the value of a life

Ah, yes, the frog in boiling water ...

In Australia the very frequency of indecencies of the criminal justice system inure us in some measure to those indecencies. But the most recent insult may yet provoke a   Thomas Kelly: 18 years old; walking in a public area; murdered in a unprovoked attack by a stranger.For this act of extermination the murderer is jailed for 4 years.

Postscript: on the appeal of the public prosecutor, Kelly's killer minimum sentence was increased to 10 years and two months.

Bagging Chicago Economics

Building Chicago Economics

(Edited by Robert van Horn, Philip Mirowski and Thomas A. Stapleford, Cambridge University Press, 2011)

Social structures commonly seek to reinforce themselves by means of systems of honour and dishonor. Thus prizes, distinctions and accolades are afforded those who have strengthened some structure. and correspondingly,  those who have damaged it will be degraded by various disfiguring marks. The best exemplification of a  regime of dishonour is probably the criminal justice system; historically it administered disgrace as much as punishment. In modern times the most crafted exercises in disgrace are found in  the (aptly named) ‘show trials’ of unfree societies. Free societies tend to more informal methods.

Systems of honour and dishonor extend to include mythologies. Positive mythologies will commonly commend their subjects by articulating an illustrious pedigree, or by enumerating the tests their subject has endured, or by blazoning their ultimate triumph or (perhaps) martyrdom. Negative mythologies seek to degrade in a variety of ways: by alleging discreditable associations, by imputing base motives, and by highlighting anything inglorious or diminishing in their target's  story .

A given individual may be tussled over by  conflicting system  of honour and dishonor. An example is Herbert  Spencer, who after enjoying a flush of adulation during the middle part of his own lifetime, was fated to be cast in the 20^th century as the bugaboo of semi-mythical  monster called ‘social darwinism’. (See Leonard 2009). In a parallel way, Milton Friedman today  is evidently the  object of contention of contrary systems of honour and dishonour. Thus there exists a biennial Milton Friedman Prize (valued at $500,000), a Milton Friedman Institute, and there has even been a Milton Friedman Day. And yet the Nobel Laureate, at the age of  86,  suffered a pie being driven into his face. 

This contention over Friedman between the positive and negative extends to mythologisation. There have been several  accounts of his life and work lionising  him  (eg Ebenstein 2007). Now it is the turn of the negative mythology. The assumed task of the volume under review, Building Chicago Economics, is to diminish and taint Milton Friedman and his doctrinal peers.

The editors' negative mythology is composed out of several elements. The first is, predictably, ‘Chile’, which the authors hasten to mention on their first page. But ‘Chile’ is small beer in an old hat, and the editors quickly move on.

The second element, curiously enough, is Friedman's involvement in the Mont Pelerin Society (at least before he proposed its abolition!). Several  contributors to the volume under review seem quite atingle at this involvement; and some attribute a great importance to Friedman's attendance at the original Society gathering in 1947. But their insinuation that a person of Friedman's deep self-belief  would be dazzled into doctrinal deference by the gathered luminaries is ridiculous. It also ignores the fact Friedman did not attend again until 1957; and that the Society was no credal sect, but a medley of fractious individuals, several of whom Friedman fought.  

What the editors presumably find gratifying in Friedman's association with the Society is that it underlines  the ideological aspect of  his thought, and thereby diminishes a much resented claim of classical liberalism for ‘economics’. Friedman, of course, never remotely claimed economic theory for classical liberalism; to Friedman economic theory  in general was the emptiest of  empty boxes. What he claimed was that his ‘hypotheses’ - competitive markets; a rational consumer;  the quantity theory - could outpredict rival theories of pricing, consumption and nominal GDP. To Friedman’s mind, in other words, theories are many, but the usefully accurate ones are those of classical liberalism. This contention may be true, or it may be false. But there seems  little gained in stressing that those who deem it true have been classical liberals.

But the prime exhibit  of Building Chicago Economics is not a discussion club, however distinguished or ambitious. It is the funding of various Chicago School activities by business fortunes controlled by persons concerned to advocate deregulated markets. Thus in the 1930s Charles R. Walgreen established a Walgreen Foundation to encourage a greater appreciation of the "American Way" at  Chicago; and to that end it later funded not only scholarships (etc) but public lectures by Chicago School  figures. Even more stimulating to the editors is the Volker Fund, that under Harold W. Luhnow financed not only lecture tours of Chicago thinkers, but a ‘Free Market Study’, under Aaron Director, that articulated doubts about the merits of competition policy.

That authors receive the patronage of rich men who think they agree with them is no discovery. There once was an author of  very strong views who was employed for only few months in his life, and who for decades was supported by the profits of a cotton mill gifted him by its owner. That man was called Karl Marx.

But the editors are not interested in the simple possibility that patronage expedites the dissemination of an ideology. Rather their concern is to suggest that the patronage at issue was responsible for the (well-known) fact that in various matters (especially competition policy) ‘the founders of postwar Chicago school (including Friedman, Stigler and Aaron Director) departed quite sharply from the classical liberals, that had animated their mentors  art the university, such as of Knight and Henry Simons’(Horn, Mirowski and Stapleford, xix).

Put simply, the Chicago School was bought. This, in its all ignominious crudity, is the editors’ thesis. 

This is not expressly stated, but rather is a matter of  ‘character assassination by innuendo’, as Bruce Caldwell puts it  in the chapter he contributes to this volume, which serves as kind of a Speech in Reply. In that chapter Caldwell  also brings out one spectacular error of the editors in making this innuendo:  that a certain conversation of Hayek dated to 1950 could not have taken place until at least 1977 . 

But the refutation of the innuendo does not require a mastery of the details of biography; it fails to fit the contours of American attitudes in general, and the Chicago School in particular. It fails to appreciate that American society at large had by the post-War period already lost interest in 'anti-trust' competition policy . Thus in 1964 it was observed by Richard Hofstadter – no neoliberal he! -  that ‘The anti-trust movement is one of the faded passions of American Reform’. Hofstadter not only underlined how public opinion had come to tolerate big business  by the early 1950s, but asked of the liberal left why was it that ‘the last thing they are interested in is the restoration of competition to correct the evils that they see’. Hofstadter had an answer. It was not that the liberal left was reading George Stigler;  it was that they were reading J. K Galbraith. To Hofstadter,  Galbraith's American Capitalism that ‘has probably done as much as any work to reconcile the contemporary liberal mind to the diminished role of competition as a force of modern society’ (Hofstadter 1965, 227)

There is a second palpable inconsistency with reality of the editors' '30 silver pieces' explanation  of  the ‘sharp departures’ of post-War Chicago from its pre-War variant: whereas Simons was almost hysterical in his hostility to trade unionism, post-war Chicago smoothly reconciled itself to it. So in 1951, near the apex of union strength in the US, Friedman sought to rebut the passionate denunciations of trade unions of Edward Chamberlin  - the Harvard apostle of imperfect competition. Unions, Friedman declared, had a ‘’negligible’ effect on wage rates; and this was because the American economy was, contrary to Chamberlin, essentially competitive. This shift  between Old and New Chicago on unionism is seen even better in the work of H. Gregg Lewis; from a partisan of Simon's crusade against unions in 1951 to theorising unions as a 'negotiation business' in 1965 (see Coleman 2010). Was Lewis bought by the AFL-CIO?

It is the duty of any reviewer to identify the value-added the work under review. To that end I would especially highlight Emmet’s chapter ‘The Workshop System and the Chicago’s School’s Success’, that tells how what was (in essence) a pedagogical innovation of Friedman had by the late 1970s spread right across the University of Chicago. Van Horn’s ‘Chicago’s Shifts on Patents’ brings out how slippery an issue is intellectual property for classical liberals.  Stapleford's ‘Friedman, Institutionalism and the Science of History’ underlines the irony that Friedman’s first paying job was at a ‘bastion of statist planning’, the Industrial section of the National Resources Committee. This is, indeed, ironic but  perhaps not mysterious. In the New Deal Friedman had sensed (in his own words) the ‘birth of a new order’, and elected to join it. But the birth was stillborn: in the post-war period the market economy ‘performed in a way we hardly dreamed of before World War 2’ (Hofstadter). It was this astonishing revival of capitalism that Friedman chose, in his own way, to join. I suggest that it is in the need that a spirited personality feels to choose sides and take to the field that  we are likely to find the germ of post-War Chicago, and not in the pursuit a trail of ancient per diems.

Coleman, William (2010), The Political Economy of Wages and Unemployment: A neoclassical exploration Edward Elgar, U.K.

Ebenstein, Larry (2007), Milton Friedman. A Biography , Palgrave Macmillan, New York.

Hofstadter, Richard (1965),The Paranoid Style in American Politics and Other Essays , A.A.Knopf, New York.

Leonard,Thomas C. (2009) ,"Origins of the Myth of Social Darwinism: The Ambiguous Legacy of Richard Hofstadter’s Social Darwinism in American Thought." Journal of Economic Behavior and Organization 71: 37–51.

 

The Blue Eagle and the Swastika

The Roosevelt Myth - the maddened remonstrance by the America Firster, John T Flynn - opens with an hour-by hour recount of the day of Roosevelt’s  inauguration in 1933. The chapter concludes,

Next morning the New York Times carried only a single front page story that had no connection with the inauguration. It had to do with another of the Messiah’s of tomorrow.

VICTORY FOR HITLER EXPECTED TODAY

In his The Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany Wolfgang Schivelbusch takes up the challenge of giving reason to Flynn’s shocking thesis of parallel and resemblance between the two 'messiahs'.

Schivelbusch sets out at some distance from events of fame and infamy. He begins with architecture. He repudiates the commonplace ‘conflation of the monumental – that is backward-looking neoclassical architecture ... and ... totalitarian regimes ... and ... the association of modernist architecture with liberal democracy’. In refutation he points out that during the inter-war Period the liberal democracies erected numerous neoclassical piles –  the US Supreme Court, built over the years 1932-1935, being a spectacular case in point  (not to mention  - we may add – the Stormont parliament, the New South Wales State Library, and the Auckland War Memorial Museum). And it is equally true that ‘modernism’ appeared in Fascist architecture- even Nazi architecture exhibited a functionalism that conformed to modernist precept. It would, then, be closer to the truth to say that civic architecture between the wars manifested no ideological divide – but rather exhibited a common style, which might be simply called “Government International”.

The point of his architectural prologue is clear. Civic architecture is the epitome of Schivelbusch’s key thesis: that a common style and technology is consistent with wholly different ends. Specifically, a common political style and political technology is consistent with different political ends.  Thus, Schivelbusch maintains, however distinct their ends, the New Deal and the Third Reich had much in common in their political style and technology.

What was this supposed shared ‘political technology’? It amounted to an attempt to  brew a one-ness between a charismatic ruler and the ruled - a one-ness that dispensed with intermediating bodies and constraining religions - a one-ness that, however contrived or faked, was not simply an act of the duper duping the duped, but involved an implicit reciprocity between ruler and ruled.

Schivelbusch's method is to articulate some inauspicious parallels between the 'new deals'.

As is well known, the Nazis instituted a boycott of Jewish business almost as soon as they won power.  In Schivelbusch’s telling the New Deal also began with a boycott; or, at least,  something like a boycott. The National Recovery Administration instituted a host of ‘codes’ for the conduct of business,  setting minimum prices and wages, maximum hours, etc. Those businesses that  agreed to conform were issued Blue Eagles posters to display from their premises to the public.  And what of those businesses that declined to conform with these (voluntary) codes? Roosevelt’s chief of staff, Hugh Johnson, announced that with respect to such recalcitrants, ‘The public simply cannot tolerate non-compliance with their plan ... May Almighty God have mercy on anyone who attempts to trifle with that [plan]’.  Schivelbusch sees in this a ‘threat of a boycott’. There was, indeed, a wave of physical intimidation of ‘non-compliers’, reminiscent of confrontations of strikers and strike breakers. But it cannot be said there was any formal boycott.  For all that, there is something sinister in Johnson’s incitement of The People’s Ire at any defiance of ‘their’ plan. And the scene of 250,000 people marching down New York City’s 5^th avenue in September 1933 with Blue Eagle flags flying doesn’t quite look the same after Schivelbusch’s comfortless analogy.

A surely more palpable parallel between the New Deal and the Third Reich lies in their common ‘back to the land’ housing programs. The unbelievably named ‘Subsistence Homesteads Division’ of the Department of the Interior launched 34 housing projects that sought to settle urban workers in semi-rural communities, each composed of 1 to 5 acre lots. The first of these was Arthurdale in West Virginia, conveniently close to Washington DC, and patronised by Eleanor Roosevelt, who busied herself in the choosing house types and their interiors. At the same time the Nazi Reich Commission for Settlement Projects was bringing to realisation the older ideal of the ‘Landstaat’   - rural settlement – in parts of Ramersdorf on the outskirts of Munich.

Schivelbusch is surely placing too much burden is placed on this (delectable) coincidence. Schemes for restoring village life were a standard move of anti-industrial ideologists since the late 19^th century (See Davison 1978, 251-254 for some curious illustrations). And the number of people housed by these projects was, of course, minute. But to Schivelbusch their significance didn’t lie in the numbers; they were essentially elaborate advertisements for their respective governments.They underline the ‘propaganda state’ aspect of the various New Deals that Schivelbusch considers so of characteristic of these governments.

By ‘propaganda’ Schivelbusch does not refer to the deception that Nazis used arrantly, intensely and routinely as technique of rule. By propaganda he does not mean the lie inflicted by the knower on those who can know no better. Propaganda is not the ‘programming’ of innocents. Schivelbusch wants the reader to allow that the propagandised had some autonomy in their beliefs. The success of propaganda therefore turned on a certain reflexivity between the propagandizers and the propagandized. In keeping with that the Nazis  and the New Deal were genuinely concerned with what the public believed; the Nazis elaborately tracked public opinion, and Roosevelt urged his listeners to write to him convey their views. In Schivelbusch’s account this was not just a ‘success check’ on propaganda; but an input into formulation of propaganda. Propaganda worked insofar as it articulated ‘the as-yet nebulous popular will’.

In his reach for parallels Schivelbusch seeks a correspondence between the Fireside Chat and Nuremberg Rally. Certainly both conformed to that communion of the ruler and ruled that the political technology deployed. Both involved psychological incitement: the rallies very obviously, radio not so obviously, but Schivelbusch reminds us of the strange power of radio in the 1930s. (Witness the bizarre reaction to Orson Wells' War of the Worlds radio drama).

Schivelbusch feels required to answer why the supposed common political technology manifested itself in ‘chats’ in the US but in rallies in Germany. Roosevelt, recall, never permitted the broadcast of his speeches; while  Hitler’s radio broadcasts were overwhelming speeches, and only infrequently direct addresses ‘to the German peope’. Schivelbusch puts this contrast down to ‘technological lag’; Germans were relatively unused to this new medium, and unlike Americans were unable to invest ‘charisma’ in radio. We see here that  Schivelbusch's unity thesis is refracted through the material conditions. We see the same turn in his explanation as to why the most salient public works differed between the two countries:   autobahns in Germany, the Tennessee Valley  Authority in the US.  His answer is that in 1933 Germany had an extensive electricity grid, but few cars; the US, by contrast, had extensive car ownership but many households off the grid. Each country caught up where they had some catching up to do.

There is, then, a functionalism present in Schivelbusch. Indeed, in his analysis, both Nazism and the New Deal at bottom functioned as ‘completing egalitarianisms’ ; each of the two were catching up where the other was ahead. Germany was ahead in the economic dimension of egalitarianism, but behind in its social dimension; and the USA the reverse. Specifically, Germany had the advanced welfare statism of a developed egalitarianism; the US had not. But the US exhibited (or at least observed) the classlessness (‘fraternity’) of a developed egalitarianism, Germany did not. Fascism  offered classlessness to Germany: The New Deal offered social security to the US.

Schivelbusch, then, is implicitly advancing two resemblance theses; one for means, and another for ends. So it not merely that the two buildings shared the same style and technology; they performed the same task. 
 But the proposed unity of ends  cannot be endured. Yes, both had powerful egalitarian aspect: but which successful political movement in the past two  hundred years has not? It matters more that each also served other ends that the other shattered. It is, in other words, completely inadequate to describe the value system of both as solely ‘ egalitarian’. And I would contend (uncontroversially) is the divergences of these value systems that makes the Third Reich so notoriously divergent from the New Deal.

The US, of course, was and remains a society saturated through with liberalism. German history (at least until the post-War period) had a highly ambiguous relation to liberalism, to say the least.  Liberalism seem to wax strongest in  moments of crisis; while in the US liberalism was business as usual.  

To liberalism – the aversion to rulers – we can contrast another value system – the aversion to rules. We can call this ‘anti-nomianism’. In this system the negative and positive poles of egotism and self-annihilation  supply the energy;  and the irrational guides and channels that to its great end;:power without law. Such an inflammable system can hardly persist. But in Germany it was ignited by fin de siecle bedlam, and superheated by the political and economic dislocation following the First World War. 

By contrast, in the United States anti-nomianism makes only  a more fitful appearance; in religious manias; in extreme Abolitionism; in the mass  bohemianism of ‘the 60s’.

The conflict of the New Deals was evidently a conflict of liberalism and anti-nomianism.  Schivelbusch is uninterested in this pedestrian truth. But, then, it is inconsistent  with his functionalism. Consider:   was not the common technology that interests him - then attempt to synthesise a one-ness between a charismatic ruler and the ruled – part and parcel of anti-nomianism?  It was the liberalism, that is second sight  of the American consciousness, that prevented that ‘technology’ getting into full operation. .                                                                                                                                                                           

Davison, Graeme 1978, The Rise and Fall of Marvellous Melbourne, Melbourne University Press.