For both Keynesians and monetarists, the main flaw that prevents the capitalist machine from running without a hitch is the workers. For Keynes, this is because, unlike him, a selfless and urbane intellectual with plenty of cash for speculation—or, rather, with plenty of wealth to distribute between asset classes of varying liquidity—they are narrow-minded and greedy. It is their unwillingness to volunteer for wage cuts in a recession, for fear of an erosion of wage differentials, that clogs up an otherwise perfectly good system. This "downward rigidity of prices" is responsible for amplifying the impact that exogenous shocks (such as a rapid decline in demand for a country’s exports) have on output and unemployment, which is one of the main reasons that the economic authorities so fear deflation at the moment. For Milton Friedman, in contrast, the main fault of the workers is that, unlike him, they are a bit slow-witted, and so can easily be fooled into mistaking changes in the nominal wage for movements in the real wage. As a result, they sometimes supply the "wrong" quantity of labour to equilibrate with long-run "natural" level of goods that firms are willing to supply. What neither of them is able to describe—or even bothers to ask—is how such an economic system comes to be. It just is, and that's the end of it. As natural as light on leaves. (As Marx writes of the French anarchist Proudhon, “M. Proudhon the economist understands very well that men make cloth, linen, or silk materials in definite relations of productions. But he has not understood is that these definite social relations are just as much produced by men as linen, flax etc.”)
It seems reasonable to observe that one version of the so-called "neo-classical synthesis" (roughly, the mix of Keynesianism and classical theory that dominates mainstream economics), in the form of the unregulated growth and mutation of the instruments of finance capital, out of kilter with developments in the real economy ("neo-liberalism"), is on the retreat politically. However, it might be a bit complacent to conclude that neo-classicism itself has been intellectually defeated—not least because, in my experience, not that many people on the left (or at least on the “hard” left) have much acquaintance with its arguments and evidence. In my view, this is mainly explained by laziness.
So, although the colossal scale of the present economic-financial crisis—which has yet to run its course, and, in some places in eastern Europe, for example, looks set to trigger output falls on a scale perhaps comparable with those set off by the collapse of the Soviet Union—seems to have opened up an ideological space for the left, all-but closed down since the triumph of Thatcherism 30 years ago, to make use of it would require a culture of self-criticism, as well as an appreciation of the strengths of its opponents.
Unfortunately, after Iraq and the retreat of many into the safety of the broad, sclerotic "anti-imperialist" dogmas of a bygone age, or the self-protective narratives carefully honed to block out their own unpleasant complicities and shortcomings, it would be an exercise in self-deception not to conclude that, for large parts of the left—or at least the most vocal/ least knowledgeable part—the reverse is the case: they really see their opponents as cartoon-style villains, while they are themselves are clean as a whistle, beyond reproach.
As the London G20 summit approaches, therefore, I hope that people protest in large numbers, that they stand up for themselves. But I also hope that the opened-up ideological space isn't simply a wormhole leading back to 1974 and the Bay City Rollers.
No comments:
Post a Comment