Sunday, 4 December 2016

Jacob T Levy's lazy post-Truth Psilosophy

Authoritarianism features State legitimized physical coercion and thus the discourse it produces is irrelevant in political context where Hirschman 'Exit' is permitted or where 'Voice' has a primary existential function of demonstrating 'Loyalty' and thus mitigating the possibility of arbitrary arrest or execution.

Orwell, Arendt and Havel may have pretended that the nomenklatura or 'intelligentsia' had some sort of countervailing power, under Stalin or Hitler, which they surrendered for a mess of pottage, or by reason of some epistemological primal error, but the truth is they never had any power at all. There was no Gramscian 'hegemony' subtly influencing you; there were goons who were ready and willing to beat you to death if you looked at them cross-eyed.

This is not to say 'Totalitarian language' isn't worth investigating. The Kremlinologist did not catalog in vain minute inflexions in Pravda's turgid prose because it was bilaterally acknowledged as a Schelling focal solution to a particular co-ordination problem and thus served a signalling function.
The trick was to separate 'cheap talk' from 'costly signals' so as to arrive at a stable Nash equilibrium which may or may not have had a feasible Aumann correlated improvement depending on the sort of signals one's own side was obliged to send.
In other words, signalling itself involved a machinery which constrained policy space. But, the important lesson to be learned from the genuine analysis of Totalitarian language which the West invested in (not what belle lettrists like Orwell or Arendt dashed off) is that our own discourse includes cheap talk and costly signals which are difficult to distinguish and which introduce hysteresis effects and which destabilise correlated equilibria.

Does this mean, liberal discourse has no place in the real world?

No, if it is part of the ethos of our nation, though it may indeed only add noise to signal in International Relations.
Perhaps Allan Gibbard, to whom Mechanism Design owes the Revelation Principle, is showing us a way forward in the analysis of 'mixed' propositions which appear to have some alethic component. In this case, the crucial test, to demarcate 'cheap talk' from a potential 'costly signal, is whether there is a 'conceptual tie to action'.
Trump's signalling has been received as tactical- because we only started paying attention to him during the course of a bitter 'Social Media' driven election contest. We are only now, very slowly, trying to link these tactical signals to an implementable strategy. There are two types of uncertainty here. One has to do with what Trump thinks is feasible. The other is concerned with the nature of the 'core' in the new GOP game in Washington.
What is exciting and gives room for the optimism the Market currently displays is that there is an implementable strategy which will be good for the median American and also less destabilising for the World. Will the GOP embrace this opportunity? Or will vested interests line their own pockets leading to a further crisis down the line?

There can be an alethic discourse about this but, I'm afraid, it can't feature irrelevant belle-lettrists like Orwell, Arendt or Havel because that's just lazy.

Take Jacob T Levy's recent article on 'Authoritarianism and post-truth Politics' which offers a useful summary of Frankfurt's notion of 'bullshit'-
Frankfurt’s “bullshit” (apologies, but I have to keep using the word) is characterized by the speaker’s indifference as to whether a claim is true—indeed, as to whether there is any truth of the matter at all. The liar or the fraud knows that there is a truth of the matter, and aims to deliberately conceal it. Neither is true of the bullshitter, who is making noise for some purpose that is orthogonal to the truth. Sometimes it is to make an impression as a knowledgeable authority, in which case the bullshitter does at least want to create the impression that there is a truth of the matter and that he knows it. So there is a deception at the level of impression, though not necessarily at the level of the claim; the pompous bullshitter might accidentally speak the truth, but still be guilty of bullshit.

The problem is, Levy thinks Trump aint jus' bullshitting. He is doing something much much more sinister-

But an untruth like this weekend’s tweet …
Follow

Donald J. Trump
✔@realDonaldTrump

In addition to winning the Electoral College in a landslide, I won the popular vote if you deduct the millions of people who voted illegally
8:30 PM - 27 Nov 2016

54,07454,074 Retweets
163,070163,070 likes

is different.

There are no winks or nudges. And I have no doubt that Trump knows this claim to be untrue. It’s not bullshit; it’s a lie, even though it comes with a spin-zone indifference to whether anyone believes it. It’s also not gaslighting. It’s too big, too obvious, and too free of any evidence. Some people will believe it, because they believe everything Trump tells them; but the people disinclined to believe him won’t believe this for a second. It doesn’t throw his opponents off-balance, or make them doubt themselves.

Why lie? Why call into question the legitimacy of the election that he won? Riling up nativist and racist populist anger isn’t especially tactically useful at this moment.

Is Levy correct? Does it make sense for a President elect, whose victory is being questioned in the Courts, to pretend that he actually got a majority in the popular vote as well?

Of course it does. The President's power increases if he claims that the people are behind him. Why? Well, there's a Newcomb's Problem type situation here. A President who thinks his program is what the people want will implement it. One who doesn't believe the majority backed him, will hesitate to do so. This in turn affects the expectations of others thus changing the pay-off matrix in a helpful way.
Trump did the right thing for himself. He sent the signal that he'd do what he promised because he believes the people are behind him and, what's more, hinted that he had the strongest possible incentive to act on at least one thing he'd promised- viz. deport illegal aliens.

Why does Levy not get that 'riling up nativist and racist populist anger' is a good tactic for Trump's victory lap because it puts pressure on the Republicans in both Houses to truckle to him in his first 18 months?

The answer is that Levy has his own axe to grind and thus needs to at least pretend to be stupid-

To understand this kind of political untruth, I think we have to look to theorists of truth and language
in politics; Frankfurt’s essay was only tangentially that. But the great analysts of truth and speech under totalitarianism—George Orwell, Hannah Arendt, Vaclav Havel—can help us recognize this kind of lie for what it is. Sometimes—often—a leader with authoritarian tendencies will lie in order to make others repeat his lie both as a way to demonstrate and strengthen his power over them.
Rubbish!
Authoritarianism has never been created by 'a leader with authoritarian tendencies'.
It has been created by goons who beat the shit out of you.
Hitler, Mussolini, Stalin, every other authoritarian dictator, started off with a huge bunch of goons ready and willing to beat the shit out of anyone whom they thought not loyal enough.
Levy doesn't get this. He lives in a fairy tale world where one day the Dictator wakes up and decides to tell his courtiers a thumping great lie- 'pigs can fly!' says he. Immediately, the Luftwaffe is reconstituted on a porcine basis. However, the RAF are undeterred by flying pigs and bomb the shit out of the Fuehrer's bunker. Perhaps that's what Levy thinks actually happened to Hitler.

Saying something obviously untrue, and making your subordinates repeat it with a straight face in their own voice, is a particularly startling display of power over them. It’s something that was endemic to totalitarianism. Arendt analyzed the huge lies and blatant reversals of language associated with the Holocaust. Havel documented the pervasive little lies, lies that everyone knew to be lies, of late Communism. And Orwell gave us the vivid “2+2=5.”

Levy is a Professor. His students have to repeat with a straight face, in their own voice, the worthless shite that he writes in order to get a corrupt Credential. The Holocaust wasn't about lies and blatant reversals of language. It was about killing people- something a lot of goons wanted to earn money doing. Havel may have documented pervasive little lies under late Communism. So what? Once people knew there were no goons ready and waiting to beat them into submission, that stupid scam collapsed completely. Orwell wrote a best-seller which took up Churchill's 'Gestapo' trope and associated it firmly with Atlee's Socialism. To be fair, stuff like the 'Groundnut Scheme' was a sort of 2+2= 25 and widely ridiculed at the time.

Being made to repeat an obvious lie makes it clear that you’re powerless; it also makes you complicit. You’re morally compromised. Your ability to stand on your own moral two feet and resist or denounce is lost. Part of this is a general tool for making people part of immoral groups. One child makes a second abuse a third. The second then can’t think he’s any better than the first, the bully, and can’t inform. In a gang or the Mafia, your first kill makes you trustworthy, because you’re now dependent on the group to keep your secrets, and can’t credibly claim to be superior to them.

Okay, so that's what happens on Politically Correct Campuses- we all know that; but not every subject taught at University is as worthless as whatever shite Levy teaches. There are some alethic disciplines which have commercially important spin-offs. Castro's Cuba may have lied through its teeth about infant mortality and so on but the Pharma Sector which earned them hard currency was permitted to go forward on alethic lines.
However, Levy is right about the horrible effects of being made to 'repeat an obvious lie'- like when you join the Masons, or the Oddfellows, or the Fulham Chapter of the Jedi Knighthood (where you have to swear that Princess Leia is too a virgin and did not get off on Jabba the Hutt's ginormous tongue).
We must immediately ban all such pernicious organisations coz they are on a slippery slope bound to end up in satanic child abuse and Mafia like organised crime.
But in totalitarian and authoritarian politics, there seems to be something special about the lie, partly because so much of politics is about speech (and especially public speech) in the first place. Based on the evidence of his presidential campaign, I think Donald Trump understands this instinctively, and he relished the power to make his subordinates repeat his clearly outlandish lies in public. Every Sunday he provided fresh absurdities that Chris Christie, Rudy Giuliani, and Kellyanne Conway repeated on the talk shows. They didn’t persuade anyone who were strategically important to persuade; the audience for Meet the Press isn’t low-information, undecided, working-class voters, and the kinds of people who did watch those shows knew the claims were false. But making his surrogates repeat the lies compromised them; that tied them to him. And it degraded them, and made clear where power lay.

This is nonsense. Totalitarian and Authoritarian politics is about physical coercion and arbitrary punishment. Even if you spout all the required lies to demonstrate loyalty, you could still end up in a Gulag more especially if you weren't pulling your weight, or, more simply, pour encourager les autres.
Levy, lazy fellow that he is, habituated to tyrannize over slavish graduate students, pretends that Trump is actually a Professor of his own ilk. Christie and Giuliani and Conway are his graduate students. They have to repeat his worthless shite in order to have a shot at tenure.

Newsflash, Levy Sahib- Professors don't have power. They are ridiculous simply. No doubt, they assert themselves in a manner destructive to whatever Research Program they espouse or, indeed, the ethos of Paideia, but there's a reason we let them carry on fucking up in such a ridiculous fashion.  Not Socrates at the Symposium, Levy and his ilk are drunken helots paraded for the edification of Spartan Youth.

The Chinese have a saying- 'Science Students look down on Arts Students. Arts students look down on Politics student. Politics students look down on their teachers.' This does not mean a small percentage of Politics students don't end up with the bigger house and Swiss Bank Account. It just means that lazy hypocrites are universally despised. Rent dissipation isn't just a feature of Authoritarianism. It is also a function of mindless preference falsification and the prevalence of holier than thou academic availability cascades.

Was Rumi stupid?

Once upon a time there was a shite Sufi sage who liked watching a shite TV soap called 'Crossroads Motel'. There was a popular character on the shite soap, Meg, who was killed off in a car-crash or summat. This led to a huge write-in campaign to bring Meg back.
The shite Sufi sage, not understanding that TV soaps can resurrect whom they like, thought that the British audience for that shite soap lacked true Spiritual wisdom because they thought destiny wasn't inevitable or some such woolly headed shite.

Was Rumi as stupid as the Crossroads watching Sufi sage?

No, though every story he tells us is obviously stupid. Take the story of a competition between the Greek and the Chinese painters. The Chinese paint a colorful mural. The Greeks burnish a mirror which reflects the mural. Rumi thinks the Sultan will give the prize for painting to the Greeks because a reflection is brighter than the original. This is incredibly stupid.
The Sultan may, if he doesn't know what a mirror is, prefer what appears to him to be the Greek mural because it includes his own form. What's more, that form is magical and endowed with life. 
However, when he sends his friends to view this magical painting of himself and they report back that it is only their own form that they can see because Sultan, dude, it's a fucking mirror is all it is he will take away the prize for painting from the Greeks and give it to the Chinese. 

Rumi was writing this shite at a time when people with genuine skills- painters, mirror makers, doctors- were likely to be enslaved and carted off to the capital city of some conqueror.  Drooling idiots- i.e. Sufi sages- were not in demand. Furthermore, there was a superstition militating against the killing of imbeciles and crazy beggars. Moreover, making out that Revealed Religion is actually a bunch of Racist shite always goes down well with whichever bunch of Racist shite have grabbed the throne and are busy enslaving people with useful skills. Thus Rumi, who wasn't actually a 'Rumi' i.e.  Anatolian himself, makes Zayd, the Prophet's emancipated slave, go on about how the Anatolians are saved and the Ethiopians are damned along with the Hindus coz God is so not into black people.

Attar in Nishapur was doing mechanism-design so that the beggar gained municipal support and training and became a bourgeois master of a trade useful to the commonwealth but Nishapur fell, as Baghdad fell, to the Mongols. Rumi, in Konya, could have put Hanafi jurisprudence on the path Attar had indicated. But, this would not have suited the feudal rulers. Poor fellow, he did the only thing he could and that has been a boon for the practice of mousike but a price has been paid in terms of, not metaphysics- that's always worthless- but mechanism-design which isn't.

In the Panchatantra there is a story of three fishes which overhear the plans of the villagers to come the next day with nets to their pond. The smart fishies find a channel to another pond and survive. The stupid fish remain behind and perish. Rumi's version- now hugely popular thanks to Coleman Barks- has a freshwater fish decide to go off to the Ocean to seek safety. That's fucked in the head. A smart fish can dodge the net by finding a shaded spot to lurk. Journeying to the ocean or playing dead reduces, not increases, the chance of survival.
Rumi's genius is to take up an obviously fantastic story, which nevertheless frames a prosaic, common-sense, message, and, while lending credence only to the fantastic portions of it, draw, in the name of Soteriology, the stupidest possible moral from it.

The hadith 'hubb al watan min al iman'- patriotism is part of Religion- is a sensible one. Yes, it is true, if you hear that your country is about to be invaded, you can run away somewhere else. Some people would call that smart.
But, it isn't really smart at all  if you are a good person and have affectionate ties to a number of your countrymen. The entire population can't flee a land under threat. No country will receive such a large number of people. 
The best strategy is to fight. Doves can co-ordinate- like the starlings' 'murmuration'- to ward off the hawk. Mathematical Game Theory has shown that this 'costly signal' (like the 'strotting' of the antelope) is actually eusocial for both hawks and doves.
Fighting includes guerrilla tactics- migrating to more difficult terrain and then resorting to a war of attrition.
Yes, it does involve risk and self-sacrifice. But then dolce et decorum est pro patria mori.
Running away isn't an evolutionarily stable strategy. It is stupid and sour and a fate fit only for gobshites.

Perhaps Rumi's popularity in the West was a function of faith in the 'liberal world order' where 'soft power' would attract and enslave every resource rich or strategically sited foreign nation and Obama or Clinton or Merkel could go on talking worthless shite about universal human rights and the rest of the World would just bow their heads and do whatever was best to ensure these gobshites got re-elected.

Rumi wasn't stupid anymore than a lot of displaced people who have made their home in the West were stupid. No doubt, because we have come from the East or our skins are a little duskier or our eyes aren't the right shape, we had to play up the notion that we were essentially as stupid as shite and buying into some supposed Western 'Universalism' in a naive manner. 

That dog won't hunt anymore.

Diaspora intellectuals have to now show patriotism to the land they have settled in and whose citizenship they have taken up. If they did so for purely economic reasons- let them tell the truth and shame the devil. The corollary is that one can champion economic nationalism with greater credibility.

Mechanism-design is about true preference revelation. Get smart. Identify what is in your interest and either send public signals consistent with your interest or, if incentive incompatibility obtains, be part of the coalition seeking improved mechanism-design.

If having a few drinks with your neighbor loosens your tongue & gives you a hangover such that you are better able to see what is in your interest and how that interest can be coordinated with others, then, yes, the literal, not metaphorical, Tavern is serving a good Sociological and Soteriological purpose. If prohibition is in force, drink coffee by all means.

Rumi wasn't stupid.
He was a survivor.
But, the death of the nation is not something one should scheme to survive.
If one ever genuinely knew Love.

The Universe, on the other hand, can just go fuck itself.
We are not at home in it.
Love is the Second Creation.
Its God Grief.

Friday, 2 December 2016

Varoufakis's Santa Claus turned Minotaur

Marxist's are bewitched by the notion of 'surplus value'- i.e. wealth created by workers which can be confiscated from them. They believe Capitalism is doomed because surpluses confiscated from the workers won't get 'recycled'. They will be hoarded. So the wheels of the economy will fall off. There will be a 'Crisis'- one of 'under-consumption' featuring mass unemployment. Finally the State will step in and nationalize everything and create a Utopia. Then the State itself will wither away because workers will be smart enough to keep their surplus value for themselves. Neither Capital nor the State can appropriate it.

Under fixed currency exchange rates, a different sort of 'surplus' can create a problem. This is a trade surplus which means a country exporting more goods and services than it imports. If this country lends its currency to the deficit country the exchange rate can remain as it is. The problem is that the borrowing country has to pay interest and thus its deficit will increase.
There is an easy solution- let exchange rates float and find their own level. There is still the problem that some countries may want to keep running surpluses and can do this by lending or investing in deficit countries. This could be considered an unfair trading practice. The surplus country goes on building up its industries while the borrowing country gets lazy. The problem is compounded by borrowing countries running a budget deficit- i.e. the Government spending more than it gets in tax revenue- using the resources provided by the surplus country. Long term this is not sustainable.

Varoufakis's big idea is that there is a problem with what he calls the Global Surplus Recycling Mechanism. America is running a deficit which means countries, like China and Germany can run a surplus.

Varoufakis writes-
Before 1971, US global hegemony was predicated upon America’s current-account surplus with the rest of the capitalist world, which the US helped to stabilize by recycling part of its surplus to Europe and Japan.
This is nonsense. The US was militarily and economically stronger than the combined might of its allies. It could have chosen to run a current account deficit- the world was hungry for dollars- financed by 'seignorage'- i.e. the US could print money without inflationary consequences because foreigners would use that money to buy things off each other. Capital flight from a poor and starving Europe would have provided the off setting capital account surplus so that the US didn't lose gold reserves.
Instead, the US chose to administer a fixed exchange regime associated with Marshall Plan aid to help put its allies back on their feet. This was good for US exporters. It was bad for US consumers who had to pay more for imports. It was also bad for U.S investors who weren't allowed to own gold. Instead, the US govt. was prepared to sell gold for dollars at a fixed price to foreign Govts even if the open market price for gold was higher. De Gaulle took advantage of this putting the 'Bretton Woods' system in jeopardy.
However, the economist Triffin had already told Congress that, under fixed exchange rates, a country whose currency is used for international trade by third parties is going to have to either allow its country to appreciate or else suspend gold convertibility- otherwise it will end up exporting its reserves at an artificially low price. From the French point of view, the US  'seigniorage'- arising from its currency financing international trade- was an 'exorbitant privilege'. However, this was only an unmixed blessing for the Americans if they ended gold convertibility- which increased inflationary risk. Thus the US citizen, not allowed to own gold, had to watch as the French Govt. made an instant profit on gold it bought from the US at the artificial price.
Under fixed exchange rates, a country can run a deficit on the Balance of Payments as a whole. But, ultimately, it has to either export gold or other reserves or else devalue. The American deficit, in the Sixties, part of which is attributable to the inflationary financing of the Vietnam war, was unsustainable. American attempts to control 'the export of dollar's backfired'. It started exporting banks as well. It had become clear that Americans were becoming more and more impatient with bureaucratic restraints on their investment choices. It was also clear that fixed exchange rates didn't work. Sterling had to devalue- the Empire was gone and there was no way to bring it back. Meanwhile, the Gulf countries- which had an 'absorption problem'- i.e. they couldn't spend their money fast enough- running genuine structural surpluses wanted to invest them through freer markets so as to get better value for money.  Bretton Woods had to end, Nixon had to stop gold convertibility, inflation was the new enemy.
Varoufakis, however, has a different view- he thinks the US had a balance of trade surplus till 1971- actually, as the chart shows, it didn't, it broke even- which it magnanimously used to help Europe and Japan.
This is nonsense. The truth is that it had a Balance of Payments deficit- it was printing dollars not backed by gold which is why it had to go off gold and let its currency depreciate- i.e. suffer inflation. This was destabilizing for the world.
However, in Varoufakis's fact free fantasy world- 'This underpinned economic stability and sharply declining inequality everywhere.
So Varoufakis thinks that the US, prior to 1971, was a Santa Claus which stabilized the world and helped the poor so that inequality declined. What actually happened was that the post war world had inherited high tax rates and massive State capacity to reallocate resources. Fixed exchange rates were part of a global order whereby States kept power to themselves. However technology was changing in a manner bureaucrats didn't understand. Rent seeking was rampant. Inflation was a stop gap to postpone social conflict. Ultimately, the alternatives was were either stagnation or an increased role for markets. First, however, the genie of inflation had to be put back in the bottle. Nixon tried a Prices and Incomes policy. It didn't work. Nobody believed a democratic Government would put thousands of Trade Unionsts in jail just for demanding higher wages. The other problem was 'fiscal drag'. Working people had been pushed into higher tax brackets. This meant that Welfare payments could increase more than proportionately because the bureaucrats and politicians running things didn't want to hand money back to the tax payer. This meant there was a supply side shock in addition to the oil shock.
The good news was that floating exchange rates and competitive markets freed politicians from the recurring headache of the external balance. Trade could take off and become much freer. China, fortunately, entered the Global Economic system at a time when this lesson had been learned. Soon, their exports completely eradicated the inflationary bias which had bedeviled post War industrial democracy. Instead, there was the problem of asset bubbles. We have a situation where some countries- like China or India- can grow rapidly but which are financially and institutionally underdeveloped and thus opaque to the global investor. Knightian Uncertainty too has increased for technological reasons. There is clearly a lot of incentive incompatibility in Financial Services. Taken together, what all this means is that a lot of voters have an inarticulate sense that National Governments need to rebuild the sort of executive capacity they had in the post war years.

Varoufakis, in his own garbled manner, is channeling some such notion about a good post war Uncle Sam who brought presents to little children in Europe and Japan but which suddenly started suffering deficits and thus became a horrible monster.
 But, as America slipped into a deficit position, that global system could no longer function, giving rise to what I have called the Global Minotaur phase.

According to ancient myth, King Minos of Crete owed his hegemony to the Minotaur, a tragic beast imprisoned under Minos’s palace. The Minotaur’s intense loneliness was comparable only to the fear it inspired far and wide, because its voracious appetite could be satisfied – thereby guaranteeing Minos’s reign – only by human flesh. So a ship loaded with youngsters regularly sailed to Crete from faraway Athens to deliver its human tribute to the beast. The gruesome ritual was essential for preserving Pax Cretana and the King’s hegemony.

After 1971, US hegemony grew by an analogous process. The Minotaur was none other than the US trade deficit, which devoured increasing quantities of the world’s net exports. America’s burgeoning deficit was financed by billions of dollars of daily net inflows into Wall Street from the foreign (and often US) owners of these distant factories – a form of modern tribute to the Global Minotaur.

The more the deficit grew, the greater its appetite for Europe’s and Asia’s capital. What made the Minotaur truly global was its function: it helped recycle financial capital (profits, savings, and surplus money). It kept gleaming German factories busy. It gobbled up everything produced in Japan and, later, in China. But at the same time, Wall Street learned how to turbocharge these capital inflows through exotic financial instruments. The floodgates of financialization burst open and the world was flooded with debt.

In the autumn of 2008, the Minotaur was mortally wounded after running into the wall of private debt that was a by-product of its appetite. While the Fed and the Treasury refloated US markets (at the expense of weaker Americans left behind since the 1970s), nothing would be the same: Wall Street’s capacity to continue “closing” the global recycling loop vanished. The US banking sector could no longer harness America’s twin trade and budget deficits for the purposes of financing enough domestic demand to sustain the rest of the world’s net exports. From that moment on, the world economy would find it impossible to regain its poise.

2008 was an asset bubble which had a wealth effect which in turn affected aggregate demand. It wasn't about trade imbalances except in so far as quasi fixed exchange rates prevailed in some parts of the globe.
What made it so important was that it put an end to a type of optimism which dismissed Knightian Uncertainty and thus suggested that riskless positive return assets exist. They don't.
However, this story has nothing to with 'recycling surpluses'.  China, a Communist country, wanted to build up foreign exchange reserves so as to increase faith in its own currency for its own citizens. The expected appreciation in the domestic currency puts a check on capital flight. Once they reversed this policy, put up interest rates and overvalued their currency, capital flight increased with a vengeance.

 It is true that China, like France's De Gaulle, espoused a stupid mercantilist view point. They talked of the Triffin dilemma after the crash because they were worried about two different thing- firstly that their dollar holdings would lose value and secondly that International Trade might grind to a halt because of a liquidity crisis.
In fact, this sort of mercantilism was stupid and the Chinese have dropped that sort of talk. They see that they have a long way to go to getting reserve status for their currency and that even when it happens that 'exorbitant privilege' can be a poisoned chalice.

Following the Minotaur’s mortal wounding, America has not only the Fed and the Treasury to thank for helping to avoid a new Great Depression. The US was also saved by the Dragon: the Chinese government cranked up domestic investment to unprecedented levels to pick up the slack created by the contraction in spending in the US and Europe. For many years, China allowed credit creation by its formal and shadow banks to run amok, even permitting them to benefit from the Fed’s easy-money largesse by taking out dollar-denominated loans. Put succinctly, the Dragon stepped in to rebalance the West when the Minotaur no longer could.

So Varoufakis thinks Uncle Sam was a Santa Claus prior to '71 which recycled its surpluses by buying toys for poor kiddies in Europe and Japan. Then the US turned into a horrible minotaur running deficits. In 2008 the World finally got wise to this evil monster. Luckily there was a nice Dragon which stepped in and 'rebalanced the West'.
The question is why was the dragon so nice?
China’s leaders knew what they were doing. They were creating a bubble of unsustainable investment to give Europe and the US a chance to get their act together. Alas, both failed to do so: America because of the standoff between President Barack Obama and the Republican-controlled Congress, and Europe for reasons too painful to recount. And when the perfect storm hit in 2015, with US interest rates climbing while commodity prices fell, China had to crank up credit creation once more.
The truth is that China has a fixed exchange rate and this imposes costs. It isn't concerned with rebalancing anything globally but with developing its own productive power.
China understands that the US borrows in its own currency from abroad and thus can always shrink its obligations by a dollar depreciation which imposes a 'demurrage' charge on foreigners using dollars for their trade with each other. This speeds the velocity of circulation and ensures liquidity.
However, it also creates a distributional asymmetry whereby the export sector which can borrow in dollars to secure assets or extinguish liabilities in the official currency gains at the expense of the rest of the country in a manner damaging to the State's resolve to deliver balanced growth.
One way to curtail the resulting mis-allocation of resources is to let the currency rise on the back of interest rates to shake out the secondary banking system.
Today, China’s credit boom is underpinned by collateral almost as bad as that on which Bear Stearns, Lehman Brothers, and the rest were relying in 2007. Moreover, because the Chinese renminbi is grossly overvalued, corporations are borrowing dollars to repay their legacy dollar-denominated debt early, putting downward pressure on the exchange rate.
In other words, the market is taking care of the problem. Since Chinese private debt is held mainly by Chinese people there is no 'contagion risk' for the rest of the world. No doubt, a Chinese shake-out will have a wealth effect which reduces their imports but there are other things happening in China which, if they succeed in improving resource allocation, will put Chinese aggregate demand on a better trajectory long run.
Trump’s plan for helping those left behind since the 1970s, to the extent that one is discernible, seems to turn on two axes: a domestic stimulus and bilateral deal-making under the threat of tariffs and quotas. But if he plays hardball with China, pushing the Chinese to revalue the renminbi and employing threats of tariffs and the like, he may well end up pricking the bubble of China’s private debt – unleashing a deluge of nasty consequences that would overwhelm any domestic stimulus he introduces.
US exports to China have already taken a big hit but not had much effect. Going forward, their agricultural sector may be endangered but the Federal Govt can easily take up the slack with set aside schemes which serve other functions as well.
In that case, Trump’s infrastructure spending would morph into more corporate welfare, implying a negligible multiplier effect. That, in turn, would set the stage for future austerity, as panic over further US interest rate rises and federal budget blow-ups put the squeeze on the government’s 
If Trump’s medium-term economic strategy is to have any chance of success, he must grasp that it is not US public debt, but Chinese private debt, that needs to be restructured. Otherwise, US Treasury yields could go through the roof, severely weakening US debt sustainability.
If, as seems likely, Trump goes in for Corporate Welfare with more or less full employment while dismantling Obamacare, all that happens is that the efficiency wage in some sectors- including the Rust belt- goes up as does Baumol cost disease in services- i.e. income distribution worsens within the working class in a manner that favors White Blue Collar workers. Corporations are sharing a rent with their workers for a specific political purpose- viz. so Trump can make good his promise to a strategically significant minority.
Trump has no interest in and no say in how Chinese debt is structured. He does have an interest in allowing a depreciation of the dollar which shrinks its liabilities and recurring interest charge on the invisible account. This is because 'exorbitant privilege' has ensured that a lot of US debt - 5 trillion of Treasury Bills for example- is held by foreigners. US devaluation has a deflationary wealth effect on them, but there is a perverse income effect whereby some foreigners have to work harder to rebuild the real value of dollar reserves. Thus global economic activity as a whole does not go off a cliff.
Likewise, Trump must realize that he cannot make America great again by emulating Ronald Reagan’s unfunded stimulus. That trick worked when the Minotaur was chained and fed; it won’t work when the Dragon has run out of fire. Instead, if Trump truly wants to rebalance the US economy so that growth benefits the abandoned people to whom he has promised so much, he should emulate Franklin D. Roosevelt and pursue a Keynesian makeover of Bretton Woods.
All nonsense. China was in no position to fund Reagan's deficit. It was very poor back in the Eighties. In fact as the table shows the US current account went back in balance towards the end of the Reagan era. This was a good thing all round.
FDR's new Deal failed. Bretton Woods also failed. A Keynesian makeover of Bretton Woods makes as much sense as a Gramscian revival of the League of Nations in which everybody sits around worrying about how Capitalist 'hegemony' is going to inevitably turn Merkel into Hitler.
Thanks in part to Varoufakis, the ECB is going to implode as Target 2 unravels and the Euro is seen as 'funny money'. The same thing would have happened to Keynes's 'bancor'.
Countries genuinely exist and the management of national currencies is constrained by prudence because very heavy punishments exist for countries which monkey around with their monetary system. The Eurozone could discipline Greece and other peripherals. It probably can't discipline its core. The ECB under Q.E is probably the designated 'bad bank' which permits a German-Dutch exit in the event that France and Italy elect lunatics.

What of Varoufakis's Minatour which eats children? Under what conditions will he declare that has turned back into Santa Claus bringing pressies for little kiddies in Europe and Japan?
The answer is, if Trump succeeds in restoring a U.S Current Account Surplus which he uses to prop up deficit finance based demagogues abroad while US corporations prowl about buying up all the productive assets.
I've said it before and I'll say it again- Varoufakis is a Trumpista. There's a good reason Trump loves the poorly educated. The case of Varoufakis proves that cognitively piss poor, historically illiterate, educators serve his cause just as well.                                                                                                                                                                         

Monday, 28 November 2016

Prof. John Weeks on neo-liberalism's irresistible rise.

Remember 'Occupy Wall Street' and all the fuss about the 1 %?
 It was bound to fail. 
Why?
Prof. John Weeks of SOAS has an interesting theory- Neoliberalism makes US Presidents, whatever their party affiliation or ideological orientation, do bad things to poor people so as to make rich people richer. This causes poor people to vote for Donald Trump because...urm... well, it's all neoliberalism's fault.

Judge for yourself-

Ushering in Trump
Fifty years of democratic capitalism was the historic accomplishment of the New Deal. Relatively low and stable inequality provided the basis for what some call the “Golden Age” of US capitalism. In 1974 under a Republican presidency (Richard Nixon, replaced in mid-year by Gerald Ford) US income inequality dropped to its lowest as measured by the Gini coefficient.

Subsequently, under presidents both Democrat (Jimmy Carter, Bill Clinton, Barack Obama) and Republican (Ronald Reagan, George H W Bush, George W Bush) inequality rose inexorably. Rising inequality revived social divisions subsumed by prosperity during the “Golden Age.” Donald Trump encouraging and exploiting those divisions is the vehicle for a transition to authoritarian capitalism.

With Donald Trump neoliberalism fulfils its logic, destroying even the illusion of a just society.


Weeks is American. He must know the New Deal failed. What got the U.S out of the Great Depression was the Second World War and then high and sustained military expenditure thanks to the Korean War and the formation of what Eisenhower termed the 'Military Industrial Complex'.

Democratic Capitalism never existed. If it had, Weeks wouldn't have imbibed Marxist Economics back in the late Fifties and early Sixties. His life would have taken a very different turn- viz. hot gospelling the magic of markets and the virtues of the ballot box to the developing world.

What did exist, when Weeks was a young man, was high tax rates inherited from the War years. The US decision to finance the Vietnam War by printing money unleashed inflation which in turn pushed working people into higher and higher tax brackets. This is called 'fiscal drag'. At the same time, Welfare payments soared on the excuse of inflation and because the Govt. was awash with cash. By the time tax thresholds were index linked and monetary policy was reconfigured to squeeze inflationary expectations, the damage had been done. Ordinary people didn't trust the tax and welfare system to redistribute income to the poor or deserving. Rather they resented having to pay for 'welfare queens'. Bill Clinton got the message and did a U turn. This had nothing to do with 'neo-liberalism' or any other catch phrase featuring what had become 'the L word' under the first Bush. The fact is, Govts. don't like handing over cash to poor people. They do like taking cash from working people on some excuse or other but working people understand that Govts. waste most of what they take.
The other big problem was that the elderly were  more numerous, more politically active and also much wealthier and smarter than ever before. Being net creditors, they wanted both high real interest rates as well as soaring asset prices. They couldn't have both which is why we now have a liquidity trap. 

Perhaps what Prof Weeks means by 'neo-liberalism' is a situation where ordinary working people have to pay Income Tax and thus resent re-distributive fiscal policy- more especially in an increasingly heterogeneous society where people of a different ethnicity are visibly worse off or more deserving of help.
Clinton and Obama- the first and second Black Presidents- were aware that Welfare dependency was considered a curse by African American intellectuals and this view was quite prevalent among other minority communities as well. Thus neither Obama nor Hilary could put fiscal policy at the center of a reflationary policy to compensate for the monetary shock from the Financial sector. But then FDR too had failed with a reflationary Fiscal policy. Indeed, Kennedy wasn't a Keynesian- he cut taxes rather than raise Government expenditure. Nixon was the first and last avowed Keynesian. He was also the only President to try a Prices and Incomes Policy.

Perhaps if the Democrats had put up a proper 'tax and spend' Liberal- say Biden- in 2008, things might have worked out differently. Still, the Republican minority had a strong card- in the shape of a pretended zeal to see a Wall Street shake-out- which they used very effectively against the Democrats. Perhaps a President who came across as a stupid loudmouth could have called their bluff. Neither Hillary nor Obama fit that bill. Worse still, Obama, as a Black man, didn't want to put cash in the hands of poor and needy people because, for well known historical reasons, a lot of such people have darker complexions. If such people get a little more money in their pockets then their rate of incarceration will go down. They will disengage from Govt. bureaucracies. They will shit upon a 'talented tenth' who have built meretricious careers by claiming to represent their surd alterity. 

Oddly, things for them might be about to improve.

Unlike Hillary or Obama, Trump can do stupid. He can do it sublimely well. That gives the White House a 'threat point' which the wonkish Obama sadly lacked. The other thing about Trump is that a lot of people think he is racist. Suddenly redistributive fiscal policy doesn't look such a bad thing from the White working class point of view.

 Put cash in the hands of the needy while starving penal or paternalistic bureaucracies. Do infrastructure. Ensure regular 'bail-ins' and 'haircuts' to correct incentive incompatiblity in asset markets. That's what Economic theory counsels. 

Weeks disagrees. He thinks Americans have less agency than sub-Saharan Africans. Clearly there must be some sort of I.M.F- a secret Masonic Fellowship of the 1%- which imposes a 'neo-liberalism' invented for the Global South upon the richest and most powerful nation in the world. How does it do it? I think it must be the thought control rays emitted by the Television set. Time to put on the tin foil hats sheeple! Or maybe that's what neo-liberalism wants us to do...






Sunday, 27 November 2016

Amartya Sen on why India can't be a global economic power- unless it can.

'India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labour force. It’s never been done before, and never will be done in the future either. There is a reason why Europe went for universal education, and so did America. Japan, after the Meiji restoration in 1868, wanted to get full literate in 40 years and they did. So did South Korea after the war, and Taiwan, Hong Kong, Singapore and China.' Amartya Sen

Rwanda has 97 percent Health insurance coverage. It will never be a 'global economic power' but remain a basket case kept going by foreign aid. South Korea, which could have stagnated like India- its politicians were even more corrupt- pursued global economic power under a ruthless military dictator from the early Sixties. Still it wasn't till 1977 that modest health insurance coverage was mandated for employees of big firms. Universal coverage only came in 1989. The country first grew economically and then looked after the health of its people. Still, even under Kim Dae Jung- the Nobel peace laureate and former political prisoner- the State put a cash limit to its support for the Health Insurance scheme. There was no blank check. Nevertheless, significant deficits built up from '96 and the Government response has been irrational causing some bizarre pathologies to develop in the Health system. The health of Koreans has suffered as a result. However, their rise to global economic power status has not been affected at all.
Similarly Taiwan, which ended martial law in 1987, waited till 1995 to institute universal health coverage. Why? It first had to get rich enough to afford to do so. India, contra Sen, has in fact been committed to free universal Health Care for some time. It fails to meet this aim because Doctors won't go to the villages and the money in the budget gets misspent. Predictably, the Public Health Service is horrible, as is the Public Education System, while the Private Sector does most of the work- for which however, in medicine, it charges too much.
 Economic development by itself isn't enough to improve Health coverage. It is also important that not-fit-for-purpose Public initiatives be shut down so as to free up resources. Cash transfers or a Voucher system are one way to make Govt. spending on Health and Education somewhat effective. Sen, of course, is against this.

Countries which want to end up healthier, better educated and richer have to make sacrifices in the short run and even the medium term.
Economic development, initially, means the vast mass of people take up jobs which endanger their health and reduce their educational prospects. Being a coal miner is bad for your health and interferes with your education. Quitting your PhD in Gramscian Grammatology at Nalanda International University and moving to a highly polluted city like Delhi to work in a call centre is bad for your health but good for the economy.
Over time, as a country gets richer, it has the resources to protect health and promote education. If no sustainable economic development occurs, health and education will worsen anyway for demographic reasons.
Amartya Sen is a very old man and the quotation given above is from an interview, not a book. Still, ordinary people of his age know full well that every country which became a 'global economic power' started with an uneducated and unhealthy labor force. Nobody said, 'first we must spend ten years educating our people and making them healthy. Then we can start earning money globally to pay for that education and health care.' Why did this not happen? Aren't under-developed countries like children? Shouldn't we first vaccinate an under-developed country and put braces on its teeth and then send it to Cambridge for a degree and only then ask it to start earning money as a global economic power?
The answer is countries are not like children. They don't have loving parents with plenty of money in the bank. No one will pay for their education and health care and then wait patiently for them to start earning so as to pay back the investment.

Which countries, by common knowledge, became global economic powers while displaying a cruel indifference to their  uneducated and unhealthy labor force? Answer- all Democratic ones. Britain did not introduce free compulsory education till 1870- and its relative economic decline began a few years later. It didn't have a National Health Service till after the Second World War. 
An unhealthy uneducated workforce- kids working down mine shafts- turned Britain into the richest and most powerful maritime nation in the world. Professor Sen has lived in England for many years. Why does he not know this?
What about the US? Surely it had an 'educated and healthy' workforce before it became a global economic power? Nope. Between 1870 and 1890, school enrollment rates fell to below 50 percent. Illiteracy, however, increased more because of the influx of migrants. Health outcomes worsened for the majority because of poor living and working conditions as well as simple ignorance and superstition. Still, America had a dynamic economy and the returns to education- even for disadvantaged groups like African Americans- were high 

By contrast, authoritarian militaristic regimes- Germany, Japan, Korea, Taiwan- saw universal education and improved health care as a way to indoctrinate and turn their populations into better soldiers and more productive workers in the factories and mines which furnished the sinews of war. Italy is a good example of how authoritarian regimes, like that of Mussolini, can raise school enrollment where liberal societies fail.  In Law, free compulsory education had existed from 1860 but illiteracy was rampant especially in rural areas. Interestingly, East Germany did better than West Germany in education- an effect which still persists- because authoritarian regimes have more power to force kids to acquire useful skills.

In a sense, India is in advance of America because the Government, not the parent, bears the legal obligation to educate all children. However, India is not an authoritarian country. It can't even punish teachers who play truant, in State Schools let alone force parents to educate their children. Sen knows full well that such schools are often very badly run. However, the teachers count votes in the elections so nobody has the guts to crack the whip on them. Similarly, there is massive corruption in Public Health provision. In China, a bunch of corrupt Doctors or lazy teachers can be shot to set an example. In India this can't be done.

Some countries have high literacy but pursue stupid economic policies and thus don't fulfil their economic potential. Japan had a literacy rate similar to European countries before the Meiji revolution. But it was stagnating economically. 
Countries which have low literacy but pursue sound economic policies will see an increase in education because the return to investment in human capital has increased. After a demographic transition, other human development indices also rise. Sometimes the State plays a role, sometimes the impetus is from Religious organisations or is a feature of traditional culture. 

Turning to Health, Cuban health outcomes improved during the famine because people had to do more exercise and got less nice food to eat.. This effect was reversed after economic conditions started to improve. Even if reforms now come to Cuba, which does have well educated people- especially in Health & Pharma- and a healthy population, it is unlikely to do particularly well because it has gone through demographic transition and has an average age of 38. India too may get a demographic transition without becoming a manufacturing giant. What matters in determining whether a country will become 'a global economic power' is whether or not it has risk-takers with a global perspective. Health and Education are irrelevant. Rising real wages may worsen health outcomes initially. Education levels may fall because young people can earn more in a factory than doing a PhD in Gramscian Grammatology while waiting for a Government job as a peon.

Amartya Sen has wasted his life comparing apples to oranges. Totalitarian regimes can do things which are not feasible for Mixed or Free Market Economies. But, the latter can- if it has risk-takers with a global perspective- turn a nation into a 'global economic power' if some comparative advantage exists and 'the gravity model' of Trade does not forbid it. India is well placed in that respect. Bureaucratic restrictions haven't improved Health or Educational outcomes but have strangled Economic activity. Sen must bear part of the blame for that.


Epiousion, Wilde & anacreontics' salvic power

Oscar Wilde, in Prison, took delight in two things- his ration of white bread, not black, not brown, supplied to him on medical grounds and...but let him tell you the story himself-

Of late I have been studying with diligence the four prose poems about Christ. At Christmas I managed to get hold of a Greek Testament, and every morning, after I had cleaned my cell and polished my tins, I read a little of the Gospels, a dozen verses taken by chance anywhere. It is a delightful way of opening the day. Every one, even in a turbulent, ill-disciplined life, should do the same. Endless repetition, in and out of season, has spoiled for us the freshness, the naivete, the simple romantic charm of the Gospels. We hear them read far too often and far too badly, and all repetition is anti-spiritual. When one returns to the Greek; it is like going into a garden of lilies out of some, narrow and dark house.
And to me, the pleasure is doubled by the reflection that it is extremely probable that we have the actual terms, the IPSISSIMA VERBA, used by Christ. It was always supposed that Christ talked in Aramaic. Even Renan thought so. But now we know that the Galilean peasants, like the Irish peasants of our own day, were bilingual, and that Greek was the ordinary language of intercourse all over Palestine, as indeed all over the Eastern world.

If Wilde were right about ancient Palestinians speaking Greek, then the word 'epiousion'- signifying 'daily' in 'give us this day our daily bread'- would be a hapax legomenon unique to Lord Jesus.


Fittingly, perhaps, it poses a puzzle for the aesthetically inclined philologist- and Wilde was academically very accomplished- because it isn't the word they would consider collocationally correct or rhetorically resonant.
Theologians might see in it a conflation of two different types of bread- that which is necessary for existence in this world and that which is for the day to come beyond nature's scope.
But what might it have meant for Wilde- a late Victorian poet and lover of paradox?

Consider what a contemporary critic wrote of Browning-

Wikipedia tells us- 'In the original Greek, the word is in an adjectival form, epiousion – here from Matthew – and is the only adjective in the Lord's Prayer: Τὸν ἄρτον ἡμῶν τὸν ἐπιούσιον δὸς ἡμῖν σήμερον[20](Interlinear: "The -- bread -- of-us -- - -- epiousion -- give -- us -- today")[2]

The paradox here, for Wilde, whose bread was now prescribed as a medicine- a pharmakon- would be that Jesus who gives his own flesh as a medicine to sinful humanity- i.e. he himself is the sacrificial animal, the scapegoat, which is another meaning of pharmakon- is using a unique adjective in a poem which truly makes God adjective to man. But this flesh made bread, or bread made flesh is a poison- a third meaning of the word pharmakon- only to the author, though an eternal cure for everyone else.

Why is this bread which is ours for the day to come so important that it gets a curious adjective- or is it really the substantive of its own adjectival Scapegoat God?- all to itself?

I suppose, if we have been deprived of white bread for any length of time, we might view Time itself through the lens of that loaf's recurrence. Prisoners know that even if their trespasses are forgiven them, they still 'have to do their own Time' , yet, Wilde intimates, there is a type of bread- fine white bread, not black or brown- the restitution of whose recurrence enables one to hope that there is some all healing pharmakon we partake in common which actually belongs to tomorrow but which we can yet legitimately pray to receive today. But only because repetition is the essence of the prison regime. The hope of release is the dangled carrot which keeps the treadmill turning.
Similarly, the repetition of the Lord's Prayer, which invokes the hope of seeing the Messianic reign established in our life-time, reconciles us to passing from one generation to another within the same prison walls.
At the center of every paradox is the hiatus valde deflendus between  Being and Becoming and irony is what populates that abyss of eternal repetition that gapes between them. In rhetoric, the paradox is governed by kairos- timing- and permits truth to have a double without violating the protocols of the account it gives of itself. In life, however, the paradox requires untimeliness, it must hesitate or otherwise miss the mark; it is a martyrdom that stands witness only to its own stupidity. To deal in paradoxes, as Christ or Socrates did, is to die squalidly, not suavely, taken in a self-spun snare. Dialethia is the other side of the coin of Divinity whose spendthrift's palm is seared by what its own prodigality has rendered too hot to hold.

There are two possible etymologies for epiousion- this word impossible, it seems, to any Greek tongue but Christ's. 

As William Barclay puts it-




Going a step further down the path of speculation, if Wilde did indeed consider epiousion as the unique ipsissima verba of the veritable Lord of the Lord's prayer, then what that archetype of the romantic artist was actually praying for was to receive His own coming Eucharist in common with all men, not- as in Luke, eternally- but now, just once though for all Time without that Time having in any sense actually having supervened. This is Pater's Dionysius who, to make Wine a Religion, must be torn to shreds by maenads and woven again by nympholepti  in a manner that yields the wordy widsiths of his personae the but gall of knowing all they have contrived is the little masks upon the vine which scare away little birds. This too is Ibn Arabi, upholding Christ as mathalan bi-takvin- a neutered symbol of engendering- giving life to clay birds- cashing out as, for not Sophist Anacreotics but Sufi Khamriyaat, that 'spirit of fire and dew, alive and leaping in a thousand vines',  which, if envisaged as 'a higher intelligence brooding over things',  breeds a but blasphemously expended sperm confirming there can be no repetition in theophany no matter how merely romantic or imaginal, id est fetishitic or phantasmic, its fabulously failed, therefore familiar or sacred, deontological detective work or worthlessly didactic ontological framing.

Thus, Wilde's adjectival epiousion exception, in favor of repentant sinners, to Agathon's - 'not even God can change the past' - proved a more atrocious substantive sentence than any merely dialectical or dialogic ratio could hand down. In repenting our sins we change the Past only to become prisoners of a snagged Time-line plucked from the common-too-common sleeve of the heart.


By contrast, Eros repairs itself. 
Indeed, a full stomach militates to no other end.
Bread's whiteness, its refinement, helps.
Metanoia, alas, as the maiuetics of a mere couvade, transubstantiates the contents of its communion cup, to a but municipal hemlock while increasingly arid grow such Symposiums as have abandoned anacreotics.
Kairos, once linked to the oracular krater- just as the Soma of the Indo-Iranians was once linked to a amphetamine rich beverage helpful in child birth- when taken up by philosophy, becomes untimeliness, inauspiciousness, an esoteric whispering in the ear, a contagion of unease and ontological dysphoria at the spectacle of the universal celebration of but Seasonal change.

Wilde wrote- If ever I write again, in the sense of producing artistic work, there are just two subjects on which and through which I desire to express myself: one is 'Christ as the precursor of the romantic movement in life': the other is 'The artistic life considered in its relation to conduct.'

It may be objected, that no two duller subjects can be conceived. 
But Wilde well very knew that true dullness is nothing if not a hiding in plain sight of a horror too monstrous for utterance- like John 22- a lover told to out tarry Time- so Love's Word flesh out- John 25- a book bigger than its World. 
Thus Wilde, taking Christ as his mot theme, turns his prison loaf into yearning's unrepeatable Paschal epiousion equal only to another prodigal son's 'swine-herding hunger for husks.'

Thankfully, Wilde's decadence was merely a Victorian veneer.
The trough of anti-semitism not yet Gallic & de rigueur
But Chesterton would see to it that base was covered for babu literature.
I believe there's a move afoot to Canonize him.
Not that a good drinking song isn't worth a Sainthood.
It's just litterachur's bread & butter sticks in one's craw.




Saturday, 26 November 2016

The death of Soft Power.

A few months ago the FT published an article saying that the US had overtaken the UK as leading in 'soft power'- Joseph Nye's notion re. the attractive power by which a nation can get other nation's to do what it wants without coercion or bribery.
Interestingly, both voters in the UK and the US have chosen to turn their back on 'soft power' and 'political correctness' and 'universal human rights' and the 'liberal world order'.
No doubt, Frau Merkel will be declared the new 'soft power' leader- till she loses upcoming elections.

Why is 'soft power' dying? Well, if an attractive person tries to make money out of their attractiveness they become vulnerable to a more or less plausible, or more or less brutal, pimp. What then ensues is not the accumulation of 'soft power' but a long history of more or less self-deluding prostitution.
Nation States, of course, don't actually hang out at street corners in stilettos and push up bras. Well, Belgium maybe but, generally speaking, it's not de rigueur.  Still, any attempt to instrumentalize soft power will produce a reaction including an attempt to game that instrumentalization.

One way to 'lock in' present soft power is through multilateral agreements or resolutions passed by international fora. The problem here is that small countries get a blackmail opportunity by using their veto power or else ganging up in voting blocs. When this happens, big countries go back to bilateralism and so 'soft power' becomes irrelevant.

One big problem with 'soft power' is that it attracts Labour and Capital flows which may provoke nativist xenophobia. In the end, it is fears about migration which is killing off 'soft power' dreams at this moment in time. However there is a bigger problem relating to Capital flows, global supply chains and the costs and vulnerabilities associated with locking in to a foreign controlled Knowledge Ecology.