The Driving Dream of MORE

Too often we assume that Homo Economicus is truly just motivated by the money, or more ridiculously the financial interests of the shareholders of the companies they run.  The truth is Our Galtian Overlords are frequently just assholes because they are assholes, not because being assholes will actually make them any richer.

                                                --Atrios

                                    

That right there.  What Atrios said.  

Digby wrote something the other day quoting Joseph Stiglitz’s assertion that the ultimate fate of the 1% “is bound up with how the other 99% live.”  Digby then added that “a stable society with a thriving middle class is more necessary to [the 1%’s] survival than a quick buck to add to their already depraved level of wealth . . . .”

With which Steve M. quibbled:

Maybe [these statements] are true in the very, very long run, but I can’t live on a planet in which North Korea’s regime has endured for decades, thriving as its population starves, and believe that the overdogs in our society can’t keep bleeding us relatively slowly for as long as we’re willing to put up with it.  They don’t need for us to thrive – they’ll sell to a Chinese or Indian or Brazilian middle class if ours isn’t thriving.  Or they’ll sell to one another.  They don’t need for us to thrive any more than they’ve ever needed a thriving middle class in any of the third world countries where they’ve long put their factories.

But I think Steve M. gets it wrong here, because I think Steve misapprehends the issue.

Digby and Stiglitz might have been discussing the division between the 99% and the 1% that obtains here in the United States, but that division is being replicated around the world and so their argument applies on a global scale.

It is fine to blithely suggest that Our Galtian Overlords will sell to a Chinese or an Indian middle class if the US middle class isn’t flourishing, but neither the Chinese nor the Indian middle class are flourishing either.  Sure, you can point to the high growth rate of the middle class in either country, but that is only because when one’s starting point is essentially zero any uptick at all implies, mathematically speaking, a growth rate of infinity.  (I exaggerate, obviously, but I think you take my point.)

The reason we have a “global savings glut” (Bernanke, Krugman, Roubini), or - stated another way - a “dearth of economic investment opportunity” (Stiglitz), or - stated another way - an “overaccumulation of capital” (Marx) is because Our Galtian Overlords in pretty much every country are appropriating for themselves alone almost all the profit from their growing economies and not recycling that profit back into the system in the form of higher wages for everybody else.

By doing so, they are at once accumulating capital for themselves and destroying any market in which they might later deploy that capital.  It’s not that they are eating their seed corn so much as they are storing that seed corn away until it rots from disuse.

This is also why Steve M.’s point about the 1% never having needed a thriving middle class in “any of the third world countries where they’ve long put their factories” is misplaced.  The cruel genius behind the idea of employing third-world workers at slave wages to manufacture goods for export is that those goods, by definition, are intended to be sold elsewhere; by keeping their labor markets and their consumer markets absolutely separate, manufacturers could impoverish the former without shrinking the latter.  But the genius of this little stratagem evaporates once one attempts to replicate it on a global scale.  When the entire world’s labor supply is impoverished, the entire world’s consumer market is as well.

And as for the idea that the world’s 1% might simply sell to one another if they can no longer sell to the 99%?  Well, they certainly intend to try doing that; in fact, that seems to be the fundamental idea underlying CitiGroup’s infamous “plutonomy memo” from 2005.   But to again quote Kunkel: “this substitution was never likely, for as Keynes observed, ‘when our income increases our consumption increases also, but not by so much.’”  Simply stated, not even the greedy gobs of the Galtian Overlords can swallow an entire world’s production, over and over and over again.

Which leaves us, finally, with the suggestion that perhaps Our Galtian Overlords will learn to be content with living the way Kim Jung-il does in North Korea:  luxuriously, wanting for nothing, content to pile up riches while the rest of the world beggars itself for their comfort.  To which I respond . . . maybe.  Maybe they could learn to live this way, but I doubt it.

It is one thing to beggar a nation, it is quite another to beggar the world.  Kim Jung-il might not be vexed by the idle wealth he is amassing at the expense of North Korea but remember . . . at the end of the day it’s still only North Korea.  How much wealth can he possibly be amassing over there?  After Kim shoots a few new action-adventure Godzilla blockbuster movies and springs for another giant waterslide, how much can he really have left over with which to play the role of Scrooge McDuck?

 (h/t Anderson Cooper)

But The World is . . . The World. 

Grab up all of The World’s resources and you can’t just let that stuff sit around doing nothing.  You’ve got to find some use for it . . . exactly the same way campus police at UC-Davis or the cops in New York just needed to find a use for all that cool new military equipment that until recently had been just lying around.  “Money – excess capital – needs to be put to work; it needs to earn profit, or else it is just useless.”  As useless as an unopened can of military grade pepper spray.

Besides, at the end of the day anyone who has climbed to or spent their life in the coveted position of a Galtian Overlord, anyone as sociopathic as the Koch Brothers who – not content to possess a combined wealth of $50 Billion -- still feel the need to purchase governors, destroy workers’ rights, eliminate all business regulation, and disenfranchise voters merely to suck up even more money. . . anyone like that is never going to be content just to kick back and enjoy their unimaginable wealth.

Because the truth is that people so batshit, Koch brothers-level insane are just a little more imaginative than you or I could ever even think of being.  And what they tend to imagine is what it would be like to have more.  And not even more money, not necessarily.  Just . . . more.  More power, more control, more authority, more stuff, more, more, more and always, always, More Than Anybody Else.

More is what drives them.  Because, in the end, it really isn’t the money.  In the end it simply is that such people are – to borrow Atrios’s term – assholes.

* * *

So, yeah . . . Stiglitz gets it right when he says that the well-being of the 1% depends on them not destroying the very markets they need in order to keep realizing their ever-present dream of More.  

Nevertheless, the 1% persists in destroying those markets anyway because these people are perfect singularities of covetousness, reflexively grubbing up anything that crosses their greed field's event horizon.  It remains true that their very well-being depends to a large extent on the well-being of all the rest of us but, as Digby says, “they are too thick” to realize that simple fact.

Digby wins the round on points.

Return of the Son of Marx from Planet X

Following up on my post yesterday about Marxian crisis theory, that little bit about the GOD (“Grow or Die”) Principle and credit was only part of a larger discussion in Kunkel’s article about how Marxian crisis theory envisions economic crises arising naturally out of capitalism.

Below the fold I am going to explain my understanding of what it is Kunkel is saying about how such crises arise, but first I want to present a small excerpt from a recent Bloomberg News op-ed by James Livingston.  Livingston is an historian teaching at Rutgers University and he makes the argument that even though economic austerity is what all the cool kidz are smoking right now, it is in fact very bad for your economic health.

I was directed to the article via Digby yesterday, shortly after posting that thing on Marx, GOD and credit, and I was struck by this statement:

In theory, the Great Depression was a financial meltdown first caused, and then cured, by central bankers.  In fact, the underlying cause of this disaster wasn’t a short-term credit contraction engineered by bankers.  The underlying cause of the Great Depression was a fundamental shift of income shares away from wages and consumption to corporate profits, which produced a tidal wave of surplus capital that couldn’t be profitably invested in goods production – and wasn’t invested in goods production.   (emphasis added)

At no place in his op-ed does Livingston mention Marx, and there is nothing to indicate that he has any knowledge of Marxian crisis theory.  However, his description of what gave rise to the Great Depression – from the point of view of an historian – mirrors exactly the kind of crisis the theory predicts capitalism will inevitably produce.  It also sounds very similar to what we are going through right now.

Marx: GOD and Credit

 At the moment, Marxism seems better prepared to interpret the world than to change it.

                                    --Benjamin Kunkel

That quote is from the closing sentences of an article in the February 2011 London Review of Books.  The article itself – “How Much is Too Much?” – ostensibly reviews David Harvey’s effort in his 2010 work The Enigma of Capital: and the Crises of Capitalism [no, I don’t know why there is a colon in that title] to consider the world’s current economic situation through the lens of Marxian crisis theory.  However, most of its length is devoted to explaining what “Marxian crisis theory” actually is and to describing the gloss that Harvey put on this theory in his earlier work from the 1980s, The Limits to Capital.

I came across the LRB article about a month ago, read it, was highly intrigued by it, but realized that I didn’t actually understand it.  So I printed it out, put it aside, and waited until this weekend to re-read it.  I think I have a better handle on it now, but reading the thing does underscore how woefully little I know about Karl Marx’s critique of capitalism.  It doesn’t help – judging solely from Kunkel’s review and some of the passages he quotes – that the critique does not seem to be easily penetrable. 

In any event, while there is a great deal in the article to pique one’s interest, I cannot claim to really be on any kind of sure footing when I discuss (as I do below) some of the ideas I found particularly interesting.  I suspect that what I really need is a very dumbed-down introduction to this stuff, something like Marxian Economic Theory for Dummies.  (I looked for it; it doesn’t seem to be in print.)

Anyway . . . here goes.