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[I don't find much of interest at many blogs, but Keven Carson's is an
exception.--DC]
http://mutualist.blogspot.com/
Monday, May 05, 2008
Review: The Mind of the Market, by Michael Shermer
Michael Shermer. The Mind of the Market: Compassionate Apes, Competitive
Humans, and Other Tales from Evolutionary Economics (New York: Henry
Holt and Company, 2008).
If you can get past the flaws in Shermer's book (things others might
prefer to think of as my fixations, hangups, and dead horses), it's
quite an enjoyable read.
But given my obsession with the ubiquity of vulgar libertarianism,
comparable to Captain Ahab's with Moby Dick, I can't refrain from
pointing out the flaws.
Before I say a lot of nasty things about Shermer's ideological
assumptions, I have to make the disclaimer up front that he comes across
as thoroughly decent and likeable on a personal level. That he takes for
granted certain ideological assumptions that I have long since declared
war on is no reflection on him as a human being. Shermer states, as one
of his fundamental guiding principles, a dictum of Spinoza's: "I have
made a ceaseless effort not to ridicule, not to bewail, not to scorn
human actions, but to understand them." I'll try to keep to that spirit
as closely as I can in discussing my caveats about Shermer's book.
Nevertheless, Shermer displays a considerable vulgar libertarian element
in his background assumptions. His writing, over and over, tacitly
equates the phenomena of existing cor****ate capitalism to the "free
market." He constantly uses things like Bill Gates, Wal-Mart, and other
transnational cor****ations to illustrate the principles of the "market,"
and treats them as living embodiments of Adam Smith's invisible hand. He
equates "the market" to the existing cor****ate economy, quoting attacks
on the evils of cor****ate power and then "proving" they can't be right
because "that's not how the market works." Implicit in his rejection of
The Cor****ation, of Chomsky and Zinn, is the assumption that the present
system, the one they're attacking, is the market.
A parallel theme is alleged popular hostility or resistance to "free
market economics," which he assumes is motivated by irrationality. A
particularly atrocious example (I'm tempted to call it a howler) occurs
on page 16:
Folk economics leads us to disdain excessive wealth, label usury a
sin, and mistrust the invisible hand of the market. What we do not
understand we often fear, and what we fear we often loathe. (As one New
Yorker cartoon featuring two people in conversation reads: "I hated Bill
Gates before it became so fa****onable.")
There you have it: invisible hand=excessive wealth=Bill Gates. Anybody
who has problems with Bill Gates and excessive wealth must harbor an
irrational fear and/or hatred for "the invisible hand of the market."
After all, it's not like Gates could have gotten so rich by any other
means, like the visible hand of the state's "intellectual property"
[sic] monopoly, could he? And we know all those other billionaires got
rich through the operation of the "free market." I mean, we hear it from
neoliberal politicians and commentators at MSNBC every friggin' day, so
it must be true. This all reminds me of Dick Cheney in 2000 boasting, of
Halliburton's wealth, that "Government had nothing to do with it."
The public mindset isn't really all that irrational, if you keep in mind
that their hostility is not so much to free markets, as to what has been
called "free markets" by the usual gang of cor****ate apologists.
I'm about as close to a free market fundamentalist as you can get. But
if I thought the "free market" meant what Tom Friedman and other
neoliberal politicians and talking heads meant by it, I'd hate it more
than anybody.
The average person sees Wal-Mart, Microsoft, downsizings, oil company
profits, offshoring, and all the other unsavory phenomena of the
cor****ate global economy defended in "free market" language, and his
response is "if that's the free market, then the free market be damned."
It's essentially the same reaction as Huckleberry Finn's. Huck lacked
the conceptual apparatus to make an effective critique of the
legitimizing ideology of slavery, or to debunk the Widow Douglas's
"property rights" in Jim. He took the slave system's ideological
self-justification at face value--and then said "All right, then, I'll
go to hell." The average American, likewise, looks at the inequalities
and injustices of our cor****atist economic system, made possible by
massive state intervention on behalf of organized capital, and sees it
defended as the "free market." And his response is the same: "If this is
the free market, I'll go to hell."
Shermer asks why people reject Adam Smith's theory of economics, despite
its being so profound and proven. The answer just might be that the
rhetoric of free markets, so closely associated with Adam Smith, has
been misappropriated to defend a system of cor****ate power far closer to
what Smith condemned than to what he sup****ted. Adam Smith, like the
other early classical liberals, was a revolutionary thinker who attacked
the entrenched privileges of the landed oligarchy and the mercantile
capitalists. It's almost impossible to go to a mainstream "libertarian"
website these days without seeing the thought of Adam Smith
misappropriated to defend the modern institution most closely resembling
the landed interests and privileged monopolists of the Old Regime: the
giant, state-subsidized, state-protected cor****ation.
As I suggested earlier, most people who display egalitarian reactions
against existing inequalities and concentrations of wealth may well
believe that what they hate is the "free market." But that's only
because the rhetoric of "free markets" has been perverted, for the most
part, by apologists for those concentrations of wealth which result from
privilege and other forms of state intervention. What they hate, they
rightly hate. They're wrong to believe that what they hate is the "free
market." But it's hard to blame them, when you can't turn on the TV or
read an editorial page without seeing a fundamentally statist economic
system of special privilege and protection for big business and the rich
described as "our free market system."
In fairness to Shermer, he sometimes tips his hat to the existence of
things like cor****ate welfare, but for the most part he treats it as a
minor deviation from a cor****ate economy that is, on the whole, a pretty
close approximation of the "free market." If you eliminated the
subsidies to military contractors and agribusiness, what you'd wind up
with is, in all its essentials, something pretty much like the economy
we actually have: a global economy dominated by a few hundred
cor****ations.
For example, he condemns the popular, zero-sum view of foreign trade as
an "abandonment of free market principles." And he cites Nobel laureate
Edward Prescott on the foolish popular belief that it's "government's
economic responsibility to protect U.S. industry...."
But in fact, the overwhelming bulk of the transnational cor****ate
economy is a zero-sum game.
For starters, the main purpose of the World Bank and foreign aid over
the past sixty years has been to subsidize the ex****t of capital and
offshoring of production from the West, by funding the trans****tation
and utility infrastructure necessary for capital investment overseas to
be profitable. The bulk of the U.S. military budget is taken up by the
Navy, whose primary purpose is to keep the sea lanes open. No less an
authority than Adam Smith argued that such expenses should be borne by
those actually engaged in foreign trade. The United States has
systematically intervened over the past century to keep landed
oligarchies in power, to thwart land reform, and generally--whether by
coup or by death squad-- to make the world safe for Enclosure. Between
this, and the helpfulness of authoritarian regimes in keeping labor
docile, supplying sweatshop industry has been supplied with a labor
force eager (or rather desperate) to work on whatever terms are offered.
But if that's for starters, it's still barely a start. The elephant in
the living room is the role of "intellectual property" [sic] in the
transnational cor****ate economy. Despite Prescott's exasperated lament
quoted above, the central function of government in the present system
of global trade is to protect transnational capital from competition.
One of the most im****tant functions of the GATT Uruguay Round's
industrial property provisions, with their long patent terms, is to lock
Western TNCs into control of the current generation of production
technology, and thus to prevent the emergence of native-owned
competition and lock Third World countries into a permanent position of
supplying sweatshop labor and raw materials. It's also probably not a
coincidence that all the profitable sectors in the cor****ate global
economy are those whose business models are dependent either on IP
(entertainment and software), direct subsidies (armaments and aviation),
or both (agribusiness, biotech, electronics). "Intellectual property"
serves exactly the same protectionist function, for transnational
cor****ations in today's global economy, that tariffs served for the old
national industries.
The cor****ate global economy, in other words, is a statist construct to
its very core, and has no more to do with "free markets" than Stalinism
had to do with workers' power. And Shermer explicitly refers to
agreements like CAFTA as examples of "free trade." The primary
practitioners of the "mercantilist zero-sum protectionism" he decries
are the transnational cor****ations themselves. It's no wonder the public
hates "free trade," if it hears it identified with such practices.
Fortunately, given my background as both a dissident free market
libertarian and a dissident libertarian socialist, I'm pretty good at
"eating what I want and spitting out the rest," even when it's embedded
in an ideological framework I disagree with. I've had to do this with
thinkers ranging from Marx to Mises. And once you get past my hangups,
there's a lot of useful and fascinating material in Shermer's book,
presented in a very engaging manner.
If you enjoy the work of Desmond Morris and similar evolutionary
approaches to human social behavior, you should thoroughly enjoy this
book. Shermer discusses the apparent irrationalities of human economic
behavior, and how the same behavior would make perfect sense from the
standpoint of the behaviors selected for in a small primate
hunter-gatherer group.
I especially enjoyed his discussions of egalitarianism and reciprocity,
and found much of it relevant to the material I posted earlier in draft
Chapter Eleven: The Abolition of Privilege.
My main disagreement with Shermer on this subject is with his assumption
that such predispositions are contrary to the ideally rational behavior
of a utility-maximizing market actor.
He is not entirely wrong on this, of course. There are some ingrained
human cognitive biases that do result in irrational behavior.
But for the most part, I believe human instincts for reciprocity and
egalitarianism work entirely with the grain of a genuine market. The
real-world phenomena that people condemn, on the basis of values of
reciprocity and egalitarianism, in fact result from violations of
genuine market principles.
In Chapter Eleven, I discussed why I believe a genuine market, absent
the zero-sum effects of privilege, would result in a comparatively
egalitarian outcome. The human instincts for reciprocity and
egalitarianism do not operate at cross-purposes to the market, but are
the behavioral basis for it. Reciprocity and equal exchange are the
normal outcomes of a market operating free from interference. People are
most likely to say "That's not fair" precisely when equal exchange has
been thwarted, and a zero-sum situation created in its place, by state
intervention on behalf of the privileged.
A good example comes immediately after the Bill Gates howler quoted above.
In most countries, [consternation over income polarization] leads
to political policy to raise the poor and lower the rich, because during
our evolutionary tenure we lived in a zero-sum (win-lose) world, in
which one person's gain meant another person's loss....
Today, however, we live in a nonzero world....
Um, no. We would live in a nonzero world, if we actually had a free
market. What we have, however, is a system of political capitalism in
which the state has systematically intervened in the market to raise the
rich and lower the poor; to subsidize the operating costs of big
business; to enforce artificial property rights like patents and
copyright, and absentee titles to vacant and unimproved land that ought
to be open to homesteading; and otherwise to protect giant cor****ations
from the competitive dangers of a genuine market. In such an
environment, it's entirely reasonable to believe that fortunes in the
billions or hundreds of millions have been acquired at somebody's
expense. It's entirely reasonable, when you see a turtle on a fencepost,
to suspect he didn't climb up there on his own.
I hope my Van Helsinglike fixation on the vampire of vulgar
libertarianism hasn't obscured the real value of this book. Even if I
just can't let the neoliberal ideology go, it's really not central to
the book. What is central is the evolutionary roots of human economic
behavior, a subject on which Shermer provides a wealth of information.
The information itself, for the most part, can stand by itself without
regard to Shermer's ideological framework. I found much of it,
particularly the parts on reciprocity and egalitarianism, to be quite
useful--although perhaps not for the purposes the author intended. At
any rate, I thoroughly enjoyed reading it. And if I could enjoy it, with
my neurotic obsessions, surely any normal person will enjoy it that much
more.
--
Dan Clore
My collected fiction, _The Unspeakable and Others_:
http://tinyurl.com/2gcoqt
Lord We˙rdgliffe & Necronomicon Page:
http://tinyurl.com/292yz9
News & Views for Anarchists & Activists:
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Strange pleasures are known to him who flaunts the
immarcescible purple of poetry before the color-blind.
-- Clark Ashton Smith, "Epigrams and Apothegms"
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