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On Hayek, Part I

Fredrich von Hayek warned us that any government intervention in the economy will lead to a ‘Road to Serfdom’. However, as history has shown us, government interviention in the economy does not inevitably lead to totalitarianism. For example, Sweden has one the biggest state-sectors in the world and still retains an ultra-liberal society. In addition, socially-just government internvention in the economy does not reduce economic efficency; as Jeffery Sachs puts it: “Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness“.  Historically speaking, the opposite is true; protecting capital from the masses, more often than not, leads to totalitarianism and authoritarianism and economic stagnation—Nazi Germany, Fascist Italy, Bureaucratic Authoritarianism in Latin America, etc. What is more disturbing is that Hayek himself was part and parcel, an ‘organic intellectual’, of one of the most repressive authoritarian regimes of the 20th century: Pinochet’s Chile. In order to understand this paradox, we have to understand what Hayek meant by ‘freedom’ and ‘liberty’.

To Hayek the market system is freedom, and any interuption in that system is totalitarian. However, Hayek goes further by arguing that only in the market system can reason emerge, as Frank Cunningham points out:

Yet another argument connecting catallaxy and neoliberalism proceeds by an historical, evolutionary argument of Hayek’s that links market competition and rationality. On the story he sketches, the few people who are skillful at taking appropriate means to achieve their given ends (that is, skilful at rational thought) will make gains in competition thus obliging others to ‘emulate them in order to prevail’ so that ‘rational methods will progressively be developed and spread by imitation’: it is not ‘rationality which is required to make competition work, but competition....which will produce rational behaviour.

Of course, this ignores that what counts as ‘success’ is determined by the hegemonic ideology and values embedded in the system; ergo, what Hayek is essentially saying is that ‘profit’ is reason, as if 'profit' is the only definition of reason. However, as we have seen with the current crisis, at the micro-level, profitability and the herd-mentality of the markets leads to a risky game where one can lose it all and indeed, banks would have lost it all, if it wasn’t for the public baling them out; and secondly, it leads to irrational macro-economic and social crises that undermine the future expansion of “rationality”/profit, contradicting Hayek’s thesis--Keynes and Marx's critique of neoclassical economics over-emphasis on the micro-level. Nevertheless, to Hayek, any intrusion on the market system, as defined by microeconomics, is an attempt to stop human reason from flourishing.

In addition, democracy is not—to Hayek or neoliberals—an inherently positive thing; it exists in order for the machinery of government to change hands peacefully and to prevent any one government from turning into an authoritarian government by subjecting them to popular referendums. In addition, Hayek is also a strong constitutionalist, arguing that the constitution is essential to preventing a authoritarian regime from emerging and also, as a check against the ‘tyranny of the majority’—problematically for this line of argumentation is that the inverse is also true; those who draft the constitution, since it does not come from God, impose a tyranny of the minorty on the majority.

The fundamental fear that all liberals share is that democracy has the potential to create a subjectivity that seeks greater and greater democraticization of life and equalization of power. Democracy, deprived of its liberal baggage within a class divided society was unacceptable for capital and liberals, as C.B. Macpherson writes: “Democracy originally meant rule by the common people, the plebians. It was very much a class affair: it meant the sway of the lowest and largest class” (The Real World of Democracy 5). What they, liberals, want to prevent, at the very least, is a ‘radical demoracy’, as elucidated by Mouffe and Laclau, who argue that “the moment when the democratic discourse becomes available to articulate the different forms of resistence to subordination that the conditions will exist to make possible the struggle against different tpes of inequality” (Hegemony and Socialist Strategy, 154). Therefore, what must be created first place is the liberal state, then democratization. As Macpherson argues, “In our Western societies the democratic franchaise was not installed until after the liberal society and the liberal state were firmly established. Democracy came as a top dressing...It was the liberal state that was democratized, and in the process, democracy was liberalized” (Real World of Democracy 5).

Hayek sought a means to protect liberalism from the encroachment of democratic subjectivity that was certainty in the ascendency during most of the twentieth century. The logic for equalization, via democratic subjectivity, was simple; as pointed out by de Tocqueville, “It is impossible to believe that equality will not finally penetrate as much into the political world as into other domains. It is not possible to conceive of men as eternally unequal among themselves on one point, and equal on others; at a certain moment, hey will come to be equal on all points”.  As the twentieth century lagged on, new and increasginly more complex demands were being exacted on the state from the popular classes that had, in Gramscian terms, had become an ‘integral state’—welfare state—that increasingly took on the responsibilities for correcting social and economic ills.

However, within a capitalist system, capital cannot create what Gramsci calls an ‘expansive hegemony’, where the hegemonic bloc is able to articulate and represent the interests of all into a “genuine ‘national-popular will’ ” (Mouffe); it relies on a ‘passive revolution’, or ‘transformism’ of demands into the system, which Mouffe describes as. “...a bastard form of hegemony and the consensus obtained with these methods was merely a ‘passive consensus’. In fact, the process whereby power was taken was termed a ‘passive revolution’ by Gramsci, since the masses were integrated through a system of absorption and neutralization of their interests in such a way as to prevent them from opposing those of the hegemonic class” (Mouffe).

By mid-century, especially the 1960s and 1970s, demands were beginig to surpass the ability of the state to ‘transform’, or institutionalize demands, because they were beginning to radically challenge the class and ideological hegemony of the system, by taking the ‘democratic revolution’ seriously. As David Harvey argues,

Discontent was widespread and the conjoining of labour and urban social movements throughout much of the advanced capitalist world appeared to point towards the emergence of a socialist alternative to the social compromise between capital and l abour that had grounded capital accumulation so successfully in the post-war period. Communist and socialist parties were gaining ground, if not taking power, across much of Europe and even in the United States popular forces were agitating for widespread reforms and state interventions. There was, in this, a clear political threat to economic elites and ruling classes everywhere, both in the advanced capitalist countries (such as Italy, France, Spain, and Portugal) and in many developing countries (such as Chile, Mexico, and Argentina). In Sweden, for example, what was known as the Rehn–Meidner plan literally offered to gradually buy out the owners’ share in their own businesses and turn the country into a worker/share-owner democracy. But, beyond this, the economic threat to the position of ruling elites and classes was now becoming palpable...The upper classes had to move decisively if they were to protect themselves from political and economic annihilation.

To be continued...


On climate change, Part II

            Climate change, however, is not the godsend that the left may think it is. There are three major issues that the left must face if it is to continue on its climate change crusade: first, the science is still being contested by some scientists—legitimately or not—, which enables capital and its organic intellectuals to articulate climate change as a plot of the left or, at best, as mistaken science; the second concerns the more intellectually honest right’s ability to accept climate science as it is, but articulate that the answer is more capitalism, not less; the last issue is the question of global development and the inherent injustice of allowing the developed world to pollute indiscriminately during its phase of industrialization, while forcing currently developing countries to curb their output or potential output during their phases of industrialization, essentially paying for the sins of the West. Therefore, climate change is also being articulated in the Global South as the West’s rouse to undermine development in the South.

            The question of whether or not warming has been occurring in accordance with human action should be questioned, as all science should be; however, at a certain point, a scientific judgment must be rendered hegemonic in order to do something. The theory of climate change has become hegemonic—like Darwinian evolution—and now we must take this premise and work with it; certainly this does not discount that all science cannot be turned on its head, a la Kuhn. However, unlike the social sciences, where one can clearly make the case that all is contestable and self-evidently ideological, with the natural sciences the case is much harder to make, since the units of analysis are empirical and can be tested and measured again and again with consistency in outcome.

           Nevertheless, the contestability of climate science is causing serious political problems, particularly in the United States. A perfect example of this is Pat Buchanan on Chris Matthew’s, Hardball:

Pat’s discourse is the type of discourse that we, on the left, should be the most worried about. It represents the height of the destructive logic of selfishness and individualism, which leads humanity to damnation under capitalist subjectivity; indeed, all of the negatives associated with capitalist subjectivity and history are embedded in his arguments, the type of ‘human nature’ that Cohen has given up fighting. For example, he doesn’t want money to go to Third-World countries, and with Buchanan you know race is involved, and believes that every country should look out for itself. Like microeconomists, they don’t understand that the environment does not end at borders and that what make sense at the ‘micro’ level, is counter-balanced at the macro-level. A perfect example is Matthew’s argument about the deforestation of Brazil’s rainforest. The discourse is good enough to quote:

Matthews: Do you challenge that it’s better not to have them [the rainforests] raped and torn down, do you want everything developed?

Buchanan: No I don’t, I would tell Brazil stop burning down the rainforest, I wouldn’t have to bribe them.

         Let us stop there for a moment, Buchanan, the arch-capitalist, is appealing to non-capitalist methods of motivation. To a capitalist, only market incentives work to incentivize people to do something, thus, is Buchanan no longer a conservative-capitalist ideologue, by appealing to higher moral sentiments, therefore, ideology? Therefore, denying the validity of instrumentalist/rational choice perspective of politics that the right depends on?  Buchanan forgets that the rainforests are being burnt down for profit—or, reason in instrumentalist political science terms; thus, is profit, ergo, capitalist instrumentalism bad in some circumstances? If profit is bad in some circumstances based on an “unknowable” notion of public good, a la Hayek, then what is left of the right? Interestingly, he claims that he doesn’t want to “bribe” them to change their behaviour —it is important to note that ‘bribe’ is, ironically, the market mechanisms of buying parts of the rainforest to compensate developing countries for the opportunity cost of not developing their rich natural resources, which are being proposed by the negotiations at Copenhagen. One wonders, what is the alternative in Buchanan’s world? Non-market mechanisms of ‘coercion’, as liberals like to call it, i.e. regulation in favour of the public good over individual good? Moving on:

Matthews: Well suppose they [Brazil] won’t do it.

Buchanan: Well if they don’t do it, they’re responsible for it.

Matthews: ...are we on this planet together, or is it every man for himself? 

Buchanan: It is every country for itself.

Matthews: It is!?!

Buchanan: It sure is.

            The same illogic pervades in microeconomics, an overly simplistic abstract world-view looking at what is in the interest of the individual firm, or in this case, a country and somehow the ‘invisible hand’ will make sure that this will translate into a public good. That for some reason what happens outside the firm, or the country, won’t affect the firm or country; therefore, denying the very existence of society. Indeed, we should not forget Thatcher’s infamous, “there is no such things as society, only individual men and women”. The very notion of the social is totally obfuscated and the separation of economics from society, or in this case country A’s climate from the global climate, is part of liberalism’s never ending reification of knowledge. This act that renders us defenseless and increasingly in danger of collective suicide masked as individual prosperity. However, we know it doesn’t happen that way and this has always been a fundamental critique of the left.

            As Henry Veltmeyer states: “non-dialectical, non-Marxist [liberal] thinking is unable to grasp reality in its vigorous dimensions as a totality. It tends to decompose reality into various parts and fragments, reifying them as if they had an independent existence—the economy, politics, society, culture—each viewed from a distinct angle, with its own domain and intellectual apparatus...abstract in form without substance (513). This is best summarized by Slavoj Zizek, as usual. He argues:

...if one wants to establish civil peace and tolerance [under a liberal hegemonic order], the first condition is to get rid of "moral temptation": politics should be thoroughly purged of moral ideals and rendered "realistic," taking people as they are, counting on their true nature, not on moral exhortations. Market is here exemplary: human nature is egotistic, there is no way to change it - what is needed is a mechanism that would make private vices work for common good (the "Cunning of Reason"). One should follow this line to its conclusion: a fully self-conscious liberal should intentionally limit his altruistic readiness to sacrifice his own good for the others' Good, aware that the most efficient way to act for the common good is to follow one's private egotism. The inevitable obverse of the Cunning of Reason motto "private vices, common good" is: "private goodness, common disaster. (The Market Mechanism for the Race of Devils)


Elecciones en Chile, 2009. ¿Que Paso?

On the streets of Santiago, supporters of the arch-neoliberal candidacy of multi-billionaire Sebastián Piñera were celebrating the electoral victory of the right wing coalition against the once hegemonic ‘left-wing’ Concertación party. The Concertación, a left-wing coalition of Socialists and Christian Democrats, ruled Chile, uninterruptedly, since the return to democracy in 1989. They fielded former President Eduardo Frei (1993-1999), who left office with an approval rating of only 28 percent—imagine fielding George W. Bush for the presidency again and you get a feeling of how ‘unwise’ the decision was.

Unsurprisingly, the Concertación was only able to receive a mere 29.6 percent of the vote, largely in line with Frei’s popularity back in 1999. The Concertación was unable to get the message that voters wanted ‘real change’ and it nominated a former President who instituted much of the neoliberal reforms that Chilenos today are itching against. However, many commentators are making egregious mistakes in deciphering what is happening in Chile. They assume that the defeat of the Concertación is a defeat of the left and the ascendency of the right in Chile; if one were to actually look at the results the opposite is true.

To some commentators, Piñera’s ‘victory’ proves that the change Chilenos want is more neoliberalism, more of the same policies that have engendered the same pessimism and hopelessness that millions of Chilenos voted against. If one were to take the time to look back at the trends electorally we can see that the right-wing parties in this round actually got a smaller share of the vote than previous elections, post-1989:

RN+UDI, as a percentage of the total vote

1989: 44.83
1993: 40.84
1999 (1): 47.51
2000: 48.69
2006 (1): 48.64
2006: 46.50
2009 (1): 44.05

One can clearly see that for all the hype, the right in Chile has actually lost a lot of ground and has been reduced to generally the same constituency that it had in 1989; thus, it also obvious that the left in Chile has increased in strength, but not in cohesiveness. Chilenos do not want to have a more neoliberal government, what Chilenos want is another alternative. The Concertación is unable to offer that alternative, because it was the same party that legitimized and institutionalized neoliberalism structurally and democratically; however, it would be unfair to state that the Concertación was not forced to enact these policies, since Pinochet and Pinochetismo were potent forces politically after 1989. The Partido Communista, with the baggage of the Allende era, also is unable to offer a viable alternative, that being said, the party has increased its voting share from 5.4 percent in the 2006 election to 6.21 percent in 2009.

Enter Marco Enríquez-Ominami, popularly known as MEO. He protrudes an Obama/Clintonesqe style and offers not only a more progressive economic platform, but also a socially progressive platform as well. He was part of the Socialist Party wing within the Concertación party, but left the party raising objections to the candidacy of Frei. MEO did not have a clear platform, nor did he have an actual party organization behind him, but he was arguing for a new Chile, who has claimed to have sympathies to Chavez. I do not believe that MEO offered anything of real substance other than to become an ‘empty signifier’ for a nascent populist movement seeking change that no other party was able to give.

It is obvious that the Chilean ‘third way’, neoliberal state is reaching its limits of co-optation and demands are beginning to go beyond what the neoliberal ideology and state is able to concede. The second round will determine whether or not Piñera can articulate his vision of Chile as one of ‘change’, I do not think he will succeed, because the trend is to the left.


On climate change, Part I

Climate change has become the rallying point for the left in the aftermath of the ‘end of history’ in 1989. Apparently, it seems, humans aren’t good agents to overthrow capitalism and save society from the ever-encroaching tyranny that is ‘privatization’, as defended by liberals. This defeatism is best manifested by J.A. Cohen in his work, If you’re an Egalitarian, how come you’re so Rich?:

I remain skeptical of the human-nature premise of the selfishness defense of inequality, for something like the old reasons. But I am no longer so skeptical of the sociological premise...if people are by now irreversibly selfish (not by nature but) as a result of capitalist history, then, so I now think, structure alone could not suffice to deliver equality, in the face of selfishness. Even on reasonably sunny views about the limits of human nature itself, capitalist history would have thrown us into a cul-de-sac from which we could not exit and regain the road to socialism. (119-120).

The aforementioned quote is truly a concession to Fukuyama’s ‘the end of history’, and I think that most people of the ‘left’ agree with Cohen. Since the left has given up fighting this ‘human nature’ element of liberal-capitalism—even if it admitted as a sociological construction of capitalism—, it has thus conceded defeat to the forces of reaction and regression. The best that we can do is admit defeat, via Giddens ‘Third Way’ liberal-democracy, which seeks to ameliorate capitalist exploitation of Polanyi’s ‘fictitious commodities’—land, labour, and capital—, by exporting the worst elements of capitalism to the Third World and living in our debt-fueled, post-modern, ‘creative economy’. Since human beings cannot be the agents of change, a new agent of change is needed, one whose internal mechanisms can be predicted and act as a deus ex machina to save us from ourselves—no longer is the social-system that is capitalism the enemy, but rather our own inferior ‘human nature’. However, to admit such a fundamental and definitional defeat is not manageable by the left, because it would render the left irrelevant; the left needs a “fetish” in order for it to live with its apparent defeat: enter the environment.

The logic is as follows: the environment is a non-negotiable element in our collective space that has its own laws of regulation that transcend human manipulation and articulation, viz., that cannot be hegemonized. However, due to man’s uncontrolled exploitation of the Earth’s resources, primarily fossil fuels, the self-correcting mechanisms of the planet are no longer functioning properly and leading us towards the apocalypse. One of the effects, that affect every human regardless of class position, is climate change. Climate change, as agreed by most scientists, is a result of human action, linked to the industrial revolution; however, what is obfuscated is that this is fueled by the unending accumulation of capital in private hands as its motivation. Thus, climate change is like a semi-religious condemnation of capitalism from the abstract planet. Therefore, we must either conform to nature, or suffer the consequences of its wrath. What we are unwiling to do is actually conform, we are trying everything in our power to prevent the dirty truth of capitalism from exposing itself, with greater and greater unpaid debts, a la Wallerstein, accumulating in the future. 

For the left this is the perfect agent of change, it has all the power of God and cannot be re-articulated. Nature, not man, has become the Jacobian agent of unrelenting, blind terror that delivers justice on a massive scale with no sense of hesitation. Of course, we all know that this is scientifically true and we, as a species, rich or poor, deserve this wrath. Why? Because we, as a species, have alternatives to this system that could help stop things from getting worse. First, the left has to fight the fundamental battle, which Cohen has given up, that human nature is not set in stone, but rather is a result of hegemonic articulation and was and can be changed. If we accept the liberal/neoclassical notion of human nature, of homo economicus, then the capitalist ‘free market’ is the only way that we can organize society and that means ‘the end of history’, literally. Secondly, assuming we have transcended capitalist subjectivity, we could democratically organize our societies in such a way to live within our means and socialize the means of production to take away the incentives that exist to ‘cheat’. Thirdly, we could strive for a more cosmopolitan world, something that can only be realized under socialism, rearticulating our sense of identity from our ‘nations’ to humanity in general, thereby allowing for a global distribution of resources.

I am not foolish enough to think that this is possible within the time frame given to us by an increasing number of climatologists, before we are essentially doomed. The recent climate change conference in Copenhagen will not result in substantive change, because real change means a post-capitalist society and those who are negotiating at the conference tables cannot even imagine such a reality. As Zizek once wrote, paraphrasing, ‘it is easier to imagine the end of the world, than the end of capitalism’. The movie 2012, which I saw in theaters here in Uruguay, is a perfect testament to that axiom. The main characters looked at who was being allowed on the ‘arcs’, the rich who paid $1 billion  for a "ticket", and knew that those who merited survival—like the Indian scientist who discovered the tectonic shifts in the first place—were left to die. The interesting thing about this is that the main characters knew it was wrong, yet did nothing and worse, could not even articulate what was going on: capitalism. As Marx wrote about ideology, “they do not know it, but they are doing it”.

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