The Good Society: An Alternative Vision of Progress

When John Locke made his pronunciations in the 18th century, the ideal of an autonomous individual was embedded in a complex system that included family and church on one hand, and on the other a vigorous public sphere in which economic initiative, it was hoped, grew together with public spirit – creating a discursive community capable of thinking about the public good. Every good society conjured up by philosophers and reformers presupposes an imaginary man managing his behavior by the dictates of pure reason and keeping in mind the long-range effects of his every action. Faced with growing homelessness, under-employment, crumbling highways and ecological disaster, our response is one of apathy, frustration, cynicism and retreat into our private worlds. Today, we search for a society built around core values: equality, democracy and sustainability. Rather than being a specific vision, or end point, the Good Society is a framework that enables us to evaluate political ideas and actions against core values.1

In a 1900 article in Rivista Alfredo Pareto commented on the radical movements at the turn of the century in France and Italy. He concluded that rather than restoring democracy and promoting social welfare, they were just seeking to replace one elite with another elite, the privileges and structures of power remaining intact. The struggle was not for a Good Society, Pareto concluded, but a squabble among elites over who was going to govern. What were the ideals and theories they claimed to fight for? Just propaganda, Pareto declared, the way upwardly mobile people manipulate the helpless, hopeless mob to take to the streets on their behalf. From Pareto’s point of view – socialism, libertarianism – all ideologies are smoke screens foisted by ‘leaders’ who really only aspire to enjoy the privilege and power of governing. He suggested class struggle is eternal, and recognized the predictions of economics fail to correspond to reality.

To seek answers, Pareto turned to sociology. He identified two factors, the circulation of elites and the irrationalism in politics. Change is associated with people always entering and leaving elites thereby tending to restore equilibrium.2 However, decisions in politics are emotional and non-rational. In such a system the function of reason is to justify past behavior or to show the way to future goals, which are determined not by reason, but by emotional wants. During the 1980s, school systems lowered educational standards to protect children from failure. The world would be saved from crime, drug abuse and under-achieving through bolstering self-esteem. In order to ensure positive self-esteem education standards were lowered, creating a milieu for extreme individualism. When there is too much self-esteem there are problems of self-tolerance, entitlement and narcissism. The culture of extreme individualism ushered in the narcissism influencing decision-making and accountability today.

With narcissism, such a person lacks empathy and does not recognize boundaries: personal, corporate or legal. The world viewed from an emotional rather than a rational perspective allows personal feelings to override the distinction between right and wrong. Individualism reinforces the person who thinks that he/she should not have to contribute to the community’s common good but should be left free to pursue his/her own personal ends. Neoliberal capitalism has nothing to do with democracy as it is now linked to a market logic that divorces itself from social cost. The harshest costs of modern economic practices fall upon ecosystems and populations with little current economic power or value, including generations not yet born. “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” observes John Kenneth Galbraith.

The deregulation and minimal role for government has been ‘culturally empowered’ since the 1970s through the universal intellectual deference to external authorities such as Friedrich Hayek and Milton Friedman. Their followers accept unquestioningly every word of their writings as a rational explanation for laissez-faire economics. Hayek claimed laws are to protect the liberty of the individual, even though it created a system with built-in inequality. Friedman proposed that trickle-down economics helps poor people by the trickle-down effect in which economic growth flows down from the top to the bottom indirectly benefiting those who do not directly benefit from the policy changes. With respect to trickle-down economics, the 2008 financial crisis is the greatest broken promise (or lie) of our lifetime. While neoliberalism champions that individuals have maximum freedom, a crisis exposes the clash with neoliberal interpretation of freedom and responsibilities, on the balance between personal freedom and the common good.

But even more so, we have a right to expect that the state does everything in its power to promote human flourishing, to provide the conditions under which all individuals have the opportunity to live well. While achieving moral virtue or knowledge may be largely within our power, other goods like wealth or health may be largely determined by fortune. While a good government cannot guarantee that citizens will attain moral virtue or have good lives, it can provide the condition under which this is possible, and it can help alleviate much of the injustice caused by misfortune. A ‘good society’ can only be achieved if there is an acceptance of the need to tame capitalism and strictly regulate it. A good society is a society that doesn’t hesitate to ask the hard questions, to lead and participate in critical conversations about what is important to us, what we value, what is working and what is not working.

In a world of increasing complexity and interdependence, we can no longer afford ‘to go our own way.’ Rather, we need to exercise our capacity for developing institutions that recognize our interconnectedness, moving toward the creation of the good society, where the common good is the pursuit of the good in common. We can define a new vision of progress based on social justice, sustainability and security. These are fundamental preconditions for the Good Society. Not only because ‘more equal societies almost always do better’ as Richard Wilkinson and Kate Pickett have shown in their impressive study. But also, because self-fulfillment of the individual, the right of everyone to achieve their own unique way of being human, needs social justice, sustainability and security. If these preconditions are lacking, opportunities are limited to the few. The Good Society wants to make them equally achievable for all.

The economic elite provide campaign contributions to both parties, which allow them to place key individuals in regulatory positions in Washington. This means decisions in government are handled from the perspective of the economic elite. The 2016 election exposed the level of degradation of the public sphere. A propaganda system created by the economic elite and their proxies manipulates the public through misinformation and echo chambers. Because of this control of information, the public only gets to agree, rather than provide an alternative vision of progress. The politics of fear is used as a driving or motivating factor for the people, to get them to vote a particular way, allow excesses in spending, or accept policies they might otherwise abhor. It’s banking on the fact that presenting people with an alleged threat to their well-being will elicit a powerful emotional response that can override reason and prevent a critical assessment of policies.

Markets will also not by themselves be able to ensure the ecological balance of our planet. Thus, functioning markets need rules and preconditions that will not be established by the market itself. These public goods will not be provided by the markets themselves. They must be provided by society. In a society where wealth is distributed on a performance-base, those owning or earning above average must contribute more to these public goods. The idea of social progress is based on a better quality of life for all. This goes far beyond increasing consumption, which can be provided by markets. People do not achieve sense in life through commodities you can buy on the market. Humans want to be part of the society, and are striving for security, participation and emancipation. Security means being protected against fundamental risks like unemployment, illness and old age (which is a “risk” only in an economic sense). It also means being protected against discrimination and exploitation.

The Good Society, based on the notion of sustainability understood as social, economic, and environmental sustainability, needs a functioning public sphere. The idea of a public sphere is an ideal of good and accountable governance. Its requisites are the free flows of information, free expression, and free debate. Such a public sphere is truly participatory and the best protection against abuse. In reality, we only find approximations of this ideal to create the inclusive society in which the  government might be organized to serve the collective interests of ordinary people – the public – rather than the personal interests of rulers and economic elites. Progressive politics can develop an alternative vision of progress that combines the dynamism of markets with more equal societies. The Good Society is built on the idea that more equality is possible; is values-based, and the challenge is more to bring these values back into our daily political and social lives, rather than changing them.3

1 Claire Andre and Manuel Velasquez. (Spring, 1992) Creating the Good Society https://www.scu.edu/ethics/ethics-resources/ethical-decision-making/creating-the-good-society/

2 An Analysis of the Circulation of Elites in America (10 June 2018) http://questioningandskepticism.com/analysis-circulation-elites-america/

3 Andrea Nahles (31 March 2011) Equality and The Good Society https://www.socialeurope.eu/equality-and-the-good-society

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We Must Take Back Control of the Public Sphere

The “public sphere” is generally conceived as the social space in which different opinions are expressed, problems of general concern are discussed, and collective solutions are developed communicatively. Thus, the public sphere is the central arena for societal communication. In large-scale societies, mass media and, more recently, online network media support and sustain communication in the public sphere. Jürgen Habermas thinks that the public sphere is important for democracy, facilitating participation in democracy. In its ideal form, the public sphere is “made up of private people gathered together as a public and articulating the needs of society with the state”. Through acts of assembly and dialogue, the public sphere generates opinions and attitudes which serve to affirm or challenge – therefore, to guide the affairs of state. In ideal terms, the public sphere is the source of public opinion needed to legitimate authority in any functioning democracy.

The Structural Transformation of the Public Sphere (1962) is Habermas’s examination of a kind of publicity that originated in the eighteenth century, but still has modern relevance. It begins by attempting to demarcate what Habermas calls the bourgeois public sphere. He defines the public sphere as the sphere of private people who join together to form a “public.” He traces the history of the division between public and private in language and philosophy. The most important feature of the public sphere as it existed in the eighteenth century was the public use of reason in rational-critical debate. This checked domination by the state, or the illegitimate use of power. Rational-critical debate occurred within the bourgeois reading public, in response to literature, and in institutions such as salons and coffee-houses. The public sphere was by definition inclusive, but entry depended on one’s education and qualification as a property owner.

Habermas emphasizes the role of the public sphere as a way for civil society to articulate its interests. Before the bourgeois public sphere came representative publicity, which existed from the Middle Ages until the eighteenth century, it involved the king or lord representing himself before an audience. The King was the only public person, and all others were spectators. The public and private realms were not separated. The development of the fully political public sphere occurred first in Britain in the eighteenth century. The public sphere became institutionalized within the European bourgeois constitutional states of the nineteenth century, where public consensus was enshrined as a way of checking domination. The fully developed public sphere was therefore dependent on many social conditions, which eventually shifted. The bourgeois public sphere eventually eroded because of economic and structural changes. 1

The boundaries between state and society blurred, leading to what Habermas calls the refeudalization of society. State and society became involved in each other’s spheres; the private sphere collapsed into itself. The key feature of the public sphere – rational-critical debate – was replaced by leisure, and private people no longer existed as a public of property owners. Habermas argues that the world of the mass media is cheap and powerful. He says that it attempts to manipulate and create a public where none exists, and to manufacture consensus. This is particularly evident in modern politics, with the rise of new disciplines such as advertising and public relations. These, and large non-governmental organizations, replace the old institutions of the public sphere. Advertising and internet have invaded and corrupted the private sphere. The public sphere takes on a feudal aspect again, as politicians and organizations represent themselves before the voters.

Habermas’ concept of ideal speech is a situation in which everyone would have an equal chance to argue and question, without those who are more powerful, confident or prestigious having an unequal say – an important aspect of the cultural dimension of modernism. This activity is oriented towards developing an understanding, and when agreement is reached, it is the knowledge and truth of the situation. The phenomena of blogging and citizen journalist creates challenges investigating the identification of quality information accessible via the web. Habermas claims it is not so much the possession of particular knowledge, but rather in “how speaking and acting subjects acquire and use knowledge.” The sheer diversity of information available today raises a critical question: how do we know which information to pay attention to, and which to discard?2

In response to concerns raised in the 1970s the corporate elite set in motion processes to dismantle the New Deal social compact, clearly recognizing that some people will now do with less to ensure an elite (big business) have more. This response to the crisis in capitalism also included moves to union busting. A key hegemonic claim is that the market provides a natural mechanism for rational economic allocation. Thus, attempts to regulate capital via political decisions produce suboptimal outcomes. This thinking is used to undermine the mechanics of popular engagement in determining policy. The actual individuals – the economic elite – who control the decision-making undermine other associations, like unions, under the rhetoric of personal freedom. Neoliberalism’s nonsense of individual freedom and equality, and its promise of prosperity and growth, are slowly being revealed as fabrications. Economic nationalism serves to distract the working-class from the very real questions about domestic distribution of economic resources by casting dispersion on foreigners.

The Internet was acclaimed as leading to a new age of enlightenment through easy communication and universal access to information. Instead, observers see the emergence of an increasingly polluted information environment. We face torrents of false or at least distorted tweets, video clips, and blog posts. We also observe the formation of many echo chambers, groups that reinforce those groups’ chosen visions, selecting what to accept as true, and amplifying each other’s biases. Public opinion is now manipulative, and, more rarely, still critical. We still need a strong public sphere to check domination by the state and non-governmental organizations. There are deliberate fakes created to deceive the public and then there are misleading images shared, often during breaking news situations, that are entirely unrelated to the story. The Internet is distorting our collective grasp on the truth – many of us have burrowed into our own echo chambers of information.

Neoliberalism has ushered in a new Gilded Age in which the logic of the market now governs every aspect of media, culture, and social life from schooling to health care to old age. Of course, the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But neoliberalism is more than a standard right wing wish list. It is a way of reordering social reality, and of rethinking our status as individuals. In short, neoliberalism is not simply a name for pro-market policies, or for the compromises with finance capitalism made just to support the autocracy. It is a name for a premise that, quietly, has come to regulate all we practice and believe: that the only a way of structuring all reality is the model of economic competition. The economic elite use Internet tools, especially social media, to create distractions to advance this agenda.2

Information manufactured by people and institutions with money supports the pervasiveness of neoliberal thought that allows it to be presented and perceived not as one option, but as the only one even imaginable. In 2008 there was nothing on the other side from neoliberalism, demonstrating its ubiquity and consensual nature that the only way society’s imagination could react to the crisis of neoliberalism was more of the same. We are beholding to Donald Trump for pulling back the curtain and drawing attention to the mechanism of the social repression behind the illusion of minimal government and austerity. He governs like a king – as the only public person – re-enforcing the fact that ‘people’ are spectators with no real input into government decisions. We must begin the process to end big money’s grip on politics to take back control of the public sphere to ensure the ongoing transformation in structures of public communication in order to overcome social repression.

The neoliberal ideological project is geared to making itself invisible – is almost never mentioned in the mainstream political world. Today, the neoliberal state is the extension of the economic elite – propagated by the economic elite and their proxies who can speak no other language than that of the privileged status of capital, and who hold the belief they are serving the greater good. With the dismantling of the social safety nets and the ongoing increasing economic inequality between the wealthy and rest of society the state now becomes an agent of social repression, becoming a protection agency for the activities of the economic elite. Today “public opinion” is created at election time by the media controlled by the economic elite, thus instead of criticizing and examining the government, the manipulated public is meant merely to agree. To prevent the decline of democracy it is necessary to remove the corrupting influence of money to ensure the public sphere once more becomes the public opinion needed for participatory democracy.

1 Jürgen Habermas And The Public Sphere https://www.media-studies.ca/articles/habermas.htm

2 Habermas, Jurgen. Structural Transformation of the Public Sphere http://www.sparknotes.com/philosophy/public/summary.html

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The Dilemma of Postmodern Metaphors in Economics

When explaining something the ideal rational language is literal and straightforward and has a unique relationship to the truth. Until the last 40 years metaphors were dismissed as deviant, misleading embellishments imposed on otherwise clear discourse. Metaphors can’t change reality; only shed light on it. When people use metaphors to take liberties with reality, their words can be misleading at best and mendacious at worst. The most pervasive false metaphors occur in economics in the support of trickle-down economics. Friedrich Hayek regards the metaphor of the ‘invisible hand’ as Smith’s most important contribution to social theory. Hayek claims, “Adam Smith was the first to perceive that we have stumbled upon methods of ordering human economic co-operation that exceed our knowledge and perception.” Milton Friedman was a believer in the metaphor of biological evolution as a predictor of the economy – to help rather than replace a fundamentally mechanistic paradigm.

Since the turn of the 20th century, there has been a belief that technology and reason could make us masters of our own environment and would continue to make life better. This was part of the modernist view that all people are equal, each person has the freedom to make his own choices, therefore we can use our intelligence and rationality to make the world a better place. Also, individual rights should be subservient to the general needs of society. Metaphors are a primary method of proposing abstract concepts. Modernist thinkers viewed metaphors as a stylistic form of speech or simile that is used to make comparisons. Within the modernist tradition, metaphors are often described as mere ornaments of language and not a constitutive part of language and understanding. By way of contrast, postmodern scholars suggest that a metaphors are basic to understanding, and consequently that they are not so much a form of speech but rather a fundamental form of thought.

Postmodernism is a 1980s movement characterized by broad skepticism, subjectivism, or relativism; a general suspicion of reason; and an acute sensitivity to the role of ideology in asserting and maintaining political and economic power. The postmodernist now doubts the end project of all technological advances will be to improve our lives. The fact is that they may not deliver leaves the feeling that the quality of life will deteriorate. Now one realizes legal attempts to grant all people equally will not make it possible for all people to have the same quality of life. With such a mindset they are unable to separate rationality from emotional attachment to a particular set of cultural values that have no basis for over-ruling cultural values. The progress of history is not consistent, and life may become worse for all of us.

For the postmodernist the intellectual, liberal belief that everyone should sacrifice for the overall benefit of society has miserably failed to replace the mythic and religious arguments for altruism. Each person is not a self-made individual but is dependent on social and environmental factors in developing their values, and the social elements that most advocated individual freedoms and self-determined values. These individuals have become, themselves, a tragedy of depressed, suicidal, and self-indulgent individuals that leads to a narcissistic society, turning their backs on the poor, and the working class. Jacques Derrida’s philosophy of deconstruction has become the foundation of many postmodern ideas today. Under deconstruction the idea is to tear apart the theories of anyone that purports to prevent a theory that is grounded in some sort of reality. This concern is that people who think they have a grasp of truth are the people who try to control others and cause suffering and pain for others. They believe that there isn’t such a thing as absolute truth.

Postmodern scholars suggest that perceived realities may change as the metaphors used to understand “reality” change. Social reality is distinct from biological reality or individual cognitive reality, representing as it does a phenomenological level created through social interaction and thereby transcending individual motives and actions. Knowledge and people’s conceptions (and beliefs) of what reality becomes embedded in the institutional fabric of society. Reality is therefore said to be socially constructed. Postmodernists believe that the West’s claims of freedom and prosperity continue to be nothing more than empty promises and have not met the needs of humanity. They believe that truth is relative and truth is up to each individual to determine for himself. Postmodernists do not attempt to refine their thoughts about what is right or wrong, true or false, good or evil.1

The US has placed great trust in the compatibility of market competition with the dedication to freedom of expression. Since 1980s a succession of administrations pursued a policy based on delivering public benefits by deregulating and relying on private market mechanisms. Neoliberalism is a consequence of restructuring of class power in favour of the economic elite. It has no vision of the Good Society or the public good and no mechanism for addressing society’s major economic, political and social problems. Today neoliberal ideology defines the social relationships of poor people and the attitude towards them that supports an economic system that creates inequality. Neoliberal capitalism is associated with increasing income gradient between the rich and the rest of society. This increasing economic inequality between the rich and the rest of society over the past four decades led to the hollowing out of the middle class, leaving many people disillusioned.

Postmodernism introduces the attitude of skepticism or distrust towards ideology and various tenets of universalism. Supporters believe knowledge and truth are products of social, historical and political discourses or interpretations, and therefore contextual or socially constructed. Postmodernism is still alive in economic theory – economic truths are socially constructed. Postmodernism is supposed to be the end of the ‘grand narrative’ or the metanarrative apparatus of legitimization. Postmodernism and neoliberalism share some common themes. Both emphasize the positive role of the pursuit of individual interest and promote individual rights rather than duty to society. Questions related to the Good Society are irrelevant to both. Neoliberals advocate deregulation in economic life while postmodernists advocate deregulation in the cultural sphere. Both currents of thought place the isolated individual in the centre of attention. Everybody has his/her own culture.2 The main dilemma of postmodernism is the quest for meaning.

The postmodern philosophy can be traced to the work of Hegel and is reflected in critiques of Hegel by the Existentialists and Marxists. Hegel’s use of Greek dialectic to introduce what has become the core of the postmodern view that “truth” evolves and is culture/context dependent is the key issue in the change. The pre-Hegelian view was that truth was attached to reality and that by training our minds to weed out error, we could know this reality. The tools that were developed: the scientific method, the utilitarian ethical system, refined logical systems, inductive logic, linguistics, statistics, and the phenomenological method of doing anthropology, history, sociology, and the study of religion, all were expected to bring us closer to an accurate “picture” of how our world really worked. This knowledge would let us become the masters of our fate and do away with chance.1 Christopher Hitchens notes, “The Postmodernist’s tyranny wears people down by boredom and semi-literate prose.”

Gareth Morgan identified eight metaphors of organization in his book Images of Organization. In his late writing Hayek described a theory of spontaneous order, which is brought about because individuals are restrained by certain rules, while the order resulting from their ‘observing these rules’ is wholly beyond their knowledge and intentions. Jürgen Habermas’s theory of social evolution describes the developmental logic for the reproduction of society, social change and the directional character of social change. Darwin’s narrative was that competition favors traits and behavior according to how they affect the success of individuals, not species or other groups. The real reason for regulations is to protect ourselves from excessive competition with one another. Market failures in Adam Smith’s framework occur only when competition is limited. Darwin’s view of the competitive process will prevail over Smith’s in the end because it offers a far more rigorous explanation of the behaviour patterns observed.3

Jürgen Habermas warns of the crisis around the demise of ideals from inept politicians and the dark forces of the market. With respect to postmodernism it implies re-inventing modernity, believing in the possibility and the necessity of social progress. This includes the need to steer social development and to think about the Good Society. As Habermas noticed, the Enlightenment is an unfinished project – we must aspire to a public sphere that serves to make things better. Today “the public” is created at election time by the technicians of public opinion, in order to give a simple endorsement of state power. Instead of criticizing and examining the government, this manipulated public is meant merely to agree. Habermas makes it clear that a successful democracy needs a vibrant, critical public sphere instead of the present fake messaging.4 Such a public sphere creates hope for a future of a political system based on the equal rights and obligations of citizens, and provides a response to postmodern metaphors in economics.

1 Wm. S. Jamison (11 July 2016) The Dilemma of Postmodernism. http://wsjamison.uaa.alaska.edu/pmd.htm

2 Hans von Zon (2013) The unholy alliance of neoliberalism and postmodernism. http://www.imavo.be/vmt/13214-van%20Zon%20postmodernism.pdf

3 Darwin’s Invisible Hand Narrative: A New Paradigm. (10 April 2018) http://questioningandskepticism.com/darwins-invisible-hand-narrative-new-paradigm/

4 Structural Transformation of the Public Sphere http://www.sparknotes.com/philosophy/public/quotes/

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An Analysis of the Circulation of Elites in America

At the turn of the 20th century, Vilfredo Pareto (1848-1923) was attempting to refute the claim that socialism provided a superior solution to economic problems. Pareto became concerned that if liberalism was superior why wasn’t it being generally practiced. This led him from economics to sociology. He observed that 80% of Italy’s land was owned by 20% of the people. He coined the term ‘elite’ in 1902 in his descriptions of these apparent ‘efficiencies’ in society. Pareto believed that elite behaviors reflected patterned distributions of individual psychological characteristics. He developed from his economic work a coherent and insightful general theory of social stratification and mobility. His theory of circulation of elites claimed regime change occurs when one elite replaces another – not when rulers are overthrown from below. The role of ordinary people in such transformation is not that of initiators or principle actors, but as followers of one elite or another.

The ‘elite’ is key to understanding society as a whole – for whatever value this elite incarnated would be reflected in society. Elites do not automatically adjust to fit changing conditions, rather an entrenched, maladaptive elite eventually emerges and tends to cling to power for years. The question is why this apparent failure of elites happened. Pareto’s theory of elite cycles frames a sobering answer. He theorized that over time a distinct psychosocial propensity – manifested by personality traits, mentalities, beliefs and actions – becomes predominant in governing elites. They are no longer able to detect or recognize risks that matter to decision-makers. This renders them, especially their leaders, prone to bias, closure, rigidity and cumulating blunders. A gradual process of decline or degeneration takes hold and leads eventually to a profound crisis during which groups and persons disposed toward the opposite propensity ascend, only to have a lengthy process of decline or degeneration begin anew.

Pareto conceived of elites as ‘governing classes’ – as complex aggregations of powerful political, economic and social groups, the inner leaderships of which are located in governments. In Pareto’s usage, governing elites encompass opposing parties and allies, rotating in and out of government offices and squabbling endlessly over policy matters. But these rotations and squabbles do not alter basic psychosocial propensities and governing styles. Elite members are disposed to combine the two modes of political rule, force and persuasion, but over time they, and especially their leaders, come to rely primarily on one mode, one style of governance. Elites always rule, leading to the domination of a minority over a majority. Not withstanding, there is a continuous decline of the elite, thereby making way for a new elite.

Cycles of elite circulation and degeneration can never be eliminated, Pareto observed. However, the start of a cycle may provide a temporary respite – an interval of renewal and hope – because the influx of new elite groups and leaders supplies needed flexibility, innovation, talent, and vigour. A measure of temporary equilibrium is achieved, and a honeymoon period for the new elite unfolds. But this is bound to be short-lived, because the new elite tends to attribute its predecessor’s downfall to specific errors and stylistic shortcomings, rather than to more general bias and closure, political mediocrities in high positions and inflexible policies. The lesson learned is less the need for elite openness and a ruthlessly honest internal discourse than for a more conciliatory or confrontational posture. Sooner than later, complacency and hubris again take hold, policies become rigid and doctrinaire, vices replace virtues and ill-advised undertakings mount.1

World War II’s technological advances, pent-up consumer savings and upgraded workforces provided the revamped American governing elites with relatively easy tasks of political management during the early postwar period. Intertwined Keynesian and welfare state precepts formed the intellectual umbrella for the 1945 – 1980 cycle. They taught that smooth economic sailing could be assured by employing fiscal stimuli in times of falling demand and that political peace could be purchased through social compacts – in partnership with unions. Republicans grudgingly accepted the limited welfare state constructed by Democrats during the pre-war depression and wartime years. After a rash of spending during the Vietnam War, there was not enough gold to cover the amount of dollars in circulation. In response the Nixon administration pulled the US out of the Bretton Woods Accord – abandoning the Gold Standard. In addition, countries led by the US, expanded their money supplies concerned that currency values would fluctuate unpredictably for a time. This in turn, led to the depreciation of the dollar and other currencies, followed directly by massive inflation and recession.

In 1980s, a new elite, the Reagan administration, introduced minimal government and deregulation. The elites’ inner cores consisted of tough-minded leaders and trusted advisors who viewed deregulated markets, reduced interest rates, lower taxes, and trimmed welfare programs as essential for economic growth. Important for the longer run, the Reagan and George H.W. Bush administrations implemented measures enabling homebuyers to obtain mortgages without substantial equity down payments, thus planting the seeds of what eventually became a gigantic housing bubble and a precipitous decline in consumer savings. When these panaceas had costly consequences, as in US bailouts of S&Ls and Long Term Capital, and when large corporations such as Enron, Global Crossing, and WorldCom went bankrupt a short time later, they were treated as instances of mismanagement, not harbingers of crisis. The blithe attitude of the governing elites about these developments was encapsulated by Vice President Dick Cheney’s flip remark, ‘Reagan proved deficits don’t matter.’

In November 2008, voters in the US were reacting to a shattering economic crisis – a failure of the governing elites – defined by the biggest decline in consumption and investment since the Great Depression. John McCain faced an impossible task that election. However, there was little change as President Obama’s election resulted in one elite being replaced with another with similar thinking. Obama signed The Recovery and Reinvestment Act – the boldest counter cyclical fiscal stimulus in American history. It included $787 billion of tax cuts and spending, with the total split roughly one-third tax cuts, one-third government investments, and one-third aid to the people most directly harmed by the recession and to troubled state and local governments. Despite Obama’s public posture has always been that he resents the political influence of special interests and financial elites, he was quite comfortable with appointing bankers to key positions in his government.

According to Pareto, circulation or upward and downward circulation amongst the members of elite and non-elite is a typical characteristic of the elite. Social change occurs with individuals circulating between the elite and the non-elite. This replacement takes place in two ways: either by gradual process of infiltration, or by complete change of the guard. During the 2016 Democratic primaries there was an opportunity for sudden change in one of the major governing elites in America. These potential changes outlined from Bernie Sanders platform include: a new federal minimum wage of $15 per hour, significant plans for an infrastructure bank to lead the renewal of the US’ roads, railways, ports and bridges, to higher taxes on the 0.1% of top income earners, to a public option for healthcare cost reduction, to environmental protection, to greater intra-party democracy. Bernie Sanders remains an important progressive voice in the Democratic Party.2

The elite manipulate overtly or covertly the political power. Donald Trump’s election is an illustration. Following Machiavellian formula of power, Pareto observes elites are able to manipulate and control the masses by resorting to two methods. First, elites adopt flexibility to environmental and situational exigencies. This group prefers materialistic to idealistic goals, but lack fidelity and principles, and use strategies that vary from emotional appeal to unadulterated fraud. The second method encompasses the conservative elite, bound by faith and ideology, who display group loyalty and class solidarity. Today’s Republican Party is an amalgamation of both methods of manipulation and control. The members of an elite will always try to ensure that the non-elites should not influence social, economic and political processes in any way. The present Republican Party, under the control of faith groups and autocracy, is closed to circulation from non-elites. In a perfectly free society there would be constant and free circulation of elites.

In 2018, there is an opportunity for the non-elites to circulate amongst members of the elite. It is presently restricted to the Democratic Party, and the primaries allow these individuals an opportunity to participate. The rate of social change in the US will depend on these non-elites – many who are women embracing many of the progressive ideas espoused by Bernie Sanders – being successfully elected in November. The task is to reverse the decline of democracy. With the moral degradation of the present political governing elites; the lack of virtuous men in power positions, now politics is not a profession, but a profitable part-time job for some seeking to promote and attain certain private advantage. “By the circulation of elites,“ Pareto wrote, “the governing elite is in a state of continuous and slow transformation. It flows like a river, and what it is today is different from what it was yesterday.”

1 John Higley and Jan Pakulski Pareto’s Theory of Elite Cycles: A Reconsideration and Application https://ecpr.eu/filestore/paperproposal/8a8d02ec-57a9-4b0d-b042-10bfb1f86972.pdf

2 Inderjeet Parmar (24 Aug 2016) America’s New Normal is Threatening the ‘Naturalness’ of Elite Rule https://thewire.in/world/are-americans-threatening-the-naturalness-of-elite-rule

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The Rise of the Kleptocracy: America’s Security Threat

Milton Friedman’s neoliberal triumvirate of privatization, deregulation – free trade, and drastic cuts to government spending laid the groundwork for Reagan economic policies of deregulation that began in the 1980s. This, in turn, launched globalization which was supposed to undermine authoritarianism. It was believed that the openness of the new century generated an advantage for emerging middle classes, on-line dissidents, NGOs and democratic movements. The lobbying profession exploded, and industries began writing legislation affecting their sectors; public services such as incarceration and war fighting were privatized; the brakes on money in politics were released; and presidents began filling top regulatory positions with bankers. Since the 1970s the technology of moving money around has changed radically, as both technological and political changes dovetailed. The dismantling of capital controls and the creation of global capital markets, tied together with instantaneous money transfer and effective free movement for the mass affluent, has created an environment highly suited to kleptocracy.

This rapid deregulation has made wealth easier both to hide and defend. Since the 1970s the complex of lawyers, bankers, lobbyists, accountants, and public relations experts – the ‘wealth services industry’ – have matured in power and skill. Not only has it successfully defended its clients from taxation, it has created new legal tools for them to avoid it: for example, the ability to keep cash owned by foreign subsidiaries in U.S. banks, untaxed but controlled in all but name by the U.S. parent company. At the same time, the wealth defense industry enables an escalation of offshore tax avoidance: consider the 30 major U.S. corporations which, between 2008 and 2010, collectively paid more in lobbying fees related to promoting tax avoidance measures in Congress than they did in federal income taxes. The wealth services industry has evolved from more or less defending Western clients into a global concern whose kleptocracy clientele now includes Russian, Chinese, Central Asian, and Gulf autocrats.

The World Bank has shown how frighteningly easy it is to launder money with complete anonymity. Under international guidelines, incorporation agents are supposed to establish the identity of a beneficial owner. The purpose of this requirement is to prevent the ability of criminals to launder funds through the system, though in reality this flimsy stipulation has broken down in the contemporary offshore environment. A recent World Bank study found that 42 out of 102 incorporation agents surveyed failed to establish the identities of their clients. This finding was further corroborated by the Global Shell Games project, an academic research project that posed as 21 aliases mimicking everything from terrorists to corrupt officials and contacted nearly 4,000 incorporation agents worldwide. This project revealed that one quarter of these agents were ready to create a shell company without any documentation, and half were ready to do so without meeting the requirements of the law.1

The key element in maintaining the kleptocracy is the anonymous or “shell” company, a company stripped to its legal essence that provides neither goods nor services. Shell companies are used to hold funds and conceal their owners’ identities. Rather than be misled by the designation of “company,” it is best to conceptualize these entities as something closer to secret codes. Shell companies are often mathematically generated legal formulas, a chain of interlocking companies and holding companies, created simply for the benefit of anonymity. This is, of course, exactly what a criminal or kleptocrat needs in order to avoid detection in either his own country or the West. Once established, these shell companies can freely acquire assets across the West with anonymity. Russian, Chinese, Central Asian, and Gulf ruling classes have shown a marked preference for laundering their wealth into prime real estate assets in Western capitals through these same anonymity devices.

Why is anonymity so important? This is the successful criminal’s dilemma. Once you are successfully stealing, your problem becomes not simply the ability to steal more, but the ability to launder these ill-gotten gains effectively. The successful criminal is accumulating dirty black cash that he cannot easily use or secure and needs to convert it into clean white cash: this is why money laundering is so important. The easier it is to launder money, the richer, more powerful, and more influential criminals become, and the quicker it becomes for the proceeds of crime to turn into new sources of power and activity. This is why nothing is more beautiful for a corrupt dictator than the ability to anonymously and untraceably move enormous sums electronically around the world. This empowers him, both at home and abroad. Gigantic sums of money are now travelling the world incognito. This dirty money is undermining democracy, weakening capitalism, and threatening security – both in America and abroad.

Globalization has created the golden age of money laundering and the rise of kleptocracy. Nestling in Western economies are offshore financial structures (and their professional enablers) which allow funds to instantaneously and anonymously jump between countries, empowering authoritarians and corrupting Western institutions. The International Monetary Fund estimates up to 5 percent of the world’s GDP is laundered money – and only 1 percent of it ever gets spotted. It has never been simpler or safer to be a kleptocrat. Globalization’s deep, structural motors are in fact enabling authoritarians. Not only can capital now mask itself and disappear without any trace, but gigantic sums of money are now traveling the world in a concealed manner. This is why the closest places to see the results of the looting are not in Africa or Central Asia but in downtown Manhattan and central London, where hundreds of “ghost apartments” now sit empty. Their primary function is no longer as residences, but as deposit boxes for illicit, laundered wealth.1

Globalization apologists optimistically predicted opportunities for peace, prosperity, and freedom would be created. Rather than retreat, democratize, and reform towards the rule of law, the autocratic ruling classes of Russia, China, Central Asia, the Arabian Gulf, and beyond have globalized with great success. The openness of the new century, the U.S. and the EU are now finding, is in fact rather well suited to the kleptocracy behind a dictator – with a coterie of American lawyers, French bankers, German accountants, and British public relations teams in tow. When a kleptocrat seeks to secure his illicitly gained and vulnerable assets, he is enabled at every step by Western bankers, lawyers, accountants, and other professionals. Recent corruption scandals have shown that major financial institutions such as HSBC, Deutsche Bank, UBS, and BNP Paribas have all participated in such money transfers. This has significantly altered the psychological perception and relationship between authoritarian and Western elites.1

Authoritarian conduct is now shaped by the ease and ability to move both their money and their persons easily offshore and into the Western world. The modus operandi of the contemporary authoritarian kleptocratic is: steal in a zone without the rule of law, and then secure it in a state with the rule of law. This changes the psychology of contemporary authoritarians. They have much less to lose if they lose power, so they can rule more avariciously and engage in much less state building when in office. This mechanism behind kleptocracy has been clear to Western bankers, lawyers, accountants, and public relations specialists for over a decade. Globalization has made it easier for corrupt officials to sequester their assets abroad. The White House, still with one foot in the Kennan paradigm, has been slower to catch on. The Robert Mueller investigation includes probing how offshore financial structures allow economic elite to corrupt American institutions and politics.

On the night of February 22, 1946, a young U.S. diplomat named George Kennan, then based in Moscow, sent a famous telegram outlining what he saw as a gathering conflict with the Soviet Union. In embryonic form, that telegram prefigured a strategy Kennan would later term “containment”: a “long-term, patient but firm and vigilant” resistance to Soviet expansion. The telegram was about Soviet behavior after their threats on Poland in 1945, and especially with regards to their refusal to join the newly created World Bank and International Monetary Fund. As the Western financial system became hospitable to authoritarian elites, powerful players from authoritarian regimes have taken advantage of offshore anonymity to amass fortunes worth billions of dollars with the aid of western enablers. Today the Kremlin uses the methods and connections of the Russian kleptocracy, and the power and influence they generate, to advance its agenda abroad.

Though unanticipated, the growth of opaque financial systems has become one of the key features of globalization: enormous amounts of money are now moving around the world covertly. Kleptocratic regimes not only are able to wield power inside Western institutions and game them to their own ends, but also use their financial heft to project influence on international media and events. These processes include undermining American foreign policy: crippling development, threatening democracy, damaging Western soft power, and fuelling state collapses. The response requires a new paradigm to replace the Cold War paradigm. These forces have become a multifaceted threat to democracy that requires a coordinated and sophisticated transnational response. It is necessary to shut down the corrupt wealth services industry involved in laundering money for clientele that includes Russian, Chinese, Central Asian, and Gulf aristocrats. Ending the anonymous shell companies must become a national security priority for the US.

1 Judah, Ben. October, 2016. Kleptocracy Initiative of the Hudson Institute. The Kleptocracy Curse: Rethinking Containment https://s3.amazonaws.com/media.hudson.org/files/publications/20161020JudahTheKleptocracyCurseRethinkingContainment.pdf

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Introducing Change While Respecting the Individual

Jeremy Bentham (1748-1832), an English philosopher, is principally known for his principle of utilitarianism, which evaluates actions based on their consequences. Bentham believed, motivated by pleasure and pain, people value self-interest above social interest. He maintained that putting his moral theory into consistent practice would yield results in legal theory, by providing justifications for social, political and legal institutions. Objectivism, the prototype of libertarianism, was a philosophy developed by Ayn Rand (1905-1984), during the Cold War blending free markets, reason and individualism. In politics objectivism advocates individual rights to life, liberty and property. Bentham’s thought has a lot in common with that of Ayn Rand. Both Bentham and Rand exalt the individual over family and society; they both argue the individual precedes society, which is simply the sum total of all individuals, thus personal interest dwarfs the social interest.

Jeremy Bentham’s moral philosophy reflects his psychological view that the primary motivators in human beings are pleasure and pain. Bentham is not referring to just to the usefulness of things or actions, but to the extent to which these things or actions promote the general happiness. Specifically then, what is morally obligatory is that which produces the greatest amount of happiness for the greatest number of people, happiness being determined by reference to the presence of pleasure and the absence of pain. Bentham says that the principle of utility is something that can be ascertained and confirmed by simple observation, and that, if pleasure is good, then it is good irrespective of whose pleasure it is. Bentham suggests that individuals would generally seek the general happiness because the interests of others are inextricably bound up with their own. For Bentham, moral philosophy or ethics can be simply described as “the art of directing men’s action to the production of the greatest quantity of happiness, on the part of whose interest is in view.”

Rational self-interest plays a pivotal role in objectivism, with one’s life having the highest value and standard, and the happiness of an individual being one’s highest purpose. Knowledge is obtained from reason, which develops into a system of judging right from wrong. Ayn Rand argues that if people act egotistically and selfishly society prospers. Rand claims, “To be selfish is to be motivated by concern for one’s self-interest … Selfishness entails: (i) a hierarchy of values set by the standard of one’s self-interest, and (ii) the refusal to sacrifice a higher value to a lower one or to a none value … Because a genuinely selfish man chooses his goals by the guidance to reason – and because the interests of rational men do not clash, other men may benefit from his actions. But the benefit to other men is not his primary purpose or goal, his own benefit is his primary purpose and the conscious goal directing his actions.”1

Bentham claims that “liberty is the absence of restraint” and so, to the extent that one is not hindered by others one has liberty and is “free.” Given that pleasure and pain are fundamental to – indeed provide – the standard of value for Bentham, liberty is good (because it is ‘pleasant’) and the restriction of liberty is an evil (because it is painful). Law, which is by its very nature, is a restriction of liberty and painful to those whose freedom is restricted. He recognized that law is necessary for social order and good laws are clearly essential to good government. He saw the positive role to be played by law and government, particularly in achieving community well-being. Bentham rejected “natural rights” claiming ‘real rights’ are fundamentally legal rights, that exist in law. However, Bentham recognized that there are some services that are essential to the happiness of an individual and that cannot be left to others to fulfill as they see fit, and so these individuals must be compelled to fulfill them.

For Ayn Rand, freedom is based on individual rights, in which freedom of choice, liberty of ownership of property leads to happiness. For Rand, advocacy of free society meant the advocacy of capitalism. Also, Rand celebrated individualism in a mass age, when the control mentality and the fear of bureaucratization and structuring American life was at its highest. She adopted the good self-love of Aristotle that included behaving with dignity and not acting on impulses, and spoke of the importance of self-esteem, as a justifiable pride in one’s accomplishments. Self-esteem was deemed a necessary defense so people could not be taken advantage of and be bamboozled by false guilt into giving up the fruits of their actions. Other actors reinforced her ideas: Friedrich Hayek had a major influence on market liberalization strategies – discrediting government economic planning. Milton Friedman’s neoliberal triumvirate of privatization, deregulation – free trade, and drastic cuts to government spending laid the groundwork for Reagan economic policies of deregulation.

Bentham held that the advantages to a moral philosophy based on a principle of utility (compared to other moral principles) allows for objective and disinterested discussion and, enables decisions to be made where there seems to be conflicts of legitimate interests. Moreover, in calculating the pleasures and pains, in carrying out a course of action, there is a fundamental commitment to human equality. The principle of utility presupposes that “one man is worth just the same as another man” and so there is a guarantee that in calculating the greatest happiness “each person is to count for one and no one for more than one.” However, he realized that seeking general happiness is something that is easy for individuals to ignore, thus he proposes making the identification of interests obvious and, when necessary, bringing diverse interests together would be the responsibility of the legislator.2

Rand claimed that freedom was not based on majority rights, but on individual rights. Rand claimed, “The government was set to protect men from criminals, and the constitution was written to protect man from government.” In her system, rational self-interest produces a drive for productivity and trade. This system supports laissez-faire economics and a system of minimal government with reduced regulation and taxation. By choosing objectivism (Rand’s ideas), one gets around the need to explain social Darwinism. This became an important aspect of minimal government as conservatives closed in on entitlements that are provided to the poor. However, with ongoing economic stagnation, a sense of instability and insecurity descends on more and more communities. Workers feel betrayed by the present economic and government systems that favour the economic elite. In recent elections in the UK and US voters were looking for social and political reform.

Of course, Bentham and Rand had serious differences, altruism being the main one. Rand categorically rejects it, Bentham embraces it. Similarly, while Bentham believes people act selfishly, Rand advises that people should act selfishly in order to enhance social well-being. Altruism is an ethical doctrine that holds that individuals have a moral obligation to help, serve or benefit others, if necessary at the sacrifice of self-interest. Bentham criticized those in power for pursuing their own narrow, socially destructive goals, instead of pursuing happiness for all. His solution was to establish democratic rule by the whole society, rather than by a select class. For Bentham, the legitimate functions of government are social reform and the establishment of the conditions most conductive to promoting the greatest happiness, for the greatest number of people.2

Societies that are economically unequal have higher levels of poverty. It is not about the amount of wealth, but about its distribution. Thirty years of deregulation and lower taxes have created a system in with increasing economic inequality between the wealthy and the rest of society. In 1997 Gerald Celente in his prediction in trends 2000 saw the increasing income gap being the cause of street unrest in the first decades of the new millennium, and the solution being the return back to democracy from a plutocracy (government by the wealthy). Reforms to ensue jobs that pay a living wage continue to elude legislators. John Stuart Mill believed nobody could be a good economist if he or she was just an economist. Since the collapse of theology, no field of study has aimed to understand the human condition as a whole. Economics is viewed as a mathematic issue – unfortunately these ‘mathematical problems’ affect human beings.3 Changes need to include more than just tweaking the system around the edges.

In the years following the defeat of Napoleon in 1815, when calls for legal, social and political reform were becoming commonplace, the ideas of Bentham became part of a broad reform movement. It is now obvious that the existing economic system does not provide opportunities for most people. The wealthy are the primary beneficiaries of the soaring corporate earnings and the booming market. On the other hand, when the stock market goes up, the the middle-class sees paltry benefits. Social reform is desperately needed. Rand’s version of individualism has failed most individuals. It is time to consider utilitarianism (Bentham’s ideas) which places the locus of right and wrong solely on the outcomes (consequences) of choosing one action/policy over other action/policies. This is about introducing equality, justice and fairness, so that it is not just a perception (like the recent tax cuts), but a reality that the system is no longer gamed for those at the top.

1 Rand, Ayn. (1964) The Virtue of Selfishness: A New Concept of Egoism. New York: Signet Books p 57-58.

2 Jeremy Bentham https://www.iep.utm.edu/bentham/

3 Skidelsky, Robert. ((04 Jan 2017) Is Economics Education Failing. Weforum.org

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Understanding Socioeconomic Contradictions

In the 19th century Georg Wilhelm Hegel (1770-1831) developed a theory to explain historical development as a dynamic process. Hegel introduced a system to study history – dialectical thinking – a progression in which each successive movement emerges as a solution to the contradictions inherent in the preceding movement with the development of freedom and the consciousness of freedom. Hegel believed in a freedom of action that included struggle through rational deliberation – when we cease to strive to realize a potential then we live by habit, by rote. Negativity is an ever present feature of reality rather than the exception, opening up the possibilities of change. The tension created by contradictions influences criteria in relation to how measurements are made, which in turn, becomes part of any transformation.

There exists a dynamic balance between the individual and society, Sigmund Freud (1856-1939) claims, created by deep-rooted instinctual impulses that cannot be rationally controlled. Freud observed, “A good part of the struggles of mankind centre around the task of finding an expedient accommodation – one, that is, that will bring happiness between the claims of the individual and the cultural claim of the group.” Soon after Max Horkheimer took over as director of the Frankfurt School of Critical Theory in 1931, a great deal of effort was expended to use psychoanalytical theory to understand the psyche of the working class. In particular, why would those who would benefit the most from a revolution of social changes seemed to resist it. Herbert Marcuse (1898-1979), one of the most prominent members of the Frankfurt School, initially turned to Hegel’s ideas in his writing in order to explain their philosophical strength through the dynamics of socioeconomic contradictions.

Marcuse uses dialectical thinking to expose the contradictions by which an advanced industrial society is constituted. The problem of concealment occurs here because not only does society produce contraindications in the forms of domination that come with them, it also produces the social and psychological mechanisms that conceal these contradictions. An example of social contradictions is the co-existence of the growth of national wealth and poverty at the same time. Today, those who own, control, and influence the means of production (the minority) grow richer while the workers (the majority) are trapped by economic stagnation. The idea that the unbridled attempt by the rich to become richer will somehow allow their wealth to trickle down so that all will benefit has proven false as the gap between the rich and the poor continues to grow.

Trickle-down ideology is very effective at making itself invisible. The neoliberal belief that unbridled competition is good for everyone conceals the goal of purging society of competition by allowing large corporations to buy out their competition. There is an active process to conceal the ongoing crisis in trickle-down economics by transforming the state rescue orchestrated by the Obama administration from a crisis in private finance to a crisis of public finance and foreign debt, which they claim it is now necessary to solve through austerity policies. The introduction of more austerity continues to accelerate the roll back of post-war safety nets in order to help balance budgets. These austerity policies used to discipline the working class, are also designed to put money in the pockets of the economic elite in the near term, with promises of balancing the budget in the long-term.

Freud claims that it was the essence of the pleasure principle that decided the purpose of life. However, the external world does not conform to the dictates of the pleasure principle, and it is even hostile towards it. Hence the pleasure principle turns inward, is repressed and replaced by the reality principle. He identified two types of repression: basic repression for the perpetuation of the human race in civilization, and surplus repression for the restrictions necessitated by social domination. Marcuse’s creative modification of Freud’s theory in 1955 was to introduce the performance principle – to account for an acquisitive and antagonistic society. Over time domination has been increasingly rationalized. The worker must work to live, but the conditions under which he/she works is determined by the neoliberal system to produce commodities and maximize profits for capitalists. The worker must be manipulated in such a way that these restrictions seem to function as rational, external laws which are then internalized by the individual.1

The market was replaced with competition as the defining character of human relations, including redefining individuals as consumers. Freud described the reality principle, the ability to evaluate the external world and differentiate between it and the internal world. The reality principle strives to satisfy the id’s desires in realistic and socially appropriate ways. In neoliberalism the reality principle is replaced by the performance principle. The performance principle presupposes particular forms of rationality for domination that stratifies society according to the competitive economic performance of its members. This performance principle teaches us to conceive of social problems as personal problems – emphasizing individual responsibility while failing to address systemic state violence in all its manifestations – underfunding healthcare, education and social safety nets.

Domination is exercised by a particular group in order to sustain and enhance themselves in a privileged position. Marcuse observes that the system doesn’t require force – just introduce one-dimensional thinking – which leads to acceptance of oppression and surplus repression. The system must make the citizen think they are freer than they actually are. This means the economic elite must control the political discourse, not the workers. The ideology in place ensures the oppressed identify with the oppressor. The desires of the individual must conform to the desires of the economic elite. The system must provide the citizen with enough goods and activities to keep them distracted. The worker, through his or her labour does not become a free and rational subject, but rather, an object to be used by the economic system, a system that is a human creation, but over which the worker has no control.

Neoliberal capitalism as market rationality describes individuals as consumers, not citizens. This self-interest and competitiveness among fellow workers leads to alienation. Social ties with colleagues weaken, as do emotional commitment to the enterprise and the organization. The consequence of this process is enough to make us more selfish, more miserable and less concerned about the welfare of our fellow human beings and the welfare of the state. This leads to tolerance of structural violence and supports pervasive inequality, as there appears to be no alternative to the new reality principle – the performance principle. In other words, the enforcement of the performance principle teaches us to conceive of social problems as personal problems, to be addressed by either focusing on market-based solutions to address system ills, or emphasizing individual responsibility, which in turn, distances us from the structural violence in the system.

In the capitalist system the worker is used as an object for reaping full benefits of production. In such a situation the worker is not able to actualize his/her potential as a free and rational being, but instead reduced to a life of toil for the sake of survival. Marcuse described two levels of negation in capitalist society. The first level is the negation of human freedom by an oppressive, repressive socioeconomic system. In this system the potential for – liberation, self-development, self-determination – the good life is prevented by various forms of domination. The second level of negation refers to the development of critical thinking, a consciousness that seeks to negate the oppressive social structure. Dialectical thinking brings this undermining of the worker’s essence to our awareness – the situation in which the worker does not have the freedom to reach his/her full potential. Marcuse’s concept of essence is not transcendental but historical – no person would want to spend his/her life engaged in alienating work.1

In order to understand changes to socioeconomic systems of oppression and domination we need to use appropriate measurements. Jerry Muller identified how the obsession with quantifying human performance threatens our society. The seemingly irresistible pressure to quantify performance distorts and distracts whether by encouraging ‘gaming the stats’ or ‘teaching to the test.’ That’s because what can and what does get measured is not always worth measuring, may not be what we really want to know, and may draw effort away from things we care about.2 The purpose of dialectical thinking is to reveal social contradictions, and to demand the overcoming of those contradictions through social change. The goal of such a process is not any specific measure of freedom, rather it is the elimination of alienation. In upcoming elections you need to determine which candidate supports policies that create opportunities and freedom for individuals to grow and reach their full potential.

1 Herbert Marcuse (18 Dec 2013) https://plato.stanford.edu/entries/marcuse/

2 An Introduction to: The Tyranny of Metrics by Jerry Z. Muller. https://press.princeton.edu/titles/11218.html

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Refuse to Be Ruled by the Past

Theories of society develop out of social conditions and are shaped by cultural influences. They have been expressed in varying forms of action, by which in turn, they have been modified. William Godwin wrote in 1793 that governments have no more than two legitimate purposes: the suppression of injustice against the individuals within the community, and the common defense against external invasion. Freedom is not something to be decreed and protected by laws and states. It is something you shape for yourself and share with your fellow men. We should refuse to be ruled by the dead hand of the past. We cannot use experience in the present to plan for a future where conditions may be quite different. If we demand freedom of choice we must expect a similar demand from our successors. We can only seek to remove the injustices we know.1

Bakunin believed that political freedom without economic equality is a pretense – a fraud, a lie. He believed that real freedom was possible only when economic and social equality existed. Freedom is a product of connection, not isolation. Bakunin insisted it is society which creates individual freedom through social interaction. Equality means social equality such as quality of condition, or equal opportunity. Men deprived of freedom to decide their own future, means they lose the sense of purpose in their life. Some – the economic elite – are cushioned by wealth and privilege from feeling the direct impact of this process, though they too are affected in insidious ways, but the poor and marginalized experience the imposition of the minimal state in a very direct way.2 The desire for liberation from the dead hand of tradition, can be traced as far back as the Middle Ages.

The Peasants’ Revolt was a major uprising across England in 1381 triggered by the Poll Tax under Richard II which was considered unfair and angered the people as the poor had to pay the same tax as the wealthy. For over 20 years prior to the uprising John Ball was preacher wandering the country-side denouncing the rich and their exploitation of the poor calling for freedom and equality: “For what reason have they, whom we call lords, got the best of us? How do they deserve it? Why do they keep us in bondage?… Except perhaps that they make us work and produce for them to spend!” The King’s army set about systematically identifying the ringleaders from each village that had participated in the uprising and executed them, including John Ball. Past promises made by the King were repudiated and the common people of England learnt how unwise it was to trust their rulers.3

The 17th century English Revolution saw an interlude of republican rule during the 1640s. During the Commonwealth a cluster of radical groups emerged that included the Diggers. Gerrard Winstanley, the Diggers’ leader, decided that it was his mission to speak up for the disinherited, for the common people who had been very little helped by Cromwell’s victory. In 1649 Winstanley published a pamphlet called The New Law of Righteousness which denounced authority of his day, “Everyone that gets an authority into his hands tyrannizes over the others.” Living in an agrarian age he saw the main problem as ownership of land. In the spring of 1649 he led a company of his men to squat on unused (common) land in the south of England and to cultivate it for their own sustenance. The Diggers were harassed by legal actions and mob violence, and by the end of March 1650 their colony was dispersed.4

In 1762, Rousseau published the Social Contract in which he defined the ideal social contract, describing how man could be free and live together in a community. By ‘equality’ Rousseau did not mean that everyone should be exactly the same, but differences in wealth should not imbalance the state, as massive material inequality can put liberty up for sale. The poor would be willing to sell their freedom, and the rich would be capable of buying it. Both the very rich and the very poor would value money more than liberty. Thus, Rousseau asserts, that some level of material equality is necessary to ensure that liberty comes before profit. The celebration of Rousseau in the French Revolution came from the fact his work argued society was formed from the general will of its people. It provided a justification for the abolishment of a government, if it had breached the social contract and ceased to reflect the people’s will. Rousseau’s critics regarded him as mainly responsible for the deification of the State which emerged in the French Revolution, and in all subsequent revolutions.

Claude Henri de Saint-Simon (1760-1825), a liberal French aristocrat, took part in the French Revolution under the Directory. Saint-Simon believed that in a previous stage of historical development, kings, nobles and priests served a necessary role. It was only now, under new conditions, that they had become socially useless. The aristocracy was now an anachronism and served as an obstacle to the new social order which Saint-Simon saw emerging around him. While a defender of laisse-faire capitalism he became more and more concerned of the dangers of uncontrolled individualism. His fascination with technology and innovation lead him to support technocrats, saying, “We must replace the government of men by the administration of things”.5 By 1830, five years after his death, his followers split into several factions. Those heading in a socialist direction built upon his rejection of individualist selfishness and rationalism and his concern for social solidarity and interdependent responsibility. They popularized Saint-Simon’s ideas and tried to make them more attractive to the working classes.

A key contribution of Saint-Simon and the Saint-Simonians was to link socialism solidly with the notion of progress through industrialization. Marx observed that all social systems have a small minority of powerful elites. For Marx all history is class struggle; exploitation is hidden by the political institutions that exist, and the state is a reflection of the most powerful economic classes. Because of Marx’s view of the dominance of the economic factor in the exploitation of one man by another, his followers were inclined to ignore the lethal characteristics of other forms of power. In the early 20th century Lenin adapted Marx’s ideas to support the Russian revolution run by a minority. Lenin installed a top-down control system (called communism) in the USSR. When Stalin finally pushed Trotsky aside and took over power in 1928, he used this system to suppress the populace and industrialize the country.

Hegel claims individuals are in various states of alienation – the tension created between the way things are and the way they ought to be. Once the potentialities of a particular society had been realized in the creation of a certain mode of life, its historical role was over; its members became aware of its inadequacies, and the laws and institutions they had previously accepted unquestioningly in the past were now experienced as fetters, inhibiting further development and no longer reflecting their deepest aspirations. Thus, each phase of the historical process could be said to contain the seeds of its own destruction and to “negate” itself; the consequence was the emergence of a fresh society, representing another stage in a progression whose final outcome was the formation of a rationally ordered community with which each citizen could consciously identify himself and in which there would therefore no longer exist any sense of alienation or constraint.

With feudalism in decline unfair taxes triggered the Peasants Revolt in the 14th century England – rulers could no longer afford to ignore the feelings of the common people. The difficulty with the version of social contract posited by Rousseau was that the contract ultimately bound the individual in one way or another to the state, claimed Proudhon, obligating him in various instances to lay aside his own particular will or desires to abide by the general rules of the sovereign power that regulates everyone. The followers of Marx failed to understand the importance of government format in delivering economic models. The increasing economic inequality over the past 30 years indicates unquestionably that the ‘trickle-down’ system has become socially useless. Proudhon claims that the pursuit of equality of conditions is the true principle of right and of government.

We should not expect the future to be determined by the past. Like Saint-Simon before us, we observe that inadequacies of the existing social conditions are inhibiting further development for many. Let us analyze needs through the lens of the poor: food, shelter and clothing. The first requirement is a minimal world-wide tax to counter the efforts of corporations in manipulating the system in order to avoid paying taxes. This will secure funds to keep state debt under control and provide for safety nets to ensure equality of conditions for individuals to participate in society. The second change is regulation of banks to prevent the manipulation of real estate, specifically, money laundering (30% hidden in real estate) and the off shore “investors” driving up prices. The third change is to introduce the necessary processes and regulation to reduce food wastage from farm to fork. These actions should address many of the injustices we know.

references:                                                                                                                                            The Anarchist Reader (1977), edited by George Woodcock, Fontana/Collin                                              1 page 15                                                                                                                                                                     3 page 29                                                                                                                                                        4 page 30                                                                                                                                                       5 page 24                                                     and

2 Part 1 of 2: The Rise of the New Anarchists (29 Sept 2014) http://questioningandskepticism.com/part-of-2-the-rise-of-the-new-anarchists/

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Beyond Plutocracy: the Return of Democracy

The Power Elite is a 1956 book by sociologist C. Wright Mills, in which Mills calls attention to the interwoven interests of the military, corporate and political elements of society and suggests that the ordinary citizen is a relatively powerless subject of manipulation by those entities. When a small group of people rules a society, the political system is considered an oligarchy; when only money and wealth determine how a society is controlled, the political system is a plutocracy. From the standpoint of a democratic society, both oligarchy and plutocracy are inherently unjust and corrupt. The job of the politician in a plutocracy is always to find the line that provides the lowest level of pay, security, housing, consumer protection, health care and political access for society so that the economic elite can extract and hoard the greatest amount of wealth, power, and immunity from justice for themselves. Today, should America be considered a plutocracy?

The first decades of the 21st century herald a new ‘Gilded Age’ with an ideology system of ideas invented by the ruling class to promote its own interests yet presented as incorporating the moral consensus of society as a whole, to keep everyone else in check. Gramsci described cultural hegemony as a form of thought control by the dominant economic and ruling elite that permeated throughout society of an entire system of values, attitudes, beliefs and morality. The trickle-down economics narrative is a grand illusion for those in power to promote to justify dominance over those who are less privileged. Of course, it is based on greed being a virtue, relying on a system to harness the selfishness of people and direct it to public good, thus freeing itself from the need to depend unrealistically upon the uncertain moral virtues of its participants. Plutocracy is government by the wealthy; by definition it is not democracy.

In the US 80% of the national wealth generated goes to the top 2%; and 65% to the upper 1%. The increasing inequality destroys the middle class and exploits the poor. In the US one-quarter of the jobs pay below the poverty line for a family of four, while one-third of the population struggle to make ends meet every month. Fast food chains in the US pay wages so low that workers’ families qualify for public assistance – the result of not earning a living wage. In this manner the plutocrats rely on public funds to allow them to profit so much. Of the fast food chains McDonald’s is at the top of this list, with Walmart the largest outside food industry involved.1 Many now believe it is not enough to define poverty as not having enough material resources to merely survive, but rather having enough resources to participate in society in a meaningful way. There has been a crisis in low paying jobs for the past forty years.

Within the plutocracy the wealthy win acceptance from the entire political class that its largely speculative activities, such as financialization – the growth of the scale and profitability of the financial sector at the expense of the rest of the economy – are normal. Through this process the financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. In addition, the wealthy control enough of the media to ensure they are credited for being the economy’s principle engine of growth. In return, they are given privileged treatment as the well-being of the national economy relies on them. Plutocrats make investments to ensure ongoing upward flow of cash. Over the decades they have spent millions of dollars opposing unions and supporting deregulation. With the subsequent increased inequality, many find themselves living in a precarious and unequal democracy of a political economy of a new gilded age.

Nader observes: concentrated power in the hands of a few should matter to you. It matters to you if you were denied full-time gainful employment or paid poverty wages, and there are no unions to defend you. It matters to you if you are denied affordable health care or are gouged by the drug industry and your medication is outrageously expensive. It matters to you if it takes a long time for you to get to and from work due to lack of good public transit or packed highways. It matters to you and your children to live in impoverished areas and have to breath dirty air or drink unsafe water and live in housing that is neglected by the landlord. It matters to you if your children are receiving substandard education in understaffed schools where they are being taught to obey rather than to question, think and imagine, especially in regards to the nature of power.2

Illusion is the ability to manipulate how other people perceive reality. What makes our society unstable is when the illusions around income inequality start to disappear. People can or are more willing to overlook income inequality as long as their quality of life remains unchanged. As long as the greediness within the plutocracy does not affect their day-to-day life – your retirement is funded, you can afford to take vacations – you are willing to look away while the economic elite are doing their thing. However, this ultimately becomes the problem – enough is not really enough for certain rich individuals. Unless there are checks and balances, the economic elite keep working the system until it breaks down. More and more find themselves in an era of insecurity as the safe routines of their lives have become undone, they now realize that the market system failed them, and this security was an illusion.

There is no difference between the fake news, misinformation, disinformation of today – such lies have been churned out for years, but today it is designed to support the plutocracy. There is an orchestrated counter-revolution based on polarization. Trump’s victim politics is a complete fraud, an old trick used by economic elite to keep working-class Americans fighting each other rather than focusing on processes to counter the plutocrats who are ripping them off. Trump and his allies stoke racial tensions even as they seek to cut taxes on the rich by shedding affordable health care for everyone else, dismantle protection for workers and consumers, and tear down environmental protections that stop wealthy corporations from poisoning communities. Victim politics is cultivated for a reason – to keep workers distracted from the real causes of economic inequality.

In a plutocracy, commercialization dominates far beyond the realm of economics and business, everything is ‘for sale’, and money is power. But in an authentic democracy, there must be commercial-free zones where the power of human rights, citizenship, community, equality and justice, are free from the corrupting influence of money. Elections and governments should be commercial-free zones, and the environment and water resources should never fall under the control of corporations or private owners. Children should not be programmed by an economy of indebtedness where their vulnerable consciousness becomes the target of non-stop marketing and advertising. It is necessary to challenge a hierarchical system in which elites are superior, have no empathy for the middle class, in fact, express distain for those who they consider inferior. For example, it is the middle class who were caught off guard with the 2008 economic crisis, and in fact, the plutocrats ensure they are blamed for the economic problems.

Social classes are hierarchical groupings of individuals that are usually based on wealth, educational attainment, occupation, income, or membership in a subculture or social network. The class system in America puts those with the most wealth, power, and prestige at the top of the hierarchy and those with the least at the bottom. During the 21st century the middle class continues to be stripped of jobs, income, and security. Max Weber (1864-1920) claims people are motivated by custom or tradition, by emotions, by religious or ethical values, and by rational goal-oriented behavior. All human behavior, Weber says is motivated by various combinations of these four basic factors. However, just because an action is rational in terms of fulfillment of a short-term goal, does not mean it is rational in terms of the whole society. It often happens, he writes, that an excessive focus on short-term goals undermines the very goals of society.

The power elite that C. Wright Mills identified over 60 years ago has coalesced into the plutocracy of today – where discipline and conformity in the office or factory are counterbalanced by a potpourri of gratifying and pleasurable consumer choices. What Mills observed can teach us a great deal about the need for change in society today. It is necessary to take steps to reverse the power now in the hands of the plutocrats: counter vote suppression gimmicks, reverse 2010 Supreme Court decision in favor of Citizens United to control the amount of money spent on elections, and take back control of the public sphere. More resources are required in public spaces – like hiring enough teachers to staff classrooms, paying them living wages, and improving a crumbling infrastructure. The return of democracy will occur with the establishment of commercial-free zones in the community that are free from the corrupting influence of money.

1 Atossa Araxia Abrahamian (15 Oct 2013) Majority of U.S. fast-food workers need public assistance: study https://www.reuters.com/article/us-usa-fastfood-wages/majority-of-u-s-fast-food-workers-need-public-assistance-study

2 Nader, Ralph. (30 September 2016) Plutocracy of Maximums, Democracy of Minimums. www.truth-out.org/opinion/item/37819-plutocracy-of-maximums-democracy-of-minimums

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Darwin’s Invisible Hand Narrative: A New Paradigm

Economists try to model human motivation in an attempt to understand how markets work. Traditional economic models assume that the satisfaction people take from consumption depends only on the absolute amount of it. Yet compelling evidence suggests that relative consumption also matters. In contrast to the Darwinian narrative, which emphasizes the link between individual success and relative performance, Adam Smith’s ‘invisible hand’ narrative assumes that individual success depends primarily on absolute income, not relative income. Available evidence leads one to question that assumption. The satisfaction an individual derives from a given consumption level depends on its relative magnitude in society (i.e. relative to average consumption) rather than its absolute level. It appears changes from a reference point matters for decisions, not absolute status of wealth. We are emotional beings strongly attached to and affected by our relative position in society who care more about our relative well-being than our absolute well-being.

Isaac Newton (1642-1727) discovered the natural laws of motion which provided the final piece to the puzzle to explain why the Earth revolves around the sun. Newton was aware of specific problems in the solar system that his laws did not explain which included the fact that Saturn was moving away from the sun while Jupiter was moving closer. To account for movements not able to be explained by his formula, Newton proposed the hand of God to guide the planets in various circumstances – providing long-term stability to the universe. Adam Smith’s claim about the ‘invisible hand’ in Wealth, first published in 1776, pertains to a scheme consisting of all the voluntary actions of people who engage in buying, hiring, producing, consuming, and selling, typically mediating these actions by exchanges involving money. Smith’s point is that, if certain conditions are met, these actions will collectively produce a result that a benevolent God would wish for us.

In the 19th century Herbert Spencer popularized the word evolution. Spencer preferred the Lamarckian evolution of adapted characteristics in which he believed that societies like living organisms evolve from simple states into highly complex forms – equating evolution with progress. He saw evolutionary progress as an economic problem, worked out at the level of the individual. This supported the doctrine of social Darwinism promoted to justify laissez-faire economics, thought best to promote unfettered competition between individuals, and the gradual improvement of society through the survival of the fittest. In the 20th century, economics needed to catch up with the advances in science, turned to biology. To achieve this the market is treated as natural which allows natural science metaphors to be integrated into the trickle-down narrative. The economic elite sought strategic interactions of the kind found in social systems which actually constitute Lamarckian evolution. The market was replaced with competition as the defining character of human relations including redefining individuals as consumers.

Over the past 30 years there have been attempts to promote ‘universal Darwinism’, the concept that any complex system can be understood in terms of the same principles that are the core of Darwin’s Theory of Natural Selection, including socio-economic systems. The predictive power of the theory rests on its specification of systemic selective forces, based on the algorithm of variation, selection and retention. Most commonalities between innovation in nature and technology need little explanation. Trial and error in populations become self-evident necessities, once we accept that humans – like nature – are very poor at anticipating successful innovations. Similarly, extinction results inevitably from limited space and resources in both the natural and technological world. Still, detractors suggest replacing the ‘top-down’ approach of universal Darwinism, with ‘bottom-up’ causal theories that explain how the interplay of descent, experience and learning shapes the competitive performance of firms in the evolution of industries.

Stephen Jay Gould pointed out, the parallel between Darwin’s natural selection and Smith’s invisible hand is remarkable. “The theory of natural selection is uncannily similar to the chief doctrine of laissez-faire economics”. In both instances, there is no regulation from on high to govern the individual transactions; neither natural selection nor the invisible hand actually exists as a tangible entity, but each works to benefit the whole system. Just as Smith saw competition leading inevitably to specialization and diversification that enrich the economy of man, so Darwin saw competition leading inevitably to specialization and diversification that enrich the economy of nature. Smith’s fundamental economic insight was that allowing people to compete in the market place allows the inefficient to be weeded out and the best outcomes to arise for all. There is an obvious parallel between this concept and that of ‘natural selection.’ Individuals are struggling for reproductive success, the natural analogue of ‘profit’. In both the appearance of order is actually the result of blind competition.1

As Darwin saw clearly, life is graded on the curve. For a genetic mutation to be favored, it is not sufficient that it enables the individual to generate large numbers of offspring. It must enable him to produce more offspring than rivals who don’t carry the mutation. Robert Frank notes: Life is graded on the curve. It’s not how big you are, how strong you are, how smart you are. It’s how good you are at the things that count relative to the people around you. As you probably know, there is a curve used in many academic settings. This means that one is not graded on how good he or she is but on how good others are in relation to them. Darwinian narrative counters that workers favor safety regulation not because of insufficient competition, but because of the consequences of excessive competition among themselves.

Robert Frank argues that Darwin’s understanding of competition describes economic reality far more accurately than Smith’s. And the consequences of this fact are profound. Indeed, the failure to recognize that we live in Darwin’s world rather than Smith’s is putting us all at risk by preventing us from seeing that competition alone will not solve our problems. Darwin’s insight that individual and group interests often diverge sharply – suggests Smith’s idea was almost an exception to the general rule of competition. The themes of inequality and competition are driving today’s public debate on how much government we need. The reason Frank gives is “Darwin’s wedge” – a term he coins to emphasize a divergence between individual and group interests which in turn causes wasteful competition and collective loss.2

Sheeham and Wahrman describe, in Invisible Hands: Self-Organization and the Eighteenth Century, the emergence of the language of self-organization that grappled with the problems of accident and causality, the mysteries of aggregation, the nature of organic life, and the complexity of modern existence. They observe that Providence initially gave “a shape and language for thinking about and describing nature’s dynamic processes. Providence was also, in turn, a shelter under which the idea of self-organization could grow.” There are two main self-organizational narratives today: Smith’s invisible hand; and Darwin’s invisible hand. These two systems of self-organization are centred on the production of knowledge – basically a disparate attempt at justifying a new faith in the world. These narratives stave off breakdown in order to allow the world to make sense – rendering the crisis (economic, metaphysical, moral, etc.) a narrative point, a turning point in the narrative rather than a breakdown in the narrative as such. If self-organizational systems perpetuate the providential desire for meaning that produces a certain kind of hope, then which of the two is the most meaningful self-organization narrative?3

Darwin, renowned for the theory of evolution, was a naturalist, not an economist, and his view of the competitive struggle was different from Smith’s in subtle but profound ways. Growing evidence suggests that Darwin’s view tracks economic reality much more closely. The central theme of Darwin’s narrative was that competition favors traits and behavior according to how they affect the success of individuals, not species or other groups. The real reason for regulations is to protect ourselves from excessive competition with one another. These regulations to deal with collective action problems are squarely consistent with the Darwinian view that life is graded on the curve. Market failures in Adam Smith’s framework occur only when competition is limited. The Darwinian framework, in contrast, holds that market failures can occur even when everyone has taken full advantage of all available opportunities for potential gain. Darwin’s view of the competitive process will prevail over Smith’s in the end because it offers a far more rigorous explanation of the behaviour patterns observed.2

In 1974 Richard Easterlin observed that self-reported happiness of individuals (i.e. subjective well-being) varies directly with income at a given point in time, but average well-being tends to be highly stable over time despite tremendous income growth. Easterlin argued that these patterns are consistent with the claim that an individual’s well-being depends mostly on relative income rather than absolute income. Consumption creates negative externalities. For example, individuals consume and therefore work to increase their status, then they will tend to work too much relative to their socially optimal level by maintaining two or three jobs. This argues for minimal wage regulation to support a living wage. Social status is important in determining how much control individuals have on their own lives and participation in society. An individual with lower income with respect to his group peers can suffer from psychosocial stress which attacks the immunological system, and individual health might worsen. Thus Newton’s invisible hand narrative is a fundamental paradigm shift from Smith’s ‘invisible hand’ for modeling human motivation.

1Ted Davis on Reading the Book of Nature (06 Oct 2016) Darwin, Free Market Economics, and Evolution by Natural Selection. https://biologos.org/blogs/ted-davis-reading-the-book-of-nature/darwin-free-market-economics-and-evolution-by-natural-selection

2Frank, Robert. Charles Darwin, Economist. https://www.the-american-interest.com/2011/09/28/charles-darwin-economist/

3 Dubilet, Alex. (26 May 2016) Book Review of: Invisible Hands: Self-Organization and the Eighteenth Century. https://tif.ssrc.org/2016/05/26/invisible-hands/

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