Hoisted with Our Own Petard (Updated).

(source)

There’s little need for words: Western economic sanctions on Russky gas and oil. Fuel prices go up. Price of everything follows (“Putin’s price hike”). Fed lifts interest rates. RBA follows.



Next … recession?

Once Upon a Time …

 … people followed the news to be informed. I’m not sure that’s the case anymore.

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As I write this, the French are voting in the second round of their presidential elections. French Lefties have a bitter choice between the first and second candidates by vote in the first round, the neo-liberal Rightist Emmanuel Macron (28% of the vote) or the populist far-Rightist Marine Le Pen (23%), respectively. (Say, should I vote for Macron for foreigners’ sake even though he will make me work three more years for my own retirement; or should I vote for Le Pen to keep my earlier retirement and screw the foreigners?)

Those who voted for Leftist Jean-Luc Mélenchon (21%) and Éric Zemmour (7%) will have either to vote for one of the two top contenders or abstain/vote blank.

Workers’ Mail: Australian Workers’ Wages are Going Backwards.

(source)

ACTU media release:

Workers’ wages in Australia are more than remaining dismally stagnant – they are in fact going backwards in real terms.

The latest Wage Price Index data released today shows that real wages have fallen by 2.1% over the last 12 months. In this quarter, wages growth has been only 0.4%, while inflation in Australia has increased to 3.8%.

In addition to those shocking figures, the public sector recorded wages growth of only 1.3% this year - its lowest annual rate of wages growth since the ABS started tracking this in 1997.

Prof. Bill Mitchell gives a panoramic view of the Australian labour market: wages, employment.

A Short View of "A Short View". (and iv)

(From part iii)

Writing in a liberal democracy, presumably for the bourgeois reader, Keynes expressed with relative “political correctness” what others in different circumstances were at liberty to express with much blunter honesty:

“Slavery is of the essence of culture, a truth of course, which leaves no doubt as to the absolute value of existence. This truth is the vulture that gnaws at the liver of the Promethean promoter of culture. The misery of toiling men must still increase in order to make the production of the world of art possible to a small number of Olympian men. Here is to be found the source of that secret wrath nourished by Communists and Socialists of all times, and also by their feebler descendants, the white race of the 'Liberals', not only against the arts, but also against classical antiquity.” (Nietzsche, "The Greek State")

It’s not known whether Keynes, Clive Bell (or any of the Bloomsberries) ever read Nietzsche, but there is a clear parallel between their views (in Skidelsky’s account) and Nietzsche’s, slightly blunter ones.

Indeed, a couple of years ago, Corey Robin (associate professor of Political Science at Brooklyn College), published "Nietzsche's Marginal Children: On Friedrich Hayek" (here). Using the notion of "elective affinity" (roughly, my own "shared worldviews") Robin explains how many of Nietzsche's elitist and anti-democratic ideas, through Hayek and the Austrian school, shaped our economic reality:

"[N]o one understood better than Nietzsche the social and cultural forces that would shape the Austrians: the demise of an ancient ruling class; the raising of the labor question by trade unions and socialist parties; the inability of an ascendant bourgeoisie to crush or contain democracy in the streets; the need for a new ruling class in an age of mass politics."

Focusing on Hayek and the marginalist/subjectivist Jevons, Walras and Menger, Robin did not mention Keynes. He should have (and this is a friendly critique to his otherwise excellent essay):

"From a distance it is easy to see how many presuppositions they [Keynes and Hayek] shared. (…) Both emphasised the importance of subjectivism in economic thinking. (…) Both were inegalitarians, believing in the beneficial spillovers from pockets of wealth. Neither was an ardent democrat." (Robert Skidelsky, "Hayek versus Keynes: The Road to Reconciliation")

Coming from a similar millieu, Keynes and the Austrians had to share worldviews: they and their peers carry the world on their shoulder. Beware the day they decided to shrug. The same reasoning Robin masterfully displays in relation to the Austrians, applies to Keynes: he belongs with them.

Atlas. [A]

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Just like Keynes, or the Austrians could not claim originality in their views, as Nietzsche held similar ideas before them, neither could Nietzsche himself make that claim.

Whether he knew it or not, one can see the shade of an older author on Nietzsche's pompous ramblings:

"It would be well for those interested to reflect whether there now exists, or ever has existed, a wealthy and civilized community in which one portion did not live on the labor of another; and whether the form in which slavery exists in the South is not but one modification of this universal condition … Let those who are interested remember that labor is the only source of wealth, and how small a portion of it, in all old and civilized countries, even the best governed, is left to those by whose labor wealth is created." (John C. Calhoun, 1836 and here)

There is a terrible lucidity in Calhoun, a kind of dark nobility in refusing to hide behind hypocritical faux humanism or undergraduate philosophising. Sometimes, it seems, there is more honour and dignity in the exploiters than in their lackeys and attack poodles.

It's not the exploiters, and least of all Keynes, the Austrians and their race of arrogant parasites to the parasites. who are "are the quality in life and surely carry the seeds of all human advancement": it's the humble workers who carry them in their backs.

Survival of the fattest. [B]

Perhaps Calhoun's contempt for liberals (shared by Nietzsche) isn’t so hard to understand, after all.

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Just one question is left unanswered. Why has “A Short View of Russia” remained largely forgotten -- as if it were a shameful family secret -- by contemporary liberal economists?

Given Keynes' intense interest for religion, it seems appropriate to answer that question thus:

22 And Ham, the father of Canaan, saw the nakedness of his father, and told his two brethren without.

23 And Shem and Japheth took a garment, and laid it upon both their shoulders, and went backward, and covered the nakedness of their father; and their faces were backward, and they saw not their father's nakedness. (Genesis, 22-23, KJV).

Image Credits:
[A] Atlas at the Rockefeller Center. This work is in the public domain. Wikipedia.
[B] "Survival of the Fattest", by Jens Galschiøt, and Lars Calmar. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. My usage of the file does not suggest their author endorses me or my use of it. Source: Wikipedia.

A Short View of "A Short View". (iii)

(From part ii)

How could worldviews commonly regarded as antagonistic, as those represented by Keynes and Mises/Rand, coincide in such a fundamental manner?

Lord Skidelsky, Keynes’ respected biographer, offers a measured and carefully worded indirect answer:

"There was clearly a tension between its [Bloomsbury Set’s] cultural ideals and democratic sentiment: civilisation, as Clive Bell put it, always rested on having someone to do the dirty work. Maynard Keynes, as we shall see, attempted to go beyond this contradiction; but it cannot be claimed he got very far. And he, like the rest of the Bloomsberries, depended completely on domestic servants to sustain their own lives [cf. Peter Clarke’s comments in Liberals and Social Democrats]. Bloomsbury was rooted in the class assumptions of the Victorians. Their revision of the Victorian scheme of life tended to take them back to the eighteenth century idea of a cultured aristocracy rather than towards the ideal of a civilized democracy". (“John Maynard Keynes: Hopes Betrayed 1883-1920”, pp. 248-250)

Whatever later commentators might argue, the Bloomsberries’ beliefs and ideals, writes Skidelsky, were not the product of dispassionate philosophizing: they were rooted in their social context. What holds true to them and Keynes, also holds true to Nietzsche, Mises, Rand.

Ironically, one of the real, but unmentioned, targets of Keynes’ ideological tantrum would probably have agreed with Skidelsky: Keynes must be judged within his social, economic, and historic context.

Karl Marx:

"I paint the capitalist and the landlord in no sense coleur de rose. … My standing point, from which the evolution of the economic formation of society is viewed as a process of natural history, can less than any other make the individual responsible for relations whose creature he socially remains, however much he may subjectively raise himself above them". (“Das Kapital”, vol. 1, preface to the 1867 edition).

Keynes wasn’t creating anything new in moral and political philosophy, just giving expression to his class’ pre-existing views of society and of his fellow human beings: the same views Nietzsche articulated before, and Rand and Mises would echo decades later.

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By 1925, in the middle of the Roaring Twenties (perhaps the last hurrah of the Belle Epoque), the class views Keynes reflected, while cheerful, were not untroubled. The previous year, Calvin Coolidge was elected U.S. President. His campaign slogan describes the times: "Coolidge Prosperity".

Across the pond, Keynes -- perhaps with more than a little bravado -- puzzled over the appeal of “Leninism”: “It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values”.

The income figures Thomas Piketty and others compiled shed some light on Keynes’ optimism and puzzlement with any discontent:

(source)

In other words (by interpolation between 1919 and 1937), in 1925 a member of the British 1% perceived a gross income (in Piketty’s definition) equivalent to about 25.0 times the average for the remainder 99%: a remarkable difference. Keynes -- the self-described "educated, decent, intelligent son of Western Europe" and financial speculator -- had little reason to feel uncomfortable and one cannot blame him for fearing that could come to an end.

Upton Sinclair, an American journalist and another eye-witness of the last days of the Belle Epoque, could have added: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

It's on this light that Keynes' oft-quoted appeal to the “ideas of economists and political philosophers” reveals itself in all its self-justifying glory:

“I am sure the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas … Soon or late it is ideas, not vested interests, which are dangerous for good or evil."

Another English economist -- one much closer to Keynes -- would have disagreed with Keynes on that and, instead, would have proposed the primacy of vested interests and prejudices in determining economic wisdom:

"Anyone who says to you: 'Believe me, I have no prejudices,' is either succeeding in deceiving himself or trying to deceive you." (Joan Robinson, "Economic Philosophy", p. 26)

There is little difference between Keynes' "pratical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist" and "the Devil made me do it".

You don't need a Ouija board to understand how Keynes, Mises, Nietzsche and others could coincide at a fundamental level; a materialist conception of history is more than enough.

 (To be continued)

A Short View of "A Short View". (ii)

(From Part i)

Why Keynes -- reputedly one of 20th century's greatest economic minds -- did not provide any economic figure, any fact, or analysis, in support of his allegations, and, instead, was happy to pen a piece of bullying, worthy of a Jeremy Clarkson?

A careful reading of the essay suggests an answer: unlike Clarkson, Keynes had no reason to fear a backlash.

Expressing himself for public consumption, the appearances-conscious Keynes wasn’t entirely forthcoming on the causes of his evident displeasure, but there was a deep personal grievance behind Keynes’ essay, a grievance he shared with members of the Western bourgeoisie.

Understandably so: an intellectual and patron of the arts, a prominent eugenicist (Keynes would serve from 1937 to 1944 as head of the Eugenics Society), and aspiring member of the British bourgeoisie, the future 1^st Baron Keynes (made hereditary peer in 1942) could not have enjoyed what he witnessed in “Russia”.

Judging by his own words, repeated 3 times for emphasis, this is what irked Lord Keynes the most:

1. “How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement?”
2. “In one respect Communism but follows other famous religions. It exalts the common man and makes him everything.”
3. “The exaltation of the common man is a dogma which has caught the multitude before now. Any religion and the bond which unites co-religionists have power against the egotistic atomism of the irreligious.”

Speaking in the first person, Keynes declares the deepest cause of his outrage: “Leninism” exalts the “mud”, the “boorish proletariat”, the “common man” (synonymous, for Keynes). Not him. Keynes -- and presumably his peers -- the “fish”, the member of the “intelligentsia” and aspiring “bourgeois” (“the quality in life and surely carry the seeds of all human advancement”) is no longer the navel of the universe. The rabble daring to challenge the Olympian men (in Nietzsche's admiring description).

That was his deep, personal grievance: the loss of social standing and control.

He wasn't the first to fear the day of reckoning. Before the Russian Revolution, others felt the same; the economist Knut Wicksell (who influenced Keynes personally), among them. How could Keynes, seeing the beast up close, have felt differently? 

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Over 30 years later, a member of the now extinct petty provincial aristocracy from Central Europe would write this praise:

“You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your condition which you simply take for granted you owe to the effort of men who are better than you.”

Those words, echoing Keynes, could have been addressed to him … but they weren't.

The starry-eyed fan behind them was not one of Keynes’ devotees; in fact, he radically disagreed with him on economic doctrine (e.g. “What he really did was to write an apology for the prevailing policies of governments”).

Baron Keynes ("I do not mean that Russian Communism alters, or even seeks to alter, human nature, that it makes Jews less avaricious or Russians less extravagant") did not live to witness the unintended  (?) snub, but in those lines Ludwig Heinrich, Edler (Baronet) von Mises was complimenting  Russian-born Alisa Zinov'yevna Rosenbaum -- Ayn Rand -- on the publication of “Atlas Shrugged”.

Both Mises and Rand, like Keynes himself, were unconditional in their support for "the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement"; both of them, non-religious Jews.

(To be continued)

A Short View of "A Short View". (i)

Upon returning to England from a 1925 fact-finding mission to the Soviet Union, Keynes published the scathingly critical essay "A Short View of Russia".

Included in the acclaimed 1931 anthology “Essays in Persuasion” (London: Macmillan and Co., Ltd; here and here), that essay is, strangely, often forgotten by Keynes’ fans.

So, I thought I’d give it a try. I shall report my findings in this and in a few future posts.

The essay is divided in two parts. The first (entitled "What is the Communist Faith?”) opens thus:

"Leninism is a combination of two things which Europeans have kept for some centuries in different compartments of the soul -- religion and business. We are shocked because the religion is new, and contemptuous because the business, being subordinated to the religion instead of the other way round, is highly inefficient.
“Like other new religions … ".

Keynes comes out, guns blazing: without argument, he repeatedly highlights a perceived identity between religion and "Leninism" in “Russia”. Which is curious in itself: Stalin had been running the show in the Soviet Union since Lenin’s stroke in 1922. After Lenin’s death in 1924 (the year before Keynes' visit), he simply was the “boss”. Did Keynes find those details unimportant?

Perhaps. Indeed, judging by the numerous occurrences in his essay of the word “religion” and variants (40 instances of the string “relig”, plus 5 instances of the word “faith”), one must conclude that either the characterization of “Leninism” as religion was Keynes’ core message -- like Cato the Elder’s “Carthago delenda est” mantra -- or he, like Richard Dawkins, must have been morbidly obsessed with religions.

Instead of a proper argument, Keynes lists several unflattering similarities between "Leninism" and religion (e.g. “like other new religions, it is filled with missionary ardour and ecumenical ambitions”, “volatile experimentalists”, "cynicism", "hypocrisy", "intolerance", “early Christians led by Attila were using the equipment of the Holy Inquisition and the Jesuit missions to enforce the literal economics of the New Testament” -- one wonders why didn't Keynes mention Vlad Tepes? -- among others).

Visiting one of the poorest, most backwards countries in early 20^th century Europe, devastated by over 8 years war, Keynes, with astonishing perspicacity, even detected that “it [“Leninism”] seems to take the colour and gaiety and freedom out of everyday life”. It couldn’t have been any other thing, for Keynes, but “Leninism”!

Regardless, with the benefit of hindsight, one must acknowledge truth in Keynes’ endless list; with the same experience careful readers may have noticed that Keynes, his followers, and Keynesianism have frequently been targets of similar remarks.

Furthermore, a careful search would yield surprising unguarded admissions:

But this is an uninteresting exercise. Even if real, similarity does not prove identity: fools’ gold is no gold, whatever the swindler’s claims to the contrary. The identity between “Leninism” and religion, which Keynes is intent on selling, is far from obvious.

Instead, it would be interesting to understand why Keynes chose to express himself in that - let's say -- flamboyant manner.

(To be continued)