GABlog Generative Anthropology in the Public Sphere

November 5, 2009

Reflections on Political Economy from Firstness to Thirdness

Filed under: GA — adam @ 6:04 pm

All exchanges end symmetrically, but, once they are no longer bound by ritual, they must begin asymmetrically.  If the forms of the hunt are prescribed, along with the manner of distribution following the kill, or if the exchange of gifts is inscribed in tradition, then the danger of asymmetry is eliminated.  But when something that didn’t exist previously is brought into the marketplace, a breach in the existing division of labor is created:  things that had value before will have different values now and new values will be created; even more, new desires will be created.  Nobody desired a car before they existed, nobody desires now whatever will be the hottest product in 2025, and no one who is now at work creating that product is going to do so if he or she is concerned with meeting existing desires.  Of course, the one who brings the new product to market can’t know whether it will, in fact, create the corresponding desire nor, therefore, whether the breach in the division of labor has indeed been effected—that too is part of the asymmetry, but also the basis for converting the asymmetry into a new symmetry, wherein producer and consumer recognize each other.  Entrepreneurship is a mode of firstness.

According to the Austrian school of economics founded by Ludwig von Mises, the creation of money by the state (“fiat money”) benefits those who get it first, while disadvantaging those who receive it later on down the line.  This seems to me a very important insight. Obviously, the people who get the money first are the ones the government gives it to, very much like those first in on a Ponzi scheme, who get their money back and can therefore testify to the bona fides of the system to later entrants.  The same would hold true for any government intervention in the economy that benefits, intentionally or not, some players over others—for example, an environmental regulation that requires a conversion from a cheaper to a more expensive technology and thereby puts the smaller businessman out of business.  The government, in such a case, doesn’t exactly give money, but it channels money in a particular direction and, like in the cases where money is given directly, those who are able to make the conversion first have the advantage—not only are they, for a certain period, the only players, but, as partners with the government in the new regulatory regime, they can use their expertise, their role in stabilizing the market and their ability to mobilize external interests to help shape future regulation.  Such market interventions lead to misallocations of capital, but it is primarily the later entrants who will notice that, especially since regulation creates a captive market the limits of which will only be revealed later on.

The introduction of fiat money and regulatory regimes are responses to the asymmetry of exchange, felt above all in the disruptions of the existing social division of labor.  These responses are modes of secondness, aimed at restoring symmetry by drawing upon the resentments neglected by the primary entrepreneurial gesture. They are not the only possible forms of secondness—the establishment of contractual regimes and legislation aimed at interpreting contractual language and guiding judicial traditions can even out the scales when resentments start to threaten social order.  Either way, though, this secondness must itself be considered an economic fact, and any economic “laws” would have to include these secondary operations.  Insofar as money is the result of a form of deferral—a certain commodity, which originally has other uses, is set aside to serve as a means of exchange, and must therefore be removed from industrial use—and itself makes deferral possible (one accumulates money rather than consuming something now and hence gambles on or, if one like, displays faith in, the future), we could see money as the medium within which these contending tendencies take on a definite shape.  When I save or invest money, I am positioning myself within the evolving social division of labor; but I am also betting on the extent to which the government, and the resentments it channels and inflames, will use money for more immediate deferral purposes.  We can think about this on the model of “matching funds,” the principle grant-giving agencies often use to provide incentives to recipients to raise as much resources independently as possible.  When I invest, I can anticipate “matching funds” in the form of the investments and future consumption of others; or I can anticipate “matching funds” in the form of future devaluations which will lessen or eliminate my obligations.  We should be able to identify the limits within which the proportions of these respective expectations fluctuate within a given political economic regime, and account for the actions of economic agents, and the probable consequences of those actions, accordingly. 

We also have thirdness, though, the totality of dispositions that allow for the welcoming, circulation and modification of the transformations introduced by the entrepreneur.  All the forms taken by everyday resentments and desires comprise thirdness, and originary economic thinking should seek to put some order into this area as well. I would suggest three categories of thirdness:  common sense, habit, and idiosyncrasy.  Common sense is the ongoing checks and balances of immediate resentments, issuing in maxims of human nature or mimetic regularity.  Common sense leads us to establish some balance between spending and saving, short term and long term expenditure, desire and need, and so on.  Habits are far more compelling:  they result from self-issued imperatives aimed at compensating for some absence which end up comprising the tacit dimension of presence.  Habits are sustaining, but also virulent and automatic—habits, like Freud’s Id, have no reason to explain or justify themselves, or to attend to any reality.  Habits account for obstinacy and a strong sense of a continuous self; but they are also the source of addictions and fantasies.  Habits get installed through an instantaneous feeling of saturation associated with some experience, and are sustained through the possibility of repeating that feeling, recalling it on demand, and for that purpose obliviousness to the outside world (and ultimately even to the habit itself) is warranted.  The question to ask about habits is whether they are shaped so as to benefit from intersections with the habits of others:  if no, then habits are a source of dysfunction; if yes, habits invigorate and inflect common sense so as to produce a healthy idiosyncrasy—one’s own way of piecing an ultimately shared reality together.

There is no reason for originary economists to abstain from passing judgment on the various forms of thirdness.  I don’t see how one can deny that addictions to drugs, gambling and pornography are harmful to the economy in the long run, even if from a strictly “economic” perspective those expenditures (assuming the legalization of drugs, at least) are no different from money spent on vacations to the beach, bicycles, flat screen TVs, etc.  Addictions paralyze common sense by creating a fantasy world in which everything will turn around soon if one can just get that next fix.  At the same time there are lesser addictions, or related modes of euphoria that are better called “enthusiasms,” that can be highly productive:  we speak about political “junkies” who help keep the various resentments visible, “workaholics,” sports fans (“fanatics”), and so on.  The difference is that one wants to spread enthusiasms to others and can do so in the normal world, while addictions close one up in private nightmares.

If the “law of diminishing returns” is not the agricultural “law” that Malthus perhaps assumed, we can certainly recoup it as a law of mimesis, and therefore an economic law as well.  Models get exhausted after a while, and we could probably in most cases trace a pretty predictable path from initial responses, such as astonishment, to a new model, to uncritical emulation, to attempts at reproduction, vulgarization, and all the way to parody and disgust.  This is certainly the case for modifications in the social division of labor, which must, it seems to me, inevitably lead to “crises of overproduction”—how can one discover that the public is saturated with jeeps, or new homes, or teen vampire movies without making too many of them and seeing them go unpurchased?  Contrary to the Marxist account, though, if left to run their course, there is no need for such crises to be generalized.  But until the model is exhausted there is little choice but to act as if it is inexhaustible, and it probably seems more inexhaustible than ever precisely at the moment of exhaustion, when everyone is rushing to squeeze the last bit of juice out of it. And nowhere is this more true than in the financial sector, where it has become especially difficult to distinguish genuine innovations in enhancing the circulation of money and the efficiency of its allocation from ways of more efficiently implicating the government in matching the funds one has advanced.  GM at least knows that somewhere along the line they need to sell cars; but can’t Goldman Sachs focus its attention upon positioning itself favorably for the next influx of fiat money into the economy?  And, finally, the acceleration of the law of diminishing terms in the financial sector of the political economy of the welfare/regulatory state feeds upon and encourages addictions lower down the food chain, as otherwise normal people get lost in fantasies of acquiring fantastic wealth merely by mortgaging themselves up to the hilt in a series of homes they will never live in.

It seems to me we can trace property back to two separate sources, division and conquest.  The first is more originary—there must already be an equal division on the originary scene of the common object.  I don’t mean that everyone gets an equal piece—I mean that everyone gets enough so that their resentments and desires don’t override the peaceful settlement, and each one calculates that the chances of getting yet a little bit more at the expense of one’s neighbor are less than the chances that the attempt will result in the neighbor getting a bit more at one’s own expense—and that’s all equality can ever really mean, anyway.  And we always see this happening in any situation where people must live and cooperate together—people who share the same office at work, members of the same family, outfielders on a baseball team, riders in a jammed subway car, etc., all carve out a kind of “property” regime for themselves, a regime that would ultimately lead to formalized separation into parcels and the possibility of exchange.  But from very early on the possibility of simply taking property from weaker parties—individuals and groups—must have presented itself, and the necessary adjustments in the ruling signs and rituals rather easily made.  And with the “Big Man” model of social organization, property as conquest and expropriation is explicitly sacralized as the foundation of culture.  I think that these more egalitarian and hierarchical modes of property will always contend with each other in civilized societies, and one can’t simply privilege the egalitarian version:  when a new corporation comes to a small town and buys up a company that employs much of the population and goes on to lay half of them off in the name of modernization, it looks a lot like conquest and devastation, but it may be absolutely necessary and ultimately the right thing even for the town itself.  But the people of the town might also most effectively see to their own future by fighting against attempts by their local or state government to help the predatory corporation along—such a fight would display cognizance of the consequences of economic decline (the setting in of all kinds of addictions) and in doing so help to defer those consequences, even if they lose the immediate battle.

So, originary political economy can help us to distinguish addictions from enthusiasms; the firstness of entrepreneurial initiative from the anti-firstness of fiat money and granting through regulation property rights in the existing social division of labor; the exhaustion of an economic model from its illusory inexhaustibility; the spontaneous cooperation undergirding property rights from the right of conquest—and, in this case, we can acknowledge that the latter will ultimately depend upon the former, since even the most arrogant conqueror must depend on his officers and enlisted personnel to divide and share duties and rewards, and even upon the conquered to cooperate in the sustaining of life.  Politically, this would involve trying to restrict governmental activity to providing rules for ongoing interactions; rules that the participants in those interactions would recognize as representations of evolved shared habits; and rules directed toward places where the “grey areas” and ambiguities inevitable in existing spontaneously evolved habits have created contentions that at least the most significant players realize can’t be settled internally.  Perhaps a helpful formulation would go as follows:  what, as an elected official, are you doing to make yourself less necessary to the transactions comprising the social order?  Or:  what are you doing that would make you replaceable by pretty much anyone, or at least any normal idiosyncratic, in whom enthusiasms crowd out addictions and are tempered by common sense, and who can refrain from treating public office as a feudal privilege?  These kinds of questions would ultimately lead to an argument for term limits, for elected officials and bureaucrats alike—this is perhaps the most egregious broken promise of the “revolutionary” Republican “class” of 1994, and perhaps a new class of Republicans can rise to power by reaffirming that promise and then either hold power or make it irrelevant whether they do or not by keeping it.  We might learn to think differently about laws and reforms if we had to tailor them to a regular rotation of public officials, who would therefore tend to be more normal people:  normal people who might have more incoherent views at the margin, who might make more mistakes and be more easily taken in by well prepared lobbyists, but who would also be much less likely to vote for 1,900 page long bills and therefore may be less tempting prey for those same lobbyists.

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