrison's explanation of global capital mobility. It is also a value: according to John Locke it is that value for the protection of which humans first entered into social contracts and thus formed political societies. According to John Stuart Mill the moral rules defining property rights are so fundamental to society that they are the moral principles to which the word "justice" primarily refers, and they are the moral principles whose violation is properly punished by imprisonment.
The quasi-mechanism producing the globalization of production is also metaphysical for another reason. It is presupposed more than discovered. Employing the term used by Aristotle and Kant, market forces and property rights are "categories," i.e. concepts in terms of which whatever is experienced is understood. The economist does not set out to discover whether markets exist, or whether forces exist. That reality can be understood as a play of "forces," or, what amounts to the same thing, "factors," or "variables," is not a discovery of economic science. It is an element of a worldview that is already built into the mathematical tools and the statistical methods that the economist employs. "The [economics professor's] hypotheses were usually quantified as propositions about the impact of some X on some Y, and therefore X and Y were constantly on the blackboard. If one were of a mind to cavil about minor inefficiency, one might complain that chalk and human energy were wasted every evening when the janitor erased the X axis and the Y axis, because shortly after 9 a.m. the following morning, the professor would invariably draw them again." Similarly, whether there is such a thing, at any given time and place, as a market, or property, is a question an anthropologist might ask. Or an historian like Polanyi or Braudel. Inside the worldview of economic society, and inside mainstream economic science, markets and property are concepts in terms of which experience is understood. They give form to economics; their existence or non-existence is not data the economist goes out to look for.
Yet it is these normative entities, markets and property rights, presupposed by economic metaphysics, constituted by social practices and the rules governing the practices, that constitute the quasi-mechanism that moves capital around the world in search of profits, and moves people around the world in search of jobs.
It is useful to be aware of the metaphysical character of the deep causes of the globalization of production. For the sake of humanity and the eco-system, for the sake of life, we want the quasi-machine to stop operating like a machine. It helps to know that it is not a machine, but only a quasi-machine.
It is useful to acknowledge that to reconstruct the global economy for the sake of peace and social justice, it will be necessary to change not just what mainstream economics considers, but also what it presupposes.
It is useful to recognize that by changing norms, we can cause facts to change. As Rom Harre puts it, by reinterpreting social institutions, we change their causal powers. (Social Being, p. 237)
It is useful to bear in mind that the explanations given by economic science depend on the existence of a metaphysical framework that has a history. There was a time when its categories and the institutions they describe (its "language-games") came into existence. And it may have an end. Humanity may graduate to a more adequate metaphysics, which will articulate the categories presupposed by a more adequate set of institutions.
At a more specific and practical level, it is useful to understand the metaphysical character of society's dominant guiding worldview when we evaluate. Obviously, we cannot transform the basic structure of global society all at once. Obviously too -- perhaps not obvious to everybody, but obvious to professionals in peace studies and peace research -- we cannot build positive peace without transforming the basic structure of global society. So we undertake small projects, that we hope contribute to transformation. We plan a curriculum, we support an alternative approach to community organizing, we lead a work camp, organize a cooperative, conduct a conflict resolution workshop for prisoners in jails ....
Whatever we do in our daily lives, when we evaluate it, we seek to ascertain whether we are taking a step in the right direction. Are we reconstructing society, or are we just temporarily alleviating some particular consequence of its dysfunctional structure?
Whatever we do, it is useful to build into our evaluation criteria questions that concern the root causes of poverty, and therefore seek to rewrite the metaphysical categories of mainstream economic science, such as: Are we (in however small a way) building a world governed more by cooperation and less by market forces? Are we encouraging sharing? Are we encouraging the socially responsible use of property? Are we demonstrating (in however small a way) that there are better and more just alternatives to living in a profit-driven "global factory," that really work? Are we empowering people at the grassroots to interpose some "friction" that will slow down the pitiless operation of the global quasi-machine, and hopefully gain more time to reorient it and transform it? Is what we are doing here and now a step in the direction of a profound transformation of the deep structure of the global economy?
I am writing this chapter for my brother, who wrote the screenplays for the film Powaqatsi (a sequel to the better known film Koyanisqatsi) and for the Home Box Office production "Earth and the American Dream." I am also writing this for my friends who support the late R. Buckminster Fuller's concept of a "design revolution." "Bucky" was convinced that politics was useless, and he devoted his life to serving humanity by inventing a "livingry" technology that would enable humans to "do more with less."
Neither ecological consciousness-raising films like my brother's, nor Bucky Fuller's inventions and theories are theories of international trade. Their relevance to my topic is that if you believe in them --and I do-- then you might think that you do not need a theory of international trade.
In green videos, such as the tribute to Fuller called "Ecological Design" featuring more than a dozen of his contemporary admirers, and films about ways of life happier than ours, such as Helena Norberg-Hodge's Ancient Futures: Learning from Ladakh, the viewer can see the contrast between modern high energy, high resource use, inhumane technology on the one hand, and on the other hand the pre-modern and post-modern soft energy paths. The difference is palpable. A modern city is like Dante's hell, made up of ugly sights, unnerving noises, poisonous smells. Images of fields cultivated by peasants with centuries-old sustainable technologies, or images from Australian public television of one of Bill Mollison's permaculture sites (or of Findhorn) remind us that one is "nearer God's heart in a garden than anyplace else on earth."
You can see for yourself, watching the screen, that what went wrong was that humans chose the wrong technology, and therefore the wrong way of life; and that what we ought to do is to choose the right technology and with it the right way of life. The calculations used to make the choice of technology, the dollars and cents, are not shown on the screen; they are purely numeric, less visible. Financial statements project no images, since they are made of pure monetary abstractions.
A three-hour American public television special, "Planet Neighborhood," sponsored by Bank of America, goes a step further. Its repeated message is that green is profitable. The way to make money is to employ environmentally responsible technologies. The way to organize communities is to cultivate a mentality that is simultaneously greener and more entrepreneurial. John Todd, a leading "Bioneer" in the Fuller tradition, appears in the video showing a beautiful system he designed to purify the polluted waters of Lake Champlain by biological means. One cannot tell from the film whether John Todd really believes that market forces and private property will from now on serve to bring about a successful adjustment of human society to the earth's reality. He may believe that now the new motor of history will be green technology, that once it is invented existing institutions and existing patterns of motivation will insure its adoption. And he may believe that once they are adopted, the green technologies will themselves create ways of life in which poverty and violence will be rare or absent. Or it may be that John Todd did not fully agree with the message of the film he participated in, but thought it best not to say so.
Not everyone who claims that mass production factory technology built the global economy, rather than vice versa, is a film maker. I will excuse myself from considering the views of any of the extreme technological determinists, and instead consider two authors who advance a sophisticated moderate argument that attributes a considerable causal role to technology choice in history. I think their moderate argument is more worth considering because it is more likely to be true, and, indeed, in many respects, I think it is true. Michael Piore and Charles Sabel explicitly argue in their book The Second Industrial Divide: possibilities for prosperity that the quasi-mechanical market forces described by people like Bluestone and Harrison do not provide an adequate account of how the global economy has developed. They project their interpretation of history forward in order to argue that it would be possible to improve human life through wise choices of technology.
By examining Piore and Sabel's study of how technology and markets influence each other, I will analyze their assessment, and make my own assessment, of a premise many thinkers and artists appear to hold. The premise in question is that it is mainly technology choice that has made the global economy what it is today.
Instead of employing a linear concept of causality, in which an explanans (a cause) produces an explanandum (an effect), Piore and Sabel develop a method for explaining the economic history of "a world in which technology can develop in various ways: a world that might have turned out differently from the way it did, and thus a world with a history of abandoned but viable alternatives to what exists."
Given at some particular time in history the state of knowledge in the natural sciences and the practical arts, technology offers humanity multiple avenues of possible development. Which avenues will be followed is a matter of choice, and which choice will be made depends mainly on political and economic power. The technology that is adopted will be the one that those who have power believe will serve their interests and ideals. (An example of an ideal influencing technology choice is the patriotism of the Japanese elites who after the Meiji restoration decided that Japan needed to adopt western-style mass production.) After a technology becomes entrenched, other lines of possible development are left behind and forgotten. Large investments have already been made along the line of the technology chosen; detailed problems of application now need to be solved; the investments already made need to be amortized through sales. No funds are available for making another huge series of investments to cover the startup costs of going in a different technological direction.
An "industrial divide" or "branching point" is a time when it is still undecided which direction technology, and therefore industry, and therefore society, will take.
Modern mass production in steel, in automobiles, in meatpacking, in consumer durables, in chemicals ... offers many examples of technologies that might have developed along different lines. Speaking more generally, mass production itself might not have come to pass, but it did. Except for the case of the USA, the decision to adopt mass production techniques was a national political decision made by powerful elites. Once having decided to go that route, the nation found itself required to follow through; what yesteryear was not even envisioned as a possibility, became a necessity.
The most important economic feature of mass production is that it requires long production runs. The firm must produce and sell many units in order to pay off the sunk costs required to get production started. It is expensive to stop and start. Frequently shutting down assembly lines, and then frequently starting them up again, in order to respond to fluctuations in market demand, destroys the low cost per unit of product that motivated mass production in the first place. Further, any firm that stops production when the market goes down will not be prepared to take advantage of the next upswing in the market; it will be undersold by competitors who during the downswing prepared themselves to manufacture more units at a smaller cost per unit.
The story of mass production is a story of chronic excess capacity, coupled with massive obstacles to fine tuning capacity to match demand. The principles can be illustrated by a simple hypothetical case which mirrors many more complex real cases: suppose that Japan, Brazil, South Korea, Australia, Germany, and Canada all decide to mass produce refrigerators. The result is a world with more refrigerators than refrigerator-buyers. If refrigerator factories run at 25% of capacity, then costs exceed revenues and nobody makes money. If then one country, say Japan, decides to reduce capacity in the light of reduced demand, then (simplifying the hypothetical by assuming free trade) instead of selling fewer refrigerators, Japan may well sell none at all, because if South Korea, say, goes ahead and expands capacity in spite of slack demand it will have longer production runs and therefore lower unit costs. The stakes are high: those who win conquer the mass markets; those who lose end up with closed rusty factories that cannot profitably be operated.
Investors do not want and cannot endure instability and high risks such as those in the hypothetical refrigerator example. Therefore, the advent of mass production technology brings with it the desire and the need to manage the market and to stabilize demand. This is the historical explanation of the origin of the modern giant corporation, as exemplified in the meatpacking and petroleum industries, which were among the first to amalgamate in order to form corporations large enough to throw their weight around in the market and in politics; the ability to achieve economies of scale went together with the ability to manage demand. This is the historical explanation of the rise of Keynesian economics, through which the government deliberately shored up aggregate demand. This is the historical explanation of pattern bargaining between Big Labor and Big Business, through which wages were tied to productivity. (In the USA, the pattern set by negotiations between General Motors and the United Auto Workers rippled throughout the economy, thus effectively regulating the technology of mass production --reducing work stoppages and increasing consumer purchasing power.) This is the historical explanation of the rise first of radio and then of television as advertising media creating mass desire for the products of mass production.
Piore and Sabel thus reverse the causal analyses of comparative advantage theory and globalization of production theory. Instead of market forces determining which technology will be used, it is the technology that is used which dictates that the market must be molded to fit technology's requirements.
The classic age of stable demand for mass produced products was the age of the American-dominated world economy after World War II. In the 1970s the "regulation" of the world economy broke down, and there has been confusion since. The breakdown is symbolized by the defeat of Big Labor, by the end of the practice of pegging wage increases to productivity gains, and by the free-floating exchange rates among the world's currencies that take away the privileged status formerly held by the U.S. Dollar. Superficially, the causes of the breakdown are commonly said to be a series of "shocks" rocking the international trading system: the social protests of 1968, a huge increase in oil prices because of the OPEC oil cartel, the failure of the Soviet harvest which drove up grain prices, another oil shock produced by the Iranian revolution .... But on a deeper level, the cause of the breakdown was inherent in the tendencies of mass production technology itself. "The most consequential and long-term postwar development was the saturation of consumer-goods markets in the industrial countries, and the consequent interpenetration --through trade-- of the industrialized economies..... Because of this saturation it became more and more difficult to increase economies of mass production through the expansion of domestic markets alone. Further development along the trajectory of mass production thus brought the major industrial economies into direct competition for one another's markets and for those of the developing world. It also exposed the limits of the postwar regulatory system."
Given the collapse of the several national systems for stabilizing demand that had for a time made it possible to manage mass production economies in the USA and elsewhere, Piore and Sabel see two possible futures for the global economy. One is to regulate mass production technology by reviving and extending to the global level the market management mechanisms formerly in place in the United States and in several other countries. This would mean worldwide Keynesian economic policies; worldwide market- sharing agreements; worldwide labor standards and collective bargaining. The second alternative is a different economy based on a different technology.
Let us take as granted (I) that technology choices are not entirely driven by blind forces beyond human control, and (II) that once made, technology choices have far-reaching consequences. Piore and Sabel powerfully illustrate these propositions by tracing the history and consequences of mass production technologies. It is reasonable to generalize, and to say that the adoption of any style of technology has far-reaching consequences, and that included among them is the consequence that it will require some social system of (in the language Piore and Sabel adopt) "regulation."
Recently powerful arguments have been made for a third proposition, (III) that humans ought to adopt sustainable technologies. If one interprets "sustainable" as meaning conducive to sustaining life, as distinct from meaning that the particular technology employed is one that could or should be used forever, then (III) is a proposition that must be true. By definition, it would only be desirable to adopt technologies which make human life on this planet unsustainable if it were desirable to end the existence of the human species. But (III) is more than a truism: it is part and parcel an indictment which alleges that the technological trajectory on which our species is now embarked is not sustainable. It implies, among other things, that establishing Keynesian economics on a global scale in order to rescue modern high energy high-resource-use mass production would not be desirable even if it were possible --indeed, it would be disastrous.
Those who downplay or overlook the radical implications of (III) do not argue that we should use unsustainable technologies; what they argue is that the transition from the technologies of today to the technologies of tomorrow will not require major institutional shifts, either because the market itself will guide wise choices, or because the problems are mainly technical, and will be solved at a technical level.
The biologist John Todd, a designer of living sustainable technologies that use plants and animals instead of chemicals to dispose of sewage waste, argues that mass production has created the potential for destroying everything humans desire. If, as Aristotle and a long tradition held, the good is that toward which human desire aims, then Todd implies that mass production is leading us away from the good.
R. Buckminster Fuller calculated that resource constraints are such that by spreading around the globe the designs for living prevailing in the industrial mass production societies it would be possible to meet the needs of at most 44% of the world's people. Therefore, he concluded, a design revolution, which does more with less, is a moral imperative because the alternative is to condemn more than half the world's people to misery.
A utilitarian ethic that defines the good as the greatest happiness of the greatest number, or a care ethic, which sees the moral life as attention to and responding to the needs of others, would imply that if Fuller's facts are correct, then it is true that doing more with less is a moral imperative.
Paolo Soleri links the idea of doing more with less with preserving the earth, as well as with meeting everybody's needs. He points out that if we project a world population of 8 billion, and calculate the resources needed to provide a single family dwelling for each family, one result is that the end sought is unattainable; another result is that attempting to reach it would spell disaster for the earth.
Amory Lovins declares sustainable technology to be a moral imperative for another reason. It is unjust to future generations to bequeath to them a planet with fossil fuels exhausted, biodiversity reduced, and the atmosphere poisoned. Even if it is true, as optimists contend, that human technological ingenuity is infinite, and will devise new solutions to whatever problems arise in the future, it is not just to put our descendants in a position where they and the flora and fauna of the planet will survive if and only if technological optimism proves to be true.
Advocates of sustainability argue that a human-centered ethics is too narrow. Instead of taking something like the preferred choices of human consumers as the standard of value, we should stand back and think of living systems as wholes, and take the welfare of the whole as the standard of value. Humans should be partners with nature. As Bill Mollison puts it, our ethic should be "the care of the earth," not just the care of our own species, and much less the care of our own individual selves.
E. F. Schumacher (echoing Gandhi) argued in Small is Beautiful that small scale technology could and should be used to generate work in the countryside, and thus (among other benefits) to stem the tide of migration to India's overcrowded cities. Among other considerations he thought relevant to technology choice were whether it was conducive to enjoying work, whether it gave scope to creativity, and whether it was consistent with what Buddhism calls "right livelihood" (although he held no special brief for Buddhism, saying rather that economics could be improved by a meta-economics taken from the spiritual teachings of any of the world's great religions).
The anthropologist Mary Catherine Bateson and many other green writers have suggested deriving norms for sustainable living by studying the ethics of so-called primitive peoples. The so-called primitives knew and sometimes still know sophisticated techniques for sustaining communities and for sustaining a relationship with the soil and with wildlife. But our challenge is greater than theirs; replicating the achievements of so-called primitive peoples is not enough because the human populations to be sustained are now much larger.
A principle often suggested for a technology at peace with nature is that humans should live within the earth's energy budget. Every year a certain amount of new energy arrives from the sun. Instead of every year drawing down on the earth's stored energy, humans should learn to give back as much as they take, and to leave the earth no poorer at the end of the year than it was at the beginning. This principle is an example of the more general idea of thinking of human economic systems as subsystems of the larger systems that function to make the biosphere habitable.
Compared to the ethical arguments for green technology, the ethical premises of neoliberalism and comparative advantage theory can be called "formal." The green arguments can be called "substantive." What I mean by this is that when prosperity or welfare is measured by economic indicators that ultimately depend on counting the revealed preferences of consumers, the procedure is "formal" in that the writer refrains from making value judgments. The writer just counts data.
Ethical skepticism is of a piece with market liberalism. Without needing to know right from wrong, or good from bad; or without presuming to have any opinion on such questions that would be valid for anybody but oneself; one can nevertheless derive an ethic by asserting everybody's right to decide for themselves. Consent is the source of legitimacy. The economic theory of the market fits the ethical theory of self-determination like a hand in a glove. If consumers decide to buy hamburgers, then that is their preference; how many of them they buy will be counted in measuring welfare, in calculating the gross domestic product, and in evaluating the success of economic policies.
The greens, on the other hand, are in the business of making substantive value judgments. They think they know something about what it would take to get homo sapiens off the endangered species list, and they are willing to assert that what is necessary for the survival of the species ought to be done. The free choices of human consumers have been overrated as foundational premises for policy decisions. Thus Schumacher, "In a sense, the market is the institutionalization of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself." Humans ought to regard themselves as responsible participants in living systems; they ought not regard themselves as morally licensed to pursue their own short term self-interest.
Amory Lovins criticizes the market as a decision-making mechanism just because it rests on the ethical legitimacy of whatever purchases consumers choose to make. Lovins points out that the market will discount the importance of long run consequences to zero over just a few years --over an infinitesimal period of geologic time. The market interest rate (the mirror image of the discount rate) is a measure of consumers' preference for satisfaction now instead of satisfaction in the future. The moral imperative is just the opposite: save the earth for the future.
Piore and Sabel's account of the need to advertise to create desires that match the outputs of mass production can be regarded as a reductio ad adsurdum of the ethics of freedom. If the ethical foundation of the whole system is the sovereign consumer's free choice, then the foundation crumbles when it is necessary to manufacture consumer choices in order to stabilize the system. Similarly, Bluestone and Harrison's account of the defeat of labor by the power of capital to move elsewhere undermines the argument that wage rates are what they ought to be because they are determined by free agreements.
It is tempting to respond to assertions that the ethics of self-determination has been violated by criticizing just its distortion, not its principle. It is tempting to say that if advertising were truthful, then consumers could really make free choices, and then market demand would indeed be the only legitimate guide to technology choice. It is tempting to say that if labor unions were strong, then there could be real collective bargaining, and wage rates would really be based on the free agreements of the contracting parties.
But the green "substantive" arguments noted above are not just arguments for correcting the distortions which prevent economic actors from making free choices. Indeed, the greens claim that if the kinds of technology they prescribe are not chosen, the consequence will be the extinction of many species, including our own.
R. Buckminister Fuller used to say that the challenge before the human species was "to graduate" before it is too late. Our "graduation time" will be the time when we learn to organize ourselves and our interaction with the planet in a way compatible with physical reality. Physical reality compels us to think in terms of whole systems; more importantly, it compels us to act in terms of whole systems.
One might be tempted to regard a philosophy of design revolution as the metaphysics of humanity's graduation. It might seem to be an adequate worldview, because of its focus on the physical basis of life. I suggest, however, that only one half of the needed reform of the reigning economic metaphysics concerns technology. The other half concerns social relationships. I will now sketch a way of looking at the history of metaphysics which hopefully will make this point clearer.
It is useful to think of the insertion of human groups into the physical reality of the earth's living processes in terms of two related structures. A "techno-structure" governs the relationship of the people to the environment; it is what is sometimes labeled "tools," and the planning of its construction is called "design." A "command structure" governs the relationship of people to each other, and for the most part it also governs the inner workings of the individual personality; it defines rights and duties; it provides the logic for deciding who is to do what when.
The human being, the species the anthropologist Clifford Geertz has defined as the animal for whom culture is its adaptation to its ecological niche, has invented throughout its pre-history and its history a series of technical and command structures. Human interaction with the earliest technologies was organized and directed by myths, as is shown, for example, in Hesiod's Works and Days. The time for plowing, the time for planting, the time for harvest, the time for celebration... and the roles that different individuals played in these activities were given meaning and guided by religion. The origin of language itself --the communication and guidance quasi-mechanism that is characteristic of our species-- is inseparable from the earliest stories (myths) that humans told one another.
Philosophy, and later its daughters the sciences, arose in ancient Greece, in China, in India, in Mesoamerica, in Peru, and other places, in cultures that already had already had techno-structures, command structures, and languages. The basic founding idea of western philosophy, out of which science later grew, was to use the expertise achieved in the techno-structure to reform the command structure. (Thus Plato: "there is no law higher than episteme, where episteme is the Greek word for the craft-knowledge of the different specialized technai, techne being the Greek word from which our word "technology" comes.)
"Metaphysics" (sometimes called "first philosophy") became, in the West and with parallel developments in other civilizations, the name of the part of philosophy that unified discourse. It provided, as mythical cultural cosmologies had provided previously, a common foundation and context for all the main uses of language. It became the conscious articulation of the worldview that defined who human beings are, their roles in society, and their place in nature.
The coming of modern society was the coming of economic society. As the historian Karl Polanyi puts it, economic relations became "disembedded" from social relations generally. The economy took on a life of its own. Instead of being, as its etymology implies, household management, the economy became the overall international context which provided the necessities of life and defined the social institutions and the worldviews of larger and larger percentages of the world's peoples. A new command structure emerged, a democratic command structure in the sense that according to its ideology everybody commanded only themselves; in it money came into its own as unit of account, medium of exchange, and store of value. Primarily through money the relationships of human beings to each other were governed; it defined rights and duties; it provided the logic for deciding who was to do what when.
Philosophers invented modern philosophy. Formally regarded as anti-metaphysics, beginning as polemics against the "metaphysics of the schoolmen," it carried on the social function of traditional metaphysics by providing society with a unifying discourse, and with logical foundations justifying its principal institutions. Part and parcel of the new philosophy was an ethics of freedom and property rights, which legitimated markets and market forces. Part and parcel of it were empiricist and rationalist theories of knowledge which kept at bay reactionary tendencies to revert to the ancient cultural cosmologies, which could have thwarted progress. The ethics of freedom sacralized a democratic command structure, consistent with treating the decisions of sovereign consumers, aggregated by the market, as the justification for modern industry. In principle, the techno-structure was to be constantly revised by institutionalized science, employing a systematically critical scientific method. Science was to do basic research that would produce never-ending improvements in technology. In practice, what philosophy made a matter of principle was what had to happen, because entrepreneurs needed to constantly revolutionize technology in order to stay ahead of their competitors. Thus the new metaphysics, yclept anti-metaphysics, carried on the traditional social function of providing a common discourse, heavily armed with powerful intellectual weapons, that unified the techno-structure and the command structure.
By putting the evolution of techno-structures in the context of their interaction with command structures, the considerations just mentioned show why it is a mistake to make technology into a metaphysics. That is to say, it is a mistake to see all issues as technical, all problems as technical, and all solutions as technical. The design revolution is only half the revolution. Suppose we grant that R. Buckminister Fuller is correct when he says that with the prevailing approach to technology, it is possible to meet the basic needs of only 44% of the world's people; it follows that to take care of everybody we need to learn to "do more with less." But it does not follow that if sustainable technologies were adopted, then everybody's needs would be met -- it follows that they could be met, but it does not follow that they would be met. Technology has a certain force of its own, so that it is as much a cause as a consequence of historical events. But it does not follow that market forces, property laws, and culture have no influence on history. It does not follow that if we make the right technology choices we can ignore the issues that divide investors from workers, and divide both from the unemployed.
On social issues, the inventors of green technologies tend to be on the side of the angels. They want humans to "graduate" to becoming a sustainable species, and at the same time to preserve the democratic ideals of modernity. Democracy is implemented by designing cheap and simple tools that ordinary people can control. They want to employ everybody in pleasant and meaningful work. Their motivation for doing more with less includes the desire to make it feasible to meet everybody's basic needs. They want to build human habitats that strengthen community because the very physical layout makes it easy to cooperate and easy to enjoy one another's company.
Whether markets, laws, and mentalities can be transformed so that the good intentions built into human-friendly and earth-friendly technologies can be implemented, depends mainly on whether humans can do better at relating to each other. In searching for resources for building better human relationships, it is useful to regard anthropology and the history of culture (and within it the histories of religion and of philosophy) as a large toolbox. By studying exactly how cultures have been constructed, we can learn to use the tools of culture construction. With community-building tools, we can facilitate the emergence of a mosaic of diverse human ways of life, which will be compatible with living together for many centuries more on the soil of our common mother, the earth.
In an essay contributed to the collective volume Trading Industries, Trading Regions Candace Howes and Ann Markusen remark that of the 84 billion dollar United States manufacturing trade deficit in 1990, $53 billion can be explained by the globalization of production due to the comparative advantages of low wage areas. "...$53 billion of the trade deficit, $40 billion with Asia, and $13 billion with Latin America, can be explained by neoclassical trade theory, or its modern expression in the New International Division of Labor theory. The United States was importing low-wage consumer goods and labor-intensive electronics assemblies from Southeast Asia. Much of the trade between the United States and Mexico is in automotive products and electronics that are exported to Mexico for assembly or fabrication and reimported into the United States. Consumer goods imports from Southeast Asia were the consequence of indigenous development efforts. The electronics and auto parts imports followed the search for low-wage havens for labor-intensive assembly by multinational corporations."
To say that the phenomena observed are "explained by" low wages is, to recall a point made above, to use the concept of "explanation" (or of "cause") in a weak sense. Low wages abroad are clearly not the sufficient explanation (the sufficient cause) of the United States trade deficit. It might be the case, for example, that the United States would refuse entirely to trade with low wage areas; in that case there would be no trade deficit with them because there would be no trade. Hence a complete list of the conditions that must be met before the observed phenomenon, $53 billion of an $84 billion trade deficit, will be produced would include all the institutions, decisions, and physical ("brute") facts, that led to, or allowed, there being such trade in the first place. A complete causal explanation would also have to explain why, thirty years previously, in 1960, the $53 billion deficit did not exist, even though the United States was trading with those regions at that time, and even though at that time too wages in those regions were low.
The conclusion Howe and Markusen mainly want to draw in the passage quoted is, I believe, that a theory of globalization like that of Bluestone and Harrison sketches some main features of a plausible causal explanation of $53 billion of the 1990 U.S. manufacturing trade deficit. But, as Howe and Markusen make clear in the sequel, with regard to the remaining $29 billion such a theory is a non-starter. It cannot possibly explain the remaining $29 billion of the deficit, because that part of the deficit was in trade with high wage areas. The implication is that some other causes must be at work besides low wages. The suggestion is that theories of a different type may be needed to understand international trade.
The late Nicholas Kaldor was a prominent economist who distanced himself from neo-classical economics, who endorsed and proposed explanatory principles different from the neo-classical ones, and who prescribed a series of neo-Keynesian remedies for the ills of international trade.
At least two types of causal explanation are characteristic of Kaldor's work, and it turns out that the two are intimately intertwined. One is the principle of "circular and cumulative causation," which Kaldor adopted from Gunnar Myrdal, which emphasizes that in international competition success tends to lead to more success, while failure tends to lead to more failure. The second is of a type I think it may be useful to call "accounting causality." It is central to the work of John Maynard Keynes. Unlike the neoclassical economists, who tend to do economics as social physics, economists like Kaldor who are in the Keynesian tradition tend to do economics as social accounting.
(Kaldor does not deny that technology itself has played a causal role in history; he holds rather that technology and economics are in constant interaction, so that it is impossible to know how much historical change is due to one and how much is due to the other.)
Kaldor notes that Ricardo's theory of comparative advantage, as it has been refined and improved by John Stuart Mill, Ely Hecksher, Bertil Ohlin, and Paul Samuelson, is mainstream international trade theory today. It implies that every nation gains from free trade, and that due to trade the poorer countries will gain most, while the richer countries gain least; as trade increases real income per person will tend to be the same in all countries.
"The observed trends in income per head for the past 200 years, during which international trade has increased very substantially in relation to total world income, have been the very opposite. Differences between wealthy countries and poor countries have grown enormously -- the very opposite of what the theory predicts."
Kaldor's explanation of the growth of the difference between wealthy countries and poor countries is that business in the more backward countries is less efficient in almost every way. Thus integration into the global economy means that farmers are driven out of business by cheap imported wheat. The spinners lose out to cheap imported textiles. (This was the motive of Gandhi's nonviolent resistance against free trade.) The native craftsmen are unable to compete with less expensive goods from foreign factories. "Backward countries are less efficient in production, which means that they require greater inputs per unit of output, not just in terms of one particular factor, but of all factors."
Shorn of their local producers, the poorer countries are condemned by free trade to "specialize" in the production of raw materials and minerals, but these particular specialties are capable of employing only a small fraction of their labor force. "...the countries depending on the exports of primary products remained comparatively poor --the poverty was a consequence, not of low productivity of labor in their export sectors, but of the limited employment capacity of their `profitable' industries."
The reverse side of the coin is that the success of the successful is cumulative. Some 90% of the funds invested to expand manufacturing capacity historically has come from retained earnings. Thus there is a polarization process, both internationally and nationally. Those who have earnings to reinvest in technical improvements and greater economies of scale, reap even greater earnings, which they are able to reinvest to become even more efficient.
An example (not mentioned by Kaldor) of cumulative success in the global market is the American pharmaceutical industry. Companies like Merck and Lilly have over the years attained commanding leads in an industry that requires enormous capital investment, great scientific expertise, and long lead times to develop a product. So far at least, the low wage countries have been unable to challenge the American (and, to some extent, European) technological lead in pharmaceuticals.
The process of "circular and cumulative causation" has as a consequence the polarization of wealth and poverty, within nations as well as between nations. "The economic unification of Italy probably provides the best-known example of the polarization effect. Since the unification occurred at a time when the industries of the North of Italy were rather more developed than those of the South (though the difference was not very large; industrial productivity was supposed to have been some 20 percent higher in the North than in the South), it was quite sufficient for free and guaranteed access of the Northern industries to the Southern markets to inhibit the development of the latter at the same time as it accelerated the industrial development of the North."
Together with the polarization produced by the tendency toward free trade prescribed by neoclassical economics, the world has seen a countervailing tendency --the spread of industrialization from one country to another. After Britain, the first country to industrialize, every other country that has industrialized, starting with France, Germany, and the United States, has done so by violating the prescriptions of neoclassical economics. "...all the countries which became industrialized (other than Britain, which started off the process) did so with the aid of protective tariffs which were high enough to induce a substitution of home- produced goods for imports."
An effect of causal processes at work in the world economy is that a high wage country that wants to remain a high wage country must concentrate on successful leadership in product development for export markets. "...the proper division of international trade in manufactures is not so much the traditional division between `capital intensive' and `labour intensive' trade, but between `low wage' and `technological lead' trade. The developed industrial countries with high wages must be able to export goods in which they have a technological lead over others, either on account of the design and marketing of new products (such as computers, silicon chips, etc.) or because of advanced manufacturing processes which yield comparatively high productivity."
Japan is history's most notable example of a nation that adopted a deliberate trade strategy designed to create technological leads for itself. The strategy succeeded in field after field. Admirers of Japan have called for an "industrial policy" in the United States, which would similarly make product development and the conquest of export markets a concerted national effort. As was the case with most of the nations that achieved industrialization deliberately under a protective umbrella of import restrictions, in Japan industrialization was a military issue. Without modern industry, Japan would be too weak to resist foreign domination. "Export or die!," the slogan coined by Kaldor's friends in Post World War II Britain, could have been the motto of Japan.
The investments in growth industries counseled by attention to the explanatory principle of circular and cumulative causation, are also counseled, for different but related reasons, by attention to social accounting.
An accounting identity important for John Maynard Keynes is that as money circulates as a medium of exchange, the total of revenues must equal the total of expenditures. What from one person's point of view is a purchase is from another person's point of view a sale; one person's outlay is somebody else's income. Every time money changes hands, there is a debit to the account of the spender of the money, and a credit to the account of its receiver. Debits equal credits. Disregarding subtleties, the overall result for society from adding up all domestic transactions is that society has exactly as much money as it had before; money just changed hands.
Hopefully the exchange process through which in money terms society neither gains nor loses, is a process by which in real terms society gains, as goods and services get produced and distributed, making people happier and healthier. Presumably if money would just keep circulating, playing its role as medium and facilitator of exchanges, there would be an unimpeded real flow of goods and services, and people would keep getting happier and happier, and healthier and healthier. But, unfortunately, from an individual point of view, people often keep accounts where success is defined as ending up with more money than they started with; for this and other reasons people are often inclined to treat money as a store of value, by saving it instead of spending it. Keynes writes, "The psychology of the community is such that when aggregate real income is increased aggregate consumption is increased, but not by so much as income. Hence employers would make a loss if the whole of the increased employment were to be devoted to satisfying the increased demand for immediate consumption. Thus, to justify any given amount of employment there must be an amount of current investment sufficient to absorb the excess of total output over what the community chooses to consume when employment is at the given level." For society as a whole total revenue for time period x is greater than the total available for expenditures in time period x + 1, because some part of the revenue is saved instead of spent. Sales lag, for lack of "effective demand," i.e. for lack of "purchasing power" (i.e. money) coupled with the desire to spend. When sales lag, everything else lags, since as a general rule goods and services are produced for the purpose of selling them. All would be well if every cent saved were invested, because investments are, from the investor's point of view, purchases of raw materials and labor and so on, and therefore they are from somebody's point of view sales, i.e. income.
Some Keynesian story, such as the one just told, is, I believe, the justification for saying that government policy can "cause," in Kaldor's terms, growth or stagnation. If the government takes those measures which result in purchasing power being in the hands of those who desire to spend it or to invest it, then the government will "cause" growth. It will make society's books balance by compensating for the individual's propensity to save without investing.
Kaldor writes, "...in the years 1980-82, Britain's policies were the cause of a deepening recession in Europe...." "For this recession I hold Britain largely responsible on account of the unfortunate coincidence of North Sea oil and Mrs. Thatcher coming on stream more or less at the same time. On account of the North Sea oil, the balance of payments on current account had a turn- around of nearly 9 billion dollars (from minus 1.4 to plus 7.5 billion) between 1979 and 1980, rising by a further 5.5. billion to 13.2 billion in 1981. The deflationary policies of the `monetarist' government of Mrs. Thatcher caused a turn-around of total real domestic demand by 6 per cent of the gross domestic product (from +3 per cent in 1979 to -3 per cent in 1981, causing a rise in registered unemployment of nearly two million."
Thus the North Sea oil bonanza was an opportunity Britain missed. The new source of income from oil should have been "combined with a bold policy of expansion of both public and private investment .... Instead, Britain's gain from oil was wholly offset by the 15 per cent fall in her manufacturing output...."
The "deflationary" policies caused the lack of growth through a series of measures that restricted access to money, including higher interest rates. It was for lack of money that demand declined, and for lack of demand that employment declined. The policies Kaldor recommended, on the other hand, would have made money available to finance public and private investment. I call this an "accounting causality" because it operates by keeping track of the national accounts, and then through government or concerted private action adjusting them. The accounts are adjusted on a macro-level in several ways; the intended result of policies advocated by people like Kaldor is usually to make it easier for people to get money in their accounts (their bank accounts) to pay for consumer purchases and for investments. Having money in the bank is a kind of power; it empowers the owner of the money to perform certain sorts of actions; thus a favorable adjustment of one's account --when coupled with a desire to spend or invest-- will generate (i.e. cause) actions to be done, namely and especially the kinds of action called purchases (i.e., from the seller's point of view, sales). Which is just what is needed to produce (i.e. cause) employment and growth. Conversely, Prime Minister Thatcher caused unemployment and stagnation.
On Kaldor's account, Mrs. Thatcher's deflation reverberated throughout Europe, since a deflated Britain was not a good customer for the goods her continental trading partners would have otherwise exported to her; consequently their sales slowed down, and, since sales slowed down, everything else slowed down.
In a Kaldorian world, accounting causality tends to be aligned with the need to attain and keep technological leads. A nation's policy should be to stimulate investments just to balance the national books, i.e. to keep money flowing. Given that investments in general ought to be stimulated, what better choice of investment could there be than those particular investments which will develop new products for export, exploiting and expanding those technological leads the nation already has, and perhaps even conquering new export markets with superior technologies?
The ethical premises built into the propositions of neo-Keynesian economics, differ little from those built into neo- classical economics. The two school advocate competing means to the same end: maximizing the satisfaction of the preferences of buyers, while respecting the freedom of the individual. Keynesians are, however, comparatively free of any bias in favor of decisions made by the market which would make government intervention in the market morally suspect. They rarely let Rousseau and Locke's premise "what is natural is good" filter into economic theory in a way that clothes deliberate government action to achieve social objectives with overtones of ethical impurity. They usually reject the notion that the market is a fact of nature; while the government is "artificial," its actions "distortions" of market prices resulting in "imperfections" in market mechanisms.
Kaldor is among the unabashed activists. He attacks the neo- classicals not because they have wrong values, but because they have absurd theories. Armed with a better theory, Kaldor prescribes a different route to prosperity and freedom. All his life he was both scholar and activist, and he made many proposals for reshaping the global economy. Toward the end of his life he proposed a four point program for restructuring the associated economies of the western powers, which were similar to his proposals for the entire global economy, and similar to the Keynesian option of Piore and Sabel. Kaldor's four point prescription can be summarized as follows.
1. Coordinated full employment budgets. "... lower taxes and higher expenditure..."
2. Internationally coordinated lower interest rates.
3. International price supports for basic commodities (i.e. for the main commodities whose prices are subject to slump because the markets for them are truly competitive) coordinated through a system of buffer stocks. An international agency would buy commodities when their prices were low in order to drive up their prices, using an international reserve currency especially created for the purpose.
4. Having made his first three points, Kaldor concedes, "..the above would still leave one important problem unresolved, and this is the problem that Keynes also left entirely unresolved, the tendency to chronic inflation under full employment conditions...." He does not think inflation can be curbed by fiscal and monetary policy alone, but only by curbing wages. His suggestion in this respect is "... a system of continuous consultation between the social partners --workers, management, and the Government-- in order to arrive at a social consensus concerning the distribution of the national income that is considered fair and which is consistent with the maintenance of economic growth, reasonably full employment, and monetary stability." Presumably there would be some sort of coordination internationally of the national wage consensus to be sought nationally.
The weight of academic and political opinion has now turned against Keynesian prescriptions like Kaldor's. One of the reasons for the advance of neoliberalism and the twilight of the age of the social democratic mandarins who managed capitalism to make it achieve social goals, is that expansionist prescriptions have led to ever-deepening debt burdens. Keynes' original idea of counter- cyclical government budgets, such that the government would engage in deficit spending when business was down, and then repay the debt by collecting more taxes when business was up, has proven to be a chimera. The legacy of Keynesian policies has been continuous deficit spending. Kaldor himself attributes the long postwar "boom" from 1949 to 1971 to American deficit spending, more than to any other factor. After World War II America created purchasing power in the world economy by running up huge public and private debts. It could afford to do this because until 1971 the dollar was accepted as the international currency. Foreign governments were content to hold reserves in the form of dollars. America's credit was golden because it could print whatever amount of money was needed to pay its debts. When Europeans began demanding gold and Deutschmarks instead of dollars, the American dollar ceased to be the world's reserve currency. America's ability to generate purchasing power on a world scale ended, and so did the postwar boom.
Thus Kaldorian prescriptions are often opposed by neo- classical economists and others as in the long run unworkable. But to say, like, for example, Ross Perot, that it is imperative to balance the budget and start paying off the debt, or that any and all spending decisions are more efficiently made in the private sector and not in the public sector is not to say either: (1) that one has a viable alternative to Keynes' proposal to counter the tendency of capitalism toward stagnation by counter-cyclical spending; thus the conclusion from the premise "Keynes was wrong" may simply be that capitalism is unstable and there is no way to stabilize it; or (2) that one disagrees with Kaldor's objective of "growth," or, more specifically, his objective of concerted national support of product development for export; thus one might support Kaldor's analysis of what needs to be done, but propose a different way to do it.
Thus even if one agrees with a neoliberal critique of Keynes, and therefore rejects Kaldor's prescriptions for expanding economic activity, there are still two more dimensions of the analysis to consider: (1) whether social accounts can be macro-managed in some other way, (2) whether it is desirable or possible to reject the objective of "economic growth" and to put into practice a "steady state" economics that does not require growth.
There is also a third dimension to be considered. Kaldor believed that the present anti-Keynesian trend has as one of its main motives strengthening management and weakening labor, by taking the question of fair wages off the national agenda. Rejecting government macro-management of the economy is a way of saying let the chips fall where they may, and this is a way of denying the voters the opportunity to vote themselves a social wage higher than what they would get through the free play of market forces and property rights. To get the government out of the economy, is at the same time to get the poor person's hand out of the rich person's pocket. Conversely, making the same point from the opposite direction, Jurgen Habermas argues in The Legitimation Crisis, that Keynesian management of the economy makes it transparent that the division of revenue between property and wages is a political division, determined by political power -- not a natural fact.
Similarly, advocates of industrial policy generally combine advocacy of measures to increase national competitiveness with measures for increasing social peace. Consensus on social issues among the "social partners" is held to be good for the export trade. Subsidies can be generously distributed so that both the rich and the poor get some. Some such consensus-producing social bargain is a requirement for the smooth and uninterrupted functioning of the economy, once it is decided that a democratically elected government will manage it. Thus another ethical dimension of Kaldor's proposals is: (3) whether an activist "industrial policy" is justified as a way to put social issues on the government's agenda.
The four-part program for economic recovery outlined above perhaps does not make it sufficiently clear that Kaldor's prescriptions were in principle global and in principle permanent. He recognized that in today's world managing the economy through social accounting, if it is going to work at all, must be made to work internationally. He was confident that all nations could simultaneously enjoy export-led growth, by exporting to each other. He found shortcomings in Harrod's theory that there is a warranted rate of growth that is indefinitely sustainable, but he amended it to repair the shortcomings; thus he was able to argue in a critique of Marx delivered in Peking in 1956 "...that there can be no presumption of crisis based on a falling rate of profit." Kaldor made major contributions to the theory and practice of taxation, and he was confident that there was a right way to impose heavy taxes, which could be practiced indefinitely without impeding growth.
The main features of Kaldor's prescriptions can be criticized by criticizing the concept of "growth." It is "growth" that permits the social books to be balanced by making savings equal investment, supply equal demand. It is "growth" that is supposed to bring about progress and prosperity. "Growth" is the necessary remedy for its alternative, the fate Kaldor takes pains to teach the world how to avoid: namely "stagnation." It is the promise of "growth" that cements a hoped-for social consensus in which governmental action to achieve social justice is supported, or not vehemently opposed, by bankers, investors and entrepreneurs. It is also the ideal of "growth" that may survive as an ideal to be pursued by other means, when Kaldor's prescriptions for pursuing it are discredited as inflationary, as inefficient, or as leading to unsustainable debt burdens.
The most obvious objection to the ideal of "growth" is that it destroys the environment. It is physically impossible to continue indefinitely the present destruction of its own habitat by homo sapiens, and it is a crime against posterity to attempt it.
In reply to such objections to the ideal of growth by green economists, Kaldor's friend Joan Robinson argued that those who complain about growth should instead redefine it. Instead of complaining that growth pollutes, exterminates species, warms the atmosphere, exhausts fossil fuels, and leaves radioactive wastes that will continue to be carcinogenic for more years than the human species has until now walked the face of the planet, the greens should define growth so that undesirable outcomes are not growth. "True growth" would consist only of desirable outcomes; activist governments would only pursue it, not "false growth."
But redefining "growth" does not solve the problems for which Kaldor offers "growth" as a solution. Product development is needed to maintain technological leads. It is not ever easy to maintain a technological lead. To keep a lead in the market subject to the constraint that only green products defined as true growth are allowed, would only some of the time coincide with the sine qua non that product development must achieve: namely, to sell the product. To solve capitalism's problem, the new product must be sold on a mass scale and thereby reap the super-profits that counteract what would otherwise be a falling rate of profit. It is the super-profits from exporting new technologies that justify the super-investments needed to balance the social books. Thus Kaldor: "Technical progress is a continuous process and it largely takes the form of the development and marketing of new products which provide a new and preferable way of satisfying some existing want. Such new products, if successful, gradually replace previously existing products which serve the same needs, and in the course of this process of replacement, the demand for the new product increases out of all proportion to the general increase in demand resulting from economic growth itself."
The process of constantly developing new products for which demand will be "out of all proportion" to ordinary demand will not stop if it is denied the honor of being called "growth" whenever it transgresses ecological norms. It will not stop, and it will not cease to be necessary to balance society's books. It will not cease to be necessary, assuming as given the main institutional features of the status quo, if islands of high wages are to be preserved in a global sea of low wages. High effective demand, and therefore consumers who like to shop and to use their credit cards, will continue to be necessary to maintain employment at acceptable levels.
The most obvious objection to "growth" is valid. Redefining growth does not magically create the institutions and the culture that would be required to guide humanity toward "true growth." If what the greens object to were no longer called "growth," it would be called something else, and they would still object to it for the same reasons.
Kaldor's prescriptions, workable or not, display the trap humanity is in. It can be likened to a treadmill. It is necessary to go forward faster and faster just to stay in place. The direction of movement is determined by worldwide potential demand for new products. Standing still means stagnation. Meanwhile, truth, beauty, justice, compassion, partnership with nature, and all the traditional ideals of the world's civilizations are placed on hold. Ideals may be honored, but only subject to the constraints imposed by what must be done to stave off economic collapse. As Keynes himself wrote, "For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our goals for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."
Every caring and aware member of the species homo sapiens sapiens must ask the questions, "Why did we get on this treadmill?" And, "How can we get off it?"
Kaldor was a member of a generation for whom "metaphysical" was a synonym for "unverifiable." In his polemics against his neo-classical opponents he delighted in castigating their theories as "at best a branch of metaphysics."
Nevertheless, Kaldor's world is shaped by the metaphysics of economic society described in sections 1c, 2, and 3c above.
Traditionally, the term "metaphysics" has been applied to attempts to articulate the fundamental categories of a civilization --embracing its cosmology, ethics, epistemology (or science), and its visions of human nature. This is what was attempted by Plato and Aristotle, by Thomas Aquinas, and Kant. Kaldor is an adherent of modern philosophy; he has particularly kind words for Karl Popper's philosophy of science. Modern philosophy articulates the metaphysics of economic society. But it is not so much his explicit sympathy for a falsificationist philosophy of science and for modern ideas generally, as the implicit premises of his economics that makes Kaldor a participant in a world shaped and justified by metaphysical ideas.
First, I will draw out some of the metaphysical presuppositions that are latent in the explanations Kaldor gives of economic phenomena. Being necessary premises of his explanations, they are also premises of his prescriptions. Modern practices and discourses, for which philosophers have composed rationales which serve the traditional functions of metaphysics (even when they describe their work as anti-metaphysical) are, therefore, at the core of Kaldor's thought. I do not believe Kaldor would disagree. Thus he says things like, "the study of economics has ... concerned the problem of how in a de-centralized, `undirected' market economy, scarce resources are allocated among different uses in the right proportions --in the proportions in which they give the highest satisfaction to consumers as a body --in a specific Pareto sense that no one could be better off with any alternative allocation, without making someone else worse off." In such passages Kaldor appears to acknowledge that economics is, so to speak, a local science, a science which pertains to the last few centuries and to those parts of the world where the institutions it takes for granted exist.
Second, I will compare and contrast traditional and modern (economic) metaphysics with the aid of several conceptual distinctions, namely: Max Weber's distinction between traditional value-rationality (Wertrationalitat) and modern instrumental rationality (Zweckrationalitat); Christopher Hill's distinction between the "Ancients" and the "Moderns" who replaced them in the universities early in the modern era; and the distinction between final causes and efficient causes.
In specifying how a technological lead, and with it the growth of a country's exports, explains phenomena of international trade that cannot be explained by comparative advantages due to low wages, Kaldor wrote, "...the most successful exporters are able to achieve increasing penetration, both in foreign markets and in home markets, because their products go to replace existing products." They replace them because they "...provide a new and preferable way of satisfying some existing want." (Causes, p. 69)
This explanation only works if it is assumed that the new products are put on sale in markets, where markets are conceived, as E. F. Schumacher put it, as populated by bargain-hunters with money, i.e. people who will buy a new, cheaper, and better product when they come upon it.
It is not a foregone conclusion that people will act like bargain-hunters, or that markets will be open. In the 19th century Japan declined to open its markets to European and American exports, and it took Admiral Perry's naval artillery to compel Japan to behave in a way consistent with economic theory. In general, the history of the expansion of markets for European exports is a history of conquest. A contemporary observer (John Locke, in a candid moment) described a process of circular and cumulative causation rather different from that described by Myrdal and Kaldor: with the money gained from foreign trade, England was able to arm ships and pay soldiers, and thus to gain the power to gain more money, which in turn, it used to buy still more power, with which to acquire still more money. The mines of South Africa provide another case in point: since the Africans had no use for money, they could not be induced to work in the mines for pay until the government imposed a tax on them which had to be paid in money; the government, in collaboration with the mine owners, rounded them up and set them to work in the mines for wages so they could earn the money to pay the tax. Africans were thus conscripted into the market.
I do not mean to deny that traditional ways of life during the past few centuries have sometimes been nonviolently seduced out of existence by cheap manufactured goods, or by wage labor voluntarily accepted. Cheap goods, conquest, and a number of other factors have all played roles in modernization. I simply want to assert that there is nothing natural or inevitable about market behavior.
There is, however, a logic of market behavior. It is the logic of the bargain-hunter. And there is a metaphysics of the market. It is modern western philosophy. (Especially early modern philosophy, i.e. empiricism and rationalism, culminating in the philosophy of Kant --later, romanticism, Marxism, and some other philosophical movements rebelled against the metaphysics of the market.)
A similar point can be made about causal explanations derived from social accounting. When Keynes writes, "The psychology of the community is such that when aggregate real income is increased consumption is increased, but not by so much as income," he assumes that we are talking about a cultural structure where people meet their basic needs by exchanging money for products; he assumes that workers work for wages, and that investors invest for profits. He also accepts, not in what he says but in what he does not say and in the questions he does not ask, that what people do with their money is their own business, which it is the business of the social scientist to observe and to explain scientifically. For Keynes the "just price" theories of Aristotle and Saint Thomas Aquinas have already been dead for four hundred years and forgotten for two hundred. The question what ought to happen when incomes rise is not a question anybody is entitled to ask. Keynes simply reports as a fact that, "...when aggregate real income is increased consumption is increased, but not by so much as income," as if he were an astronomer reporting on the gravitational attraction of a moon for its planet. Similarly, when Kaldor, interpreting Keynes, writes, "A private enterprise economy requires such an excess [revenue exceeding costs]: the receipts obtained from the sale of output must exceed the entrepreneurs outlay on production. .... Hence, ultimately, it is the exogenous component of demand which will determine what the level of output in the aggregate will be...," he is telling a story about the need for ever-new "exogenous" demands (mainly because the wages and profits paid in the aggregate will not yield enough money to buy the products in the aggregate). The story includes words like must and determine, which appear in mathematical theorems and in laws of natural science. The very language thus tends to treat socially constructed realities as if they were natural realities.
I do not mean to say that treating its socially constructed reality as if it were natural is unusual. Every culture does it. I do mean that a comprehensive intellectual system that does it can properly be called a metaphysics. What is unusual about recent western metaphysics --and what marks the thought of Kaldor, Keynes, and other economists as participating in a metaphysics generically distinct from those of all the world's other great civilizations and from those of most of the smaller entities known as "cultures"- - is the recognition of a sphere of social activity to which moral rules prescribing solidarity do not apply.
I do not wish to exaggerate the extent to which the institutions and norms of recent western civilization (which, by expansion, have defined the rules of the game of the global economy) are constant from generation to generation and from group to group. Nevertheless, certain broad generalizations are plausible. Without exception, each of these broad generalizations is connected with recent western civilization's characteristic institution: the disembedded market. One of these broad generalizations is Max Weber's concept of instrumental rationality (Zweckrationalitat).
Weber held that social action, by which he meant action meaningfully related to the behavior of others, could be oriented in four (admittedly often overlapping) ways: as instrumentally rational, determined by values (value-rationality), affective (especially emotional), or traditional. The first of these, Zweckrationalitat, typifies modern society; indeed without a certain amount of it modern society could not have come into being and would not be able to function. Weber defines instrumentally rational social action as, "...determined by expectations as to the behavior of objects in the environment and of other human beings; these expectations are used as `conditions' or `means' for the attainment of the actor's own rationally pursued and calculated ends."
The purest form (although not the only kind) of instrumental rationality is capital accounting, in which money is used to quantify the decision-making process. "From a purely technical point of view, money is the most `perfect' means of economic calculation. That is, it is formally the most rational means of orienting economic activity."
Other societies, the non-modern ones, are the ones where the value, affective, and traditional orientations predominate. For example, "..modern economic life by its very nature has destroyed those other associations [i.e. other than the coercive power of law] which used to be the bearers of law and thus of legal guaranties. This has been the result of the development of the market." There is, thus, such a thing as a characteristically modern, instrumentally rational, way of thinking and acting, which is part and parcel of modern society's institutional structure. And thus Weber's concept of Zweckrationalitat helps to explicate what it means to locate the discourse of an economic theory like Kaldor's in the broader context of the metaphysics of economic society.
If we look at the intellectual sea-change wrought in Europe in the 16th and 17th centuries; documented by Christopher Hill, C. B. Macpherson, and others; we will find further confirmation of the proposition that economics presupposes an economic metaphysics; or, as E. F. Schumacher put it, that economics as a science accepts instructions from meta-economics. The causal mechanisms cited as explanatory principles by neo-liberal, globalization-of-production, and neo- or post-Keynesian economists, include institutional features of modernity: private property guaranteed by a modern legal system, a general expectation that people will tend to act from rationally calculated self-interest, certain rights, and certain freedoms. These make it possible to speak of "market forces," and to give a scientific explanation of social phenomena in which market forces play the role of cause. All of them are articulated and included in the modern worldview developed first outside the universities, which then gradually became accepted within the universities, and which now has become academic orthodoxy. None of them is endorsed or supported by the traditional western metaphysics, centered on Aristotle, which was academic orthodoxy at least until the middle of the 17th century, and in some places long after that.
Economics did not create economic metaphysics. If we date modern economics from the publication of Adam Smith's Wealth of Nations in 1776, then it arrived almost a century and a half later than the philosophies of Thomas Hobbes and Rene Descartes. They were among the leaders in dismantling the old metaphysics, and in erecting in its place an alternative which was supposed to provide a "scientific" account of human action. In Leviathan (1651), Hobbes consciously took Galileo's physics as a model for social science. Armed with an ideology borrowed from contemporary technology, mechanics, and mathematics, Hobbes constructed a new philosophy that included as fundamental natural rights private property and the market freedoms, while it excluded traditional (Judeo-Christian and Greek) distributive justice. Hobbes's was one of the philosophies that reflected the advancing spirit of the age; it was seminal for, among others, John Locke; who was in turn seminal for, among others, Adam Smith's confidante David Hume. The professor of moral philosophy at Glasgow did not need to create either the institutional context or the metaphysical context of political economy; in 1776 they had already been created by the evolution of society and by earlier thinkers. Even if we think of modern economics as beginning before Smith, the sequence is still that the geographical extension of markets came first, the ethical philosophy justifying market institutions second, and the scientific explanation of market phenomena third.
The coming of the modern ideas that economics depends on was ferociously resisted in academic halls, as well as on battlefields and from pulpits. There were century-long see-saw battles at Oxford, Cambridge, and other centers of learning, as Ancients and Moderns fought for control. When rich merchants endowed new chairs, libraries, and colleges they did so for the express (although normally diplomatically expressed) purpose of challenging the reigning metaphysics and replacing it. Christopher Hill write, for example, "Sir Thomas Bodley ... founded his Library to forward the struggle against popery. But the Bodleian was a pro-scientific as well as an anti-Catholic influence in Oxford. The frieze in the Upper Reading Room must have shocked conservatives by including figures so strange to the university as Copernicus, Tycho Brahe, Paracelsus, Vesalius, Mercator, and Ortelius .... Thomas James, the first Librarian of the Bodleian ...used the Roman Index `that we may know what books and what editions to buy, their prohibition being a good direction to guide us therein'."
Thus the existence of the economic metaphysics Kaldor inherited is made visible by history. Historically it attained the status of being obvious and taken-for-granted, which it enjoys today, by struggling against neo-Aristotelian scholasticism and defeating it.
The concept of "final cause" marks a metaphysical chasm separating Ancients from Moderns. The word "final" here designates "end" in the sense of objective or purpose, as in "to what end?" or as the French and Spanish fin, French finalit?¹, Spanish finalidad. Aristotle had held that the cause or principle (arche) of any given thing included its end, its purpose, that toward which it aims. According to the Ancients, for humanity, the all-important final cause was humanity's Objective, which was caritas, participation in God's love, which was to be achieved through the salvation of the soul and through good works. The Moderns denied that there were final causes anywhere in nature. They insisted that truly scientific explanation must confine itself to what in Aristotelian terms are called "efficient causes," in other words the forces, factors, or independent variables which produce the phenomenon to be explained. The modern paradigm came to be the terrestrial and celestial mechanics of Sir Isaac Newton, whose Principia Mathematica (1687) is a story about vis (force) from beginning to end, vis being the Latin rendering of the Greek dynamis, which is the term Aristotle used to designate what in English we call an "efficient cause."
Failure to understand that the global economy conforms to an ideology that has banished final causes weakens many well- intentioned critiques of it. Examples of such well-intentioned but inadequate critiques are that the global economy is wrong because it rests on the premise that humans have a right to exploit the earth, or that it pursues material accumulation of excess for a few instead of meeting the basic needs of all, or because it rests on greed as a value, or because it incarnates masculinist rather than feminist values, or because it takes technological progress as an end in itself, or because it worships science in a way that excludes spirituality. These well-intentioned critiques miss the mark because they fail to understand that the global economy, regarded as a system of efficient causes studied by economic science, does not have any Objective. It is inadequate to argue that humanity has been pursuing the Wrong Objective, and that the species could get back on track by pursuing the Right Objective. The global economy is legally structured and ideologically defended in such a way that it has no Objective at all.
The possibility of thinking of economics as a science was thus created in two steps: (1) Final causes were banished from nature, and nature came to be conceived as a great machine, moved by forces; and (2) By analogy with nature, so conceived, the market was conceived as a machine, moved by market forces.
Modern philosophers synthesized the "experimental method of reasoning," as Hume put it, i.e. a science of efficient causes; with an ethics of freedom. Thus they performed the social office of the metaphysician by unifying in a single discourse the language of the society's techno-structure and the language of its command structure.
It should at least be mentioned, however briefly, that even before the philosophers, theologians contributed to the social construction of the institutions that made economics possible. In the 15th and 16th century, at a time when public discourse on social issues had to be conducted in religious terms because there were no other terms, religious reformers contributed to building the scientific and ethical premises of modern accounting and managerial rationality.
The reformers appealed to scripture to refute the established church, and in the process sharply distinguished revelation from natural reasoning. They could consistently recognize the independence of the supernatural (the revealed) and the natural (the discovered) from each other. The natural, having nothing to do with the knowledge required for salvation, could safely be regarded as a system of efficient causes. Natural science thus obtained theological legitimacy. By extension, social science could legitimately seek to discover the natural causes of prices. Thus was opened up a discursive space which political economy could occupy --in an area which the traditional synthesis of reason and revelation had monopolized, and which it had conceived in terms of final causes (and therefore in terms of just price, common good, the good of the soul, and divine will). Somewhat later, when terrestrial and celestial mechanics had been discovered, and when the laws of supply and demand had become recognized as their social homologues, theologians and orators could add to the authority of political economy by asserting that God had created it. In 1795, Edmund Burke could write of "...the laws of commerce, which are the laws of nature, and consequently the laws of God....." Later still, when Nicholas Kaldor undertook the study of it, economics had become fully independent of theology. In the disputes that preoccupied Kaldor and his fellow students at the London School of Economics in the 1920s, an assertion that God had ordained one law of commerce or another would have detracted from rather than added to its authority. Nevertheless, historically, the evolution of religious doctrines played some essential roles in the process of constructing the metaphysics that became Kaldor's.
Suppose that the growth treadmill, and the drive toward lowering production costs even where doing so conflicts with other values (such as, to name one, the value of maintaining a high social wage), are problems intrinsic to the basic cultural structures of the modern world. (I use the word "cultural" as a broad term which includes "social" as a subset) It follows that to ask "Why did we get on this treadmill?" is to ask "Why did the modern world come into existence?" Asking this question does not presuppose that pre-modern and non-modern cultures were or are, in general, better than modern society. It does presuppose, in this context, that the improvements modernity brought were accompanied by what Charles Lindblom (in a presidential address to the American Political Science Association) called, "the market as prison." (Lindblom compared the market to a prison in order to highlight modern society's built-in resistance to efforts to modify it to make it conform to human and environmental values.)
Anthony Giddens has suggested that the three classic theoretical traditions of sociology, those initiated by Karl Marx, Emile Durkheim, and Max Weber, stake out their fundamental differences from each other in the accounts they give of the origins of sociology's object of study, modern society. Their founders' differing accounts of why modernity arose shape the way their respective followers conceive of society as it is today. More recently than Marx, Durkheim, and Weber, historians have created an enormous literature devoted to studying in much greater detail exactly how and why the change from medieval Europe to the modern global economy happened. (Another enormous literature documents the modernization of non-European peoples.) Much of this literature has come to be known as "studies in historical discontinuity," centered in France among the Annales historians, and identified in the U.S.A. with the work of Immanuel Wallerstein and his school at the State University of New York at Binghamton.
Leaving for later (part 6) a more complete discussion of Marxist explanations of the rise of modernity, and leaving for later (part 7) post-structuralist deconstructions of "modernity" as a scientific concept, non-Marxist explanations of why the modern global economy began can, I believe, for the most part be put in one of five classes:
1. Technological theories, e.g. the concept of the Industrial Revolution.
2. Philosophical theories, i.e. accounts of the mathematization of the world, the rise of science, the rise of secular ethics.
3. Organization of human activity theories, e.g. theories about specialization and supervision; in factories, in schools, in bureaucracies, where the transition from traditional to modern stems not so much from new technology as from what Michel Foucault might call new forms of the deployment of power.
4. Political theories, e.g. accounts of the rise and political evolution of the first nation-states, Holland, England, France; together with accounts of the interaction between internal struggles within the nation-states, and the economic and military strategies they have followed internationally.
5. Market theories, i.e. accounts of the disembedding of the economy from social relations as the geographical scope of markets was extended.
It may be that all of the explanations of the rise of modernity so far proposed are wrong, and that some explanation not yet thought of is right. It may also be that the theories mentioned are incommensurable with each other, because in each case the definition of the phenomenon to be explained is different; thus, for example, if it is energy-intensive mass production industry that is to be explained, then the causal factors identified and the dates assigned to them may not be comparable to the causal factors and dates found in, say, an explanation of the decline of empires and the rise of nation-states --because the explananda are disparate. There may be no such thing as "modernity" in general, and therefore there may be no general explanation for its rise.
It seems more likely, however, that the five types of theory mentioned above have all partially explained a complex reality whose elements form an interrelated set of cultural structures, and which can usefully be named "the modern global economy." It seems likely that the best explanation would be one that accounted for each element and gave it its due weight.
I will outline an argument leading to the conclusion that the verdict from detailed studies of historical discontinuity comes down, on the whole, in favor of the fifth of the five kinds of theory I have suggested. The work of scholars like Fernand Braudel, Immanuel Wallerstein, and Karl Polanyi, tends to justify seeing the extension of markets as the leading cause of modernity coming into being. (I am not asserting that these scholars would accept my argument as valid; my assertion is, rather, that it is valid, and that the evidence they have amassed supports it.) Modernity's technological, philosophical, organizational, and political causes can be understood in the context of explanatory narratives fundamentally shaped by accounts of successive changes in patterns of trade.
Although Braudel, Wallerstein, Polanyi, and others devote a great deal of attention to the further question why the European commercial expansion which extended markets itself came into being, and why it was Europe and not China or Islam that was the center of commercial expansion, I will not; I will not consider what caused the enlargement of markets, but will confine myself to outlining reasons why, given that for whatever reason or reasons it happened, it, in turn, caused modernity.
The explanandum (that which is to be explained) is modernity. The explanans (that which explains) is the enlargement of markets.
In one respect this explanation is true by definition. One important feature of modernity is (now) the global economy. Formerly, before it became truly global, the modern economy was what Wallerstein calls "the European world-system," incorporating Europe and most of the Americas and parts of Asia and the East Indies, but not the entire globe. Since one of its essential characteristics is being a large market area, and since formerly markets were mainly local; and since, by definition enlarging markets creates an enlarged market; it follows that modernity (in this respect) was produced by the enlargement of markets. (Wallerstein would qualify such an analysis as follows: occasional trade and trade in luxuries, did not produce the historical discontinuity called the emergence of modernity; the relevant enlargement of the market consists of regular trade, which includes trade in necessities. I am not sure I agree with him with respect to luxuries, since luxury trade just like necessities trade generates profits, moves ships, and creates a livelihood for those engaged in it; and further, it is hard to draw a line between for example, pepper from India as a luxury for the rich and pepper from India to make the bad meat of the poor edible, or between the Santo Domingo sugar trade in its earlier phases when sugar was a rare luxury and in its later phases when sugar and rum made from it became mass consumption items.)
Citing the expansion of trade over larger geographical areas as an explanation is more interesting and more illuminating to the extent that it explains something other than itself. To the extent that it is plausible to say that the other important features of modernity were produced by, or at least facilitated by, trade that extended over vast reaches of the globe, it becomes more reasonable to identify market enlargement as "the leading cause" rather than "a contributing factor."
Further, in the case of any given phenomenon which the proposed explanans is supposed to explain, the plausibility of the explanation is enhanced by (1) an account of the sequence of events compatible with the cause producing the effect (Post hoc ergo propter hoc is a fallacy, but nevertheless effects do not precede their causes, and hence a proposed explanation has passed a test if it can be shown that the cause preceded the effect); and (2) an account of the quasi-mechanism by which the alleged cause produce its alleged effect.
In favor of counting market growth as the cause of an 18th century Industrial Revolution that took place then because for economic reasons society was ready for it, is the fact that the steam engine, which powered the coal mines and the cotton mills, was invented long before the 18th century. Braudel points out that, "The steam engine, for example, was invented a long time before it launched the industrial revolution --or should one say before being launched by it?" The ancient Egyptians had steam engines as toys. As a further point in favor of seeing market growth as the leading cause factor, a quasi-mechanism can be cited giving a reason why in the 18th century it became profitable to use steam engines in mining coal and in manufacturing cloth. Namely: production on a larger scale for the sake of both exports and an expanded home market. (Enlargement of markets occurs within as well as between nations, as local fairs give way to national systems for selling merchandise, and as barter and the informal economy give way to money.) The point about steam power could be generalized, although it should not be generalized in a way that denies the facts adduced by writers like Piore and Sabel to demonstrate that technology choices are sometimes market-leading and not always market-led.
The sequence of events also favors counting the growth of the market economy as the cause, rather than the effect, of its ideological justification. The seminal ideas of Descartes, Hobbes, Locke, and Newton were articulated in the 17th century, several centuries after the time when great trade expansion began. When Hobbes, for example, made fun of Aristotle's concept of a just price determined by what the buyer and seller respectively deserved, on the grounds that people would not complain if they got more than they deserved from a sale, and people should not be heard to complain that they got less than they deserved if they had freely consented to the sale, there was a functioning market economy based on arms-length transactions already in existence in England. When a number of writers hit on generalizing the achievements of technology in a science of mechanics, and then articulating the theory of the market as a social analogue of mechanics, there was already a modern market society in existence to write a theory about.
One can cite mechanisms by which larger markets react back upon and reshape local everyday life, and thus explain the world which writers found before them to write about --which, admittedly, the writers reshaped and partly determined the future direction of, by the very act of writing (provided that they wrote ideas whose time had come, which, consequently, were read). Such a quasi-mechanism is the relationship of the continental wool trade to the enclosure movement. Property rights and every aspect of daily life in English villages were altered because it became profitable to devote land to sheep raising for the export trade; it became profitable to usurp the common land formerly used to produce food and fiber for local consumption. Daily life in the villages of Guinea was irrevocably altered when the slave traders arrived in search of human labor to work the sugar plantations of Brazil and the Caribbean; the plantations, in turn, exported the sugar to Europe, and required from Europe the means of subsistence to support them, which in turn, meant that agriculture somewhere had to be reorganized to export food to the sugar plantations. Examples of such mechanisms at work could be multiplied indefinitely.
The early factories were organized to support production on a larger scale, which was in turn a function of markets. Parallel considerations apply to the evolution of hospitals, schools, barracks, and prisons. When Michel Foucault explains the normalizing of human behavior through the new and more subtle means of exercising power that is more and more characteristic of modernity, he frequently cites economic necessity. For example, he cites thievery on the London docks in the late 18th century as threatening to reach intolerable proportions ruining commerce, thus making necessary modern police and the modern prison. In the case of the development of many organizational features of modernity, the sequence was such that the enlargement of the market came first; and the mechanism producing institutional change was the need to establish the institutions that the smooth functioning of a market economy required.
On the other hand, it seems to be the case, as Foucault suggests, sometimes implicitly sometimes explicitly, that there is a creepy vengeful side of human nature that delights in participating in the exercise of power (and in resistance) even when it serves no useful purpose; and it seems to be the case that bureaucratic and psychological inertia, and the self-interest of functionaries, produce results, and elaborate rationalizations for those results, which are not required by any market imperative; and it seems to be the case that power has a life of its own that transcends both individual psychology and collective wisdom. Similar caveats against exaggerating the importance of the direct and indirect effects of the growth of markets could be made about the technological theories and philosophical theories discussed above. I don't want my outline of an argument in favor of a theory of historical discontinuity that treats the enlargement of markets as the leading cause of modernity to be taken as an excuse to ignore features of modernity, or constants of human nature, that market enlargement cannot easily account for.
If one dates political modernity from the rise of nation-states, it is common to take the Peace of Westphalia of 1648 as a watershed date. This was the treaty that guaranteed the independence of the Netherlands from the Spanish Empire, and which laid to rest the juridical principle that Christendom was in principle a single temporal and spiritual realm. The Netherlands can be thought of as the first nation-state, and it can be regarded as showing in a nascent and unusually transparent form some characteristics all the many nation-states that have since come into existence have had in common.
Immanuel Wallerstein's thoroughly documented account of the position of the Netherlands in international trade explains why this nation-state came into existence, and why the nation-state as an institution emerged there and then and in the form it took. Admittedly, the word "explains" here is not used in a sense so strong as to imply that an ineluctable necessity compelled the nation-state to evolve as it did. But this key fact of political history is explained in the sense that when we understand the position of the Netherlands in international trade we can see why it would have been reasonable to expect in advance, before it actually happened, that the Netherlands would want independence from Spain's empire, that it would be powerful enough (with the help of alliances) to win it, and that when independence came the Netherlands would become a constitutional monarchy dominated by burghers.
Admittedly, too, the emergence of the first nation-state is not the only event to be explained in a political account of the origins of modernity. But it is one important event, and the considerations this event illustrates can serve to outline this part of an argument for seeing market enlargement as the leading cause of modernity's rise.
In the 17th century, Dutch merchants became major middlemen in Europe. Although Spain and Portugal had vast empires rich in silver and gold, they were short of food. In the preceding centuries the Dutch had gradually improved their fishing and merchant fleets; they were major purchasers of grains from the countries on the shores of the Baltic Sea. The Dutch Oost Indische Companie brought spices and fabrics from far Asia, which were traded, in part, for Baltic grain. The Netherlands was in a position to supply provisions to the Iberian peninsula, and in a position to use the precious metals thus acquired to finance commercial adventures elsewhere.
Given Holland's wealth, and given the source of it, it was to be expected that the Netherlands would desire to be rid of Spanish taxation and regulation; it was to be expected that (with alliances) it would have the power to free itself from the Empire; it was to be expected that the resulting independent state would recognize, in the words used by Lord Mansfield of the second nation-state (Britain), that "commerce is become the pillar of the kingdom." It was to be expected that the first nation-state would be (as subsequent nation-states have been) a participant in an international trading system. It was to be expected that its governors would support its merchants by pursuing policies designed to enable them, and therefore the nation, to prosper. In the Netherlands as elsewhere, reliance on trading in enlarged markets to supply the daily bread of the people, led to the establishment of political institutions that were conducive to trading successfully.
Thus with respect to the origin of the nation-state, the proposition that commercial expansion is the explanans and political modernity the explanandum can be shown to be in a significant sense true. It cannot be shown to be true in the strongest sense of the concept of cause and effect, but neither is the causal connection so weak as to empty the word "cause" of meaning. The sequence of events was that commercial expansion came first, political modernity second. An account of how one could be expected to produce the other provides a quasi-mechanism showing how the alleged cause operates to produce the alleged effect.
It is not necessary or desirable to be a reductionist or a determinist. We need not and should not say that politics is nothing but economics. We need not and should not say that once 17th century trading patterns are known it can be rigorously deduced that The Netherlands had to become an independent constitutional monarchy. The weaker but still significant claim that commerce is the leading causal factor, and a background condition operating on the other factors, is sufficient.
To complete the argument it is necessary to show that the need to find political forms conducive to success in the modern economic world, which was operative in the case of The Netherlands was similarly present in the emergence of other modern nations; and it is necessary to show that what is true of the nation-state is also true of the other main features of modern politics. I believe that the weight of the evidence amassed by students of historical discontinuity does show these things --even though, admittedly, the weight of the evidence also shows that social history is infinitely complex, that there is no current without a counter-current, and that there is no generalization that does not require qualifications. As a second set of examples, supporting the view for which I have an outlined an argument using 17th century Netherlands as a first example, I would cite and analyze Immanuel Wallerstein's account of the French Revolution and of the shape modern institutions took in the first years of the 19th century in his The Modern World-System III: the second era of great expansion of the capitalist world-economy 1730-1840s.
The enlargement of markets changed the moral status of the stranger. From being mainly unknown, presumed on contact to be an enemy, at best a lost soul whom a saint might convert to the true faith, the stranger came to be an essential partner in the business of life, the customer, the source of wealth, even the source of necessities. As local daily life came to be organized around production for sale in distant markets, the status of the neighbor changed also; the neighbor became more like a stranger.
Ethics had to change.
The ethics of medieval Europe was, like ethics everywhere, an element of ideal culture which, although it provided a discourse for criticizing and for guiding practice, did not describe or govern practice. It was --like the ethics of many other civilizations and cultures-- an ethics that prescribed self- discipline both for the improvement of one's own character and for the good of others and the community. It was an ethics suitable for communities where survival was always an issue, where individuals and families relied for survival on the protection and food provided by neighbors (be they superiors or inferiors) who owed allegiance to the same lord and prayed to the same God. We pay special attention to medieval Europe not because it was intrinsically more important than any other pre-modern or non- modern culture, but because Europe turned out to be the part of the world where, at the end of the medieval period, the modern system that became today's global economy was born.
Life was precarious. Population increased slowly, and in some decades declined. Plagues and poor harvests, the latter often leading to an outbreak of the former, undid the effects of fecundity. The medieval settlements in Greenland died out completely, leaving no survivors. Warfare was endemic --with moors from the south, tatars from the east, Vikings from the north, as well as with feudal lords of Christendom fighting each other. Whole villages were exterminated by war, their farms pillaged and destroyed "to the root."
The population was overwhelmingly rural. Braudel estimates that even in 1500 only 10% of the English and 2.5% of the Russians lived in towns with more than 400 inhabitants. The main form of production was manorial, producing for use more than for exchange; for barter more than for sale; for local fairs more than for long trade routes to exotic destinations. The peasants who produced food for the knight of the manor were the knight's servants in peace, his infantry in war. The knight was the protector of his people.
Medieval Europe produced a systematic ethics of conventional solidarity of a type typical of traditional civilizations. It was elaborated --in a way also typical of traditional civilizations-- in the form of commentaries on sacred texts. One of the biblical names for God was agape (love). In Saint Thomas summaries of medieval thought, caritas, the Latin translation of the Greek agape was the centerpiece. (This is my interpretation of Thomas, and I think it is a straightforward reading; many commentators, reflecting today's scholarly concerns, find the centerpiece of Thomas' thought to be his epistemology, his theory of meaning, or his onto-theological hierarchy.) Caritas was the basis of moral obligation; it was also the source of joy (gaudium) and of peace (concordia). It was the basis of the duty of the sovereign to care for the people; it was the basis of everyone's duty to perform the seven corporal works of mercy, the first of which was "feed the hungry." (The seventh was "bury the dead.") Law was defined as an ordinance for the common good made by the one whose duty is to care for the community.
This is the context of the just price. The police of medieval Paris were instructed to supervise the markets, and in so doing to assure that food would be plentiful and cheap. In the medieval ethical system it was the duty of the peasantry to produce food and to make it available at low (just) prices; they could legitimately be compelled to do so. Merchants who interfered with just prices by committing such crimes as "forestalling" (meeting the peasants on their way to town, buying their produce, and then taking it to town themselves to sell it for a profit) were believed to deserve punishment.
As the medieval period drew to an end, in the commercial expansion of the 15th and 16th centuries, a modern economy was born. When, later, there were technological, philosophical, organizational, and political changes; and when modernity expanded further to become a global economy; these further changes were conditioned by, and to a not inconsiderable extent and in a not insignificant sense they were caused by, the commercial expansion that had already taken place. The historical discontinuity wrought by commerce required discontinuity in ethics.
It had to become possible to buy and sell with any people anywhere, allowing them to have their own religion and way of life, but imposing on them universal norms requiring compliance with bargains struck in business. As the centers of commerce, the towns, grew, the expectation that people would share their goods with indigent neighbors had to cease to be a moral and legal requirement, although it might be allowed to continue as voluntary generosity or as a duty self-imposed for private religious motives. Particular moral rules needed to be repealed: the rule against charging interest on loans, the rule forbidding a person to sell an item for more than was paid for it, the rule allowing the poor to steal when compelled to do so by need.
What expanding markets needed was a revival of the Roman jus gentium, the law of all nations, the common law of commerce used in Roman times when peoples of many cultures came together to buy and sell in markets. And that is what first Europe, and then the world, got. Revived Roman law became (even in England, whose difference from the continent in this respect is often exaggerated) the basis of the civil law which gradually replaced the confessional, the canon law, and scripture as the source of public moral and legal authority. Backward areas that still did not have civil codes in 1800 had codes imposed on them by Napoleon's armies; when the Napoleonic tide receded the codes remained. Outside Europe civil codes came with colonization, or else with modernizing elites, such as the Young Turks or the liberals who led the revolutions of the Latin American republics against Spain. Europe moved away from what Ferdinand Tonnies called a Gemeinschaft (from the German gemein, common) a community, whose principle is unity; and toward what Tonnies called a Gesellschaft (from the German Gesell, companion, partner, fellow, brother member), a society, whose principle is mutual respect for the rights of independent persons.
But the historical discontinuity of ethics needed something more. It needed a worldview in which the normative principles that governed secular life in the factory and in the marketplace could continue to enjoy legitimacy because they could make sense --if only because so long as all the cosmologies were religious, human behavior could only make sense in religious terms. There had to be, and there was, an historical discontinuity in metaphysics.
That international trade theory is derived from economic theory, and that the latter in its principal versions presupposes the existence of certain institutions and ideas (markets, property, contracts ...) that I have characterized as modern, is not difficult to establish. What is perhaps more difficult is to show how the main concepts underlying international trade theory were, specifically, part of a metaphysical sea-change. What I think I need to show is that in the birth of the global economy there were conceptual discontinuities, and not simply cumulative advances from what Adam Smith called "early and rude state of society" toward higher and higher levels of what he called the progress of "improvement."
I shall make my case for saying that a discontinuity in metaphysics made international trade theory possible by tracing the evolution of the concept of "rent."
As a limbering-up exercise for the mind, before considering rent it may be helpful to broaden the context by citing some facts from prehistory and from child development, even though they are not, strictly speaking, relevant. In Before Philosophy, H. and H. A. Frankfort wrote, "...there is justification for the aphorism of Crawley: `Primitive man has only one mode of thought, one mode of expression, one part of speech --the personal.' This does not mean (as is so often thought) that primitive man, in order to explain natural phenomena, imparts human characteristics to an inanimate world. For this very reason he does not `personify' inanimate phenomena..." Somewhat similarly, Jean Piaget writes, concerning the judgment and reasoning of young children, "...originally the child puts the whole content of consciousness on the same plane and draws no distinction between the `I' and the external world. Above all we mean that the constitution of the idea of reality presupposes a progressive splitting-up of this protoplasmic consciousness into two complementary universes --the objective universe and the subjective."
These brief allusions to early peoples and to early childhood may, by marking beginnings, serve to suggest that the evolution of the mental frameworks within which human symbolic functioning takes place has a direction. The suggested direction of this evolution is away from undifferentiated thought suffused with personal qualities. It is toward thought that is progressively more articulate and more objective. The little piece of metaphysical history that is about to be outlined, the history of the idea of rent from the 13th to the beginning of the 19th century, can be regarded as a fragment in a much larger process of mental evolution.
The practical utility of this brief reminder that the history of thinking about rent, or, for that matter, the history of thinking about anything, is a part of the history of thinking, is that it may enlarge our ability to think of rent as a malleable concept. The evolution of mental frameworks may not be over yet. (When comprehensive mental frameworks are deliberately made into intellectual systems they are traditionally called "metaphysics.") Our present stage of mental evolution may be only a step toward a more intelligent future in which the concept of rent, along with other concepts, will be more articulate and more objective than it is now. And, on the other hand, it may be the case, as scholars who have devoted themselves to the study of ancient myths incessantly tell their readers and audiences, that valuable ancient wisdom, which somehow went along with conceiving of reality in an undifferentiated manner suffused with personal qualities, has been lost somewhere along the way. If so, it may be easier to recover the lost wisdom if we remember that economics and the global economy, which are, respectively, today's dominant discourse and dominant practice, grew out of earlier forms, which, in turn, grew out of still earlier forms.
According to the Oxford English Dictionary the word "rent" comes from the Old French rente, which comes from the popular Latin rendita, which comes from the classical Latin reddita, a form of the verb redare, which is formed from dare, "to give" and the prefix re, and which meant "to give back." The O. E. D. suggests a cross-reference from "rent" to "render," which has the same Latin source, and which, of course, is sometimes a synonym for "surrender."
In the early common law of England, the words "rent" and "render" were sometimes used interchangeably. "With a render of rent, which in those days was of Corn or other Victual." "It is frequent in domesday-book, after specifying the rent due to the crown, to add likewise the quantity of gold or other renders reserved to the queen." "They swore ... that they would ... make such renders from the land, as had been done before to any other King."
From these brief etymological remarks it can be surmised, correctly I believe, that at first the word "rent" was used along with "render" and other terms to refer to the tribute paid by the feudal inferior to the feudal superior. Land was most frequently held by the feudal inferior under socage tenure, by which the inferior became the liege man of a feudal baron. Each had duties to the other in the relationship. The most important of the liege man's duties was to deliver food to his lord. The most important of the lord's duties was the military protection of his vassals. Rent was at first paid mainly in kind; it was only with the passage of time and the increasing use of money that it became customary to pay a certain sum of money in lieu of surrendering a certain portion of the harvest.
By the time when economists came to write about it, rent had already become the price paid for the use of land. There was a lingering awareness that this price had its origin in the subjugation of some people by others. Thus Adam Smith writes, "As soon as the land of any country has become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was common, cost the laborer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the license to gather them, and must give up to the landlord a portion of what his labor either collects or produces. This portion, or, what comes to the same thing, the price of this portion, constitutes the rent of land...."
True to the mechanistic psychology employed by many of the advanced thinkers of his time, Smith declared human nature to be such that landlords would raise rents as high as they could. It thus became a fact of nature, and a premise to be regarded as a cause when studying its effects, that in order to obtain the use of land it was necessary to pay as much as the tenant could afford to pay, for that was the sum without which permission to use the land could not be obtained. "Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavors to leave no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labor, and purchases and maintains cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighborhood."
It was thus easy to conclude that rent was a quality of a physical object, most notably the land. Since the moral factors were held constant, they dropped out of the equation; they became invisible. Two of the invisible moral factors were: (1) The institution of land ownership; and (2) The moral compass guiding the landlord. Rent attained the metaphysical status of a natural quality of a physical object. Together with its new metaphysical status, rent attained, from a normative (legal and moral) point of view, the status of a given in a constellation of rent-related institutions. These rent-related institutions, which presuppose the land yields rent, included, or soon came to include, the duties of trustees holding land in trust, the duties of managers holding land as agents for the owners, the holding of land in endowments for educational and eleemosynary foundations, landholding by corporations whose directors have fiduciary duties to shareholders, land burdened with debt on which payments must be made to banks, the payment of property taxes by the owners of the land, land owned by pension funds, and so on ... It became, and it now is, impossible to modify rent, as a concept and as an institution, without also changing the courses of the other stars in the normative constellation of which rent is now a part.
The objective nature of rent as a quality of the land itself was classically articulated in 1817 by David Ricardo in his theory of rent. Ricardo distinguished between "rent" as a word in ordinary language and "rent" as a technical term employed in the science of political economy. The latter he defined as payment for "the original and indestructible powers of the soil." When a country is first settled, there is no rent. The time of first settlement is, "...when land is most abundant, when most productive, and most fertile..." Then nothing is paid for the powers of the soil because the cost of farmland consists entirely of the labor and capital required to improve it. "...it is only when its powers decay, and less is yielded in return for labor, that a share of the produce of the more fertile portions is set apart for rent." The rent of a particular piece of land, the "quality of the land," which makes labor on it more productive by pairing it with natural fertility, is measured by the difference in value between the crops this particular piece of land will produce, and what can be produced on the worst land then pressed into use (with equal labor).
(The worst land then pressed into use has at any given time become cultivated because of the growing demand for food. The worst land does not produce any rent. It is marginal. When there is a slight drop in demand, this worst land will not be used at all, and when the worst land is cultivated it yields just enough to pay the cost of working it.)
Ricardo's theory of rent has often been cited as a paradigm showing what it means to be a law of economic science. It is non-obvious, quantitative, and empirically testable. Once rent becomes a quality of objects, economics as a science is off and running. Thenceforth, in analyzing the prices of commodities, the rent that must be paid to produce them can be studied as one of the causes of the effects observed. Income streams consisting wholly or partly of rent can thenceforth be treated as objective, natural phenomena; rent streams of income, and by extension of the metaphor other streams of income too, can be measured and studied in a manner analogous to the hydraulic study of streams of water.
The transformation of the concept of rent was a part of a metaphysical discontinuity, and a metaphysical discontinuity was its context. Rent evolved hand in hand with a world-change toward a world where personal relationships counted for less, and objective facts counted for more. As the world changed, worldviews changed. In terms of human welfare, much was gained --the change indeed represented what Smith called the progress of "improvement" -- but there was loss too. In Martin Fierro, a classic of Argentine literature, the hero laments the fate of the gaucho in words that mock modernity:
Pues todos son sus senores Sin que ninguno lo ampare
Everybody wants you to call them "Sir" (senor), but nobody protects you.
The unsettling of traditional ways of life caused by the coming of modernity was first felt and discussed as a religious crisis. It took several centuries in the West to get to the point where social issues could be framed in terms of debates between competing secular ideologies. Even then, even now, ghosts of ancient religious ideals hover about the subtexts and the silences of the social sciences, as ghosts of Enlightenment humanism hover about the subtexts and silences of the genealogies of Michel Foucault. When modernity arrived pre-modern traditions did not depart. The West itself--like the rest of the world--is an alloy, a split-level culture, in which the ancient ideals typically expressed in religious discourse have remained alive as dialogue partners of modernity, and as elements in a series of cultural syntheses.
The theories that I am counting as Marxist are theories that explain international trade and the global economy through the idea of "accumulation" developed by Karl Marx. "Accumulation" is intrinsically connected with other key Marxist ideas, such as surplus value, commodity, the labor theory of value, and the private appropriation of the social product. I am including in the same discussion Maria Mies's book Patriarchy and Accumulation on a World Scale because she refers to Marxist ideas frequently, either to disagree with them or, as in the case of "accumulation," to employ them. Marxist theories, and also Mies's theory, provide powerful scientific arguments in favor of an egalitarian and communitarian organization of society. Their socialism, or, in Mies's case, feminism, projects a future cultural synthesis of modern ideals of liberty and equality with a holistic sense of society as a great mutually interdependent family. In this latter respect their visions of a better future are like the visions of brotherhood and sisterhood found in ancient sacred texts.
Marx and Marxists explain international trade, and, more generally, the global economy, as a search for profit, or, more precisely, as accumulation. (In making this generalization I exclude, in addition to the many Marxists I have not read and do not know about, Louis Althusser, who, although he was a Marxist advanced ideas on causal explanations more conveniently discussed together with the post-structuralists, below in Section 7.) In order to discuss the global role that Marxists assign to "accumulation," it is first necessary to consider "profit."
Much of Volume One of Marx's Capital is devoted to discovering "the secret of profit-making." Before Marx, Adam Smith had given what can properly be called a moral explanation of profit, even though in Smith's work the moral element is in the process of disappearing. Smith's explanation is that the entrepreneur would not be willing to invest capital unless he expected to make a profit. If there were not profit to be made, the entrepreneur would, instead of undertaking a business venture, lend out his money at interest. He would, indeed, prefer to lend out his money at interest even if he could expect a profit from running a business, if the expected profit from the business were smaller than the interest he would get from lending. Similarly, the moneylender would not be willing to part with his money unless the borrower paid interest --and, indeed, interest in excess of, or at least equal to, what could be gained from lending to someone else (with appropriate adjustments made for terms of repayment and degree of risk).
What makes Smith's explanation of profit irreducibly moral is its reference to the will of the entrepreneur. The human will is the very same entity which, often but not always under the name of "spirit," was, and still is, construed by religion to be in need of salvation. Actions performed after deliberation and choice were, and still are, regarded by ethics, including secular ethics, as acts for which the person is responsible. Willful actions can be praised as good and right, or condemned as bad and wrong, just because they are acts of the will.
Smith uses as the explanatory principle, which explains profit, the will of a stylized human person; i.e. the will of homo economics, an ideal type. Since it is the will that explains, it is necessary to examine Smith's account of profit in the light of appropriate categories for the analysis of deliberate human action, such as those proposed in ancient times by Aristotle, and those proposed by the twentieth century philosophies of human action of Stuart Hampshire, Stephen Toulmin, Rom Harre, and others. In Aristotelian terms, the conduct of the entrepreneur needs to be analyzed with the categories of deliberation, choice, habit, character, rule, and convention (that is to say, ethics).
Smith's account of profit leaves room for realism and accuracy because the reference to the will of the entrepreneur allows for the possibility that he or she, functioning as an acting human person, might deliberate differently and might decide otherwise. It leaves open the possibility that the practices and conventions of the milieu, which guide normal action, might prescribe conduct somewhat different from that of the homo economics Smith supposes. The person might decide to loan money without charging interest -- indeed, according to canon law, and according to the guidebooks used by confessors even long after the middle ages, making zero interest loans is not merely a logical possibility; it is sometimes the course of conduct required by a moral imperative. It is one of the many types of action that grace empowers the human person to perform. Upon baptism caritas (the Latin term for agape) enters the human heart, and --so the mainstream traditional doctrine goes --caritas becomes thenceforth the ruling principle of all the person's actions.
Smith's reference to the will also leaves open the possibility that if interest is to be charged, or if goods are to be sold at a profit, the rate of interest or profit will be a conventional rate, i.e. a customary rate, i.e. an ethical rate (according to the root meaning of the word "ethics," and in the sense of the German Sittliche). Allowing for this possibility is a step toward realism and accuracy, as has been shown by Cyert and March in A Behavioral Theory of the Firm, and by many others who have documented the roles played by custom, by ethics, and, moreover, by friendship, in the real world of business.
Smith, by explaining profit by reference to what the entrepreneur will or will not do, leaves open the door to a social psychology or an anthropology of business which would study the real life of human beings -- which is a moral life, embedded in the normative conventions of language and daily practice. Having left the door open, he declines to enter it, and prefers to build political economy on the basis of his own few and scattered observations, which serve to confirm his belief that homo economicus, is an ideal type which can be relied on to explain what humans have done and to predict what they will do next. Early in the 20th century, Vilfredo Pareto, the Austrian economists, and the others who are generally considered the victors in the Methodenstreit (the battle over the methodology of economic science in which those who took economics to be a branch of history, which studied the economic norms prevailing at any given time and place, are generally thought to have lost) made the validity of Smith's hypotheses about the behavior of his ideal type a matter placed beyond the reach of empirical inquiry, because of the way they defined economic science. Real economics, pure economics, according to Pareto, takes as its field of study the behavior of profit maximizers. Pareto's defense of Smith has the consequence that economics may well be --as Nicholas Kaldor and others have indeed said that mainstream economics was-- an arcane academic subject which does not apply to most of the phenomena in fact observed in the world.
Milton Friedman, a 20th century self-styled "positive economist," justifies Smith and himself by giving a reason why entrepreneurs who do not seek to maximize profit can be disregarded by economic science. Friedman wrote that a businessman who does not seek in some way to maximize profits "will not be in business for long." The existence of such people, according to what Friedman wrote in this particular unguarded moment, may safely be ignored by social science because their own irrational behavior will soon cause data about them to disappear from all equations. Friedman thus overlooked the findings of behavioral economics and economic anthropology; he overlooked the histories of civilizations where homo economicus was unknown which survived for centuries; he overlooked the existence of the nonprofit sectors of the economy.
Nevertheless, one-sided as the claim that non-profit- maximizers "will not be in business for long" is, it is a claim about the proper methodology for economic research that is the bearer of some important truths about social structure. It is quite true that the competitive institutional structure of modern economic life is such that people are often compelled, or at least pushed, to act like homo economicus whether they want to or not, and whether their moral compass points them in that direction or not. Friedman's point does not imply that Aristotle was wrong to say that voluntary human action is the product of deliberation and choice. Friedman's point does underline the fact that what Marxists call "the competition of capitals" does impose severe constraints. These constraints can be described as limitations on the moves that players who wish to remain in the game can make in the complex language game called "capitalism." Certain moves lead to forfeit of capital, to what Smith called "ruin," and the player is thenceforth demoted to the working class; or, even worse, the player is demoted to the ranks of those who have no money at all, in a world where all the necessities and conveniences of life must be purchased with money. In capitalist society, in terms cited by Braudel, he or she who has no money "wanders dead among the living."
Marx did not aim to broaden Smith's vision. Instead, Marx aimed to exploit the internal contradictions of classical economics. Like a guerrilla army that acquires its weapons by capturing them from government troops, Marx wrote a critique of bourgeois political economy that created out of the framework of concepts that Smith and others had constructed, a powerful ideology for the working class. Marx mocked economists like Smith for failing to notice that according to their own premises, exchanging commodities at their values does not yield any surplus of value (Mehrwert). Therefore, if the classical theory of the market were correct, making a profit would be, as a general rule, impossible.
Although Smith's homo economicus may desire a profit, and may be unwilling to invest if no profit can be expected, it follows from Smith's postulates that profits happen only in unusual circumstances, where the capitalist succeeds in cheating, or happens to have the good luck to buy at less than market value and/or to sell at more than market value. The exchange process produces no surplus. "Turn and twist then as we may, the fact remains unaltered. If equivalents are exchanged, no surplus value results, and if non-equivalents are exchanged, still no surplus value. Circulation, or the exchange of commodities, begets no value." (Capital, pp. 181-82) Much of the first volume of Marx's Capital is devoted to analyzing this contradiction, and to solving the riddle of profit. Thus profit-making becomes the explanandum, that which is to be explained. The labor theory of value (more specifically, the use value of labor-power) turns out to be the explanans, that which does the explaining. By explaining what classical bourgeois economics could not explain, Marx established the scientific superiority of Marxism.
This scientific superiority is achieved by moving the analysis to a deeper level --moving downward in metaphysical space from the superficial level of the surface of society, the level of circulation, in order to encounter Reality more intimately and more truly in the underlying depths of society, at the level of production. The movement of the argument from surface to depth is dramatized in these famous lines:
"This sphere that we are deserting, within whose boundaries the sale and purchase of labor-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property, and Bentham. Freedom, because both buyer and seller of a commodity, say of labor-power, are constrained only by their own free will. ... Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself. The only force that brings them together and puts them in relation to each other, is the selfishness, the gain and the private interests of each ....
"On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the 'Free Trader Vulgaris' with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides, in front as capitalist; the possessor of labor-power follows as his laborer. The one with an air of importance, smirking, intent on business; the other timid, holding back, like one who is bringing his own hide to market, and has nothing to expect but --a hiding." (Capital, Volume I, pp. l95-96)
Between the lines of Marx's explanation of profit, in its silent subtext the ancient ideals of love and justice chant inaudible enthymemes, as a mute, invisible chorus. It turns out that the secret of profit-making is the exploitation of labor. (The chorus: "...inasmuch as ye have done it unto the least of these, so ye have done it unto me.") The capitalist buys labor- power at its exchange value, which tends to fall toward --here as elsewhere Marx follows Smith and Ricardo-- the cost of buying the means of subsistence necessary to keep the laborer alive. Labor- power's exchange value, like the exchange value of everything else, naturally tends toward its cost of production. The capitalist, having purchased labor-power at its fair value, then uses the commodity that he has bought and therefore owns. He puts the laborer to work. At the conclusion of the labor process, the capitalist owns the products. The products are then sold at their exchange value, and it turns out that they have value-added, a surplus value; labor-power is not only a source of value, but a source of more value than it has itself; its use produces an exchange value in excess of what it cost. Thus it is by privately appropriating the product of the social effort that the capitalist makes a profit.
But this is just the beginning of the story. Money ("value in money-form") having been metamorphosed into more money, the resulting surplus of money can now be thrown back into the acquisition of more elements of the production process --and the cycle begins over again. Surplus value is thrown afresh into the production of more surplus value, over and over. It accumulates. It must accumulate, and continue accumulating, for only the continuous repetition of its self-aggrandizement produces profit (and, as by-products, employment, goods, and services.) The concept of necessary self-expansion of capital leads Marx and Marxists to think of the global expansion of capitalism as a necessary historical process, an "accumulation on a world scale." Whatever the Chorus may think, from a scientific perspective, even the capitalist himself, viewed in historical perspective, is but the agent of forces that neither he nor anyone else controls "From a concrete point of view, accumulation resolves itself into the reproduction of capital on a progressively increasing scale." "...the social wealth becomes in an ever increasing degree the property of those, who are in a position to appropriate to themselves again and again the unpaid labor of others." "Moreover, the development of capitalist production makes it constantly necessary to keep increasing the amount of capital laid out in a given industrial undertaking, and competition makes the immanent laws of capitalist production to be felt be each individual capitalist, as external coercive laws. It compels him to keep constantly extending his capital, but extend it he cannot, except by means of progressive accumulation." "Accumulate, accumulate! That is Moses and the prophets."
David Harvey synthesizes the scientific explanations of the global economy offered by several contemporary Marxists. Harvey takes it for granted that where there is capitalism, there is accumulation. He adopts the concept of "regimes of accumulation," which implies that while as long as there is capitalism there is always accumulation, nevertheless the form and method, the "regime," of accumulation varies from time to time and from place to place. "A particular system of accumulation can exist because 'its schema of reproduction is coherent.' The problem, however, is to bring the behavior of all kinds of individuals --capitalists, workers, state employees, financiers, and all manner of other political-economic agents-- into some kind of configuration that will keep the regime of accumulation functioning."
Harvey characterizes the present state of the global economy, since more or less l973, in partial contrast to previous phases through which global capitalism has passed, as a period of "flexible accumulation." Among its characteristics are rapid change, flux, uncertainty, more flexible labor processes including more temporary workers and less job security, more open markets, greater geographical mobility of capital, rapid shifts in consumption practices, a revived entrepreneurialism, neo- conservative ideas (known as "neo-liberalism" in most of the world), postmodern culture, the breakup of United States economic hegemony, new and sometimes exotic financial services, a decline in manufacturing and a rise in the service sector, new industrial ensembles in hitherto underdeveloped regions, high levels of structural unemployment, and the rollback of labor union power. The new trends which characterize this new, flexible, regime of accumulation, were themselves produced by the crisis of the previous regime of accumulation, which Harvey broadly characterizes as Fordist-Keynesian, which for a variety of reasons) was unstable. The pre-1973 Fordist-Keynesian regime of accumulation was unable to keep the accumulation process going, and therefore it had to be replaced.
Harvey finds, faithful to Marx's original vision that capitalism would eventually produce the conditions of its own revolutionary overthrow, that today's global economic regime, flexible accumulation, is itself also unstable, more a "temporary fix" than a permanent solution. Flexible accumulation,"...has to be seen as a particular and perhaps new combination of mainly old elements within the overall logic of capital accumulation.")
Maria Mies in Patriarchy and Accumulation on a World Scale discusses the place of women in the international division of labor,"...the relationship between women's exploitation and oppression and the paradigm of never-ending accumulation and 'growth'"...) Mies believes that,"...the confusion in the feminist movement worldwide will continue unless we understand the `woman question' in the context of a global division of labor under the dictates of capitalist accumulation."
Mies's scientific explanations of the global economy can be expressed in terms of three phases or stages. In the first and earliest stage, the stage where the main part of her analysis begins (but not without some attention to still earlier times), the explanandum, that which is to be explained, is the oppression of women, and, generally, the oppression of everybody except the dominant males. Patriarchal control over women, as she conceives it, historically has been intrinsically interwoven with the establishment of class societies. The explanans, that which explains, is violence and coercion.
The second stage is what Mies, Marx and others call "primitive accumulation." It is the period before the capitalist global economy, properly speaking, gets underway, when the initial capital stock of the wealthy classes of the European core countries was accumulated. It is a phase characterized, according to Mies and other authors (she relies, among others, on Marx, Immanuel Wallerstein, Carolyn Merchant, and Barbara Ehrenreich) by, among other things, commercial expansion and the discovery of the new world. There were a series of opportunities for capital accumulation (one was piracy, another was feeding the working classes potatoes instead of grains, which made it possible to lower their wages...). There were strong incentives to amass capital for commercial ventures; large funds were also needed, then as now, to pay for wars, for governments, and for upper class luxuries. The explanans, that which explains how primitive accumulation was accomplished, is, once again, violence and coercion, but usually under the mask of some moralistic pretext. Mies especially emphasizes the witch hunts, in which millions of women, and a smaller number of men, were accused of heresy, tortured, and burnt. Their property was confiscated. "The persecution of the witches was a manifestation of the rising modern society and not, as is usually believed, a remnant of the irrational `dark' middle ages." Witch hunts were a mechanism used to subordinate women, to quell heterodox sects, and, at the same time accumulate capital."
In the third phase the explanandum is the modern global economy. The explanans is the logic of accumulation. Mies gives parallel accounts of the fate of women in the third world under colonization, and the fate of women in the first world under what she calls "housewifization." She shows that family structures and gender relations regularly followed the pattern that was dictated by profit calculations. For example, in the Caribbean islands, when it was more profitable to buy new slaves from Africa than to breed them on the islands, the slave women were prevented from marrying and not allowed to have children. When it became more profitable to treat the African territories as colonies with their own labor forces to be used in Africa, and to breed slaves on-site in America, then the slave women were evangelized with pro-family ideologies. For another example, until the middle of the 19th century the lower classes in Germany and other countries were not expected to marry and to have families. An ideology which discouraged the formation of lower class families, and reserved the concept of "family" for the upper classes, helped to keep wages low. In a later phase of capitalism, however, family formation became an important source of consumers; the logic of accumulation led to a different ideology, and to a different role for women. But the evolution of women's roles in Germany was not independent of industrial Germany's relationship to the third world; it was part of the same global logic of capital accumulation. "It is my thesis that these two processes of colonization and housewifization are closely and causally interlinked. Without the ongoing exploitation of `external' colonies --formerly as direct colonies, today within the new international division of labor-- the establishment of the `internal colony,' that is , a nuclear family and a woman maintained by a male `breadwinner,' would not have been possible."
Mies brings her analysis down to the present day. "Asian women in the electronics industry are placed on a global assembly line that reaches from Silicon Valley in the USA to South-East Asia. On this assembly line the Asian women do the most monotonous, time-consuming, stress-producing, unhealthy jobs. They have to weld together under a microscope the hair thin wires which hold the tiny chips together to make them an integrated circuit. These electronic components are the actual `brains' by which the new computers and automata are directed. The American and Japanese firms have worked out a subtle system of labor control which combines methods of direct compulsion with methods of psychological manipulation. It goes without saying that trade union activity is prohibited in these factories. In Malaysia, if women are found to belong to some trade union, they are fired. The firms employ only young women between 14 and 25. When they marry, they usually lose their jobs. Hence, the firms save maternity benefits and always have young, inexperienced women who get some quick on-the-job training. The women have to complete a certain number of chips per day. A woman from a semi-conductor plant in Penang, Malaysia, said that every woman worker had to complete 700 chips per day, that they were not allowed to speak during work, that they were not allowed to move away from the workplace, that there were no breaks..."
Mies's use of "patriarchy and accumulation on a global scale" as an explanans provides an effective answer to those who say, "Slavery and exploitation happened in the past. Today advanced societies have put all that behind us, and what happened in the past is not the fault of anybody now living. So let's get on with the task of bringing the backward areas up to the standards of the advanced areas, and forget about the bitterness caused by memories of the past." What Mies shows is that the same explanatory principles, patriarchy and accumulation, explain both capitalism's past and its present. Whether as an exploited factory worker making microchips in the third world, or as a doll running up credit card debt in the first world, a woman now is part of a single global economy. It has the same logic now as it had when some women were slaves in the sugar plantations of Santo Domingo while other women were pampered favorites in Paris. Hence it is not true that the past is behind us; the same causes are still producing similar effects.
Mies's theory is, nevertheless, a delicate balance, perhaps a synthesis, between, on the one hand, her great and pervasive explanatory principles, coercion, self-interest, and the logic of accumulation, and whatever additional factors seem important to explain a particular phenomenon. Included in the latter are the voluntary acts of persons. Mies is somewhat troubled by the position taken by Clara Zetkin, a leading 19th-century German socialist feminist, who spoke in favor of, not against, women staying home and being dependent on their husband's income. Although Mies does not say so explicitly, it seems clear that she implies that Zetkin could have taken a different position, and that if she had taken a different position it would have made a difference.
Nor did Marx himself deny that the individual person is more than the helpless agent of economic laws. "I paint the capitalist and the landlord in no sense couleur de rose. But here individuals are dealt with only in so far as they are the personifications of economic categories, embodiments of particular class-relations and class-interests." Marx is usually careful to say whenever he speaks of what "the capitalist" will do, that he is speaking of a particular human person only insofar as he or she is regarded as "capital personified," i.e. assumed to act on the basis of economic calculations.
In conclusion, where accumulation is the explanatory principle, human action that is deliberate (and therefore subject to moral evaluation) is twice buried. It was buried once by classical economics, when writers like Adam Smith replaced concrete human action with a stylized ideal type. It was buried still deeper when Marx replaced Smith and Ricardo's account of the profit motive with the concept of surplus value ceaselessly augmenting itself through the historical process of capital accumulation.
But it is not irretrievably buried. As Marx implicitly acknowledges, and as Maria Mies implicitly illustrates, even where the logic of accumulation is operating, deliberate human decisions can make a difference. And, further, the fact that accumulation operates at all necessarily reflects the existence of certain institutions and the performance of certain acts of will.
That deliberate human action can make a difference is a proposition that Maria Mies manifestly believes. She proposes a positive future for humanity, a "feminist perspective on a new society." The new society is to be achieved, at least in part, by embracing better concepts (she suggests some), and by taking deliberate steps to put better concepts into practice.
Conversely, in her historical account of the evolution of the global economy --this is the other side of the same coin-- negative effects were often caused by people who had wrong moral philosophies. Mies cites, for example, A People at School, a book by a Mr. Fielding Hall, who was the Political Officer in the British administration in Burma in 1897-91. Mr. Hall reports that when the British conquered Burma they found a people who practiced the equality of the sexes, and recognized the independence of women; the Burmese lived at peace under the guidance of the precepts of the Buddhist religion. "But, instead of trying to preserve such a happy society,..." Mr. Hall believed so firmly in militarism and in sexism that he thought it was the duty of the British to impose them on the Burmese. "I can imagine nothing that could do the Burmese so much as good as to have a regiment of their own to distinguish itself in our wars. It would open their eyes to new views of life." "It must never be forgotten that their civilization is relatively a thousand years behind ours... Men and women are not sufficiently differentiated yet in Burma. It is the mark of a young race. Ethnologists tell us that. In the earliest peoples, the difference was very slight. As a race grows older the difference increases."
At the same time that Mr. Hall's policies, which included establishing male dominance by a new marriage law and revising the law of inheritance to establish male succession, were promoting "progress," inexpensive manufactured goods imported from Great Britain were destroying the local industries that were the material basis of the Burmese women's self-reliance. "In Rangoon the large English stores are undermining the Bazaars where the women used to earn an independent livelihood." I mention this point because I do not want to give the impression that either I or Maria Mies believe that deliberate human action motivated by good or bad concepts operates independently of events in the material world.
Mies's prescription for a positive future starts with reconceptualizing work. Disagreeing with Marx and other economists, she proposes to break down the division between work time and leisure time, and to promote human activities with human meanings, where labor and enjoyment are combined. She proposes, in effect, to undo the "progress" which has dimmed the enjoyment of human activity formerly found, and still found today, among, for example peasant peoples who have not yet learned to reckon time as money, and accordingly to divide it into earning time and spending time.
"If we take as our model of a `worker' not the white male industrial wage-earner (irrespective of whether he works under capitalist or socialist conditions) but a mother, we can immediately see that her work does not fit into the Marxian concept. For her, work is always both: a burden as well as a source of enjoyment, self-fulfillment, and happiness. Children may give her a lot of work and trouble, but this work is never totally alienated or dead. Even when children turn out to be a disappointment for the mother, when they eventually leave her or feel contempt for her --as in fact many do in our society-- the pain she suffers at all this is still more important than the cold indifference of the industrial worker or engineer vis a vis his products, the commodities he produces and consumes."
In proposing to emphasize those kinds of human activity that involve the direct production of life and use-values, Mies is quite willing to distinguish what is "more human" from what is "less human" and, accordingly, to speak of a human "essence." She asserts, for example, that men should help with housework and with child care because that will give them a more sensual, less alienated, and therefore more human existence. And, "Men have to start movements against violence against women if they are to preserve the essence of their own humanity."
Although she differs from Marx on many points, Mies echoes his view that there is an essence of human nature, a Gattungwesen, and that the human essence is social and sensual. She does not hesitate to recommend as a positive goal in her "feminist perspective on a new society" that humanity create a future where both women and men are less alienated from themselves, from each other, and from nature.
Although it was Marx who introduced the idea of "alienation," and although sometimes Marxists characterize the achievement of a socialist society as a process of "de-alienation," on the whole Marx deliberately refrained from prescriptions. He wanted to separate himself from the utopian socialists; he wanted to present his work as scientific. On principle he did not think it wise to try to write blueprints in advance for a future society still only dimly perceived. I think it is correct to say, nevertheless, that in addition to asserting that a de-alienated humanity, which expressed humanity's social and sensual essence, would be a great good, Marx assigned a positive prescriptive force to the concept of "use value."
In the whole sweep of Marx's writings, the key concept of "exchange value" and the related concept "commodity" appear as unfortunate detours, distortions, caused by the present, hopefully transitory, organization of society. Exchange and commodification interfere with the direct production and distribution of that which ought to be, but under present circumstances unfortunately is not, la chose qu'on aime pour lui-meme, which is use value.
In saying that the whole point of economic activity is to produce use values, Karl Marx does not differ from Adam Smith, although in Marx "use value" is embedded in a richer and more conceptual philosophical context. Going beyond Smith, Marx finds that capitalist society is wrong because it often loses sight of, or positively frustrates, the life-sustaining and life-enhancing qualities of use value. Capitalism is a system governed by exchange value. Under capitalism, in Marx's words, the wealth of society "presents itself as an immense accumulation of commodities."
When defining "use value" Marx treats it as equivalent to what John Locke called "natural worth." Locke: "The natural worth of anything consists in its fitness to supply the necessities or serve the conveniences of human life." (Locke, quoted with approval by Marx, p. 42)
Marx's prescription is, therefore, in a precise sense, romantic. Society should pursue "natural worth." Humanity should leave behind, as a superseded historical epoch, a period during which the production of those things which are by nature necessary, and convenient for life, tended to be artificially constrained, because production was either done for the private pursuit of profit, or not done at all.
Notwithstanding the existence, or former existence, of dialectical materialism (the infamous "diamat" which bored millions of schoolchildren in the former Soviet Union, and in Eastern Europe), I believe that on the whole the most useful thing to say about Marxist metaphysics is that there is none. The second-most-useful thing to say, I think, is that although there is no Marxist metaphysics, there is a Marxist metaphysical bias.
The analysis and critique of the logic of accumulation --which is my litmus test for distinguishing what is Marxist from what is not-- does not imply a positive program. It does not lend itself to the construction of the sort of comprehensive conceptual system I have been calling a "metaphysics" because it lacks an ethical culture; there would have to be an ethical culture, norms, a social "command system," to merge and to synthesize with science and technology, in order for there to be a comprehensive worldview, systematically articulated, i.e. in order for there to be a metaphysics in the tradition of that book Aristotle wrote which became the book that gave meaning to the word "metaphysics."
To be sure, the logic of accumulation implies an ethical principle, to wit: use value ought to be la chose qu'on aime pour lui-meme. This is not a controversial principle. Proponents of capitalism typically agree that enjoyment of goods and services is the goal; they argue that a capitalist market economy is the best means for getting use value produced and delivered. What is controversial, and what does establish a distinct moral imperative, is Marx's further implication: that there are constraints on enjoying natural worth imposed by private appropriation of the social product and by production-for-exchange, which ought to be lifted.
But the Marxist critique does not say what cultural structures, what normative principles and/or caring attitudes meshed with practice, would achieve the results mandated by this lightly sketched moral imperative. The combination of possessing a powerful critique with only a weak sketch of an alternative to offer has been an embarrassment for Marxist revolutionaries who have seized state power and seized private assets. They have, quite literally, not known what to do next.
Marx's critique of the logic of accumulation does, nevertheless, introduce a metaphysical bias. The critique proceeds by moving downward in metaphysical space (a "space," i.e. an order, not created by Marxism, but found pre-existing in the logic of the society Marx is criticizing) from the sphere of circulation to the sphere of production. This conceptual move, which finds something more "real" by moving to a "deeper" level suggests a series of dualisms which have been the bane of Marxism ever since. As circulation is to production so surface is to depth. And idealism to materialism. And the bourgeoisie to the proletariat. And exchange value to use value. And commodity to natural worth. And alienation to the true Gattungwesen of the species. And price to value. And culture to economy. And superstructure to base. And ideology to science.
Marx was the first to denounce simple dualisms. Nevertheless, it is hard to resist the conclusion that Marx really did mean to say that the sphere of circulation is properly characterized as "surface," and therefore less real, less important, more illusory, more deceptive, than something else, namely: the sphere of production. Given this premise, it is easy to slip into simple dualisms and hard to avoid them.
The lack of an existing society, complete with ethical culture, to articulate the structure of, seems to me to preclude there being a Marxist metaphysics properly so called. Further, the bias toward seeing the phenomena of circulation as surface phenomena to be explained by a theoretical apparatus grounded in processes that are deeper and more real, a bias that Marxism does have, seems to me to be an impediment, which sets back, more than it moves forward, the improvement of ethical culture.
There is no global economy organized to implement the ideals that Marx suggested and implied. It is doubtful whether there is, or has ever been, a national economy so organized. If there were such an economy, it could function only in the context of cultural structures different from those that exist. Hence there is no existing set of institutional structures for a Marxist metaphysics to be the ideological reflection of.
At most there are some partially successful experiments, some nascent communities of solidarity struggling to learn to live in a more human, less alienated, way --and they are held back, not helped, by certain features of the Marxist tradition, such as an unfortunate tendency to denigrate ideals as idealism, which stems from the analogy: circulation is to production as idealism is to materialism.
The task of a would-be Marxist metaphysician is unlike the task of an Aristotle, a Saint Thomas Aquinas, or an Immanuel Kant, in that she or he would have to --if it were possible-- articulate the fundamental conceptual structures of a culture that is still a dream, still imaginary; or perhaps articulate the fundamental precepts of a process or historical movement that is not yet able to exhibit the desired outcome that it is moving toward; and which, if I am correct, will only be able to exhibit the desired outcome it is moving toward, or trying to move toward, by transforming culture. But it will only be able to transform culture by adopting a conceptual strategy different from that of Marx's critique of the logic of accumulation.
Marxism remains a project, a pro-ject (The English word comes from the French pro-jet from jeter, to throw. The German is Ent-wurf from werfen, to throw.) It is a throwing forward into the unknown.
"Post--structuralist" is a name for a subset of the "postmodern."
Although it does not capture the full range of meaning of that amorphous and ubiquitous term, I adopt Jean-Francois Lyotard's definition of the "postmodern" as "incredulity toward metanarratives." "Metanarrative" names something which all postmodern writers, and therefore all post-structuralist writers, do not believe.
The "meta" in "metanarrative" is a synonym for "grand," "global," "big" or "comprehensive." The writers in question might, then, believe petite, local, small, or partial narratives. There is here an important presupposition. It is that if they were going to believe anything, it would be a narrative (a story) of some size. (They would not, however, necessarily characterize what they were doing as "believing;" they would indeed be more likely to characterize it as "taking a position.") For the thinkers in question it has been several decades since the time when social science was about testing hypotheses, models, or theories by assembling data (data = "the given." It is derived from the Latin dare, to give.) The context of incredulity toward metanarratives is already an intellectual climate where discourse is no longer transparent.
Within postmodernism, people who call themselves, or are called by others "poststructuralists" are people who, if they had not embraced postmodern incredulity, would have structuralists. They work in a tradition where the voice of the 20th century French Marxist philosopher Louis Althusser, and the voice of Michel Foucault, are never silent.
Within the class so designated, and not counting works which make important methodological points but do not bear directly on trade theory, I have only two books about the global economy to discuss: Encountering Development by Arturo Escobar, and The End of Capitalism by J. K. Gibson-Graham (the pen name of Julie Graham and Katherine Gibson).
Richard Wolff spoke for many when he wrote:
"The word `explain' is just too implicated in essentialist thought. It connotes fullness, completeness, fixity, closure, and the image of a statement about an object of interest that is not contradictory, particular, and evanescent. It should be displaced in favor of `intervention,' `position,' or `story.'" (Wolff qualifies his own position with nuances that I will not discuss here.)
A few pages earlier in the same article Wolff (interpreting Althusser) gave another reason for eschewing what used to be the main aim of science, explanation in terms of cause and effect:
"That concept [Althusser's concept of history as a dense network of overdeterminations, a process without a subject] holds that every aspect of history --an individual, an event, a social movement, and so on-- is constituted by all the other aspects of the social and natural totality within which it occurs. It has its existence (and each specific quality of that existence) only insofar as it is overdetermined in and through (constituted by) the relations that bind it to them all. The logic of overdetermined constitutivity displaces that of causes and their effects." (p. 153)
Anti-essentialism and overdetermination. These two key words name reasons why post-structuralist writers deliberately do not offer explanations.
Wolff lists some motives that inspire anti-essentialism.
"Many of the contributors to anti-essentialism, including Althusser, rejected the sorts of essentialist thinking that they associated with existing social conditions, capitalist and other exploitative class structures, racism, sexism, homophobia, etc. to which they were deeply opposed." They saw capitalism and the patriarchal family as strengthened by essentialist claims that capitalism alone conformed to human nature; or that market incentives alone could make the economy work; or that the patriarchal family alone could produce mentally healthy children.
With evils so many and so great attributed to essentialism, and such great hopes for liberation from oppression pinned on anti-essentialism, it is no wonder that many social scientists want anti-essentialism to be true. The anti-essentialists are, like all the economists considered in these pages, on the side of the angels.
"Essence," that which anti-essentialists do not believe in, is defined in standard dictionaries as, "that which makes a thing what it is." It is derived from the Latin esse, to be. Its current and philosophical meanings can be traced to esse and to ousia, a Greek word for "substance" or "being" that was the principal term Aristotle sought to define in his Metaphysics. Essentialist claims are sometimes called universalist claims, because if there is some essence that a thing essentially is, then it is that essence always and everywhere.
Richard Wolff's discussion of the proposal that social scientists stop using the words "explain," "cause," and "cause and effect," because they are too closely tied to essentialism, lists some connotations of "essence" that anti-essentialists find false and undesirable: fullness, completeness, fixity, closure. "Essence" is also accused of obscuring what anti-essentialist writers do want to bring to their readers' attention: the contradictory, the particular, the evanescent.
Whether it is really the case that philosophers and scientists necessarily fall into error when they employ the term "essence" (and related terms like "substance," "reality," "cause," "explains," and "cause and effect") has been debated for several thousand years. Circa 500 BC. Heraclitus succinctly stated an intellectual case for anti-essentialism: panta rei, "all is flux." It is old news that language itself, by its very nature and structure, impels humans to speak and write as if the world and their experience were more full, complete, fixed, and closed than they really are; and as if the world and experience were less contradictory, particular, and evanescent than they really are.
Nevertheless, through the centuries, the realists (defined here as people who make the sorts of conceptual moves that anti- essentialists call "essentialism" and hold to be mistaken) have held up their ends of the debates --from Plato and Aristotle down to Carl Jung and his followers, Willard van orman Quine, Marie Mies (cited above), Fredric Jameson, Jacques Lacan, Mario Bunge, and Rom Harre. The general trend among anti-essentialists (e.g. Jacques Derrida) is to attribute to essentialists a view that is not plausible (in Derrida's case, in his Grammatology, a "metaphysics of presence") and then to deconstruct it. People who still advance philosophies of science where "explanation" and "cause and effect" play important roles; or who still talk about "nature" or "the real" as something that social constructions of culture ought to take into account and adjust to, generally do not call themselves "essentialists." They are more likely to call themselves "critical realists," "materialists," "deep ecologists," or advocates of a "naturalized epistemology." Without adopting the "essentialist" label as a self-description, they nevertheless hold views incompatible with a radical anti- essentialism -- but their "essentialisms" are more plausible than the "essentialisms" that anti-essentialists identify as their targets. Such more plausible views include, for example, Rom Harre's view that things have causal powers; the use by Fredric Jameson and others of Spinoza's idea of an "absent cause" which is at work in history even though in the nature of things human reason cannot fully grasp it; and Jacques Lacan's philosophy of psychoanalysis in which in addition to the Symbolic and the Imaginary, there is also a Real which resists symbolization absolutely. I think it is fair to say that neither Jacques Derrida nor Michel Foucault nor any other recent anti-essentialist has come up with any new and decisive argument, which proves that after all these centuries the contemporary heirs of the nominalists and skeptics have decisively won, while the contemporary heirs of the ancient and medieval realists have decisively lost. Anti- essentialists have indeed shown that there is no Truth with a capital T; and they have indeed shown in great detail that hidden (not obvious) platonic unities, hidden ideologies, and hidden machinations of power have often deluded people by making them think that socially constructed realities were natural realities. But they have not advanced decisive arguments for the proposition that all reality is socially constructed reality. On the contrary, in academic epistemology, critical realism has not lost ground in recent decades; if anything, it has gained ground.
(This is not to say that mechanical, Cartesian, Newtonian, or statistical versions of cause and effect reasoning have gained ground. Indeed, advocates of realism, myself included, are generally allies of the anti-essentialists when it comes to criticizing the excessive, often surreptitious, use of mechanical root metaphors.)
I conclude that anti-essentialism, in the strong form in which it requires abandoning scientific explanation as a goal of social science, is not for the contemporary social scientist an obligatory epistemological stance. The rejection of "causal models" of any and all kinds is not a rejection imposed by virtue of the outcomes of scholarly debates in which essentialism has been refuted, deconstructed in such a way as to be shown to be without merit or groundless, or unmasked as an ideological distortion of reality. Radical anti-essentialism is a political strategy. Some aspects of its merits as a political strategy will be considered in 7b and 7c below. Now I will turn to a second key argument in favor of deleting talk of "causes" from social science, the argument that social effects are "overdetermined."
The idea of overdetermination comes from Sigmund Freud. He introduced it to denote a confluence of subconscious representations. The representations condense in a single dream image (or in a neurotic symptom) governed by an emotion. The leading instance of the use of the term is Freud's analysis of his own dream known as "Irma's Injection," which he dreamed the night of July 23-24, 1895. Irma in the dream was a representation of herself, a patient who had frustrated Freud by refusing to accept his analysis of the causes of her hysteria. The same dream image, Irma, also represented another woman who had not been Freud's patient, whom Freud had wanted to come to him for treatment, whom Freud supposed would have been more cooperative, more willing to accept his analysis. The same Irma (I am referring to the elaborated image, which includes, at one point, her appearing to have false teeth, at another her appearing pale and puffy .....) represents yet a third woman, and, collectively, children at a children's hospital where Freud had previously been employed. A Dr. M. In the dream was also both himself and a stand-in for several persons with whom Freud had interacted in real life. The emotion (Freud called it a wish-fulfillment) governing the dream was Freud's frustration over his analysis being rejected in the particular instance of Irma. A triggering incident the day before the dream reminded him of the rejection and, so to speak, touched the button that set him off. Frustration over Irma flowed together with frustration over other failures, and with resentment over being regarded as a quack by professional colleagues. (What made the dream a wish-fulfillment was that, as the dream turned out, Freud got support from allies and vindication. Part of the vindication was that the dumb idea of giving Irma a thoughtless injection with a dirty syringe was someone else's mistake, not Freud's.)
It was Louis Althusser, in his essay "Contradiction and Overdetermination" who "borrowed" the idea of overdetermination in order to explain --or rather, to decline to explain-- historical events.
The reason why I wrote, "or rather, to decline to explain," is this: The paradigmatic Enlightenment notion of explanation, which postmodernists are concerned to deconstruct, is a Newtonian one: A causes B as cause to effect is a mechanical relationship in which the impact of force A produces phenomenon B. As applied to international trade theory and economics generally, this paradigm suggests that the aggregate of self-interested acts of economic actors will produce predictable results. As applied to Marxist economics, this paradigm suggests that accumulation will lead to revolution.
The historical event in question in "Contradiction and Overdetermination" is the Russian Revolution of October, 1917. When he borrowed the idea of overdetermination from Freud, Althusser declined to explain the revolution in the paradigmatic Newtonian sense of "explain." The coming of the revolution was not determined by the economy, not even in the last instance. It was not determined, either, by any quasi-machine analogous to an economy. It was "overdetermined."
It is important to acknowledge that neither Althusser nor anyone else needs the concept of overdetermination to make the point that for any social phenomenon there are many factors that contribute to causing it. Mainstream social science research (which predominates even today, even while debates about postmodernism preoccupy the avant-garde) uses statistical regression analysis to quantify the many factors found to be associated with the phenomenon under study. For example, a study of violent acts committed by children might find:
15% of the variance explained by children seeing violence on television. 25% of the variance explained by learning violence from parents at home. 5% explained by learning violence from video games. 10% by learning stereotyped gender roles and machismo. 45% "error variance" not explained yet, although presumably further research would show what the rest of the explanation is.
That in reality there are many factors (also known as "variables," or "forces") at work, and that sophisticated mathematical techniques may be needed to sort them out, is not a proposition that requires dissent from the metaphysics of the Enlightenment. Complexity in itself does not require any abandonment of the sorts of explanations that rationalists and empiricists have been refining, amending, affirming, and denying for the last several centuries. (Indeed, Freud himself probably did not intend to abandon the Newtonian paradigm --even though, as Jacques Lacan has shown, he did.)
I think I have already shown in previous pages that although complexity does not require abandonment of Enlightenment metaphysics (i.e. of economic metaphysics), an appreciation of the fundamental roles that ethical premises play in economic explanations does. I will not belabor the point here. My question here is, rather, why Althusser, having decided, for whatever reason, that economics (which is part and parcel of Enlightenment metaphysics) does not determine the course of history, did not choose to revert to the older metaphysical traditions of the West, to Plato, Aristotle, Aquinas ..... Hegel, in which, in one form or another, human action is characterized by deliberate choice in an ethical context. Acts embody concepts. Ideas do things.
Althusser chose, instead, to borrow the idea of overdetermination from Freud.
Althusser answers my question: "Je ne tiens pas expressement a ce terme de surdetermination (emprunte a d'autres disciplines), mais je l'emploie faute de mieux a la fois comme un indice et un probleme, et aussi parce qu'il permet assez bien de voir pourquoi nous avons affaire de toute autre chose que la contradiction hegelienne."
I believe that a fair reading of Althusser's essay, and of his work as a whole, will show that he desired to serve the cause of Marxism, and therefore of materialism, by extirpating idealism. When Marx praised the "rational kernel" in Hegel, he was not to be understood, according to Althusser, as endorsing any sort of dialectic in which ideals function as causes in history.
Those of us who do think that ideals function as causes in history can see, in this light, why Althusser does not agree with us. We can also see why Freud's concept of overdetermination served Althusser's purpose.
"Overdetermination" does not function at the level of consciously chosen human ideals. It does not function at the level of cultivation of agreements, and of cooperative action, in public social space. It does not function at the level of the ego, the integrating element of the personality. It functions at night, in the rapid-eye-movement periods of sleep, when the emotions assemble images. Extended to history, faute de mieux, as the index of a problem in the social sciences, overdetermination is a confession that we really do not know why history happens as it does. It is also a profession that whatever the course of history may be, we should remain loyal to materialism, and we should reject the ancient metaphysical hierarchies.
"The global economy must thus be understood as a decentered system with manifold apparatuses of capture --symbolic, economic, and political. It matters to investigate the particular ways in which each local group participates in this complex machinelike process, and how it can avoid the most exploitative mechanisms of capture of the capitalist megamachines." Escobar calls his perspective "poststructuralist."
Escobar's excellent book can be thought of as proceeding at three levels.
At the ground level, Escobar gives an account of particular programs and projects carried out by development professionals in the third world; especially in his own country, Colombia; and within Colombia especially the anti-hunger programs; and among the anti-hunger programs especially one called Integrated Rural Development (Desarrollo Rural Integral, DRI).
At the global level, programs like DRI are placed in the context of development discourse. Development discourse was called into being by the challenges faced by the United States after World War II. It was created by a few senior government officials, academics, and bankers, all of whom were white, male, and from the first world. They were almost all economists. Backed by the power of the World Bank and allied institutions, development discourse became a required language that the third world had to learn.
At a philosophical level, Escobar treats development discourse as knowledge that is power, and as power that takes the form of knowledge. He calls for a reformed social science in which a reformed poststructuralist anthropology rather than economics would set the tone. But the leading role of the new anthropology does not consist of creating an alternative theoretical hegemony, which would vie to replace development discourse in particular or economics in general. "To think about alternatives in the manner of sustainable development, for instance, is to remain within the same model of thought that produced development and kept it in place. One must then resist the desire to formulate alternatives at an abstract, macro level; one must also resist the idea that the formulation of alternatives will take place in intellectual and academic circles, without meaning by this that academic knowledge has no role in the politics of alternative thinking."
I believe that Escobar's choices at the philosophical level respond to his desire to make a useful contribution toward alleviating the enormous and endless human suffering endured at the ground level. Escobar's posteconomic deconstruction of "development" is, like postmodernism generally, an epistemology motivated by an ethics.
The earliest of Escobar's ground-level Colombian development stories is about rice. Early in the 20th century, the Colombian elite realized that in order to compete in the international market it would have to exploit, as its comparative advantage, access to cheap labor. The people who were going to be the cheap labor force to whom the entrepreneurial elite and their financial backers would have access had to move from the countryside to the sites of industry, and, once there, they needed cheap food. Without cheap food they could not survive on low wages. The government pioneered and protected the rice agribusiness because it had the potential to produce high calorie food for the workers at low unit cost.
Why are we not surprised? I will answer this question myself instead of paraphrasing Escobar, but I do not think I will say anything Escobar would deny, or anything he is not aware of. First, we are not surprised because the Colombian rice story is similar to many stories we have heard before. It repeats with variations an oft-told tale, classically stated in the early in 19th century in Ricardo's argument that the British corn laws should be repealed in order to decrease the price of food, and thus cheapen labor, and thus increase profits. (In the Colombian case a tariff was imposed, to protect rice agribusiness to get it started; in the British case a tariff was repealed; what makes them variations of the same story is that food policy was a function of the profit imperative.)
Second, we are not surprised because the basic cultural (ethical) structure of modern society implies that such things will happen, and keep happening, again and again. Given, private ownership of the means of production. Given, that the incentive for production is the expectation of profit. Given, that profit can only be realized by the sale of the product, which can most effectively be accomplished, other things being equal, by bringing the product to market at a price that beats the competition. It follows that capitalists will seek profits by lowering the costs of production, and that they will seek them, other things being equal, by lowering labor costs. Escobar's Colombian rice story, in some form, will be told many times.
The most up-to-date of Escobar's ground-level stories from Colombia appears to be the one about the ladies who pack shrimp in the port city of Tumaco. "The feminization of the labor force in some industries continues, and it is linked to development schemes; such is the case, for instance, with women in shrimp packaging plants in the port of Tumaco in Colombia. The vast majority of women working in these plants come from rural families who have lost their lands; they now work under precarious conditions."
Why are we not surprised? First, because the feminization of the labor force, and the feminization of poverty, are a well-known aspect of the worldwide current trends commonly known as "neo-liberalism," or "flexible accumulation." These current trends themselves are similar to what Andre Gunder Frank in the 1960s called "the development of underdevelopment;" which is in turn similar to accounts of the destruction of African cultures by the slave trade and by the forced incorporation of Africans into European money economies; which are similar to histories of the driving of peasants from the land that Engels called "...the progressive pauperisation of the English countryside;" which are similar to the descriptions of the enclosure movement in England given by, among others, Marx in Capital....
Second, we are not surprised because the basic cultural structures of modern society set the stage for market behavior, and for the enlargement of markets. Markets, and especially larger markets, imply a drive toward more cost-effective profit- seeking. There is, for this reason, a systemic bias in favor of creating classes of workers who can easily be exploited, and therefore a systemic bias against the modicum of security enjoyed by small farmers, and indeed against any modicum of security enjoyed by anybody.
The centerpiece of Escobar's ground level series is a pair of Colombian programs, PAN and DRI, which flourished in the heyday of development discourse; during the period after the invention and imposition of development discourse after World War II; and before today's disillusionment, which is leading to a decline of classical development discourse and its partial replacement by new forms of power/knowledge.
PAN was a program for alleviating hunger, to a large extent by giving away food, although it included other components, such as nutrition education. A structural trap. Given the basic cultural and ethical structure of modern society, it could have been predicted that free food would depress food prices and discourage food production.
PAN's companion program, DRI, proposed to spend public money (provided by the World Bank and allied institutions) with the principal objective of increasing food production. This was to be achieved mainly by introducing more scientifically advanced farming techniques. In the abstract, the increase in production due to DRI might be imagined as compensating for the decrease in production due to PAN. In reality, a complex series of political struggles, structural constraints, economic forces, illusions, and errors produced some net winners, some net losers, and, overall, no significant alleviation of hunger in Colombia.
It could have been predicted that in the absence of a major surge in effective demand for food (i.e. purchasing power) the food supply would not significantly increase. It could have been predicted that treating food production as a scientific, physical, problem would result in favoring some farmers, and in damaging others, without significantly augmenting the total food supply, and with undesirable environmental and social side- effects. That is what happened. By the 1990s, DRI had largely been abandoned. It had proven the obvious: that there are no profits to be made in producing food for sale to people who have no money.
I have embroidered Escobar's stories about ground level development projects in order to make crystal clear the operations of economic quasi-mechanisms to which he only alludes. He has a good reason for only alluding to them: from his perspective explanation in terms of economic quasi-mechanisms is universalizing, essentialist; his scholarly project is to show that a poststructuralist anthropological approach is more adequate than one which relies on a theory of political economy that is supposed to be universally applicable. His achievement consists of "making visible local constructions side by side with the analysis of global forces" so that the ground level facts are seen from a new perspective and in a new light, after having been seen for decades in the light of economics in general and development discourse in particular. "From the classical political economists to today's neo-liberals at the World Bank, economists have monopolized the power of speech." Now, with Escobar's help, the actions of development agents in remote third world hamlets are shown to be dramatic performances scripted by local discourses which are in turn shaped by the powerful texts of the development discourse promoted by the World Bank and its allies. It is the discourse that creates the actors and the objects. The actors are lived by powers they do not understand (or, in some cases, do understand, but are required to pretend not to understand in order to keep their jobs).
Although Escobar does not offer explanations in the traditional sense; that is, he does not detect cause and effect mechanisms and relationships; he does use the word "explain" in the context of discussing why development discourse arose. An example concerns a famous speech the American president Harry Truman gave in 1948, in which he proposed to lift the poor people of the world out of poverty by sharing American know-how, by sending American technical experts to every corner of the globe to teach everyone else what to do to solve their problems. In retrospect, Harry Truman's "point 4" speech was naive and arrogant. What needs to be explained, the explanandum, is why what he was saying made sense to him and to his audience at the time. The explanans is development discourse.
I should have said that development discourse is a quasi- explanans, which quasi-explains why Harry Truman and many others thought as they did. The story Escobar tells to "explain" why development discourse arose is more like a genealogy, a la Foucault, than it is like bringing a particular phenomenon under a general causal law, a la Newton. Further, it is important to Escobar's argument to insist that there was nothing inevitable about the rise of development discourse. Although it was an understandable response of the first world elite to the challenges posed by the times, it was not a result compelled to happen by factors that caused it.
"The free enterprise system was in peril after the Second World War. To save such a system, the United States was faced with various imperatives to keep the core nations of the capitalist system together and going, which required continuous expansion and efforts to avoid the spread of communism; to find ways to invest U.S. surplus capital that had accumulated during the war (particularly abroad, where the largest profits could be made); to find markets overseas for American goods, given that the productive capacity of American industry had doubled during the war; to secure control over the sources of raw materials in order to meet world competition; and to establish a global network of unchallenged military power as a way to secure access to raw materials, markets, and consumers...."
In such a context, development economics was an idea whose time had come. After World War II it took off as a subdiscipline within the science of economics, building on theories of economic growth written earlier in the century (some of which used the word "development"). It offered itself as a general scientific theory showing how to create a desired world, and how to avoid an undesired world. Its major prescriptions, as commonly advocated in the 1950s, were "...(1) capital accumulation, (2) deliberate industrialization, (3) development planning, and (4) external aid."
Development discourse, regarded as a normative framework for public policy (supported by development economics as its academic legitimation and theoretical backup) was created after World War Two by a small first world elite, composed of government officials, academics, and bankers. Escobar names names, and gives the dates and places of the meetings where the language of development discourse was crafted, and where institutions that would play key roles in spreading the discourse were founded. "Development" was conceived by many to be a companion to the Marshall Plan. The Marshall Plan had saved Western Europe from Communism by rebuilding its economies; similarly, "development" would save the rest of the world from Communism.
Created in the first world, the ABCs of development formed a curriculum that the third world had to learn. In every field -- health, education, agriculture, industry, water, electricity, transportation, women's rights.... -- new programs and projects were touted as keys to progress, and they required funding. The principal sources of funding communicated only with people who spoke their language.
Power begat cosmology. Development discourse oriented the human spirit in space, in time, toward objects, and toward ideals. Spatially, the planet was divided into developed and underdeveloped regions. The arrow of time pointed from less development to more development; the poor majority of humanity was invited to see its own future in America's high paying union jobs, and in Western Europe's welfare states. The objects of the world were physical objects, to be manipulated by engineers applying science to produce abundance for all. The negative, what ought not to be, was underdevelopment; the positive, the ideal to strive for, was development.
It took about two decades of bitter experience for "development," as Harry Truman and the founders of the World Bank conceived it, to lose its charm. Already in 1970, the World Bank, USAID, and the other leading funding agencies, were sponsoring the "basic needs approach," "growth with equity," "integral development," "grassroots development," and, later, "sustainable development." To remain credible, development discourse had to reform itself in order to focus directly on extreme poverty, on environmental degradation, loss of cultural identity, and violence against women; it had to include popular participation in struggles against oppression.
During the 1980s Latin American countries experienced the harshest social and economic conditions since the conquest. A similar assertion could be made about Africa. A number of voices, of which Escobar's is one, called for the rejection of the term "development" altogether, seeing it as the name of a concept that was fatally flawed from the beginning, which could not be rehabilitated by any adjective one might select to write in front of it.
The rise and decline of development discourse illustrates --yet again-- the absurdity and the tragedy of the situation of the human species on the planet earth. Physically --as the late R. Buckminster Fuller tirelessly repeated-- there is no reason why the resources of the earth cannot be mobilized to meet the needs of every member of a human species living in harmony with all living systems. But at this point in history humanity has not invented the cultural structures and the ecological practices it would need to enjoy the happiness that mother earth promises. (One need not romanticize the past to see the present as a tragedy; the gap between potential and reality is tragic, regardless of whatever consolation one might derive from comparing the relative magnitudes of the sorrows of today and the sorrows of yesterday.)
It is important to try to articulate truthfully the reasons why "development" has done little to alleviate human suffering, and has probably made it worse. If Escobar is right in saying that the (or a) principal sin of development discourse was that it was essentialist, universalizing, then the last thing we will want is a postdevelopmental era guided by another essentialist discourse. Further, if Escobar is right, then we will expect major improvements to flow from the growing influence of poststructuralist perspectives. But what if he is wrong? or only partly right? or what if he has made it impossible to assign a meaning to the word "right"?
Escobar is thus compelled, willy-nilly, contre coeur, to make judgments about causes and effects. If the widespread adoption of Escobar's poststructuralist theoretical position causes life to become more harsh, not less harsh, then the results will be inflicted (not just inscribed) on bodies.
I cannot pretend to know whether, all things considered, the current trend toward poststructuralist scholarship like Escobar's will prove to bear delicious fruit; or whether it will prove to be un engano mas, another nail sealing the coffin of hope. Time will tell. But I would like to express two reasons why I do not believe that the results will be optimal.
The first is that Escobar's poststructuralist approach puts him in an awkward position regarding non-western cultures and regarding traditional western values.
One might have expected that a book calling for the empowerment of ordinary people in the third world would have included more than passing references to liberation theology (which Escobar mentions only in two footnotes), to Islam, and to Gandhi, and that there would be some discussion of progressive Buddhism, as found, for example, in the Sarvodaya movement in Sri Lanka. Although there are poststructuralists who have written at length on religion, Escobar's neglect of religion is typical, and, moreover, it is symptomatic of an inherent conflict between poststructuralism, which is an ultramodern philosophy; and traditional societies. Traditional societies, in their splendid variety, are not infrequently profoundly religious, and also not infrequently collectivist, hierarchical, patriarchal with carefully differentiated gender roles, homophobic, puritanical, xenophobic, and superstitious. (These are all, of course, western terms, and mainly pejorative ones used to describe others; the people who actually hold such views describe them in their own ways, and not pejoratively.)
It does not take much reading between the lines of the works of authors Escobar cites with approval, such as Michel Foucault, Gilles Deleuze and Felix Guattari, Michel Taussig, Garcia Canclini, Dorothy Smith....; or much reading between the lines of Arturo Escobar himself; to see that their values are secular, individualist in the positive sense of favoring personal autonomy and what Carl Jung called individuation, democratic, feminist and tending toward gender equality, opposed to compulsory heterosexuality, sensual, internationalist, and critical.
Poststructuralism is thus in an awkward position. There is no problem as long as it is a matter of criticizing mainstream modernist liberal thought for pretending to be universal and eternally rational. There is no problem as long it is a matter of citing attractive examples --of which there are many in Encountering Development-- of small and little known cultures which have their own ways of seeing things and doing things, which are just as legitimate, and often happier and more in harmony with nature, than the ways of the modern West.
The problem is that although Escobar and poststructuralists generally do not believe that whatever the oppressed say must be right, it is built into their approach that it is hard to legitimate the fine tuning criteria needed for telling the difference between valores de rescate (values to be rescued), and temas superables (themes best forgotten and left behind). They have a wholesale ethical criterion for valuing whatever "the other" has to say; namely: no one should have a right to define someone else's reality for them; it is time for the voices that have been excluded and silenced to name their own worlds; it is time for "the other" to speak out and be heard. They also have a wholesale ethical criterion for rejecting many of the things non-Western and traditional people say when they speak; namely, to summarize in one word, freedom.
The awkward mixed message ("the intellectuals from the university insist on our right to name our own reality as long as we agree with their corrupt, individualistic, materialistic, permissive, and effeminate values") is not an incidental feature of postmodernism, that can easily be corrected by noting oversights. It is intrinsic in the implicit and sometimes explicit reasons given for honoring everyone's right to have a voice. For example, Islamic fundamentalists are granted the right to a voice because they, like everyone else, are entitled to it according to a radicalized ethics of autonomy. But when Islamic fundamentalists begin to speak, those who hear them learn that "Islam" does not mean "autonomy." It means "submission." And when fundamentalist Muslims speak it is not to name their own reality, but to spread the teachings of the Holy Qu'ran. The ethic of autonomy, in turn, which is the source of the awkwardness involved, is intrinsically connected to Foucault and Escobar's central concept: power. Since the 17th century "power" has been, and it still is, the principal root metaphor with which western philosophy has erected secular alternatives to the older and more traditional religious worldviews of the West. Autonomy is what you have when you are not oppressed by power. (Thus Kant: autonomy is the principle of all genuine morality; heteronomy is the principle of all spurious morality.) Escobar's story of the rise of development discourse is a story about power and speech, and therefore it is a story about oppression and silencing, and therefore it leads to the conclusion that the oppressed should speak. And then, when they speak: confusion.
Secondly, taking a poststructuralist philosophical position makes it unnecessarily difficult to talk about objective physical reality. In principle, there is supposed to be no such thing. The discourse defines the objects.
This principle sometimes seems to be a philosophical opinion with no practical consequences, since poststructuralists are able to cope with objective physical reality in everyday life the same as everyone else. But sometimes it does have consequences. It makes a difference --at least so it seems to me-- when Escobar criticizes Samir Amin.
Amin sees no hope for his continent, Africa, without major capital investments in agriculture. For Amin, as for economists generally, it is axiomatic that there can be no serious attack on poverty without capital accumulation. The relatively comfortable peoples of the first world are only able to enjoy their comforts because of the work of people in past generations whose savings and investments made it possible to create advanced technologies, install equipment, and build infrastructure. Whether capital is accumulated by a puritan ethic, by exploiting colonies, by extracting surplus value from workers ... or by forced industrialization under five year plans a la Stalin or a la Mao ... no people emerges from poverty without somebody voluntarily or involuntarily postponing present consumption for the sake of investing in future productive capacity.
Given that Africa will be prosperous only after Africa makes capital investments in agriculture and industry; given that capital-poor Africa has for the last several centuries been to a great extent at the mercy of capital-rich foreign powers; given that the capital accumulation processes that history has seen so far have been cruel, destructive, and unjust: Amin has devoted himself to elaborating proposals for what he calls "autocentric accumulation." He wants to put the accumulation process under humane, ecologically-conscious, and democratic control. He wants Africans (and all peoples) to control their own destinies. He wants to use new appropriate technologies to achieve shortcuts that will make the tooling up process less painful than it was in the 19th century. He wants the burdens to be shared equitably by all, and in particular to redress the balances between towns and countryside, and between members of different ethnic, racial, and tribal groups.
Amin's project would appear to be a wholly laudable one, but Escobar raises an objection to it. In principle. "It is necessary to emphasize, however, that Amin's prescriptions are written in a universalistic mode and a realist epistemology, precisely the kinds of thinking criticized here."
Why does Escobar care so much about the issue of realist epistemology vs. poststructuralism that he finds it necessary to criticize Amin's constructive project on philosophical grounds?
The answer is, I believe, that Escobar has written a two hundred and fifty page book which continually berates development discourse for being based on a realist epistemology.
As Michel Foucault showed that prisons have indeed served their real purpose --extending power-- even though it was clear from the beginning that they would not serve their declared purpose --rehabilitating criminals--; so Escobar was able to show that development discourse has served its real purpose -- extending power-- even though it was clear from the beginning that it would not serve its declared purpose --lifting the suffering masses of the third world out of poverty. Development discourse pulled off the sleight-of-hand trick necessary to disguise its real purpose, and pulled it off in such a way that it was able to de-politicize poverty. What had been a conflict of interest between exploiters and exploited became a technical problem to be solved by experts. All of the problems were (supposedly) about objective physical reality. A realist epistemology guaranteed the credentials of the development economists and the other technical experts who were employed to solve, for example, "the problem of hunger," as development discourse had defined that "problem" into existence.
Amin draws Escobar's fire because he agrees with his professional colleagues that the need to accumulate capital is indeed an objective physical problem. The concept "accumulation" is bifurcated. It is, first, another name for exploiting colonies and workers, and for the quasi-automatic machine-like global extension of capitalism; it is also, secondly, the name for the tooling up process without which no people can enjoy prosperity. Under its second name, it represents a fact of Nature. Lack of accumulation is a fact too, and a brutal one; it is like the swarms of locusts that God sent to devour the grain of the Egyptians. All of the priests of Egypt, with all their syntax and semantics, with all their synchrony and diachrony, with all their breaks and sutures, story and ritual, texts and subtexts, semiotics and grammatology, genealogy and deconstruction, could not stop the locusts from eating the grain. In Africa today the physical need to bring water to the land, before the seeds will germinate, grow, and produce edible fruit represents the irreducible resistance of Nature against the hegemony of Meaning; it represents the revolt of objects that refuse to allow any discourse to define them out of existence.
Amin offers an alternative physical solution to a physical problem. His realist epistemology does him (and humanity) no harm at all.
In the end Escobar and Amin are allies on the democratic left; Escobar recognizes the merit of Amin's work even though he thinks it must be "continuously destabilized." Nevertheless, Escobar's criticism of Amin's realism overshoots the mark. Showing that mainline development discourse rests on false realist epistemologies does not rule out the possibility that the work of Samir Amin and many others might rest on true realist epistemologies.
In expressing the view that poststructuralism's consequences are likely to be suboptimal (because it makes it hard to discriminate better traditions from worse traditions; and because it emphasizes discourse too much, facts too little) I do not mean to be unappreciative. I do mean to suggest that the achievements of poststructuralism do not need to be purchased at the expense of discrimination and realism.
The tradition that takes its name from Aristotle's Metaphysics constructs first principles; or first archai, as Aristotle called them. Its inquiries into the first principles and causes of all things concern, above all, being or substance (ousia).
Explanations of the global economy presuppose that the global economy has being; the global economy is assumed to be something that is. Even the most excellent explanation is stultified if the phenomenon that it purports to explain does not exist.
The criteria for distinguishing being from non-being, existence from non-existence, become crucial when somebody thinks it important to deny the existence of something whose existence somebody else thinks it important to affirm. Famously, in the history of metaphysics, the first principles governing the concept of being have been invoked to prove, or to disprove, the existence of God. The present question, however, concerns not whether God exists, but whether the global economy exists.
In The End of Capitalism (as we knew it): a feminist critique of political economy, the author argues that there is no global economy. "Like many political economists I had heretofore theorized the US social formation and `the global economy' as sites of capitalist dominance, a dominance located squarely in the social (or economic) field. But a theoretical option now presented itself, one that could make a (revolutionary) difference: to depict economic discourse as hegemonized while rendering the social world as economically differentiated and complex." (pp. x-xi)
It becomes crucial to ask what sorts of reasons would count for or against the theoretical option that Gibson-Graham embraces, which includes denying (or declining to assert) that global capitalism or the global economy exist. "Metaphysics" is the usual name of attempts to discern why one should, or should not, attribute being to the entity allegedly or putatively designated by a contested concept like "God," or, now, "the global economy," or "capitalism."
Taking Aristotle as a source and a representative of the mainstream ancient and medieval metaphysical traditions of the West, two salient differences between traditional metaphysics and the postmodern metaphysics of Gibson-Graham can be succinctly stated.
First, Aristotle tends to favor attributing being to generalities; Gibson-Graham tends to favor attributing being to particulars.
Thus Aristotle: "If there is nothing apart from individuals, there will be no object of thought, but all things will be objects of sense; and there will not be knowledge of anything, unless we say that sensation is knowledge." It is typical of Aristotle to think of a characteristic substance, or being, as a seed (which has intrinsic to it the form of the plant or animal it will become), or as a product produced by an artisan who had in mind the form of what was to be made before making it, or as a person with a continuing soul self-identical through its transient states (his favorite example is Socrates). "...we say the Hermes is in the stone, and the half of the line is in the line, and we say of that which is not yet ripe that it is corn." Ousia, finally, has two senses: "(A) the ultimate substratum, which is no longer predicated of anything else, and (B) that which being a `this' is also separable --and of this nature is the shape or form of each thing."
Thus Gibson-Graham: "...a capitalist site is an irreducible specificity. We may no more assume that a capitalist firm is interested in maximizing profits or exploitation than we may assume that an individual woman wants to bear and raise children, or that an American is interested in making money.... When Capitalism gives way to an array of capitalist differences, its noncapitalist other is released from singularity and subjection, becoming potentially visible as a differentiated multiplicity." Generalities, such as The Global Economy, and Capitalism, appear in Gibson-Graham's book as false and oppressive. A discourse that celebrates protean variety, proliferation of differences, performs the service of making visible many things which ought to have been seen long ago; which the "hegemony" of the discourse of Global Capitalism has made invisible.
Second, Aristotle thinks of his inquiries as discovering truth. Gibson-Graham "...invoke the constitutive or performative force of economic representation."
For Gibson-Graham "the global economy" is an economic representation constituted by other people's performances, by the acts they performed in and by speaking and by writing. The global economy was called into being by discourse. Her own performance, the writing of the book The End of Capitalism, is designed to constitute a different discourse. "In the hierarchical relation of capitalism to noncapitalism lies (entrapped) the possibility of theorizing economic difference, of supplanting the discourse of capitalist hegemony with a plurality and heterogeneity of economic forms. Liberating that possibility is an anti-essentialist project, and perhaps the principal aim of this book."
Gibson-Graham's aim is similar to that of most writers on the topics of capitalism and the global economy, in the respect that, like most others, she seeks to understand the way the world works in order to change the way the world works. But she takes the view that the very concepts most employed, viz. "capitalism" and "the global economy," have backfired. By attributing to the capitalist global economy an essence, a monolithic nature, they have contributed to its strength. It seems all-powerful because the theories of left-wing political economists tell us it is all- powerful. "For if capitalism's identity is even partially immobile or fixed, ... if it is the site of an inevitability like the logic of profitability or accumulation, then it will necessarily be seen to operate as a constraint or a limit. It becomes that to which other more mutable entities must adapt. (We see this today in both mainstream and left discussions of social and economic policy, where we are told that we may have democracy, or a pared-down welfare state, or prosperity, but only in the context of the [global capitalist] economy and what it will permit.)
Gibson-Graham proposes a new anti-capitalist strategy. She deconstructs the concept of capitalism. She denies that it exists "as we knew it," i.e. as it has been conceived. This theoretical move serves to refocus vision, making what was previously invisible visible, making what was previously impossible possible. "Theorizing capitalism itself as different from itself --as having, in other words, no essential or coherent identity-- multiplies (infinitely) the possibilities of alterity."
She borrows from the writings of other feminists, and from queer theorists, tactics for discourse analysis that deconstruct stereotypes. The same philosophical arguments that demolish the idea that there is such a thing as a typical woman, and which do battle against compulsory heterosexuality by demolishing conventional stereotypes of gays, are deployed to prove that there is no Capitalism, and no global economy. Never generalize.
Hazel Henderson and others had already pointed out that if we count how many hours the people of the world work, we will find that the majority of the work done in the world is either unpaid household labor and child care, or work in the nonprofit or public sector, or production for direct use (such as gardening or do-it- yourself home improvement). Only a minority of the world's work is wage or salary labor done for capitalist firms. Gibson-Graham cites the same facts, and also counts the self-employed as non- capitalist. The middle level business executive who loses her job to downsizing and ekes out a living as a consultant, and the paupers who sell chewing gum on the streets of third world cities, count as part of the noncapitalist total. The informal sector, which Marx characterized as the industrial reserve army of the unemployed, is seen in a different light, since it produces a series of instances of economic diversity --as do the elements of feudal agriculture, household slavery, and patriarchal sweatshops which are found in one place or another of our diverse world. Gibson-Graham is not in favor of all this variegated misery, but she does use it to buttress her case that any general thesis which postulates that there is a world capitalist economy must be wrong.
A considerable part of her book is about the "blokes" who work in Australian coal mines. Highly mechanized Australian mines are able to deliver coal to the world market at competitive prices; the workers are organized in militant unions with left ideologies. The blokes make good money; their wives, who may be nurses or teachers, sometimes make good money too; they may own several houses; they are likely to fly to Europe for vacations. Gibson-Graham's ethnographic account of "blokeland" reinforces her image of the world as a crazy-quilt of diverse economic forms, which does not at all resemble the world portrayed by Marx in Capital, where capital grew and accumulated through extracting surplus value from workers who were paid just enough to make it possible for them to survive.
At this point I would like to engage in an imaginary dialogue with J. K. Gibson-Graham, running the risk that the words I attribute to her may be different from what she would say if she spoke for herself in a real dialogue.
Critic: Surely you do not mean to say that capitalism is such a minor component among the rich variety of economic forms found in the world that if it were to crash again, as it did in the 1930s, there would be no problem, because humanity with all its rich variety of noncapitalist forms could get along quite well without it.
Gibson-Graham: Of course not.
Critic: So you do recognize that capitalism is an important institution in the world as it exists today?
Gibson-Graham: If I didn't, I would not be writing a book about how to change it.
Critic: You do not mean, either, that the economic policies of the world's governments are mistaken when they seek to attract investment, foster a favorable business climate, provide incentives and security for investors, build confidence in the economic stability and profit potential of whatever part of the world they govern, and generally work to keep up profits so that capitalism will run smoothly?
Gibson-Graham: I think that profits could be considerably lower without the dire consequences that even supposedly leftist economists threaten will follow if workers and governments do not cave in to all the demands of capital.
Critic: But you do recognize that in order to function capitalism requires some rate of profit?
Gibson-Graham: Yes.
Critic: And do you recognize that as a general rule, and other things being equal, entrepreneurs will seek the highest profits they can get? And that other economic actors, such as workers and bankers, also seek to maximize their returns?
Gibson-Graham: No.
Critic: Why not?
Gibson-Graham: You are not understanding me very well. I am writing about political economy as discourse. I am not conducting an inquiry within that discourse about the phenomena of economics and how to explain them. I am not saying that Ricardo, or Marx, or Paul Samuelson, got the laws of profit wrong. I am critiquing the discourse that constructs "profit" as a category, defines "economic actor" as an entity seeking to maximize something, and makes it meaningful to talk about "laws of profit."
Critic: So you think that economists should not even be trying to write general laws which explain and predict that under such and such conditions profits will be such and such?
Gibson-Graham: It's disempowering.
Critic: What do you mean by that?
Gibson-Graham: Social reality is constantly being contested and renegotiated. If we think there are some supposedly scientific laws that determine how much the workers are paid, and how much profit capital has to get, then we will passively accept social reality as defined by someone else, instead of participating actively in creating social reality.
Critic: The laws of economics may be disempowering, but I can't help thinking that they are to some extent true. Does it help the victims of the system when intellectuals convince them they have power that they do not really have, so that, like the rooster Chanticleer who thought he could make the sun rise by crowing, they think that if they talk tough and go on strike they will get high wages and benefits?
Gibson-Graham: I do not deny that it is to some extent true that capital has power. The question is the extent. If you write economics as if the world economy were a monolithic system governed by inexorable laws of capital accumulation, then you create a myth that capital is all-powerful, the rest of us powerless.
Critic: It seems to me --correct me if I'm wrong-- that you advance two types of reasons for concluding that capital is less powerful than most people think. First, you attack the concept of a monolithic global economy governed by inexorable laws, saying that the very idea of a capitalist global economy makes invisible the world's diversity of economic forms. This is a sort of negative proof of your thesis; you are telling us that "believing is seeing." All the evidence we think we see is filtered through the lenses of an essentialist discourse, so that if it were true (and you think it is true) that the social world is infinitely diverse and constantly under renegotiation and reconstruction, people would not see the truth.
Gibson-Graham: I recognize (pp. 5-9) that in my book I am attacking a straw man, although not a straw man I have constructed by myself. There is probably nobody who holds that the capitalist global economy is as monolithic and powerful as it is in the image of it that I attack.
Critic: But your straw man resembles the views of Fredric Jameson, David Harvey, Immanuel Wallerstein .... and others, and it also resembles your own former views, since you yourself used to write about "the global economy."
Gibson-Graham: My theoretical target is simplified in order to make my point, but it is relevant to what ordinary people and social scientists actually say and think.
Critic: So part of your argument is that any theory as general as the straw man you attack must be wrong. But you do not specifically refute any thesis actually advanced by anyone.
Gibson-Graham: I would not put it that way. It is true that I do not specifically refute anything that Fredric Jameson, for example, affirms, as if it were a matter of scoring points in macho intellectual combat, or a matter of one mathematician finding an error in another mathematician's proof. But I do elaborate an alternative to a Jamesonian vision. If you go back and read Jameson again after reading my book, you will find him less persuasive.
Critic: So your work is illuminating. It makes real-live facts visible that, strictly speaking, could not possibly happen according to the straw man who thinks everything happens according to simple laws of capitalist accumulation. The straw man's discourse is similar enough to discourses that are actually employed --indeed, are dominant-- that by helping the reader to see its flaws, you also help the reader to see flaws in discourses that actually exist, like Jameson's.
Gibson-Graham: I would not have put it exactly that way, but I won't object either.
Critic: Apart from saying that the straw man must be wrong because in principle essentialism is always wrong, you also fill your book with anecdotes.
Gibson-Graham: You mean facts, cases.
Critic: Yes, for example, in the 1990s, after a protracted struggle, the United Steelworkers of America (USWA), Local 5668, won a three year contract with Ravenswood Aluminum Company, in spite of the company's effort to use its bargaining advantage as a multi-national company to break the union by locking the workers out. The union's researchers established that the new owner of Ravenswood was a global commodities trader who had been indicted by the U.S. Department of Justice on 65 counts of tax fraud and racketeering. The union's tactic (which you call a "non-standard response") was to portray the company as an international outlaw, damaging its public image and triggering investigations by government agencies. "Terrier-like, the USWA pursued the company relentlessly around the globe yanking and pulling at it until it capitulated." (p. 129) Logically, this one case refutes the straw man (or perhaps a straw man even simpler than the one you construct); since if labor wins even once in a conflict with capital, then it is not true that capital always wins.
Gibson-Graham: This is one of the stories that shows the value of my anti-essentialist approach to social theory. If the steelworkers union had believed the myth of the global economy, it might have given up without even trying. As it turned out, the workers met internationalism with internationalism of their own, and won.
Critic: But you do not attempt to use a statistically significant sample of similar cases. You don't test a hypothesis about how often and for what reasons labor wins. You do not propose a causal mechanism, or a model, to explain the observed facts. You do not design tests that deliberately compel your theory run the risk that it might be shown to be false. You do not do any of the things that mainstream social scientists do to test their theories.
Gibson-Graham: I don't.
Critic: You do not even use descriptive statistics. You do not tell us how often the sorts of cases you describe occur.
Gibson-Graham: I do think social reality is overdetermined, and I do not believe in causal models. Descriptive statistics are less objectionable, although they are often misleading because they mask differences among the cases grouped together. But anyway, quite apart from what I think about what positivist social scientists do or do not do, what I myself do is something different. I show how the dominant discourse about the global economy has defined capital as powerful, labor as weak, and thus has made invisible many things which actually happen.
Critic: So the point of your discourse analysis is not to define a different causal mechanism (different from the mechanism of accumulation) which can be expected to regularly produce similar results. The point is not to claim that the cases you cite are typical, or even numerous. The point is not to identify the objective conditions under which labor's chances of winning improve. The great advantage of your poststructuralist postmarxism is, rather, that victims of oppression who accept your approach see more possibilities and have more confidence. Your theory is like a pep talk. Don't just assume that capital can move production wherever it wants! Don't just assume that it is impractical for labor to organize multinationally! Look at X! Look at Y! They had courage, fought back, and won!
Gibson-Graham: "Pep talk" is a shallow way to describe what I do. A better way to describe the process of encouraging people to try what Paulo Freire called the "untested feasibility" is to think in terms of changing scripts. "The global economy" is not just a false generalization. It is a script, like the script for a play or a motion picture. It defines the roles of the actors. My book is an attempt to rewrite the script, so that people will transgress the present rules, and act in (now) non-standard ways, which will eventually lead to new standard ways, new scripts.
Critic: Do the non-standard transgressions exercise power that people really have, but which the hegemonic script of the capitalist global economy leads them to believe they do not have?
Gibson-Graham: I will answer with an example. I compare the rape script to the global economy script. (pp. 120-144) There is a standard script about men raping women, in which the role of women is defined as passive, powerless; the woman is a victim who lets herself be raped in order to save her life. By analogy, a similar script governs the rape of the third world by the MNC's (Multinational Corporations).
Critic: Before we discuss the analogy, tell me why you know that rape is governed by a rape script. Have you interviewed a significant sample of rapists and rape victims and coded the interview data?
Gibson-Graham: I borrow the "rape script" concept from other feminist writers. It is a concept that rings true to me, but not because there is a lot of empirical data verifying hypotheses about it. It rings true because it is an accurate interpretation of meanings that prevail in our culture. I think the "rape script" concept rings true to my readers for the same reason. We are all participating members of our culture, and we all know that "man" is defined as "strong," while "woman" is defined as "weak."
Critic: You cite an example of a woman who refused to play the role assigned to her by the rape script. She grabbed the penis of her would-be rapist while he was hitting her head. He lost his erection and ran away. (p. 129)
Gibson-Graham: Similarly, there is a prevailing script which defines MNC's as strong and third world people as weak.
Critic: Is the implication that if people in the third world --or poor people generally-- would follow a different script, then they would be powerful?
Gibson-Graham: I don't want to be backed into a position where I am obliged to defend the absurd thesis that all victims are more powerful than they think they are. Some victims are less powerful than they think they are. My point is that certain essentialist scripts define roles in which people are defined as powerless regardless of the facts; the script itself has performative force --it makes people less powerful than they otherwise would be.
I shall conclude and stop now, my talk with Gibson-Graham. My imaginary speculations about what she would say, have been, I hope, not distant from her thought.
Speaking now just for myself, I find, and I think the imaginary dialogue above illustrates, that J. K. Gibson-Graham, and poststructuralists generally, have an awkward relationship to the ancient question, "Why?" "Why do things happen as they do?" Their awkwardness is due to rejecting mainstream and Marxist paradigms of scientific inquiry, without sufficiently developing new (or reviving old) ways to answer "Why?" questions. (I have said above that the idea of "overdetermination" is, when applied to conscious waking social life, not so much a way to answer the question "Why?" as a way to justify not answering it. I will later suggest that ideas like "constitutivity," "script," and "performative performance" are more promising.) Their diagnoses and prescriptions necessarily seem haphazard as long as their allusions to the sources of problems, and their grounds for believing that the conceptual reforms and the courses of action they advocate will solve problems, remain inchoate.
Aristotle thought that there were four archai, four main types of principle or cause, four main ways to respond to the question "Why?"
--the material cause, what the thing is made of, as a vase is made of bronze.
-- the efficient cause, the source of movement, as the vase- maker who makes the vase, or as love or desire considered as a principle initiating motion.
-- the formal cause, the form, shape, pattern, definition, or essence, that which makes the thing what it is, as the shape which causes the bronze so-shaped to be defined as a vase.
-- the final cause, that for the sake of which the thing is made, the end or goal the vase-maker serves in making the vase.
By the time Louis Althusser and the post-structuralists took up the critical examination of science, Aristotle had become identified with traditions that were erroneous and undesirable. The idea of final cause was thought to falsely attribute human purposes to nature. The idea of formal cause was thought (quite rightly) to confer the status of natural facts on social conventions by treating accepted definitions as hallmarks of true being; thus being-as-form favored aristocracy, divinity, and masculine privilege. Although efficient causes were what mechanistic science was all about, the "impacts," "forces," "impressions," "effects," and "variables" to which it attributed (efficient) causal efficacy and/or explanatory significance were not the sorts of sources of movement that Aristotle had in mind.
Gibson-Graham cannot be expected to sympathize with a traditional anti-democratic worldview. As an anti-essentialist, she cannot be expected to sympathize with Aristotle's treatment of social conventions as if they were natural essences. She might, however, have some sympathy with regarding human action as praxis, and as a paradigm for explanation. Aristotle's vase-maker is not making a revolution, but at least he is making something. "`Cause' means ...the form or pattern ... [and that] from which the change or the resting from change first begins, e.g. the adviser is a cause of the action, and the father a cause of the child, and in general the maker a cause of the thing made, and the change- producing of the changing.... `Beginning' means ...that from which change naturally first begins, as a child comes from its father and its mother, and a fight from abusive language ... that at whose will that which is moved is moved, and that which changes changes, e.g. the magistracies in cities, and oligarchies and monarchies and tyrannies are called archai, and so are the arts... for all causes are beginnings."
2500 years ago, in his primitive, patriarchal, and naive way, Aristotle expressed some observations about why things happen the way they do that are in accord with Gibson-Graham's desire to encourage victims to become activists, and not to be misled and discouraged by mechanistic causal models.
Any number of contemporary approaches to social science are reviving Aristotelian notions of deliberate human action, praxis. Once again, a human choice is a source of movement that explains an action. Formal causes, the patterns and implicit definitions built into language and accepted by common sense as the framework of action in everyday life, have returned as (for example) constitutive rules, institutional facts, symbolic interaction, dramaturgic social analysis, emic viewpoints, plans, performatives, phenomenology, language-games, scripts, ethnomethodology, act/action structures, and cognitive structures.... Meanings are causes. Again. Gibson-Graham is among the social scientists who offer explanations in terms of causes Aristotle would have classified as formal. (Or as efficient in a sense later centuries deleted from the idea of efficient cause-- as when he takes a human decision to be a source of movement; for example when a raid triggers a decision to go to war. For example: in The End of Capitalism a woman's submission to rape is explained by a rape script which defines her as powerless. However, Gibson-Graham is not mainly in dialogue with Martha Nussbaum, Alasdair MacIntyre or any contemporary neo-Aristotelian; she is not mainly in dialogue with Milton Friedman or any mainstream positivist economist; she is not mainly in dialogue with Carol Gilligan, Nel Noddings, Rom Harre, or any social scientist influenced by recent mainstream Anglo-American analytic philosophy. She is mainly in dialogue with other feminists, with Althusserians and with Marxist political economists. She stands in a tradition shaped by Marx, and for that reason encounters a special conceptual impediment standing in the way of accepting a neo-Aristotelian model of human action. Marx begins Capital by writing that he is about to analyze, "that form of society where wealth appears as a vast collection of commodities." ("Commodities" is Waren in the original German; in the cognate English it would be "wares," things offered for sale.) Already in his first sentence Marx telegraphs the structure of his discourse. Capitalist common sense is an intrinsically illusory discourse. Wealth only appears as commodities; it appears in what Marx later calls commodity-form. But the commodity-form is not, for Marx, what Aristotle would have called a formal cause; for Marx commodity-form, i.e. exchange, is not the pattern of what truly is and not the source of movement; it is an illusion masking the deeper reality. The real essence of the commodity is not found on the surface of society; its essence is the quantity of labor embodied in it, its value. Marx's analysis asserts that as long as we remain at the formal level, at the level of circulation, we will never understand capitalism. Capitalism is essentially something that happens beneath the surface, at the level of production, where workers are exploited and surplus value is produced.
For this reason anti-essentialist left intellectuals can regard themselves as remaining within the Marxist tradition only with great difficulty. Anti-essentialism cannot follow Marx in his move from surface to depth, from circulation to production, from formal appearance to material essence.
If anti-essentialist left intellectuals would take just one more step --and I am not saying that they will-- they could undo not only Marx's demotion of circulation to the level of mere appearance, but also undo modernity's (e.g. Descartes', Locke's....) demotion of appearance to mere secondary qualities. They sometimes take this step in practice, e.g. in Gibson-Graham's recognition that the rape script has causal powers. Culture shapes vision so that one person appears as (is) the powerful man and another appears as (is) the weak woman. Meanings are causes. Perhaps they would consider recognizing in theory that what Marx called the "commodity-form," i.e. the meanings at work in the ritual of exchange, functions as an explanatory principle, a cause.
It would follow that there really is a capitalist global economy. If one is accustomed, coming out of a Marxist tradition, to define capitalism in terms of the production relationships between owners and workers, then the variety of production relationships in the world might lead one to be more impressed by the differences than by the similarities, and to insist that there is no worldwide capitalism, only many capitalisms alongside many noncapitalist forms. If, however, one recognizes that Aristotle was not entirely wrong to attribute being to forms; then money, accounts, debts, investments, wares offered for sale, exchange relationships, markets ... everything that "appears" at the level of circulation, is among the "things that are." The global market, the commonality worldwide of the use of money, does not constitute a universal truth valid in every place and in every respect, but it does constitute a major feature of the world we live in. It is justifiable to say of the capitalist world economy that it has being, it exists --even if this means that "capitalism" is not defined in any way that Marx would have defined it.
However, it does not follow that we are all powerless victims of a monolithic system governed by inexorable laws. If (pace Aristotle, and in agreement with Gibson-Graham) we see forms as (or mainly as) social constructions; then it follows that the capitalist global economy has been socially constructed. It can be socially reconstructed.
At this point, instead of prefacing my recommendations with a statement of my own theory, I will go straight to recommendations. And instead of starting from scratch to answer the practical question, "What shall we do?", I will offer commentaries on the excellent answers to this question already given by Professor Jane Kelsey of Auckland University in New Zealand. She has written extensively on how multinational corporations --supported philosophically by free market economic theory-- have undermined the security of the people of her country. From her scholarship and from her experience as an activist she has produced a series of practical "tips". Twenty-six of her tips have been circulated worldwide by the Canadian Centre for Policy Alternatives. By standing on her shoulders, augmenting her tips by writing commentaries on them, I hope to produce advice that is superior to what I could produce alone.
My aim is to show that in the light of the preceding theoretical efforts to understand the global economy, practical efforts to change the global economy can be both supported and improved. Further, although it may not be apparent on the surface, underlying my comments on Jane Kelsey's recommendations is a search for positive cultural norms suitable for guiding the construction of an ethical global economy. In that search I have been especially helped by four thinkers, mentioned above either slightly or not at all --M. K. Gandhi; M. L. King, Jr.; Carol Gilligan; and Riane Eisler. Gandhi proposed that those of us who own property regard ourselves as "trustees," and he viewed his own life as a series of "opportunities for service". King's stated purpose was to build a "beloved community". Gilligan identifies a "care ethic," which she defines as attending to and responding to needs. Eisler extols "partnership".
These are Jane Kelsey's tips:
Tip 1: Be skeptical about fiscal and other "crises." Examine the
real nature of the problem, who defines it as a crisis, and who stands to gain.
Demand to know the range of possible solutions, and the costs and benefits of each to
whom. If the answers are not forthcoming, burn the midnight oil to produce the
answers for yourselves.
Commentary: A few decades ago it was easy for some people to believe that the countries of the world were gradually moving in the direction of high wages, social security, and a high level of social services for all; the West European social democracies were imagined to be models of what could be everybody's eventual future. The reversal of the trends that made such optimism plausible has been marked by a series of crises, such as those characterized by oil price shocks, unpayable debts falling due, and sudden currency devaluations. Such crises reflect structural problems that are there all the time, but it is not until a crisis that a government (or other actor) acknowledges the structural problems, albeit in a form subject to distortions by the interests of those who define the crisis. Dependency on oil is a structural problem. Debt that is unpayable is a structural problem --and it is a structural problem that reflects a deeper structural problem, namely: the instability of capitalism. John Maynard Keynes, who was typical of those who wrote economic theory for West European social democracies, proposed to remedy capitalism's instability by counter-cyclical spending --but, unfortunately, the cycles nearly always cycled downward, and eventually it became obvious to all that some day the deficit spending incurred to counter them had to stop. Currency devaluations reflect the structural fact that not every nation can win in international economic competition, for the same reason that not every basketball team can win 100% of its games.
The existence of fundamental crises --moments when structural problems can no longer be ignored-- creates a climate where it is easy to manufacture bogus crises. In any crisis --a real one, a bogus one, or a real one made bogus by exaggeration-- the decisions made are likely to be unwise, and are likely to be biased in favor of those who have the most power to influence public opinion. It would be true wisdom to avoid the crises altogether by eliminating their deep structural causes; namely (in the cases of the three examples mentioned here) dependence on fossil fuels, capitalism, and an international economy that is more competitive than cooperative.
Tip 2: Don't cling to a political party that has been converted to neoconservatism. Fighting to prevent a social democratic party's capture by right-wing zealots is important. But once the party has been taken over, maintaining solidarity on the outside while seeking change from within merely gives them more time. When the spirit of the party is dead, shed the old skin and create something new.
Commentary: A political party is not normally in a position to transform society, because its primary task is to seek votes. The party normally accepts as given that public opinion, and the moneyed and other interests that shape public opinion, are as they are. If, nevertheless, a party advocating socialism or some other form of social transformation achieves control of the executive, legislature, and judicial branches of government, then it is still not in a position to transform society. The national government is part and parcel of the modern world-system. It protects property; it encourages business. It creates conditions favorable to the growth of prosperity by helping the (capitalist) system work smoothly. Each state helps the entrepreneurs of its nation succeed in international economic competition. The first national government --that of Holland in the 17th century-- set the pattern that most national governments have conformed to ever since. Jane Kelsey is quite right to say that parties that chime in with neoconservatism are not worthy of support, and that there is a need for political parties that advocate real alternatives. Parties can be educational. They can exercise some degree of political leverage. But we should not expect too much of political parties or of government; neither will be able to implement real, workable, alternatives, without the support of social movements.
Tip 3: Take economics seriously. Neo-liberal economic fundamentalism pervades everything. There is no boundary between economic, social, environmental, or other policies. Those who focus on narrow sectoral concerns and ignore the pervasive economic agenda will lose their own battles and weaken the collective ability to resist. Leaving economics to economists is fatal.
Commentary: Economics is not a science that applies universally; it is not like chemistry, which appears to apply even on other planets and in other galaxies. It is not even a general science of human society; like anthropology, which attempts to study all forms of human culture. The data of economics come mainly from accounting and bookkeeping, and its models apply mainly where there are accountants and bookkeepers. Instead of saying that every society has an economic base, we should say that every culture has an ecological context. The general science of humanity's interaction with the earth and other living systems is ecology, not economics. Culture is homo sapiens' overall survival strategy, its ecological niche. Economic society is a particular form of culture. We must take economics seriously because it is a basic cultural structure of today's societies, and if, with Immanuel Wallerstein, we hold that today there is only one society, the global one, it is a basic structure of society. Economics is basic because it governs the meeting of basic needs. It determines (or is an ideological reflection of the structures that determine) which members of the human species eat and which do not. Even problems that are not on the surface economic problems --like the motivated by ethic hatred in massacres in Bosnia and in Rwanda-- have an economic dimension. An economic solution is a prerequisite to any viable solution to any social problem, even where the problem is ostensibly a non-economic one. But --this is a big but- - there are no economic solutions. Solutions come only from a broader vision that sees economics as a part of culture and culture as a part of ecology. That is why leaving economics to economists is fatal.
Tip 4: Expose the weaknesses of their theory. Neo-liberal theories are riddled with dubious assumptions and internal inconsistencies, and often lack empirical support. These right- wing theories need to be exposed as serving rationalizations which operate in the interests of the elites whom the policies empower. (Note: as the word "football" is used in most of the world to name what Americans call "soccer," so the term "neo-liberal" is used in most of the world to name ideas Americans call "conservative.")
Commentary: Exposing dubious assumptions and internal inconsistencies of free market economics needs to go hand in hand with building alternative communities and cooperatives. Mainstream economics is the ideology of mainstream institutions. The shelves of university libraries house many books that refute it. Yet it remains mainstream; it is the standard doctrine taught in most introductory economics courses; although it has many times been shown to be false, it is assumed to be true in television news analyses and in newspaper editorials. Practitioners of neo-liberal economics generally do not take the trouble to reply to their academic critics. They do not need to, because they have power. They do not have the time, because they are busy running governments, corporations, the media, and the international agencies.
Building alternative communities, cooperatives, nonprofits, and other institutions that actually function according to principles that differ from those of free market economics is essential. Post-economic living proves in practice what the books on university library shelves prove only in theory.
Tip 5: Challenge hypocrisy! Ask who is promoting a strategy as being in the "national interest" and who stands to benefit most. Document cases where self-interest is disguised as public good.
Commentary: But it is really true that when high taxes drive businesses out of business, then the employees lose their jobs. It is really true that when the government fixes prices so low that bigger profits can be made elsewhere, then production falls and with it employment opportunities.
To a considerable extent it is true that there can be no business without profit, and no business means no jobs.
Hence when moneyed interests assert that what is in their interest is in the national interest, their hypocritical assertions are convincing and partly true. They have more than arguments. They have power. To a considerable extent it is true that if capitalists choose to invest, then there are goods produced, services rendered, jobs, and incomes that governments can tax. And if not, not.
Capital is not above bluffing. Often its advocates threaten dire consequences if wages are raised, profits are taxed, or safety or environmental regulations are passed. And then the wages go up, the profits are taxed, the regulations are enforced, and capital adjusts; the dire consequences never materialize.
But the power behind the bluff is not imaginary. Sometimes the dire consequences do materialize.
Therefore, when we challenge hypocrisy, we should also challenge power. The way to challenge power is to disarm it, to dismantle the quasi-mechanism through which it operates. The way to disarm economic power is to build alternatives. So that it will be less and less true that if there is no profit, there will be no business and no jobs. So that it will be less and less true that human societies must sweeten incentives to investors in order to produce goods, render services, work, and join together for the common good.
Tip 6: Expose the masterminds. Name the key corporate players behind the scenes, document their interlocking roles and allegiances, and expose the personal and corporate benefits they receive.
Commentary: Identifying individuals can sometimes help to unmask the true nature and intentions of a movement. For example, in Italy during the 1920s Olivetti was secretly funding Mussolini. Meanwhile, Mussolini --like many opportunists before and since-- was saying whatever he thought would please multitudes; he spoke in favor of John Dewey's progressive philosophy of education, and at one point he even came out for feminism. The consequences of Mussolini coming to power could have been more accurately predicted by studying who his backers were than by listening to what he said.
On the other hand, it is not generally true that social problems can be solved by using a discourse that traces the economic benefits particular people pursue. Since the principal causes of poverty and insecurity are deep cultural structures, it is unfair and misleading --and, worse, it is contributing to the problem, not to the solution -- to assume that individuals are and always will be vicious automata of egoism. The reality of the human condition is that we are all actors on a stage we did not make; as children we learned to play the roles society prescribed for us. Those of us who are trying to improve society need to work on improving society's role designations and its assumptions about human nature. Human action will improve when society defines humanity in ways that bring out the best in people.
The liberation theologians of Latin America have a good way to express the need to both hold people accountable for their actions and to call people to act according to higher standards. The buena nueva (good news) encompasses both denunciar (denouncing evil) and anunciar (announcing the coming of a better world). The Jewish Yom Kippur liturgy puts it: "If you do not both praise and revile, then I have created you in vain, sayeth the Lord."
Tip 7: Maximize every obstacle. Federal systems of government, written constitutions, legal requirements and regulations, supra-national institutions like the ILO and the UN, and strong local governments can provide barriers that slow down the pace of the corporate takeover.
Commentary: The corporate takeover is a recent version of the relentless pursuit of profit that Adam Smith in The Wealth of Nations sometimes depicted with water metaphors. Money flows into profitable channels of trade as water flows downhill. Expanding on Smith's hydraulic images, we can caricature the neo-liberal global corporate takeover by saying that the pursuit of profit by self- interested individuals is like a never-ending flood. The forces of the market are like rain that never stops. Whatever obstacles stand in the way of the floodwaters --federal systems of government, written constitutions, legal requirements, ILO standards-- the water will seep through, soak, flow around, submerge, and finally wash away.
According to the metaphysics of neoliberal economics, the market forces are natural, like water, and whatever impedes them is artificial. The barriers that inhibit them from flowing where they naturally flow (toward profits) are like dams. Since the rains never stop, no dam will last.
At the same time that we counter-strategize by maximizing every obstacle, in order to slow down the pace of the corporate takeover, we can do something more humane. We can cooperate on a not-for-profit basis to meet each other's needs. A new light dawns. The rain stops, the flood waters recede.
Tip 8: Work hard to maintain solidarity. Avoid the trap of divide and rule. Sectoral in-fighting is self-indulgent and everyone risks losing in the end.
Commentary: It is hard to maintain solidarity. People who have everything to gain from solidarity, fall out and divide over social issues, such as religion or the lack of it, sexual morality or the lack of it, abortion, homosexuality, generation gaps, race, gender, ethnicity, unforgiven past wrongs, language, addictions, and mental illness.
I will explain the last two items, addictions and mental illness, because they are not usually thought of as issues that divide social movements. It does not seem to me to be possible to organize a mass movement (at least not here where I am, in Southern California) without including people who suffer from depression, recovering alcoholics, people who never got over bitter divorces, people with odd beliefs and odd delusions, people who are chronically irresponsible and undependable, people with sexual obsessions, self-destructive people, control freaks, deeply angry people, desperately lonely people, and people who occasionally hallucinate and hear voices. A solidarity movement confined to people who are unquestionably sane cannot be a mass movement; it will always be a minority movement.
Mental health issues put solidarity in jeopardy because mentally healthy people generally do not feel obliged to stay in organizations where they have to put up with the foibles of neurotics and borderline psychotics. Also because mentally ill people find it notoriously difficult to bond with other people, and to work in solidarity with others for a common cause.
Given the standard divisive social issues (religion...etc.), and given the two I have added, I conclude that it is not possible to achieve a high degree of solidarity in heterogeneous groups. It was a theoretical illusion --homo economicus-- that created the parallel illusion that a mass solidarity movement could take political power and build socialism. Real people, whatever their economic interests, cannot achieve cohesion without sharing values; the exception proves the rule in communities like my own, where our very love of diversity is a value we share. It follows that the only way to achieve solidarity on a large scale and across social barriers, is to form coalitions that combine the powers of many grassroots face-to-face groups, each of which meets the need-to- belong of a more-or-less homogeneous type of person.
The role of the organic intellectual, the leader, is crucial. To maintain solidarity, there must be key people who can lead their kith and kin into broad functional coalitions with people their kith and kin would not like and would not agree with, if they got to know them well.
Solidarity becomes more doable if it is thought of as concentric levels of commitment, or as Nel Noddings puts it, as concentric circles of caring. It is futile for one person to try to be in complete solidarity with all humanity and all the animals and plants that share the planet with us --even though some of us try. But it is a practical possibility for one person to be in complete solidarity with a lover or with a family; and it is practical to be in very close to complete solidarity with a circle of close friends. If everybody could be in a family, and in a loving community larger than a family, then, step by step, building on the elements of solidarity that already exist in the world wherever they are found and in whatever language they are expressed, then, after much trial and error, we might be able to achieve the goal announced by the slogan, "Workers of the world, unite!" It could be achieved.
Tip 9: Do not compromise the labor movement. Build awareness of the corporate agenda at union local and workplace levels. Resist concessions that tend to deepen co-optation and weaken the unions' ability to fight back.
Commentary: First I will make a general suggestion about how to build a strong union, drawn from my experience with Cesar Chavez. Second, I will argue that labor unions alone cannot transform the global economy. Third, I will state reasons why unions are essential (although not sufficient.)
Once when Cesar Chavez was asked how he organized the union he answered, "First I organized one person, and then another person, and then another person, and then another person, and then another person .... " When he and a few others started organizing in California's Central Valley, the first thing they did was to listen to whatever farm workers wanted to desahogar (express from the heart). They found that many were afraid they would die an unknown death, with no funeral and no one to mourn. Thus Chavez arrived independently at a method used by the first working people's associations in Europe. One of the first things the new union did was to assure that every time a member died there would be a funeral.
Although I have not said very much about Chavez, I think I have said enough to lead up to the general suggestion I want to make. It is this: the solidarity needed to solve economic problems will come to a great extent from non-economic motives.
My second point is that labor unions alone cannot transform the global economy. Unions do not produce any goods or services (except for the services rendered in administering the union itself). They produce no food, no housing, no clothing, no medical attention or child care. Their ultimate weapon is the strike, which is a non-action, a not-showing-up-for-work. The strike is stop-power, not go-power. The strike is, in principle and for structural reasons, a weak weapon. Refusal to work is always subject to the risk that someone else will be hired, and to the risk that the business will close, or move somewhere else. Moreover, even when it may be successful, the strike must be used sparingly, because shutting business down offends not just business, but also the public and the government. Labor is caught in a structural trap.
The transformation of the economy requires the transformation of go-power. It cannot be done with stop-power alone.
There is a traditional division of opinion in the labor movement between those who favor unions closely allied with socialist parties that aim to deliver control of the means of production to the working class; and those who favor labor unions that focus on wages, benefits, and work rules in business enterprises working people will never own or control. In this dispute I sympathize with the former, with those who view union action as complementary to political action.
However --and this is a big however-- I have concluded above that political parties cannot transform the global economy even if they achieve governmental power, because national governments (either singly or in concert) cannot. Hence neither unions, nor governments, or the combination of the two, can transform the global economy's structure. (Do not even ask about violence; it has as much chance as the proverbial snowball in hell.) Something more is needed. I call the something more the growth of a culture of solidarity.
One might ask then, whether labor unions are unnecessary as well as insufficient. If the global economy can be transformed at all, perhaps it can be transformed without labor unions. Not so. Unions (not counting the corrupt ones) augment the power of working people. A world where the masses of working people were more powerless than they already are, would not be a world where social transformation could occur. Empowerment of the people, in many forms, including labor unions, is needed to make change feasible.
Further, a collective bargaining contract is in itself a positive cultural transformation. A union contract embodies respect. It is not just about wages; it is about human rights in the workplace. It is about replacing arbitrary power with social norms, and with grievance procedures for the adjudication and enforcement of the norms. Neither the norms or the procedures are ever perfect; improvement is always possible. But it is nevertheless a step forward in principle to establish procedures for governing relationships in the workplace (or anywhere else) according to a pattern of standards, an ethics, which seeks, in principle, to take into consideration everybody's needs and everybody's rights. It is a step away from the rule of force, and a step away from the rule of the quasi-force of the quasi-machine called "the economy." It is a step toward a world where human beings cooperate to meet needs, and treat each other with mutual respect.
Tip 10: Maintain the concept of an efficient public service. Resist attempts to discredit and dismantle the public sector by admitting deficiencies and promoting constructive models for change. Build support among client groups and the public which stresses the need for public services and the risks of cutting or privatizing them.
Commentary: The concept of an efficient public service needs to be maintained because it is a concept under attack. There are people who deny the validity of the concept. They do not just criticize government program A or B for being inefficient; they criticize the very idea that there could be such a thing as efficient public service.
That governments are always and necessarily inefficient is a metaphysical proposition. However, it is a metaphysical proposition that is given an aura of plausibility by reports on concrete historical experience. For example, P. T. Bauer, a leading anti-government pro-market writer, reports that government programs in India that were supposed to help the poor in fact wasted time and favored the middle class. Instead of farming, farmers spent their time currying favor with government officials and going to political meetings. Those who mainly received the benefits of the programs were not the neediest; they were the ones who could afford to offer bribes and near-bribes; the ones who could find time to develop contacts and learn the art of grantsmanship; the ones who knew how to negotiate their way through the official procedures required to obtain a share of the government's largesse.
Similarly, horror stories about failures of planning in the USSR and elsewhere are used to suggest, if not to prove, that the "planning model" is always wrong and the "market model" always right.
The metaphysical proof that the concept of efficient public service is a contradiction in terms proceeds by defining "efficiency" in such a way that only free, competitive markets can be efficient. The price fixed by such markets reflects, by definition, an optimal allocation of society's resources. Other criteria for allocating resources are, in principle, inefficient.
From this argument it follows that not just modern public institutions, but also humanity's older institutions --family, kinship, and religion-- are inefficient; as are innovative modern institutions, such as cooperatives, nonprofits, charitable foundations, volunteer agencies, intentional communities, neighborhood associations and fraternal lodges. It follows that they are all by definition inefficient, insofar as they operate according to an ethic that diverges from the norms that govern "rational" behavior in free competitive markets.
A more convincing metaphysical argument can be made for the opposite conclusion: public service (and other institutions responsive to ethical criteria that override market "rationality") may be efficient, but free competitive markets are never efficient. The argument starts by defining "efficient" in a standard way: to be efficient is to achieve the objective at the least cost (or to a higher degree at the same cost). Next, it defines the objective: to meet the physical and spiritual needs of humanity, in sustainable harmony with the living systems of the earth.
On the basis of these plausible definitions, it can be argued that in principle the concept of an efficient free competitive market is mistaken. In such markets money and the self-interested decisions of economic actors always intervene between the objective and its achievement. The real measure of efficiency in achieving the objective --meeting needs long term-- does not necessarily coincide with any outcome the actors in the market seek, i.e. not with the goal of maximizing money returns for self-interested actors.
There are at least three reasons for concluding that efficiency and the market not only do not necessarily coincide, but, indeed, necessarily do not coincide.
1. Markets are always biased in favor of effective demand, i.e. in favor of the demands of people with money. A market may be Pareto- optimal, but it can never (except in the imaginary abstractions of mathematical welfare economics) be Pigou-optimal, i.e. it will never allocate the necessities of life to those who need them the most.
2. Markets never internalize external costs. Two actors who strike a market-rational bargain between themselves need not consider the consequences of their bargain for other people outside their bargain, nor the consequences for the earth.
3. Markets always discount the value of the long term future. A payment to be made 1,000 years from now (a mere speck in geological time) has a market value of virtually zero according to any commonly used discount rate.
It follows that public service (or any enterprise or institution that takes meeting real needs as its objective) has at least a chance to be efficient; but the concept of an efficient free competitive market is a contradiction in terms.
But what should we say about the historical experiences with inefficient public service, which lend empirical support to the (false) generalization that government is never efficient? We should say that those experiences are so many reasons to maintain the concept of an efficient public service, admitting deficiencies and promoting constructive models for change. (And, of course, we should say that recognizing the inherent inefficiency of markets does not imply that we should go to the extreme of trying to build a world with no markets at all.)
Further inspiration comes from emphasizing the positive. For example, biologists find that the single most important factor explaining the increased longevity of the species homo sapiens sapiens in recent centuries is improved public health programs -- cleaner water, better treatment of sewage, control of infectious diseases, etc. The hard physical fact is that people now live longer because of an alliance between science and efficient public service.
Tip 11. Encourage community leaders to speak out. Public criticism from civic and church leaders, folk heroes and other prominent "names" makes corporate and political leaders uncomfortable. It also makes people think. Remind community leaders of their social obligations, and the need to preserve their own self-respect.
Commentary: When the consequences of globalization violate deeply felt human values, then the conscience of the people, expressed by community leaders of various kinds, is available as a weapon of the resistance. There then emerges an ad hoc protest coalition. Whether a local ad hoc protest coalition can be part of a global transformational social movement depends --in part-- on whether it is possible to transform the world system through a diverse alliance whose constituent elements do not share a common ideology.
Whoever encourages them to speak out on an issue, community leaders will not speak with the voices of their encouragers. They will speak with their own voices. A priest will reflect some version of the social teachings of his denomination, modified by his own prayers and reflections. Ethnic, tribal, and racial leaders will speak from the matrix of their communal identities. Economic interest groups will usually argue for the compatibility of their particular short term interest with the long term common good. A woman may speak on behalf of women or she may express a view that articulates some other dimension of her participation in society. (This point applies to the others too, since everybody has multiple group affiliations.) As long as the ad hoc protest coalition has no common philosophy, each community leader will speak in a specific voice, that is hers or his; and not in a general voice that expresses the aims and the spirit of a unified global transformational movement.
For Plato, as for many others, ancient and modern, western and non-western, it was obvious that social transformation would require cooperation, and cooperation would require likemindedness. Plato's ideal city was to be united by a single shared philosophy. For Karl Marx it was obvious that the working people should be unified in practice through sharing in theory a common socialist ideology.
Liberalism does not agree. For liberalism the variety of voices in an ad hoc protest coalition is an asset, not a liability; and, indeed, the very fact that people speak as community leaders rather than for themselves alone is already suspect. It is a sign that there may be too much conformity. According to liberalism, each person should think and advocate for herself, or for himself.
I believe that Plato and Marx had good reasons for seeking likemindedness, but liberals also have good reasons for fearing likemindedness and valuing diversity of thought. I hope that it will be possible to transform the global economy through unity-in- diversity.
If we adopt the idea of the classical anthropologists, that human cultures can be understood as diverse adaptations to diverse environments; and if we think of the global economy as certain features of modern European culture writ large --as European economic practices expanded to a global scale-- then we can see global economic transformation as cultural transformation. Ultimately it will be an adaptation to just one environment, planet earth.
Cultural transformation does not necessarily or usually proceed by the conscious adoption of a single coherent philosophy, belief system, or religion. Diverse subjectivities can be functionally equivalent. What people do is ultimately more important than what they think; and harmony of action need not require unity of thought. The social conflicts that prevent successful adaptation to the physical environment can be worked out differently, on different occasions, in different places, among different kinds of people, with different personalities, speaking different languages.
This is not to say that humanity would not benefit from more connectedness and bonding than it has now. We need community. Beyond community we need resonances across community boundaries that help us to feel the common human energies that fuel diverse cultural forms; those who work for global transformation need to capture a variety of positive energies; we need to share in the dream of a multicultural earth.
As we build community, and as we network our community with other communities, we can celebrate both unities and diversities. We can treasure the likemindedness that exists in the world; we can help it to grow, and to grow in the appreciation of diversity. We can encourage likemindedness to be ecumenical. Not everybody should be a Buddhist, but the fact that there are likeminded Buddhists who understand each other's spirituality, and who can act cohesively because they think cohesively, is an asset for all of humanity. Wherever there is trust; wherever there is a functioning set of shared norms and beliefs; wherever there are sacred rituals and stories; wherever there is an ethnic identity; wherever there is solidarity; there, in those places, there is empowerment. Wherever there is empowerment there is the capacity for resisting and transforming global economy.
Tip 12. Avoid anti-intellectualism. A pool of academics and other intellectuals who can document and expose the fallacies and failures of the corporate agenda, and development viable alternatives in partnership with community and sectoral groups, is absolutely vital. They need to be supported when they come under attack, and challenged when they fail to speak out or are co-opted or seduced.
Commentary: The people's movement --conceived as a movement to make the world work for 100% of humanity without ecological damage- - should avoid anti-intellectualism because it requires intellectuals (1) for technical expertise, and (2) for humanitarian conceptualization.
(1) A transformation of the economy can only take place with the support of people who know how to make technologies work. In this respect --as possessors of knowledge-- intellectuals have power; indeed they have more tangible power than the power capitalists have, because the knowledge of intellectuals is a physical requirement of production, while the rights of owners depend on legal fictions.
Against point (1) it can be objected that those who wait for technical experts to make common cause with the people will wait in vain because (a) most experts are not intellectuals, and (b) most intellectuals support the status quo. I would reply to these potential objections as follows:
(a) Technical expertise leads to general intellectual culture insofar as it requires mathematical reasoning and the logical use of language --and it leads to general intellectual culture to an even higher degree at the higher levels of technology, where creativity, philosophical reflection, and the interfacing of different disciplines are also required.
(b) General intellectual culture will lead to commitment to participating in practices that transform cultural structures as competent thinkers become aware of the objective reality of the situation of the species homo sapiens on the planet earth.
(2) Intellectuals are also needed to facilitate the evolution of social norms toward more solidarity and cooperation. Given that moral evolution is possible and necessary, then intellectuals will be needed to facilitate its accomplishment. It will not be easy or automatic. It will require cross-cultural and cross-faith humanitarian understanding, psychological and spiritual study and practice, and artistic talent.
(Note that the need for more cooperation does not mean an end to healthy competition. Even Gandhi played soccer --with a team called the Pretoria Passive Resisters-- and Martin Luther King Jr. loved a good pillow fight.)
(P. S. Although I do not object to Jane Kelsey using the phrase "corporate agenda," it is not a phrase I would have used myself. My own emphasis is on the deep structural causes of human problems, and I hesitate to identify any group of people as impeding progress and desiring regress.)
Tip 13. Establish an alternative think-tank. If one already exists, make sure it is adequately funded. Neo-liberal and neoconservative think-tanks have shown how well-resourced institutes on the right can rationalize and legitimize the corporate agenda. The need is obvious for one or more equally well-supported think-tanks on the left. Uncoordinated research by isolated critics will not suffice.
Commentary: Since it is cultural structures that need to be changed, there is no substitute for grassroots action projects, where norms and values are transformed. If this premise is accepted, the role of think-tanks should be seen in the light of it.
I am grateful for the existence of alternative think-tanks. Having worked for two of them, I perceive three of their limitations to be:
(1) their survival depends upon funding, which is always precarious;
(2) obtaining funding requires devoting a great deal of time and energy to seeking the favor of rich and powerful people;
(3) legal restrictions often prevent close connections with political parties, unions, churches, social movements, cooperatives, and self-help groups.
I suggest that in addition to think-tanks there should be support for other ways to build the intellectual infrastructure for alternatives to the present global economy. This would include the systematic sharing of tasks among tenured academics, who already have salaries. I believe that Jane Kelsey particularly has in mind the systematic dissemination of ideas that would reply directly to the intellectual products of the World Bank, the International Monetary Fund, the Ministries of Planning, the Institutes of Strategic Studies, and the well-funded conservative think-tanks.
Tip 14. Invest in the future. Provide financial, human and moral support to sustain alternative analysis, publications, think-tanks, and people's projects that are working actively to resist the corporate agenda and work for progressive change.
Commentary: Help! I do not have any discretionary money; I can barely keep up with paying my bills and my taxes. The philanthropists who give to progressive causes are already overwhelmed with valid calls for funding.
What can people in my position do? (1) We can organize productive communities like Gandhi's ashrams, which generate food, other necessities of life, and money --and thus do not depend so much on asking donors to donate. (2) We can reduce our personal expenditures, simplify our lives, so that we can give more time and money for the good of humanity.
Tip 15. Support those who speak out. The harassment and intimidation of critics of the corporate takeover works only if those targeted for attacks lack personal, popular, and institutional support. Withdrawing from public debate leaves those who remain more exposed.
Commentary: Also speak out in favor of other people's good work. Building community requires food, music, and praise. Perhaps there should be a rule that for every protest there should be at least one award for outstanding service.
Tip 16. Promote ethical investment. Support investors who genuinely respond to social and ecological concerns. Expose unethical investors who don't. Boycotts have proved a powerful force in environmental, anti-nuclear and safe product campaigns. Companies that ignore social and environmental concerns can be embarrassed and called to account.
Commentary: It is cultural structures that need to change, and cultural structures are composed of conventional norms; therefore:
(1) It does little good if workers or government officials take over businesses, and then operate them with the same conventional norms and/or the same corruption;
(2) It is a step in the right direction if people who already have positions of influence in business use their influence to conform behavior to higher ethical standards.
Tip 17. Think global, act local. Develop an understanding of the global nature of economic power, and those forces which are driving current trends. Draw the links between these global forces and local events. Target local representatives, meetings and activities which feed into the global economic machine.
Commentary: I can act locally for global structural transformation by starting with just one act. If I keep just one promise, abiding by just one commitment to meet some need for somebody, and I keep the promise not because it is in my self- interest to do so but because I promised, then I am making some person a tiny bit more secure because that person can count on someone else, namely me. I am undoing the damage done by the global market economy, which, in principle, makes people insecure because people's needs cannot be met without the help of others, and nobody motivated purely by market incentives will do anything to meet somebody else's needs unless it is in their self-interest to do so.
I can act locally starting with a connection to just one person. If I can establish solidarity with one person, then there are two of us outside the market (as far as the relationship between us is concerned). If we are in a family, and the family (or surrogate family) is part of a kinship system or tribe or its equivalent and if the process continues with people in different types of human alliances --families, unions, cooperatives, towns, nations, etc.-- providing different degrees and types of support for one another, then it will become clear that what began on a local level was a change of principle that transformed the global economy.
Tip 18. Think local, act global. Actively support international strategies for change, such as people's tribunals, non-governmental forums and codes of conduct, and action campaigns against unethical companies and corporate practices. Recognize that international action is essential to counter the collaboration of states and corporations, and to empower civil society to take back control.
Commentary: With the help of the Internet, countervailing idealistic organizations are catching up with the globalization of business. It is easy to get on listserves and visit websites that will keep you up to date on precisely what you can do to act globally.
Tip 19. Develop alternative media outlets. Once mainstream media are captured by the right it is difficult for critics to enter the debate, and impossible to lead it. Alternative media and innovative strategies must be put in place. Effective communication and exchange of information between sectoral groups and activists are essential, despite the time and resources involved.
Commentary: As far as I can, with my limited means, I try to support people who run alternative publications, alternative radio, and public access TV. In addition, I think there is an important role for personal communications or mini-media; the samizdat, the tiny publications that played such an important role in the fall of the Soviet Union in 1989. Samizdat includes, for example, local church bulletins, which people tend to read and trust because they know the authors personally. The following is a mathematical calculation, which tends to show that messages that people read and repeat will spread widely at low cost.
Suppose I send 100 of my friends a personal newsletter, communicating a justice message that bears repeating, and suppose
that they, in turn, send a similar message to 100 of their friends (not counting repeats to the same people I wrote to). That would reach 10,000 people.
If the same pattern is then iterated three more times, it reaches, successively, 1,000,000, then 100,000,000, and then 10,000,000,000 people --which exceeds the population of the earth.
Although the assumption that each recipient will in turn send 100 messages to new people is false, I think this calculation has some tendency to show that if I send out a message that people in general find worth passing on, then the message is likely to spread widely. A practical suggestion: when I send a message, I should accompany it with a request that it be passed on.
Tip 20. Raise the levels of popular economic literacy. Familiarize people with the basic themes, assumptions, and goals of economic fundamentalism. Convince them that economic policy affects everyone, that everyone has a right to participate, and that alternatives to the corporate agenda do exist.
Commentary: Raising popular economic literacy can be done a propos of current events. When reporting current events, the mainstream media regularly make the neo-liberal assumptions of comparative advantage economics, such as the assumption that whatever price the market fixes is natural and right, and the assumption that a free market will meet everyone's basic needs. Assuming that through the alternative media advocated in (19) above it is possible to comment publicly on current events, the alternative interpretations of events can introduce alternative philosophical principles.
Tip 21. Resist market-speak. Maintain control of the language, challenge its capture by the right, and refuse to convert your discourse to theirs. Insist on using specific terms that convey the hard realities of what is going on.
Commentary: Market-speak treats an abstract number, profit, as the bottom line. Real bottom lines have some physical or spiritual substance, like a tree that bears fruit, a loaf of good bread, a drink of clean water, someone who cares about you.
Tip 22. Be realistic. Recognize that the world has changed, in some ways irreversibly, and that the past was far from perfect. Avoid being trapped solely into reacting and defending the status quo. Defending the past for its own sake adds credibility to the claims of the right and wastes opportunities for genuine change.
Commentary: There are several reasons why there has been a global sea-change since 1973 or so, in favor of neo-liberal market economies; a stance against planning, against labor unions, against the welfare safety net. The deepest and principal reasons are due to the working out in our times of the basic causal mechanisms that have governed the global economy since its inception in the 16th century. Consequently the deepest and principal methods for working for justice in the global economy are contributions to replacing those basic causal mechanisms. The principal method for replacing them is to build alternatives that work, i.e. alternatives that succeed in producing and distributing food, housing the homeless, caring for the sick....
Tip 23. Be pro-active. Start rethinking visions, strategies, and models of development for the future. Show that there are workable, preferable alternatives from the start. This becomes progressively more difficult the longer you wait to respond to the corporate agenda.
Commentary: The only way I can show that there is a workable, preferable, alternative is to join a group. Alone I might be able to read books about alternatives, or even write one, but I cannot show one working.
If the group's purpose is to show that there are workable, preferable alternatives, then it needs to be a model of one. Nobody will believe us if we say the world could function differently if we cannot run our own lives differently.
Tip 24. Challenge the TINA ("there is no alternative") claim. Convince people --individually and collectively-- that there are real and workable alternatives. Present options that combine realism with the prospect of meaningful change. Actively promote these alternatives and have them ready to be implemented when the corporate agenda fails.
Commentary: I will comment on a scenario where it might seem to be really true that there is no alternative.
Such a scenario is a national debt crisis. The nation cannot make current payments on its debts. Nobody accepts payment in the nation's currency; only dollars or hard European money will do. The nation's airports, its port facilities, its gold reserves, and other tangible assets are already mortgaged as security for its debts.
It appears that the only thing to do is to sign a letter of intent with the International Monetary Fund, and thus get funding and a reprieve, conditioned on accepting the principles of neo- liberal philosophy. In practical terms this means reducing public services, freezing wages, freezing hiring, producing for export, and making the nation even more tightly bound than previously to the global market.
In such a situation the progressive intellectual is backed into a corner. What does she or he propose? To turn the world overnight into a socialist commonwealth where money is not needed? That the nation close its borders and go it alone? Do I really have any advice to offer to the president of a third world country when debt currently falling due cannot be refinanced, and three IMF economists fly in from Washington to draft a letter of intent for his signature?
I can take cold comfort in treating the TINA situation as proof of my theory. "I always said that if you played the rules of global capitalism, it would come to this, but you would not listen. Now will you listen? Now are you ready to play a different game by different rules?"
But, specifically, what would I say to President Arias of Costa Rica when the New York bankers are knocking on his door and the IMF sends a rescue mission? I would say I really don't know what would persuade the bankers and the IMF to give Costa Rica some leeway, but that I am sure he will negotiate the best deal he can get under the circumstances. Then, assuming that the president's interest in philosophy is only moderate, I would hazard the suggestion that he encourage self reliant community development, permaculture, and the use of sustainable technologies, as feasible steps in the direction of reducing the probability of another TINA situation arising in the future.
If he seemed at all open to the idea, I would suggest that he threaten bankruptcy, and, if necessary, not only threaten it, but do it. The ancient biblical principle of Jubilee could be invoked to cancel debts, reorganize, and get a fresh start.
Tip 25. Promote participatory democracy. Build a constituency for change through alternative information networks and media. Use community, workplace, women's, church, union, First Nations, and other outlets to encourage people to take back control. Empower them with the knowledge they need to understand the right-wing forces affecting them and how they can fight back most effectively.
Commentary: Let us call it participatory social democracy. My motive for adding the word "social" is to emphasize the building of what Riane Eisler calls "partnership" relationships, thus bringing out the dimension of working together cooperatively to meet needs already implicit in "participation" (being part of one another) and "democracy" (rule by the people). The word societas from which the English "social" comes is Latin for "partnership." My second motive is that "social democracy" is a general name for a progressive political trend, which was --with all its limitations-- in many countries around the world, building a social safety net for all citizens, before it was reversed by the present conservative and neo-liberal trend, which is dismantling the social safety net.
The practice of participatory social democracy, "partnership," at grassroots levels can build political leverage at higher levels. Then when the tide of free market ideology crests and begins to recede, and social democracy reasserts itself as the politics of the future, civil society will be stronger, happier, and greener. As a result social democracy at the national and global levels will take hold sooner and work better.
Partnership relationships can often be expressed by taking the ancient pre-capitalist meaning of a word to be its real meaning, the meaning the word had before it was debased by market individualism. Thus a real community (Greek koinonia, Latin communitas, German Gemeinschaft) is one where there is common property, in addition to private property. A real workplace (Greek ergon, work) is a place where vital social functions are performed, such as the work of providing food, or the work of providing medical attention. Mater, the Latin word for "mother" is the root of "material" and "matrix" (womb), suggesting that the substance and source of life is feminine. A church, to be a real church, should be an ecclesia (Greek and Latin), a gathering like the house churches in The Acts of the Apostles where the members bear one another's burdens. A union (from unitas, oneness, as also in German Vereinigung and Bund) makes one of many. First Nations often have words reflecting ancient traditions of respect for the land, for animals and plants, and for other people, such as, for example, the Quichua expression ayni ruway, which names social relationships as pacts of mutual obligation, as owing to one another.
Participatory social democracy can provide solutions to the everyday problems of the participants --where to find a babysitter, how to get an old person to the hospital, how to find food and lodging for the unemployed. Love as the law of our species, as Gandhi put it, can grow by being practiced.
Tip 26. Hold the line. The corporate takeover is not yet complete. Social programs have not been entirely dismantled. Unions have not yet been destroyed. Not all environmental protections have been eliminated. There is still time, through sustained and co-ordinated action, to hold the line.
Commentary: The forces that are rolling back the gains made by social democracy in the middle decades of the twentieth century have their roots in the basic cultural structures of modernity, i.e. in market relationships. Welfare states using Keynesian social accounting to macro-manage the economy could only go so far, and could only last so long, before encountering limits imposed by the very structure of the global capitalist economy, i.e. unpayable debt, bureaucratic inefficiency, individualist ethics, a tendency for the rate of growth to falter, the power of capital to shut business down and move somewhere else, etc. Further, even if New Zealand style social democracy could have continued indefinitely and could have been generalized to the rest of the world; even then, in this best-case scenario, it would have been physically impossible. The earth cannot bear the resource-intensive standards of living --the cars, the free-standing houses, the cornucopia of consumer goods-- attained by the middle masses who were the primary beneficiaries of 20th century macro-managed economies.
At the same time that we hold the line, we should cut off the forces of neo-liberalism at their roots. To use another metaphor, the forces that are rolling back labor gains (and also rolling back environmental gains) should be dissolved. This (cutting off at the roots, dissolving) can be accomplished by reviving old ways of life, and creating new ways of life, that are governed by ethical principles of solidarity.
There is not just one future-viable ethic. Perhaps I should not have chosen "solidarity" as a general name for them all; "caring" or "love" or "empowerment" or "ministry" or "spiritual enlightenment" might have been better. Throughout the world there are many cooperative practices, and many ways of talking about them and celebrating them; there are many alternative technologies. Together, they can make the world's peoples less dependent on capital; therefore less subservient to it; therefore better able to regulate it, to govern it, to socialize it, and to channel it in constructive directions.
(Jane Kelsey's tips are taken from the Canadian Centre for Policy Alternatives Monitor, April 1996)
1.
In the first volume of Capital, published in 1867, Karl Marx wrote the
following passage. It is helpful to bear in mind while reading it that the German
word translated as "commodities" is Waren, which can be equated to our
English word "wares," as in, "Said Simple Simon to the Pie Man, `let me taste your
wares.'" The word translated as "labor power" is Arbeitskraft, the energy,
strength or power that makes it possible to do work.
"For the conversion of his money into capital, therefore, the owner of money must meet in the market with the free laborer, free in the double sense; that as a free man he can dispose of his labor power as his own commodity, and that, on the other hand, he has no other commodity for sale, is short of everything necessary for the realization of his labor power.
"The question why this free laborer confronts him in the market has no interest for the owner of money, who regards the labor market as a branch of the general market for commodities. And for the present it interests us just as little. We cling to the fact theoretically, as he clings to it practically. One thing, however, is clear --Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labor power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older forms of social production.
"So, too, the economic categories, already discussed by us, bear the stamp of history. Definite historical conditions are necessary, that a product may become a commodity. It must not be produced as the immediate means of subsistence of the producer himself. Had we gone further, and inquired under what circumstances all, or even a majority of products, take the form of commodities, we should have found that this can only happen with production of a very specific kind, capitalist production."1
These words seem optimistic today. Their implied message is that in earlier periods of social evolution there were different forms of social relations and different forms of property; in those times the buying and selling of commodities, and the buying and selling of labor power either did not exist at all or were not dominant. Karl Marx was one of the writers who sought to restructure the ordinary person's perception of the everyday world of common sense, so that budgets and bills, wages and debts, bank accounts and taxes, and all the many economic institutions that the ordinary person takes for granted would be seen as the outcomes of an historical process that had taken thousands of years to get Europe to where it was in 1867. Once the everyday world is perceived as a temporary configuration of human practices, it can be projected that social evolution will continue. If the institutions of the past were, on the whole, different and worse than the institutions of the present, then it could be anticipated that the institutions of the future would be, on the whole, different and better.
Nearly one hundred fifty years later, however, little has changed. The owners of money still confront in the market masses of "free" men and women possessing nothing but their own labor power. Moreover, the economic categories Marx articulated have in the intervening century and a half become more firmly established outside Europe. The masses of Africa no longer live in tribal groups on their own lands; they live in townships and teeming cities. The masses of India and of China are more, not less, under the sway of commodity production and they work --if they can find jobs-- for wages.
Since Marx wrote, the rules that govern everyday life in market economies have remained the same. For a time revolutions inspired by Marx's concepts controlled areas that were home to one third of humanity, and seemed likely to conquer the areas inhabited by the remaining two thirds. But instead of expanding further, they shrank, and today only a few isolated governments, such as those of North Korea and Cuba, fly Marxist banners. The global trend today is that increasingly, not decreasingly, the owner of money meets in the market with the free laborer, "... free in the double sense; that as a free man he can dispose of his labor power as his own commodity, and that, on the other hand, he has no other commodity for sale, is short of everything necessary for the realization of his labor power."
Yet Marx's analysis --a thousand times discredited and refuted in theory and in practice-- refuses to go away. Its basis and beginning --if I may be permitted an interpretation of Marx at variance with those of some eminent scholars, but nonetheless in my opinion clear from the plain meaning of Capital-- is the analysis of the commodity and of exchange. That (together with the labor theory of value conceived as a principle for planning the efficient deployment of human energy) is what is central and what does not go away.
Marx showed that the alienation, the mass poverty, and the instability of modern society are rooted in the basic cultural forms that govern its leading institution, the market. "The simplest form of the circulation of commodities is C - M - C, the transformation of commodities into money, and the change of money back again into commodities; or selling in order to buy. But alongside this form we find another specifically different form: M - C - M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes, capital, and is already potentially capital."2
Marx will not go away not because he solved the problem --in many ways he was mistaken-- but because he identified the problem. The problem he identified is a deep source of structural constraints ("contradictions" in Marxist terminology), rooted in the cultural forms that define both everyday life and the global economy. They frustrate even the most well-intentioned efforts to make the world work for 100% of humanity without ecological damage.
A root of the problem is that the masses of the world are, and are still, "...short of everything necessary for the realization of their labor power." They still face capital in the labor market with no commodity to sell but their own vital energy.
And capitalism is still --not by accident but due to the very nature of the exchange process that is its basis and beginning-- inherently unstable, compelled to pursue its never-ending fatal addiction to "growth" in a series of desperate efforts to stabilize itself. Until a sustainable steady-state economy is achieved, Marx's analysis of the inherent tendency toward infinite expansion of the exchange process will not go away. (Marx quotes Aristotle, who regarded the circulation of money to produce more money as unnatural because it is in principle infinite and unlimited, "...there are no bounds to its aims, these aims being absolute wealth.")3
I have been suggesting throughout my review of scientific theories that purport to explain the global economy, that the problems of the world economy cannot be solved when they are defined as economic problems. As Fritjof Capra might put it, poverty is not a problem that can be solved in the (economic) terms in which it is posed.4
Marx helps me to make my point. Poverty is an inherent feature of a global economy where the owner of money meets in the market with the free laborer, "...free in the double sense; that as a free man he can dispose of his labor power as his own commodity, and that, on the other hand, he has no other commodity for sale, is short of everything necessary for the realization of his labor power." And poverty is inherent whenever, the "economic categories" are those characteristic of historical conditions such that all, or a majority of products "take the form of commodities."
It follows that poverty is not a problem economics can solve. Because the very data of economics are prices, sales, investments, loans, rates of interest, wages, etc. That is to say, the facts economics studies, records, and frames explanatory hypotheses
about, already presuppose the existence of the economic categories of commodity production; the capitalist as homo economicus going out into the market to buy labor power with money, the worker as homo economicus going out into the market to sell him or her self. These very basic categories are the ones Marx showed to contain the germs of contradictions that will not go away until those very basic categories themselves are restructured. Hence using economic thinking to frame a solution to the problems of the global economy, is like trying to lift yourself by pulling upward on your shoes.
Perhaps I underestimate the diversity of "economics" as a vast and varied field, which includes thousands of economists I have never met who have written thousands of books I have never read. I should perhaps limit the assertion that economics cannot possibly solve the problem of poverty (because it presupposes the use of concepts within whose ambits poverty is inevitable) to those economists who in fact do presuppose the use of those concepts. Maybe. Or maybe it would be better to decline to apply the term "economist" to the mavericks, radicals, and alternative thinkers. In any case, I think that socialist planners, as well as capitalist economists, have advanced theories that, in principle, cannot possibly solve the problem.
The same conclusion I just drew --or rather the converse of the same conclusion-- can be used to argue that a capitalist economy is the only possible economy. Given that the worldwide expansion of capitalism is the context in which economics as a science arose, and from which it derives its data and its concepts, if it is then postulated that economics is a universally valid science, it follows that a capitalist market economy is the only possible economy. This is the sort of argument that Ludwig von Mises and Eugen von Bohm-Bawerk made after the October revolution in Russia, when they argued that socialist planning could not be done. As they conceived the matter, economics requires that goods have prices derived from values. Values are set by the market, that is to say, they thought, by the value preferences, or utilities, of consumers. Therefore, no market, no values. No values, no prices. No prices, no economy.5
In reply to von Mises, in an effort to show that socialist planning was possible, the Polish economist Oskar Lange employed the concept of "opportunity cost." It was not necessary to have private property in the means of production to set prices for goods. The Central Planning Board could construct a functional equivalent for a capitalist market mechanism by (1) setting some initial price, (2) ordering managers of state-owned enterprises to produce quantities based on the assumption that they will sell the product at that initial price, while minimizing the costs of production, and (3) letting consumers spend their incomes as they see fit. If it turns out that there are shortages, then the planners can increase the prices. If it turns out that there are surpluses, then the planners can lower prices. The costs of production, which the managers are supposed to minimize, could be set, in quantitative terms that planners could use, by counting as the cost of an input a number measuring what had to be given up to get it, i.e. the alternatives sacrificed or opportunities foregone, i.e. the opportunity cost. Hence --here Lange might seem to refute, along with Mises and Bohm-Bawerk, my claim that the very categories of economics preclude overcoming the contradictions Marx analyzed-- it is possible to plan socialist economies.6
Piero Sraffa went even further. In The Production of Commodities by Means of Commodities he generalized David Ricardo's "corn model" in a way that shows that an economy could run (in principle) with no human beings at all. The "corn model" idea is that in a one-product economy, producing and consuming only corn, a certain quantity of corn is needed for seed, and a certain amount of corn is needed to supply energy to do the work of growing corn. Thus corn could reproduce itself using corn to produce corn. Sraffa showed that in an economy with any number of commodities, the necessary inputs could be calculated to produce the necessary outputs, which would in turn be the inputs of the next cycle of production. The quantity of an input needed for a given output is a "technical coefficient," which can be supplied by an engineer or an agronomist. Neither consumers maximizing preferences nor investors maximizing profits are needed to provide the signals telling the economy what to produce when.7
(Both before and after Sraffa, a number of input-output computer models of national economies and of the world economy have been created. The outputs of some processes are inputs for other processes, which in turn produce more outputs, which become new inputs. Assuming that observed ratios will continue to hold in the future, models using input-output principles can project forward in time the operation of the present world economy. Assuming that past and present ratios and relationships will continue to hold, often amounts to assuming that there will be positive feedback loops, so that a trend now will be an even stronger trend in the future, like compound interest. The almost uniform result of such future modeling is that projecting present trends forward shows that the future of the world economy is system collapse, as pollution, resource depletion, and population growth combine to create disaster scenarios. Projections show sustainable scenarios to be possible if and only if there are radical social and environmental changes soon.)8
Lange and Sraffa have indeed shown that it is possible to do economics without capitalism. Lange, Sraffa, and others invented ways to build a non-capitalist economic system by organizing production according to principles that depend less on the voluntary consent of the owners of factors of production. They thus made great progress in the physical planning of socialism, but not in the human planning of socialism. They showed how to partly dispense with homo economicus, while partly relying on consumer choices and on monetary incentives which presuppose the same homo economicus presupposed by capitalism. They do not show how to transform homo economicus.9 Marx himself, if he were alive today, might well join those who argue --with arguments illustrated by many horror stories drawn from history-- that opportunity cost and input-output planning lend themselves to a net regress -- backward from misery under capitalism toward misery under slavery.
I am drawing support for my view that transformation of basic cultural structures is needed from Marx, who showed that there are intractable problems built into the formal structure of the social relations that provide both the framework of everyday life and the framework of the global economy: the free laborer, the market, the commodities that are bought and sold.
Marx knew that the exchange of commodities was the stuff of everyday life throughout the capitalist world, and that the world economy was a single system, and that the governments of nation- states were its local administrators, not its lords and masters. He has been vindicated in recent years by the decline of the power of the nation-state in the wake of the globalization of production.
Encouraged by the flourishing of West European social democracies after World War II, and incautiously underestimating the significance of temporary features of that historical period and of the privileged role West Europe then had in the international division of labor, many people had taken Sweden, or Denmark, or Holland to be the image of the ideal future of human society, give or take a few blemishes. If Sweden could have full employment, high wages, and universal health care, then (people fallaciously reasoned) every other nation could do the same; what is possible for one national element of the world economic system (people mistakenly thought) must be possible for all. Marx was thought to be a pessimist, who had been disproven by the ability of essentially capitalist nation-states to redistribute income through elected labor governments and strong labor unions.
I actually do think that Marx was overly pessimistic in underestimating the possibilities for using political power to shape and mold a national economy, and I actually think that Anthony Giddens in his book A Contemporary Critique of Historical Materialism has given good reasons for seeing Marx's vision was not entirely right in this respect.10 But Marx was not entirely wrong, as is brought home by the present crumbling of West European welfare states under the relentless pressure of global economic competition; and as is brought home by the fading of the dream that some day the poor of Guyana, Botswana, and the U.S.A. will achieve the level of security enjoyed by the poor of Holland. I will not repeat here the arguments of Part Two, The Globalization of Production, but only note that the quasi-mechanism identified there as the explanation of the success of global capitalism's end run around labor governments and labor unions is precisely the basic cultural structure that is the basis and beginning of Marx's analysis.
Although politics is important, and it does matter who is elected and what programs and policies governments implement, nevertheless, on the whole, it is not true to say that humanity is ruled by governments. A modern government, like any other modern institution, and much like an individual person, has bank accounts, income, expenses, and a budget. It struggles to pay its bills, and it has to pay interest on its debts. A government cannot simply rewrite the rules of the system it depends on and is part of. On the other hand, humanity's existing economic institutions are not, either, merely the creations of a privileged class of powerful people, who made them up, and who could make up different ones whenever they might choose, or might find it in their interest, to do so.
What we need, however, is not so much insight into who and what does not rule the world, as insight into who and what does.
One would like to hope that it would be possible to achieve a better understanding of who and what rules the global economy, and to learn how to contribute more effectively to solving humanity's and the earth's problems, if one had a better theory. I have been suggesting that a fatal flaw in most economic theory is its metaphysical alliance with the natural sciences, borrowing most of its metaphors and mathematical tools from mechanics. I have been suggesting that we might do better by treating economics, or planning, as a human science, which would be closer to linguistics, to philosophy, and to cultural anthropology. If indeed, cultural forms are, as Marx and others have shown, root causes of the phenomena to be explained, it would seem logical to seek a methodology for explaining them in those sciences which have devoted themselves to the study of cultural forms. At this point I would like to add more detail to some particular suggestions I have already made, beginning with the suggestion in the Introduction to Part One, that a market can be thought of as a language, and that the scientific explanation of international trade and other economic phenomena could proceed by considering a market as a system of meanings.
2.
Two of the ideas that linguists of the twentieth century have found most helpful for
understanding language are:
1) The distinction between the diachronic study of language and the synchronic study of language; and
2) The distinction between the signifier and the signified.
Without exaggerating the similarities between economics and linguistics, and without pretending that linguistics is a field where scholars have reached consensus concerning the nature of their subject, I want to suggest that these same ideas are useful for scholars seeking to understand the global economy, and for activists seeking to change it.
By a lucky coincidence, when Fernand de Saussure, in his Course in General Linguistics, introduced the ideas of "diachrony," "synchrony," "signifier," and "signified," he drew on analogies with markets and prices. Consequently, there is a convenient procedure available to show the bearing of these key linguistic ideas on economic institutions. It is to comment on Saussure's text, reversing the direction of the analogies, using linguistics to shed light on economics where Saussure used economics to shed light on linguistics. Saussure introduces the distinction between diachronic and synchronic linguistics in the following passage, at the beginning of Chapter III of his Course:
"Few linguists doubt that the intervention of the time factor creates special difficulties for linguistics, and that it places their science before two routes that are absolutely divergent.
"Most sciences know nothing of such a radical duality; time does not produce any special effects. Astronomy has established that the stars undergo notable changes; but she has not been obliged for that reason to split itself into two disciplines. Geology reasons almost constantly about successive states; but when it comes to occupy itself with fixed states of the earth, it does not make of them the object of a radically different study. There is a descriptive science of law and a history of law; nobody opposes one to the other. The political history of states moves entirely in time; nevertheless if an historian describes an epoch, one does not have the impression of making an exit from history. Conversely, the science of political institutions is essentially descriptive, but it can well, on occasion, deal with an historical question without disturbing its unity.
"On the contrary the duality of which we speak already imposes itself imperiously on the economic sciences. Here, contrary to what happens in the preceding cases, political economy and economic history constitute two disciplines clearly separated in the heart of the same science; the books recently published on these subjects accentuate that distinction. In proceeding in this way, one obeys, without properly taking notice of the fact, an interior necessity: and it is an entirely similar necessity which obliges us to separate linguistics into two parts, each having its own principle. It is the case that there, as in political economy, one confronts the notion of value; in the two sciences, it is a matter of a system of equivalence between two things of different orders: in one work and salary, in the other the signified and the signifier.
"But to better mark that opposition and that crossing between two orders of phenomena relative to the same object, we prefer to speak of synchronic linguistics, and diachronic linguistics. The synchronic is everything that refers to the static aspect of our science, diachronic everything that deals with evolutions. In the same way, synchrony and diachrony designate respectively a state of language and a phase of evolution."11
Thus Saussure finds that linguistics and economics are unusual among sciences in the extent to which part of their subject matter is immersed in the flow of time (diachronic) while another part is outside of time (synchronic). The part of linguistics that is synchronic includes what those of us who are unsophisticated in linguistics call the study of grammar and the study of the meanings of words. One could write a dictionary showing how the meanings (the values) of all the words in a language relate to each other (are defined in terms of each other) without any reference to the dynamic temporal processes that caused the meanings to be what they are. In economics one could write a list of the prices (the values) of all the goods for sale in a market, thus giving the ratios at which they can be exchanged for money and for each other --as a report about a given moment of time, without regard to the passage of time.
Perhaps Saussure overestimated what he called the "inner necessity" to separate diachronic and synchronic studies as "absolutely divergent" in linguistic and in economics. Perhaps he underestimated the extent to which a similar distinction might apply to other sciences. But for present purposes it is not as important to determine whether Saussure was exactly correct, as it is to see what it is about human life that gives his view whatever plausibility it has, i.e. what led him to say that "values" are outside the flow of time, while system change is immersed in the flow of time. However, before looking more closely at the synchronic/diachronic distinction, let us turn for a moment to the other key distinction Saussure uses in the passage quoted, the distinction between the signifier and the signified.
A common sense model of language regards a language as mainly a set of words standing for things. Thus "table" is a word standing for the thing called a table. Similarly, all or most words are thought of as standing for the things which they name. This common sense model quickly proves inadequate for the scientific study of even one language, let alone the study of many languages. Linguists have replaced the word/thing distinction with more accurate technical distinctions, among which one of the most famous is signifier/signified.
When Saussure introduces the notion of "signifier," he identifies it with the "acoustic image." That is to say, the signifier is the pattern of sounds, which the speaker speaks and the hearer hears.
Thus the signifier is identified with spoken words and with other entities that play a similar role. The suffix "ier" ("iant" in French) indicates that the signifier is what is active. It acts. It does. It corresponds to the verb, the active part of the sentence; and to the will, the active part of the human soul. The spoken word can do the signifying, but something else could signify --a footprint, a drumbeat, a kiss, a tassel on a hat ....-- and then it would be a signifier. It was the active, controlling, responsible side of the notion of "signifier" that enabled Jacques Lacan to diagnose paranoid psychosis as a "disorder of the signifier," when he was working as a psychiatrist charged with treating criminally insane prisoners referred to him by French courts. (Lacan's diagnosis is also fitting because it alludes to the imaginary voices that psychotics hear.)12
There is another, related, way to think about signifiers. The question, "What is a signifier?" can be answered, "A signifier is not anything." To say that something is (one can say) is to say that it is identical with itself. But a signifier is constituted by performing its function, and its function is to direct the hearer beyond itself to something else. The being of the signifier might be said to be, so to speak, exhausted by pointing outward. Once the pointing is done there is nothing left, or --what comes to the same thing-- whatever is left is not a signifier. A corollary of thinking about signifiers this second way, and then thinking of language as a system of signifiers, is anti-essentialism. On such a view the signifiers do not vanish; indeed free-floating signifiers relating to each other become what language is all about; what vanishes is the strong sense of the word "is," according to which it implies that we live in a world of stable essences, identical with themselves.
According to Saussure, the signifier does point to something; what the signifier points to is the "signified." (signifie). He initially identifies the signified as the "concept." In other words, what the signifier points to is an idea, a meaning, or, as Saussure says, a "value."13 The spoken word "tree," functioning as a signifier, does not directly signify a particular solid, real- live tree with some pine needles fresh and others dusty, roots that curl deep in the ground around pieces of rock, and gum oozing from joints in its trunk.
That the signifying process is about social values, not directly about brute facts of nature, is not an arbitrary principle Saussure dreamed up for no reason. It is a principle imposed upon linguists (although they do not all use Saussure's terminology) by the subject matter of their science. It leads to an important philosophical point: The human species is not a species in direct contact with reality. As a social, language-using species, we operate in terms of curtains of meaning interposed between us and reality.
To return now to the text quoted above, there Saussure draws an extended analogy as follows:
Signified is to Signifier
as
Diachronic is to Synchronic
as
Work is to Salary
If we change our focus, and recast this set of three parallel distinctions as two sets of three, then we have:
All the first terms --signified, diachronic, work-- have something in common.
All the second terms --signifier, synchronic, salary-- have something in common. Saussure tells us what it is they have in common. They are all about "values." (valeurs). They are all socially-defined counters, which can enter into transactions with equivalent counters, and be exchanged for their equivalents. Thus a salary (or a wage), according to the classical economists, represents the exchange-value of work.
The first three of each pair --signified, diachronic, work-- are, in Elizabeth Anscombe's terminology, relatively "brute;" they are brute relative to the second three of each pair.14 Without boasting of any miraculous unsullied contact with nature uncontaminated by any human interpretation of it, they are closer to nature. The orderly systems found in the second three of each pair --signifier, synchronic, salary-- are paradigmatic of what is meant by "socially constructed reality."
The first three of each pair --the signified, the diachronic, work-- are socially constructed also, but they play different sorts of roles in the social construction. They float free of nature to a lesser degree; they are closer to the pine needles and the roots; closer to history; closer to expenditures of energy, efforts, sweat, and toil.
3.
Jean Baudrillard has written some very helpful remarks on the two passages from
Saussure on which I have commented (the one I discussed in the Introduction to Part
One, and the one I just discussed immediately above). They are as follows:
Saussure offered two perspectives on the exchange of language terms when he compared them to money: a piece of money can be placed in relationship to all the other terms of the monetary system; and it can be exchanged against a real good of some value. It was for the former dimension that Saussure increasingly reserved the term "value": the relativity of all the terms among themselves, which is internal to the general system and composed of distinctive oppositions --as opposed to the other possible definitions of value: the relation of each term to what it designates, of each signifier to its signified, as each monetary unit has something against which it can be exchanged. The first type of relationship corresponds to the structural dimension of language; the second to its functional aspect. The two dimensions are distinct, but articulated, which is to say, they work together and cohere -- a view that characterizes the `classical' configuration of the linguistic sign, which can be placed with the commodity law of value, where the function of designation always appears as the goal or finality of the structural operation of language. At this `classical' stage of signification, there is a complete parallel with the mechanism of value in material production as Marx described it. Use value functions as the horizon and finality [finalite] of the system of exchange value: use value qualifies the concrete operation of the commodity in (the act of) consumption (a moment of the process that is parallel to the sign's moment of designation); while exchange value refers to the interchangeability of all commodities under the law of equivalence (a moment parallel to the structural organization of the sign). Use value and exchange value are organized together dialectically throughout Marx's analyses and define a rational configuration of production regulated by political economy.15
So far so good. "Use value functions as the horizon and finality of the system of exchange value...." This is just what Adam Smith proposed when he wrote the first great work of economic science. The whole point of economic activity, Smith said, is to supply in ever greater quantity and quality the necessities and conveniences of life. The free market is preferable to the rigid institutions of bygone times and distant places because through exchange among self-interested individuals, powerful human motives are harnessed to achieve the common good. Smith noted with satisfaction that the relatively high degree of market-driven capital investment devoted to "improvement" of lands and "stock" in his 18th century Britain had produced greater general prosperity than had been found in the kingdoms and empires of yore, or among distant peoples he, ethnocentrically, regarded as rude savages. The market, i.e. the system of exchange value was for Smith a social quasi-mechanism which functioned to produce goods that were useful by nature.
In the 18th century, the leading progressive thinkers of the time did not doubt that social institutions could be reformed in order to serve natural functions better. As the 21st century begins, we need to reassess and refine that premise, as well as other founding premises of modern western civilization that we have inherited from Adam Smith and other great 18th century thinkers. We can see now that in some ways the 18th was a demented century, full of violence clothed in incoherent ideals --such as Nature conceived both as savage and (simultaneously) as the source of true norms; and Freedom conceived both as liberation from the constraints of an ethics of virtue, and (simultaneously) as the source of the moral legitimacy of contracts. Saussure's distinctions may help. Helped by a better theory, the difficult process of discernment --deciding which among the ideals of modern western civilization are the ones that should be treasured as a precious heritage and carried forward into the future-- may (and, I think, will) show that what is best in western civilization is what it has in common with eastern civilization; and that what is best about modern civilization revises and improves the achievements of ancient civilization.
"Use value functions as the horizon and finality of the system of exchange value...." Further applying Saussure's terminology, this thought can be revised and expanded to say: the purpose of the synchronic structures of language, of words, money, and of economic exchange (the signifier-synchronic-salary triad) is to make life better in the real world (pointed toward by the signified-diachronic-work triad). Looking at life in the light of this thought, two corollaries immediately follow about how not to be a social activist.
The first corollary is that society cannot be transformed by violence. This is a way of expressing the thought that improving the cultural forms that guide life necessarily means working with cultural forms; with the process of negotiating social reality; with the signifier-synchronic-salary side of the three Saussurean distinctions just discussed. Brute force cannot produce a new society; it cannot produce a society at all.
I should admit that although I have called the proposition that society cannot be transformed by violence a "corollary" following from the idea that social life is organized by signifiers, which function in a synchronic world of social ritual and meaning, there will be readers who will see no logical connection between the symbolic character of social reality and the necessity of using nonviolent means if one aims to transform it. I cannot help but suspect that if such readers meditated longer on the subject, and perhaps considered Hannah Arendt's way of distinguishing "power' from "violence" in her essay On Violence, then they would see what I see. But I cannot rule out the possibility that if I thought about the matter longer and were properly instructed, then I would realize that I am imagining a logical connection that is not there.
The second corollary is that society cannot be transformed by action that is superficial. This is a way of saying that transforming cultural structures to adjust them to physical reality can only be done by working with physical reality, which lies behind the signified-diachronic-work side of the three Saussurean distinctions just discussed. Ecology is necessarily the framework of any real transformation --not economics; economics is a piece of the system of social values to be transformed; it is not the natural framework defining the physical context where social transformation happens. To understand the natural framework it is necessary to coordinate the findings of physics, chemistry, biology, geology, and astronomy, and thus to grasp the interrelated systems of the biosphere. That, by definition, is ecology.
Baudrillard himself, unfortunately, is among those thinkers who are in principle committed to a superficial philosophy. Immediately after the passage from his works quoted above, he goes on to assert that there has been a 20th-century revolution in thinking that has eliminated production, use-value, and all reference to real things. He uses the passage quoted above only as a jumping-off point, in order to describe the modern worldview (in the specific forms it assumed in Marx and Saussure) which post- modernism has now, in his opinion, deconstructed and destroyed.
I do not want to argue that anything of substance is shown to be true simply because once certain definitions are laid down certain conclusions logically follow. However, I think it is worth noting that the Saussurean concepts I have been defining are not simply arbitrary definitions, but definitions that have much to recommend them because of their capacity to facilitate the scientific understanding of the phenomena of linguistics, economics, and, in general, as Saussure says, all those areas of culture essentially concerned with values. And I think it is worth noting that it follows from the non-arbitrary conceptual framework that I have been developing that the only possible route to the solution of humanity's and the earth's problems is one that can properly be called nonviolent transformation. I have already explained why only nonviolence will work. My reasons for pairing with "nonviolence" the word "transformation" are two. First, using the word "transformation" is a way of saying that the forms of human life, the cultural structures, must be changed ("trans" "form" comes from Latin roots meaning to "change form"). (There is no point in trying to change the laws of physics or chemistry or the other natural sciences; it is culture that must change.) Second, the word "transformation" carries the implication that the changes needed are deep and profound; poverty and other human problems will not be solved by anything short of restructuring the basic structures identified by (among others) Karl Marx. By the same token, superficial change is not enough; change must be practical and physical, relating to the earth and the human body.
The conclusion that nonviolent transformation is possible and desirable can be drawn from many different considerations; perhaps most important, it can be drawn from the practical experience of those who have lived it. It is, nevertheless, not unimportant to notice that it follows as a corollary from widely accepted principles of anthropology, linguistics, and the human sciences. The congruence of nonviolence with science tends to validate both; it shows nonviolence to be scientific and science to be nonviolent.
Before going on, in the next section, to say more about the theory of nonviolent transformation, I will give an example.
It happens that in the same city where the world headquarters of the International Monetary Fund and the World Bank are located, there is another organization, with a different philosophy, called The Church of the Savior. It meets the physical and human needs of people whom the system has rejected. In its goals and in its methods it is not unusual. Although I have chosen it as an example, what I will say of it could be said, with variations from case to case, of thousands of organizations around the world, many of which I have observed. One thing the Church of the Savior does is to run bakeries, where people from the streets learn job attitudes and job skills and find employment. The Church takes donations. It seeks and uses volunteer help. It takes in interns as volunteers and provides a modest stipend. It recycles donated items. It gets a certain amount of funding from public and private agencies. In terms of the Saussurean analysis I have been using, it has a clear grounding in the real world: the aim is to meet people's needs. In the social world of economic values it is eclectic. It doesn't seek to accumulate profits, it does not stop an activity before needs are met because there is no profit, but neither does it shrink from running a business; it organizes whatever pattern of human action gets the job done.16
There is nothing remarkable about the Church of the Savior, and just because it is
not remarkable it represents a practical approach. I do not think my theory (of which
the Church of the Savior is an illustration) is remarkable either, and just because
it is not remarkable it is likely to be true. But there is a remarkable consequence:
if everybody in the world followed the practices of the members of the Church of the
Savior, then the world would have no poverty; it would have ecological balance; it
would have gender equality; it would have respect for diversity; the world would have
no wars. In the Church of the Savior, as in the base community movement generally,
creative alternatives and empowerment go together. Positive alternatives show the way
to a positive future; at the same time they build leverage to influence and reshape
the system that is now in place.
4.
My confidence that the generalization of the practices of the members of the Church
of the Savior will solve humanity's problems is based on seeing them as a particular
illustration of a general theory that is true. Since I am not a member of that Church
myself, I do not know about the petty quarrels among the members and the personality
quirks and foibles of some of them, which make day to day life in it different from
the ideal picture of it that I have used for purposes of my example. I have assumed
that with all the failings I know they must have, but which I have mercifully been
spared knowledge of, they are committed to a spiritually- inspired love ethic, and
they are putting their commitment into practice.
Above I noted that the signifier does not refer directly to things, but to signifieds, which, roughly speaking, are concepts. More broadly, the human species does not relate directly to reality. Instead, culture --words and money, images and rituals-- mediates between the human species and the earth. Certain forms of culture --namely the free market, property rights, and the self- interested individual-- sustain the global economy. Worldwide trade according to comparative advantage; the globalization of production; the choice of unsustainable technologies; accumulation, instability, the private appropriation of the social product; and the balancing of social accounts that Keynesian economists struggle with, are operations proceeding according to the regular exchange of equivalent values. The value exchange process is governed by the signifier-synchronic-salary side of Saussure's extended analogy.
I have assumed that the members of the Church of the Savior have bypassed the market. They have achieved a direct insight into the relatively brute nature found on the signified-diachronic-work side of Saussure's extended analogy. They have done this by sympathetically observing the homeless people huddled on the streets of Washington DC (some in the very shadows of the buildings that house the International Monetary Fund and the World Bank). They have observed that they are cold at night and hungry in the morning; they need medical attention; they need some regularity in their lives; they need love and human bonding; they need a place to take a shower, a change of clothes, and a clean place to sleep. I have also assumed that the members of the Church have been reading about global warming, acid rain, holes in the ozone layer, and the exhaustion of fossil fuels. Unlike Adam Smith, who believed that the more use-values were produced the better, they know that the objective reality of our species is that it must become a responsible family within the larger community of the living systems of the earth.
While economists have developed very sophisticated quantitative methods for choosing the optimum use of scarce resources, the members of the Church of the Savior have made some simple observations that bypass economic calculations as well as the market: they have observed that some needs are not being met at all. They have also called on people to be committed to stewardship of their treasures and talents, and insofar as they have thus called forth resources that would otherwise be idle, they have put to work resources that otherwise would not be used at all. In the light of their practical demonstration of values in action, the mathematical models used at the World Bank to determine precisely what would be the optimum way to use a scarce resource to meet an unmet need are convicted not so much of erroneous mathematics as of erroneous metaphysics. They are convicted of operating within a worldview which assumes that the socially constructed reality of economic metaphysics is a natural and inevitable reality.
(This is not to say, of course, that when what Elizabeth O'Connor, a member of the Church of the Savior, called "servant structures" become the accepted global economic structures, it will not be necessary to do a great deal of calculating to value the opportunities foregone when a resource is put to one use instead of to another.)
Taken by itself, the ability of a group of church members to bypass the circulation of commodities, and gain direct insight into objective reality, might lead to practices like those depicted in Alexander Solzhenitsyn's Gulag Archipelago. The Stalinists in Solzhenitsyn's novel say: you must obey me because I know the objective truth. But I believe that the members of the Church of the Savior have not made this mistake. They know that there is a cultural and spiritual reality alongside physical reality. The signifier-synchronic-salary side of Saussure's extended analogy can be eliminated only by eliminating the human species; there is no alternative to transforming it; there is no alternative to treating means as ends. Hence they work, as Gandhi worked, not just with truth conceived as objective scientific fact, but also with truth conceived as respect and faithfulness in relationships; with truth as satya, openness to the being of the other. (from the Sanskrit sat, "being," ya, "open")
If we travel half way around the world, from the streets of Washington DC to the rural villages of Sri Lanka, we will see another movement that illustrates respect for, and transformation of, the meanings found in local culture. Unlike the Church of the Savior, which is Christian, the Sarvodaya Shramadana movement works with the concepts of a people steeped in Buddhist philosophy. Examples are: karuna (Sinhalese for "compassion"), metta (loving kindness), muditha (sympathetic joy, joy in the joy of others), purushodaya (personal awakening), artachariya (constructive activity).18 Thus my confidence in the sort of thing the people at the Church of the Savior are doing stems from what I see it as an example of. I see it as an example of meeting objective needs in spiritually inspiring and culturally appropriate ways.
The Church of the Savior and Sarvodaya Shramadana are just two particular examples of what intelligent people of good will are doing worldwide, with or without pay, drawing resources from wherever they can be found, to meet needs, to save the environment, and to build peace. As the mainstream careens toward oblivion, there are creative minorities everywhere who are responding to felt problems in ways that contain the elements of a positive future. They are found not just in churches and grassroots movements, but also in political parties, government offices, labor unions, international agencies, foundations, and in all of the professions, including even the management of for-profit businesses. Standard forms of economics are not working, and by trial and error people who see a need and act to meet it are inventing alternatives that do work. The alternatives that work turn out in practice to be alternatives that depart from and modify the metaphysics of economic society, i.e. materialism, private property, the self- interested individual looking out only for himself, production if and only if there is profit to be made.
5.
I would like to comment on the logical status of some of the statements I have just
made. The statement, "The alternatives that work turn out in practice to be
alternatives that depart from and modify the metaphysics of economic society," might
appear, somewhat misleadingly, to have the logical status of an empirical
generalization. Although almost every word in the statement,
"...there is a spiritual and cultural reality alongside physical reality," would benefit from a clarification of its logical status, I would like to comment (first and briefly) only on the word "spiritual."
The status of "spiritual and cultural," as opposed to "physical," here is that of one more restatement of the distinctions I have been drawing from Saussure, where the "spiritual and cultural" is associated with the synchronic side, with the mental (in German, geistliche side). "Spiritual" is, however, a controversial term that lends itself to evasions and abuses, and the objection might be raised that it would have been wise policy to avoid using it, even though it has a legitimate logical status. The following three reasons seem to me sufficient to tilt the balance of policy in favor of taking the risk of speaking of spiritual realities: (1) Spirit-talk invites communication with the wisdom of ancient, medieval, and non-western sacred texts and practices, which modern western secular philosophy has too often deliberately decided not to try to understand. (2) Spirit-talk acknowledges that the transformation of the global economy must be in large measure a transformation of the will. In many languages and contexts the word "will" and the word "spirit" are so closely allied that they are nearly synonyms. For example, in the Spiritual Exercises of Saint Ignatius Loyola the stated purposes of the exercises is to purify the will, and to bring the will into harmony with the divine will. (3) Speaking of "spirit" is a token acknowledgment that dreams and myths move the world at least as much as concepts.19
"The alternatives that work turn out in practice to be alternatives that depart from and modify the metaphysics of economic society." If this statement were to be regarded as having the logical status of an empirical generalization, and if a team of social scientists were to design a research methodology to test it, then its meaning would have to be spelled out in terms that could be measured. Criteria would have to be established for deciding what counts as "alternatives that work" and what counts as "departing from and modifying the metaphysics of economic society." ("Transformative" for short) If proper studies were done, using appropriate research methods to gather information logically tied to appropriate criteria, then, I am sure, studies would show that it is the transformative policies, programs, and projects that are successful. Why am I sure?
That workable alternatives are at the same time transformative alternatives, departing from mainstream western worldviews, is suggested by studies that have already been done. In Dharma and Development,a study of Sarvodaya Shramadana, Joanna Macy shows in detail how that transformative movement is rooted in values distinct from those of the modern western secular culture in which economic thinking has its context. In my own empirical study The Evaluation of Cultural Action, an evaluation report on the Parents and Children Program (PPH) in southern Chile, I engage in a long dialogue with an imaginary interlocutor called The Reasonable Social Scientist, in which I show that even procedures that seem to be impeccably unbiased and objectively scientific persistently let the realities of a social movement with a transformative ideology slip through their conceptual nets.20 In Cultural Expression and Grassroots Development, a collection of eleven case studies from Latin America, the editor, Charles Kleymeyer, coins the phrase "cultural energy." The phrase names a power foreign to the explanatory categories of what I have been calling economic metaphysics. Cultural energy revitalizes and empowers communities, but in order for the observers who see it working to believe what they see, it is necessary for them to depart from and modify economic ideology.21
Nevertheless, it is misleading to assign the logical status of an empirical generalization to the statement, "The alternatives that work turn out in practice to be alternatives that depart from and modify the metaphysics of economic society." That there is something wrong with thinking of it as an hypothesis to be tested would become clear if a serious attempt were made to test it. I said above that I was sure the truth of this statement would be confirmed if proper studies were done using appropriate criteria. However, it is a foregone conclusion any attempt to carry out a comprehensive empirical study designed to asses it, would quickly become embroiled in controversies over what criteria would make the proper links between the evidence and the concepts. Some would say that the West German post World War II finance minister Ludwig Erhard's Sozialmarktwirtschaft ("social market economy" --in which the government encourages business and then skims taxes off the top of profits to finance a welfare state) was an example of remaining within the framework of the worldview of economic society, and of doing so successfully; while, conversely, the genocide in Cambodia under Pol Pot was an example of departing from the concepts of universal human rights which are part and parcel of the metaphysics of economic society. I would have said, however, that people like the Christian Democrat Ludwig Erhard,22 and his British counterpart the Labor Party's Sir Stafford Cripps,23 shaped economics in directions guided by social conscience, and that the West European welfare states that blossomed under their stewardship were, with due regard for their limitations, transformative steps forward for humanity. (I might add that the leading philosopher of Christian Democracy was Jacques Maritain, and that the author identified as most influential in their thinking by Labor MPs coming into office at the close of World War II was John Ruskin --two writers whose dissent from the metaphysics of economic society was the raison d'etre of their lives and works.)24 As to Pol Pot, I would concede that he departed from modern western ideals, but he departed in the wrong direction, not in a positive direction that could correctly be called "transformative." At some point, some of the members of the panel would begin to suspect (correctly) that the reason I was sure that a study would confirm my statement was that it was not an empirical generalization at all. They would notice that whenever they came up with evidence that would prove it false, I would come up with reasons for counting the same evidence as proving it true.
"The alternatives that work turn out in practice to be alternatives that depart from and modify the metaphysics of economic society." This is not a statement which just happens to be supported by all the evidence because I am a clever person who knows how to massage data. It is a statement with a built-in tendency to be true by definition. We could analyze it with a Venn Diagram, drawing one circle to represent "alternatives that work."
alternatives that work
Another circle could represent, "departures from the metaphysics of economic society in a positive direction."
positive departures
We could then draw the circles as overlapping and cross out the parts outside their intersection:
The areas crossed out are empty because there is nothing that is an "alternative" that is not also a "departure;" further, there is nothing that "works" that is not also "positive." In view of the ease with which evidence that might falsify the statement can thus be conceptually disqualified, it would be better to regard the statement as only secondarily an empirical one, and as primarily what I have been calling a "metaphysical shift." It is a call to look at facts already known in a new way. It is already known that in the world there are people who are loving, cooperative, intelligent, and zestful; they are more interested in solving the problems than in making profits or in holding on to received ideas. It is already known that they are implementing alternative solutions, while standard solutions are proving unworkable. The logical status of the proposed new way of looking at these known facts (that is, the status it would occupy if the call to look at the world as it proposes were accepted) is similar to that of the central assertions of the great metaphysical systems of the past. Aristotle, Aquinas, and Kant unified the categories and cosmologies of western civilization, at three different periods of its history. When studying their writings one comes to recognize that once the conceptual framework the philosopher is operating within is understood and accepted, the central statements of the metaphysical system become necessary truths.
In Chapter Two I suggested that to make a metaphysical shift today, in order to transform the metaphysics of the global economy, we could benefit from using Ludwig Wittgenstein's idea of "language games." I also endorsed Charles Taylor's proposal to make "constitutive rules" fundamental to research in the social sciences. Now I want to spell out these suggestions in more detail, and to use them to explain the logical status of "The alternatives that work turn out in practice to be alternatives that depart from and modify the metaphysics of economic society."
The first language game Wittgenstein discusses in his Philosophical Investigations is a vehicle for criticizing the simple view held by St. Augustine, that the essence of language consists of names for objects. Wittgenstein wrote:
"Let us imagine a language for which the description given by Augustine is right. The language is meant to serve for communication between a builder A and an assistant B. A is building with building-stones: there are blocks, pillars, slabs, and beams. B has to pass the stones, and that in the order in which A needs them. For this purpose they use a language consisting of the words `block,' `pillar,' `slab,' `beam.' A calls them out; --B brings the stone which he has learnt to bring at such-and-such a call. ---Conceive this as a complete primitive language."25
Even more than Saussure's, Wittgenstein's language-game model of language sees words as embedded in activities, in social roles, in norms, in the interaction of humans with physical things. The idea of "game," already introduces the notion of "rule," a notion Wittgenstein examines at great length. Thinking of human actions in terms of "language-games" already introduces the consciousness- raising idea that the way things are is not the way things have to be. Unlike Saussure's, Wittgenstein's model is not based on the exchange of equivalents. In some games equivalents are exchanged; in some not.
Following Wittgenstein, we could say that the general pattern of humans interacting with each other and with nature is to get some sort of game going; when the game works people get their needs met and find joy. Adam Smith's account of living by exchange, starting from what he called "the natural tendency to truck or barter," is a more specific account of what humans do, as Newton's theory is a special case of Einstein's. Marx's general formula for capital, buying in order to sell, C - M - C', is one among many basic kinds of language game people can play, which happens to be the dominant one in capitalist society. What about Keynes' fundamental observation that the sum of sales must be the sum of purchases because what is a sale (a revenue) for the seller is a purchase (an expense) for the buyer? Is that just a way of saying A = A, a thing is identical with itself, and therefore not subject to the variation through human creativity that is implied by the game model? Listen to Wittgenstein: "`A thing is identical with itself.' --There is no finer example of a useless proposition, which is yet connected with a certain play of the imagination. It is as if in imagination we put a thing into its own shape and saw that it fitted. We might also say: `Every thing fits into itself.' Or again, `Every thing fits into its own shape.' At the same time we look at a thing and imagine that there was a blank left for it, and now it fits into it exactly."26 So --we play with identity too, as Keynes himself did when he played with that most self- identical of all things, the unit of currency, suggesting, among other things that after the October revolution the Soviets could have just inflated away debts by printing lots of money, and that employment could be created in Western countries by burying money so that there would be profit in paying people to dig it up.27
One might object that the language-game model does not apply to the proletariat. Life might be a game, albeit a serious game, for the businessperson who "plays," the stock market, but for the person, "who has no other commodity for sale, is short of everything necessary for the realization of his labor-power," the necessity to find a job in order to earn the money to buy the necessities of life is, so to speak, "not a game." Well, the usefulness of every word, even "game," comes to an end at some point, as Wittgenstein himself insisted. But there is another way to look at the violence committed against the poor by the laws of property and contract. It is a violence masked by the common sense of the victim-in-the-street who has not yet realized that, "Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labor power. This relation has no natural basis, neither is its social basis one that is common to all historical periods." Helping people to become aware that their oppression is not natural, but is the consequence of mutable social rules is called "consciousness- raising." Consciousness-raising could even be defined as shifting from the metaphysics of economic society, which classically defines the economy as a social machine, to a language-game model, which defines the economy as a game people play. One of the main results of consciousness-raising, Paulo Freire says, is becoming aware of what he calls the "untested feasibility." The untested feasibility is made up of the feasible things you can do to change the world, which you have never tested, because you have been imprisoned in a worldview which has made you believe that the world cannot be changed.28
Regarded as observed regularities in human behavior, in some given group at some given time, social rules are like the regularities observed in nature. Spring. Summer. Autumn. Winter. Day follows night. Bed time follows bath time. The passenger pays the fare, and then takes a seat on the bus. Regarded as norms, rules have a feature natural phenomena do not have: breaking them exposes the rule-breaker to criticism. Rules can be regarded in yet a third way: They have what H. L. A. Hart in his analysis of rules calls an "internal aspect." That is to say, the normal citizen not only behaves with a certain degree of predictable regularity, and not only joins in the general disapproval of those who violate the cultural norms; she or he also is self-directed, using a conscientious awareness of the accepted rules to monitor and guide the self.29
Of particular interest among social rules are those that define the background in which human action takes place. They create social objects and relationships, which would not exist without them, and which set the stage on which social actors act. These are the constitutive rules; they create the social world. John Searle suggests that the general form for a constitutive rule is, "X counts as Y in C," where X is some brute or relatively brute fact, Y is an institutional status conferred by the rule, and C is a context.30 Searle excludes from the category of constitutive rules cases where the Y term just assigns a name or label; thus "This sort of object (X) is called a `chair' (Y)" is not constitutive, because you could sit in X whether you called X a chair or not.31 To be really constitutive, the rule has to set up the rules of the game; the game (chess is a favorite example with Saussure, Wittgenstein, Taylor and Searle, among others) would not exist and could not be played at all without its constitutive rules.
Searle writes, "If it has a certain kind of shape, we can use it as a chair regardless of what anyone else thinks. But when we say that such and such bits of paper count as money, we genuinely have a constitutive rule, because satisfying the X term, `such and such bits of paper,' is not by itself sufficient for being money, nor does the X term specify causal features that would be sufficient to enable the stuff to function as money at all without human agreement. So the application of the constitutive rule introduces the following features: The Y term has to assign a new status that the object does not already have just in virtue of satisfying the X term; and there has to be collective agreement, or at least acceptance, both in the imposition of that status on the stuff referred to by the X term and about the function that goes with the status....
"Our sense that there is an element of magic, a conjuring trick, a sleight of hand in the creation of institutional facts out of brute facts derives from the nonphysical, noncausal character of the relations of the X and Y terms in the structure where we simply count X things as Y things. In our toughest metaphysical moods we want to ask `But is an X really a Y?' For example, are these bits of paper really money? Is this piece of land really somebody's private property? Is making certain noises in a ceremony really getting married? Even, is making certain noises through the mouth really making a statement or a promise? Surely, when you get down to brass tacks, these are not real facts."32
I have been showing that to understand the global economy it is necessary to understand its constitutive rules, their history, and their effects. I do not entirely agree with Searle when he writes that constitutive rules are noncausal; they have consequences, which are profound. Without the institutional facts (the constitutive rules) presupposed by the metaphysics of economic society, the quasi-mechanisms that explain international trade according to theories of comparative advantage would not exist. Theories of the globalization of production, which explain the exploitation of labor in the third world, accompanied by unemployment and de-industrialization in the first world, rely on the same quasi-mechanisms as their explanatory principles. Theories of technological change deal with only half the problem; the other half is culture. Ecological design solves only half the problem; the other half of the solution is the transformation of cultural forms, most notably the transformation of the constitutive rules that govern economic relationships. In our times the steady forward march of social democratic welfare states guided by Keynesian macro-economic principles has encountered both physical and institutional limits; the latter take the form of unpayable debt, and they cannot be overcome without revision of what Marx called the capitalist "economic categories," in other words, without revision of the constitutive rules. Marx himself pioneered methods for following out the consequences of those constitutive rules of economic society which produce "accumulation," which necessarily (i.e. necessarily as long as the constitutive rules are not transformed) exacerbates "contradictions." Historians like Braudel, Wallerstein, and Polanyi have spelled out in exhaustive detail the story of the processes by which market structures defined by the constitutive rules of capitalism became over time an interlocking set of interrelated quasi-mechanisms, which expanded outward from Europe to become today's global economy. The post- structuralists have deconstructed the guiding and legitimating ideas of socially constructed realities, including "development," "global economy," and "capitalism," among others. They have unmasked the pretensions of mainstream economists who treat poverty as a quasi-physical problem to be solved by economists who are quasi-engineers.
Those who really do solve social problems are not quasi- engineers, trained to operate conventional quasi-mechanisms. The real problem-solvers are those who march to the beat of a different drummer --the Gandhis, the Jane Addamses, the Eugene Debses, the Dorothy Days, the Hazel Hendersons, the Martin Luther Kings, the R. Buckminster Fullers, the Paulo Freires, the Mother Teresas, the Helena Norberg-Hodges .... the thousands and millions of people, some famous and some unknown, whose lives transform the conventional rules of economic society because they live according to alternative rules, which are unconventional now, but which foreshadow a positive future.33