Þe Persistent Structures of Antiliberal Thought

BRIEFLY NOTED: For 2022-02-02 We

CONDITION: On the Omicron Downslope?

Not really noticeable yet here in Berkeley…

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First: The Persistent Structures of Antiliberal Thought

I often say that Frank Fukuyama's big mistake in his “The End of History” <https://www.jstor.org/stable/24027184> was believing that fascism had died at the hands of the Red Army in the rubble of Berlin in 1945. Yet at the same time Frank was writing, Isaiah Berlin was undertaking one of his expeditions into the intellectual milieu of Saint Petersburg in the 1800s, and finding there what we now recognize as what we now see revived as Trumpism:

Isaiah Berlin (1990): Joseph de Maistre & the Origins of Fascism: ‘This is… a genuine conviction… that men can only be saved by being hemmed in by the terror of authority…. Their appointed masters must do the duty laid upon them by their maker (who has made nature a hierarchical order) by the ruthless imposition of the rules—not sparing themselves—and equally ruthless extermination of the enemy. And who is the enemy? All those who throw dust in the eyes of the people or seek to subvert the appointed order. Maistre calls them “la secte.” They are the disturbers and subverters. To the Protestants and Jansenists he now adds deists and atheists, Freemasons and scientists, democrats, Jacobins, liberals, utilitarians, anticlericals, egalitarians, perfectibilians, materialists, idealists, lawyers, journalists, secular reformers, and intellectuals of every breed; all those who appeal to abstract principles, who put faith in individual reason or the individual conscience; believers in individual liberty or the rational organization of society, reformers and revolutionaries…. This is a catalog of which we have since heard a good deal. It assembles for the first time, and with precision, the list of the enemies of the great counterrevolutionary movement that culminated in fascism…

LINK: <https://www.nybooks.com/articles/1990/09/27/joseph-de-maistre-and-the-origins-of-fascism/>

The lesson that personal authority is necessary—that, as Karl Polanyi wrote at the end of The Great Transformation—fascists believe that individual freedom must be surrendered to obedience to the will of the leader if humans are to live successfully in society—is, indeed, the basic fascist lesson. People must, in Polanyi’s words, “resign [themselves] to relinquishing freedom and glorif[y the] power which is the reality of society”, just as a single stick that claims to be free is soon broken, while if it loses its freedom in a stick-bundle tied with leather thongs it becomes a mighty force in the hand of its wielder. Mussolini took this to be the lesson from the power he saw in ethno-nationalism during World War I.

But there are other liberal and anti-liberal currents.

Lenin suffered from the infantile mental disorder.of believing that upon the removal of the market the oppressive state would also wither away, and all would be very simple and easy, for "accounting and control necessary... have been simplified by capitalists to the utmost and reduced to the extraordinarily simple operations—which any literate person can perform—of supervising and recording, knowledge of the four rules of arithmetic, and issuing appropriate receipts."

What a maroon!!

Keynes thought the problem could be finessed with an extremely light-handed amount of central planning: full-employment policy, and the euthanization of the rentier class by the low-interest rates need to implement full-employment policy, would do enough of the job to make the economic problem cease being a bigger deal than the problem of the continued survival of Disco.

Polanyi himself called for a kind of “socialism”. But what kind? He wrote: “acceptance of the reality of society gives man indomitable courage and strength.... As long as he is true to the task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality..."

That peroration may have satisfied Polanyi, but I have no idea what it means.

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One Audio:

Richard Baldwin & Tim Phillips: Managing Risk in Global Supply Chains: ‘Covid–19 demonstrated that modern global supply chains do not guarantee food in supermarkets or PPE in hospitals. Richard Baldwin tells Tim Phillips how risky these supply chains really are, and what we could do to shore them up… <https://voxeu.org/vox-talks/managing-risk-global-supply-chains>

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One Picture:

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Very Briefly Noted:

• Marcus Tullius Cicero: De Re Publica <https://www.gutenberg.org/files/54161/54161-h/54161-h.htm>

• Serhii Plokhy: The Empire Returns: Russia, Ukraine & the Long Shadow of the Soviet Union: ’The Kremlin attempts to reassert control over its neighbours, Ukrainian historian uncovers the deep roots of the crisis… <https://www.ft.com/content/0cbbd590-8e48-4687-a302-e74b6f0c905d>

• Peter M. Shane: Conservative Justices Versus Legal Text, the Constitution, & Public Health: ‘Str[iking] down the Biden OSHA rule for COVID–19, the high court’s conservatives ignored their own principles… <https://washingtonmonthly.com/2022/01/31/conservative-justices-versus-legal-text-the-constitution-and-public-health/>

• Alexander Pope: Of the Use of Riches: An Epistle to the Right Honourable Allen, Lord Bathurst <https://saintlukebc.org/book/of-the-use-of-riches-an-epistle-to-the-right-honourable-allen-lord-bathurst-by-mr-pope-the-second-edition>

• Kathleen Mahaffey: Pope’s ‘Artimesia’ and ‘Phryne’ as Personal Satire <https://www-jstor-org.libproxy.berkeley.edu/stable/pdf/513634.pdf>

• Gideon Rachman: The International Cult of Vladimir Putin: ’If the Russian leader triumphs in Ukraine, his thuggish style will gain new followers… <https://www.ft.com/content/da08b08c-eac3-4586-abe3-c3691cb54f44>

• Beatrice Cherrier: ’Here’s tweetstorm on the history of quantitative economics: Focus was on 1952 ‘Measurement w/o theory’ debate b/w Cowles & NBER…

Beatrice Cherrier @Undercoverhist

1/ Weekly lecture was on “what should come first: theory or data?” so here’s tweetstorm on the history of quantitative economics Focus was on 1952 ‘Measurement w/o theory' debate b/w Cowles & NBER – replayed as structural vs reduced-form in 2000s & uses of machine learning now

• Hamish McKenzie, Chris Best, and Jairaj Sethi: Society Has a Trust Problem. More Censorship Will Only Make It Worse

Society has a trust problem. More censorship will only make it worse.

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Paragraphs:

Pedro Schwartz: In Praise of Neo-liberalism: ‘Pigou’s case against free markets was they were inefficient due to an endless number of external effects. Ronald Coase effectively turned the tables on Pigou with two arguments: that people and firms in the market often corrected externalities by mutual agreement, and that solutions imposed by government were more often a worse outcome than the starting situation. In the famous 1959 dinner at the home of Aaron Director… Coase overturned a majority of twenty against his theorem at the beginning of the dinner. What is important for the neo-liberal position is that Coase did not take it for granted that markets functioned perfectly…

LINK: <https://www.econlib.org/library/Columns/y2013/Schwartzneoliberalism.html>

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Robert Armstrong & Ethan Wu: About that Big Fed Pivot…: ‘The rates picture changes. A little…. The bond market reflects confidence… high inflation will last a year or two, at most…. That confidence is starting to waver a bit. With investors spooked by a hawkish Federal Reserve (perhaps too soon, in our view), the entire yield curve has moved up… the biggest bulge is toward the middle… the longer… only… a touch (a friend called it the “anaconda curve”)…

LINK: <https://www.ft.com/content/3bf4af71-cf1f-49c8-8ec5-c559037111ab>

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Xi Jinping: Making Solid Progress Toward Common Prosperity: ‘After the launch of reform and opening up in 1978, through a thorough review of both positive and negative historical experiences, our Party came to realize that poverty is not socialism, and thus began breaking down the constraints of outdated systems. This allowed some areas and some people to become better-off first… drove the liberation and development of productive forces…

LINK: <http://en.qstheory.cn/2022-01/18/c_699346.htm>

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Nathan Nunn & al.: African History through the Lens of Economics: ‘The shadow that Africa’s past casts on contemporary economic, social, and political development… a free online course on “African History through the Lens of Economics”, which will bring together the considerable volume of work… open to students with a background and interest in economics, political science, history, cultural anthropology, and psychology…

LINK: <https://voxeu.org/article/african-history-through-lens-economics>

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Quamrul Ashraf & Oded Galor: Dynamics and Stagnation in the Malthusian Epoch: ’This paper examines the central hypothesis of the influential Malthusian theory… improvements in the technological environment during the preindustrial era… leading to a larger, but not significantly richer, population…. In accordance with the theory, technological superiority and higher land productivity had significant positive effects on population… but insignificant effects on the standard of living, during the… 1–1500 CE…

LINK: <https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.101.5.2003>

PAID SUBSCRIBER ONLY Content Below:

DRAFT Review of R. Glenn Hubbard: The Wall and the Bridge

The real sea-change came in 1870, with the coming of what Simon Kusnetz <https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/lecture/> labeled: Modern Economic Growth. Since then, humanity’s global deployed-and-diffused technological capabilities have roughly doubled every 35 years or so, revolutionizing the economy each and every generation, and then re-revolutionizing it again in the next generation. Technological progress, the market economy, and modern capitalism brought extraordinarily efficient new ways of making old and new things. But if your life was centered around making old things in the old way? Well, it was for good reason that Joseph Schumpeter called modern capitalism “the perennial gale of creative destruction” <https://archive.org/details/in.ernet.dli.2015.262276>. And the technological forces driving the “destruction“ part were amplified because in a market society the only rights that it recognizes are property rights, and only some property rights turn out to be valuable. People believe they ought to have many more and very different rights than those conferred by ownership of valuable property. People are not happy to be told that they should say: “the market giveth, the market taketh away: blessed be the name of the market.”

Now comes highly intelligent and thoughtful ex-right neoliberal economist Glenn Hubbard and his book The Wall & the Bridge <https://www.amazon.com/Wall-Bridge-Fear-Opportunity-Disruptions/dp/0300259085/>, to reflect on what has happened to the American economy over his career, since he started studying economics back in 1977. He closes with a vision of a very important and much better road not taken:

Since September 1977… technological change and globalization have magnified the market value of my skills and… [other] professionals. Meanwhile, the closure of Youngstown’s integrated steel mills did not lead to moon-shot efforts toward the preparation and reconnection of many workers and communities…. Imagine if bold support for community colleges and training would match the preparation and reconnection of the G.I. Bill as America was encouraging global integration… bridge ideas… economic participation…. that generates an ever-increasing wealth of the nation.

Imagine mass flourishing.

I read this closing. I flash back not to 1977, but to 16 years later, 1993. I am in the Roosevelt Room of the White House. the voice I hear is not Glenn Hubbards but instead the voice of Bob Reich <https://en.wikipedia.org/wiki/Robert_Reich>, Bill Clinton’s then-Labor Secretary. Benefits of technology and globalization, the risks to those who might be left behind, the urgency of action to build not walls, to protect industries and occupations that the creative destruction of modern capitalism is rendering unproductive, but instead bridges, to true human flourishing in the 21st century—all that was in there. Plus there was a Vice President, Al Gore, keenly interested in taking the initiative to spend federal money to create the backbone of what became the Internet of the 1990s <https://www.mentalfloss.com/article/25986/history-us-al-gore-really-did-take-initiative-creating-internet>, the ultimate bridge to mass flourishing in the 21st century.

Bob Reich was then, in a sense, the leader of the Democratic wing of the Democratic Party. In those days I, working at the Treasury, was in the Bob Rubin wing—the left-neoliberal wing—of the Democratic Party. “Yes”, we said to Bob. “You are right. But not now. American voters are angry. We need to curb the deficit, raise taxes on the rich, put the budget deficit on a glide-path toward zero, and generate a high-investment high-productivity growth recovery. So this year Reconciliation. Next year NAFTA. These left-neoliberal priorities must be our immediate priorities. Then we can turn to bridge building, and to social democracy.

It might be that if you could look Bob Reich’s bare back you might you might scars from the treads of our vehicles as we rolled over him in the Clinton administration policy debates. The Clinton administration turn to social democracy, bridge building, and mass human flourishing never happened. We could have taken that road. But Newt Gingrich led Republicans to legislative victories, and blocked it. Gingrich then embarked on the journey that now has him auditioning for the role of the Pierre Laval of American politics. Gingrich was bad news then. And he is bad news now

We would very much have liked to have had Glenn Hubbard on our side in the political economy debates of the 1990s.

Thus when Glenn Hubbard writes “we economists have let the public debate drift to the opposite extremes of building walls and a laissez-faire optimism about change and markets making everything OK”, my immediate reaction is that of Tonto to the Lone Ranger in the old joke: “what is this ‘we’, kemosabe?'“ When he talks about how “T[rade ]A[djustment A[ssistance] came up as a policy topic only when new trade expansions were sought—it received little sustained attention or interest in its augmentation [otherwise]”, he is talking about the Republican Party debate he participated in, rather than the one I have participated in.

But “Glenn, you are late to the party!” is not a review but rather a self-indulgent whine. The big question is: What refreshments does he bring? The answer is that he brings a lot, and that they are tasty indeed.

I really wish that I had had this book in my hands six months ago, before my forthcoming Slouching Towards Utopia: The Economic History of the Long 20th Century, 1870-2010 <https://bit.ly/3pP3Krk> was set in type. I can count at least five pages that I would have been able to completely rewrite for the better had I had Glenn’s book at my fingertips as I undertook final revisions. Indeed, the intellectual landmarks he principally references are the same as mine: Polanyi, von Hayek, Keynes.

I think Glenn has it right. Populists build walls. But what we need are bridges:

The antidote or counterargument to a wall is a bridge. Bridges prepare individuals for, and reconnect them to, participation in a dynamic economy. In an economic sense, they are required for mass flourishing. Politically and socially, we need bridges in order to regain public support for the economic system…. Economics offers the blueprints for bridges to prepare individuals for the market system, reconnect them to it, and build support for it.