Is there anybody who genuinely supports the free market? That is, anyone who supports it when free market principles would forbid the bailout of failing financial institution costing one’s life’s savings or when a protectionist law would prevent the loss of one’s job? I leave aside times when one might balance other priorities against a free market purism: say, in imposing sanctions to contain or bring down a dangerous regime, the protection of public spaces from development, the interference in a free labor market through immigration restrictions and so on. In such cases, one could always argue that the free market itself requires citizens and governments willing to defend freedom and sovereignty and the market can’t do that on its own; but in my opening examples, it is the very consequences of the free market, that which makes it a market in the first place, that are negated. Of course, we may protect only one industry or bail out one bank–but the point is that if, when push comes to shove, when too many constituencies demand the repeal of market verdicts, we capitulate; which, then, means, that if larger encroachments on the operations of the market were required by an even more pressing emergency, we would surely capitulate more abjectly. Who would stand for economic freedom, in the way in which there would always be quite a few who would stand, at great risk to themselves, against some new form of racial discrimination; and if they stood, who would notice or care?
I am trying to point to a paradox here, which is that the one article of consensus holding together the free world in the post-Cold War era is meaningfully adhered to by almost no one. One might go even further and say the same thing about the Consitution, or the law–how many really “believe ” in either, as opposed to having becoming habituated to the greater probability of advantageously settling disagreement through these means rather than through violence? This, of course, is part of the genuis of modern freedom–that it works without virtue, without making unrealistic demands upon its practitioners and beneficiaries. But the case of the market seems to me to be different, or at least more extreme. We would know “where” to stand in defense of, say, civil rights: there is a courthouse where someone is being tried unjustly, a school someone is prevented from attending. But where does one stand in defense of the market–where “is” the market for that matter. It is also true that it is far more seldom that the market requires this kind of commitment–but when it does, it really does.
Perhaps it’s needless to say that these reflections are provoked by the current financial “meltdown” in the U.S., which demands some kind of response from originary thinkers, even a rank amateur in economics like myself. Part of the fascination in these unfolding events lies in the clarity of the causes behind it; and the other part in the complete impossibility of claiming any real expertise regarding how to correct what has gone wrong. First, the cause: we actually have a victimary financial crisis that, according to some accounts at least, imperils the entire capitalist system. This certainly situates the whole discussion of the victimary on new terrain! The stakes had already been raised by the victimary absolute of global jihadist terrorism, but now we have something much more benign and closer to home with potentially far more catastrophic consequences. One would have thought that affirmative action created all kinds of local, but hardly critical, injustices–a white kid who has to go to a state school instead of a more prestigious private university; an employee with 15 years experience given the same seniority as a minority employee with only 5, etc. And, of course, there is the broader, creeping corruption of the whole notion of equal rights and equal opportunity and the associated incremental encroachment of the state upon private freedoms… But this is on another scale entirely: because of the claim, promoted first of all by “community activists” like Barack Obama going back to the 70s and 80s that banks were “redlining” (who would have thought, as a reader of leftist stalwarts like The Nation and Mother Jones in those days, that these tendentious, monotonous, hysterical arguments would bear such prodigious fruit!) and thereby unjustly excluding minorities seeking mortgages, laws were actually passed mandating that such mortgages be extended by banks; mortages which then got caught up in various financial mechanisms and shenanigans which I can’t pretend event to begin to understand so that when the housing boom peaks and all those mortgages go unpaid, enormous sums of money (how much? trillions?) goes poof! Not even real money, of course, but promises of future money, which is now worthless because nobody believes the promises.
But now, what to do? I, like many others, accepted the initial dire narratives of total, imminent collapse and “got behind” the original “bailout plan.” But now, a few days later, having had a chance to be reminded of the disgraceful behavior of the Democratic majority, which continues to provide no evidence that it has the slightest interest in actually governing; becoming increasingly suspicious, not of President Bush’s intentions but of his “compassionate” tendencies which might be leading him to err on the side of inflating the crisis so as to take responsibility for it; noticing that the sky seems not to have fallen yet (while stipulating that it still might); detecting a somewhat desperate, even “it’s too urgent to explain to you idiots” bullying tone in those urging the bailout; and, finely, have seen among conservative thinkers some other, cheaper, more market friendly alternatives–now, I say no.
And then this no reveals a whole new vision of the stakes in the upcoming election (and, yes, all this is happening in the middle of a rather important Presidential election in such a way as to upset all the carefully laid strategies of both campaigns–neither of which, clearly, has the slightest idea of what to do). This election gives us a choice regarding the meaning of the events of 9/11: either that day was the beginning of the end of victimary blackmail, because we now realize that no payoff can ever satisfy the blackmailer, because each payoff simply confirms the original and incommensurable guilt of the the extortee; or, in some hazy, not quite explainable way, all the bad things that have happened since 9/11 (sliding over imperceptibly into 9/11 itself) are the fault of the Bush Administration and therefore, once that scapegoat (and everthing associated with it) has been sacrificed, all will be right again. Back to the prior status quo in which we perpetually negotiate the terms of blackmail based on the fantasy that a final settlement is just within reach, and less and less incentive remains not simply to jump over to the side of the blackmailers. This is why Obama, in his final, extraordinary and yet unremarked upon, remarks in his first debate with McCain, provided the following criteria for determining the rightness of American policies: prospective immigrants from Third World countries must find them inspiring. That McCain didn’t seem to even notice this bizarre combination of triviality and teachery filled me with the closest thing to despair I have felt in a long time.
John McCain seems capable of thinking of himself, as a public figure, only in terms of “saving the country.” That’s fine–a president can have worse ways of imagining himself. But he has to choose between two versions of this attitude: one, “saving the country” from what may very well be exorbitantly inflated claims about the danger we are in, which will mean covering up, in the interesting of brokering a bi-partisan deal, the deep implication of the entire criminal cult that goes by the name of the Democratic Party in that crisis; or, he can join the Republicans who were either immune to or have snapped out of that hypnotic stance in which one simply insists “we must do something,” and have regrouped around the more salutary “no, instead I think we’ll just stand here for a while,” and ruthlessly, obsessively virulently, rub the faces of the Democrats and Obama above all in the consequences of their decades of, in essence, “laundering” the ideological currency of victimary blackmail–and, in that case, he just may have a chance of saving his country from an Obama Presidency and Democratic control of both houses of Congress and what will be a veritable riot of the Left which is still in a scapegoating mood and has been busy painting targets on the backs of their enemies.
OK, I’m not sounding very “disinterested” myself, am I? But I think I may have located where one “stands” in defense of the market–against every law and every employment of governmental power that gives anyone in the government any interest in who wins in the market place or, for that matter, increases their ability to predict who will win. Doesn’t the rush to scapegoating result from the selection and promotion of preferred winners, with the subsequent skewing of the market place, upsetting of values and suddenly visible and unseemly ties btween the winners in politics and the winner in the marketplace. Right now, there is someone out there with an idea for how to get super-rich by cleaning up at least a good portion of this mess and redistributing values more productively. And none of us could have any idea who that might be or what that idea might look like. My own criterion for any governmental action in the meantime is that they not do anything that gets in his (or her!) way. In the meantime, the public itself seems to be on the side of distinerest–let them sink! seems to be the general idea. Some principled and clever politician might use this event to paint all government interference in the market place as being not only against the interest of most of you but a first step towards a calamity. But first the opposition to the bailout must become increasingly determined, unified and articulate.
Adam
As perunusual, i am both saved and greatly succoured by the way in which what AK writes manages, with quite shocking reliability, to focus with great ferocity (oh shit ok afro-city) just like thatz THIS mine otherherwise unmanageable and yes, ungovernable mindstuff! The last paragraph most especially gets my little gizzard going like never before!
‘We’ are familiar we must presume with the – notion!? idea?! Ostension! that the market IS somehow ‘disinterestedness’! Floating with impunity on the limpid waters of Loch Ness, ye ken! It DOES not exIST!
BURN for it!
BUT what comes very nextly? I myself am ONLY supported by music and cannot be said to possess an ichor of legitimacy, from my spine-o-centric stern to my very latest japaneaseful bow, bit –
bit – SUDDENLY VISIBLE & UNSEEMLY TIES!
there are winners in politics and winners in the marketplace.. THESE can NEVER be confused as long as we wish to remain healthy and hefty beings!
the totally crap but awfully real question AK is how CAN anyone get IN THE WAY of what they cannot even imagine encountering?
CALL me MR ICKY FIN, but it is ONLY your provocative prosoda that GETS me up and burping firth upon your BLOG
i am on the BRINK of comprehending in its ENTIRETY the awfulness of the IdeoLoGiCaL currrrency of VB
something in me wishes to drill ever deeper in that pseudosubstance we call the chillbilly, and by heem i mean not some remotely fanta-sized inhabitant of alaskitude, but that globe-trotting glibmobile who assumes ever and always that we must BAIL OUT of each and every exchange that theatens to become a genuine argument, and return to chillville our only ‘peaceful’ recourse…
HOW MANY ‘invisible hands’ does it take to NOT incarnate as a crisis-Inflator?
please do, at least, enlarge if you can on the “bizarre combination of trivia and treachery” involved in the comment on deter-Mining the rightness etc…
Comment by lightweed — October 6, 2008 @ 12:06 am
I’ll try.
It is trivial to posit an imgained response by those who might want to move to this country because they cannot possibly be considering our national interests and futuree as a whole; because who American policies appear to them are highly mediated by outlets which cannont, to put it mildly, be assumed to have our best interests at heart; because there are lots of propsective immigrant and which of them, in particular, should we be trying to impress and why; how, exactly, would we calibrate our policies to the precise quantity of admiration we hope to induce in those who, like Obama’s Kenyan father, are weighing a stab at a Green Card on the global marketplace of possible citizenships; for that matter, why do we care if this our that immigrant would prefer to come to the U.S. or any where else…Need I go on?
Treacherous because, of course, the hopeful, bright eyed youthful immigrant is a stand in for what is often spoken of as “global public opnion,” represented by agencies such as the UN, international lawyers and huamn rights groups, and the reporters and other cultural elites who idolize them. It is to these agencies, possessed of no, that is zero, moral authority that our transnational progressives, who find their avatar in Obama, wish to subject American decision making. This cannot be said openly, so one has to hide behind the touching naivete of one of the huddled masses forever gathering at our shores.
There are winners and losers on the marketplace and the losers wish to be compensated while the winners wish to remain winners forever–both present their respective desires to the state, which finds it very difficult to resist their entreaties, as both gather formidable constituencies around themselves. In fact, most to be feared is the alliance of winners and losers, in which, as mediated by the state, the former agree to subsidize the latter in exhange for a guarantee of their own pre-eminence. I must confess I have no universal method for breaking up this alliance other than the very fallible one I proposed in the post: all laws should be subject to the test of whether, and how far, one could predict its effects on winners and losers–all things being equal, the less predictability, the better the law. Such a support of the market “in itself” would, in fact, require a very high degree of disinterestedness, which means that those actually participating in the marketplace are unlikely to have the requisite quantity–after all, even honest executives are obliged to advance the interests of their shareholders, even if that means lobbying the government for tax breaks, etc. I don’t know what kinds of concrete agencies might fill this gap, just that it is a gap and the best time to try and occupy it might be during times of crisis when interests get “scrambled, and those with cooler heads and sharper analyses might prevail–not for long, right after the sign comes the sparagmos, but for long enough to lay down sufficient institutional and moral infrastructure to hold us until the next crisis and to provide a precedent for dealing with it. So I take it I agree with you than winners in politics must be kept separate from winners on the market, and think that the best way to assure that is to make sure there is as little as possible for players on the market to win in politics. But I plan to write something else on the sources of disinterest which we are in so much need of in a forthcoming post.
Comment by adam — October 6, 2008 @ 5:45 pm
Adam,
Thanks for the post. Leaving aside for the moment the question of whether or not the present “crisis” is being inflated to victimary ends, I’m wondering how you would discuss the government’s role in (re)framing the marketplace in a real crisis (and how would we know when that was): is this ever best restricted to setting rules, or does government have a particularly active role in helping kick-start the circulation of a new sign?
Are you objecting to the claim, some make, that what needs to be done now is to empower Paulson as a market maker (buying up the debts, thus releasing liquidity, and then re-selling the debt when prices and buyers can be found), which one might argue has little to do with biasing the market to certain winners and losers, but rather to re-starting exchange? Yes, if little is done the losing banks and investment houses will be more likely to have to merge with winners, thus rightly throwing some senior management out of work. On the other hand, the losers have already lost a lot of credibility and what the “bailout” or “government investment” proponents argue needs to be done now is to figure out how much. This can’t be done as long as the credit market is frozen up and the value of assets unknown. It may be that a proper accounting of losers and winners needs, as it were, a new market.
How long we could go without the emergence of a new sign for market circulation? How long could we wait things out in trying to identify if we are facing a real crisis or just inflationary rhetoric?
In hypothesizing the originary scene, I don’t readily think of firstness as a government function, however much the scene and the first to make a sign is “governed” by some pragmatic paradox involving all present; we tend to think of government emerging with the institutionalization of the successful sign. But thereafter, if the exchange of signs breaks down, threatening violence, is it not inevitable that we cannot just wait things out, having no faith in any sign’s deferral, but look to the legatees of the old order to affirm their inevitable presence on the scene in some way – I don’t want to imply any judgment as to the mysterious value of any such affirmation, which historians may look back on as “successful” or not – so as to help “identify” the nature of the paradox from out of which a new sign capable of maturation must emerge.
If it would take years for the market itself to figure out how to untangle the present credit crunch, and if it were announced that the government would just let this happen, then surely the government would be pressured by the paradox you are trying to identify to “take action” in other areas to keep economic activity going. And these would have a greater tendency to predicting winners and losers.
Comment by John — October 7, 2008 @ 4:16 pm
Actually, I don’t think it’s being inflated to victimary ends–the pork with which the bill which was finally passed was laden seemed to be more Congressional business as usual than anything else–my point was that it had victimary origins. But you’re right, anyway, that that says nothing about what to do now. And I would first of all say that this is a situation in which it’s best to recognize that any of us can be wrong. There are a lot of “ifs” in your account, and my own preferences (as fallible, I repeat, as anyone else’s) would be to set incentives for private firms and individuals to buy up the debt, reduce taxes on capital gains, get rid of the mark-to-market rules (apparently done already, but it would need some time to work, I assume), along with some of the post-Enron restraints on accounting, among other things. But something along the lines of what they are doing might help, and it might be necessary just for appearances sake, but if it isn’t coupled with breaking up Fannie Mae and Freddie Mac and repealing the Community Reinvestment Act that got the ball rolling in the first place, then why should it work–isn’t the problem all the bad loans, and then the attempt to “securitize” those loans, and if the conditions for starting to make exactly the same kinds of loans again are still there, why should credit open up? I suppose I am arguing for small changes first of all, which might have measurable effects, and which would demonstrate restraint on the part of the people whose lack therefo has a lot to do with the mess–in which case, I am betting that there won’t be a massive, catastrophic crisis, and viewing that first sign as requiring a kind of asceticism that would be shared all around.
Comment by adam — October 7, 2008 @ 4:52 pm
Dear all,
I for one will miss hate week when it’s over…
The idea that the financial crisis can be blamed on the Dem’s affordable housing seems like more desperate bailing. I think Media Matters for America, those anti-American socialists who Adam would no doubt like to ship to Guantanamo, have studied this myth.
http://mediamatters.org/items/200810100022?f=s_search
Thank God there’s a living wage in the military. One thing I will say for John McCain, he certainly put the POWs left in Vietnam first, as those fetus bombing terrorists at Democracy Now! Report: *
“We speak to Pulitzer-winning journalist Sydney Schanberg about how the “war hero” candidate Sen. John McCain buried information about POWs left behind in Vietnam. Writing for The Nation magazine, Schanberg reveals that McCain “worked very hard to hide from the public stunning information about American prisoners in Vietnam who, unlike him, didn’t return home.”
Listen/Watch/Read
http://www.democracynow.org/2008/10/23/report_mccain_suppressed_info
“
It’s lucky McCain will keep us safe with the Bush doctrine, because we here all know there aint no problem this great nation can’t solve by Kickin’ Ass.
http://www.youtube.com/watch?v=fqCha93nBTU
Yours,
Rampantly
Comment by Rampantly Homosexual — November 4, 2008 @ 3:34 pm