The myth that Ha Joon Chang is against mainstream economics

The following is extracted from an interview published in Truthout. My comments are in bold.
Ha-Joon Chang: The biggest myth about globalization is that it is a process driven by technological progress. This has allowed the defenders of globalization to brand the critics as "modern Luddites" who are trying to turn back the clock against the relentless progress of science and technology.

However, if technology is what determines the degree of globalization, how can you explain that the world was far more globalized in the late 19th and the early 20th century than in the mid-20th century? During the first Liberal era, roughly between 1870 and 1914, we relied upon steamships and wired telegraphy, but the world economy was on almost all accounts more globalized than during the far less liberal period in the mid-20th century (roughly between 1945 and 1973), when we had all the technologies of transportation and communications that we have today, except for the internet and cellular phones, albeit in less efficient forms.

The World was much less globalised between 1870 and 1914 than in the 1950's in absolute terms. Hundreds of millions of subsistence farmers in Asia and Africa and Latin America had virtually no connection with global markets. Even in many parts of Europe, linkages to global markets were very weak. The great Russian famine of 1891 was exacerbated by poor transport links and bottlenecks in the distribution of relief shipments- for example, those sent from America. The great Indian famines of the 1870's and 1890's showed British administrators, like Sir Bartle Frere, that the majority of the native population had no reliable connection to global markets and thus local food availability deficits could not be remedied by the cash nexus. China too suffered terrible famines. The North China famine probably had more casualties than the Indian famines of the period. This was despite no overall global food availability deficit. 

It was not till technology and infrastructure improved greatly that the terms of trade started to move against primary products from the 'Global South'. However, this meant that in relative terms Globalisation might appear to decrease- for e.g. India's share of World Trade dropped quite steeply. This did not mean that Indians got richer. No. They were pursuing stupid autarkic policies and asserting their proud independence by passing around the begging bowl in a shameless manner. It was not till India dropped its 'principled' opposition to Globalisation, and Gandhian addiction to panhandling, that living standards and life chances started to improve for the majority.

Technology is a determinant of globalisation- it makes transport and infrastructural linkages more feasible and cheaper- but it isn't the only factor to be considered.

 Between 1914 and 1950 large parts of the globe were affected by warfare or internecine conflict. This meant that even Liberal Britain had to introduce conscription and restrictions on Economic freedom of various types. The US- which had a Protectionist history- though not directly threatened, did face an internal political crisis (one which featured a 'Capital Strike') which complicated its response to a purely financial crash. Thus, US citizens lost the right to hold gold along with many other quintessentially Liberal freedoms.

After the Second World War, the Militarisation of Societies meant that incentive structures and patterns of behaviour diverged greatly from what had previously obtained. Ex army personnel employed by Corporations brought a different ethos with them. The post-war Japanese Corporation is an example of relatively flat income distribution combined with extreme disparity in power and status.  Other post war economies were characterised by a similar 'habitus' and/or social compact. However, the divorce between ownership and control, or 'Managerial Revolution' was not actually as equitable a process as Macro-Economic statistics might indicate. There were a lot of 'perks' and rent seeking opportunities for those at the top which the figures don't capture.

What is different about today's globalisation and that of the 'Liberal' late Victorian/Edwardian era is that it is colour and gender blind. Thus, a young female factory worker in China can become a billionaire because the barrier to entry into global informational and financial markets has fallen greatly in a manner advantageous to vast numbers of people- including women- whose ancestors lived miserable malnourished lives. 

No doubt, under Victorian Liberalism, some Chinese or Indian peasants were shipped off under articles of indenture to work in plantations and a few who survived terrible conditions had some prosperous descendants. However, power remained with the metropolitan bourgeoisie. It took considerable political struggle and sacrifice for these people- similar to the victims of outright chattel slavery- to gain Civic Rights and Social Mobility.

The reason why the world was much less globalized in the latter period (i.e. after the second World War) is that, during the period, most countries imposed rather significant restrictions on the movements of goods, services, capital and people, and liberalized them only gradually. Actually the restrictions were imposed during war time and were only gradually lifted because of Balance of Payments considerations which only ceased to have salience after the collapse of the Bretton Woods system of fixed exchange rates. However, rationing of foreign exchange in a manner unfavourable to the working class did not immediately disappear. Indeed, there was a lot of rationing and 'restrictive covenants' and price and service provision discrimination which was quite legally practised for the greater part of that period.

 What is notable is that, despite [its] lower degree of globalization … this period is when capitalism has done the best: the fastest growth, the lowest degree of inequality, the highest degree of financial stability, and -- in the case of the advanced capitalist economies -- the lowest level of unemployment in the 250-year history of capitalism. This is why the period is often called "the Golden Age of Capitalism."

The Soviet Union and China (prior to the Great Leap forward) saw an even more rapid improvement in living standards (because not being bombed or shot increases productivity) and Samuelson himself believed there was some substance to Khrushchev's boast that Communism would bury Capitalism by providing workers with a higher standard of living. 

Moreover, people like Galbraith, Tinbergen, Morishima etc pointed out that what was actually happening looked more like 'convergence' to something Weberian and Bureaucratic, not Capitalist at all.

Obviously, the Post War era was going to have some unusual features. The end or reduction in hostilities, freed up resources which, in turn, could be used much more efficiently than ever before because of technological and engineering breakthroughs made during the War or by the Military Industrial complex. There was also a baby boom which itself may be causally linked to the World War. Thus there were plenty of 'low lying fruit' and, because of Cold War rivalries, there was also direct Super power f.d.i for industrial development.

It may be argued that the pattern of International Trade in the post War period was shaped by a type of Economic thinking which rejected the autarkic or corporatist mindset of the Thirties.  However, in reality, this wasn't always the case. France under De Gaulle grew at a good clip despite his bizarre economic ideology. The truth is, not economists but pragmatic technocrats made up policy as they went along. Consider, ENI- the Italian oil and gas company. Enrico Mattei turned it into a giant. But, what was it? Did it fall into the category of Public Sector or Private Sector or Mafia sector? In the end, nobody cared. 

One reason even leaders whose worldview was shaped by the war started to retreat from dirigisme is because it had become obvious that traditional Economic theories of Trade and Development were worthless shite. 

Intra-industry trade became a big feature and export led growth, based on carefully nurtured acquired advantage, proved a far better vehicle for rapid growth than import substitution. South Korea was about as poor, more corrupt, more politically divided and faced a far greater existential threat than Kerala- with which it was comparable in terms of education and land distribution. Kerala, as part of India, was excluded from globalisation and ended up exporting people. Korea also exported people but also built up huge export industries some of which are now technological leaders and dominate their field. Still, the fact is 'the Golden Age of Capitalism' wasn't very golden for most Koreans. Indeed, its protectionist strategy was initially very costly though later on, after a shakeout, benefits began to flow through. 

In any case, it was only after the socially polarising consequences of inflationary bias in Advanced Democracies proved resistant to Monetarist medicine, that 'Globalisation' really came into its own as a way to hold down costs while letting unemployment rise to its natural level.
Crucial to the cost containing potential of Globalised supply chains was greatly improved technology of an inherently novel type- things like computers and fax machines and electronic dildos- now more commonly used as smartphones.

Technology only sets the outer boundary of globalization -- it was impossible for the world to reach a high degree of globalization with only sail ships. It is economic policy (or politics, if you like) that determines exactly how much globalization is achieved in what areas.

What determines how much globalization is achieved, other things being equal, is the absence of war or the threat of war. Iran and Russia and North Korea would probably like more, not less, globalization but can't get it because of a perceived military threat.

The current form of market-oriented and corporate-driven globalization is not the only -- not to speak of being the best -- possible form of globalization. A more equitable, more dynamic and more sustainable form of globalization is possible.

Yes. It is already happening. Zhou Qunfei makes touchscreens for mobile phones. She is 45 years old and worth 10 billion US dollars. Not bad for a girl who went to work in a distant factory at the age of 16.

Ha Joon Chang admits that the post War World was more equitable because Globalisation based on European Imperialism could not sustain itself militarily. However, it seems poor people are irremediably stupid and sold themselves into slavery to big Corporations because they didn't understand this was just a form of neo-colonialism.

He says-

Unfortunately, starting in the 1980s but accelerating from the mid-1990s, there has been a rollback of the sovereignty that the post-colonial countries had been enjoying. The birth of the WTO (World Trade Organization) in 1995 has shrunk the "policy space" for developing countries. The shrinkage was intensified by subsequent series of bilateral and regional trade and investment agreements between rich countries and developing ones, like Free Trade Agreements with the US and Economic Partnership agreements with the European Union.

India liberalised at the start of the Nineties. What 'rollback of sovereignty' has it experienced? None. Which foreign company can cause a political storm in India by threatening to lay off workers? Not a single one. By contrast, what Tata Steel does with its British subsidiary can affect the outcome of more than one Parliamentary seat.

No doubt, 'policy space' for stupid bureaucrats shrank. But the Indians realised this was a good thing. Finally, under Narendra Modi, they got rid of the Planning Commission because it was a waste of space.

The second thing that distinguishes the post-1973 globalization is that it has been driven by transnational corporations far more than before. Transnational corporations existed even from the late 19th century, but their economic importance has vastly increased since the 1980s.

OMG! Has this man never heard of the British East India Company or the Dutch East India Company or the Royal Africa Company or other Seventeenth and Eighteenth Century enterprises which engaged in the Slave Trade? Adam Smith and Edmund Burke exposed the malpractices of these 'transnational corporations'. Surely, this Cambridge economist has read at least the former?

They have also influenced the shaping of the global rules in a way that enhances their power. Most importantly, they have inserted the investor-state dispute settlement (ISDS) mechanism into many international agreements. Through this mechanism, transnational corporations can take governments to a tribunal of three adjudicators, drawn from a pool of largely pro-corporate international commercial lawyers, for having reduced their profits through regulations. This is an unprecedented extension of corporate power.

It is not unprecedented at all. Rather, what has happened is that MNC privilege has been curtailed. American Defence Contractors enjoyed extraterritoriality in Iran under the Shah. Employees of I.B.M or E.D.S could literally get away with murder. In Leftist India, the Government bent over backwards to ensure that Union Carbide's CEO escaped the clutches of the Indian courts. There was a time when the United Fruit Company could topple regimes in 'banana Republics'.  

Rules based Globalisation can curb Corporate malpractice. It is true that stupid bureaucrats and ignorant politicians found that ISDS could boomerang upon them. Canada thought ISDS was a stick to beat the Mexicans with, not a gun pointed at their heads by investors in dirty Energy.
Politicians and bureaucrats are now  smartening up and hiring better lawyers on the one hand and working with their counterparts abroad to change the rule-set. No doubt, Trump's election has thrown a spanner in the works for the moment. Still, there is no reason to believe this was an inevitable outcome or that the situation, going forward, is irremediable.

Chang: The assumption that globalization benefits everyone is based on mainstream economic theories that assume that workers can be costlessly re-deployed, if international trade or cross-border investments make certain industries unviable.

Mainstream ne0-classical economic theories assume that markets benefit everyone only if there is no need for markets and markets don't cost anything to run. They prove only that Economics, under ideal conditions, won't do any harm because it would be completely useless.  

Heterodox economic theories, mainstream or otherwise, assume that ordinary people are as stupid as shit and don't notice that they are being incessantly raped and robbed by evil politicians or corporations or some abstraction like 'neoliberalism' or 'austerity' or 'Populism' or 'Globalisation'. They counsel doing the stupidest thing possible under the circumstances because that's the only way ordinary people will wake up and understand that they are being sodomised and stolen from. Thus, what America needs to do is to actually do what Trump said he'd do while impeaching Trump because he is actively anally raping  every single American citizen on a daily basis.

In this view, if the US signs NAFTA with Mexico, some auto workers in the US may lose their jobs, but they will not lose out, as they can retrain themselves and get jobs in industries that are expanding, thanks to NAFTA, such as software or investment banking.

You will immediately see the absurdity of the argument -- how many US auto workers do you know who have retrained themselves as software engineers or investment bankers in the last couple of decades? Typically, ex-auto-workers fired from their jobs have ended up working as night-shift janitors in a warehouse or stacking shelves in supermarkets, drawing much lower wages than before.

The point is that, even if the country gains overall from globalization, there will always be losers, especially (although not exclusively) workers who have skills that are not valued anymore. And unless these losers are compensated, you cannot say that the change is a good thing for "everyone".…

Since the US Federal Govt. can't legally compensate every loser from Globalisation, it follows that Trump's Protectionism is what is required by the Rawlsian Difference Principle which focuses exclusively on the fate of the least well off.

Of course, most rich countries have mechanisms through which the winners from the globalization process (or any economic change, really) compensate the losers.

No. There is a safety net- a 'social minimum'- but no specific compensation. It may be argued that 'property rights in jobs'- e.g. statutory redundancy pay- represent compensation. This is not the case as it encourages 'last in first out' and imposes a higher Present Value loss on the youngster who gets fired than the old crock who has already been featherbedded.

 The basic mechanism for this is the welfare state, but there are also publicly financed retraining and job-search mechanisms -- the Scandinavians do this particularly well -- as well as sector-specific schemes to compensate the "losers" (e.g., temporary protection for firms to promote restructuring, money for severance payments for the workers). These mechanisms are better in some countries than others, but nowhere are they perfect and, unfortunately, some countries have been running them down. (The recent shrinkage of the welfare state in the UK is a good example.)

In your view, Ha-Joon Chang, is the convergence of globalization and technology likely to produce more or less inequality?

Chang: As I have argued above, technology and globalization are not destiny.

The fact that income inequality actually fell in Switzerland between 1990 and 2000 and the fact that income inequality has hardly increased in Canada and the Netherlands during the neoliberal period show that countries can choose what income inequality they have, even though they are all faced with the same technologies and same trends in the global economy.

Switzerland saw increased wealth inequality, more particularly at the top 0.05 percent, because of the way their tax system is structured. Canada doesn't have world famous brands for structural reasons and so will look different to the U.S. The Dutch legal system deals with debt differently and, in any case, the stupidity of their leaders make even Belgium's wholly dysfunctional state look good by comparison. Still, they are Dutch. They don't choose anything. Otherwise they wouldn't be Dutch.

There is actually a lot that countries can do to influence income inequality. Many European countries, including Germany, France, Sweden and Belgium are as unequal as (or occasionally even more so than) the US, before they redistribute income through progressive tax and the welfare state. Because they redistribute so much, the resulting inequalities in those countries are much lower.

Oh! So Globalisation is a good thing provided you have a decent 'Social Minimum' and are careful about the type of bilateral or multilateral Trade agreements you sign. Urm...isn't that the mainstream view? What is wrong with you? Do you not understand that a heterodox economist has to do more than just expose the myth that everybody isn't genuinely being anally raped and robbed by Neoliberalism but also give the most mischievous possible policy prescription? Other Cambridge economists have no difficulty with the second part. I appreciate that South Koreans don't like fucking up Economies, but you owe it your elevated position in an essentially worthless profession to rid yourself of such childish scruples.

Siah mashq

I have no ink with which to write

Of that lunatic Moon tonight

Love, let this black bile serve

To pen Pain's Peano curve

James Meek & the true Labour theory of Value

James Meek has a well researched article in the LRB about a Cadbury factory which relocated from England to Poland.

The English workers, thanks to the use of robots, enjoyed quite high pay (as much as £50,000) and received generous redundancy packages (Meek mentions a worker who received £100,000).  The Poles received much less which also meant that expensive robots were not used on the production line. However, as wages in Poland rise, it appears likely that such factories will shift Eastwards to countries poorer yet. Ironically, prior to 2014, the E.U subsidised this export of jobs- a fact which has turned some of the English ex-Cadbury workers into Brexiters. Similarly, in Poland, the Conservative, homophobic, ruling party is attractive to the working class because of its anti EU rhetoric.

Why did English Cadbury workers enjoy high wages and a good standard of living? The answer is that England, over the course of centuries, had developed Naval and Rail technology and so could import raw materials and ship finished products cheaply. Moreover, the Rule of Law was well established- once again because of centuries of investment. This meant Factories could retain a larger proportion of the price to the consumer. Competition between Factories raised wages thus, the maker of the chocolate gained proportionately more than its transporter or distributor. 

By contrast, historically low wage parts of Poland were notably less favoured in all the above respects.

England lost its inherited 'acquired' advantages in manufacturing but developed others connected to Finance, Education, Culture & so on. The working class could still find some high real wage niches but, increasingly, not in big factories where, in any case, migrants might work harder for less money. 

Meek reports an ex Cadbury worker as saying ' ‘We were just the keepers of those jobs. We needed to hand them down to our children and our children’s children.’ This makes sense. If there are to be property rights in jobs, they should be heritable. However, the law permits the hiring of migrants or others genealogically unconnected to current workers. Understanding this, such workers prefer to accept a fair redundancy package and let the matter drop. Even in Poland, more and more of the production line jobs are being taken by Ukrainian contract workers. Thus, we ought not to expect a major backlash from working class people as factories move to where costs are lower yet.

Meek is evidently troubled by an ugly, xenophobic, spirit to be seen in post Brexit Britain and in Kaczyński's increasingly psychotic Poland. He is trying to explain these unwholesome developments as a response to greedy multinationals destroying well paid manufacturing jobs and replacing them with ill paid and precarious employment. The obvious rejoinder is that National Governments could, under pressure from voters, establish high minimum wages and restore strong property rights in jobs. Why haven't Poland and Britain done so? The answer, obviously, is that these property rights can't be made heritable without running afoul of equal opportunity legislation and the terms of the relevant European treaty. All that would happen, if property rights were ramped up, would be that a generational divide would worsen- grown up sons would either emigrate or remain in idleness under the paternal roof- and that migrants would be sucked in to keep things ticking over. Notably, it was France, not Britain or Poland, where a truly extreme party- the National Front- became a serious contender for power.

Meek concludes his essay by conjuring up the spectre of a Marxian 'under-consumption crisis'

Robots eat something much more expensive than chocolate- viz. technical knowledge of an arcane type. If the children of comfortably off working class parents are so stupid as to believe that they will inherit jobs in the same factories at the same or higher real wage, then they will quite rightly refuse to acquire any such knowledge. They may try to learn the guitar or disco dancing or whatever it is that kids are into nowadays because such knowledge impacts directly on their reproductive success.

As a matter of fact, kids everywhere understand that 'nerds' can make the big bucks and get the hot blonde- like in 'Big Bang Theory'- so they are in fact willing to acquire arcane knowledge and skills. Not everybody can be a rocket scientist or robot designer. But everybody can be alert to the main chance and allocate their own labour better than some guy sitting in a skyscraper back at Corporate HQ. The true Labour theory of value is that labour which values itself stops getting reamed in the pooper. Marxism, as a political force increasingly relevant in our troubled times, is struggling manfully to avert this outcome.

. 

Adam Tooze & Varoufakis's 'financial deterrence'

Adam Tooze, a Professor of History, has a sympathetic review of Varoufakis' latest book here.

This caught my eye-

Tooze is conflating OMT (Outright Monetary Transactions), regarding which the European Court had made the judgement he refers to, and Q.E. (Quantitative Easing) which was a new policy initiative of Draghi's.
On winning its first election, the Syriza Govt. in Greece signalled it was reneging on the country's Memorandum of Understanding re. Euro Bailout conditionalities and thus was disqualifying itself from OMT whose mere existence, not use, was enough to reduce the cost of borrowing and contain contagion risk for the other debtor countries.

Had Greece not elected Syriza and stayed the course, it was expected to be eligible for OMT in 2015 and even direct Q.E (which increases liquidity in troubled local banking systems with some notional 'sterilization' (i.e. nullification of the inflationary impact) at the central level)

The market expectation that Greece wanted to comply with its MOU and thus meet the conditions for OMT support would have been enough to secure it cheap credit in order to continue down the path of primary surplus. In other words, the World would have said 'The Greeks are getting their house in order. The ECB is behind them. Thus they should be able to borrow at low interest rates and service their debt more cheaply.'

Tooze is rightly critical of German legal challenges to Draghi's very successful OMT and QE policies (whose effect was psychological rather than anything requiring profligate spending). It would be pointless to have an independent ECB if it were constrained from doing the sorts of things only a Central Bank can do.

As a Keynesian, Tooze is perfectly at liberty to criticise purely monetary tinkering and to call for  robust fiscal expansion. Europeans, however, were sceptical because the PIGS had incurred massive debt for investment in infrastructure and construction prior to the financial crisis. A lot of this money had been wasted. Corruption had increased. The entire Economy had been distorted. For Keynesian policies to work, not just Political parties but Civil Society itself had to change. Leaving aside Greece for a brief period after Syriza's first victory, the other PIGS took the bitter medicine of austerity because it was all to palpable that vested interest groups- including Public Sector employees and 'feather bedded' permanent employees- would not relax their vice like grip on the economy. Young people had to emigrate or make do as members of an impoverished 'precariat'.

Tooze, like other Anglo Saxon academics finds Varoufakis an attractive personality. He believes him to be a flag bearer for Keynesianism, despite the latter's self-description as a 'Hayekian Marxist'. Thus, Tooze speaks of Varoufakis as having a 'Machiavellian' plan to subvert Draghi's benign Monetary policy thus leaving no option on the table save Keynesian reflation.

This appears too charitable an assessment. Draghi had won a victory over the Germans in the European Court. He had the legal authority to extend OMT and perhaps even QE help to Greece in 2015. All the Greeks had to do was stick with the MOU and 'extend and pretend'. Failure to do so meant that Draghi's hands would be tied as would those of Syriza sympathisers in France and the other 'PIGS'.

Tooze thinks Greece could have 'blown up QE'. How? They'd already made themselves ineligible for OMT, forget QE. They weren't in the lifeboat. How could they blow it up?

The other peripheral countries were sticking with their MOUs and benefiting accordingly. Draghi was slowly but surely winning the fight against the stupider sort of German because the Markets were on his side.

Tooze says Greece could impose a haircut on its bonds as a type of blackmail- 'the nuclear option'. Yes, the ECB would have taken a hit. But, the markets would very quickly understand that this was just a pinprick. Moreover, getting shot of Greece meant the ECB's rating should rise not fall.

Thus, Greece had no 'financial deterrent' against the ECB.  It could be a minor embarrassment to some sympathetic Left leaning or more Keynesian Mandarins and Politicians. But there would be no lasting impact on anyone's career.
On the other hand, Greek pensioners and Financial Institutions would not recover. They would bear the brunt of the haircut. This has never been Syriza policy. They want to compensate Greeks who lost under the last haircut, not shave their head completely.

Suppose Syriza wanted to pauperise Greek pensioners, destroy its financial sector, shut down its banks, impose exchange controls and limit cash withdrawals and so on. Then it could credibly have threatened a haircut. Would the ECB have had to 'reevaluate its portfolio of sovereign bonds'? No. Why? The other PIGS were meeting the conditionalities for OMT. The Market would initially have jitters but then look at the map and say 'Oh! Greece is just a small country not contiguous to the rest of the Eurozone. So what if it goes down the pan? It's tiny.'

Tooze says a voluntary Greek haircut could have led to a new legal challenge to Draghi's QE. How? On what basis? The law had already been clarified. Only if Draghi proposed to break the law to accommodate the Greeks would a legal challenge be entertained. It is a different matter that political opposition, in Germany, to QE might have increased. But that political opposition wouldn't have mattered because elections were still years away.

Since Varoufakis is an Economist he can't possibly have believed Greece had a 'financial deterrent'.

Why is Tooze making such a ridiculous claim?
Surely there can be no substance to it? 

The answer is that Tooze is not an Economist. He teaches History.

He is trained to look at the facts regarding what actually happened- not what rational people would do in obedience to the correct Economic theory.

Tooze has a credible source for his assertion- and points us to this article by Paul Mason-
Yanis Varoufakis is pacing the marble hall, cellphone to his ear. In the Maximos Mansion, where the cabinet is about to meet, there’s a “spy room” for secure communications. But by June 21, Varoufakis—hunched against a statue—no longer needs it.

If the Germans are listening, they need to hear what he is planning to do. With nine days to go until the Greek bailout program ends, Varoufakis is about to offer a significant compromise to the lenders. Pensions will be cut, and taxes hiked—hitting the fiscal targets demanded by Europe. That’s Plan A. If it doesn’t work, there is a Plan B, which he explains almost in a whisper:

“My very strong suspicion is that the powers that be, at least within the Eurogroup, have made up their minds to give us an offer we can’t possibly sign up to, and that as a result, there’s going to be bank closures on Tuesday.”

Are you ready for that? I ask him. “Of course not,” he says. “Nobody is ready for Armageddon.”

“The big question is this: Once the banks close their doors, are we prepared to do what it takes—and respond to this aggressive act by the [European Central Bank] and the Bank of Greece aggressively—by haircutting the €27 billion of SMP bonds we owe to the ECB?”

Varoufakis knows defaulting on the ECB would be like dropping a financial atom bomb. We store the only copy of the interview in a safe and wait for Armageddon. But it doesn’t come.

If Syriza had gone to Brussels and provoked the showdown, scrapped €27 billion worth of debt to the ECB and mobilized the vast network of support it enjoyed in Europe, it might have stood a chance. Instead, Greek negotiators spent the next week pursuing the same strategy of compromise that had got them nowhere for months.

On Friday, June 26, Prime Minister Alexis Tsipras walked away from the negotiations and called a referendum; but it was never backed by the kind of action Varoufakis proposed.

By July 13, Greek resistance to austerity was over: With the economy close to collapse, Tsipras was forced to sign a new bailout deal, handing economic sovereignty to Brussels. The first left-wing government in modern Europe had been effectively destroyed. The delight of the European elite was summed up by Slovak Finance Minister Peter Kazimir: “tough for Athens” he tweeted, “because of their ‘Greek Spring.’”

The ECB had to increase Emergency Liquidity Assistance by 40 billion between February and June 2015 to keep Greek banks open. Reneging on 27 billion historic debt would have meant the ECB could stop ELA and end up with less cash outflow. Good Business Practice for Brussels but Armageddon for the Greeks.

Reneging on historic debt when you are on the IV drip of Liquidity Assistance is crazy.

It isn't an 'atom bomb' you can target at your Creditors.

It is a 'dirty bomb' which poisons only your own demesne.

Tooze takes a different view.

Wow!

Is Tooze serious?

Greece posed no contagion risk in 2015.

How could it?

The private sector had no exposure to it.

The ECB is a central Bank with massive assets.

A Greek default would have been a pin-prick, nothing more.
On the other hand, getting shot of Greece would boost the ECB.
But it would also boost the Euro.
The German trade surplus would have been affected.

No doubt, Coeure and Draghi (both of whom are economists like Varoufakis and thus had a class interest in not seeing him screw up) liked Greece and didn't want it to turn into Zimbabwe on the Mediterranean. No question, they'd have got a bashing in the Press for a week or two if Greece went down the toilet. But no European institution- including the ECB- was imperilled by Greek suicidal stupidity. The Greeks could threaten to cuddle up with Putin, or even embrace Islam, and it would have made no difference. The only 'deterrent' they possessed was of threatening to send hordes of their young people into Europe to take jobs from the natives. Sadly, Greeks are lovely people. Europe wants more of them to come and settle and get jobs and pay taxes and start families. Nobody is going to give Greeks money to stop their youngsters from coming to their countries and enriching their communal life.

Tooze ends his sympathetic review by highlighting two points- viz.

1) Varoufakis's irresponsibility towards other PIGS. However, as we have seen, since they were meeting their conditionalities, they were legally covered by OMT and nothing the Greeks could do endangered that. 

2) That actually the whole thing was a delusion. There was no Greek 'ICBM', just a 'dirty bomb' they exploded upon themselves.

I believe Greece could have led the way in 2015. A good economist able to speak German could have made the case that 'odroliberalism' required an expansionary fiscal stance. Why? Well, by standard Keynesian arguments, the ECB commitment to 'Price Stability', is multiply realisable. Taken together with the notion of a 'Social Minimum', it militates for what Kennedy called 'budgeting for a full employment surplus'. Of course, Econometrics has moved on a lot since the Sixties. That's a good thing. It is easier now to make a sound statistical argument which would hold up in the European Court that sustainable price stability requires an end to stupid deflationary policies which have no basis in Economic theory and no support in empirical data.

Sadly, Varoufakis was not a good economist. He is an excellent self-publicist- a 'rock-star'- but he damaged Greece very badly during his short tenure and has made the task of sensible Economists, confronted by ignorance and prejudice, that much more difficult.

That St. Agnes' Eve's tryst we too kept

 For but xenial is our Khaddar's Kumarappa to Love's Ariadne's thread

Keat's 'demon debt' manciples Merlin's Books (supra) to our red

To wist, that St. Agnes' Eve's tryst we too kept

Shitting the bed in which Beauty slept

Jason Smith's worthless Information Transfer Econ

Jason Smith is a Physicist who wants to 'use Claude Shannon’s insight about matching distributions on either side of a communication channel to match distributions of supply and demand on either side of market transactions.'

This is silly.

Markets are a solution to a coordination problem. They are not a channel of communication.

Prices may have a 'signalling' function if 'dis-coordination' games exist- i.e. there are arbitrageurs (which will only occur if there is 'hedging' and 'income effects' arise) 

However, for this to happen there has to be a noise generator.

(Otherwise expected 'income effects' are zero so no arbitrageurs exist.)

More pointedly, no information or preference aggregation occurs because it would represent a waste of resources.

Noise is a 'bad' for Information theory. It is vital for Market signalling.

Smith is a physicist. He wrote a blogpost on 'Evonomics' which begs for money to fund worthless shite like Smith's on the grounds that it is trying 'to make the world a better place'. It solves a coordination problem for stupid people who want to give away their money and stupid pedants who need to get paid to pose as saviours of humanity.

 Smith says- 'Let’s start with a set of people who want blueberries (demand) and a supply of blueberries. These represent complex multidimensional distributions based on all the factors that go into wanting blueberries (a blueberry superfood fad, advertising, individual preferences) and all the factors that go into having blueberries (weather, productivity of blueberry farms, investment).

Why is Smith is starting off with a situation where there is perfect inter-subjective information available to his auditors through some ubiquitous error free communication channel? Shannon's insights are useless here. Information Theory has no purchase. 

Perhaps he believes that there is a God who creates a distinct Universe at every moment. Furthermore, this God is under his control. So he says to this God- 'Start by creating a set of people with such and such preferences and endowments'. God may reply 'such people can't be the product of evolution. Under Natural Selection, there can be no unique 'complex, multidimensional' mathematical representation for what you ask. What you get is Red Queen races on Fitness landscapes. Indeed, it is nonsense to say 'people want blueberries'. They don't. Natural Selection endowed them with plasticity in this respect which is why they didn't go extinct. Please don't be so stupid. You begin with a premise which wholly vitiates the argument you are trying to make.' 

Smith isn't really making an argument. He's just displaying stupidity and ignorance because that's how we can make the world a better place- right?

In place of Hayek’s aggregation function, information theory lets us re-think the price mechanism’s relationship with information. A price vector is an information string. Simple. That's the relationship. Nothing more. Nothing less.

Stable prices mean a balance of crop failures and crop booms (supply), population declines and population booms (demand), speculation and risk-aversion (demand) — the distribution of demand for blueberries is equal to the distribution of the supply of blueberries. Nonsense! Stable prices means prices are stable. If we assume everybody has perfect information- i.e. an ubiquitous error free information channel is instantaneously available to everybody without any cost cognitive or otherwise, then, assuming convexity, no hedging, homogeniety, gross substitutability, etc, etc, then Smith wouldn't necessarily be telling stupid lies. However, there would also be no need for a market or prices or Information Theory or Physics or Mathematics.  Everybody would be a Leibnizian monad continually reflecting on the perfection of an Occasionalist God.

Prices represent information about the differences (or changes) in the distributions. And differences in distributions mean differences in information. Nope. Prices don't represent anything unless we make a bunch of assumptions which make Information Theory redundant. The truth is, the price vector is just an abstraction. All that matters is that bilateral transactions proceed. Everything else follows very quickly because evolution has hardwired us in a particular way. Thus overall we get a Hannan consistent result featuring arbitrage and evolutionary channelisation of diversity. This may look a Liebnizian outcome to pedants or polemicists, but it isn't. It is regret minimising.

In the remainder of his post, Smith appeals to the following two notions. Both fatally vitiate his argument

1) The principle of maximum entropy- this justifies Samuelson type Economics even in the absence of ergodicity. But if Samuelson type Econ is permissible, Muth Rationality must be even better. Hence, Information theory has no purchase because we always have a better discriminator than that of a

2) A Generative Adversarial Network.  The joke here is that availability cascade based shite like Smith's gets past its own peer review process. Why? Because it is 'second order', not alethic. It seeks to make the world a better place not by actually doing so but by asking for money to continue being a fucking parasite on rational discourse.

Daniel A. Kaufman predicts the next great scandal of the Trump era

Is Philosophy useless to Economics?
Positive Economics replied with a resounding 'No!' a long time ago.
Philosophy can help us become better housekeepers.

Good housekeeping, that is Economics, concerns itself with Choice under Scarcity while Philosophy concerns itself with parsimonious tools to demarcate 'embedded' or 'conventional' quid juris decision situations from alethic, ergodic, quid facti decision situations. Consider my decision to eat a biscuit just now.  It might have got me thrown in jail for violating the law applicable to fasting during Ramadan in some jurisdictions. However, in the country where I live, it is classed a wholly private self-regarding act without any signalling or strategic function.
Nevertheless, some actions which are legal can come to be regarded as repugnant- because they violate something which we feel has the moral force of a law- and Philosophy plays a role in illumining why this should be which in turn enables Economics to frame a theory of repugnancy markets.
A similar point may be made regarding data used as inputs for Economic models. Philosophy objected to 'interpersonal comparisons of Utility' and Economics found that new, more fecund, vistas where opened by complying with what initially appeared to be a purely epistemological scruple.

On this view, Philosophy is complementary to Economics and supplies it with a demarcation criteria.

It turns out, I'm behind the times.

Apparently, while I was watching Netflix, a new type of Philosophy has arisen.

It is called 'mainlining' (as opposed to free-basing)  philosophy'

But first let me introduce Daniel A Kaufman who sued the University which employed him for barring him from campus because of his disability which he describes as 'depression with psychotic features'.

This circumstance alone lends a melancholy interest to a recent article of his from which I quote.

In “Excessive Reason,” an essay I published in these pages last year, I argued that mainline philosophy is characterized by a pervasive and systematic rationalism, the main characteristics of which I summarized as follows:
1) The acceptability of a belief, activity, practice, institution, etc., rests entirely on whether or not it can be rationally justified.
The rational justification of beliefs is comprised either of empirical evidence or of inductive or deductive proof. The rational justification of activities, practices, and institutions may include appeals to utility, where this notion is grounded in a scientific conception of human nature (like Bentham’s), or to duty, as long as it is grounded in some clearly definable, logical conception of reason (such as Kant’s).
Rational beliefs and actions are the logical and causal products of rational intellection.
Rejected categorically are those beliefs, activities, practices, and institutions grounded in the authority of individuals, classes, customs, or traditions—the collective sources of what Burke called “prejudice”—adherence to which is broadly identified with pre-modern civilization and is considered intellectually and behaviorally atavistic.
Also rejected are those beliefs, activities, etc., which are grounded in common sense, intuition, or sensibility, obedience to which, inasmuch as they do not constitute rational grounds for obtaining knowledge or motivating action, is also treated as regressive; the province of children or of incurious or otherwise unreflective adults.
Truth is the end of all inquiry and belief and trumps all other intellectual ends. The fulfilment of one’s duty (service to the Good, the Right, and the Just) is the end of all activity and consequently, supersedes all other practical ends.

I also suggested that these ideas support an ethos or conception of the Ideal that is also characteristic of mainline philosophy and which is defined as a conjunction of the following

A. Disinterestedness (impartiality) in belief and conduct: one must eschew bias, prejudice, and any other form of pre-judgment, in everything that one believes and does, and go wherever the evidence, logic, cost-benefit analysis, or other rational calculus leads.

B. Dispassion in belief and conduct: one must believe and act solely on the rational merits of the case at hand. One should never believe because of appealing rhetoric or wish-fulfilment or act on the basis of critically unexamined sentiment.

C. Autonomy: The ideal person is a free agent, both in belief and in action, but this freedom must be rigorously defended: from the forces of nature, by having one’s reason sit in constant judgment over one’s inclinations and sensibility; and from the forces of social conformity, by maintaining one’s independence from the influences of others and especially from the often unconscious influence of habit, custom, and tradition.

D. Consistency and Fairness: As inconsistency is the most obvious manifestation of irrationality, consistency is a bedrock rationalist virtue. Fairness is a manifestation of both consistency and dispassion, so it too is a rationalist virtue.

E. Purity of Purpose and Perfectionism: Absolute fidelity to the supremacy of truth, goodness, rightness, and justice in everything that one believes and does, over the course of one’s life. 

Kaufman's paradigmatic 'mainline philosophers' are Peter Singer & ditto Unger.

However, they are not generally considered to be doing philosophy any longer.

They are merely engaged in polemics of a silly but bien pensant kind.

If philosophical activity uses up scarce resources, their sort should be banned- and, indeed, it is all too obvious, they no longer make a pretence of taxing their brain cells before dashing off articles. So what? Lots of philosophers give up even the pretence of thought and take to writing stupid nonsense as they grow older. Why is Kaufman working himself up into a lather over senile Singers and Ungers?

The answer is Kaufman has been reading that master of paranoia, GK Chesterton, who anticipated UKIP by visualising an England where Muslims would ban Pubs and the Edwardian equivalent of the NHS would lock us all up as lunatics.

Kaufman, warns-

If there is a general characterization of what is wrong with rationalistic philosophy it is that it represents a rebellion against our humanity; one that has played and in my view will continue to play a negative role in the lives of individuals and in the civilization of the modern West. 

Oh dear. Did those naughty rationalistic philosophers rebel against our humanity again? Whatever are we going to do with them? I know! Let's just ignore them. After all, rationalistic philosophers don't have any power. Also they tend to be stupid as shit and teach a worthless subject. They can rebel against plants or atoms or our humanity or anything else and it still won't make any difference to anyone. 

Philosophy does not matter unless it changes the incentive structure- i.e. it has some means to inscribe itself as Polanyi type 'embedding' or else can change behaviour in an ergodic manner. But, in that case, there is always an Economic path to put down its anti-human rebellion. We don't need Philosophy to fight Philosophy when only Economics can do the job.

 This rebellion ranges from rationalism’s hostility to our natural and customary beliefs, sensibilities, and inclinations, to its outright rejection of our humanity, if conceived of as an integrated, organic unity of mental and bodily capacities that is only fully realized in a social and cultural context and which possesses a complex and heterogeneous good. 

Irrationalism and the conviction that my neighbour's cat is talking to me are equally hostile to our natural and customary belief that cats can't talk and that people who speak of  the 'integrated, organic unity of mental and bodily capacities' are either stupid careerists or mentally ill.

 Rationalist philosophy rejects this on behalf of a wholly abstract personhood which, in “Excessive Reason,” I identified most strongly with Descartes, Locke, and Kant,

why not Grotius, Spinoza and Lessing? All philosophers say silly things. It is child's play to show that Grotius was actually more Cartesian than Descartes or that Locke is more Spinozan than Spinoza and so on.

 but which I traced back to Plato and even earlier, to the Pythagoreans and the Orphic mystery cults. 

Orphic mystery cults! What's next? David Icke's theory about Lizard people from Planet X?

 Two significant areas in which modern mainline philosophy has persistently urged resistance to our natural and customary beliefs and inclinations, in the service of rationalist perfectionism, are ethics and epistemology.

All philosophy resists customary ethics and folk epistemology. So does all Jurisprudence, all Economics, all Science, all Medicine- every useful Art or Science begins by showing that one's knee jerk reaction is wrong. There is a Techne here which is initially counter-intuitive and which it takes patience and perseverance to master.

With respect to ethics, modern mainline moral philosophy’s perfectionism — particularly, its requirement that one adopt a disinterested, dispassionate, and impartial stance, in identifying and carrying out one’s moral duty, and its rejection of sentiments such as love, hatred, sympathy, attraction and aversion as morally legitimate motives — far from advancing the cause of goodness and justice, in fact constitutes an obstacle to it.  

Nonsense. I love my son and hate Maths. I still should send my son to School to learn Maths because my hatred of Maths is irrelevant when it comes to determining  what's best for my son's future. In fact, I would be easily persuaded to do the right thing  if a successful man in my neighbourhood came to me and said 'My friend, like you my father loved me and hated maths. Yet he made me study maths. The result is that I am now rich and happy. If you want the best for your son, you may please emulate my father in this respect.'

No doubt, there are philosophers who said stupid things like - 'don't kiss your baby coz you love him but act dispassionately.' However this is the reason philosophers are a laughing stock. 

On the epistemological front, the rationalist’s rejection of nature and custom as legitimate sources of belief and insistence that every belief be rationally justified do not serve the cause of liberal, democratic politics, as mainline political philosophers have liked to claim, but instead create intellectual conditions conducive to totalitarianism, by leaving a vacuum at the foundations of social, civic, and political belief and thereby exposing the public to the manipulations of propagandists and demagogues.

Is this guy serious? GK Chesterton had some very odd ideas about the Jews. Nazis claimed these ideas were 'natural and customary' and rejected rational arguments, such as those Fredrick the Great employed, to refrain from robbing and killing patriotic citizens of Jewish origin.

There is no 'vacuum' at the 'foundations of social, civic and political beliefs'- there are people. If we get the mechanism design right, then those people have proper incentives to ensure proper preference and information aggregation and Hannan consistent checks and balances on Social Choice.

Philosophers are too stupid and crazy to be allowed anywhere near the foundations of anything unless, like Radhakrishnan, Philosophy was just their day job- a way to pay the bills, nothing more.

Kaufman must know that Singer & Unger don't represent philosophy as opposed to virtue signalling. He approvingly quotes Bernard Williams who did have some influence as a member of the 'great and the good' when I were a wee lad.

'Some writers aim to increase a sense of guilt in their readers. Peter Singer is an example, and in his book Practical Ethics he is evidently more interested in producing that effect than he is in the theoretical basis for it, which gets very cursory treatment. As moral persuasion, this kind of tactic is likely to be counterproductive and to lead to a defensive and resentful contraction of concern. This can be seen in research and, at the present time, all around us.'

Of course, Singer & Unger's arguments fail immediately because of information asymmetry. They still make them anyway because that is their brand in a globalised market for nonsense. If Kaufman's philosophy is too stunted mathematically for him to see why what he calls 'mainline philosophy' is mainlining the intellectual equivalent of heroin, Economics can come to his rescue. There is no need to jump to some extreme Pyrhhonist scepticism about even sense data.

Skepticism, when understood as a position rather than as a method, is the product of a frustrated rationalism — the result of the rationalist being convinced that the high epistemological standards to which he adheres cannot be met — and would seem, therefore, to entail that we should suspend all of our beliefs and activities and adopt the posture of the Pyrrhonist or at least, the Pyrrhonist of popular legend. 

I tell you that I am your mother and that you owe me Rs. 123 for my breast milk because the neighbour's cat said so and cats are well known to be perfectly rational. What do you do? Do you say to yourself- 'Oh no! Since cats are perfectly rational it must be the case that this fat and ugly black man is really my own Mumsy-wumsy!' Do you become frustrated with rationalism and become a sceptic? Let us suppose you do. Now set fire to your foot. You can see your foot is on fire, but can't be sure it is really on fire. You feel a lot of pain but don't know if it is your own pain. You burn to death because of your scepticism all because I told you a stupid lie about a perfectly rational talking cat.

Perhaps I'm being unfair to Kaufman. Judge for yourself-

 Now, on first glance, the risk here, would appear to be purely theoretical: even though Hume warned that such a person would suffer “pensive melancholy” and would receive a “cold reception” from others and Reid thought that “a man who did not believe his senses, could not keep out of harm’s way an hour of his life” , both were convinced that the rationalist-skeptical stance was unsustainable; that the force of natural belief and inclination and inherited habits and customs would always overcome even the most hardnosed rationalist philosophy and that consequently, neither rationalism nor skepticism posed any real danger to individuals or to mankind as a whole. 

Hume & Reid were shrewd and canny Scottish. They had a sense of humour. They never endorsed the notion that if some worthless philosopher made a ridiculous claim then any sensible person was obliged to go completely bonkers. Yes, at the time, the Established Church did require a certain mental elasticity, or outright hypocrisy, of the clerisy. But, there has never been a tradition in these Kingdoms of believing the absurd claims of psilosophers. 

By contrast with Hume, Chesterton was actually mad- not in his personal life but in his writings. It is to him Kaufman now turns, having first shown that Hume & Reid did not endorse his claims at all.

He quotes 'Orthodoxy'-

“Just as one generation could prevent the very existence of the next, by all entering a monastery or jumping into the sea,” he wrote, “so one set of thinkers can prevent further thinking by teaching the next generation that there is no validity in any human thought.” 

This is nonsense. Thinkers don't engender other thinkers in the same way that humans give birth to babies. It may be that a particular School gains complete control over a Society and so a subjugated and brutalised clerisy pretends that they don't have any valid human thoughts. Maybe that could happen. However, we can point to no such Society extant today. Why? They get invaded or overthrown or sink back to the stone age.

Chesterton, poor booby, had a theory of Economics.

It was shite.

So what?

Everybody had a more or less shite Economic theory back then.

He never claimed to be a Philosopher, but did claim to be a Christian.

Since he was charitable in his personal life and bore no malice to Jews or infidels, his claim stands.

His intellectual mistakes were those of his age.

His affectionate and convivial nature was entirely his own as was a brooding demon of psychosis.

What is imperishable in his wit, if not all his works, is the former's victory over the latter.

Oddly, Kaufman doesn't move on from Chesterton to Voegelin and shiter gobshites yet in order to stake a claim to being an Alt Right Guru. This suggests that his character is better than his intellect.

Unfortunately, he believes that Heidegger helped the Nazis. This isn't true. Heidegger didn't know from Math. He couldn't have helped anybody. He was engaged in something wholly worthless. So was Hannah Arendt. Still, there is a globalised market for nonsense and they built up their brands and made a bit of money- so let us leave it at that.

Why pretend they had any influence at all?

One answer is- we have even less, in so far as we waste our time writing worthless shite like this blog post. Why not just pretend that the neighbour's cat has achieved Nirvana and is dictating the New New Testament to us? We might actually make a bit of money out of that scam. 

Another, sadder, answer is that it may be that philosophy can serve a therapeutic function if one is suffering from psychosis. However, failure to understand Economics can lead a Philosophically inclined person to adopt a Paranoid Hate ideology- like Chesterton's anti Semitism. 

Diminished Rationality leads us to take shortcuts. Financial Markets become personified as 'the Capitalist' who in turn can turn into 'the Jew' or 'the Arab Sheikh' or 'the gnomes of Switzerland' or 'Marwari industrialists' etc.

Kaufman invokes Jung to mourn the 'disenchantment' of the World and the end of 'embedded' Social processes.

'More serious still is the alienation effected by the withdrawal of the conscious self from its body, its world, and its history, on which Carl Jung hung the ongoing and currently metastasizing pandemic of neuroses, afflictions that arise not simply from a sense of distance from the world, from others, and from one’s past, but from the horrible over-awareness of self that results.

Freud and Jung et al. discovered it paid better to treat healthy people who thought they were ill than to treat ill people who couldn't work and thus couldn't afford bogus treatment. Neuroses don't exist. Psychoses do. Jung started by treating psychoses but shat the bed in predictable manner. Still, he had some personal experience of schizophrenia and so was probably less dangerous to his patients- unless they were wealthy or sexually attractive- than his peers. 

 “Whenever there is established an external form, be it ritual or spiritual, by which all the yearnings and hopes of the soul are adequately expressed, then no spiritual problem, strictly speaking, exists,” Jung wrote. 

This is not the Hindu view. The Ashtavakra Gita teaches that the spiritual problem only becomes acute enough to be addressed when such external forms become full fledged and thus recognisable as as duality.

 The modern man, however, “has become ‘unhistorical’ and has estranged himself from the mass of men who live within the bounds of tradition,” the consequence of which, he explained, is that we have “suffered an almost fatal shock and fallen into profound uncertainty.” Indeed, the very need for clinical psychology, Jung believed, “is symptomatic of a profound convulsion of spiritual life.”

Clinical psychology can improve outcomes as part of a Care Plan, but the need for it was delusive- a case of advertising creating a market for a bogus product. Modern man has experienced 'no profound convulsion of spiritual life'. He has been fucked over by stupid politicians and worthless economists. I recall older people, in Baghdad, discussing the impact of the televised moon landing on the Bedouins of the desert. Would they rise up and destroy every vestige of modernity in their path? No. They were cool with it. They did however show a shrewd appreciation of cross border arbitrage opportunities. That's all that rationality is. Arbitrage. Trade. Swapping your camel for a pick up truck.

Economics at one time was about substantive solutions to macro problems. However, thanks to its mathematical basis, it was able to see it couldn't be any such thing. Rather, its role was in facilitating co-ordination games (which, since David Lewis, is the Philosophical explanation of Conventions and 'embeddedness') and arbitrage through discoordination games. Some philosophers have made contributions to Econ but it is the latter's mathematical foundations which have made such 'distinctions without a difference' useful in motivating open research programs. However, it is John Muth's notion of Rationality, coupled with Schelling on focal points, which shows the way out of 'mainlining' Philosophy's cul de sac. Put briefly, 'moral properties' are a Muth Rational solution to a Co-ordination game. One can't be sceptical that such games exist. However, evolutionary game theory predicts that, under Knightian uncertainty, Hannan consistency requires hedging- i.e. arbitrage on dis-coordination games. This is not a scandal for current Economics. Why should it be one for mainline Philosophy?

Kaufman, who believes 'moral scepticism' has special standing, is innocent of any such notions. If he ever starts thinking about the money in his wallet, or the fact that Banks create credit he'll probably turn into a Chartalist nutjob because he doesn't get that Human beings have to be good at spotting focal solutions to Co-ordination games and that Muth rationality, too, is pretty much hardwired which is why we don't contantly bump into people in the street but either keep right or left by some unconscious mimetic process. Actually, full disclosure, I do bump into people a lot on the street coz I tend to be drunk off my head. Still, most other people don't, and that's what's important.

Kaufman, being untroubled by any such reflections, is able to end his essay with this fine rhetorical flourish-

There is no one more enslaved to his nature then one who is unaware of it or who was once aware of it, but has denied it to the point where he believes his own lies and has forgotten it. 

WTF is this supposed to mean? Kaufman is saying two types of agent are equal with respect to a property x. One is unaware of it. The other was aware of it, denied it, then lied about it and then forgot about it. What can we reasonably say about property x? The most parsimonious thing is that property x is meaningless. It is similar to 'being a gfullis hoxxjw'. The predicate is nonsensical. 
 If someone says 'you don't even know you are a gfullis hoxxjw', and you go crying to Mummy what she will say to you is 'Just ignore that silly boy. There is no such thing as a gfullis hoxxjw. It is a meaningless word.'

Suppose, years later, at your Senate confirmation hearing, that silly boy shows up and accuses you of having denied that you were a gfullis hoxxjw, and then lied about it,  what should you do? Clearly you should masturbate vigorously. 

Why?

Well, as Kaufman explains-

' For the person who accepts the fact that his every act of reasoning is ultimately grounded in the uncritical acceptance of his world, his faculties, and his inclinations and habits, reason remains a real, active force for sound behavior and thought. But for the person who insists on the rationalist’s rarefied conception of reasoning, reason is no longer a real, active force for soundness in his life, but at best an empty proceduralism, taking place in a vacuum; a void that will be filled either by his own unreasoned, unrecognized nature or that of others. In either event, he is controlled.'

You were being controlled when you masturbated vigorously and jizzed in Mike Pence's eye.

How it happened was this.

Your parents sent you to College and, stupidly, you studied mainline philosophy.

This caused you to start insisting on the rationalist's rarefied conception of reasoning.

This created a void inside you.

The void was quickly occupied by some evil person who wanted to jizz in the Vice President's eye.

Something similar happened to Trump when he went to Moscow and ended up getting a golden shower from various prostitutes.

Mainline Philosophy is aiding and abetting the fake news of the mainstream media.

Sad!

 The greatest irony of all, then, is that a philosophical movement that for two and a half thousand years preached the rational ascendance of man over nature and the wills of others may very well be responsible for effecting his utter subordination to both.

That's the greatest irony?

Really?

You come up with a theory which states that 2500 years of Western Philosophy can lead to a Supreme Court nominee jizzing in the Vice President's eye and your biggest worry is that Man will continue to be subordinate to nature and the wills of other men?

Give yourself some credit, Kaufman.

Your theory predicts the next great scandal of the Trump era.