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A Primer On Pragmatism: Applications

Posts in this series. This post is updated from time to time with additional resources.

This introduction to pragmatism was motivated in part by the fact that the philosopher Elizabeth Anderson identifies herself as in the pragmatist tradition, but there are other reasons. Our political environment is toxic. It’s hard to maintain our sense of self, of our values, our hopes, and our sense of security. Philosophy offers us reminders of the existence of our values, and the role they play in holding us together as individuals and in our relations with others. It takes us away from the noise and the turmoil and puts us in a quiet atmosphere where we can nurse our wholeness. It can provide us with armor against the forces that are ripping at us.

With that in mind, I’ll close with a brief discussion of democracy and Modern Money Theory. Both begin with the key idea of pragmatism, that all our ideas, no matter how old, were formed for human reasons, and to meet human needs. All of them, no matter how old, are subject to rethinking in light of new conditions.

Democracy

Pragmatism is particularly well-suited to democracy. The most striking justification for democracy is found in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

I’m not so sure these truths are self-evident. Prior to that time, the dominant view was that some people are born to lead, and others are only fit to follow. As Peirce and James point out, philosophical systems then were grounded in the idea that there is a universal truth outside human experience, but one that the best of us can comprehend somehow. Those lucky people can construct a social system that accords with the will of the universe, or the Almighty. Many of them argued for centuries that the King ruled with the blessing of the Almighty, and everyone else was inferior, fit only to follow.

At the time Jefferson wrote, the French and the English were directly contesting the divine right of kings, and there was discontent with the idea of hereditary authority. But the US was the first country to adopt Thomas Jefferson’s formulation as a founding idea. It’s a revolutionary statement, and one we are still trying to reify, not just in our government but in our social lives, our work, and other institutions.

The Declaration was a break with what seemed like a firts principle. And that is fundamentally a pragmatist act: rejecting a first principle because it isn’t working to create the kind of lives people wanted. Jefferson’s formulation wasn’t totally original. It derives from prior thinkers, but instead of laying out a rule, it articulates a value, a value that should guide our efforts to create a decent society. The system of government created by the Constitution was supposed to be one that would enable the creation of a new kind of society, one informed not by rules thought to be eternal, but by values that are thought to be best for human beings.

There have always been people insisting that there are eternal rules, and that deviation from those rules would bring disaster. They settle all doubt by tenacity, as Peirce would say.

Pragmatists say that we have to justify our choices on the basis of what works. But the first step is to decide what our priorities are. We do that by defining our values and our goals, and then by working out the best way to reach them. Life, liberty, and the pursuit of happiness my not be the best goals for today, but they’re a start. Our task is to decide what that means in today’s society. Anderson says we don’t want to be humiliated or dominated. That’s a good way of talking about what liberty and the pursuit of happiness might mean today. We won’t the answers by looking outside our human experience.

Modern Money Theory

Much of neoclassical economics is grounded in normative concepts. One of these is Jeremy Bentham’s utilitarianism, discussed in §2.1 of this entry in the Stanford Encyclopedia of Philosophy. The economist and mathemetician William Stanley Jevons used this normative concept to create the economic idea of marginal utility, one of the foundations of neoclassical economics. See pp 9-10 here.

Utilitarianism is a normative idea. This is from the Stanford link:

… [Bentham] promulgated the principle of utility as the standard of right action on the part of governments and individuals. Actions are approved when they are such as to promote happiness, or pleasure, and disapproved of when they have a tendency to cause unhappiness, or pain. Combine this criterion of rightness with a view that we should be actively trying to promote overall happiness, and one has a serious incompatibility with psychological egoism. Cites omitted.

Jevons explicitly sets out to mathematize Bentham’s utilitarianism. Marginal utility is therefore grounded in a normative idea. It incorporates a specific value, but the value is hidden and ignored when it comes to putting marginal utility into practice. It is only loosely, if at all, based on practical experience of human behavior. Nevertheless, it is the foundation of large parts of neoclassical economics and of its modern version, neoliberalism.

Pragmatism rejects the idea of starting from normative theories. I don’t know how to deal with marginal utility from a pragmatic point of view, so I turn to another fundamental idea of economics, the creation of money. As best I can tell, mainstream economists say that banks create money. There’s a story about bank multipliers you can google. Governments get money by taxation or borrowing. In this story, the private sector is responsible for money creation subject only to some loose guidance from the Federal Reserve Board. This protects us by making sure Congress can’t ruin the financial sector with profligate spending and borrowing which would automatically happen, and which would be an inflationary disaster.

Modern Money Theory starts with a question: how is money created? It looks at the things that are done as a result of which there is money. Governments create money by spending it. They reduce the amount of money by taxation. They may or may not issue bonds. MMT is based on observable facts. The description of the creation of money leads to other testable ideas and to a completely different concept of the role of government in money creation and society.

Money creation is a governmental action, and thus is subject to politics. Congress decides how much money is created, and how the new money is used. The old story tries to deny this reality with cloudy abstractions and claims that it’s all the working of some invisible hand. Pragmatists don’t believe in invisible hands. They say that politics is the arena in which we decide about how to use the power to create money.

MMT isn’t just for progressives. Deficit hawks and small government supporters get to argue their opinions, and to assert their values. This is a quote from Modern Money Theory by Randy Wray:

However, I also believe that most of the tenets of MMT can be adopted by anyone. It does not bother me if some simply want to use the descriptive part of MMT without agreeing with the policy prescriptions. The description provides a framework for policymaking. But there is room for disagreement over what government should do. Once we understand that affordability is not an issue for a sovereign currency-issuing government, then questions about what government should do become paramount. And we can disagree on those. (Emphasis in original.)

The fact that MMT is value-neutral, that it can be used by people of every political persuasion is a powerful point in its favor. I don’t think we can say the same thing about neoliberalism.

Conclusion

There is much more to be said about pragmatism. It is a powerful tool we can use to cut through old ideas and useless distinctions. But perhaps its most important contribution is that it is an open-ended theory. It makes room for the endless possibilities of human beings. I think that is a powerful value.

The Politics Of The Green New Deal: More Democracy

Posts in this series.

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

The Green New Deal: OMG It’s Socialism!

The Politics Of The Green New Deal: We Can’t Pay For That

The Green New Deal restructures democracy in ways that benefit the working class at the expense of the donor class. The donor class gets its way most of the time, Here’s a recent discussion from Eric Levitz at tNew York Magazine. Levitz takes the Gilens and Page study farther, showing policies that are popular with majorities or large pluralities are not even considered by politicians. One example:

Take government drugs (…please): DFP and YouGov asked voters, “Would you support or oppose having the government produce generic versions of life-saving drugs, even if it required revoking patents held by pharmaceutical companies?”

Respondents approved of that idea by a margin of 51 to 21 percent. The proposal enjoyed the approval of a majority of Trump voters, and actually garnered more support in (stereotypically conservative) rural zip codes than in urban ones.

One of the drugs that meet this test is insulin; here’s a good description of the problem. In December 2018 Elizabeth Warren and Congresswoman Jan Schakowsky offered the Affordable Drug Manufacturing Act, which would put the government in the business of manufacturing generics to reduce prices. And here’s a predictable response, it’s evil socialism. Bills like this are not part of the discussion.

History tells us that capitalists will dominate the nation’s response to climate change, as they have in every economic disruption. The Green New Deal works against that outcome. Section 3 says

a Green New Deal must be developed through transparent and inclusive consultation, collaboration, and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses;

At present, the first three groups are rarely heard in legislative and policy circles, and civil society groups and academics are barely heard and pretty much ignored. This section alone will expand democracy. These unheard groups are nearly powerless, and other provisions of the Green New Deal are intended to strengthen these groups and increase their voice in the process of coping with efforts to salvage something from climate change. For example, Section 4.3 requires the government to

Provid[e] resources, training, and high-quality education, including higher education, to all people of the United States, with a focus on frontline and vulnerable communities, so those communities may be full and equal participants in the Green New Deal mobilization;

Section 4.6 requires

ensuring the use of democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers to plan, implement, and administer the Green New Deal mobilization at the local level;

Labor unions have played a strong role in protecting the interests of workers. Section 4.9 calls for strengthening labor unions and making it easier for workers to organize. Section 4.11 requires that trade agreements protect the interests of workers. Section 4.10 calls for

strengthening and enforcing labor, workplace health and safety, antidiscrimination, and wage and hour standards across all employers, industries, and sectors;

There is a connection between deeper involvement in strictly political matters and stronger unions. People start by participating in political decision-making, and learn that they can have actual control over public expenditures and policies. Then they apply that to their participation in union activities, and soon learn that they can have a say in the conditions that affect them for the largest part of their working day. They can change the conditions of work including safety, their schedules, and eventually they realize they don’t have to wear diapers to deal with lack of bathroom breaks, or suffer other abusive practices. Equally important for success in fighting climate change, working people often understand their jobs better than management. They can work smarter if they have enough power to make it happen. Perhaps the most important lesson I learned practicing Bankruptcy law is that no business ever failed because of its workers.

It works the other way, too. Participation in unions leads to more involvement in politics, and a clearer understanding of the issues. Unions have played a large role in Democratic politics, but the politicians have not done anything to protect unions and their interests. Stronger unions won’t accept their disregard.

Our lives seem different under this administration. The constant ratatat of garbage news from Trump’s brain and his erratic behavior swamp our news and our entertainment. At a personal level, the nonsense has dominated every dinner party I have hosted or attended since he got elected, leaving us struggling to change the subject or plunging us into a miasma of anger and despair. It took an out-of-town guest with a background in medieval history to break that chain, and remind me that politics has infected my life and that of my friends and family. The current level of democracy leaves us impotent. We can’t stop the damage, we can’t slow it down, and we can’t fix the real problems. We are powerless.

This in turn reinforced my reasons for thinking that the Green New Deal is vitally important. If it happens we open new channels for participation in the decisions that affect our day-to-day lives. Right now, Democratic politicians and their consultants and their rich donors tell us to work on their political campaigns, but not to upset them with primaries, not to establish purity tests, and most important not to demand radical change. Change is coming, they tell us, but just a little at a time and only if the Republicans won’t shout too loud.

My very first blog post at FireDogLake raised the question: what should Obama do for us? We supported him without making specific measurable demands. That’s not what the donor class did. But the Green New Deal is a demand from below. It’s a demand not just for climate action, but aspecific kind of action. It’s a demand for full participation by all of us in the decisions that affect our lives. It’s a statement that we aren’t going to allow the rich and their supporters to make the decisions and leave us to clean up the mess and eat the losses.

The Green New Deal Challenges The Domination Of Capital

The Green New Deal is an overarching statement of political goals for the Democratic Party, something the party has not had for decades. It lays out a vision of a future inspired by the best the party has to offer, Franklin Roosevelt’s Four Freedoms, which he laid out in January 1941 as the US stared at the unfolding crisis in Europe. In this post I called for just such a statement, and this is everything I could have hoped for. It is a combination of Roosevelt’s unfinished goals and the massive work done by liberals to expand the reach of the Constitution to previously disfavored groups. It offers hope and possibility as we confront the crisis of environmental disaster.

It also offers a stunning contrast to the closed and frightened Republican/MAGA plutocratic vision for this nation. Their hounds immediately attacked the messenger, the message and anyone who might want to consider the message with their usual childish insults and trollish memes, their version of political discussion. A few conservatives recognize the seriousness of the problem of climate change, but have nothing to offer, as reported by Emily Atkin in The New Republic.

Here is the text of H.R. 109. I encourage everyone to take a few minutes and read it. The summaries I’ve seen are insufficient to convey the brilliance of the document.

The Green New Deal acknowledges that meeting the challenge of impending climate disaster will be enormously disruptive. It’s most important virtue is that it doesn’t assume that the entire burden of the disruption will be borne by working people. Instead, it insures that workers are protected from disruption, not with some phony job training program, but with real protection. Equally important, it insures that capital will not be able to grab vast profits or control adaptation for their cash benefit.

Capitalism has brought staggering social and environmental changes in this country. Frequently, the technology that has produced those changes was the product of government research and development. Capitalists imposed all the costs of those social and environmental changes on working people and the poor while sucking up all the benefits for themselves. You don’t see the rich living next door to petroleum processing plants or airports or gravel pits or trash dumps. You don’t see their kids suffering from asthma caused by factory pollution or heavy truck traffic or worse. You don’t see them unable to pay medical bills or take their kids for needed medical attention. That’s for the little people.

The Green New Deal says that’s over. When the price of natural gas dropped, capitalists stopped using coal, and coal miners lost their jobs, their insurance, their homes and their futures. Under the Green New Deal, when natural gas is phased out every displaced worker will have a job and health care, because the Green New Deal offers a job guarantee and insists on universal access to health care. Communities, especially marginalized people, will participate in decisions about location of new manufacturing facilities and other issues affecting them, and that participation will enable all of us to protect ourselves from the costs capitalists impose on us today.

The Green New Deal recognizes that a substantial research and development program will be needed to create new technology to meet its goals. That’s going to be funded by the government. But this time there is no free ride for the capitalists. Section 4.1 requires the government to provide and leverage

… in a way that ensures that the public receives appropriate ownership stakes and returns on investment, adequate capital (including through community grants, public banks, and other public financing), technical expertise, supporting policies, and other forms of assistance to communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization ….

The entire document is designed to rebalance power in deciding the future of the nation. It is explicitly small-d democratic. It explicitly favors the interests of the vast majority. It explicitly slashes the power of the rich to dictate what, if any, response will be made to the threat of climate change.

This rebalancing is a serious challenge not just to capital and the rich, it is a serious challenge to both parties. Democrats claim to be the party of the people. The Green New Deal forces them to prove it. The Republicans represent the interests of the rich against the interests of working people. The Green New Deal makes this contradiction concrete. Both parties claim to want the best for the future of the country. The Green New Deal forces them to come up with positive programs or to do nothing in the face of mounting inequality, a zero-sum political economy, and impending environmental catastrophe.

There’s an even more direct assault on the dominance of capital in the Green New Deal. It calls for decarbonization of the economy. That directly threatens the wealth and power of a number of rich people, for example, the Koch family, whose fortunes are grounded on petroleum. The value of their fortunes will fall as oil becomes a mere feedstock for chemical processing. So will the fortunes of others, Russian oligarchs, Saudi princes, and African kleptocrats. The finances of a number of regimes of varying degrees of hostility to the US, including Russia, Saudi Arabia, the oil emirates, Iran, Iraq, and maybe ISIS. Their power will drop as the value of their natural resources falls. These are ruthless people with no interest in planetary survival. They will fight to the death to prevent the loss of power and wealth.

Meanwhile the media focuses on the horse-race and the cost. Can the Green New Deal pass? How could we ever pay for it? Every single article I’ve read makes a point of saying it’s politically impossible and almost all whine about the money. No one thinks the Senate with its piratical crew of Republican science deniers and Trumpists will ever pass it. And costs are not an issue until we agree to move it forward, and when it becomes real, brilliant economists like Stephanie Kelton will lead the way.

Right now every Democratic politicians opposed to the idea has to explain why their tweaks to neoliberal capitalism will accomplish something without crushing their voters. Republicans will continue to deny until the evidence overwhelms even their astonishing capacity for self-delusion. The rest of us have a planning document, something we can turn into legislation, something we can actually do that will make a difference. We’ll be working on it while the brain-dead bitch about the impertinence of the youngs, and politicians pour perfume on their campaign treasuries to hide the stench of raw petroleum.

Democracy Against Capitalism: Conclusion of the Conclusion

Index to all posts in this series.

My original plan for the multi-part conclusion was to show the differences between the analysis of Ellen Meiksins Wood in Democracy Against Capitalism and the views of Bruce Scott in Capitalism: Its Origins And Evolution As A System Of Governance. I quickly found a number of similarities in their views of capitalism and its dangers. I expected to find differences in their views of democracy, that Scott would edge away from Wood’s view that democracy is failing us, based primarily on what appears to be an early draft of Chapter 13 of his book. I was wrong. Scott also believes that democracy as practiced today is failing at the task of controlling the excesses of capitalism.

As evidence, this is from the very last paragraph of the epilogue:

This brief look at the role of the firm in a capitalist society suggests that achieving accountability for firms is a vital aspect of a successful, decentralized system of decision-making. At the same time, it suggests that achieving such accountability on a continuing basis as conditions change is anything but a simple task. As a result, market frameworks can be expected to be continually contested between the firms, the regulators, and other societal interests that are affected. We should expect that some measure of distortion is the rule rather than the exception.

That’s from page 639, so not really a brief look. Scott blames neoliberalism, though he doesn’t use that term. Instead, he argues with Milton Friedman’s Capitalism and Freedom throughout the first part of his book, so effectively that the reader cannot take Friedman’s neoliberalism seriously. In a scholarly work such as this, the following counts as invective.

A second view, and arguably a very influential one among US economists, was that capitalism is a self-regulating system based upon voluntary transactions among consenting adults. This view, which has drawn little benefit of any historical perspective, is perhaps best exemplified by Milton Friedman and the Chicago School. P. 12.

In Scott’s telling, the US chose to separate the economy from the rest of society, and turned over management of the economy to the private sector, subject only to rules enacted by the political arm. That led to frequent financial crises and then to the Great Depression. Scott sees the New Deal as the government’s response to unbridled capitalism, and bases his model on the interregnum.

But then he confronts the obvious: beginning in the 1970s the political arm wrecked the regulatory framework of laws, regulations and institutions that held capitalism under light but firm control. Without controls, capitalism now threatens to democracy itself as firms have once again become strong enough to control governments at all levels, just as they were from the 1870s through 1932. In his discussion of the Great Crash of 2008, he again criticizes neoliberalism, this time Alan Greenspan. According to Scott, Greenspan’s ideology has no basis in reality or values, and it caused damage to millions of Americans.

As to the impact on democracy, Scott says:

Democracy is premised on the notion of moral equality among individuals and the freedom of self-determination; inequalities beyond some limit become incongruous. Capitalism, on the other hand, is premised upon the notion of granting individuals economic freedoms to develop their talents and resources, as well as “the primary freedom of choice in the market place.” Though individuals are subject to governance through regulated forms of competition, those who excel in that competition receive higher rewards, which they are allowed to retain and build upon to achieve still further advantage. How can two systems based upon such differing premises manage to be mutually stabilizing let alone mutually supportive? P. 96; fn omitted. The quote is from a third party.

Scott doesn’t offer a path to change, but then there’s no reason he should in a scholarly history of economics. Wood believes that nothing will change unless the working class leads the way. I took up the issue of class in the Marxist sense here, but I think the Marxist definition in terms of relations to the means of production is nearly useless today. Instead, I propose that the working class consists of those who must sell their labor to live. It includes a large number of managers and professionals who have not accumulated wealth, and those who suffer the stress of trying to live a middle class life when the things that life requires steadily increase in cost while wages and salaries remain stagnant. With that definition Wood is right: no change will come without the insistence of the workers.

And here’s the fun part: they seem to agree that capitalists are the problem. Wood is a Marxist, so her view is expected. Scott is a genteel defender of capitalism, as a review of the section on the Great Crash reveals. He thinks it was caused by

… mistaken ideas and beliefs among the major actors themselves. These mistaken ideas led to repeated policy mistakes. P. 616, fn omitted.

As a side note, bland justifications like this are sprinkled throughout the text, and that’s why I see Scott as a defender of capitalism. Anyway, by “mistaken ideas” he means neoliberalism. He says bluntly that the capitalists caused the Great Crash and were not held accountable by being fired for incompetence, but he ignores the their fraud. P. 639.

Neither Wood nor Scott engages with any of the theoretical ideas I took up in my discussions of Polanyi, Arendt, Veblen, the Frankfurt School, Foucault, or Pierre Bourdieu.

And finally, neither Scott nor Wood offers a path forward. Regulate capitalism or die, they say, but they offer nothing to those of us trying to figure out what is to be done.

As I see it, there is a general agreement running across all these writers that capitalist ideologies, first laissez-faire and now a more sophisticated neoliberalism, is a serious problem for democracy. In theoretical terms, it seems to me that neoliberalism is imposed by the capitalists on society as an act of what Bourdieu called symbolic violence. The ideology offers the dominant class (capitalists) a tool for maintaining their position while the dominated class (everyone else) accepts that dominance as right and just, because it is the outcome of the ideology they accept and follow.

This suggests a strategy for serious change. Attack neoliberalism directly and forcefully as a theoretical ideology with no factual basis, just as Scott claims. In doing so, you aren’t condemning markets or competition. You are attacking an invented theory used by the dominant class to pretend that its dominance is natural and just. A good bit of what I’ve written in these posts is directed at ways to attack neoliberalism, but I’m no Frank Luntz and do not know how to turn these ideas into practice. Still, that’s what I think we have to do.

Democracy Against Capitalism: Conclusion Part 2

Index to all posts in this series.

The Marxist views of Ellen Meiksins Wood in Democracy Against Capitalism give a bleak picture of capitalism which I contrasted with the view offered by Bruce Scott, the Paul Whiton Cherington Professor of Business Administration, Emeritus, at the Harvard Business School. Scott’s paper, The Political Economy of Capitalism is apparently a draft of a chapter of a book he wrote titled Capitalism: Its Origins and Evolution as a System of Governance. The book is available here.

The paper gives a picture of capitalism as an organic system that evolves as it encounters new things, rather than as a physical system, one subject to the laws of physics and chemistry. Scott calls capitalism a form of indirect governance of the economy. Here’s an extended quote from the paper that gives a fair picture.

Capitalism, as I define the term, is an indirect system of governance based on a complex and continually evolving political bargain in which private actors are empowered by a political authority to own and control the use of property for private gain subject to a set of laws and regulations. Workers are free to work for wages, capital is free to earn a return, and both labor and capital are free to enter and exit from various lines of business. Capitalism relies upon the pricing mechanism to balance supply and demand in markets; it relies on the profit motive to allocate opportunities and resources among competing suppliers; and it relies upon a political authority (government) to establish the rules and regulations so that they include all appropriate societal costs and benefits. Government and its agents are held accountable to provide physical security for persons and property as well as the laws and regulations. Capitalist development is built from investment in new technologies that permit increased productivity, where a variety of initiatives are selected through a Darwinian process that favors productive uses of those resources, and from the periodic modernization of the legal and regulatory framework as indicated by changing market conditions and societal priorities. Capitalist development requires that government play two roles, one administrative, in providing and maintaining the institutions that underpin capitalism, and the other entrepreneurial, in mobilizing power to modernize these institutions as needed.

I leave it as an exercise for the reader to work out the wide variances between his conceptualization of capitalism and real live capitalism. I will only point out the most obvious problem: the externalities of pollution are not corrected by any regulation or law, efforts to do so have been struck down by the courts, and the coming disaster cannot and will not be fixed by capitalism.

In the book, Scott says that he was dissatisfied with existing histories of capitalism because they were observational rather than explanatory. What he found lacking was human agency. This book is his attempt to incorporate human agency into the history of the evolution of capitalism.

When human agency is taken into account, the story of US industrial development in the 19th century becomes one of competition between those who wanted to empower firms to grow and become more productive and inevitably more powerful politically as well as economically, and those who wished to establish a regulatory framework to protect the public from the abuse of private power by those same firms, for instance, through regulation of railroad rates and/or by restricting the rights of firms to grow through mergers and acquisitions. P. xxi.

Scott claims that our current system features two systems of government, one for the economy and one for all other matters. The economy is managed by private interests, under rules and laws created by the central authority and by intermediary institutions. He calls this indirect governance of the economy. The other part of society is governed directly by the central authority. He identifies a three tier system of governance for the economy, using a sports analogy. In Olympic sports, there are the athletes and the games at one level, the governing bodies of the sports at another, and the top tier is occupied by the Olympics organization. By analogy, there are business firms at the first level of the economy, then institutional foundations, such as regulatory authorities, and then the elected officials at the third level.

In sports, as indeed in capitalism, political authorities play two distinct roles: one administrative, in maintaining the existing system of playing fields and enforcing the existing rules, and the second entrepreneurial, in mobilizing power to win the needed votes in the legislature in order to admit new teams, change the locations or timing of competition, change the rules and regulations, and/or change the distribution of revenues. Book, p. 50.

It’s possible to see the US system of capitalism as Scott describes it, at least in abstract theoretical terms. I don’t think he has solved the human agency question correctly. At least in the parts I’ve read so far, Scptt doesn’t discuss power relations in capitalism. For Wood, power relations are central to capitalism. She identifies those relations as the social relations between producers and capitalists: domination, exploitation and appropriation. Compare that with the description in the quote from Scott’s paper above: workers are free to work for wages (or not), capitalists are free to invest seeking a return (or not). What happens to workers who don’t work for wages? What happens to capitalists who don’t invest? The different outcomes are obvious: the workers starve, and the capitalists lives off their money.

Scott also understates the problems created by the power of the capitalists inside the organizational structure he describes. He is clear that capitalists have the ability to lobby, buy politicians and regulators and courts, and to rig the system in their favor. He recognizes that some of the gains of capitalists are the result of the “deliberate distortion of [market] frameworks for private advantage” but calls them by the bloodless term “externalities”. From the paper:

While small imperfections can be overlooked as acceptable aspects of an imperfect process, large, deliberate distortions for private gain are likely to add to the income inequalities in the society, creating and/or sustaining a vicious circle in which the markets serve as a way for the rich to exploit the poor. On the other hand, if a poor majority were to take political power in a country or region it could use that political power to shape institutions to disadvantage the rich, including to take their property.

Fear of letting the poor have a significant role in government has motivated the dominant classes throughout history, with few concrete examples of the horrible possiblity of losses by the rich.

And I’ll say again, capitalism isn’t going to fix the coming planetary disaster. In fact it’s going to make it worse by insisting on pumping more carbon dioxide and other chemicals into our environment. The continued profitability of huge swathes of the economy depends on it. As long as the economy is governed solely by the profit motive, there can be no solution.

Update.

Commenter Anon raises an interesting question: can the bloodless quality of Bruce Scott’s account of capitalism be attributed to Scott’s life work in the Harvard Business School. There is a partial answer in the Preface, which may be the single most useful preface I have ever read. He describes the evolution of his ideas, complete with the names of individuals, including his research associates, who helped him formulate them, and books and experiences that were important.

For those interested, this is worth reading, and I have a better understanding of the question Anon raises. In short, I think Scott has a framework grounded in standard economics and standard political science. He works at moving away from it, as is evident in his flat rejection of neoliberalism (he doesn’t use that term), as well as by his clear affinity for a form of capitalism. Thus, he finds himself in the gap between the structured views of capitalism we see in Wood, and the materials he found useless or dead wrong. He wants to construct a different view, but he tries to salvage as much as possible of the views he’s always held.

I’ll add a discussion of the similarities between Scott and Wood in the next part of this extended conclusion.

Democracy Against Capitalism: Index To Posts

This list will be updated with links to the conclusory post or posts on Democracy Against Capitalism by Ellen Meiksins Wood, and all posts are updated to include a link to this post. As a reminder, I read this book on a Kindle, and it didn’t give page numbers. All citations are to the Kindle location, as best I could tell.

This book turned out to be very difficult going. Part of it was my own unfamiliarity with the vocabulary of Marxist thought, where even the definitions are hard to understand concretely. Part of it is that most of the previous books engage with a history I’m vaguely familiar with, while the primary issues of Marxist thought relate to the transformation of feudalism into capitalism, and from monarchy to liberalism. Wood adds detailed discussions of ancient Greek and Roman history that I didn’t knowabout. Understanding these transformation required a lot of background reading. Another difficulty is that I’m not familiar with any of the work Wood cites. Unlike most writers, Wood only engages with Marxists, with the exception of Karl Polanyi, whose work she mentions briefly.

But mostly it was difficult because it is a criticism of capitalism from outside capitalism. All of the other books I’ve discussed take capitalism as a given, and do not even offer much of a definition. At most, they criticize it from inside the bounds of capitalism. This orientation makes it very difficult for those of us raised to believe that the only option to capitalism was pure evil.

I mention these difficulties because I think this perspective is worth the difficulties of learning a new set of ideas. Even if some of the book is jargon, the value is there, and it’s worth wading through.

I did not write about Chapters 5, 8, or 9. Chapter 5 focuses on Wood’s view of Weber. The latter two chapters concern the social issues on which the left was focused during the late ’80s and early 90s. Wood argues that these issues are important, but that they were diverting leftists from the economic issues that have always been at the center of left theory. Maybe progressives are relearning the political reality that food and shelter are at the forefront of the lives of almost everyone. I generally agree with that view and have written about it repeatedly.

In my introduction, I mentioned a post by Eric Levitz, a writer at New York Magazine. I hope people will take the time to read this excellent discussion of relationship between capitalism and democracy, and the article by Jedidiah Purdy linked in it. As I have said throughout this series, you don’t have to be a Marxist to see the problems capitalism creates, and I think these two pieces illustrate that nicely.

1. Introduction To New Series.

2. Competing Stories About Wages.

3. The Separation Of Politics And Economics.

4. Capital In A Fiat Money World.

5. Base, Superstructure and More Definitions.

6. Neoliberalism.

7. Class.

8. Notes On Class.

9. Markets.

10. Democracy.

11. Liberalism.

Conclusion, Part 1 on Capitalism

12. Democracy Against Capitalism: Conclusion Part 1.

13 Democracy Against CApitalism: Conclusion Part 2.

Democracy Against Capitalism: Liberalism

In Chapter 7 of Democracy against Capitalism Ellen Meiksins Wood sets out an historical analysis of the politics of the transition from Feudalism to Capitalism, starting with England. In Wood’s telling, two of the major steps along the way were Magna Carta and the Glorious Revolution of 1688. Both events temporarily settled the relations between the nobility and centralizing state in the person of the monarch. Neither event had anything to do with the establishment of democracy in the sense of rule by the people. The settlements assume the continued servility of the masses, and continued domination by the aristocracy. The power of the nobility was based on their economic domination through non-economic means, military, juridical, and ideological, and on control over the power of the nascent state.

As feudalism morphed into capitalism, domination was split between two forces, the centralizing state and increasing economic power, mostly held by the aristocracy and by the rising merchant class. The latter were threatened by growing centralized power, and reacted to it by working to increase the power of the Parliament which they controlled. Capitalism helped make this possible because the economically dominant class was able to extract surplus from the productive sector through economic power, only somewhat aided by the power of the state.

Liberalism became the dominant ideology among the dominant economic class. This use of the term “liberal” has a specific meaning: it refers to a set of values including limited government, constitutionalism, individual rights and civil liberties. Kindle Loc. 4499. The pre-condition for this kind of liberalism is the existence of a centralized state, one that has to be limited by these ideological constructs. Kindle Loc. 4502.

The dominant classes were willing to extend civil protections from the central state to the multitudes. What they were not willing to do was to allow any intrusion on their rights of property. That led to a search for legal and constitutional protections of their property rights. Capitalism provided the economic framework for this project. Citizenship relates to the State, and a growing right to select representatives to govern. Citizenship is irrelevant to the economy, where the economically dominant class controls everything. Legal and ideological structures protect that division.

Wood looks at US history, and sees a somewhat similar process. In the US, a limited form of democracy existed in the States at the time the Constitution was written, and the Founding Fathers could not displace it. Still, the same solution emerged. The Constitution protects property interests. Theoretically, all citizens share in that protection of property, but the emphasis is on political freedoms, the liberal freedoms of individual rights and civil liberties, and limited government. The principle limit on government was to prevent it from imposing restrictions on the free use of property. The dominant class, first merchants, then industrialists, and then financiers, controls the economy.

The idea was that all citizens would be represented by their elected officials. Wood says that the representatives are removed from the people at large, both spatially in the sense that the central government was isolated; and in the sense that the representatives are few in number compared to the number of citizens.

In ‘representative democracy’ rule by the people remained the principal criterion of democracy, even if rule was filtered through representation tinged with oligarchy, and the peoplel was evacuated of its social content. Kindle Loc. 4436; ital. in orig.

The term “social content” means the natural social context in which people live, relations of home, work, church, community. This idea of representation is natural according to Alexander Hamilton in Federalist No. 35, quoted by Wood

The idea of actual representation of all classes of the people, by people of each class, is altogether visionary…. Mechanics and manufacturers will always be inclined, with few exceptions, to give their votes to merchants in preference to persons of their own professions or trades…. they are aware, that however great the confidence they may justly feel in their own good sense, their interests can be more effectually promoted by merchants than by themselves. They are sensible that their habits in life have not been such as to give them those acquired endowments without which, in a deliberative assembly, the greatest natural abilities are for the most part useless…. We must therefore consider merchants as the natural representatives of all these classes of the community. Kindle Loc. 4240.

These words could have come from Plato, substituting a different elite for merchants, or from any other elitist theorist. This obviously is not rule by the people, as in the original meaning of democracy. As I type this, we can see our elitists in action, busily confirming a known liar and a sexual creep to join four other conservative hacks on SCOTUS, where they will decide just how much majority rule we are allowed.

The political sphere is the home of limited government, the home of civil liberties, the home of individual rights. That sphere is separate from the economic sphere, which is put into the hands of the oligarchs, the rich, and their minions. The economic sphere is the area that provides us with the means to live, mostly by selling our labor. The idea is that the political sphere is not supposed to interfere with the economic sphere, insuring that every part of our productive lives are at the disposal of the rich, including our ability to provide our families and ourselves with food and shelter.

Wood sees liberalism as “democracy tinged with oligarchy”. As I explain in this 2013 post at Naked Capitalism, we live in an oligarchy inside a democracy. This and similar posts at FDL are based on Oligarchy in the United States? by Benjamin Page and Jeffrey Winters and on Winters’ book Oligarchy. They argue that Oligarchs share three interests:

1. Protecting and preserving wealth
2. Insuring the unrestricted use of wealth
3. Acquiring more wealth.

Oligarchs differ on what we call social issues (the carceral state, abortion, gay rights, guns and so on), which in Wood’s telling are the domain of the political sphere. Consequently some legislation on those issues is possible. Their views on economic issues are almost identical. A threat to one rich person is a threat to all. Therefore they unite on economic issues and generally prevail when legislation or regulation threatens any of them. Or when they really want a SCOTUS nominee to be confirmed.

Democracy Against Capitalism: Democracy

The second half of Ellen Meiksins Wood’s book, Democracy Against Capitalism, is devoted to a discussion of the current state of democracy in the UK and the US. She begins with a discussion of ancient Athenian democracy, which she regards as a real democracy, and a good model for comparison. In Athens, there was a class of peasant farmers and artisans who were juridically free citizens. They owed no duties to tyrants or aristocrats. They possessed their own means of production, lands and tools, and worked as they saw fit with out any regard to the demands of any other class, or tyrant or government. There were slaves, to be sure.

But the free labourer enjoying the status of citizenship in a stratified society, specifically the peasant citizen, with the juridical/ political freedom this implied and the liberation from various forms of exploitation through direct coercion by landlords or states, was certainly a distinctive formation and one that signaled a unique relationship between appropriating and producing classes. Kindle Loc. 3586.

In other pre-capitalist societies, either the state or a group of aristocrats appropriated some or all of the production of the peasant class “… through various mechanisms of juridical and political dependence, by direct coercion – forced labour in the form of debt bondage, serfdom, tributary relations, taxation, corvée and so on.” Kindle Loc. 3700.

In classical Athens, all citizens, including the peasant farmers and artisans, had the right to participate in decision making on all issues. Of course, people generally deferred to experts on technical matters, such as warship design, but all were entitled to hear the presentations of the experts and to choose the one they thought best. In the same way, all participated in other political decisions. It goes without saying that this “all” didn’t include slaves and women. Even so, this is a remarkable advance for the peasant class.

This arrangement was the subject of debate among the Athenians; though it’s fair to say that pretty much everything was a subject of debate there. Wood offers a fascinating discussion of Plato’s dialog Protagoras as an example. Protagoras was perhaps the most famous of the Sophists, a group of teachers of wisdom and virtue. We only have fragments of his work directly (as opposed to the words Plato puts in his mouth), but I especially like this:

Man is the measure of all things; of things that are, that they are; of things that are not, that they are not. P. 239, The Pre-Socratics, ed. John Wainwright.

In the dialog, Socrates defines the issue as whether virtue can be taught. Roughly, Wood claims Plato argues through Socrates that virtue is philosophical form of knowledge available only to those with a privileged access to a higher truth. Obviously to Plato man is not the measure of all things; rather there is some other sphere of understanding and universal truth that eludes most people, but is available to a special few.

In the Dialog, Protagoras argues that virtue is taught from the beginning of life.

Education and admonition commence in the first years of childhood, and last to the very end of life. Mother and nurse and father and tutor are vying with one another about the improvement of the child as soon as ever he is able to understand what is being said to him: he cannot say or do anything without their setting forth to him that this is just and that is unjust; this is honourable, that is dishonourable; this is holy, that is unholy; do this and abstain from that. And if he obeys, well and good; if not, he is straightened by threats and blows, like a piece of bent or warped wood. At a later stage they send him to teachers, and enjoin them to see to his manners even more than to his reading and music; and the teachers do as they are desired. And when the boy has learned his letters and is beginning to understand what is written, as before he understood only what was spoken, they put into his hands the works of great poets, which he reads sitting on a bench at school; in these are contained many admonitions, and many tales, and praises, and encomia of ancient famous men, which he is required to learn by heart, in order that he may imitate or emulate them and desire to become like them.

That sounds like something Pierre Bourdieu might have written. We teach our young how to be virtuous in our own societies, using the social understandings we learned in the same way, and through our own experience of our culture, including our own study of the texts available to us. This argument leads to the conclusion that every citizen partakes in virtue, and that this civic virtue is the indispensable tool of democracy. Socrates takes the view that only some have access to the higher, universal virtue, and those ought to rule. Wood adds that the producers should be required to enrich and feed the chosen few.

Wainwright says that the Sophists primarily taught people how to win arguments. Those arguments might or might not be best for the community, or even virtuous or moral. Wainwright seems to favor Plato’s position. This argument is ongoing; for example, it’s a big part of Zen and the Art of Motorcycle Maintenance by Robert Pirsig.

Two thoughts.

1. Philosophy. Plato draws a distinction between appearance and reality, a dualism that survives today. Appearance is the aspect of reality that comes to the human mind mediated through our senses. Reality is something else, a deeper unchanging universal existence which only some precious few of us can grasp. One analogy is Plato’s cave, where we humans can perceive only the shadows that real things cast on the wall, not the things themselves. It’s as St. Paul says, 1 Corinthians 12.

For now we see only a reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully, even as I am fully known.

Reading this, it’s easy to see how St. Thomas Aquinas might have been influenced by Plato, if he had those texts, and at least by the Neo-Platonists, which he did have.

Protagoras’ view that man is the measure of all things rings true to me. I will resist the temptation to write about this in depth, but I more or less agree with the ideas Richard Rorty, the American pragmatist, discusses in his accessible collection of essays, Philosophy And Social Hope. It’s worth noting that Rorty really despises Marxism, at least dogmatic Marxism, for reasons that are baffling after reading Democracy Against Capitalism, and which are hard to square with his appreciation of E.P. Thompson’s The Making of the English Working Class, a book praised by Wood.

2. Democracy. I think Protagoras has the better argument on this point. Decisions about how society ought to operate should be made with the participation of as large a number of citizens, the people most affected, as possible. Wood agrees. She thinks that socialism comes from decisions made by a large majority of us or not at all. In our current system, we assume that it’s enough that we are represented in those decisions through our elected officials. But what does that even mean in our current version of democracy?

Democracy Against Capitalism: Class

Chapter 3 of Ellen Meiksen Wood’s book, Democracy Against Capitalism, takes up the issue of class. She says that class can be defined in one of two ways: “either as a structural location or as a social relation.” Kindle Loc. 1504, ital. in original. The first way takes an index and divides it into parts. For example, we rank everyone by income, then call the lowest quintile the lower class, the next three quintiles, the middle class, the 81-99% the upper middle class, and the rest the upper class.

The second way is to define class in terms of relationships, the relations of the members to the means of production, relations among themselves, and relations with members of other classes. In this treatment, the working class is people who have no direct access to the means of production and only have their labor to sell. Marx wrote:

“In the process of production, human beings work not only upon nature, but also upon one another. They produce only by working together in a specified manner and reciprocally exchanging their activities. In order to produce, they enter into definite connections and relations to one another, and only within these social connections and relations does their influence upon nature operate – i.e., does production take place.

I saw a folk musical recently in Chicago called Haymarket, about the Haymarket Affair, a general strike that turned violent in Chicago in 1886. The play opened with one actor singing a union song, Solidarity Forever. She encouraged us to join in the chorus, which, of course, I did. It was a great way to demonstrate how organizers of that day worked to instill a sense of comradeship among workers in different industries, a sense that they had a lot in common, a sense that they formed a class in opposition to the capitalists, a/k/a the “greedy parasites”. This is the last element of class in Marxist thinking. The class can be seen objectively, which Marx called a class-in-itself, but when the members become aware of their status as class members and begin to struggle together for a common end, Marx called it a class-for-itself.

This last point is illustrated by E.P. Thompson’s book, The Making of the English Working Class, which Wood discusses at length. The basic class structure is in place long before the members begin to understand that they are a class. People similarly situated in the relations of production experience them in class ways. Kindle Loc. 1614. Shared experiences bring them together. Ultimately the members of the class become conscious of the conflicts of interest and aggravation that are making them miserable, and those become the grounds of struggle. The struggle eventually leads to confrontation. Marx argued that in the long run those confrontations lead to socialism as the only form that gives workers a voice.

Wood identifies the relations of production in capitalism as exploitation, domination and appropriation. Neoliberal capitalism has jacked up these three relations at the expense of all workers. For example, meat companies use government regulations to increase the exploitation of meat cutters by increasing line speeds. Payday lenders suck money out of military families and other low income people, protected by the totally not corrupt Republican Mick Mulvaney. For domination, look at the way Amazon warehouse workers are treated. As to expropriation, look at the latest research on the impact of concentration of businesses on wage rates. Or just check out this simple chart, discussed here. The blue line represents corporate profits in constant dollars; the red line is wages in constant dollars.

The concept of class has received “remarkably little elaboration, either by Marx himself or by later theorists…”, Kindle Loc 1519, but it’s possible to identify several. Capitalists own the means of production and control access to them. The working class owns no assets and has no access to the means of production other than through individual relations with capitalists. They own only their own labor, and rely on their ability to sell that labor to stay alive and reproduce. Slaves don’t own themselves or their labor. Professional people, small business people and artisans own a little property and use it to produce goods and services for sale. Many of them are dependent on the capitalists in the financial sector through loans and leases, which compromises their independence as a class.

In America, everyone is middle class. Barack Obama appointed Joe Biden to chair a multi-agency Middle Class Task Force. The Department of Commerce was the only agency to respond, as I discussed here. The Department offered the following definition of middle class:

Middle class families are defined by their aspirations more than their income. We assume that middle class families aspire to home ownership, a car, college education for their children, health and retirement security and occasional family vacations.

There’s something fabulously American about that definition, so focused on the individual and so utterly indifferent to the context in which people try to achieve their aspirations. Also, who doesn’t want that stuff? The vacuity of the definition makes it clear that we as a nation are not willing to confront the implications of class.

In our highly differentiated economy, it isn’t easy for people to understand that the unpleasantness or worse that they endure in their jobs is common to everyone. That makes the nastiness feel like something specific to the job, a bad manager, bad policies or other excuses. We don’t notice appropriation because the capitalist pumps money out of workers using the “market”, and producers think it’s normal for the capitalist to grab all the profits. Somehow US workers don’t recognize that they are being exploited. They think their long hours and wrecked evenings and weekends and lack of vacations and medical and personal leave and lousy pay and benefits are just fine.

Wood has a different idea. She thinks that capitalism has successfully separated democracy from the economy. Everyone agrees that the government should be controlled democratically. People are taught that the economy is and should be controlled by private interests, and that private control should be sanctioned and enforced by government. Employers exercise domination and control in ways that would not be acceptable if done by the state. Employers restrict exercise of political rights in ways that are forbidden by the Constitution to the government. Fear of losing our income silences most of us at least occasionally.

Wood argues that the economy should not be separated from democratic control. She doesn’t offer a specific mechanism; she thinks that people will eventually demand change, and that the new controls will spring from democratic control over the State. She quotes E. P. Thompson who asked:

By what social alchemy did inventions for saving labour become agents of immiseration? Kindle Loc. 1739.

We can’t begin to solve the problems capitalism creates until we all come to grips with this question. And we almost know the answer, even if we haven’t verbalized it yet. It springs from the relations of the capitalist mode of production: exploitation, domination, and appropriation.