Gotham Diary:
Contraptions
13 May 2013
Too soon, it is the middle of May.
In the current issue of the London Review of Books, James Meek writes about the banking crisis in Cyprus, and how it has damaged quite ordinary people, aside from the Russian jillionaires that you read about. His closing paragraph is enormously powerful and its very wide scope encompasses far more than a half-Greek, half-Turk island.
In the 2000s, in the conference rooms of New York, Frankfurt and Moscow, Cyprus seemed like a small island with many issues. The UN worried about reunification of the two communities. The European Central Bank looked at the quarter-by-quarter economic numbers. The International Criminal Tribunal for the Former Yugoslavia investigated money laundering. Big Russian companies liked the country’s tax regime. None of them saw the bigger picture. The ethnic-sectarian narrative, the Yugoslavian conflict narrative and the Cyprus economy narrative were never seen holistically for what they were – three facets of a single issue, that of a tightly knit Greek Orthodox community, bound together by a sense of mutual vulnerability and a weak fourth estate into grudging acceptance of rule by oligarchic political-business families, which became skilled at playing big foreign institutions, state and commercial, off against each other for short-term gain. The karmic aspect of Cyprus’s fate may please some outside the island, but nothing has really changed in terms of Europe’s institutional inability to see a problem in the round. The continent cannot afford to be run by so many moralists who are ignorant of finance, and so many financiers who are ignorant of morals.
Nor can the world. And yet that is our very predicament. Economists stoutly reject any role for morality in their dismal science. Humanitarians can’t be bothered with costs and benefits. Opportunists exploit the absence of comprehensive oversight. The “institutional inability to see a problem in the round” is not a specifically European problem; the United States is no less afflicted. Here, you might even argue, there are checks and balances designed to preclude access to the whole picture. Congressional Republicans are not alone in refusing to enter into discussions on terms other than their own. Now that we have all learned that control of the discourse determines the outcome, we have become choreographers of dances that few care to join.
Over the weekend, I finished one book by Albert Hirschman, The Rhetoric of Reaction, and read another, The Passions and the Interests: Political Arguments for Capitalism before Its Triumph. The books are highly discrete case studies that, while they sound certain notes in common, bear no structural resemblance in their dealings with the history of ideas. That’s to say that they don’t form two parts of a larger whole. Shifting Involvements: Private Interests and Public Action, which I read earlier last week, is equally nonpareil. But I begin to have a sense of “what Hirschman is about.” In a nutshell, I believe, he wrote to encourage the reincorporation of economics within the humanities. His method was to undermine the “physics envy” that so many economists suffer by demonstrating that political economy, like everything else, changes over time. The world did not begin with John Stuart Mill’s 1836 definition of political economy as the science of man considered “solely as a being who desires to possess wealth,” but if it did, we’ve been living in the world for less than two centuries, and can hardly be said to understand it very well — especially when we bear in mind that for the better part of one of those centuries, from 1917 until 1989, the meaning of Mill’s claim was contested by world powers armed, ultimately, with weapons of mass destruction. Our experience of self-conscious economy is brief and inconclusive. We don’t know what we’re doing.
Much of Hirschman’s thought attacks the conservative (or reactionary) appropriation and inversion of that fact: since we don’t know what we’re doing, we’d better not do anything; this is the best of all possible worlds, and it’s going to the dogs. But he acknowledges that liberals can be equally pig-headed. At the end of Rhetoric of Reaction, in fact, he demonstrates the liberal habits of argument that correspond simplistically to those of the reactionaries.The Marxian insistence on the inevitability of social amelioration mirrors, for example, the reactionary conviction fundamental change is impossible: each party believes that the other’s policy is futile. What’s deadly about this configuration, however, is that neither will attend to the other.
There remains then a long and difficult road to be traveled from the traditional internecine, intransigent discourse to a more “democracy-friendly” kind of dialogue. For those wishing to undertake this expedition there should be value in knowing about a few danger signals, such as arguments that are in effect contraptions specifically designed to make dialogue and deliberation impossible. I have here attempted to supply a systematic and historically informed account of these arguments on one side of the traditional divide between “progressives” and “conservatives” — and have then added, much more briefly, a similar account for the other side. As compared to my original aim of exposing the simplicities of reactionary rhetoric alone, I end up with a more even-handed contribution — one that could ultimately serve a more ambitious purpose.
If he does say so himself. In fact, Hirschman’s writing is suffused with a gently ironic modesty that, together with the fractured nature of his output, explains the limits of his fame. In the books that I have read, he never states the belief that I have imputed to him, about folding economics back into the humanities. (He does rather roguishly insist upon calling himself a “social scientist,” a term that gnashes the teeth of economists.) He proposes no laws or theories that can be easily grasped out of context; his arguments must be read. (Unlike Adam Smith’s, they are brief.) The titles of his books, rendered unalterable by his death last year, betray the knottiness of his attention. To find out more about what he thought, we shall have to read Jeremy Adelman’s biography, Worldly Philosopher: The Odyssey of Albert O Hirschman. But what’s really necessary is for every educated citizen of every nation in which citizenship means anything ought to read The Rhetoric of Reaction. And every serious economist ought to learn the history behind Mill’s reductionism, which Hirschman lays out brilliantly in The Passions and the Interests. As James Meek says, we need moral bankers and numerate moralists.