If there is anything that annoys me intellectually the most, is when people give the apparent well-greased functioning of the Global North as evidence that the Global South should follow the steps of the former. It sometimes comes in the form of immigrants and exiles from the periphery or the former socialist bloc, who are often quite ignorant of the source of the dysfunctionalities of their former homes, and simply think these problems are related to very abstract and cosmetic differences between let’s say, Venezuela and Canada. For example, I recently saw a blog post claiming how Hayek showed that the pauperization of Venezuela is related to the socialist calculation problem! To this person, it seems that Venezuela tanked due to not satisfying some extremely abstract and formal philosophical requirements, such as letting price signals decide the allocation of goods. Yet, Venezuela “on paper” is very similar to european, social democratic states like the scandinavian countries, the latter which are much more livable and successful. Therefore its problems are not really related to liberal or libertarian canards, but very concrete issues embedded in the venezuelan social fiber that probably pre-date capitalism or “socialism”, which make Venezuela much more miserable than Scandinavia, even if both’s policies seem very similar abstractly, “on paper”.
Popular and pundit analyses about the deficiencies of the periphery, especially on countries that have leftist administrations, often contain very little about the concrete microphysics of these states. For example, they almost never speak about the existence in the periphery of pre-capitalist social formations that impede the rise of rule of law and transparent institutions. Some of these social formations are: (i) Patron-client relations, where loyalties between different factions and groups are mediated through the exchange of services and goods, at the expense of loyalty to the state, law and public institutions. (ii) Cultural issues, such as different approaches to work, time, nature and communalism, that impedes the formation of an “efficient” proletariat. (iii) Lack of capital intensive technologies in the periphery that make one hour of labor time much less efficient than the same hour in the core. (iv) Finally, the asymmetric position of the periphery in the global economic order is probably the most important source of immiseration, where peripheral countries cannot run deficits as large as Canada or the United States to fund social programs, and instead are at mercy of the boom and busts of whatever raw materials they use to finance their social spending.
The sumtotal of the the above outlined conditions will lead to to a large gap between the periphery and the core, and these conditions are not only a matter of policy, but slow moving, historical averages that are frozen into the social fiber of these countries and that cannot be uprooted easily without some sort of incredible violence. Much of the economic advantage seen in, for example Canada, is a function of an extreme bloodletting that lead to the destruction of First Nation social consciousness, in order to supplant it with anglo-saxon approaches on law, private property, and work, turning Canada essentially into the fevered labor camp imagined by the spiritless automatas of Protestantism. In the case of Latin America, such as in southern Mexico, many indigenous nations have not forgotten who they are, their pre-capitalist memories, although transformed by the centuries long existence of private property, presidents and Kings, still form an impediment for the smooth functioning of the capitalist economy. For better or worse, this existence of ancient modes of life hamper the efficient realization of the capitalist clockwork we see in the core economies.
Curiously, this abstract disease of western liberals that make them unable to fathom the concrete causes of the periphery’s misery, is shared by western leftists as well. For example, many leftists believe the common anti-communist canard that the Soviet Union collapsed due to the abstract constraints of a “planned economy”, In other words, that the conditions of the USSR’s lag were related to formal failures in the idea of a planned economy – i.e. Hayek’s argument that planners will never be as efficient at allocating goods as price signals. However the collapse of the USSR was probably related to concrete, social microphysics that were a combination of Russian social forms that pre-dated socialism as well to dysfunctionalities that emerged due to the USSR’s need to defend themselves militarily from a hostile and more economically powerful west. In fact, some left historians and sociologists (e.g. Fitzer, Ticktin ) have pointed out that these unique conditions created degenerative laws, such as various factions of the bureaucracy scamming, lying, and conning each other which lead to the manufacturing of shoddy, unusable goods, artificially tight labor markets, incredible waste, terror and authoritarianism, opacity of information, “planless” planning, and ultimately, collapse. These conditions outlined are not simply the product of “formal” arguments about economic calculations, but a function of the concrete historical trajectory that predated the creation of the USSR.
Another example of a leftist version of the disease of abstraction lies in the Keynesian/post-Keynesian hegemony in leftist economic thinking. Much of Keynesoid arguments, such as running large deficits, printing extra money, and the state patching unemployment through the generation of public sector jobs, assume that states have monetary, material, and food sovereignty – that the supply of money and accrual of debt is not constrained by the productive bottle-necks in the agricultural and manufacturing sectors. These idealized conditions essentially assume the generalization of labor camp-like relations and homo economicus in all relevant countries. Yet these idealized conditions essentially exist only in a handful of imperialist countries (e.g. United States, and Canada) and not in countries that actually have or had real leftist administrations (Venezuela, Brazil).
Curiously, the partisans of these neurotic abstractions claim the mantle of realism and pragmatism, given that they assume that the triumph of the core economies stand as empirical evidence of their arguments. It’s a methodology that fits quite well with the anglo-saxon theory-less barbarism of correlation coefficients and tables. This disease has led to to many Leftists pursue weak-kneed programs such as market socialism, big tentism, and slow gradualism. However the concrete issues of the periphery, such as the lack of material and monetary sovereignty, should raise questions against this cowardly and short-sighted programs. If anything, we must look beyond the nation-state and the market, and find scientific ways of administering and planning the planetary economy in order to destroy imperialism, avoid ecological collapse, and create a world where african, european, and latino workers take reign of their destiny collectively and in an internationalist way. We must present an alternative to the present, the latter which is rendered under the stochastic whims of the capitalist, headless automata.