Economies fall into one of several categories: market, barter and gift. In market and barter economies, exchanges are made contemporaneously between the parties, in one case for money and in the other for acceptably equivalent goods or services. In gift economies transfers are made without an explicit agreement for a return, either in the present or the future. These economies rely on honor or shame or some similar non-cash basis that creates an obligation for the donee to provide something of equivalent or greater value to the donor at some other time. Bourdieu studied a gift economy in his early field research. He observed that exchanges are driven by self-interest like any other transaction. According to David Swartz in Culture and Power: The Sociology of Pierre Bourdieu, Bourdieu says that these practices would not occur if people saw them as motivated by personal interest.

“The operation of gift exchange,” for example, “presupposes (individual and collective) misrecognition (meconnaissance) of the reality of the objective ‘mechanism’ of the exchange.” P. 91.

Isn’t this a perfect description of our legislative economy? Politicians and their staffers do favors for rich people. That translates to giving gifts to rich people, gifts that only governemnt can give such as favorable laws and regulations, litigation positions, and choices not to prosecute. Politicians and staff do not see themselves as self-interested, and do not have enforceable expectations of a return. The rich do not see themselves as doing anything wrong. They don’t make a promise of any return of the gift, and there is nothing to force them to do so.

Then, when government officials retire, the rich give them lavish gifts , meaningless jobs, exorbitant speaking fees, positions in the non-profit sector. These gifts are justified on other grounds, such as expertise or influence. But they are still gifts.

Each side hides the reality of the situation from themselves and from their opposite numbers, and from the public. The task of hiding reality falls to third parties, mostly lobbyists, lawyers, and public relations firms, and a cadre of people labeled as scholars or experts. The lobbyists and lawyers come up with fake justifications for the favored policies. The scholars create rationales that fit some version of the conventional wisdom. The PR teams translate those into pretty words. These are fed to donors and staffers and the politicians who mouth them to the public as their positions and justifications.

The rich people get to pretend, and may even believe, they are doing the right thing, because after all their experts support them. The legislators and staffers get to pretend, and may even believe, that they are acting in the public interest. The media report these lines as if they constituted genuine public discourse. In so doing, the media helps conceal the gift economy from the public. And the courts pretend this is normal. There is no quid pro quo by definition, so therefore there is nothing illegal.

The whole thing depends on the misrecognition of what’s happening. The people who see through it, and there are plenty, are either attacked as naïve or stupid, or completely ignored.

Bourdieu says that the role of the sociologist is to detect the underlying principles of this kind of economy through statistical analysis. Maybe it’s time for someone to apply his ideas, or similar frameworks from other fields, to look at this form of corruption. Until then, we have an explanation for how people avert their eyes from Zephyr Teachout’s principle that corruption is the use of public position for private gain.

The text for this series is David Swartz’ book Culture and Power: The Sociology of Pierre Bourdieu. Swartz says that Bourdieu extends concepts from economics to sociology. Bourdieu writes about various forms of capital the individual might have, and the interests that drive the individual in the pursuit of capital and its use. Capital comes in material forms, as economic resources, as well as symbolic forms, as social capital, cultural capital, religious capital. Bourdieu says that these are recognized as capital when they are “…objects of struggle as valued resources.” P. 43.

Interests are “… defined practically as whatever motivates or drives action toward consequences that matter“. P. 71. Swartz says that for Bourdieu seems the critical interests are obtaining power and wealth, which probably explains the use of economic models. Elsewhere Swartz says that Bourdieu’s framework seems less useful for analyzing the working class or the underclass. P. 82. That makes sense, because the concerns of a large part of society don’t involve gaining wealth and power; other concerns are dominant, such as maintaining their existence.

The use of economic modeling raises the specter of rational actor theory and other axioms of neoliberal theory. Bourdier explicitly disavows rational actor theory. He insists that most human action is pre-reflective, dispositional and tacit, rather than consciously planned and strategized to assure optimal outcomes. The definition of interest is similarly vague. These definitions are more like descriptions. They leave open a space at the center of the theory that serves to remind us that as individuals we are largely inscrutable to others, and perhaps even to ourselves. It also leaves a space for surprise, for the generation of new behaviors by the self. The point of sociological inquiry is to discern regularities in behavior that are invisible even to ourselves, using various forms of observations and different kinds of statistics.

Bourdieu says that just because a scientist can formulate a rule that describes the behavior of a group doesn’t mean that individuals are following a rule. Rather, he says that we follow a practical and informal knowledge that helps us predict which behavior might produce the desired results. Again, that leaves from for individual agency.

Bourdieu says that people form ideas of the way society works and the way they fit into society beginning at a very early age from their families, their friends and their surroundings including people and events. These experiences are internalized, and become the basis through which people understand the world and their own potential. This practical sense of position and possibility is called habitus. Habitus is “the product of class situations, not their cause.”

Habitus, then, represents a sort of deep-structuring cultural matrix that generates self-fulfilling prophecies according to different class opportunities. And Bourdieu’s “cultural” explanation of unequal educational attainment differs from the blaming-the-victim version of culture-of-poverty arguments in emphasizing individuals’ adaptation to limited opportunities rather than the cultural origins of deviant behavior. It shows how structural disadvantages can be internalized into relatively durable dispositions that can be transmitted intergenerationally through socialization and produce forms of self-defeating behavior. P. 104.

This unconscious socialization of the individual turns into an acceptance of the power structures confronted by the individual. It seems natural, so that neither the dominated nor the dominant feel cheated or privileged. It affects the sense of possibilities and establishes the limits of aspiration, and thus limits the scope of actions that seem plausible to each individual. In other words, it cements class relations.

As I was reading, I got the impression that Bourdieu used habitus to make predictions about how people would behave. I don’t think that’s right. Instead, it appears that the point of the concept is to describe how people come to accept the status quo. They learn from experience what results are likely from particular actions, and they internalize the results of those experiences as the world they live in, the world that sets the parameters for the success or failure of their actions. Kids learn beginning at birth what actions produce favorable outcomes, and which produce bad outcomes. They aren’t thinking, these are concrete experiences, not processed by a thinking mind. The learning is pre-reflective, that is, people aren’t even aware that they are learning, because they aren’t able to think about or to understand what is happening. They only see that it is happening, and they think that’s the way things are and will be.

Changing one’s habitus is difficult. Swartz says that change occurs only when the strategies are applied in new situations and they produce unexpected results. In such cases there can be a gradual adjustment to the new circumstances. Action requires some use of capital, mostly social, cultural or economic. People are reluctant to make use of their capital unless they think there is a reasonable chance of success, won’t make such use if the outcome is uncertain. That assessment arises from habitus, which limits the exposure to new situations. As an example, Swartz cites the results of changes in the French education system after WWII. Middle class people were more likely to take advantage than members of the working class who were inclined to “know their place”.

So far I haven’t seen discussion of things done strictly for pleasure. For example, in the discussions of cultural and social capital, there is no mention of the fact that both can be enjoyed purely on their own, without regard to the possible gain of wealth or power. Similarly, there is no discussion of religious behavior as personally rewarding, and there is no discussion of altruism. This is an interesting gap, in part because personal pleasure is an important concern to the Frankfurt School. I wonder whether the omission will be cured later in the book, or whether maybe this is a result of the use of the economic model of competition for scarce resources that frames Bourdieu’s thinking.

According to a law journal article by Zephyr Teachout, the Founding Fathers had a shared understanding of corruption.

To the Delegates, political corruption referred to self-serving use of public power for private ends, including, without limitation, bribery, public decisions to serve private wealth made because of dependent relationships, public decisions to serve executive power made because of dependent relationships, and use by public officials of their positions of power to become wealthy. P. 373-4.

Of course, the Supreme Court doesn’t see it that way. The only form of corruption the politicians on the Court recognize is quid pro quo transactions, the formal exchange of value for taking a governmental action. This view carries over to the private sector. Only rarely are there prosecutions for kickbacks or other forms of corporate bribery because the laws are spotty, and anyway, who cares? The market, whatever that is, will take care of it.

The Ryan-Trump tax bill is an excellent example of of corruption in Teachout’s sense. A number of senators received personal benefits from a provision which applies low pass-through tax rules to passive investments in real estate. This clause will not increase investment or jobs. It only benefits equity holders, including Tennessee Senator Bob Corker. For details, read the articles by International Business Times’ David Sirota. Corker and Hatch deny that they are corrupt but do not describe any benefit to ordinary Americans from the changes.

Another beneficiary of changes in the law is Senator Ron Johnson, R-WI, who owns interests in a pass-through manufacturing business and several pass-through real estate businesses. Equity holders pay ordinary income tax on it at their personal rate. Johnson announced he wouldn’t vote for the bill unless it benefited him; as well as anyone else who owned investments like his. He wanted a deduction of part of the income. Senate leadership eventually made an offer, there was bargaining, and eventually they settled on 20% of a number based on a complicated formula involving wages and capital. Just as on the real estate side, this bill is just a gift to owners of unincorporated businesses. The value of their interests will go up and their taxes will go down, and nothing will change in terms of investments in the business. Johnson’s explanation for this is not his personal wealth but the fact that business income is treated differently depending on the form of business organization. But the reason people choose non-corporate forms is the personal benefit, and Johnson doesn’t explain this crucial difference or the impact of the changes.

It isn’t only government officials who can use public positions for their personal benefit. In 2015, 58 university presidents made more than $1 million. They must be really good at raising money. Fun fact: the ridiculous tax bill provides for a 1.4% tax on income from endowments greater than $500,000 per students at schools with 500 or more students. The insufferable N. Gregory Mankiw is perturbed. I say good. At least there is somewhat less incentive to raise vast sums of money at schools like Notre Dame, which estimates its tax at $6 to 9 million. Notre Dame spent $354 million from its endowment which garnered about $1.21 billion, if I read this right.

Corporate CEOs have reached even higher levels of compensation; so of course as a group they were proponents of this sickening bill. They’ll get billions to use to pay shareholders with dividends and buybacks, and they’ll benefit handsomely from both, because almost all of them are big shareholders. They also love huge mergers, and once industries are consolidated, they raise prices in excess of costs which increases corporate income and thus their own. I wrote this about drug companies showing the details. And here’s a disgusting recent example.

I’ve focused on economic corruption, but abuse of power goes beyond economics; the most obvious arean is sexual predation. Others can do a better job explaining that kind of abuse so I’ll just leave it there.

Many of the people in positions of authority in the corporate sector, the non-profit sector and the government sector use their positions for private gain. We can speculate about the reasons for it, and debate the extent of it. Maybe it’s no worse now than before; it just seems worse because Trump is president. And of course, we aren’t all corrupt, and we aren’t all corrupt all the time. For those with some self respect or some self control, there is this sickening feeling of collapse.

I think that’s because our public discourse is so barren. We have no vocabulary for analyzing the problem, or thinking about what we need to change. We think in terms of criminal law when we talk about corruption, and not the language of duty and responsibility. Let’s stop doing that.

Corruption is the use of public positions of authority for private gain.

The text for this series is David Swartz’ book, Culture and Power: The Sociology of Pierre Bourdieu. Swartz says that the central focus of Bourdieu’s work is how in a given culture the systems of domination reproduce themselves in such a way that it seems natural and obvious, so that there is no resistance and so that neither the beneficiaries nor the non-dominant people recognize the forces at work. The hope is that understanding the way these systems operate will give us a chance to affect change that benefits them even if there is a loss to the dominant elites. The need for this should be quite obvious as we watch elites in the US, the UK and other more or less democratic nations slowly drive us to collapse while authoritarian governments survive. Change is not without its own dangers, of course.

Swartz opens with this sentence:

Culture provides the very grounds for human communication and interaction; it is also a source of domination. P. 1.

As an example, Bourdieu spent a lot of energy studying the education sector. He himself was an outsider, born in 1930 to a working class family in a small town in southwestern France. He began his studies in rural schools and only at the age of 19 did he move to Paris to continue his studies, first in a prestigious Lycée and then at the top French school, the Ecole Normale Supérieure, where he studied with and under many of the leading French intellectuals of the day. Although some of his fellow students were from similar backgrounds, including Michel Foucault, most were upper class Parisians. This no doubt gave impetus to his study of the way French intellectuals reproduce their dominance across generations. Swartz explains:

Educational institutions secure partial autonomy from political intervention and economic constraints by establishing their own criteria for legitimation and by recruiting and training their own personnel—that is, by securing control over their own reproduction. P. 77.

This should be obvious. Academia has been reproducing itself this way since it began, and it seems logical and natural that new teachers would begin by learning from experienced and knowledgeable teachers. But it is far from universal, we in the US are in danger of treating it as a factoid, a given, and taking it in isolation. If we did that, we might add the fact that people like to hire people who are like them, so we would draw the conclusion that this is a problem because it tends to exclude people who aren’t like existing teachers in some unacceptable way, such as gender or skin color. Or we might say that it is good because it removes the government from the academy regardless of whatever flaws there might be.

Bourdieu embeds the fact in a theory. The theory is that society is organized to reproduce itself in a natural and unthreatening way, so that members of society, elites and others, don’t see the machine at work and are strongly inclined to accept things as they are. When we see it this way, we ask different questions. For example, we see clearly how legacy admissions to elite universities serve the goal of perpetuating the domination of the elites. Their children get an edge that is invisible to most people; only the smart kid from Enid OK who didn’t get into Yale sees it, and people write her off as bitter. Then legacies get an edge in taking power in government, corporations and other sectors, including education.

A 2011 survey of 30 top universities found that legacies had a 45% greater chance of admissions that non-legacies. Even when legacies are reasonably competent compared to the other applicants, this advantage is a natural way to recreate the dominance of the existing elites. I don’t doubt that Chelsea Clinton is bright, though obviously Jared Kushner is a tougher call. The point is that Clinton and Kushner are certain to reproduce the attitudes and politics of their parents. Their slots at Stanford and Harvard did not go to equally qualified people from non-elite backgrounds, and the same is true of all the slots that went to the legacies. On the other hand, I’m just sure both Clinton and Kushner see themselves as hard-working meritocrats, succeeding because they are special.

But that isn’t all we can see. The elites don’t like the idea that they don’t get to influence academia. They intend to deploy their wealth as they see fit (the link is to my post on oligarchy in democracy, and may be of interest for further links), and aren’t interested in hearing from the rest of us; they don’t want democratic control of anything. Thus we get charter schools that can easily be used to teach kids that society is organized to facilitate the capitalist mode of production and that joyful participation is the way to succeed in life. If you don’t succeed in this way, you are a loser who deserves to suffer. If this schooling is successful, the profits and losses are irrelevant to the rich.

The rich have led the way in bringing business methods into the university. Today the focus is on job-oriented education as a replacement for liberal arts, in other words on vocational training instead of learning to think clearly and objectively. Education, if that’s the word, becomes a consumer object, with the student as consumer. As in business, the goal is to drive down the costs of labor, hence the use of miserably-paid and abused adjuncts. Meanwhile endowments grow repulsively big. We can easily see Yale and Harvard as hedge funds with a few attached schoolrooms, dorms and gyms.

But Bourdieu’s question is merely the apex of a framework. There is a broader and deeper analysis of society that establishes the framework, and makes it easier to apply to a wider range of strategies and rationalities supporting the central point, that societies and especially elites are organized to reproduce themselves and their dominance as covertly as possible. The carceral state is the tool for dealing with the dissidents and the non-conformists.

The text for this series is David Swartz’ book, Culture and Power: The Sociology of Pierre Bourdieu. I’m starting with a vocabulary of some of the technical words and ideas in the book.

1. Practice. For Bourdieu, practices are the behaviors that people exhibit in coping with their social environment. A simple example is table manners. Manners are taught to us at an early age, and it’s rare that we ever think about them, but they say a lot about us. Emily Post manners are essential for people trying to climb the greasy pole to the C-Suite, just as State Fair eating manners are crucial to political candidates. They’re a necessary but not sufficient condition for entering certain social groups. They also matter in dating, as the charming series Blind Date in the Guardian shows. The paper sends a couple on a blind date to a restaurant and then interviews them about the date. They always ask about table manners. In this one,, the pair went to a Japanese restaurant and apparently tried to shell edamame with their chopsticks, a funny faux pas.

Practices can be complex. How do I interact with higher-ups in my workplace? I don’t have to think about that, I just do it, and it is obvious that I’m not thinking when I do it. One way to describe this is to call it intensive behavior as contrasted with reflective behavior, two terms I learned years ago from an otherwise unreadable book.

2. Capitalist Mode of Production. When I found this term in the book, I knew exactly what it meant, but somehow it made me uncomfortable. After a moment, I realized it was because I associate the term with Marxist analysis, and as a good American boy, I know that all of Marx is evil. But of course, it isn’t. There’s a lengthy discussion of the capitalist mode of production (without the term) in Thorstein Veblen’s book The Principles of Business Enterprise, which I discuss here and here.

Fear and loathing of Marxism is a foundational aspect of neoliberalism; its founders wanted to insure that capitalism would never be threatened by such un-American ideas. But in the intellectual training in France in the 40s and 50s Marxism is a jumping off point.

3. Thinking. Perhaps we all know what this term means intuitively, but there’s more than just self-examination as a way to understand it. I contrast thinking with behaviors that don’t involve thinking, like the practices that Bourdieu studies. Practices are learned behaviors that we emit without being conscious of them. We deploy them as needed in response to the social signals we encounter.

The act of thinking calls on us to become aware of ourselves as thinking. In action, it feels like we are activating a specific part of our mind. Once we start thinking there are various ways to go. One is to ponder an idea, trying to get a grip on it, trying to flesh it out, and generally to meditate on it. Another is purposeful, thinking with a goal. A good example of the former can be found in Plato’s Socratic Dialogs, as Hannah Arendt discusses in The Life of the Mind. Here’s a .pdf; see the two sections starting on page 166.

The latter is what we do when we try to prove a mathematical theorem. We know where we begin, with axioms, theorems, lemmas and corollaries, and a mental image of the problem; and we know to use formal logic. But the choice of steps to take is an art, not a science.

I use the word “contrast” as opposed to define because there are many other contrasting mental states. For example, I could contrast thinking with the kind of mental babble that the Buddhists call the monkey mind. Or I could contrast it with the mental state of practicing a physical behavior.

We live in a complicated society; I think building in complexity is something mammals just automatically do to amuse themselves if nothing else. We can’t comprehend the complexity we jointly create, so we invent mediating concepts to enable us to proceed. The selection of those concepts is an art. The use of those mediating concepts is an art. The Frankfurt School, for example, designed its empirical research around its theoretical concepts as a test of those concepts and as a way of understanding their results. The choice of contrasts is a useful way to add structure to the messy social world.

4. Dialectical thinking. I spent hours reading The Dialectical Imagination, and more hours reading texts about the Dialectic, but I am not comfortable with my understanding. Most of what i read was some version of thesis, antithesis and synthesis, That makes sense in the context of dialectical materialism, because we can see that historically one movement is confronted by another. We don’t have to explain why the second movement arose, except that it arose in opposition to the dominant thesis. In The Dialectical Imagination, it seemed to be a braoder idea, based on negation, which I understood to mean that when working in the context of abstract ideas, the thinker would try to work up an opposing thesis and it’s implications.

In The Life of the Mind, Arendt talks about the dialog of the self with the self, which seems to be a form of dialectical thinking. Swartz adds another idea, from the French philosopher of science Gaston Bachelard. He says that science doesn’t proceed from a priori constructs. It does not begin with atoms or cells, but only comes to them after empirical observation, and changes them as new observations are made.

Rather, the movement of thought proceeds from a limited conceptual framework, which is closed to some important aspect of experience, to the development of a broader framework that includes the previously excluded aspect. In this way, for example, Euclidean geometry was not replaced but rather superseded and regionally situated within a broader non-Euclidean, space-time conceptual space. P. 32.

That seems much closer to what I understood from The Dialectical Imagination. Jay quotes Adorno as saying the true dialectic is “… the attempt to see the new in the old instead of simply the old in the new.” P. 69. I’ll leave this here, but I will be alert to this issue.

5. Relational thinking. According to Swartz, Bourdieu’s approach is to define a term as I did above, in opposition to another term. Concepts have meaning in relation to other concepts. This view appeals to me, because it sets up poles in the space of inquiry, which otherwise would feel too unstructured. At the same time, it doesn’t limit us to other contrasts that may open our minds to other possibilities.

That’s my starting point for working on this new area. We’ll see if it holds up.

My first post at Emptywheel proper went up December 9, 2014; before that I wrote at FireDogLake alongside Marcy. One thing my poor eyes appreciate about this site is that it is ad-free. More important, the only effective way to get ads is through Google or some other placement site. I hate the idea that those people are making money off our work. I hope you will join me in keeping Emptywheel ad-free with your donations.

In making this list, I reread almost all of my posts and most of the comments. It made me realize just how long my posts are. Somehow they didn’t seem so long when I wrote them. I think most of them hold up pretty well. The discussion of the texts themselves seems quite good; but I would probably have somewhat different responses to the texts. The weakest posts are on Critical Theory, mostly because the ideas were unfamiliar and at the same time compelling.

One of the best parts of writing here is the excellence of the commenters. There have been a large number of insightful comments and suggestions that helped me in reading and understanding, and several which changed my mind. Other comments have fleshed out the weak parts of my discussions, which was very helpful in keeping me focused.

From oldest to newest, here are my top ten at EW

1. Paradigm Change Through Authority and Arguments About Truth

My first posts were about obvious weaknesses of neoliberal economic theory; lack of definitions of critical terms like market, for example. At the suggestion of a correspondent, I reread Thomas Kuhn’s The Structure of Scientific Revolutions and wrote several posts about the book. It served as a good jumping off point for a more detailed criticism of neoliberal economic theory. This post shows us contrasting views of change, Kuhn’s theory and another. With this post I took a small step towards a more theoretical analysis.

2. Mankiw’s Ten Principles of Economics Part 6: Markets Are Usually a Good Way to Organize Economic Activity

After reading Kuhn, I tried to create a paradigm of neoliberal economics based on Mankiw’s Ten Principles of Economics that every economist agrees are right, and then did a series on those ten principles. This one is typical. Mankiw doesn’t define “market”, and neither do Samuelson and Nordhaus. They just wave their hands. In contrast, I offer a definition.

3. The Great Transformation Part 3: Neoliberalism Before It Got Its New Name

I next did a series on The Great Transformation by Karl Polanyi. This post is typical. Polanyi discusses the part of the history of capitalism we lost in what C. Wright Mills called the Capitalist Celebration. This is an ugly picture of the past, and maybe the future, of work, and the attitude of the new feudal lords, the capitalists.

4. The Cost Of Equal Opportunity In A Neoliberal Economy

I shouldn’t have put Neoliberal in the title, but I think this is important. There is a limited number of jobs at any level of our economy. If some are given to a previously excluded group, some of the privileged group lose something real. This post uses me as an example.

5. The Origin of Totalitarianism Part 6: Totalitarian Propaganda

Hannah Arendt’s book fits nicely with Polanyi’s discussion of 19th Century capitalism and adds anti-Semitism and a deeper history of the rise of the Nazis. This post is especially relevant to today, when the Republicans are waging a war against reality and adopt crackpot theories.

6. The Origins of Totalitarianism: Conclusion

The comments are especially smart and valuable.

7. The Theory of Business Enterprise Part 2: Neoclassical Economists and Veblen

The next book was The Principles of Business Enterprise by Thorstein Veblen. This remarkable book knocks down neoclassical economists in favor of observations by a smart guy about the US capitalist system. All the forces he describes are still at work, and the current administration is trying to get us back to 1904.

8. Testing The Limits On Wealth Inequality

This post addresses the question of whether there are limits to wealth inequality as discussed in Capital In The Twenty-First Century by Thomas Piketty. After he wrote the book, he wrote a paper in which he shows how to use r > g to estimate a kind of limit. It’s very high.

9. An Economics For the Left

This post offers an economic platform for the left, something that I think is lacking. It turns on an unstated idea, that allocation of the production in any society is a matter of political choice, and in a democracy, everyone should have a voice in that choice. There’s a new textbook: Microeconomic Theory: A Heterodox Approach., suggested by Stephanie Kelton. Maybe change is really underway.

10. Liberal Bubbles and Conservative Elites

Not all my posts are about books; sometimes I go off on a rant. This one is about the stupid.

For good measure, here are two of my favorite posts from FireDogLake

1. What Should Obama Do For Us?

This was my first post at FDL, in September, 2008. The lefty side of the blogosphere, as we called it then, was all in for Obama, but made no demands in return for that support. In retrospect, I see that the problem was that there was no organized way to make demands, no leader to interact with the campaign, and no openness from the campaign to hear the hopes and prayers of all those small donors and door-bell ringers. We were irrelevant because we had no communication from the bottom up.

2. Oysters and Time

On Saturdays for a year, I wrote a short piece on a work of art. This was the first. I love this painting.

My last series summarizes the state of my neoliberalism project. It turns out that I have mostly focused on the economics of neoliberalism. Another aspect of the project was to learn how we as a society got caught up in neoliberalism. None of the work I’ve done so far has given me much of an answer to that, let alone the question of how we get out of this mess.

That part was relatively straightforward. I had a basic understanding of how to read and learn about neoliberalism. I have a background in dealing with the actual economy; I knew most of the mainstream economic ideas from College where I took several courses; and from continued readings over the years; and I’m reasonably fluent in college-level math. When it comes to culture as a field of study I’m pretty much at ground zero, and to tell the truth, I was surprised to see the emphasis on culture in Critical Theory. So, this will be a different kind of reading.

I’m going to start with Pierre Bourdieu, a French Sociologist of the second half of the 20th Century. Bourdieu and Foucault are perhaps the best known French thinkers of that period today, as existentialism and indeed most straight philosophy have fallen out of intellectual favor. Their kind of thinking is not that common in the US; we don’t exactly have an intellectual class, and we never really valued the life of the mind. We have a lot of experts and a lot of smart and well-trained people, but they are rooted in specific fields, and the number who think usefully beyond their areas is small. Historically, the intellectual was a recognized class in France, and even today many French politicians aspire to the title. Can you imagine a US politician who wants to be thought of that way? We elect regular folk just bursting with common sense, which probably explains something about our inability to solve problems.

But there is another factor: David Brooks. I read parts of Brooks’ New York Times column regularly as a check on my own ambitions. One common form of column is “I read this article and it proves conservatives like me are right and liberals are killing society.” Here’s a lovely example of High Brooksism. I think wants to say that neoliberalism is a bad theory because it emphasizes the isolated individual and rejects communal and social values, but he can’t because neoliberalism is at the heart of conservativism. Too bad, because it would enable him to criticize Republicans and most Democrats, and it would move him outside the boundaries of “both sides do it” and into an open policy space. But, as he says, people over 56 years old like him are clueless, so we get this absurd conclusion from the incoherent mess above it:

Congressional Republicans think a successful tax bill will thwart populism. Mainstream Democrats think the alienation problem will go away if we redistribute the crumbs a bit more widely. Washington policy wonks build technocratic sand castles that keep getting swept away in the cultural tides.

I absolutely don’t want to be like Brooks with his unmoored rationalizations and his pretense of intellectualism. My goal is to see what other people think and try to make sense of it. To that end, I think someone who sees things from a perspective outside my own culture will give me more distance, as was the case with my earlier readings.

I first heard of Bourdieu some time ago, I don’t remember where or when, but the gist was that his book Distinction: A Social Critique of the Judgement of Taste was a must-read. Now I want to read it, because some of the issues around taste seem important in the US, where all our choices seem to define us. But as with Critical Theory, I’m going to start with an overview of Bourdieu to learn some of his basic concepts. So, the next book is David Swartz’s Culture and Power: The Sociology of Pierre Bourdieu. I’ve started it, and it seems very readable.

I have a couple of basic thoughts to start with, and we’ll see if they hold up.

1. I’m pretty sure that culture isn’t the outcome of the economy, as might be the point of early Critical Theory. It seems likely that people’s natural creativity just pours out. I read The Kandy-Kolored Tangerine-Flake Streamline Baby by Tom Wolfe years ago, and came away with the idea that the people in that car culture, just like the surfers, the anti-war groups, and the disco dancers in Saturday Night Fever were happily living in the shadows of the economy, not straining for success in the broader world, but creating their own milieu with what was at hand. Of course, corporate culture sucked the life out of those cultures, or they died on their own, but the impulse to use the conditions of life in new and inventive ways never dries up. We can watch the process as gaming culture grows up and gets turned into an ESPN sport. I’m sure the kids will be moving on, leaving the olds farther out of touch.

2, When I was growing up, there was this trope about lowbrow, middle-brow and high-brow taste. We have plenty of classifications of people today: tribalists, angry white people, Evangelicals, Berniecrats; personality types like INTJ, and authoritarian submissives; and of course all the marketing categories, like these in Wikipedia. These characterizations feel ad hoc and instrumental, and no matter how fine the segments are, they hardly seem adequate to the complexities of most of the people I have ever met. But we can’t think clearly about a population of 320 million without categories, so some kind of classification seems important.

3. The first book about psychology I read was I’m OK, You’re OK, by Thomas Anthony Harris. I thought I knew something when I was done. Then I read some Freud, Jung, Adler and other actual psychologists (badly, I should add), and realized I had been sucked into a pop psych book. It wasn’t useless, but close. I want to avoid that. More pointedly, I don’t want a system. I think we all come in in the middle, including the Frankfurt School and Bourdieu and Foucault, and try to figure things out as best we can. What I’m looking for is some sort of starting framework that can be used and evaluated and reformed, over and over until it needs replacement by a better framework.

What I don’t want is sloppy, disjointed and internally inconsistent thinking, theories unconnected to data, or random collections of data interpreted ideologically. And no thought leaders, whatever the hell they are. And no David Brooks.

Part 1.
Part 2.
Part 3.
Part 3A. This post at Naked Capitalism expands on Part 3, and adds a discussion of Simcha Barkai’s paper and methodology; I discuss other aspects in Part 4A.
Part 4A.
Part 4B.

It’s fairly easy to criticize neoliberalism from the inside, just based on its incoherence and its failure to deliver good outcomes to most of us. The Barkai Paper discussed in parts 3A and 3A, and the Paradise Papers and the Panama Papers make it obvious that the benefits of neoliberalism flow to the wealthy at the expense of the rest of us, whose wages are largely stagnant and have been for decades, and whose share of overall wealth has fallen.

Neoliberalism can also be criticized from the outside as a form of capitalism, and that seems to me to be more revealing. The constricted logic of capitalism leads directly to domination by the few in business and society generally. The logic that pushes towards dominance is the result of the nature of reason as it has evolved since the Enlightenment. I’ve discussed similar descriptions of the drive to domination in Polanyi, Arendt and to a lesser extent Veblen; click name above to visit my author page. My recent discussions of these points based on my first readings in Critical Theory can be found here, here, and here.

The members of the Frankfurt School were trained in classical German thought, including Hegel, Kant, and Marx. Initially they accepted Marx’ theory of an inherent contradiction in capitalism: that the rich would accumulate all the money and impoverish the workers, who would rise up and lead the revolution. That didn’t happen. Instead, the drive to domination was restrained by legislation. The majority’s insistence on restraints was so strong that the Supreme Court, that playground of the elites, was forced to allow the legislation to stand. But the scholars of the Frankfurt School knew that the drive to domination didn’t disappear. Today it’s just as strong as it was in the late 19th Century.

The natural logic of capitalism is gigantism. Marx said that in unrestrained capital, smaller businesses will be swallowed up by larger businesses, and he was right, as we see today. Organizations with massive capital wield enormous power, and can easily take over control of a society. We see the beginnings of all this today. There is a long tradition in the US of distrust of large piles of money and the people who control them, a sentiment that drove the progressive movement of the late 19th Century. That doesn’t disappear accidentally. It requires an external force to change it. I wouldn’t say it has disappeared today, but far too many of us have lost that natural distrust.

Somehow many people think billionaires as just like the rest of us. They aren’t, and the vulgar braggart in the White House is a perfect exemplar. But far too many of us are willing to accept rule by the rich. One of the central influences that led to this sorry situation is the Law and Economics movement, with its single-minded focus on economic efficiency. Economic efficiency: who could object that? Of course we should be efficient.

Once courts decided that the most important part of justice is insuring economic efficiency, they began to eat away at the laws and theories that enabled the majority to control the rich and powerful. Ideals like the importance of fairness, or social equality, or recognizing and correcting power imbalances through legislation, withered and vanished. Gradually we lost the ability to govern by majority rule. Our Supreme Court feels no compunction in overruling the will of the majority on health care, on voting rights, even on actual elections.

That is the result of the same kind of logic that drives capitalism, the logic of economic efficiency applied to every area of life. A somewhat simple idea that might be useful in limited settings becomes the overall mindset, the formula for decision-making that jumps from the tiny number of cases in which it might be a useful to the absurd idea that it works in every area of law.

It would be interesting to see a history of the erosion of the Securities Laws beginning under Reagan and his hit-man SEC Chair John Shad, followed by mildly limiting legislation, which the courts expanded to cut way back on the ability of the regulator to regulate, and the investor to sue. The Supreme Court bought into Posner’s principle, and then expanded it beyond recognition.

Friedrich Pollock, a member of the Frankfurt School, said that the profit motive has always been a form of the power motive. It just gets dressed up in fancy reductive logic by the likes of Posner and Bork for public consumption. Regardless of their motives, they are no different from Frank Luntz, who uses the tools of rhetoric to hide the ugly transformations sought by the rich.

All these changes start small, and require something that seems like a justification, but eventually, it’s just the whim of the elites. That’s how Trump acts, and that’s how the more effective members of his cabinet and his other appointees act. Rex Tillerson is destroying our capacity to engage in diplomacy. Scott Pruitt is destroying our ability to protect ourselves from climate change and pollution. Jeff Sessions is wrecking the Justice Department. All this was foreshadowed by the destruction of the SEC under Shad.

When government is dismantled, how does a society work? The rich take over and run things according to their fancies.

That’s the logic of capitalism. Control the capitalists or they controls you.

Part 1.
Part 2.
Part 3.
Part 3A. This post at Naked Capitalism expands on Part 3, and adds a discussion of Simcha Barkai’s paper and methodology; I discuss other aspects in Part 4A.
Part 4A.

In Part 4A, I laid out the neoliberal theory of the person, and the beginning of an appraisal of the effect of that theory on elites. In this post I add to that appraisal, and take up the impact of this theory on the rest of us. In the next post I will offer a possible explanatory context, but not a solution.

The neoliberal theory of the person is the basis of the economics most of the elites learn as undergrads, and in business schools. Lawyers are taught neoliberal principles in anti-trust classes and in the jurisprudential aspects of other courses, through the impact of the law and economics movement. When elites get jobs in business or law or government, they are surrounded by others who are deeply enmeshed in neoliberalism, even if they can’t name it. They believe that the market, whatever that is, is a wonderful, if occasionally erratic, judge of worth. They earn what they make because the market rewards the productive, and everyone finds their level in that system of rewards, based on their personal merit and their productivity. As they rise in pay and prestige, that opinion is cemented. It’s like Calvinism, with the market substituted for the Almighty. And if the market rewards the productive and dumps on the “non-productive”, then that is right and just.

The farther elites get from the productive work of businesses, the more they come to regard employees as cogs in a machine, not fully human, merely factors of production. The ease with which they fire people is the result of their belief that elites are productive and the rest tools. Lawyers and politicians may see their employees as humans, if weak versions, but the rest of the working world vanishes, except when needed. In brief, the elites operationalize Karl Polanyi’s concept of labor as a fictitious commodity.

And how does this work out for the lesser people? They are forced to live and work in the neoliberal world. They learn to repeat its tropes. For a beautiful piece of research on this, see Coming Up Short: Working-Class Adulthood in an Age of Uncertainty, 2015, by Jennifer M. Silva, The people Silva interviewed describe themselves in the terms in the Mirowski quote in Part 4A, as bundles of skill sets, who must take risks and invest in themselves to get ahead; when it doesn’t work, they think it’s their fault, they blame themselves, and they struggle to find some other way forward.

I saw this many times in my 25 years of bankruptcy practice. People who file Chapter 7 always blamed themselves, and never could understand how their failures resulted from the cruel form of capitalism we enjoy in the US. Here’s a composite case. A young couple with two low-level jobs in a county near Nashville decide that the husband will go back to school so he can get a better job. The wife gets pregnant, suffers a bad miscarriage and can’t go on working. They don’t have insurance, and the bills pile up. He drops out to get a job to support them and tries to pay down the debt. She gets well enough to work, and then he loses his job. They can’t pay the medical and student debt. They get money from family, but it doesn’t work. They file Chapter 7, but they can’t discharge the student debt and they feel obligated to pay back their families. And when we talk to them, they blame themselves in words and phrases exactly like those Silva reports in her book.

In Part 4A, I describe two of the prevalent ideas that neoliberalism has given us, Bork’s antitrust revisionism and Posner’s Law and Economics. For the elites, the first was a boon. It was easy to explain how the markets would protect consumers after a merger. Corporations became larger and larger. Regulators allowed almost every merger, and the elites became more and more powerful, with more and more assets under their control. Combine the new wealth and power with their belief that they are superior, as shown by the rewards heaped on them by the all-knowing market, and suddenly elites are exerting even greater control over the government and using it to enrich themselves as managers and shareholders. According to Mirowski, this is a desired outcome of neoliberalism. See, e.g. point 10.

The Law and Economics movement supports this view. Courts following Posner look at economic efficiency above any other interest, and interpret the laws narrowly so as not to interfere with the sacred market. The consistent rulings in their favor support elites in thinking they are wonderful.

After the Great Crash, brought on by elites at gigantic banks, hedge funds, big law firms and other cheats and liars, not a single member of the elites went to jail, and they all got paid, and they all got to keep their ill-gotten gains. Many of the political elites defended their Wall Street friends. Pundits and academics and think-tankers sprang to the defense of Wall Street. Both of these groups pretended that it was everybody’s fault, or the fault of those evil subprime borrowers or nobody’s fault because it was all perfectly legal and the deals were between equally sophisticated and brilliant people, but it surely wasn’t the fault of the well-known people who organized and sold RMBSs and other deals. The prosecutors said they couldn’t indict any individual because responsibility was spread out among lots of people, or it was too hard to get a conviction, or because something something. When elites are not held accountable, it reinforces their sense of how wonderful they are.

But the effect of these two two neoliberal theories on the rest of us is bad. As I note in Part 4A, based on this paper by Simcha Barkai, increasing concentration is perhaps the most important cause of the wage-productivity gap. Wage stagnation as profits increased has left workers struggling to get ahead, to the point that less than half of US households can pay an unexpected $500 bill without borrowing or selling something.

In the same way, the law and economics movement has hurt workers. For example, Banks and other large corporations put arbitration clauses in all their contracts, and clauses that bar class actions, and courts routinely uphold these clauses, because it’s so efficient. That means that when you get cheated in one of Wells Fargo’s schemes, you have to arbitrate, and class actions are barred.

So far, the legacy political parties and the elites have been able to deflect the anger that is slowly building up in our society as frustration turns into pain. It’s dawning on all of us that the way we treat our people is disgusting, whether it’s cops killing unarmed Black people, sexual predators attacking women, unfair pay for people of color, massive corruption, lawsuits with utterly unjust results; the list is endless.

My prediction of the slow death of neoliberalism is based on my profound hope that people are realizing that neoliberalism is a nightmarish theory, the spell will be broken, and people will demand to be treated like human beings with natural rights that must be the central focus of social organization.

Part 1.
Part 2.
Part 3.
Part 3A. This post at Naked Capitalism expands on Part 3, and adds a discussion of Simcha Barkai’s paper and methodology; I discuss other aspects below.

In this post, I take up the nature of the person in neoliberal theory and neoliberal society. I begin by describing the nature of the person in theory, and then apply it to elites. In a separate post I will discuss the nature of the average person in neoliberal theory and society. Then I will try to put this in a general context, based on my initial readings on Critical Theory.

The nature of the person in a neoliberal society is simple: a utility-maximizing computing machine, only interested in satisfying wants and needs in a world of scarce resources, where survival depends on the ability to grab stuff ahead of other people. Somewhat more elegantly, Philip Mirowski explains it this way

Neoliberalism thoroughly revises what it means to be a human person. Classical liberalism identified “labor” as the critical original human infusion that both created and justified private property. Foucault correctly identifies the concept of “human capital” as the signal neoliberal departure that undermines centuries of political thought that parlayed humanism into stories of natural rights. Not only does neoliberalism deconstruct any special status for human labor, but it lays waste to older distinctions between production and consumption rooted in the labor theory of value, and reduces the human being to an arbitrary bundle of “investments,” skill sets, temporary alliances (family, sex, race), and fungible body parts. “Government of the self ” becomes the taproot of all social order, even though the identity of the self evanesces under the pressure of continual prosthetic tinkering; this is one possible way to understand the concept of “biopower.” Under this regime, the individual displays no necessary continuity from one “decision” to the next. The manager of You becomes the new ghost in the machine.

Mirowski could be describing corporations: they are in fact the Platonic Ideal of this version of human nature. They have only one goal: to succeed in the market, whatever that is, by grabbing everything they can, money, power, resources, everything. We should all aspire to be like corporations.

In the neoliberal universe, the market, whatever that is, is the perfect computer. It balances all desires with money and spits out the perfect answer. The market can do no wrong. It disciplines everyone to its demands. There is no need for external government oriented regulation. Any regulation will simply make everything worse. In fact, there is no need for or room for democratic control of any kind. The market also selects our leaders, as Thorstein Veblen observed over a century ago.

We’ve been living under this intellectual regime for half a century now, and we can see its impact all around us. On the corporate side let’s look at two of the main theoretical innovations, Robert Bork’s antitrust revisions and Richard Posner’s Law and Economics movement.

As far back as 1960, Bork was fretting that socialism would be enforced on the US through antitrust law. In his seminal 1978 book, The Antitrust Paradox, he claimed that the purpose of the Sherman Act, the crucial antitrust law, was to protect consumer welfare, and that the existing law protected inefficient firms and thus drove up consumer prices. That view was adopted by the Supreme Court in 1979. Supposedly it would protect consumers better than prior law focused on the dangers of concentrated money and power.

A recent paper by Simcha Barkai shows how that worked out. Barkai is now a professor at the London School of Economics. His paper, Declining Labor and Capital Shares, is here. The first two sections and the conclusion lay out the thesis in English, not econspeak. The labor share is declining. The cost of capital is low and little additional capital has not been added to the existing depreciating stock, so the capital share is low. Profits are up in an amount sufficient to cover both drops. The profit share has risen because of increased concentration, which occurred because of the adoption of Bork’s opinion. See Part 3A, Observations.

Across specifications, the profit share (equal to the ratio of profits to gross value added) has increased by more than 12 percentage points. To offer a sense of magnitude, the value of this increase in profits amounts to over $1.1 trillion in 2014, or $14 thousand for each of the approximately 81 million employees of the non-financial corporate sector. P. 3.

Profits go to the owners of firms, who distribute the money as they see fit. Profits are not distributed to the 99%; they go to shareholders and top management. This is terrible for consumers, whose wages have stagnated while profits soar. Bork was totally wrong, and wrong in ways that hurt people and society.

The second neoliberal innovation is the Law and Economics Movement, driven by Richard Posner, recently retired from the Seventh Circuit. This is from a 1987 speech he gave at the American Economic Association, behind pay-wall but available through your local library. According to Posner, these are the basic premises of Law and Economics:

1) People act as rational maximizers of their satisfactions in making such nonmarket decisions as whether to marry or divorce, commit or refrain from committing crimes, make an arrest, litigate or settle a lawsuit, drive a car carefully or carelessly, pollute (a nonmarket activity because pollution is not traded in the market), refuse to associate with people of a different race, fix a mandatory retirement age for employees.

2) Rules of law operate to impose prices on (sometimes subsidize) these nonmarket activities, thereby altering the amount or character of the activity.

A third premise, discussed at greater length later, guides some research in the economics of nonmarket law:

3) Common law, (i.e., judge-made) rules are often best explained as efforts, whether or not conscious, to bring about either Pareto or Kaldor-Hicks efficient outcomes. P. 5

You can find my discussion of Kaldor-Hicks efficiency here, with a link to a discussion of Pareto Efficiency. Posner is quite serious about this.

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This is from [Posner’s] 1985 article in the Columbia Law Review, An Economic Theory of the Criminal Law:

My analysis can be summarized in the following propositions:
1. The major function of criminal law in a capitalist society is to prevent people from bypassing the system of voluntary, compensated exchange-the “market,” explicit or implicit-in situations where, because transaction costs are low, the market is a more efficient method of allocating resources than forced exchange. Market bypassing in such situations is inefficient — in the sense in which economists equate efficiency with wealth maximization — no matter how much utility it may confer on the offender. … (P. 1195, footnote omitted)

Posner carefully explains how this works with rape. I’m sure Weinstein, O’Reilly and all of the sexual predators heartily endorse his conclusions. It’s just sick to think in terms of the utility these predators gain balanced against the “disutility” to the people they attack. In Kaldor-Hicks terms, the predator can make everything right with a few bucks and/or a part in a movie, and Posner would be fine with that.

This analysis is explicitly inhuman: it takes no account of human dignity, or bodily autonomy and personhood of people under assault. The disutility caused by rich predators? What kind of person thinks like that?

To be precise, that is the exact mindset that neoliberalism calls out. That focus on economic efficiency defined in the most dehumanizing terms possible is at the core of the education of the elites and it perfectly explains their behavior in their institutional roles. All of them are sure they are perfection of humanity because they were selected by the perfect market. And it is therefore right and just that they should be in charge of everything. Screw democracy; as Posner put it in a 2007 opinion, the value of voting to the individual is elusive.