Global warming connects the local and the global. As Canada dumps greenhouse gases into the atmosphere at a rate of 22 tonnes per person each year, sea levels in Bangladesh rise, swallowing coastal communities.
Instead of tackling political affairs as a question of nation-states, the climate crisis calls for a planetary politics. In other words, we need to think of ways to organize that transcend our countries’ borders, to complement and reinforce local organizing that’s already happening on the ground. By this, I mean: a world democratic socialist republic.
No longer can transnationals, banks, and politicians command inordinate power over the fate of all life, and tear our Earth apart for the venal goal of profit. The majority will become stewards of the land, oceans, and major industries, and will manage them for the good of the planet and the humans and other living beings that inhabit it.
We have inherited our national borders from wars, parcellation of whole continents by imperialists, and the breakdown of empires. For decades, nation-states have been competing for razor-thin margins, ransacking the cheapest natural and human resources on the planet.
Right now, our fragile and unpredictable world system is controlled by a world oligarchy, leading to what’s called core-periphery relations. Core countries like Canada and the United States are wealthy states that can command much of the world’s economy. They can basically monopolize highly technical processes through a combination of trade secrets, intellectual property law, and state sponsorship. For example, Canada, the United States, and Western Europe held 34 per cent of world’s refinery capacity of oil and gas in 2017, while representing 7 per cent of the world’s population. Peripheral countries are forced to buy back the raw resources as more expensive finished goods.
Core economies also host the headquarters of transnational companies. Although the presence of these transnationals may extend across countries, the main logistical decisions are made in the core economies. Gold mining giant GoldCorp, which is headquartered in Vancouver, received over 1.5 billion dollars in revenue from the mines they own in Latin America in 2016. Its impending merger with its Denver-based rival Newmont will create the world’s biggest gold mining company.
Peripheral countries are forced to sell their workers’ labour and resources, without safeguarding the dignity of workers and the environment, since they need U.S. dollars – the world’s reserve currency, used in international transactions – to be able buy technology, refined resources like gasoline, and other capital intensive products from core states. This core-periphery dynamic gives rise to the hellish conditions of textile factories in Bangladesh or Mexico, the cobalt mines that employ child labourers in the Congo, and the agri-business giants that spray Argentinian farming communities with cancer-causing herbicides.
Even leftist governments elected in core countries are still forced to maintain a competitive economy under capitalist terms. They need to produce and sell commodities in the world market in order to get U.S. dollars they can use to buy products from the outside, as no country can produce everything that it consumes. This makes it so that even nominally leftist governments may be compelled to steal land from Indigenous peoples, enforce austerity, implement anti-worker laws in the hopes of increasing productivity, and engage in the ransacking of the periphery.
Plus, virtually all nation-states are run by an alliance of the business elite and politicians. In so-called “democratic” countries, public posts are shuffled amongst a small pool of elites who hoard the wealth and networks necessary to run viable political campaigns – think of the Clintons, or the Trudeaus. And modern “democracies” generally don’t allow for the self-government of localities, where power would bubble from the local level upwards to the national level. In Canada, this can be seen in the way the federal government routinely violates treaties and the sovereignty of First Nations through the extraction of natural resources and the imposition of oil pipelines.
A state accountable to workers, Indigenous peoples, and peasants around the world can only take the form of a democratic republic – one that balances self-governing localities with global structures. Localities should be allowed to achieve as much self-sufficiency and autonomy as possible, and the administration of local services and resources should be left to them.
Meanwhile, capital intensive industries that require logistical chains across large scales, like the energy industry, would be administered and owned democratically by the world republic. Global, socialized management would make it possible to wind down the fossil fuel industry and invest its final profits in green energy.
In order to abolish the unaccountable class of professional politicians, all important public posts should be electable, recallable, and term-limited, and individuals should be prohibited from running for too many posts during their lifetime.
The autonomy of localities and the global socialization of large-scale industries would undermine the tendency of large states to become centralized and authoritarian (like in the cases of the Roman and American Empires). It will lead to the self-determination of Indigenous groups and other ethnic minorities by allowing them to manage their homelands. All of this while opening the door for cooperation on large-scale, logistically complex, international projects.
It’s true that all sorts of political changes would have to occur to create the conditions for a world socialist government. But we’ve already seen regional movements emerge and transcend the nation-state – the next step is for them to coalesce into global polities. Historically, many social movements took a continental character – like the anti-imperialist struggles in 19th century Latin America that culminated in the short-lived state of Gran Colombia, and the spikes of socialist, working class militancy that swept across European borders in the 1910s and 1920s and led to the Italian Biennio Rosso, the German Revolution, and the Russian Revolution. Today internationalist solidarity movements that struggle against American military intervention, climate change, and the occupation of Palestine are a testament to this tendency. In fact, the old socialist movements of the First, Second, and Third International created far-reaching organizations that could coordinate internationalist struggle with the loyalty of millions of workers.
Recent history has already shown that the world plutocracy will pursue profit at all costs, even if it leads to massive inequality, environmental destruction, and humanitarian crises. The only way to fight the destructive power of the elite is for those that have a stake in the planet’s future – the disenfranchised majority – to take over the world economy with democratic and transparent institutions. This political program takes the form of the world socialist republic: the global, participatory stewardship of the earth, seas, and sky.
For too long there appeared a conflict between what seemed to be eternal, to be out of time, and what was in time. We see now that there is a more subtle form of reality involving both time and eternity.
The bud disappears when the blossom breaks through, and we might say that A building is not finished when its foundation is laid; and just as little, is the attainment of a general notion of a whole the whole itself. When we want to see an oak, we are not satisfied to be shown an acorn instead. In the same way science, the crowning glory of a spiritual world, is not found complete in its initial stages.
The world is complicated and opaque. The old societies, such as hunter-gatherer tribes or agricultural communities, could comprehend themselves in a more total way than modern societies. We may understand better today the laws that rule the natural universe, laws that we have been able to manipulate to send man to space, impregnate the air with electromagnetic waves that carry instantaneous messages, and annihilate whole cities with the mass-energy of atoms. But the self-comprehension of ourselves as a society is lower than in antiquity, for today’s laws that make the community flourish are sunken below layers of complexity and abstraction. In ancient cities, like Rome, or Athens – or inclusively in the urbanization projects of many developing countries of the 20th century – the restrictions that inhibited flourishing were well known. For the destiny of communities was rooted in their capacity to create the calories and housing necessary to sustain a population, and these activities were constrained by the capacity of agriculture to create sufficient flows of energy.
Today, our bodies and spirits are subject to many complex and contradictory forces, that sometimes lead to tidal waves that submerge our destinies beneath emergent properties of which we have very little control or understanding. Even the economic elites, with their capital and firms, only have partial epistemological access to the chain reactions that their activities can unleash. These actions can lead to financial chaos, the elite’s capital devaluation, or mediatic crisis. Another complexity nexus is how our biological bodies react before the abstract layers and terraforming created by the capitalist world-system. We are evolved animals, produced by natural selection, but we are also abstract animals programmed by the semi-autonomous systems created by modern civilization, including its landscapes of concrete, glass, and steel. Trying to grasp the specific mechanisms that mould the human spirit is a very complex task.
In other words, we human beings are subject to microphysical mechanisms, constrained by particularities like “free” choices and biological processes, but we are also regulated by macroscopic forces that are universal and abstract, such as financial systems, history, culture, and the market. This dialectic of the particular and universal cannot be dissected surgically, for the microphysical and macrophysical aspects are in communication with each other, generating an interrelation that is not easy to disassemble.
The cosmos is living and palpitating, in constant flux. For example, the worlds of the hunter-gatherer and the 21st-century cybernetic-worker are entirely different universes, even if there are similarities rooted in the human being’s evolved animality. However, today’s self-mythology of modernity is based on inert and linear laws. This is due to the victory of the technique, which had triumphed in the 19th and 20th century. Chemistry, electromagnetism, and nuclear physics could be manipulated to create a world filled with light, machines, and mechanical monsters that devour human bodies. This capacity of the technique to convert a forest into a storehouse of energy created a class of enthusiastic intellectuals that wanted to apply it to every class of problems. In other words, they wanted to violently convert the universe into a mechanical clock.
In all disciplines, inclusively in those not related to the natural sciences, this tendency towards the technique can be seen in the dissection of a substance into its analytic parts. However, the properties of the natural sciences are different from those of the human body and its mind. In the case of the systems of natural sciences, the problems studied are linear and static. Linear in the sense that the system can be approximated as the sum of its parts. For example, in many calculations involving elementary particles such as electrons or photons, the system can be approximated as the sum of its parts, and this makes possible a very precise mathematical study. Since many systems that are studied in the natural sciences can be approximated in this manner, the technique, that method that dissects the substance into digestible units, proved enormously useful in the investigation of the natural universe. However, the social world is an accumulation of interrelations, emergent properties, and totalities, and cannot be approximated as the sum of its parts (a linear system). In other words, the human totality is an assemblage of biological, historic, and economic processes, and cannot be disassembled that easily.
However, given the predominance of the technique, many intellectuals, scientists, and opinion makers have enthusiastically pushed it as a method to study the bio-historical-geographical assemblage that is society, trying to linearize the problem as if we were just a cumulus of electrons and quarks in steady-state, without taking into account the nonlinear, emergent properties and feedbacks. This tendency towards linear equilibrium not only is fundamentally naive but also encourages very conservative and reactionary thinking. Indeed, if this world can be explained as a product of unchanging, static universalism, then the impulse to change it for a freer and more dignified cosmos becomes an affront to science itself. Since I think this approach is not only fundamentally wrong but also imposes unfreedom – as the heart is merely reduced to electrons, springs, and wheels – I find that it is my duty to combat this cretinization. Furthermore, I also noticed that there is a tendency in both thought and activism to challenge this linear thought by pretending the world is just flux and difference, dismissing universal patterns and properties.
Curiously, I learned that our world is pulsating with life, light and change from science itself, as my doctorate in physics ultimately concerned the fate of nonlinear systems. A nonlinear system is ultimately a coupling of both the universal and particular. At the microscopic level, there is indeed difference and particularity, such as the random motion of particles, but this apparent individuality gives rise to macroscopic phenomena, that in turn influence the trajectory of these microscopic world-lines. Nonlinear thought tries to grasp the coupling of both the particular and universal, for a non-linear system is more than the sum of its parts, yet the behavior and properties of each individual part become relevant too. Therefore, this article is concerned with a study of the origins of this reductionist impulse to either reduce the world to the universal, or in the opposite case, the particular, and how a living and nonlinear thought should, in turn, supersede this impulse.
In philosophy, the technique emerged in the form of analytic philosophy in the Germanic countries, where the old form of philosophizing, which was impregnated with historicity, literature, and forests of concepts, was replaced by a philosophical program that wanted to reduce the world into logical atoms. Although the seed of this philosophical technique can be found in the work of Descartes, for in his “Discourse of Method” he explicitly describes the method of reducing a system into its atomic parts so that it can be analyzed (the geometric method), this seed did not become totalizing until the 20th century.
This assault against traditional philosophy began with the criticisms against Hegel and Heidegger launched by English and German philosophers. In England, Russell rebelled against the Hegelian-inspired idealism that was popular in that era, to replace it with a research program that exchanged the ambiguous language of traditional philosophy with logical precision. This logical-mathematical language was inherited from Frege, a mathematician-philosopher from the 19th century whose project was to reduce arithmetic to a logically consistent system that could be derived from axioms. In Germany, Carnap severely criticized the language of Heidegger, for Carnap thought the utterances of Heidegger lacked sense and were misuses of language that could indicate the emotional state of the utterer but not describe the world. These positivist philosophers wanted to reduce the world to logical and atomistic propositions that could be verified with empirical observations.
The project of logical-atomism that emerged in the early 20th century is considered a failure by philosophical consensus, but its technical spirit persists in that impulse to reduce the world to thought experiments on a canvas emptied of history. For example, one of the most famous analytic philosophers of the second half of the 20th century, John Rawls, developed a theory of justice where the initial assumption of his thought experiment was a “veil of ignorance” where the citizen has no knowledge of their social, cultural, and psychological position in relation to other members of society. I will not affirm that Rawls’s methods cannot be useful in specific contexts, but it still demonstrated that tendency to linearize the world into a thought experiment, ignoring the nonlinearities of history. Given that the political world is nonlinear, and is more than the sum of its parts, the true materialist dialectic must grasp the interactions between the abstractions of history and the particularities of individuals, not just reduce the problem to a geometric derivation.
Another example of thought infected by linear technique is economics. The political economy of the 19th century, which studied the couplings between social classes, and the value and labor chains that began in agriculture and ended in factories, has been marginalized to the remote wing of only a few university departments. Today, the economy focuses on mathematical functions of utility that are maximized in order to calculate agent preferences and Walrasian equilibrium. In other words, the destiny of mankind, with all its historical, institutional and cultural dimensions, is reduced to mathematical functions, equilibrium and stationary state assumptions.
These assumptions exist because they linearize the problem, approximating it into something similar to those systems that are already well understood in the natural sciences. However, these assumptions that treat the economy as a linear problem end up converting the abstract mathematical model into a concrete policy objective, especially after the economic shock of the 70s. In other words, Washington tried to submit the rich and nonlinear complexity of developing countries to the violence of a myopic universality. For example, the policies of developing countries focused on the liberalization of the market due to models of Walrasian equilibrium that were in fashion in that era. The state intervention that was ubiquitous in developing economies, including such policies as fiscal expansion and import-substitution, was criticized for distorting the market, and therefore triggering scarcities of commodities.1 Anglo-Saxon economists counseled Latin American countries to liberalize their economies, pointing at the economic growth experienced by some countries in Eastern Asia (e.g. Singapore, South Korea, China).
This linear and abstract thinking wishes to submit the chaotic world to the violence of universality, yet, it was unable to capture the historicity of developing countries, which goes beyond tepid Walrasian equilibrium. The economic liberalization of Latin America did not birth the economic growth that was expected, but caused contractions, inequality, and slow growth.2 A more materialist analysis of Asian economies would reveal that the liberalization narratives of those Western economists were simply a caricature. In all of those Asiatic countries, the government intervened in an extreme manner that countered the counsel of Washington, to the point that such intervention contradicted Anglo-Saxon economic orthodoxy. According to the models of Washington, governmental presence of such magnitude would lead to great distortions of the market, producing inefficiencies and scarcities. However, these Asian countries instead experienced great economic development thanks to state planning.
An example of the misjudgments of these economists is the case of South Korea. While the marginalists argued that South Korea experienced an explosive economic growth thanks to market liberation, more accurate studies found that the state had great control of the most important industries.3 Even if the state did not possess these industries in a legalistic and transparent manner (the only manner intelligible to Anglo-Saxon brains with their myopia of formal structures), the state manipulated them for the accomplishment of discrete and planned objectives. A great part of this planning was possible because the state controlled the financial system and could manipulate corporate incentives through discretional credits.4 In fact, some economists saw the relation of the state to firms as forming one organization, where firms were simply internal organs of a corporate association between them and government.
Other Asian examples demonstrate even more the deficiencies of Western orthodoxy. For example, all the economists that see the growth of China as evidence of the supremacy of the free market are blinded by their fidelity to Anglo-Saxon abstractions. Other more nuanced thinkers have argued that the current growth of China is rooted in the base of the “socialist” state imposed in the 50s, when China adopted the Stalinist model, since this was an era where a rational state capable of organizing society under a unitary plan was erected.5 Today, the plan of the Chinese Communist Party is to be open to the global market, but this process is imposed through planning that is possible due to the Stalinist base of the state.6 Furthermore, a great part of capital-intensive industry is still controlled by the state.
Finally, the experience of the USSR can be seen as a refutation of many of the precepts of marginalism. The USSR did suffer from inefficiencies and scarcities, and thus it could be said that it did not obtain the Walrasian equilibrium between supply and demand, but even then the country industrialized extremely quickly, destroying illiteracy, unemployment and turning into an industrial power. Finally, a great part of this growth happened when the majority of the capitalist world was sunken into a depression.
I do not want to justify the experiences of Asiatic countries and the USSR as examples that must be followed, I simply seek to show how myopic and incorrect economic orthodoxy is. Given its violent abstractions, it was incapable of grasping the roles of culture, state, and economy that a genuinely materialist and dynamic thought comprehends. Given these concrete nonlinearities, the counsel of Washington’s economists led many developing countries to inequality, economic contraction, and slow growth. The Anglo-Saxon technocrat linearized concrete reality in the economic periphery through coercion and the spillage of blood, in the form of military dictatorships and economic blockades.
Until now, I have only focused on the linearity of philosophy and the social sciences. However, the same reductionist impulse can be found in some corners of psychology and genetics. This tendency is to reduce the destiny of mankind to microscopic variables – specifically biological ones – a tendency manifests itself at various levels of intensity. In the field of behavioral genetics, there exists a legitimate scientific debate (erroneous, in my opinion, which I will explain later) about what is nature versus nurture. For example, there is a consensus that our psychology and behavior is partially inherited, where inheritance explains about thirty to fifty percent of our behavior.7 Yet, inherited variables do not necessarily have a biological origin, for example, cultural aspects can also be inherited. As a matter of fact, the most advanced techniques of behavioral genetics, such as thestatistical correlation of clusters of genes to intelligence, only find correlations of five to ten percent.8
Therefore, these studies have only been able to demonstrate a correlation with a percentage that, in the best of cases, is of fifty percent, but without being able to show that these inherited variables have biological origin. This limitation has not stopped scientists like Robert Plomin of proclaiming that our behavior is determined mostly by our biology, and that neither therapy nor environment can change this fact.9 A related argument is the divergence of behavior between different sexes, for example, the paucity of women in the mathematical sciences, that some psychologists correlate with biological variables.10
In a milieu outside scientific legitimacy, there exist extremists that give a radical and macro-economic twist to these statistical correlations. I have analyzed this style of argument in a previous article.11 Basically, the most extreme versions of this perspective try to explain socio-economic divergences between the core and periphery as a function of pseudo-biological variables such as intellectual quotient. These thinkers also blame poverty of certain demographics on genetics, arguing that certain races are less intelligent than others. These viewpoints are not orthodox and only exist in the internet periphery, or are uttered by a few scientists that aren’t accepted entirely in the community of scientific legitimacy.
Rather than arguing against these extremist-racists, which I have done in a previous article, I want to return to the debate of nature versus nurture.12 In my opinion, to grasp the problem as one of biological inheritance versus environmental attributes is an inadequate scheme. The human being is integrated in a nonlinear manner to its environment, where the biological parameters interact with the social and material geography of the world, influencing each other mutually, so that disentangling the interaction into isolated poles is probably impossible.
A contemporary advance that demonstrates these nonlinearities is epigenetics, where environmental parameters determine which parts of the genetic code express themselves phenotypically, and these epigenetic modifications can be inherited even when in theory they do not change the DNA. For example, research has shown that stressful environments can impose epigenetic modifications on an organism.13
Some psychologists have begun to understand that the scheme of nature versus nurture is erroneous. For example, scientists in the field of child development have sketched how genetic and epigenetic factors interact with early childhood experience, and how this interaction leads to the structuring of neural connections and moulds the manner in which complex and mental activity is effectuated. In other words, these scientists developed a nonlinear theory of childhood development as a function where both biology and environment are coupled.14
In conclusion, in the same way orthodox economists cannot grasp the world system as a dynamic organism filled with historicity, for they submit it to dead and steady-state laws, those who try to explain the destiny of the human being as a simple function of biological parameters do not grasp the nonlinearities of Homo sapiens as a being embedded within its historical-geographic surroundings. In other words, these thinkers entertain false and vulgar materialism. A sophisticated materialism would grasp how the biological processes are interrelated with the environment, influencing each other. Nafis Hasan described these limits of biological determinism and presented dialectical materialism as a method of understanding nonlinearities.15
While the technicians have erred in abstracting the world under universalism, there are those who oppose this abstract realm by enshrining the particular and different. For example, activist and intellectual movements of the Left celebrate the microphysical and particular to oppose the centralization of capital and the American empire. In this type of thought, macrophysical properties that emerge from microphysical processes, and at the same time mould and constrain the microphysical, are not taken into account. In the case that these macrophysical-universal processes are considered, they are perceived as obstacles to freedom, and therefore, fragmenting them becomes imperative. This fetishization of the particular emerges in pure thought and also in political activism. Its origins can be pinpointed to the continental philosophy of the 20th century. Heidegger, at the beginning of the 20th century, rebelled against the abstract and calculating thought of the West in order to push forward a philosophy that emphasized intuition, the immediate environment, and the particular culture.
The great abstraction of the West, the desire to catalogue and describe entities in a systematic manner, was seen by Heidegger as an obstacle which prevented the disclosing of Being in a more holistic and immediate sense. Instead of tapping into truth through speculative-abstract thought, Heidegger saw the authentic being as rooted in the destiny of blood and soil – in the existential confrontation before Death.
Heidegger’s students informed the French philosophy of the second half of the 20th century. In the world of French post-structuralism, logical meshes did not constrain entities, but entities existed in a universe of fluxes, multiplicities, and difference. These processes in flux could only be investigated at the local level since, according to these philosophers, theory became unintelligible and unstable at the global level. For Foucault, local networks of power constrained knowledge. Derrida considered all conceptual infrastructure, such as science or Marxism, to be unstable. The universe of Deleuze was one of fluxes of energy, matter and signs, where unstable nodes could exist, but not universal laws.
However, the materialist, informed by natural sciences, knows that the laws that rule the universe are interconnected across various scales, and that macroscopic scales influence the microscopic scales and vice versa. For example, gravity, which distorts space and time, regulates cosmic scales, creating cobwebs of stars and light. In these cobwebs, spherical bodies of gas and rock pulsate, their perfectly round forms a function of the radial symmetry of gravitational force. However, the radius, temperature, and mass of these stars, planets or compact objects are caused by atomic processes that interact with gravity, such as the nuclear force between protons and neutrons, or the concentration of electrons. In this cosmic dance, the microscopic laws of quantum mechanics, and the macroscopic laws of gravity are in communication, influencing each other mutually. An authentic materialist assumes that humanity, including its collective spirit, is an emergent property of elementary particles such as quark and gluon fields, but at the same time, the social abstractions and material geographies created by mankind, such as the economy, urban spaces, and history, constrain the flux of these elementary particles. In summary, war, waged by Homo sapiens, develops the nuclear bomb that turns human bodies into vaporized carbon. Modern capitalism, that accumulation of human actions, emits photons and electrons that unite the whole world in a network of finance and communication.
This local thought also informs today’s politics. On the left, particularism manifests as the destruction of universal programmatism, like that embodied by the parties of the Second and Third International. Instead of internationalism and the struggle for the universal and socialist republic, localism, nationalism and fragmentary struggles are fetishized. An example of this phenomenon has been the European left, which sees the struggle against neoliberalism as manifested in secession from the European Union and in the affirmation of national sovereignty.
With liberals in the United States, sometimes this thought process manifests itself as the glorification of small businesses, the movement of organic farming, and the irrationalism against scientific medicine.
This reaction against universalism is understandable from a left perspective, for the bloody history of modernity is tied to empires that violated and pillaged the world with “enlightened” pretensions. Yet, materialist thought grasps that national sovereignty is illusory, for there exists a world economic system that traverses the borders of nation-states, and even if these states have the capacity to manipulate some endogenous variables in their territory, the destiny of these national economies is controlled by the tidal waves of the world-system, and the long and slow historicity that drags the corpses of dead generations. Given this reality, it is necessary to struggle against the world-system not only in a local and fractal manner but also with the creation of a global, sovereign machine that can channel the world-system for the benefit of all. In other words, it’s necessary to establish a worldwide socialist republic.
Not only is linear thought incompatible with the truth of a palpitating and living universe, but it cannot imagine a world of a flourishing humanity, for linear thought considers the current dark state in equilibrium and eternal. This attitude inhibits the march toward the splendid city that will give light, dignity, and justice to all human beings (Neruda). We not only require an infinite patience for the future dawn, but also a deep comprehension of the nightmare of the past. Yet, technical barbarism conceals the weight of the past generations, for it sees the human being as an individual agent surrounded by a canvas emptied of history and geography. This tendency will always end in reaction, for the laws of its world are inert and, therefore, fundamentally conservative.
To be a radical is to be a non-linear thinker. The problems of the present are embedded in a complex system, for the historical and economic laws that regulate this world are the same laws that cause global warming and financial crisis. Therefore, a radical and socialist solution requires a total program that transforms the nexuses that connect the present calamities. Furthermore, the socialist knows that the present world system is dynamical, with only a couple of centuries of existence, for in a more remote past, coinage, the waged worker, and the commodity were not totalizing. Ironically, treating a system as nonlinear, opaque, and dynamic, converts its destiny into something transparent, capable of being channeled for the benefit of collective flourishing. In contrast, those barbaric intellectuals that theorize capitalism as something transparent and eternal, with genes and hormones as the machinery of this spurious destiny, chain humanity to the domination of elites and venal interests.
Bruton, H. J. (1998). A reconsideration of import substitution. Journal of economic literature, 36(2), 903-936.
Lee, C. H. (1992). The government, financial system, and large private enterprises in the economic development of South Korea. World Development, 20(2), 187-197.
Aglietta, M., & Bai, G. (2012). China’s development: Capitalism and empire. Routledge.
Plomin, R., & von Stumm, S. (2018). The new genetics of intelligence. Nature Reviews Genetics, 19(3), 148.
Schmitt, D. P., Realo, A., Voracek, M., & Allik, J. (2008). Why can’t a man be more like a woman? Sex differences in Big Five personality traits across 55 cultures. Journal of personality and social psychology, 94(1), 168.
This article was originally published with my friends at Cosmonaut.
This will be a study of the phenomenology of man. I am not very well versed in the theory of gender, but I may have a perspective to share since I am both interested in the social structures that surround me, and also an immigrant from the periphery, where masculinity exists in a more concrete manner than in the global North. In the latter, the manhood of taverns, honor, and brotherhood has been replaced by the abstract virility of the administrator, banker, and the assertive intellectual. Although this tendency of transforming the masculinity of combat and war into the essence of a lawyer or powerful executive exists in all corners of the planet, it is denser in the wealthier countries. In other words, the alpha males of the free market have impeccable skin and ten-percent body fat, yet their power derives from abstract numbers in bank accounts. However, the masculine program still persists, even if it has changed form.
The masculine program could be defined as the program of the warrior. In many societies, especially Western ones, men were taught the principles of war in a cultural and formal manner. When neither the police nor the professional soldier existed, every man was a potential warrior, a person capable of wielding violence to defend his property and to kill in the name of the lord, king, or emperor. The warrior program has survived in contemporary masculinity – the modern man still aspires to be a good warrior – a good performer of stoicism, domination, and violence. However, these values are realized in a sublimated manner – the warrior now exists in the office as a manager, or on the directive board of some bank; the ancient words of Marcus Aurelius and Sun Tzu end up imposed by suits and phone calls, even if once upon a time they were enforced by the sword.
But not all men end up as managers or millionaires. The majority of them are workers or unemployed – beings dominated by someone else, by the boss, the cop, the social worker, and the fat man in the tavern. In other eras, even the lowliest of peasants had potential access to domination, through the glory of war. However, “lawful” masculine violence is institutionalized in the police and the military, which contain a very reduced number of people. Furthermore, the sublimated form of the warrior program, for example in the figure of a CEO of Silicon Valley, can only be realized by a small number of bourgeois individuals and professionals.
Then, for the majority of men, the only two ways of dealing with the warrior program are simply to not emulate it, or to apply it in an unlawful manner, reducing the warrior to a criminal that beats up their partner or becomes part of a gang. Therefore, we have a problem – man, who has been socialized as a warrior, turns into a being that can only channel the rageful parts of the libido, such as aggression and domination, while the other parts of his sexuality, such as that which converts two subjects into one being, are repressed: intimacy, vulnerability, love, and mutual respect. That’s why I want to write a bit about this phenomenon, exploring the way in which the masculine program asphyxiates the libido, withering it within a mould that does not quite fit in modernity, where the desires of the ancient warrior become sublimated in the office, sports, or in self-destructive violence.
It’s interesting to witness how men try to elaborate on that program, in this desert of computers, video games, and Prozac pills. Recently, I was a witness to this same process, where a community tried to extract the content of this program, uttering it in propositions. The place of this remarkable event was a thread on Facebook, where a person asked their community of cybernauts the question: “what is a positive masculinity?”. There were dozens of answers; the 4chan racist, the anime nerd, and the internet Marxist discussed the heroic values that supposedly melded: “not fearing death”, “bravery”, and “combat abilities” – abstract positions that tried to codify the essence of man. But these precepts were so abstract that they were completely separated from the concrete life of these people, men that are office workers, other students, some who lived with their parents. These utterances couldn’t be anything other than symptoms of alienation, in the same way the neurotic thinks about catastrophe and death even while living in a rich suburb and holding three degrees.
This event on facebook caused me to have an epiphany – the categories behind that malaise that I’d felt for so many years became intelligible. I began to ask myself how many men actually feel comfortable under their skin, experience those precepts in their blood, without having to think of them in an abstract manner. Most men must shrink their heart so that it can fit in the straightjacket of virility because, in a world of spreadsheets, electromagnetic waves, and hunched desk jockeys, the spilling of blood becomes ephemeral. Since not all men can be bosses or millionaires, that warrior spirit ends in mental malaise, domestic violence, or fascism.
I am a man from the third world. I was born in a city where more than ninety percent of people are Catholic, and where divorce was rare and taboo. In this society, I was socialized as a man. I learned that that camaraderie, responsibility, honor, and violence are the programmatic content of masculinity. I had to participate in rituals that filled me with virility. I remember when I fought on the school’s playground because some of my classmates made my life miserable, since I was tall and fat, yet shy and peaceful – in other words, the perfect target for those who wished to satisfy their sadistic desires for domination. I defended myself with violence, for it was the manner in which a man, who is essentially a warrior, proved his worth before other men. This truth was relayed to me by other men whom I loved, such as friends or family members. When I avenged my honor and the others knew, my heart was filled with glory. Yet, the physical fight was not a natural impulse for me – I had to premeditate the violence that made me so uncomfortable.
I do not think that the contradictions that lay within me, that discomfort before the imperatives of masculinity, were only experienced by me. I believe the majority of men do not fit completely into the mould. This can be seen in the rage, alcoholism, and suicide that has always plagued men – that death drive that has destroyed so many men through drugs and explosions of violence. We may satisfy certain aspects of masculinity, such as our identification with the masculine body, with a certain fashion sense, sexual tastes, and hobbies. However, the precepts of the ideal man – the principles behind the stoic and honorable warrior, were merely aspirational.
It was not until the day I experienced sexual love where I began to realize the psychic damage that masculinity had caused me. It was not until my mid-twenties when I was able to experiment with emotional and sexual intimacy. All those years I had lived without experiencing that sensation of unity, the extension of the ego beyond the boundaries of my body, its fusion with another ego in order to create one spiritual object. The moments I had lived with other men, even if they sometimes attained emotional intimacy, could never reach the climax of the physical game – unification became stillborn.
Although men’s friendships reciprocate the anger, camaraderie, and sometimes even love, the tactile game does not exist beyond homosexuality or sports. Then, for the majority of men, the real dissolution of the ego with that of another subject only appears in heterosexual relations. A person like me, that grew up shy and fat, and lived behind screens and with my nose inside a book, did not have a concept of ego unification, because I very seldom had sexual intimacy. I was isolated in the prison of my brain, finding everything beyond the phallic ego unintelligible. Given my isolation in the phallic universe, only cultural artifacts that embodied the warrior program attracted me. I read books on stoicism, listened to music that glorified the ancient era of warriors and gods, and consumed a television diet filled with cowboys, detectives, and fighters. But once I had access to another ego through intimate love, I was able to enjoy more sensual music, loosen my shoulders before the assaults against my masculinity, and appreciate poems that dealt with issues beyond death or nihilism without feeling hurt or embarrassed.
I cannot pretend that I have never felt the seduction of power, that I have never derived enjoyment from the humiliation of my enemies, and inclusively sometimes of my friends. The problem is that I have only been taught the pleasure of aggression and domination, without learning to enjoy and understand the other aspects of the libido. Yet, the core of the libido must be polymorphous, for the existence of BDSM has taught us that within a situation of trust and play, the human being can enjoy in a primordial manner many contrasting faces of power, from submission and domination, to libidinal equality. Yet, men are only socially equipped to enjoy power, and in this modern world of abstract systems that dominate us beyond the concrete orders of the boss, it’s impossible to maintain complete control.
Many powerful men entertain more sadomasochistic fantasies. Cities with the highest concentration of executives also have the largest density of sex dungeons and dominatrices. The different tendencies of the libido seek to unleash themselves in the concrete, outside of fantasy, yet men are only programmed to use that dominating and violent part of the libido, which in the past could be unleashed in war and sport. Yet, little by little, modernity shrinks the percentage of men that become warriors, for there are fewer soldiers, more bureaucratic control, and the relations of domination become too abstract to be combated in a physical manner. Therefore, the aggressive libido is unleashed against oneself and others, sometimes exploding in massive violence such as school shootings or terrorist attacks.
I have mostly spoken about man as an individual and his repression. Yet, there is a sociological dimension to this warrior program. One of the persons that diagnosed this psychological malaise was Wilheim Reich. Reich wrote a fairly famous book called The Mass Psychology of Fascism that tried to diagnose fascism as a political expression of the sexual repression suffered within the authoritarian family. For him, fascism was caused by a combination of (i) anxieties rooted in the trauma of the infant before the structures of the authoritarian family, and (ii) the political channeling of the aggressive impulses, such as the death drive.
This anxiety comes from the fear of freedom engendered by the strict rules of the family; fascism channels this fear of liberty and difference through means such as propaganda, racism, or sexism. Fascism offers a cure for this anxiety through the totalitarian state, even if this comfort is merely immediate and short termed. The aggressive impulses, such as the death drive, are channeled through military marches, war, and that catharsis of turning into a worm before the omnipotent leader. Finally, fascism channels libidinal aggression against its enemies, through means such as assassination, war, and terror. But in spite of the desire for the order of the fatherly figure, or for violence against the other, fascism channels rebellion against authority. Fascism emerges as an illusory opposition against the established order. For example, in the decades of the twenties and thirties, fascism unleashed itself against the young democratic republics of Europe.
This analysis of Reich’s can be applied to the 21st century since there is a reactionary current amidst the youth of the west, where the old ideas of neoliberal conservatism are replaced by a pseudo-rebellion that has revived white nationalism and encouraged misogynists. Since the West has not taught men how to channel the loving and unifying aspects of the libido, reaction ends up becoming a release valve for young men that do not know of love as a totality, who unleash their sexuality in camaraderie and violence against the other.
I do not pretend to argue that reaction, such as fascism, is simply derived from the socialization of men into warriors. There are material causes rooted in class structures and economic crises, and also in reasons of an ideological nature. However, these ideological and socio-economic causes conspire against the masculine libido, tying it to the constrictive warrior program, while at the same time diminishing the opportunities for war-like violence. I believe the socialist program should emphasize this problem – not as a condemnation of men as individuals, but by recognizing that the social order causes their malaise since it does not permit them alternative ways of expressing libido. Some alternative forms of libidinal expression are homosocial love, submission, emotional vulnerability, and a sensuality that transcends sports or homosexual relations. Today, reactionary ideologues try to impose the warrior program with pseudoscience, like misreadings of evolutionary psychology, manipulating the sexual insecurities of young men. We socialists must argue that such “cures” offered by reactionary intellectuals do not offer either liberation or happiness – the true antidote for this malaise is the abolition of the warrior program.
The attack against modernity is a cliche at this point. Even if once upon a time that critique was in the domain of reactionary intellectuals and apocalyptic sects, now it simply forms part of popular culture, embedded in movies, music, and video-games. Recently, I opened a book by Ernesto Sabato, a surrealist writer of the 50s. The first paragraphs describe a world where humans have turned into cogs of the capitalist machinery and slaves of instrumental reason. Although this proposition may have sounded very profound and original for the 1950s reader – it made me close the book. I didn’t stop reading because his viewpoint was incorrect or stupid, but simply because I would learn nothing from that book, for I have encountered that perspective throughout most of my life, through the internet, television, and contemporary thinkers.
However something that has been transformed into a permanent topic of conversation is trivialized, being converted into the unexamined chatter of “they”. The critique against technic and the enlightenment is not anymore a novel observation – not like it was in the first half of the 20th century, when it was first developed by Heidegger and the Frankfurt School. This position is simply a fossilized point within any superficially “anti-systemic” perspective, whether its from the far right or left, or from a popular music band. Given the state of this critique, it is necessary to re-analyze its premises, since its ossified form has led to the obliteration of the objects of criticism: namely the triumphs of the Enlightenment. In the late 19th century and early 20th century, since the merits of the Enlightenment were considered beyond questioning, it was necessary to excavate the dark side of the technic, that logic of scientific domination that has transformed human labor and the Earth into an accumulation of commodities Yet, once again, we must reconsider the successes of the Enlightenment in lieu of the dominance of anti-technic arguments.
To clarify the discussion I will briefly define what I mean by the technic. I do not refer to technology itself, given that it has existed in an artesanal form since before civilization. What I mean instead is a scientific-technical totality (both social and “instrumental”) used to abstract the universe into discrete entities that can be studied in a fundamental manner, entities subject to universal laws. The technic also facilitates the manipulation of entities through science and coordination for utilitarian ends (e.g. engineering, logistic, etc). This totality incorporates technology, but it cannot simply be reduced to the neutral application of science. We can locate the origin of this conception of the technic in the 17th century, with the Enlightenment and the thought of Newton and Descartes. The technic is not only used to understand and manipulate the natural world, but also society, through logistic, psychology, and coordination (e.g. marketing, industrial engineering, public administration).
I will not attack this anti-technic perspective in its totality, for I don’t think it’s completely flawed. Only a technocrat or white supremacist would have the guts to defend modernity like something completely positive. Modernity brought the holocaust, the atomic bomb, and the rape and pillage of the americas. Information technology has given rise to a state of surveillance that would kill of jealousy the secret police of Stalin and Hitler. The rationalization of the natural world so that it can be exploited by logistics and technics is leading to global warming, a process that would not only kill hundreds of thousands due to hurricanes and heat-waves, but would come with incalculable socio-economic devastation. There’s a reason why science fiction projects worlds of evil computers and ecological destruction – this recognition of the dark side of the technic is rooted in the marrow of western culture. Before the empirical evidence and sentiment of this era, it would be irresponsible to hide the crimes of our technical society. Finally, like Heidegger once argued, the technic has concealed that qualitative part of truth that is not quantifiable, such as the poetic dimension of a forest, or social structures that are invisible to calculation, but that still scaffold the power differentials between classes, races, genders, etc.
Many socialists of more positivistic nature would argue that this critique isn’t about the scientific-technical society, but about capitalism. They say that technology and science are neutral, and that they can be used for pro-social ends as much as for destructive ends. Science could be used for the good – for the construction of a sustainable world, with automatization and cybernetics applied for the emancipation of society from toil, hunger, and in a distant future, for the liberation of humanity from the limits of an organic and mortal body. But this viewpoint gives an ahistorical role to science that not even the old thinkers of the Enlightenment expounded. Science, as we understand it, is not simply a continuity that begins with the prehistoric origin of tools and human curiosity and ends in the present. Modern science emerged and evolved in combination with capitalist development. The technic as defined in the beginning of this essay, has only existed for a couple of centuries. In contrast to modernity, the technologies invented in more ancient epochs were not coupled with an all encompassing perspective that treats the universe like a machinery that can be manipulated for utilitarian ends, but simply emerged through trial and error. This conceptualization of the cosmos is linked with the abstraction of all social relationships, such as the transformation of peasants and artisans into an homogenous proletariat that can be subject to the coordination of a technical-logistic rationality. This rationality was described in the first chapter of “The Wealth of Nations” by Adam Smith. The destruction of the community and its organic unity and its replacement by price signals and coordination was not simply a neutral process of abstract problem solving, but the creation of an efficient machinery destined for capital valorization.
However, the various tendencies of the technic are not simple and unidirectional. Although critics attack the technic for its homogenizing violence, and its subsumption of the particular under the universal through the force of abstraction, since the technic privileges the “scientific” narrative over others (e.g. religion), these critics are victims of their own “post-structuralist” abstractions. A more rigorous and charitable analysis of the technic would see it as an unstable, contradictory system. The power of scientific-technical abstraction isn’t only used to convert humans and forests into piles of labor and lumber that can be dissected and manipulated. This tendency undoubtedly exists, and it represents a drive towards domination, but there are also emancipatory tendencies, both ideological and material. For example, the radical wing of Enlightenment, represented by the likes of Spinoza, considered the technic as an instrument for establishing a democratic and egalitarian society, a weapon against popes, kings, and lords.
Since the technic does not require divine revelation to be accessed – but simply uses the rational capacity of any human being – it becomes emancipatory. The physical laws of Newton and the geometry of Descartes, were discovered through calculation, abstraction, and analysis, which are mental capacities universal in all human beings (Kant); these discoveries weren’t revealed through divine revelation, such as the content of religious texts and the divine rights of kings. If all humans have the capacity for calculation and reason, and if the optimal social order can be excavated by the technic, in the same way engineering can be used to create the most optimal machinery, then the consequences of this argument is that all humans, with their autonomous reason, can participate in the political and social administration of the social order.
This defense of the technic outlined previously was of an ideological nature. However, there is also a material defense of the technic that was originally outlined by Marx, but that was then confirmed empirically by the trajectory of western europe. The rationalization of the european peasantry into free laborers that are not attached to the land, dissolved the agricultural patriarchy. Before, the peasantry was constrained by the land, the youth were completely submitted to the power of the parents and the feudal lord. Specifically, the youth had to inherit the land from their parents, and for marrying they required a dowry that also came from the parents, furthermore the youth had to swear fealty to feudal lords.
This emancipation of labor from the land also brought the structures that scaffold gender rights in modern liberal democracies, which while imperfect, were an advancement in western europe. This decline of the lords’ power, based on the increasing concentration of ex-peasants in the cities and towns, and the emergence of industrial capital, also caused the transference of power from rural areas to urban centers, were workers, embedded in the industrial infrastructure, became indispensable to the circuits of capital since the fixed capital of industrialists would lose value without the manipulation of workers. Since workers were embedded in the logistical mesh of the economy, they were able to acquire democratic rights since the workers turned indispensable (Endnotes). Furthermore, the historian Geoff Eley argued that the vigorous expansion of democratic rights at the second half of the 19th century and the beginning of the 20th century, was triggered by workers’ movements – movements that would have not emerged if the technic hadn’t transformed the peasantry into proletarians, since that rationalization integrated workers into the political and logistical meshes of the city.
All these tendencies, one in the direction of domination, and the other in the direction of liberty and democracy, do not converge in a common course but instead create instabilities. In physics, an instability means that a system can move in many directions, without the properties of the system revealing a favoritism for a particular trajectory. For example, in the case of a ball at the top of a perfectly symmetric hill, random perturbations like the wind can push the ball in any direction along three hundred thirty six degrees, with every trajectory equiprobable. In the technic the same instability exists. Some directions point towards democracy, enlightenment, a world of leisure, health and education. Other tendencies of the technic point to opposite directions, such as the surveillance state, scientific racism, the atomization of all communities, and the extermination of all life.
All these trajectories of the technic aren’t simply a function of something external, in accordance to what the positivists say when they qualify the technic like something neutral, but actually emerged from the internal dynamics of the system- a tendency towards calculation, universalism, and abstraction. But this negative narrative about the technic, that drive that brought the extermination of six million jews through industrial-scientific means, and is bringing about the cooking of the Earth, while accurate, is only one tendency amongst others that emerge from an instability. The same instability also brought the democratic rights of workers, the decline of child mortality, the haitian revolution, and the destruction of the agricultural patriarchy in europe, the latter a process that also brought gains in gender equality.
The technic has various potentialities, one that dominates and kills, and the other that illuminates and liberates. However, a society obsessed with the technic, such as modern capitalism, will always push that instability towards the trajectory of domination. Capitalism found a vehicle for its own manifestation in the technic, for a society organized by price signals will always tilt toward the violence of the calculation. The properties of the human being that cannot be abstracted into a number become unintelligible – such as social and psychological needs. The technocrat only sees GDP growth, and the boss can only calculate surplus value. This aspect of the technic that only sees in forests and human energy stores, was demonstrated by Heidegger, who argued that the technic obscures and blocks the other aspects of the truth that are not quantifiable. However, he forgot to add that this aspect of the technic is only one potentiality, that tendency embedded in capitalism, given that a society ruled by money, a quantitative substance, will only exploit a narrow calculus at the expense of other more holistic aspects of the technic that may have emancipatory qualities.
This deconstruction of the technic as a totalitarian force requires a socialist synthesis. Socialism is the descendant of Radical Enlightenment, that tendency toward a world where humanity uses reason to create a free and democratic society, where social needs are satisfied by the economic order. The highest manifestation of the socialist technic emerges in the planned economy, under a world workers’ republic. However, socialists also argue that not everything can be abstracted into numbers, for social and psychological needs are not entirely intelligible to calculus.
Marx had described this qualitative aspect of the technic, for the rationalization of the human being within a division of labor dissects the body and mind, turning them into something automatic and alienated. Therefore, a socialist synthesis, while using the technic to plan a rational economy, must also yield a specific magisterium to the more spiritual and qualitative aspects of the human being. For example, in capitalism, one of the main objectives of national policy is GDP growth. However, in a socialist society, growth of productivity and efficiency wouldn’t be a priority, for there would be other objectives related to the flourishing of human beings. Many of these objectives cannot be subsumed into equations and rational dissection, but requires a space outside the technic. Socialism should therefore be a synthesis where the technic enhances other more qualitative modes of life, instead of just subsuming them under quantitative abstraction.
The economy is a complex system – a system pulsating with billions of agents that interact between themselves, sometimes along planetary scales. From these interactions, that at first glance appear random, emerge properties and laws subject to certain quasi-deterministic logics. These emergent laws were studied for the first time by the old political economists of the 18th and 19th century, like Smith, Ricardo, and Marx. One of these emergent laws is the existence of certain resources that are considered “free”, but are extracted without their value reflecting in price. For example, the domestic sphere, which contains house cleaning, child rearing, and cooking, is “free” since this labor is not remunerated and isn’t reflected in prices. In other words, the domestic sphere is invisible to the price system, even when this labor is necessary for the reproduction of the worker and therefore, for the reproduction of capital.
A similar phenomenon is reflected in the treatment of the environment by capital. Marx once argued that the the value of a commodity is a function of the labor quantity employed in creating it. If we use this idea, then the value of lumber, oil, and water simply reflects the labor spent in extracting, processing and transporting these resources. However, the natural resource in itself, without being processed by such labor, has no value. We could say then that these resources are “free” for capital – opened to absolute plunder provided there is access to enough labor power. Therefore, the domestic and environmental sphere are unintelligible to capital – this unintelligibility is a law that emerges from random processes of billions agents – such as firms, workers, consumers, etc., without those agents being conscious that their coupled actions give rise to these laws. This was Hegel’s observation, who referred to this emergence as the “cunning of reason”, since even though the passions of different human beings are varied and contradictory, they somehow end up coalescing into an intelligible motion of history.
This problem, of the invisibility of the earth system before capital, has become one of the most important political-economic problems of the last couple of decades, since this unintelligibility of the environment before price signals has pushed the planet to the brink of devastation. In its spontaneous state, the price does not reflect the ecological damage that the extraction and use of certain natural resources infringe on the planet. In conventional economics, this damage is referred as “externality” since its information is not reflected in the price. Economics usually recommend that these “externalities” are transformed into internal variables, through the intervention of the state. Particularly, these conventional economists recognize the existence of emergent phenomena springing from capital that are destructive, and require public planning so that the ecological damage becomes intelligible to the capitalist system. Yet this intelligibility is applied in an external manner, it does not emerge spontaneously from the market, but from the conscious planning of the state, through the volition of scientists, politicians and judges.
This need of gubernamental intervention to tackle the problem of climate change shows something very important: the emergent laws of the market not only cannot solve the problems of existential dimension facing the human race, but these same emergent laws often enlarge the problem, for example, the tendency of capital to perceive the environment as a storage of free resources that can be ransacked. This observation is more profound than the idea that capitalism is guilty of all the problems of modernity, which is a proposition that often is pronounced in a reflexive manner, without much thought. The principal problem of capitalism is that it is not designed for the direct resolution of problems – capitalism is a system that, as a first approximation, emerges from the random interactions of billions of consumers, firms, and workers, without the behavior of the system being the result of someone’s volition. Specifically, emergent phenomena and laws, that originate in the random behavior of billions, control the destiny of the system, laws that will not necessarily result in favorable consequences, and that in reality, can impact society in a destructive way. Not only can these laws be destructive, but simply there is no human will that legislated them, instead, they emerged spontaneously from aleatory processes.
The incapacity of the market to resolve the fundamental problems of society is well known by the state’s functionaries, and this is the reason why much of the infrastructure required for society uses public planning. Some examples are roads, railways, medical services, the police, and education. Many markets owe their existence to technology and methods developed by the state, since only the state is capable of absorbing the large financial risk and has the will to spend the necessary capital to springboard certain industries. For example, the oil industry in Alberta, Canada could emerge thanks to Peter Lougheed’s government investing in the required technology and research so that the oil industry is profitable, industry that today is the most important of that province. This fact is interesting since it contradicts the usual “right wing” attitude of Alberta, one of the most conservative provinces in Canada.
If at first glance, planning appears so superior to the market, why is then the free market the economic orthodoxy? In spite of the existence of a class system, why did capitalism enrich certain countries such as Great Britain, Netherlands, and the United States? The defendants of capitalism, even if they admit it is not a perfect system, can point at certain advantages the market brought. In the core economies, during the twentieth century there was an exponential jump in the quality of life for even the poorest individuals. It can also be said that the countries that “invented” capitalism, such as Great Britain, United States, Netherlands, and Germany are some of the wealthiest countries in the world. The socialist bloc, even if it brought immense material gains to the population, raising millions from poverty, could never surpass the capitalist west in production and riches. Not only did the socialist bloc fell, encouraging all reactionaries to proclaim the supremacy of the market, but some of the “socialist” countries are materially fairly miserable, such as North Korea or Venezuela. Finally, many see China as proof of the supremacy of the market, since this country’s economy is rapidly growing after they opened up to the global market. All these facts are frequently used to justify the greatness of the market and attack the socialist project.
Without doubt there are countries that adopted the doctrine of the free market and keep being miserable, such as the majority of peripheral countries. Yet, the arguments of neoliberals must be dissected – we must find that secret of capitalism that brought it to the resolution of certain technological and social problems, which gave the advantage to the so called “first world” countries. This problem is important since as we said, the atom of capitalism is the aleatory interaction between agents, such as firms, consumers, etc, not a unified and conscious problem-solving will. However, even when there is no “plan”, capitalism invented the diesel engine, modern medicine, made of certain countries immensely rich, and lead to longer life expectancies. We must discover the reason why the Smith’s “invisible hand”, could resolve certain problems that benefited so many people.
One of the developments that brought capitalism to its almost total triumph is instrumental reason. We will define instrumental reason as that technic that uses scientific rationality for some end. For example, instrumental reason can be applied to public health, using research, medicine and logistics to neutralise some epidemic. The end of instrumental reason is axiomatic: in the case of capitalism it’s often profitability, where the rationality of marketing, engineering, and logistics is applied. Many philosophers and sociologists will argue that instrumental reason emerged with capitalism. But there is a contradiction here: we have mentioned that the phenomena of capitalism are not legislated by conscious volitions, but emerge spontaneously from the stochastic and granular interactions of agents. Yet, at the same time, we have argued that capitalism emerged coupled to instrumental reason, that scientific rationality that must be applied by a conscious will to accomplish some intelligible end. Furthermore, with capitalism emerged bureaucratic rationality, something Weber was obsessed about. How can a system that apparently emerges from disordered interactions give light to to a rationality that requires conscious human volition?
The answer is that Instrumental reason wasn’t the result of conscious wills that sat in a table and discussed its creation, but emerged spontaneously from class struggle. This was the thesis of Robert Brenner, marxist historian. In the sixteenth century there was an agricultural revolution in the British countryside, where scientific and technical methods were applied to reorganize production, such as animal husbandry, or the centralization of infrastructure to create a more efficient production chain. In order to reconfigure production in a more scientific and efficient manner, it was necessary that the lords stripped the peasantry of their lands and converted them into waged workers. In consequence, it became possible for the lords to centralize and manipulate the land through scientific reason, investing in infrastructure and training the peasantry with more advanced skills required for a more scientific agriculture and animal husbandry. These advances were motivated by the growing absorption of lords under the logic of the commodity, where it was necessary to produce crops in a more quick, efficient, and cheap manner, in order to be able to survive the brutal world market.
Brenner argued that this agricultural revolution did not appear in the other regions of Europe, such as France, or Poland, since in the case of France, the peasantry had such a high level of organization and autonomy that it was impossible for the lords to break them and atomize them into waged workers. In the case of Eastern Europe, the lords were so powerful and the peasantry so dominated that the creation of a waged class was unnecessary. In this region, the lords dealt with the growing mercantile competition by simply hyper exploiting a peasantry that did not have the means to defend itself. Therefore, it was the specific balance of class forces that brought the agricultural revolution that converted Great Britain into a world power. We could say then that Great Britain invented instrumental reason as used today – where the unquestionable end was profitability, and the rational means were the technical reorganization of the countryside.
If we take Brenner’s thesis seriously, then the economic supremacy of certain capitalist countries was formed by the technical reorganization of their societies for the end of creating commodities more cheaply and efficiently. Yet for Brenner, this technical jump does not appear spontaneously out of the existence of commercial relations, such as the process of buying and selling commodities, but only emerges if the configuration of classes permits it, and only in specific industries. From Brenner’s observation, we can perceive the weaknesses of the pro-capitalism arguments of the orthodoxy: the source of wealth of specific capitalist countries was subject to certain exogenous restrictions: in the case of Great Britain it was the balance of class forces between lords and peasants. This thesis is incompatible with Smith’s theory, who saw technical reorganization as an endogenous process of the market.
Once certain capitalist sectors developed instrumental reason, then the State began to wield this process, and applied it for other more macroscopic ends. The foundations of this state were established in the french revolution at the end of the eighteenth century, where secular reason replaced the arbitrary deliberations of the nobility with the will of the people, where human beings, by their free will, legislate laws that emerge from rational discourse. This was was Hegel’s fevered dream, where Reason, the essence of the true God, manifests itself in the kingdom of this world as a secular and rational State. In this new order, the proto-capitalists converted the small landholdings of the peasantry into proto-factories, centralized under the sun of reason, and broke communities into atomized proletarians that can be integrated into a logistical mesh.
Once agricultural capitalists unleashed instrumental reason into society, the state began to apply it to more ambitious ends, since this reason as wielded by capitalists was constrained and distorted by the small scales in space and time of profitability. First, the french revolution applied this reason in a political manner, where this rationality was used to deal the final blow to the lords and kings. But then, the state began to use science and the technic for concrete ends, developing large public projects that the private sector could never develop by itself, such as railways, electric grids, and public plumbing, coordinating thousands of workers across the continent. The socialists of the second international, who marvelled before public planning, demonstrating the irrationality of capitalism – for it was absurd to let private companies take advantage of public infrastructure and coordination, necessary ingredients for the survival of capital. It was simpler to submit the private sphere in its totality to public planning through the socialization of firms.
However, the incapacity of capitalism of resolving certain social problems, coupled with the flourishing of instrumental reason in early capitalism, demonstrate that capitalism’s technical triumph wasn’t necessarily a function of the free market, but instead, of the class struggle, where the lords destroyed the old forms of life of the peasantry, and replaced them with the atomized worker. Once the proletarian is unchained from their relationship to the countryside and the patriarchal household, then instrumental reason can integrate them to a scientific and coordinating logic. This scientific logic that enriched the countries that developed capitalism first, was not the market. Instrumental reason only emerged when the peasantry was stripped of their old forms of life rooted in soil and honor, and their labor power centralized under larger scales to produce commodities more efficiently. In other words, the technical supremacy of “first world” countries was unleashed by processes that are exogenous to the market, such as the class struggle between lords and peasants.
Therefore, those countries that couldn’t destroy the processes that root the individual into a spatial coordinate, did not transcend their material backwardness when they adopted capitalism. This was because traditions and communal constraints did not let capitalists and politicians abstract completely human beings from their spatial roots and convert them into an atomized mass that can be manipulated by scientific coordination.
A skeptic could use the experience of the old socialist bloc to protest against my argument, since in these countries, supposedly scientific reason was applied through planning. Yet, these states were never able tos surpass in wealth and technical prowess the capitalist west, and their foundations were so unstable that many states could barely survive through the duration of a human life. Moreover, some of these supposedly planned economies remained materially miserable, such as North Korea. However, this argument is defective, for at this point in time, all national economies are embedded into a world capitalist system, where notwithstanding the alleged existence of scientific planning, the law of value that operates internationally would starve any country refusing the market. All states are embedded in an international division of labor, and ultimately, the computers, vaccines, and engines required to build a hospital can only be imported from rich countries through dollar transactions.
The existence of this antagonistic world order does not mean that these socialist societies did not have endogenous dysfunctions, such as a lack of democratic rights, corruption, and bureaucratic hierarchies. However, the political problems of these countries, including their authoritarianism and corruption, were caused in part by the aggression of the political-economic world order. For example, the dysfunctions of the USSR, such as stalinism, emerged in part as a reaction to an aggressive west, since the USSR had to industrialize in a fast paced, disjointed manner in order to create a war machinery that can be used to defend themselves against the “capitalist” west. Furthermore, In many of these socialist countries, forms of life endured that predated modernity, sabotaging instrumental reason, since those pre-modern structures enabled the survival of the patron and the client at the expense of the collective. It’s very probable that the alleged inefficiencies and inflexibilities of planning are not inherent, but related to the the antagonistic nature of the capitalist world order, and the antiquated forms of lives embedded in many of these countries. Wealthy capitalist countries did not necessarily enrich themselves only through the market, but through the destruction of the peasantry and the application of instrumental reason – in other words, through planning.
We conclude the first part of this essay. The second part will deal with the necessity of socialist planning to combat climate change.
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A common and mistaken assumption among radicals is that right wing parties win because of ideological trickery and lies. In other words, that the electorate does not understand their own class interests, and are bamboozled by smooth talking politicians. For example, a popular idea about american politics is that poor whites tend to vote against their own interests, as there is the preconception that they are part of the electorate of Trump and the GOP. Just recently in Ontario, Doug Ford, a millionaire, won the provincial elections under a very vague platform that included lowering taxes and “anti-elitist” rhetoric, very similar to Trump’s “drain the swamp” antics. Some pointed out the contradiction of the wealthy Ford running under an anti-elitist platform – seeing it as a form of ideological articulation and nothing else.
In general, there’s been a rise of the right wing in elections across the the developed West. A couple of high profile examples are Trump, Brexit, and the recent German elections. Furthermore, fascistoid parties that took power recently in some european countries, like Hungary and Poland. Superficially it may seem that these parties are the “will of the people”, since they won by an algorithmic majority in democratic countries. For leftists this may seem hopeless, as it could be interpreted that we lost the ideological battle, and that much of the Left’s traditional demographic (e.g. workers) have fallen into reaction.
I find that these sentiments begin with the wrong (and liberal) idea, that the body of citizens are an amorphous, classless set of individuals that must be “won over” so that they do not turn right wing. Another iteration of the same argument is that many voters are going against their “own interest” by voting for the right wing. For example, the common archetype of the poor rural white that votes Republican.
The worst aspects of these assumptions are in the mainstream of the Left, especially social democratic parties and “center left” parties. Since the electorate at first glance seems to swing conservative, many social-democratic parties have swung to the right to win back some of that electorate. An interesting example is the rise of the center-left NDP (New Democratic Party) in Alberta, one of the most conservative provinces of Canada. Many of the militants in the federal NDP are against the construction of new oil pipelines, for fiscal and environmental reasons; yet the Albertan NDP has taken a pro-big oil stance in order to appease the seemingly conservative Albertan electorate. I am sure that the shift towards austerity politics of many of the mainstream social democratic parties is also related to the tailing of a supposedly conservative electorate.
However, once we start looking with nuance at hard data, rather than simply taking a phenomenological algorithmic majority for granted, we will find that the rise of the right wing isn’t really just a matter of false consciousness or ideology, but has a real class basis. In other words, today’s electoral choices fully emerge from the class interests of much of the voting base. This is simply because many of whom fit the marxist definition of proletarian, that is someone that owns nothing except their own labor, are not voting. It’s well known that lower income makes it more likely that someone will not vote. In fact, there is a correlation with income inequality and low political participation.
Let us look at the United States as a particularly dire but interesting example. The reason why voters choose politicians that want to cut social programs and enforce austerity, is that the same politicians often promise more tax cuts, a restructuring that would benefit people from higher tax brackets, who happen to be the people that vote. Surveys have found that nearly half of non voters in the US make less than 30k in income. If you zoom into the lifestyle of a large percentage of 60k+ households – a life that may include mortgages, workplace insurance, fat credit lines, and segregated neighborhoods were race and income cut along zip code lines, voting patterns make sense. I imagine that the last person that would benefit from rent control, centralized school funding, and welfare is going be an office manager that holds home equity and sends their kid to piano lessons.
These voting patterns are also interesting from a political economy perspective. Much of what passes as class analysis in the more popular iterations of marxism usually only looks at workplace relations, and whether someone collects a salary as opposed to being a capitalist. Yet, one of the ways the liberal democratic state culled working class militancy is through the introduction of cheap credit, which suddenly made much of the traditional working class into “property owners”, because they now own house equity. Specifically, the skilled layer of the working class and professionals became petit-bourgeosified (synonimous to small land holders). In other words, this middle class, even if some of them collect a salary, stop being proletarian in the marxist sense (a class that owns nothing except their labor power) and turn into small property owners. In the american case, this was also related to racial dynamics, where a white middle class entrenched itself in segregated zip-codes, with housing associations that monitor the evenness of lawns in order to mantain property values. Furthermore, zoning privilieges are also a way of gatekeeping resources for their childrens’ social mobility – for example, through public schools that are only attended by rich people.
The existence of a petit-bourgeosified middle class and upper middle class, who are isomorphic to small land holders, can only manifest in the era of finance capital, as their lifestyle is sustained by fragile debt that leads to financial fragility and secular decline. According to Minsky (who has been recently adapted to macroeconomic models), financial fragility emerges from banks and other financial institutions lending too much money in boom periods, which inevitably leads to financed enterprises that fail to be profitable. This generates a bubble that later on bursts, creating business cycles and dislocation between financial sector and the real economy. Furthermore, as mentioned in my previous post, the financialization of capital correlates with the decline of productivity across virtually almost all industries, so only finance capital instead of the “real economy” can sustain these small proprietors. So it is no surprise that there is almost a clientelistic link between these small proprietor, middle class whites and the most reactionary elements of capital, as the latter buys them off by giving them racialized financial leverage that is not available to poorer, racialized sectors.
No wonder why left wing tendencies and social democratic parties have declined, and the ones that survived, shifted rightwards. For they all aim to convince “likely voters” who tend to be petit-bourgeosified middle classes whose class interests are aligned with tax cuts and fiscal austerity, in contrast to lower income individuals that do not vote as much, and who would benefit from wealth redistribution programs.
Instead of aiming for likely voters, leftists should create a genuine socialist party that fights for the working class and the poor. The key for socialist hegemony is politically activating unlikely voters, e.g. racialized, working class and poor individuals, rather than trying to pull the heart strings of a middle class. This strategy will not yield easy wins in the ballot box, for the likely voters tend to be conservative. Instead it would require a strategy in the long run where socialist hegemony is created amongst unlikely, low income voters.
A minimum program for a party of the working class and the poor could contain some of the following policies: (i) nationalization of real estate (except the infrastructure built upon it), (ii) a job retraining program for the casualized, unemployed, or low wage workers, (iii) a robust public healthcare infrastructure, (iv) abolition of temporary “work visas” and instead full citizenship for all immigrants, and (v), restructuring of educational infrastructure so that funding depends on “head count” rather than zip codes, including free upper education and student stipends. These positions are only some tentative examples, and this minimum program should go hand in hand with the long term maximum program of a world workers’ republic, and the replacement of market mechanisms with world economic planning.
Much of the platform of a workers’ party will be opposed by the small proprietor middle class, since it is diametrically opposite to their interests – for example, real estate nationalization is in contradiction with home ownership. However, the large underclass that does not vote, and the segment of the working class that does go to the polls, should be able to be won over by a program that considers their immediate class interests.
The outlook for a workers’ party is moderately optimistic. As the pauperization of millennials, who are poorer than their parents, and the recent financial crisis have shown, the lifestyle of middle class small proprietors inflated by financial debt is unsustainable. Therefore, the base for a future workers’ party is secularly increasing.
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It’s an empirical fact that the economy experiences business cycles, in other words, oscillations between booms and busts. Furthermore, many argue that the economy is experiencing a secular decline. For example, productivity across all industries has decreased since the 1970s. What ares the mechanisms behind these instabilities and also decline? What would an accurate theory of economic crisis look like?
I believe that capitalism is both unstable and vulnerable to business cycles, and is also experiencing secular decline. The source of these trends are feedback mechanisms that are structural to capitalism that encourage the growth of fragile and expensive complexity (logistics, rent-seeking, finance, etc) due to the pursuit of short-term profits. Furthermore, this complexity becomes increasingly separated from the human labor (see Marx on labor theory of value) that creates wealth indirectly or directly (e.g. the factory worker, the doctor, the teacher, etc.), which means a larger ratio of overhead versus wealth creation. The growth of expensive complexity in the long run means both declining productivity and fragility to the business cycle.
I will first review some of the theories that already exist to explain this secular decline and also the nature of business cycles. Then I will present my own crisis theory that addresses the weaknesses of the other existing models.
The mainstream economic approach to the business cycle is modelled through the so called Dynamic Stochastic General Equilibrium model (DGSE). In this model, mainstream economists assume the world economy is more or less in equilibrium (e.g. markets clear, and agents’ utility functions maximize) until a random shock appears, for example, a sudden rise in oil prices. The nature and the source of the shock are irrelevant in this model – the DGSE approach only dictates that random shocks are an economic reality. Thus the task of the economist reduces to studying how the structures of the economy amplify/dampen and propagate the shock. For example, after the 2008 crash, economists began taking seriously how aspects of the financial sector may amplify these shocks (they call these financial frictions). It appears mainstream economists only have achieved a consensus on business cycle modelling but not necessarily on the secular decline of the economy.
Hyman Minsky was an important heterodox thinker that elaborated a crisis theory, and also recently became widely cited because of the 2008 crash. Minsky argued that crisis emerges from endogenous activities in the financial sector. Minsky explained that in booming times, banks and other financial institutions become “euphoric” and begin lending and also borrowing large quantities that in bust periods they would find too risky. Given that these financial actors are overconfident, a speculative investment bubble develops. At some point, the debtors cannot pay back, and the bubble bursts, creating a crisis.
The more orthodox of the Marxist approaches to crisis is referred famously as the theory of the tendency of the rate of profit to fall (TRPF). According to Marx, capitalism experiences a secular decline in the rate of profits as work is automated away by machines, and therefore less workers are employed, which means less human labor to exploit. As production becomes more optimized, machinery and raw material absorb more of the costs of production, and less workers are employed due to rising productivity. In marxist analysis, profit comes from exploitation of workers, that is, from paying workers less than the value created by the hours they worked. So in marxist analysis, as machinery automates more of the labor, the rate of profit also declines. According to Marx, in a hypothetical scenario where all labor becomes automated by robots, the capitalist wouldn’t profit at all!
Finally there are some crisis theories were more heterodox marxist models and pseudo-keynesian theories converge. Thomas Palley recently compared Foster’s Social Structure Accumulation theory (SSA) to his own theory, Structural Keynesianism. Both Palley and Foster argue the decline of economic growth is related to a stagnation of wages. If wages are stagnant, the aggregate demand necessary for growth is unmet, because workers don’t make enough to purchase commodities. They argue that this economic stagnation is related to the neoliberal growth model adopted since the 1970s. According to Palley, the only mechanisms that kept the economy from crashing were the overvaluation of assets, and firms filling the hole in aggregate demand by taking on more debt. However this excess of credit lead to financial instabilities that eventually crashed the economy in 2008.
In my opinion all these approaches are flawed. For one, the mainstream approach under-theorizes the sources of fragility and the secular decline in the rate of profit. It is true that much of the crises/business cycles have to do with the fragility of the capitalist economy to volatility, which is explained by mainstream models. However, an important part of the story is why the capitalist system is fragile to these shocks. In fact, mainstream economists showed their ignorance with their inability to forecast the effects of the 2008 recession. After the crash, mainstream economists implicitly conceded to the heterodox arguments of Minsky that the financial sector creates fragility. For example, only after the crisis did mainstream economists include in their DGSE models the financial instabilities mentioned by Minsky. Furthermore, it appears mainstream economics doesn’t really have a theoretical consensus on the secular decline of capitalism.
The problem with the Minskyan approach is that it is severely limited – for one, it only identifies one source of fragility, which is the financial sector. It also does not theorize why the financial sector is “less real” than for example, the manufacturing sector – which Minsky implicitly assumes when he blames fragility only to the financial part. Because of Minsky’s limited theorization, he also fails to explain the secular decline of the rate of profit, content with only explaining the business cycle.
The greatest flaw of the “orthodox” Marxist approach is its dependence on pseudo-aristotelian arguments. The TRPF model is based in a logical relation between very specific variables, which are the costs of raw materials and machinery (constant capital), the costs of human labor (variable capital), and the value extracted from the exploitation of human labor (surplus value). This spurious precision and logicality is unwarranted, as the capitalist system is too complex and stochastic be able to describe the behaviour of crisis as related to a couple of logical propositions. One has to take into account the existence of instabilities and shocks, as the mainstream economists do. However, Marx still had a key insight which is that the aggregate wealth of the world must be sourced in human labor that produces use values. The source of wealth comes from dentists doing dentistry, and construction workers doing construction work, not from the dentist trying to make money by trading in the stock market. Furthermore, Marx identified that there is a secular trend in the declining rate of profit, which is missing in other contemporary accounts.
Finally, Palley’s approach seems to be too politically motivated. To them, the stagnation of the economy is related to issues of policy – of statesmen adopting the “wrong” set of regulations/deregulations. If politicians were just “objective”, and followed Palley’s set of ideas, then crisis and decline could be averted! To Palley, the neoliberal phase was a matter of certain “top-down” policies rather than endogenous/spontaneous fragilities and instabilities that are inherent to the capitalist system. In my opinion, it’s impossible to disaggregate what is political and what is inherently structural in the secular decline of capitalism, since the whole world economy is more or less neoliberalized at this moment so there is no alternative to compare it at the present. So it seems to me that it’s a just-so story that is projected from the present to the past and impossible to prove empirically.
One of the issues I have with the “left” theories of crises, such as Keynesian and Marxism, is that they don’t take instability, uncertainty, stochasticity, and complexity seriously. Instead, proofs and discussions are reduced to aristotelian logical chopping related to a few variables. In the Keynesian case, it’s aggregate demand, in the Marxist case these variables are surplus value, constant capital, and variable capital. A system that pulsates with tens of billions of people is reduced to the logical chopping of a few variables. Instead, we must device a more holistic view of the capitalist world-system, taking into account its nonlinearities and fragilities.
The theories outlined above contain parts of the truth, so we can use some of these elements to synthesize a model of crisis that contains the following: (i) economic fragility to instabilities and shocks, (ii) endogenous sources of this fragility, (iii) a theory of the secular decline of the rate of profit. The concepts ultimately uniting these three points are fragility/nonlinearities and increasingly expensive complexity. For example, Minsky, by addressing the fragility in the financial sector, also implicitly points to a theory of degenerative complexity, where the financial sector acts as a complex, expensive, and fragile overhead that exists over the “real economy”.
We can use Taleb’s definition of fragility to make the concept more precise. Taleb mathematically defines fragility as harmful, exponential sensitivity to volatility. For example, a coffee cup can withstand stress up to a certain threshold, above that, the cup becomes exponentially vulnerable to harm, as any stress higher than that threshold will simply shatter the cup. The reason why fragility is a nonlinear property is that the cup won’t wear and tear proportionally to stress. Instead the cup will sustain the stress until a certain threshold is reached, and then suddenly shatter. So in other words, the cup reacts exponentially to stress, with stress below a certain threshold inflicting negligible damage.
Similarly, the capitalist world system probably has many thresholds, many of them currently unknown. This is because the capitalist world system is complex and nonlinear. It is complex because it is made of various interlocking parts (firms, individuals, governments, etc.) that form causal chains that connect across planetary scales. It is nonlinear because the behaviour of the system is not simply the “sum” of the interlocking parts, as the parts depend on each other. Therefore one cannot really study the individual components in isolation and then understand the whole system by adding these components. In other words, interdependence of the units within capitalism makes the system nonlinear. Furthermore, nonlinear systems are frequently very sensitive to change in its variables, where surpassing certain thresholds can make the system exhibit abrupt changes and discontinuities that often manifest as crisis. This abrupt changes caused by the crossing of certain threshold is a common mathematical property in nonlinear systems. Fragility therefore correlates with nonlinearities, abrupt jumps/shocks, and complexity.
However it is not enough to say that the capitalist world system is fragile because it is nonlinear. The point is that the capitalist world system structurally generates feedback loops that lead to the accelerated creation of endogenous fragilities. The frenetic pursuit of short-term profits in increasingly competitive contexts leads to the creation of fragile, nonlinear complexity. This is because a firm must invest in more expensive research, infrastructure, and qualified personnel to generate innovation that leads profit in the short term, as many of the “low hanging fruits” have already been plucked. So capitalism leads to a random “tinkering” by firms and institutions to produce profit, by often adding ad-hoc complexity. This complexity make generate short-term profits, but is expensive in the long term. Joseph Tainter tries to measure the productivity of innovation by looking at how many resources go into creating a patent. For example, here is a plot showing how ratio of patent per GDP and per R&D expenses has declined since the 70s:
A very common and studied example of this nonlinear complexity is the financial system. The financial system is an example of growth of complexity in order to aid the profit motive. Cash flows are generally too slow and cash reserves too low in order to cover the capital required to start firms, or to add a layer of complexity required for more profitability, so agents must resort to acquiring credit and loans. In other words the financial system acts as a fast, short-timescale distributive mechanism for the funnelling of resources to banks, firms and individuals that require quick access to capital in spite of low cash flows. Without the financial system growth would be much lower because access to capital could only be facilitated through cash flows. However, as Minsky noted decades ago and mainstream economics emphasizes now, the financial system is extremely unstable, complex and nonlinear, and therefore fragile. Here is a figure that shows for UK banks how much the “leverage ratio”, which is roughly the ratio between debt to equity of banks, has exponentially grown from the 1880s to the 2000s – in other words, banks depend on loans/credit in order to have fast access to capital.
The addition of complex overhead as inversely proportional to growth has been empirically verified for various parts of capitalism. Here are some examples: the cost diseases associated with industries like education and healthcare, the admin bloat in education and healthcare, the stagnation of productivity across virtually all industries including manufacturing, the stagnation of scientific productivity in spite of exponential growth in the number of scientists and fields, etc.
Furthermore, capitalism encourages rent-seeking and expensive complexity, even if there are no benefits in wealth production for the economy in general. For example, this rent-seeking scenario is probably the case for admin bloat at the universities. In the case of this admin bloat, there is a transfer of wealth from society to certain sectors of the university, but there is no obvious economic benefit for society in general. This is in contrast to traditional, profitable industries were profit leads to capital valorization through the reinvestment of that profit.
As noted in a previous post, there is also a secular degeneration of science with the secular decline of capitalism. To summarize that post, as informational complexity grows at a faster rate than empirical validation and knowledge production, an informational bloat of unverified scientific theories gets created. An obvious example is the complex bloat of theoretical physics models that predict all sorts of new particles, in spite of the fact that the Large Hadron Collider, a multibillion dollar experiment, failed to confirm any of them. So you have a whole layer of professionals that are just experts in unverified/degenerative theories, and these professionals collect large salaries in spite of not contributing to economic nor epistemic growth. Another example of a degenerative profession is economics. Judging from the stagnating productivity across most industries, we can probably assume that these caste of degenerative professionals is rampant across all corners of capitalism. This caste of degenerative professionals and “degenerative” experiments add expensive and fragile complexity to capitalism.
Finally, as complexity grows, there is an increasing dislocation between abstracted logistical, degenerative, and “scientific” complexity and the human labor that creates the wealth. A very good example is finance. To paraphrase and elaborate on what Taleb said, the wealth of the world is created by dentists doing dentistry, and construction workers doing “construction work”, not by the dentist trying to become rich by trading their savings in the financial market. This is where Marx becomes relevant – for the wealth of society comes from human labor, not from the transfer of wealth through administrative and accounting tricks, or through the circulation of financial instruments. This bloated complexity is required for the functioning of capital because of financial, accounting, and logistical constraints. Much of this complexity acts as an overhead for the world-economy that is required for the survival of capital itself, but this complexity does not necessarily create socially necessary wealth. An example of the fragility of this separation between wealth creation and complex abstraction is the existence of speculative bubbles. Due to the overconfidence of the financial industry, assets are often overvalued and at some point their value collapses, as the dislocation between the real and financial economy becomes unsustainable. This financial instability was discovered by Minsky and that now is understood by mainstream economists, who incorporate it in their models.
Here we begin to sketch a theory for the secular decline of capitalism. First there is a secular increase of fragile, nonlinear complexity driven by ad-hoc tinkering of firms/institutions in order to pursue short term profits at the expense of fragility. Furthermore much of this expensive complexity is due to rent-seeking, where specialists trained in degenerative methods that add no obvious knowledge/efficiency self-reproduce and multiply, like string theorists, economists, university admins, healthcare admins etc. In the long run, all this added complexity that is created for short term profits becomes increasingly expensive, leading to even slower productivity growth (GDP growth per labor hour). Part of the lowering of productivity is the increasing dislocation between human labor that produces wealth and an abstracted layer of researchers, administrators, managers, etc. Furthermore not only there is a secular decline of the economy, but there are also increasing fragilities and instabilities, as the bloated complexity is very nonlinear, given that it couples agents across planetary scales, such as how the financial industry transcends national economies. So the world economy becomes increasingly more vulnerable to shocks, due to nonlinearities (caused by interdependencies) that lead to abrupt changes. These instabilities and fragilities give rise to the so called business cycle.
In conclusion, a socialist theory of crisis should begin by looking at the economy as a whole, taking into account its instabilities and fragilities. In my opinion, the methodologies of the various Keynesian and Marxist schools are wrong because they pretend to have identified a couple of important variables (e.g. aggregate demand, organic composition of capital) and then logically derive a theory of crisis through these variables. However, because the economic system is extremely complex and nonlinear, these theories probably amount to just-so stories, since the mechanisms behind the instabilities in capitalism are probably very varied (and many of them unknown), and therefore cannot be pinpointed to just specific sources. Instead, a better approach to a crisis theory is to analyze how capitalism creates endogenous feedback loops that lead to fragility, due to generalized and socially unnecessary nonlinearities and complexites. This nonlinearization and complexification is imposed in order to pursue short term profits, at the expense of long-term productivity. Moreover, another important issue is how a large part of this complexity becomes increasingly dislocated from wealth creating labor – such as the dislocation between administrators and professors, or the financial sector and the real economy.
I am confident many of the theories presented in this article can be both quantified and verified against empirical data in a much more rigorous way than done here. But alas, there isn’t an eccentric millionaire backing this research program😞.
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