June 10, 2010

Paul Krugman notes a curious phenomenon: any number of economists and pundits calling for fiscal austerity – in the U.S., in the U.K., in Germany, in Greece – hell, everyfuckingwhere – even though such policies will straightforwardly and directly inflict suffering on the citizens to whose rulers such wise men address their advice. What could possibly be the explanation for this misguided thinking?

What’s going on here? I don’t think you can resort to class-warfare arguments. What I think is happening is that we’re seeing the deep seductiveness, for many economists (and others), of taking what sounds like a tough-minded position in favor of inflicting pain on the economy — and the people who make up that economy.

Don’t go resorting to class-warfare arguments, now: this is really a matter of innocence. It’s just so seductive to policy advisors, this assault on the working class. No need to inquire about the source of this seductiveness, its motives or purpose, whose interests it serves or what power promotes it. It’s just one of those things! Policy advisors finding fucking over ordinary people seductive! End of story! Move on!

Take the situation in the U.K., for example. We know, if we consume media commentary, that reducing the deficit is the NUMBER ONE PRIORITY for any U.K. government (because continuing debt-financed spending in a recession is of course unthinkable – impossible). And we know that reducing the deficit must mean SPENDING CUTS. We know, therefore, that we are entering a new age of austerity. Britain’s whole way of life will have to change!

Now we might reflect that there are TWO ways of reducing a deficit: cutting spending; or increasing revenue. Increasing revenue means, for a government, increasing taxes. So it seems that if the government were to increase taxes instead of cutting spending, that would also reduce the deficit. As it happens, there’s an entire capitalist class with a fuckload of huge corporations making obscene profits – perhaps taxes could be raised there?

No; don’t be silly. Serious people think that welfare should be cut and jobs should be lost. Why do they think this? Who knows – it’s just something in the air, an inexplicable and innocent collective sadism on the part of paid analysts, almost as if these pundits and advisors were children, too gentle for the world.

Krugman quotes Keynes on Ricardian economics:

That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue.

Somehow Krugman forgets (this time) to reproduce the rest of the quote:

That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority.

Even Keynes gets it, more or less. Why can’t Krugman? What could be the explanation for that?


3 Responses to “Innocence”

  1. duncan Says:

    Ha – thanks Molly, yes exactly. It must be strange living in Krugman’s world, these proposals just growing like moss or falling from the sky like rain, except you can’t make a forecast, no causal explanation possible, it’s just magic which must be responded to with magic. His response to that post is interesting too –

    I’d also say two things: first, it’s not so easy to identify the culprits, and second, vested interests aren’t as clearly the villains as one might imagine…. class is certainly a factor. But I find myself in conversations with people I don’t think have a deep urge to inflict pain and/or safeguard the rentier class who nonetheless ask, “But how long can we keep interest rates low? Won’t bad things happen?”

    This just incredible naivete and willed stupidity on Krugman’s part about what a class-oriented explanation involves, the complete inability to think about the spread of ideas in social terms. Which then damages the economic analysis, of course.

  2. duncan Says:

    I think it’s psychologically connected to the kind of yah-boo liberal pugnacious ‘rationalism’ that’s common in this blogospheric social space, too (and I’m sure outside the blogosphere, I just don’t interact with the folks in real life) – someone like Brad DeLong with his “why oh why can’t we have a better press corps” schtick, where the answer is blindingly obvious – entrenched and extremely powerful and well financed ruling class interests – and at some level DeLong and his readers must know this, or the rhetoric doesn’t work, but it has to be responded to with incredulity, in DeLong’s world, because the second you stop being incredulous and piling on the contemptuous rhetoric you have to reach for an actual explanation, and that explanation is going to involve a more realistic analysis than can be tolerated in the discursive space DeLong and co inhabit. So the ‘explanation’ becomes reason versus inexplicable error.

    (btw – I just finished the first Perry Anderson book you recommended – the Antiquity to Feudalism one – and I found it really helpful – thank you.)

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