home  |  book  |  blogs  |   RSS  |  contact  |
  An American Manifesto
Tuesday November 25, 2014 
by Christopher Chantrill Follow chrischantrill on Twitter

TOP NAV

Home

Blogs

Opeds

Articles

Bio

Contact

SISTERS

1930s analysis

UK spending

US bailout

US gov debt

US budget

US revenue

US spending

sisters, sisters

BOOK

Manifesto

Sample

Faith

Education

Mutual aid

Law

Books

CHAPPIES

All

Beck/Graves

Hayek

Mises

Northrop

Novak

Paglia

Stark

Turner

Voegelin

Wilber

JV CHAPPIES

Beito

Boyd

Green

CHAPTERS

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10

Chapter 11

Chapter 12

Chapter 13

Chapter 14

Chapter 15

Energy Calculator

 BLOG

Dr. Ha-Joon Chang, Renegade Economist? Oh Please!

ONE of the talking heads on Ross Ashcroft's Four Horsemen documentary is Dr. Ha-Joon Chang, an economist who's a Reader at the University of Cambridge in England.

In this video under the "Renegade Economist" brand Dr. Chang rehearses lefty talking points on "neoliberalism."

I didn't really know what neoliberalism was when I watched the video; I just knew that it was a term that lefties swung around as a kind of pejorative. It turns out that it was developed by spanish-speaking activists opposed to Gen. Pinochet's regime in Chile. See Wikipedia.

But before you can trash neoliberalism, you have to define "liberalism." For Dr. Chang, liberalism is a 19th century social economic theory that had a rather narrow view that everything should be run on market principles. They didn't quite realize you needed bankruptcy and limited liability laws. (Actually Marx was prescient on this, says Dr. Chang, arguing in the 1860s that limited liability was the future of capitalism). And, of course, these 19th century liberals thought that democracy was a rather bad idea, since the people would vote for an income tax and destroy incentives for wealth creation. This liberalism, of course, was completely discredited in the first half of the 20th century, through two world wars, the rise of communism, the Great Depression, and the rise of social democracy in western Europe.

What about neoliberalism? It's a remake of the old 19th century liberalism, according to Dr. Chang, but it has been modified at the margins. Now it doesn't oppose democracy directly, and endorses limited liability. It wants to maximize the domain of the market -- where one dollar, one vote rule dominates. But it still wants to diminish the domain of the state and democratic policies. It still believes that the most important freedom is freedom of property, and profit-seeking should be the only motive, and that "poor people should be punished." This ideology has been promoted very aggressively by "bad people" (Chang kinda swallows the "bad" on the video) "with a lot of money and power," so the whole world has come to accept this as the truth. Since the financial crisis of 2008 there has been some rethinking, but frankly there is too much power, money and intellectual prestige at stake for this to go away quickly.

Of course, this is a left-wing "narrative" that amounts to an apology for power, as the postmodernists teach us. Only the postmodernists generally spend their energies unmasking evil bourgeois apologies for power, rather than their own noble educated ruling class apologies.

I think the first thing to understand is that conservatives and libertarians think we are trying to understand the world, not change it. That makes us the opposite of Karl Marx who said in his Theses on Feuerbach: the point is not to understand the world, but to change it." What everyone from Marx to Mill was thinking in the mid 19th century was: what on earth has just happened, and what will happen next?

My take on the 19th century liberals is that they were trying to understand what had happened since the start of the industrial revolution. They were thinking: how should be understand this new world, and how can we preserve the beneficial changes? In fact, everybody thought, from Malthus to Ricardo to Marx, that it couldn't last. That's what Marx's "immiseration" thesis is about. He rightly saw that the ruthless efficiency of capitalism would extract the maximum out of the workers as the capitalist firms ruthlessly reduced prices.

But Marx, and all the static thinkers before and since, misses the whole point of capitalism. It is not about accumulation of wealth. It is about sudden, and repeated innovation, what George Gilder calls "surprise." The textile revolution was a complete surprise; nobody saw it coming. And it created fabulous wealth, not to mention cheap clothes for the masses. When that was petering out along came another surprise: steam railways and ocean steamships. Now for the first time ordinary people could travel -- travel the world -- and bulk goods like grain could be profitably transported across the world. It was a complete surprise. Tons of money were made, and famine was eliminated in Europe. Just as the railway revolution was at its height, along came the illuminating oil revolution. A clerk working in a commission merchant's store noticed the barrels of oil in the store, and decided to get into the new mineral oil business. Oil prices came down by 80 percent and John D. Rockefeller became a billionaire and invented modern philanthropy. Then came the electrical revolution, then the auto revolution, then the electronics revolution. Then the information revolution. The point about all these revolutions was that they were complete surprises; nobody saw them coming. The upshot is that per-capita income in real dollars has increases from $1 per day to $100 per day in 200 years. There has been nothing like it in human history. Ever.  The whole thing has been a complete surprise.

Now the question is: how does this system, or this organism, or this emergent phenomenon work? And what should be its relation to government, to society, to religion? In the 1970s, when "neoliberalism" reared its ugly head, the western world was going through a patch of "stagflation." Establishment minds decided that the world was becoming ungovernable, and that we should get used to the idea that the future would not see much growth. In fact we had to adjust ourselves to "The Limits of Growth." Nothing could be done, as the song says.

Well, not to worry. Along came a bunch of renegades, led by Bob Bartley at The Wall Street Journal. They proposed a program of hard money, lowered marginal tax rates, and reduced administrative regulation. This program was inspired by the Austrian economics school led by Ludwig von Mises (an Austrian Jew) and F.A. Hayek, and it was backstopped by "public choice" theory that argued that all regulation of business ended up in "regulatory capture" of the regulators by the regulated. Implemented by Reagan in the US and Thatcher in the UK, the result was a surprise: sky-high energy and commodity prices crashed, and a 20 year boom followed, interrupted only when people got overexcited by the internet boom in the 1990s.

Were the 19th century liberals a bit slow on relaxing bankruptcy laws? Maybe? But once the economy got moving, we could afford leniency on bankrupts, because there was always more where that came from. But go back to Middlemarch and the financial troubles of Dr. Lydgate. Should he have been able to escape his creditors, the local High Street merchants, after his ludicrous profligacy inspired by his empty-headed social-climbing wife? And what about limited liability? Well, the story on that goes back to the South Sea Bubble of 1720. After that crash, people thought that limited liability was a dangerous invitation to fraud. Limited liability got revived in the mid 19th century when it just became obvious that you just couldn't assemble the capital needed when each investor was liable for the debts of the bankrupt enterprise to the limit of his entire fortune. Limited liability protects the small investor, who doesn't have to keep an eye on the CEOs of the companies in his stock portfolio. His liability is merely that he can lose the entire value of his stock equity. My daughter's Wall Street father-in-law thinks that today's investment banks should return to partnerships, where the owners are the bankers and their entire personal wealth is on the line when the market crashes. Maybe there should be an exception on limited liability for bankers.

The argument of neoliberalism is an argument between elites. Should big corporations be regulated by the market and simple rules to penalize fraud, and incentives making it costly to pollute the environment? Or should they be regulated in detail by the assignees of the educated ruling class? It should be clearly understood that establishment economists like Dr. Ha-Joon Chang are not disinterested bystanders in this question. They are the chaps that get to do the regulating, and apply what Deirdre McCloskey calls the "sweet use of the monopoly of violence in government" to the corporate chieftains. But then what? Obviously the corporate CEOs do not just sit there when the Changs and the Grubers come calling. They learn how to manipulate the regulators, and execute a program of "regulatory capture." The result is what we racist-sexist-homophobes call "crony capitalism."

I suppose if we are honest, we right-wing nut-cases should admit that "crony capitalism" is a pejorative.

A couple of points: I don't think that 19th century liberals were really against democracy. Here's Wikipedia on John Bright, who along with Richard Cobden symbolizes 19th century "Manchester" liberalism. He "headed the reform agitation in 1867 which brought the industrial working class within the pale of the constitution" and gave them the vote. Conservative Prime Minister Disraeli famously one-upped the Liberals and passed universal male suffrage in a program called "Tory Democracy." So where is Dr. Chang coming from on this?

Then there are Reagan and Thatcher. The big thing about them is that they successfully appealed to the upper working class, and the left has never forgiven them. It was Reagan that enticed the "Reagan Democrats" out of the Democratic Party; in 2014 the white working class voted Republican by 30 points. And it was Thatcher that appealed to the "C2s" in Britain by passing a program for them to buy their "council houses." Just last week a Labour front-bencher resigned after sneering at "White Van Man" in a tweet.

Dr. Chang is right that there are a lot of people pushing the idea of a market-place relatively free from government power. But there are also a lot of people like him pushing the idea that corporations should be minutely regulated and supervised by government. And they are passing laws to do this, big, comphrehensive and mandatory programs like Sarbanes-Oxley in 2002 and Dodd-Frank in 2010, including the Consumer Finance Protection Bureau on which Sen. Elizabeth Warren (D-MA) did the Grubering. These are huge regulatory actions that have submerged corporations in a tsunami of paperwork. And no doubt they will all end in tears as the big corporations learn how to game them and use them to beat up their small-business competitors.

Let's at least be clear about one thing. Dr. Chang is not a "renegade economist." Nobody that "served as a consultant to the World Bank, the Asian Development Bank and the European Investment Bank as well as to Oxfam and various United Nations agencies" is a renegade. He just isn't!

There's a catchphrase that describes Dr. Chang. He's what politicians call a "safe pair of hands."


perm | comment | Follow chrischantrill on Twitter | 11/25/14 12:13 pm ET


Piketty: Deirdre McCloskey Weighs In

BACK in the spring the intellectual world was convulsed by a book about capitalism written by a Frenchman, Thomas Piketty. The book, Capital in the Twenty-first Century argued that the return on capital was always bigger than the economic growth rate (expressed as r > g) and this would mean that the rich would forever get richer and richer. Since the left is currently focused on "inequality" ...

 click for more


perm | comment | Follow chrischantrill on Twitter | 11/24/14 12:36 pm ET


Georg Simmel: Numbers and Social Life

WE moderns like to think that we invented numbers. Back in the old days life was organic and natural, centered around the family and the village collective. But Georg Simmel in The Sociology of Georg Simmel translated by Kurt. H. Wolff reminds us that enumeration was not an invention of the absolute monarchs and their bureaucracies. Numbers in social life go further back than that. But the ...

 click for more


perm | comment | Follow chrischantrill on Twitter | 11/23/14 8:52 pm ET


Georg Simmel: 18th and 19th century views of freedom

SOCIETY want to be an organic whole of which "individuals must be mere members." But the individual rebels against total absorption into the whole, writes Georg Simmel in The Sociology of Georg Simmel translated and edited by Kurt. H Wolf. The individual strives to be rounded out in himself, not merely to help round out society. This conflict between the whole and the individual is insoluble. ...

 click for more


perm | comment | Follow chrischantrill on Twitter | 11/21/14 12:25 pm ET


|  November blogs  |  October blogs  |

 OPED


Ferguson: Life in the Promised Land

THE FINAL PROBLEM for all political and religious movements is what to do after you get to the Promised Land. You’ve defeated the enemy, you’ve conquered the land flowing with milk and honey. What next?

What’s next is that the soldiers of the revolution should get a job, get married, and start a family. And forget all about millennial hope.

But usually they don’t. Instead they get angry.

That’s why blacks rioted in the aftermath of the Civil Rights Act of 1964 and the Voting Rights Act of ...

more | 08/25/14


Let's Fight for the Nation State

Everyone that has half a brain understands that the foundations are shaking. ...

more | 08/18/14


"As President, I Will Defend Americans Against the Moral Bullies"

Aunt Peggy Frowns at the Obama Boys

Do Corporations Rule America?

Opeds


 RMC CHAPTER-A-DAY


RMC Contents
Chapter 1: After the Welfare State

WHAT WILL come after the welfare state?  After 120 years, at the turn of the twenty-first century, it is clearly showing its age.... more


Chapter 2: Down in South Carolina and Out in Brooklyn
Chapter 3: Awakenings of Monotheism
Chapter 4: The Nineteenth Century From the Top Down
Chapter 5: The Nineteenth Century From the Bottom Up
Chapter 6: Popular Religion in the Nineteenth Century

 RMC BOOKS


RMC Book of the Day

Stevenson, George M, The Puritan Heritage


RMC Books on Education

Andrew Coulson, Market Education
How universal literacy was achieved before government education

Carl Kaestle, Pillars of the Republic
How we got our education system

James Tooley, The Miseducation of Women
How the feminists wrecked education for boys and for girls

James Tooley, Reclaiming Education
How only a market in education will provide opportunity for the poor

E.G. West, Education and the State
How education was doing fine before the government muscled in


RMC Books on Law

Hernando De Soto, The Mystery of Capital
How ordinary people in the United States wrote the law during the 19th century

F. A. Hayek, Law Legislation and Liberty, Vol 1
How to build a society based upon law

Henry Maine, Ancient Law
How the movement of progressive peoples is from status to contract

John Zane, The Story of Law
How law developed from early times down to the present


RMC Books on Mutual Aid

James Bartholomew, The Welfare State We're In
How the welfare state makes crime, education, families, and health care worse.

David Beito, From Mutual Aid to the Welfare State
How ordinary people built a sturdy social safety net in the 19th century

David Green, Before Beveridge: Welfare Before the Welfare State
How ordinary people built themselves a sturdy safety net before the welfare state

Theda Skocpol, Diminished Democracy
How the US used to thrive under membership associations and could do again

David Stevenson, The Origins of Freemasonry
How modern freemasonry got started in Scotland


RMC Books on Religion

David Aikman, Jesus in Beijing
How Christianity is booming in China

Finke & Stark, The Churching of America, 1776-1990
How the United States grew into a religious nation

Robert William Fogel, The Fourth Great Awakening and the Future of Egalitarianism
How progressives must act fast if they want to save the welfare state

David Martin, Pentecostalism: The World Their Parish
How Pentecostalism is spreading across the world


 READINGS:

The Will To Power
Mona Charen helpfully lists Obama's previous violations of settled law.

Ten Reasons Why I Am No Longer a Leftist
We rushed to cast everyone in one of three roles: victim, victimizer, or champion of the oppressed.

The DC Dem leaders hate Obama
Now they tell us.

Energy Boom Can Withstand Steeper Oil-Price Drop
names of smaller oil companies in shale plays.

The highly sophisticated hacking of Sharyl Attkisson's computers | Fox News
Sharyl Attkisson on agenda-driven journalism.

> archive

 CCWUD PROJECT

cruel . corrupt . wasteful
unjust . deluded


 


Take the Test!

 THE PROJECT

Work to restore the Road to the Middle Class. Here’s how. Ground it in faith. Grade it with education. Protect it with mutual aid. Defend it with the law. more>>

 THE ARGUMENT

The Road to the Middle Class is a journey from a world of power to a world of trust and love. In religion, it is a journey from power gods that respond to sacrifice and augury to the God who makes a covenant with mankind. In education, it is a journey from the world of the spoken word to the world of the written word. In community, it is the journey from dependence on blood kin and upon clientage under a great lord to the mutual aid and the rules of the self-governing fraternal association. In law it is the journey from the violence of force and feud to the kingŽs peace, the law of contract, and private property.


 TAGS


Responsible Self

[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.


Taking Responsibility

[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050


Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust


What Liberals Think About Conservatives

[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. “Racist, sexist, homophobic, anti-choice fascists,” she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican


Liberal Coercion

[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State


Moral Imperatives of Modern Culture

These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self


US Life in 1842

Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism


 

©2014 Christopher Chantrill

mysql close 0