The private pathology of the public philosophy

July 5, 2024 12:48 AM

Hayek marvelled at this concert of unknowingness. Like a psychoanalytic symptom, prices condense and communicate fragments of knowledge that are obscure to the conscious mind. The movement of prices effects a change in our “dispositions”—what we want, how much of it we want, what and how much we’re willing to give up to get it—again, without our knowing why, or that we even had such a disposition in the first place. Hayek called this a sort of “social mind”—though, unlike the Freudian mind, he thought it must remain inaccessible. from Hayek, the Accidental Freudian [The New Yorker; ungated]
posted by chavenet (16 comments total)

In Hayek’s anguished bid to end his marriage, we find, just as Freud would have anticipated, the private pathology
accidental? see Edward Bernays [wiki]
posted by HearHere at 2:33 AM on July 5 [2 favorites]

A few years ago I was trying to read Quinn Slobodian's Globalists, and ran into a brick wall of...not boredom, exactly--Slobodian is a good writer, good historian (good twitter follow)--but something kept me from sinking in and enjoying the read. Now I think the problem is, the history is too large, too complex, for such small ideas. This huge intellectual edifice, just so you can say, "those rich guys have it right, we should let them do whatever they want."

That's why Robin's piece (see his response to Slobodian here) is so interesting, I think. Not so much that we should view Hayek through a Freudian lens, but rather, we should place the two thinkers, the two eras, side-by-side, and contemplate why one thinker--though wholly, incredibly, amazingly wrong--spawned a fruitful field of psychology and cultural analysis that still has its appeal today--while the other--while also wrong, although in a more dull, grinding fashion--spawned nothing but gray misery. (Another way to say it is, try reading Globalists next to something like Schnitzler's Century or A Nervous Splendor or for that matter any biography of Freud, and despair at what we've lost!)

We're still living with the wreckage. Mises and Hayek's calculation problem haunts any critique of capitalism and markets--"What could you replace them with? Don't you know a socialist state wouldn't have the information it needs, so it would produce nothing but poverty and misery!" Yet we look around us and see poverty and misery. The price-point being the sole piece of information available leaves behind so much waste, failed businesses, products nobody wanted, a junkyard and a graveyard, and in the end, power still accreting to the few, not out of any merit or wisdom, but just because that's what power does, if you leave it to itself.

A bad age produced bad philosophers whose ideas are still opening up new wounds.
posted by mittens at 6:11 AM on July 5 [15 favorites]

> Yet we look around us and see poverty and misery.

If you judge Capitalism by saying "it has been in charge for 30 years, look at what it did" globally, you end up with "it resists the costs of CO2 pollution" as the main critique.

It has generated people of insane wealth, but it has overall made the world's wealth more spread out than before. Short of saying "no true Scotsman" to the rise of former 2nd/3rd world economies (that wasn't Capitalism!), the amount of poverty and misery eliminated in the last 30 years has been insane.

Now, in the first world, it has not done this in the last 30 years. The last 30 years has increased inequality in almost every industrialized nation. The bottom 20% have (at best) barely moved upwards, while the top 20% have moved up and the top 1% have skyrocketed.

But most of the inequality in the world has been international. The global middle class is 10-100$ per day (2500$-25000$ per year), not well off by industrialized nation standards, but insanely better off than the global poor.

Absolute "extreme poverty", at under ~1$ per day (depending on base year), has collapsed in the last 30 years, especially in East Asia (~95% reduction). South Asia (~50% reduction) and Sub-Saharan Africa (~30% increase) are the two remaining areas with substantial absolute poverty, but there are fewer remaining absolute poor today than have been lifted out of absolute poverty in the last 30 years.

There are many valid attacks on Capitalism, but stating globalism hasn't reduced poverty is a stretch. The inequality wreck of the last 30 years in the "first world" has been mirrored by a massive drop in suffering globally.

The thermodynamic wealth/power concentration problem is a big problem in my opinion. If you build really naive models of Capitalism (random economic agents bouncing around doing nearly random trades with whomever they collide with), you end up with a small fraction of agents becoming exponentially rich; not because they are "worthy", just due to the statistics of thermodynamics. These "randomly rich" tycoons in the real world end up having way too much political power, and they can damage the world for millions or billions of people.
posted by NotAYakk at 7:01 AM on July 5 [5 favorites]

A bad age produced bad philosophers whose ideas are still opening up new wounds

No surprise at all to me at least that the doyen of neoliberal economics turns out to have been a narrowminded, wilfully blinkered, selfish, deluded, weaselling, manipulative, irresponsible prick.

The price-point being the sole piece of information available leaves behind so much waste

I've been musing lately on Tom Murphy's observation that

Monetary valuations badly miss the mark by orders-of-magnitude, so that decisions based on money (i.e., most societal decisions) will be bad ones.

and I think he has that exactly right.

Economics is all very well, but the valuations that economists work with are exclusively those given to that which can be traded and there are so many things that living things in general simply require, things that for aeons never needed to be traded because they're just there - until they're fairly suddenly not and we're all just fucked.

Pricing tradable goods, then, is about deciding on the value of something one already has and/or can produce that is surplus to one's own needs. It has to be that way because pricing trade goods is not an activity that can be performed by dead people and, as the old saying goes, you can't eat money.

When two entities are negotiating a price for goods that one of them can supply but the other needs in order to stay alive, the idea that there is anything non-coercive about the terms of that trade is simply not defensible.
posted by flabdablet at 7:10 AM on July 5 [13 favorites]

NotAYakk, point taken regarding capitalism's tide raising all boats, except I do think we have to clearly distinguish between neoliberalism and developmental, state-directed capitalism. We'd be hard-pressed to find an example of Hayek's neoliberalism raising any country out of poverty, whereas the heavy hand of government picking winners and losers within young and developing capitalist economies has done really well.
posted by mittens at 9:13 AM on July 5 [5 favorites]

posted by NotAYakk at 8:01 AM on July 5

E-pun-isteryical!
posted by ropeladder at 12:33 PM on July 5 [2 favorites]

Some interesting comments here.
My thoughts on Neo-Liberalism versus more Social Democratic governance is that history is an ebb and flow of Free Trade Hawks and Trade Protectionists.
In the context of English history we see the state controlled mercantalist trade of William Pitt the Senior in the late 18th Century morphing into free trade policies when Prime Sir Robert Peel repealed the Corn Laws in 1846.
In an American context we saw Reaganism Republicans making globalization government policy until it was discharged by Reagan Donald Trump in the 2016 election.
The voting public seems to want cheap products to buy but not at the cost of job security.
posted by Narrative_Historian at 3:29 AM on July 6 [1 favorite]

NotAYakk, there’s something that has bugged me for a long time about the “less than $2 a day” type measures. How do they account for the non-market natural resources that are no longer accessible because of industrialism and capitalism?

Eg, a village that used to have hardly any cash but a sustainable inshore fishery, vs the same village with more cash from the bar that serves commercial fishing boats but now they’re bidding for the fish against the entire rich world. Richer in dollars, poorer in NPP.
posted by clew at 8:39 AM on July 6 [4 favorites]

> Economics is all very well, but the valuations that economists work with are exclusively those given to that which can be traded and there are so many things that living things in general simply require, things that for aeons never needed to be traded because they're just there - until they're fairly suddenly not and we're all just fucked.

i like the way this economist put it: "[I]f an asteroid was about to crash into New York City, we wouldn't ask economists to create a poorly-founded model of its costs. We would tell NASA to do whatever it can to save us. Economists need to stop telling us what the program for change should be, but rather identify the most efficient means of implementing a program scientists already deem necessary." cf. use vs. exchange value, viz. delegability

also btw, hayek on healthcare...

There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision...

Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance—where, in short, we deal with genuinely insurable risks—the case for the state's helping to organize a comprehensive system of social insurance is very strong. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less effective. But there is no incompatibility in principle between the state's providing greater security in this way and the preservation of individual freedom. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken.

and 'assured minimum income' :P

There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need to descend. To enter into such an insurance against extreme misfortune may well be in the interest of all; or it may be felt to be a clear moral duty of all to assist, within the organised community, those who cannot help themselves. So long as such a uniform minimum income is provided outside the market to all those who, for any reason, are unable to earn in the market an adequate maintenance, this need not lead to a restriction of freedom, or conflict with the Rule of law.

posted by kliuless at 6:26 PM on July 6 [5 favorites]

Yes Clew we see that in the Pacific Islands where commercial fishing boats clean out all the Tuna and local fishermen can't compete with this economy of scale and have depleted fish stocks.

The convenience noodles in our supermarkets that are so cheap are based on extrative palm oil farms in south east asia that are depleting the tropical forests.

Cheap toilet paper ditto.
We are presented with difficult moral choices at the supermarket.
posted by Narrative_Historian at 7:44 PM on July 6 [2 favorites]

> NotAYakk, there’s something that has bugged me for a long time about the “less than $2 a day” type measures. How do they account for the non-market natural resources that are no longer accessible because of industrialism and capitalism?

I should ask my father, who did work on the subject after the fall of the USSR in Georgia. Measuring only traded goods resulted in an under-estimate of the productive capacity/wealth of an area with subsidence agriculture and self-reliance; so Georgia wanted a better estimate of its economic capacity so it could secure better loan terms.

Failing to measure trade - like, a village that has fisherfolk and fish processors and house builders etc, but they use non-money based mechanisms to share labour - would be another form of economic measurement failure.

I don't have the answers, but I can say that people do look into it. I will say that the deviation is going to be bounded in practice; I'm unaware of a society that manages anywhere close to modern industrial productivity in a non-trading (people making stuff for themselves) economy.

On the other hand, you can have two different "absolutely poor" populations, one of whom is literally starving, the other is well fed (in good years) and makes their own clothing; even a population that feeds itself using 12+ hours of labour, and another that does it on 1 hour of labour. These are very different kinds of poverty.
posted by NotAYakk at 7:22 AM on July 8 [3 favorites]

well fed (in good years)

not exclusive to physical subsistence systems...

I once asked Brad DeLong the same question, and after a middle bit that I think combined his professional caution with my trying not to afflict him with professional questions in a social situation, we agreed that eventually the skeletons will tell us. A specific application of "in the long run but".
posted by clew at 1:13 PM on July 8

delong on neoliberalism :P

Yes, you need the market system and the profit motive as pieces of the societal-calculation mechanism to figure out what to produce, how to produce it most efficiently, and to incentive people to actually carry out the economic plan that the market comes up with, all given the current state of science and technology.

But the mercenary institution of the market cannot push forward science and technology very well, if at all.[1] And if you leave the market alone, you will find that market prices are rarely fully in accord with societal values. Thus we need, in a phrase, industrial policy. This has been obvious for all of the past 180 years.

oh! and on corey robin's fellow crookedtimber blogger dan davies' new book -- The Unaccountability Machine: Why Big Systems Make Terrible Decisions and How the World Lost Its Mind ("The most important thing, he says, is to dethrone mainstream economics. 'You can't have the economists in charge,' he writes, 'not in the way they currently are.'")

How can we be at least 15 times richer than our pre-industrial Agrarian Age predecessors, and yet so unhappy? One explanation is that we are not wired for it: nothing in our heritage or evolutionary past prepared us to deal with a society of more than 150 people. To operate our increasingly complex technologies and advance our prosperity, we somehow must coordinate among more than eight billion people.

We therefore have built massive societal machines comprising market economies, government and corporate bureaucracies, national and sub-national polities, cultural ideologies, and more. Yet we struggle to fine-tune these institutions, because we simply do not understand them. We are left with a globe-spanning network of profoundly alien leviathans[2] that boss us around and make us unhappy, even as they make us fabulously rich compared to previous generations.

...the best way to reform organizations so that they do not become unaccountability machines is to revive the post-World War II quasi-discipline of management cybernetics. Pioneered by the computer scientist Norbert Wiener[3,4] and the political scientist Herbert Simon[5], the approach was named for the Greek word kybernētikos: “good at steering a boat.”

The guru who made the most progress in building management cybernetics was the counterculture-era management consultant Stafford Beer, whose book Brain of the Firm explored how bureaucracies can be reformed so that the internal flow of information between deciders and decided-upon is kept in balance. Without that, a system will not remain viable and useful to humanity over time.

Reviewing The Unaccountability Machine in the Financial Times, Felix Martin describes Davies’ approach as “a kind of psychoanalysis for non-human intelligences, with Stafford Beer as Sigmund Freud.” I could not have said it better. Our social world is no longer confined to our families, our neighbors, our co-workers, and those with whom we directly interact via networks of affection, antipathy, barter and exchange, small-scale planning, and arm-twisting. Instead, more and more of what we do is driven by an extremely complex assembly of vast interlocking social and technological mechanisms that we have made but do not understand.

If the challenge of modernity is to figure out a better way to work and think together as a global community of more than eight billion people, how can we improve our understanding, and thus our control?[6,7,8]

posted by kliuless at 9:25 AM on July 9 [4 favorites]

The Unaccountability Machine: Why Big Systems Make Terrible Decisions and How the World Lost Its Mind

Well, I guess I know what'll be going on my teetering to-be-read pile next.
posted by mittens at 9:46 AM on July 9 [1 favorite]

I asked my Father. He helped set up the surveys in Georgia but didn't work with the results, so I don't have more data. It covered "trade in kind" more so than "self production".
posted by NotAYakk at 12:52 PM on July 15 [1 favorite]

Capitalist Markets Aren’t “Free.” They’re Planned for Profit.
posted by jeffburdges at 8:17 AM on July 29 [1 favorite]