Fun for the whole family

Ah, things LI loves! There’s nothing like the smell of the laissez faire lollipalooza collapsing in the morning!

Here’s an advertisement for a service that is roiling the business blogs. Here’s an interview with some people who are walking away. Of course, the interview, from 60 minutes, is all this is so immoral. Not a story they would ever run about a company that fired a mass of workers for no other reason than that the company wasn’t making a profit. Or a big enough profit. That, of course, is good clean fun!

All the style sections of papers and mags have had so much fun for the past decade with how we can now all act like millionaires that people are starting to act like millionaires – is that cool or what? Act like a bank and ‘write down’ your debt. Write it down on a piece of paper, scotch tape the key to the house you can no longer afford, and send it to the bank that holds the mortgage with best wishes on selling the sucker.

Last night, CBS' "60 Minutes" took a look at the "subprime loan crisis." You can find the full transcript here, but the following exchange between "60 Minutes" correspondent Steve Kroft and homeowner Stephanie Valdez is a highlight worth examining a bit closer; it's significant both from an economic and, more importantly, a socionomic point of view.

STEPHANIE VALDEZ: Why pay a $3,200 payment on a 1200-square-foot home? It makes no sense.

STEVE KROFT: That's what you agreed to do when you bought the house.

STEPHANIE VALDEZ: Fine. If the value is going up. But we're not going anywhere. The price or the value is going down. It makes no sense because we will never be able to refinance and get a lower payment. There's no way.

STEVE KROFT: You're saying, essentially, that you're going to stop making payments on it? You're just gonna let it go into foreclosure?

STEPHANIE VALDEZ: You know, that's the only advice we've gotten so far is walk away from the home. We don't want to do that to our credit. Why can't our mortgage company work with us?

Kevin Depew:

The issue Kroft is alluding to here is what one might call "the morality of contractual obligation." Without saying it explicitly, Kroft implies ("That's what you agreed to do when you bought the house,") that Valdez and her husband, by walking away from the house, are engaging in some vaguely immoral behavior. It's a promise. They are breaking their promise. Left dangling for the viewer to arrive at is the conclusion that people who break promises are immoral.

the aristocrats, the plutocrats, and other rats

From the perspective of the nineteenth century worker, there is something mocking, something a little satanic about freedom, as it was presented in the establishment discourse. Freedom, of course, comes with contracts – but what contracts! On the one side, the employer was in the position of seemingly having no limit to the things he could require of the laborer. On the other side, the laborer was blamed for not adhering to every tittle and jot of the employer’s dictate. From the perspective of the intellectual, society was making a Faustian pact with technology and industry. From the perspective of the worker, it wasn’t Faustian at all, but reeked of sulfur in the old, old way: the devil required infinite pain in this life, on penalty of losing life altogether without him. In the Position of the Working Class, Engels indicts the order of life required of the laborer in the factory by giving examples of the rules he or she had to follow, under threat of fine or dismissal:

“What a time the worker has of it, too, inside the factory! Here the employer is absolute law-giver; he makes regulations at will, changes and adds to his codex at pleasure, and even, if he inserts the craziest stuff, the courts say to the working-man:
"You were your own master, no one forced you to agree to such a contract if you did not wish to; but now, when you have freely entered into it, you must be bound by it."
And so the working-man only gets into the bargain the mockery of the Justice of the Peace who is a bourgeois himself, and of the law which is made by the bourgeoisie. Such decisions have been given often enough. In October, 1844, the operatives of Kennedy’s mill, in Manchester, struck. Kennedy prosecuted them on the strength of a regulation placarded in the mill, that at no time more than two operatives in one room may quit work at once. And the court decided in his favour, giving the working-men the explanation cited above. And such rules as these usually are! For instance: 1. The doors are closed ten minutes after work begins, and thereafter no one is admitted until the breakfast hour; whoever is absent during this time forfeits 3d. per loom. 2. Every power-loom weaver detected absenting himself at another time, while the machinery is in motion, forfeits for each hour and each loom, 3d. Every person who leaves the room during working- hours, without obtaining permission from the overlooker, forfeits 3d. 5. Weavers who fail to supply themselves with scissors forfeit, per day, 1d. 4. All broken shuttles, brushes, oil-cans, wheels, window-panes, etc., must be paid for by the weaver. 5. No weaver to stop work without giving a week’s notice. The manufacturer may dismiss any employee without notice for bad work or improper behaviour. 6. Every operative detected speaking to another, singing or whistling, will be fined 6d.; for leaving his place during working-hours, 6d.”

The notion that the owner has complete freedom to put anything in a contract he feels like putting in – that in fact, this is the alpha and omega of freedom, the unmediated power relationship between owner and worker - is still a powerful one in the U.S. Some states, notably Texas, have a fire at will clause that allows abusive leeway to the owners which is close to that allowed to the owners of serfs. As Engels notes about the lives of the working class – “these laborers are condemned, from their ninth year until their death, to live under the mental and corporal rod, they are more utterly slaves than Blacks in America, because they are more closely supervised – and then it is demanded, that they live like human beings, think like human beings, and feel like human beings!”

I am fascinated, myself, by the prohibition on singing – which I want to get back to, as I am interested in tracing a history of alienation in the evanescent fabric of song culture. One should point out that the Manchester factories represented, at the time, a classical liberal ideal – elsewhere, for instance in the U.S., custom weighed on the extent to which you could limit freedom on the laborer’s side by contract. Jack Beatty’s excellent but, for some reason, little noticed book on the Gilded Age last year, Age of Betrayal: The Triumph of Money in America, 1865-1900, is all about the triumph of the libertarian freedom of the owner, at the expense of the worker.

Beatty’s chapter of the Homestead strike is well worth reading for those who want to understand how slowly the attitude took hold that one’s place of work was not at all one’s own – that ownership was strictly limited by the contract one freely signed, thus conveniently carving out a domain of serfdom in the free society. This serfdom has now, of course, been so assimilated that we naturally segregate our work space from other spaces, and in fact obey the rules that now organize any public space – so much for the existential dimension of freedom. The contract still has this marvelous, magical property, operating to emancipate the contractor and enslave the contractee. There’s an interview with Beatty at the Atlantic site about the book. Beatty points to a turning point after the Civil War in which the Republican party converged with the business elite and turned its back on the ideal of ‘free labor’, in essence betraying its very reason for being:

“Even when Lincoln was advocating free labor, it was a nostalgic idea. As early as 1866, 60 percent of people worked for other people. Now, it’s 90-something percent. Then, of course, they worked in small units; it wasn’t the full-blown factory. But sure, Lincoln’s vision was at variance with the imperatives of the economy and with the necessities of the industrializing elites who came to power after the war. And then there was the railroad—and that changed everything….
…
Still, the free-labor ideal survives in farming as propaganda. Preserving the tiny number of "family farms" is a justification put forward by the farm lobby. The Homestead Act was put forth by the Republicans as a supposed cure for the class structure congealed by industrialism. The idea was that the eastern factory laborer would leave the factory behind for free land in the west. But that’s not the way it worked out. Why? Because the land was not free—$1,500 was the minimum needed to set up a farm as early as the 1840s. And that was three years pay for the skilled factory worker of 1900! Small farms weren't economically viable. So it wasn’t the factory laborer who went to the farm, but the factory itself. Women’s labor, child labor, seasonal labor—all the aspects of wage labor that the farm was supposed to cure became a part of farm life. That was a bitter social turn. There was no escape from industrial capitalism.”

Legends have grown up around the Homestead strike. John Commons, in 1918, wrote:

“In the Homestead strike, the labor movement faced for the first time a really modern manufacturing corporation with its practically boundless resources of war. The Amalgamated Association of Iran and Steel Workers in 1891 … was the strongest trade union in the entire history of the American labour movement.”

In 1892, the Carnegie Corporation, under the management of a well known opponent of Unions, H.C. Frick, decided to take on the Amalgamated Association by proposing a lowering of the wage for skilled labor in the steel mills and a new date for renewing contracts, January 1. The latter would make any future refusal of contract fall in the winter, when it would be harder to strike. The Union refused the terms – Frick sent a contingent of 300 Pinkerton men guarding a number of strikebreakers on barges down the Monongahela River. In response, the union barricaded the factory. Somebody fired a shot. A pitched battled ensued, in which the Pinkertons raked the crowd with rifle fire. Seven men died, but then the crowd returned fire until the Pinkertons had to go below deck. Certain of the guards lost heart, and the Pinkertons finally surrendered and were marched through a crowd that mauled them, and then sent back to Pittsburgh. Using the violence as an excuse and, of course, recognizing unlimited freedom of property only on the side of Carnegie, the state government sent in the militia, and to the Carnegie company sent in more Pinkertons. The strikebreakers gained access to the mills, and though the strike lasted until October, the power of the Union was broken.

This is what Carnegie’s latest biographer, David Nasaw, said, in 2006, in an interview with a Pittsburgh paper:

Q: Now that the mills are gone, do you think Carnegie has a lasting local influence other than the libraries and museums?

A: I did not get into a cab or have a conversation at a hotel when I didn't get a response -- a lively response -- after telling people why I was in town. Everybody had a story about Carnegie, and very few stories put him in a good light. He moved to New York in the 1870s and died in 1919. But his presence still seems to haunt the city.
Is that because of the famous 1892 Homestead Strike? Carnegie blamed that on his business partner, H.C. Frick.

Well, reading the local papers on microfilm, I discovered that while the rest of the world might have been surprised by Homestead, Pittsburghers weren't. This wasn't the first time he'd brought in the Pinkertons -- he'd done the same damn thing at [Braddock's] Edgar Thomson works. Homestead followed a script he'd already written.
Still, Carnegie had written articles about respecting the working man. And previously, he'd been way out in front negotiating with unions. So workers weren't just angry when he brought in the Pinkertons: They felt betrayed.”

Beatty’s account of the strike draws upon the sociological study of the Pittsburgh area financed by the Russell Sage foundation in 1912. One of the sociologists, Margaret Frances Byington (about whom there is an astonishing paucity of information) wrote the book about Homestead. I’m going to quote from her in the next post.

Take your hypnopaedia like a good robot

A post about Utopia at Culturemonkey, that does a nice rundown of some late nineteenth century utopias and the thread prompted by the post has made me think a bit about utopias. Obviously, the intersection between my project - tracking the triumph of happiness – and utopia is inevitable, but I have not mapped that out by any means.

I’ve been thinking about this all the more as I have been looking at Brave New World, lately. In fact, the review I just did of Comfortably Numb, a book that does a nice job of muckraking in the druggy ventricles of the Prozac Nation, begins with a Brave New World quote about soma.

Flipping through Brave New World again, it is funny how certain things startle the innocent, 2008 reader. For instance, this marvelous prediction of our computer game culture:

“The Director and his students stood for a short time watching a game of Centrifugal Bumble-puppy. Twenty children were grouped in a circle round a chrome steel tower. A ball thrown up so as to land on the platform at the top of the tower rolled down into the interior, fell on a rapidly revolving disk, was hurled through one or other of the numerous apertures pierced in the cylindrical casing, and had to be caught

"Strange," mused the Director, as they turned away [from some children playing a game], "strange to think that even in Our Ford's day most games were played without more apparatus than a ball or two and a few sticks and perhaps a bit of netting. imagine the folly of allowing people to play elaborate games which do nothing whatever to increase consumption. It's madness. Nowadays the Controllers won't approve of any new game unless it can be shown that it requires at least as much apparatus as the most complicated of existing games."

And, of course, there is the hypnopaedia, the sentences that are infinitely repeated by the inhabitants of the World Society that have taken the place of truth – which is pretty much the way elections are now conducted. It is a hypnopaedic orgy, with the winner condemned to smilingly utter hypnopaedia until the moment comes when they haul him – or, perhaps, this time, her – away to the Presidential library.

Happiness as a social criteria is naturally utopic. What Maurice Halbwachs wrote, in the Working Class and the Level of Life (1912), about class consciousness points to why, on each class level of the capitalist societies that arose in the nineteenth century, there was a corresponding utopic moment:

… by definition, there are classes only in a society that is hierarchized to some degree, and under whatever form that takes. To be conscious of itself, for a class, means to recognize at what social level it finds itself, and consequently to represent itself by relation to what kind of privileges, what rights, what advantages are measured out to these levels and that hierarchy is determined. Every representation of class implies a double judgment of value: the estimation of the most important good or goods and the most appreciated in the society considered – the estimation of the degree to which it is permitted to the members of the class to satisfy the needs that relate to them….

Now lets seek what are common to all these references [to different supreme goods in different societies], and if it is possible to express that whole set of judgment on the value of diverse activities and goods by means of one general formula. Whatever the type of society that we consider, the ideal, the supreme good, is without doubt a specific form of social life, but it is, at the same time, the most intense social life that one can imagine (se représenter). »

Halbwachs, here, is still operating in what Lukacs would call the bourgeois domain of sociology – that is, he assumes that all classes throughout history, no matter what the forms of production, have an equal chance of being conscious. There’s a strong Marxist tendency to claim that pre-capitalist societies were, for the most part, sunk in apathy – the idiocy of rural life. After all, this is why capitalism has a double aspect – both as a system of exploitation and as a system of emancipation.

However, the most intense social life that one can imagine is certainly the portal to utopian dreams and dystopian nightmares, depending of course on how you turn in the dream.

notes from the ice age

In the Postulates of the Political Economy, William Bagehot writes:

'In the Athenian laws,' says Demosthenes, 'are many well-devised securities for the protection of the creditor; for commerce proceeds not from the borrowers, but from the lenders, without whom no vessel, no navigator, no traveller could depart from port.' Even in these days we could hardly put the value of discounts and trade loans higher. But though the loan fund begins so early in civilisation, and is prized so soon, it grows very slowly; the full development, modern banking such as we are familiar with in England, stops where the English language ceases to be spoken. The peculiarity of that system is that it utilises all the petty cash of private persons down nearly to the end of the middle class. This is lodged with bankers on running account, and though incessantly changing in distribution, the quantity is nearly fixed on the whole, for most of what one person pays out others almost directly pay in; and therefore it is so much added to the loan fund which bankers have to use, though, as credit is always precarious, they can, of course, only use it with caution. Besides this, English bankers have most of the permanent savings of little persons deposited with them, and so have an unexampled power of ready lending. But ages of diffused confidence are necessary to establish such a system…

That diffused confidence reflects, among other things the power relationships within a society that have been imposed on the distribution of assets. So what has the ice age of the neo-liberal society established? We have been living on an unproven supposition, from which is derived a practical aporia. The supposition is that only by ensuring that the businessman can achieve the greatest possible real compensation can we motivate the capitalist system beyond its tendency to crisis. And the aporia is that the money made by that businessman will depend on the demand of a population which will otherwise have their own compensations squeezed, the natural consequence of guaranteeing the businessman the greatest compensation possible for his activity. Crushing the bargaining power of labor is always the first and greatest of the tasks of conservative government. So thoroughly was this accomplished during the last thirty years – the years of the Reagan economy – that we rarely see anybody write, anymore, about the bargaining power of labor. We have, bizarrely, decided that the power of to compensate should lie solely with those in management. Hence, the general shape of the new economy is indistinguishable from the drivers to increasing economic inequality. This should be distinguished from immiseration – it is possible for the working class in general to gain purchasing power over time in an economy in which their economic power vis a vis the top income tier diminishes. However, there are limits to how far this movement can take place. That’s the simple alpha and omega of the ‘new economy’.

Business Week has an interesting article that gently asks if we are at a reckoning point, or as the author, Michael Mandel, puts it, How real was the prosperity?


Here are some highlights:

“Personal Spending. The rule for a prudent individual is simple: Don't spend more than you make. For a long time, the U.S. economy obeyed that rule. As far back as the 1960s, personal spending, adjusted for inflation, has basically tracked the overall growth of the economy, as measured by gross domestic product. Sometimes consumers would get ahead of the economy for a few years, and sometimes fall behind, but never for very long.
That pattern changed in the 1990s. As of the third quarter of 2007, the 10-year growth rate for consumption was 3.6%, vs. GDP growth for the same period of 2.9%. This difference represents an enormous gap. If consumer spending had tracked the overall economy over the past decade as it has in the past, Americans today would be spending about $600 billion less a year. The extra spending has amounted to a total of about $3 trillion since 2001.
…
Consumer Lending. The past 10 years will go down as one of the greatest consumer-lending sprees ever. Adjusted for inflation, consumer debt—including mortgages—rose an average 7.5% per year since 1997, far faster than the 4.2% rate of the previous 10 years. The last time debt rose so fast was the 1960s, as the postwar generation bought homes and autos. If Americans had kept borrowing at their pre-1997 pace, they would have had about $3 trillion less in debt.

The extra debt also represents a formidable obstacle for banks and other financial institutions that might want to lend more to consumers. "Going forward, we're not going to see this credit-driven growth," says Alistair Milne, a professor and banking expert at City University in London. "Banks are saying, 'we have to be more careful here.'"
…
Corporate Earnings. Yes, there's been a profit boom in recent years. Corporate earnings, as measured by government statisticians, have averaged 8% of GDP over the past decade, up from a low of 6.5% in the early '90s. That has helped propel stocks upward.

But here's an unfortunate truth—the profit surge has been mainly in one area, financial services. Financial institutions have benefited from the consumer credit boom, the proliferation of new financial instruments, and relatively low rates. By contrast, the earnings of nonfinancial companies over the past decade have averaged about 5.3% of GDP, about the same since the mid-1980s. There are few signs of any acceleration, even after years of restructuring. “

Mandel’s figures speak for themselves. However, in an economy shot through with an ideology tailor made for the wealthy, but requiring an ever increasing level of demand from the not-wealthy, these are figures that dare not speak their name. So the job of weaving lies is left to political reporters and the like. Take this analysis of the Bush economy by Sheryl Stolberg, one of NYT’s Washington reporters (a pool from which we have gotten Judith Miller and Elizabeth Bumiller, whose very names echo all the freighted servilities and stupidities of the decade): “Echo of First Bush: Good Economy Turns Sour.”


“Mr. Bush has spent years presiding over an economic climate of growth that would be the envy of most presidents. Yet much to the consternation of his political advisers, he has had trouble getting credit for it, in large part because Americans were consumed by the war in Iraq.”

Notice how neatly the wisdom of 2004 is turned around, when the word from the governing class was that it was the popularity of Mr. Mission Accomplished that covered up the dissatisfactions with the economy. But now we have that ‘climate of growth’. In order to put the nail in, Stolberg quotes, of all people, Bruce Bartlett:

“From a strictly economic perspective, it is difficult to blame Mr. Bush for the current crisis. Even some economists who have been critical of the president, like Bruce Bartlett, who worked in the Reagan and first Bush administrations, say he cannot be held liable for the burst of the housing bubble or problems in credit markets.”

Well, is that precious or what? Why choose this particular economist who is critical of the president – why not, say, Paul Krugman? Because the first rule in political reporting is that a Republican who has criticized a Republican has been washed in the blood of the lamb – thus, anything that Republican says is as precious gold. The same rule applies to Democrats only to the extent that the Democrat doing the criticizing is Senator Lieberman. This is the code of the pack.

Anybody who looks at Mandel’s figures will note that the three trillion dollar lag is close to the two trillion dollar surplus, which came about due to the payroll tax increase put in by Reagan and the extremely mild increase on the marginal income of the wealthy by Clinton. They will further note that the swag was distributed by Bush to his wealthy buds. End of story.

Except it isn’t even the beginning of the story for birds like Stolberg, whose heart belongs to daddy.

“Once the stimulus package is passed, the president plans to turn his attention to making his tax cuts permanent, an approach that Joel Kaplan, the deputy White House chief of staff, said would provide “the foundation for continued economic growth.”
“And I think the historical record will reflect that,” Mr. Kaplan said.
Still, for the White House, there are obstacles ahead. Democrats are unlikely to agree to extending the tax cuts and, despite the seeming bipartisan enthusiasm for the stimulus package, it could run into trouble on Capitol Hill. Even if the package does pass, some economists — Mr. Bartlett among them — believe it will do little to improve the nation’s economic health, leaving Mr. Bush vulnerable to accusations that he did too little, too late.

Mr. Bush has roughly 51 weeks left in office. He had hoped to spend the time focused on creating peace in the Middle East and stability in Iraq. Now he has a new battle on the home front. And here in Washington, where finger-pointing is practically a pastime, the economic blame game has only just begun.”

The tears of things cry out for the President. We wonder what conservative shithead Stolberg is going to do her Plutarchian life with – Bumiller chose Condy Rice.

Come out of the cupboards, ye boys and girls…

Ultras

In Engel’s introduction to his The Situation of Labor in England, he gives a brief history of the displacement of the old, ‘detached’ rural farming and artisan system brought about by the new system of industrial production:

“The felt comfortable in their quiet plant life, and would never, save for the Industrial revolution, have been taken out of this clearly very romantic-cosy, but yet, for humans, unworthy existence. They were not humans, but simply working machines in the service of the few aristocrats, which up until now have lead history. The Industrial Revolution has thus only carried through the consequence of this when it made the laborers completely into a mere machines and took away the last remnant of independent activity from under their hands; but in doing so drove them to thinking and to the claims of a human situation. What politics effected in France, in England was effected by industry and the movement of bourgeois society overall; it pulled the last classes to be mired in the apathy against universal human interests into the vortex of history.”

Engels had already explained to his readers in the foreword what he means by the bourgeois:

“…I always used the word Middle Class in the sense of the English middle-class (or as it is almost always said, middle classes) where it means the same as with the French bourgeoisie the possessing class – the class, which in France and England directly, and in Germany as “public opinion” indirectly is in possession of state power.”

That is a pretty fascinating definition of class, linking it both to economic power and the power of the state even if – in backwards Germany – that power is possessed not by representatives, but by ‘public opinion’. The latter – the power of public opinion – is what fascinates me about the conflicts between ‘freedom’ and ‘the emancipation of the working class’. What, after all, does it mean for the workers to be uprooted from shameful apathy and thrown into the ‘vortex of history’ where they could think about the claims of the human situation except that the working class would have, among other things, an opinion?

This is the question that became very real to the generation of 1848 after the revolution failed. Herzen’s whole life has often been seen from the perspective of a before and after 1848 – he himself often wrote in those terms. Isaiah Berlin has noted that Herzen’s skepticism – about the people, and especially about progress – preceded the events of 1848. It is a shame that Berlin never really grappled with Lenin’s essay on Herzen, because Lenin makes an acute historical point:

Herzen's spiritual shipwreck, the profound scepticism and pessimism to which he fell prey after 1848, was the shipwreck of the bourgeois illusions of socialism. Herzen's spiritual drama was a product and reflection of that epoch in world history when the revolutionariness of the bourgeois democracy was already passing away (in Europe), and the revolutionariness of the socialist proletariat had not yet ripened. This is something the Russian liberal knights of verbal incontinence, who are now trying to cover up their own counter-revolutionariness by florid phrases about Herzen's scepticism, have not understood and cannot understand. With these knights, who betrayed the Russian Revolution of 1905, and have even forgotten to think of the great calling of a revolutionary, scepticism is a form of transition from democracy to liberalism to that servile, vile, infamous and brutal liberalism which shot down the workers in 1848, restored shattered thrones, applauded Napoleon III and which Herzen cursed, unable to understand its class nature.

Lenin’s notion was that bourgeois skepticism targeted the supposed incapacity of the working class to enjoy the cultural gains of progress. Ripped from their apathy, as Engels puts it, their minds were concentrated by their conditions on the material facts of life, making them great sniffers out of the web of self interest that underlies the industrial system, but contemptuous of the culture of the rentiers of that system. In Tom Stoppard’s Coast of Utopia, this is exactly how Herzen is portrayed:

“Being proved wrong has made them [the revolutionaries] cocky. They’re more certain than ever that the people are natural republicans waiting to be lead out of bondage. But the people are more interested in potatoes than freedom. The people think equality means everyone should be oppressed equally. They love authority. They’re suspicious of talent. They want a government to govern for them and not against them. To govern themselves doesn’t enter their heads. We thought we could educate the people like a horse doctor blowing a pill into a horse. We thought we could set the pace for social change. The emperors did more than keep their thrones, they pushed our faces into the wreck of our belief in the revolutionary instincts of the people.”

The luster and luxury of disillusionment – it has a standing, in the cold war mythology, with the metanoia of Saul in sacred history, except that it is conversion to the God that failed. There is an impulse in Herzen, embodied especially in the middle dialog in From the other shore, between a doctor and his lady companion before the house in which Rousseau wrote... something, which is full of phrases about the precarious civilization of people such as him and her, in the face of the inscrutable masses. But, as I pointed out in an earlier post, Herzen wrote dialog not because he wanted to represent himself in one speaker who cleverly undoes another, but because he felt the clash in himself of views. This, actually, is the liberal intellectual’s highest form of skepticism – the refusal to pretend that the clash has an easy resolution. Like Engels and Marx, Herzen was definitely one of the Ultras in 1848 – and like those two, he wasn’t stupid about it. But he didn’t quite have Marx’s moderation – for Marx was strongly of the opinion that the task at hand was democratic government, at least in Germany and Austria.

Stoppard’s picture of Herzen the sceptic is, as has been mentioned in many reviews, a bit too reliant on Berlin's picture of Herzen as the disenchanted liberal, kin to John Stuart Mill. Herzen doesn't see some elite, some cultured margin, as separate from and higher than the people and their potatoes. In reality, he was shrewder than this. In his letters to an old comrade [Bakunin] which have been used to make the case that Herzen turned to the right at the end - they were written in the late 1860s - he writes this:

“It is this pattern that the past, which we want now to leave behind, has followed. The forms, aspects, and rites have changed but the essence has remained the same. He who bowed his head before a Capuchin friar bearing a cross is no different from the man who bows his head to a court decision no matter how absurd it is.”

The man who bows his head to the court decision is, of course, the establishment liberal par excellence. He is bowing his head to his own system. It is only in seeing Herzen’s criticisms as total, directed not just at the people but at European society in general, that one understands how the sceptic and the revolutionary were joined.

the elementary particles and general society

Those who have read one or two of Houellebecq’s novels will immediately see that Jérôme Kerviel sprang out of the brain of Michel Houellebecq. His problem is that he is fictional. It must have bothered him:

“He failed in a bid for town council in his 20s; he never rose higher than a green belt, a midlevel rank, after years of judo training — because of his bad knees; and he attended an average college where he earned respectable but unremarkable grades.
“People who want to be golden boys or clever in the market don’t come here,” said Valérie Buthion, the director of the University of Lyon’s economic and financial engineering department, where Mr. Kerviel earned a master’s degree in market finance. “The showoffs don’t come.”

“. . . his hedonistic worldview and the forces that shaped his consciousness were common to an entire generation. Just as determining the apparatus for an experiment and choosing one or more observables made it possible to assign a specific behavior to an atomic system-now particle, now wave-so could Bruno be seen as an individual or, from another point of view, as passively caught up in the sweep of history. His motives, values, and desires did not distinguish him from his contemporaries in any way.”

“In the French media, former colleagues and even agents in a neighborhood real estate office near his apartment remembered him for his understated sartorial elegance and a boyish resemblance to Tom Cruise.”

“Moments after they climbed down from the Jeep, Bruno realized he had made a mistake. The estate sloped gently toward the south, scattered with shrubs and flowers. A waterfall tumbled into a clear green pool; nearby, a woman lay naked, sunning herself on a flat rock while another soaped herself before diving in. Closer to them, on a rug, a bearded man was meditating or sleeping; against his tanned skin, his long blond hair was striking--he looked a little like Kris Kristofferson. Bruno felt depressed.”

“Mr. Kerviel remained hidden from public view Friday. A handwritten note posted in his apartment building in the wealthy suburb of Neuilly-sur-Seine urged swarms of journalists to leave residents alone because the former trader had taken shelter elsewhere.
“Kerviel,” the note read. “Is not known in the building.”

"There remains some humans of the old species, particularly in areas long dominated by religious doctrine. Their reproductive levels fall year by year, however, and at present their extinction seems inevitable. Contrary to the doomsayers, this extinction is taking place peaceably, despite occasional acts of violence, which also continue to decline."

There will be mud...

Last night, LI went and saw There will be blood. An infrastructure film – what great timing! A shot from the past, when capitalism had its hooks in nature, instead of like it is today, when the real money is made in the supernatural, capital flows marked in nice digits on screens that have as much meaning as messages left on Ouija boards from old Aunt Marge’s avatar in the Beyond. Anyway, I loved the oil derrick. I loved the finding of the oil I loved the gloves on the pipemen, the long johns, the big, thick greasy ropes. I loved the moment the gusher came up. Giant has nothing on this film. Of course, even being a transplant to Texas, certain of the stories of the tribe have penetrated my skull, and I, even I, am stirred primally by an oil strike, vaguely remembering Spindletop and a thousand tents springing up all at once, oil rush towns and gushers that took weeks to cap, wildcatters suddenly rich and then squandering that money and dying on the down in a Houston backalley, of exposure – yeah, we revel in that shit. Hey, at one point in my life I was friends with the chauffeur of one of H.L. Hunt’s mistresses, at that time already long in the tooth, the mistress that is, and now no doubt lying peacefully underground. So I, too, have seen a little bit of the mystery and the glory.

The star of There will be blood is undoubtedly not the blood, but the dirt. Dirt as petroleum residue. Dirt as silt. Dirt as clay. Dirt as sludge. The blood at the end is not half as impressive as the pools of oil in the middle. There’s the scum that dries on the face of the minister who is dragged into a rivulet of oil by Daniel Plainview, and that he wears to the dinner table, a mask of his humiliation. There’s the puddles everywhere, black on that salt barren land – which Plainview promises to irrigate, which, of course, will eventually harvest its own lithic disasters as the mineral salts come to the surface. There’s the dried crust on the boots of the oilfield workers. There’s, picturesquely, oil on Plainview’s face as he watches the flames catch hold of the derrick – his demonic face. And oil on the child’s face. One never forgets that oil is gritty.

As has been remarked, ain’t a lot of women in this flick. In fact, for the first time in my memory, a film about man and primary product extraction goes to the brothel and shows – men! Not a female form to be found, dressed or undressed. A most, an irritating female laughter off camera, in the background.

LI, truth be told, is rather finicky, especially about grease. We do despise grease. But in this film, dirt is heroic. That’s the true sex in the film: man and mud. And just as we liked the grease here, the shine of it, we liked the capitalist at the center of it, the toad with the jewel in his forehead – he is an I.W.W. caricature kapitalist sprung to life, except that we only see him buying land, not chiseling his workers or breaking strikes. Nowadays, of course, those are considered virtues. To create an effect, best cheat people out of the unearned wealth they deserve from the minerals upon which they’ve planted their dwellings – that is a thing we all know is wicked. It is like robbing a man’s winning lottery ticker. But even here, in truth, by the standards of wildcatters in Texas, he pays pretty well for the land – enough to sicken your orthodox Randian.

brother, can you spare a trillion?

They used to tell me I was building a dream ...

LI had to swallow a little sob of pride, yesterday, as the Bush administration, in the form of the Fed, did what it does best – made sure that our billionaire class is all tucked in and shit. Are they being fed well? Have their diapers been changed? Since last August’s cuts (which, we’ve been assured over and over by financial journalists, were ‘brilliant’), the Fed has shown that it takes its mission (“drinks on the house!”) seriously.

Many might be thinking, gee, if trillions of dollars can be lost in the blink of an eye, perhaps the state should have captured that money and used it for something useful. Such thinking is vicious, criminal, and should be outlawed. As libertarians would point out, such thinking would hamper all our freedom – freedom – freedom. Soon we’d be demanding free health care and who knows what other kinds of shit. It would be the Soviet Union all over again.

But carpers are always a problem. Econospeak has a nice post referencing an article in the dear old New York Times of last July. Remember last July? It was the gilded age, last July. We were all so happy. Things were turnin’ around in Iraq. The towers of Babel were being built in the heart of many a gentrified area – such as in Austin – and everybody was getting rich, mining the potential in their up and up houses by tapping the mortgage money, here and there, for the new kitchen, the boat, and how about a six pack of 25 dollar wines? It was then that we heard the words of one of the captains of our industry and fate as though it were a blast from the Whore of Babylon herself, speaking at the ‘Anti-Christ welcome home’ party:


"Kenneth C. Griffin, who received more than $1 billion last year as chairman of a hedge fund, the Citadel Investment Group, declared: "The money is a byproduct of a passionate endeavor." Mr. Griffin, 38, argued that those who focus on the money -- and there is always a get-rich crowd -- "soon discover that wealth is not a particularly satisfying outcome." His own team at Citadel, he said, "loves the problems they work on and the challenges inherent to their business." Mr. Griffin maintained that he has created wealth not just for himself but for many others. "We have helped to create real social value in the U.S. economy," he said. "We have invested money in countless companies over the years and they have helped countless people"."

"The income distribution has to stand," Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, "you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard."

Can you imagine how we would all suffer if Mr. Griffin did not work so hard? I imagine that he would get out of his seat slower. Or, when some suited scumbag came in with another computer simulation showing how to fleece suckers ever more creatively, he’d airily wave them away. He’d be on strike, our maestro. Imagine that creativity taken away from the common good to which he so richly contributes! He’d lie down on his office sofa more. It would be so sad. Similar sentiments were uttered by Russian serfholders in 1850 – take away the ability to own a serf and you simply destroy the incentive structure that had made Russia great!

Sganarelle, 1848

O er hat nicht unrecht, jener populäre Philosoph, wenn er sagt, daß das Sein, nur ein Begriffsaggregat mit markierten elektro-magnetisch-psychologisch-galvanoplastischen Momenten ist. – Nestroy, Freiheit in Krähwinkel

It is strange that Nestroy’s Freedom in Kraehwinkel (Martin Swales once suggested that the title should be Englished as ‘Freedom comes to Chickentown’), which combined songs and music with farce, was never transposed into some equivalent of the Magic Flute of 1848. It is a political farce that takes revolution as another route to the improbable junction of two hearts; it makes a light operetta of revolution and reaction. Those with an interest in opera and Marx – ahem, Chabert? - would, I think, love Nestroy’s play – if this ain’t achin’ for a dialectical-materialist-allegorical reading, I don’t know my Benjamites! That someone like myself, not exactly an expert in real music, especially after the lifetime I’ve spent under the dulling influence of pop, that even I can hear the ghost of the opera it could be in the play, must count for something.

Okay, to come clean, people. Yes, there is one Nestroy play all Americans know. Except they don’t know that it came from Nestroy, via Thornton Wilder. I mean, of course, Hello Dolly. This can’t be helped - and hey, I love the Louis Armstrong version of this, so go fuck yourself if you have a problem with that! So there, my full confession has been made. The Nestroy play was also recast by Tom Stoppard as On the Razzle.

Freedom comes to Chickentown was revived in 1980 in Schwechat, a suburb of Vienna that contains the Schloß Rothmühle. This was the castle where Mesmer produced some of his first cures. It is now the center of the international Nestroy society. The history of revivals is pretty bizarre. The play was revived after the Anschluss, and – ah, the abysses that open up! – the word “Führer” was substituted for the word “Freiheit”.

The most interesting character in the play is Eberhardt Ultra, a journalist, and thus by trade a troublemaker. He appears in numerous disguises in the place – now as a Russian general (the Russians were called in by Franz Joseph to help crush the revolution), now as a priest, and once, crucially, as Metternich himself.

This play fits so well with the metaphoric of ghosts that Derrida explores in Specters of Marx that it is … ghostly. Except here the ghost is not communism, but just the opposite:

“Ultra: Also, wie's im großen war, so haben wir's hier im kleinen g'habt, die Reaktion ist ein Gespenst, aber G'spenster gibt es bekanntlich nur für den Furchtsamen; drum sich nicht fürchten davor, dann gibt's gar keine Reaktion!”

(Thus, as in the great world, so in the small, reaction is a ghost, but a ghost, as is well known, only exists for the timorous. thus, stop being afraid and reaction will just cease to exist!)

As we will see when I get to those Herzen posts, the ghost metaphoric is written all over Herzen’s 1848 writings. I think I will postpone, however, making the Derridean connections until then.

The plot of Freedom comes to Chickentown is your usual farcical fare. The established power – reaction – in Krähwinkel is represented by the mayor and his chief official, Klaus. Klaus has a marriageable daughter, Cecilie, who Klaus wants to marry to Jesus Christ – highing the obedient Cecelie to a nunnery, in short. But Cecilie is secretly smitten with Siegmund – who Klaus believes is in love with the Night watchman’s daughter. This belief is essential to the trick that brings Cecilia and Siegmund together, which I won’t reveal – I mean, one day you all might see this play! On the side of ‘freedom’ are the mid level Kraehwinklers – there’s little reference to labor. Thus, the Nightwatchman and his friends, Pemperl and Schabenfeller, among others, represent freedom and revolt. Pemperl is in it mainly for the sensation – as he says, he “just wants to see a little revolution”. The true liberals, here, are members of the ‘new class,’ relatively speaking. There’s Ultra, the journalist. And there is the vaguely upper middle class widow, Frau von Frankenfrey, with whom Ultra is smitten. Ultra’s disguises are not only in the service of the revolution – they are primarily designed to free Frau von Frankenfrey from the manipulations of the Burgermeister, who is manipulating the terms of her late husband’s will to force her to marry him.

Such is the genius of farce that the path of love and the expulsion of the villain create a perfect vehicle for freedom - freedom - freedom. Although by the time the play was performed, on July 1, 1848, reaction was on the verge of coming back. Ultra’s exorcism was uttered just as the specters were changing.

LI is interested in how, exactly, it came about that after 1848, an attitude arose, shared among the intellectuals of the three sites I’ve already referred to – the pessimists, the liberals, the radicals – that “freedom” was a secondary value for the ‘people’ – whereas, pre-1848, freedom was considered to be a subversive shibboleth that bonded together the dangerous class. On the one hand, there was the visible betrayal of the cause of the people by the liberals to the cause of legitimacy. On the other hand, there was the adoption of a narrower political notion of freedom – I would label this, provisionally, as the defeat of existential political freedom, the freedom to disturb the social order, and the rise of liberal freedom, which named a specific order. Ultra represents this split – he is visibly, in his changing costumes and his tricks, a Lord of Misrule, a visitor from the older notion of freedom – but at the end, with the Burgermeister expelled by fake students, Klaus’ rule over Cecilia overturned, and Ultra’s suit accepted by Frau von Frankenfrey, nothing really changes the order in Chickentown. The exorcism of the ghost of reaction at the end point is truly a surface phenomenon, the end of the rule of pigtails, or Zopf, representing the pseudo ancien regime of Metternich. The restricted order of freedom, the compromise with reaction that, in fact, became the norm, had the effect of demystifying freedom – taking away its former, chthonic power, and in essence removing it, in the perspective of the intellectuals, from the interest of the people.

A little note: that Ultra of Ultras, Karl Marx, was in Vienna on August 28, 1848, where he analyzed the struggle for democracy in terms of the struggle between the workers and the bourgeoisie, comparing it to what was happening in France. After he ended his talk, a man arose and said that no, the Viennese workers weren’t conscious, like the French ones were – they simply wanted 5 more Kreuzer a week. (G. Herman, Karl Marx in Wien, in Der Kampf, 268)

Our poor Pres

In some ways, LI feels sorry for Bush. The man’s plan, after 2004, was clearly to set another bubble in motion by clearing out the middle class’ retirement accounts. Plug Social Security into the stock market, watch the shenanigans make his friends rich, and the looting of that retirement wealth would have stretched the bubble well into 2009, when its fall, and the consequent decimation of the middle class ability to retire for the next generation, would fall on somebody else’s head. Oh, ownership society! a swindler’s wet dream, now even farther off! although the thugs in D.C. will still lustily call out for Social Security Reeeform, by which they mean finding that last trillion or two dollars Americans hid in the cabinet. Where’d that bitch hide my drinkin’ money! That is the question good Republicans want answered.

Revolutionary justice in the Mortgage Market.

TKO - watch it on the video!

Via Eschaton, LI went to this astonishing site, the Irving Housing blog. The writer uses public information to profile the use of multiple loans on houses to extract money on the “appreciation” of the house’s value – and, of course, that money was not exactly invested in the organs of production in these here states. More like vacations and private schools and the lot. The rhetoric on the site is reminiscent of the charivaris and jacqueries of the Old Country, when communities would come down upon the those who threatened the social order. At the same time, there is a distinct whiff of real estate porno about the whole thing – the comments about the condition of the houses pictured, down to the year and model of the stove in the kitchen, are … amazing. Rather like YouTube comments about whether some stripper/singer in some video is fat or not.

The resentments definitely are going to be spilling out this year. I was happy to see, on the NYT Opinion page last week, the loathsome opinions of that all around toad, Steven Landsburg – the oh so contrarian economist who contributes to everybody’s favorite white supremicist mag, Slate. (a, but they are contrarian KKK-ers there, as we all know – secretly liberal to the core!). It was a Timon of Athens happy feeling - the feeling of confronting something rotten in its purest aspect. Landsburg starts out dumb and gets dumber, paragraph by paragraph. His point is that free trade is good! mmm good! Welfare is bad! We don’t owe anybody nothing, people unemployed as manufacturing goes down, ha ha sucker. Landsburg, who is supposedly defending a thesis about international trade, defends it by cavalierly identifying it with trade per se:

“I doubt there’s a human being on earth who hasn’t benefited from the opportunity to trade freely with his neighbors. Imagine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother’s home remedies for health care. Access to a trained physician might reduce the demand for grandma’s home remedies, but — especially at her age — she’s still got plenty of reason to be thankful for having a doctor.”

How to put one’s brain around this fatuousness? Suppose I defended a law making it illegal not to speak French in the U.S. by writing – I doubt there’s a human being on earth who hasn’t benefited from language.”

Landsburg’s idea is that the destruction of the U.S.’s manufacturing base is made up for by the lower prices on goods we get from abroad:

“All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?
Um, no. Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?”

This is a nice argument. It calmly ignores the fact that the era of free trade has coincided with the era of trade deficits. Of course, if you just conceptually abolish the difference between trading in a nation and trading between nations – which is the point of Landsburg’s idiotic paen to trade – then there’s no problemo. The globe itself doesn’t have a trading deficit. But if you actually live on some point in that globe – say, the U.S. – then there is a big problem. If we pay for the lower prices through lower wages and greater and greater amounts of national debt, we are eventually going to be constrained in very nasty ways – or I should say, the bulk of the American population. Landsburg’s notion of we is confined to the five percent of the exploiters who have, through various unscrupulous and predatory means that are unwinding as I write this, engrossed the great benefit from destroying the bargaining power of labor.

These thoughts, I must confess, came to me only after I read a very sharp commentary on Landsburg’s column by my new favorite economics blogger, Peter Dorman. My first reaction to Landsburg is that he is using a measure that excludes intangible goods – in other words, he is tallying up the lower prices of first order consumer goods and ignoring social costs, which are evident whenever you go to Rust belt areas or industrial areas and start poking around. They are multipliers of crime and decreased well being. But, as Dorman points out, Landsburg is also bullshitting on the macro-economic level – like most of the radical free traders.

“Ordinary people in many parts of the world, and not just in the US, worry about trade because they are afraid that jobs lost to imports will not be counterbalanced by jobs gained through exports. They worry that there will be fewer economic opportunities for them and their children. They worry that their wages or working conditions will be pushed downward through competition with even more vulnerable, desperate workers in other countries. They are right to worry about these things. Such miseries are not destined to happen, but they cannot be ruled out either.

Except in standard economic models which begin with the assumption that increases in imports automatically call forth equally valued increases in exports. If trade balances on the margin we live in the happy world of comparative advantage, and it is indeed true, as Landsburg says, that “when American jobs are outsourced, Americans as a group are net winners.” But the assumption that trade balances at the margin is simply a modeling convenience, something that enables Landsburg to regale his students with blackboards full of elegant diagrams and equations. It is not grounded in real experience, and especially not the experience of the US economy since the 1970s.”

LI has some respect for the libertarian view of limiting the state’s right over one’s lifestyle choices. But we have zero respect, in general, for the libertarian view of the state. It is childish nonsense, and its motives are simply to paper over the unhinged system of mass inequality and increased exploitation in which we live with spurious justifications sprung from defective economic models. And, of course, the more spurious it is, the smugger the tone. I think libertarians have captured a certain tonal range of smug that you rarely hear, outside of successful high school debate teams. Ah, the soul in the tone of voice! There's the unctuous "I know best" voice of PC lefties hairsplitting identities and vying for the victim brand; and then there is the adenoidal, bowtied smugness of libertarians. I can take the former, but barely. The latter is the kind of thing that you just want to punch in the face.

Freedom vs. Happiness in the world series of Love

On March 13, 1848, this is how the revolution came to Vienna:

“On this day – recounted an eyewitness – already rather early, I observed in Herrenstrasse, on which there were State office buildings, individual workers were standing around, and a giant man, with a jacket, which was covered with patches, that was obviously neither his size nor made for him, moved in the direction of the buildings, with his dirty cap pressed boldly down over his eyes, with balled up fists, flashing glances and a backwards bent posture, all ready for blows, as if going into battle, with giant steps, whilst keeping suspiciously to the middle of the street. In his rear pockets he must have carried a mass of stones as ammunition, because his jacket was stiff on his back, and visibly he had to force himself not to be pulled backwards by the weight of his pockets. At his side hurriedly humped along, in order to keep up with his steps, a small, weighed down, dirty and rather aged man with a long open coat with long arms. He was loaded, each pocket stood out, and the hind coat pockets almost hit his calves…” (Ernest Victor Zenker, 112).

As the riot commenced in Herrenstrasse, the factories went up in Mariahilf (a linen factory in which a financial agent – presumably an accountant – was tossed into the flames); in Sechshaus, the police station and government building, plus a cotton factory, was stormed; by evening smoke was drifting into Vienna from the suburbs.

And this is how the revolution came to Krähwinkel:

Krähwinkler citizens, among whom are the Night watchman, Pemperl and Schabenfellner sit around a big table and drink)
…

“Klaus(coming to the middle of the stage). Good evening, my fellow citizens.

Nightwatchman (whispers to Pemperl). And here comes my very point!

Pemperl (to the nightwatchman). He’s a little round to be a point.

Klaus. I want just a little drinky, but you all don’t mind me – drink up!

Night watchman. Well, we are free to do so.

Klaus. Free? You should not use such brutal expressions. I am from the state office, and we don’t like it, that men are free.

Pemperl(to the group), Let’s go out in the garden – it is pleasanter in the free air.

Klaus. If only it wasn’t so free, that air – I’m staying here.

Pemperl. Primo, then we won’t have you breathing down our necks. (To the Night watchman) Come on, Mister!”

Nestroy plays with ‘freedom’ and its galvanic effect on the state officials who compose the respectable strata of Krähwinkel throughout the play. Freedom has the same horrifying sense for the respectable state employees as the invisible power of St. Petersburg has for the respectable strata of Russian officials in Gogol’s The Inspector General.

Which brings me to an issue that I haven’t even mentioned, in all of my posts so far. The liberal opposition – the protest against the hedonistic tendency of bourgeois society made by bourgeois intellectuals – was made, time and time again, in the name of freedom. That opposition informed, say, the cold war liberalism of Isaiah Berlin. Here’s a typical passage from his 1955 essay, Herzen and Bakunin on Liberty:

“It is a singular irony of history that Herzen, who wanted individual liberty more than happiness, or efficiency, or justice, who denounced organized planning, economic centralization, governmental authority, because it might curtail the individual’s capacity for the free play of fantasy, for unlimited depth and variety of personal life within a wide, rich, ‘open’ social milieu, who hated the Germans (and in particular the ‘Russian’ Germans and German Russians0 of St. Petersburg because their slavery was not (as in Russia or Italy) arithmetical, that is, reluctant submission to the numerically superior forces of reaction, but algebraical, that is, part of their ‘inner formula’ – the essence of their being – that Herzen, in virtue of a casual phrase patronizingly dropped by Lenin, should today find himself in the holy of holies of the Soviet pantheon, placed there by a government the genesis of which he understood better and feared more deeply than Dostoevsky, and whose words and acts are a continuous insult to all that he believed and was.” (Russian Thinkers, 104)

This paragraph stands out in Berlin’s essay for its overwhelming flow – the commas, here, that barely organize the sentence, signal that the rush of something – some feeling? some oratorical impulse? – has overwhelmed the analysis of 'Herzen on Liberty'. And that flood of feeling is directed towards a capture, or an envoûtement – one justified by a previous envoûtement, the capture of Herzen by the Soviets, who have put him in an (imaginary) pantheon. Although the motives of the Soviets become a little hazy – is it really because of some ‘casual’ word dropped by Lenin? In any case, the reason this is a kidnapping rather than an alignment of the interests of Herzen’s ghosts with the ghastly Soviets is because Herzen was defending the individual’s liberty. Interestingly, that liberty is connected to a decentralized economy – although Herzen was clearly a socialist throughout his life, and towards the end of it was recommending peasant communes, which, although decentralized in one way, surely bear upon the economic liberty of its members in ways quite other than that one would expect from Berlin’s Hayek-Popper language.

But whether Berlin is right or wrong about Herzen, surely his instinct – that liberty is opposed to schemes for social happiness – picks up on the tradition LI has been examining. Our question is about whether some further kidnapping hasn’t shaped this history – whether it is the socialist leaning working class or the bourgeois intellectual protecting liberty, proclaiming the worth of freedom, in 1848. This is not only a question of what Herzen believed – it is a question of what was being said by, say, the workers in Herrenstrasse. And this is where Nestroy’s play, written in 1848 (astonishingly, I can’t seem to find an English translation. Hard to believe this play hasn’t been translated) becomes really interesting. Nestroy was, like Moliere, an actor, and he did not exactly rank high among his socially snobby Austrian fellow writers of the time – Hebbel compared Nestroy to some poisonous flower whose stink corrupted the smeller.

As always, one must correct for the astonishingly persistent and stupid idea that the Masses were silent, that the writers were all mirrors of the bourgeoisie, and that we had to wait around until a buncha nervous intellectuals, Marxists all, gave ‘voice’ to the working class. One of the sources I am using to understand the 1848 effect is, for instance, a journalist whose writings were highly respected by Karl Kraus and a sentence from whom serves as the epigraph to, I believe, Wittgenstein’s Philosophical Investigations – Ferdinand Kürnberger. Kürnberger was the son of a lamplighter, and his enthusiasm for freedom, his exile from Austria, his return and his success as a journalist – as, indeed, the greatest journalistic essayist of the later half of the 19th century in Vienna – are all of a piece with being of the people. If one looks around at where the writers come from, the journalists, the pamphleteers, you will soon enough dispel the idea that all the writers came from out of the perfumed pocket of a furlined overcoat in some salon. Nor did their origins predict their predilections – aesthetes came from coal heavers. LI is playing around with the notion that one of the themes that emerges in the investigation of happiness triumphant is the third life – how it was constructed, how it operated, how it collided with the happiness culture in which it recognized something of its own, a sort of child to which it had given birth, but which it could no longer control.

1979 - a flashback

One thing LI loves about libertarians is their “never say die” attitude to reality. If reality blows up your ideology – why, then reality just needs a bigger dose of ideology! If we have a financial system which used the “magic of the market place” to take a financial sector that has the dull task of providing money for investment and turned it into the exciting task of betting on betting on betting on The Wheel of Fortune, the fault lies not in the financial market – but in the remaining structure of regulation. We never de-regulate enough, you see.

In fact, of course, we need a lot of re-regulation. We need re-regulation out the bungus. We need to regulate the financial markets to make it very, very difficult to maintain a hedge fund. We need to rein in derivatives, and we need to make sure that the excuse that is usually given for not regulating derivatives – that the market is played only by millionaires who can afford it – is roundly shown up as the lie that it is. In reality, the financial markets are tied in one with another – as how could they not be, since the whole point of deregulation was to make them interpenetrate each other and ‘speed up’ the transfer of capital – and so the millionaire’s misfortune quickly becomes everybody’s social misfortune.

We are really living in some kind of John Law virtual world. Surely, we are creatures in his dying dream. That brilliant little Scotsman’s vision is our reality. The American government – followed by the U.K. – chose to outsource countercyclical policies to the financial sector. This might actually be the only course open to a society that wants to preserve an increasing inequality of wealth – impoverishing the middle class from an absolute standpoint – while preserving the relative wealth of that stretch between the 80 percentile and the 30 percentile on the income scale.

The article people should be reading at the moment is THE SQUEEZE ON THE MIDDLE CLASS by William Kowinski in the New York Times Magazine. The New York Times Magazine, that is, of 13 July 1980. The pre-deluge days.

Kowinski starts out with the Newmans – a couple who are, for that time, doing very well:

“Now David and his wife, Bonnie, who works as a librarian in a suburban school, have a combined income of $60,000 a year. ''It's astounding that we have this much money,'' he says. ''And it's astounding that it doesn't buy anything.''

''Anything'' is, of course, an overstatement. The Newmans are not a family trying to stretch $15,000 and shocked to find no room for a daughter's prom dress or even, suddenly, next month's fuel bill. But that even they are concerned shows how pervasive the effects of inflation are. The inflated dollar's loss of buying power is only one change the Newmans have noticed in their everyday lives. There are other nagging reminders of inflation's effects - for example, quality seems to have declined as producers trim costs, while prices still go up. ''An item I might have bought a year ago for $30 would have been a quality item,'' Bonnie Newman says. ''Now it's inferior, and I won't buy it.''

''Whatever we're doing these days doesn't seem worth the money,'' David agrees. ''You spend $50 on dinner and it's not all that terrific.''

But economic expressions like loss of buying power or declining quality don't adequately convey the feelings of dismay and confusion that accumulate when inflation and recession change the value of money and all that money means, culturally and psychologically; when the assumptions of several generations about America's expertise and leadership and this country's pre-eminent place in the world are jumbled and wounded; when values are distorted and called into question by economic conditions that affect, in different ways, every class in society. Within the middle class in particular, there lurks the suspicion that their dream - the American dream - is endangered.”

Now, what is funny about the Newmans is that their complaints, that tiny addition to the collective roar in 1980 that brought Reagan into office, are based on economic conditions that were created for them by the mixed economic policies of the past. And those mixed economic policies were actually working pretty well for the Middle Class. That is, of course, one of the funnier ironies of the Reagan revolution. The Middle Class drove it, and thereby cut their own throats, systematically destroying the system that had favored them against the wealthy and the poor. A long quote here:

''Before, it seemed possible to look forward to a time when things would be O.K.,'' Bonnie said. ''Now I don't feel there will be an easy time when things are O.K. I feel it's always going to be like this. The whole situation is frightening and I don't know where it will end.'' At first glance, it might seem ridiculous that a young couple starting out with a $60,000 income should be worried about money, but the Newmans' worries aren't groundless. They live in Manhattan, for one thing, where costs and tastes make $60,000 less than the abundant income it might be in many other parts of the country, where taxes and the price of housing in particular are lower. And even with two paychecks (about half of the wage-earning families in America have at least two incomes), the fight against inflation is a losing one. Last year, median income for couples rose 8 percent, which was 5 percent less than the rate of inflation. From March 1979 to March 1980, despite a record increase in private, nonfarm wages, the real earnings of two-income households, adjusted for inflation, fell 4 percent. The only solace for them might be that single-income families did even worse.

On the other hand, the Newmans aren't suffering like many members of the lower middle class who have seen inflation deplete savings and dangerously erode buying power, or like those forced by the combination of inflation and recession to join food-stamp and unemployment and welfare lines. Even inflation alone, which attacks more directly than recession the professional middle class's buying power, liquidity and sense of security, does not hit the Newmans harder than anyone else. In fact, the Brookings Institution's Joseph Minarik, who has studied the situation in detail, says flatly, ''On almost every account, the average middle-class family is in a very good position in regard to inflation. They are the winners in inflation, in relation to both those above and below.''

Many people would find this a startling statement. Much of the clamor to control inflation arose because the middle class felt that it was inflation's primary victim, that in the rush to assist the poor and provide loopholes for the rich, the Government had forgotten the middle-class majority. But, according to Minarik, the poor have lost ground because welfare and other aid programs have not kept up with the rate of inflation, and the rich have lost ground because the investments that make up the bulk of their income have generally done badly. Only the middle class, because salaries have climbed, has held its ground - especially if a mortgage is the major debt, because homes have increased in value faster than prices through the worst of inflation.

''But the middle class doesn't see it this way,'' Minarik admits. ''Their homes are appreciating in value, but they don't see it. It doesn't put cash in their hands. Instead, they see prices rising. They don't see that the raises they are getting are inflated. Usually a raise of 2 percent would be considered good, but, because of inflation, they have to get 8 percent. But the inflation rate is higher than that, so what they see is inflation robbing them of all that extra money.'' Minarik's analysis of the middle-class position may be right, but it brings little comfort to David and Bonnie Newman. And it does little to allay the fears of middle-class families that their expectations will not be met.

Despite the changes in these expectations during the last couple of generations, the key ingredient in the middle-class formula for upward mobility is still higher education. So it isn't surprising that one of the middle class's primary concerns is the high cost of education.

It begins with a feeling of injustice, expressed this way by a former teacher: ''The thing that got me,'' she said, ''was when a bright, interested middle-class student didn't get a scholarship to college, but another student did just because he was from a lowerincome family.'' It is a variation on a middle-class theme: The middle class is denied financial help, especially from the Federal Government. Thus the middle-class student is excluded from college and that crucial step on the ladder to success, while the rich can afford tuition and the poor are given a free ride. There are two interesting facts about this variation: first, that the middle class has done something about it; and second, that the premise doesn't seem to be true.

The middle class has done better than the lower class - and even the upper class - in keeping up with the price of higher education. College costs have indeed risen over the last decade or two, but not, according to the Congressional Budget Office, as fast as the incomes of middle-class families with college-age children. The after-taxes income of upper-middle-class households, for instance, rose 106 percent between between 1967 and 1978, while education expenses increased 67 percent at public universities and 77 percent at private colleges. Between 1967 and 1976, the percentage of income both lower- and upper-middle-class families spent on education actually declined.

Despite studies consistently showing that middle-class students reach college, graduate and go on to earn advanced degrees far more often than lower-income students, formidable political pressure has been exerted to increase scholarship aid for middle-class students. It resulted in the 1978 Middle Income Student Assistance Act, which provides grants for middle-class students. A Capitol Hill aide who worked on the legislative package said, ''There was a feeling here that this was something that the middle class really wanted, so why not give it to them?'' According to Senator Daniel Patrick Moynihan of New York, whether the middle class had in fact lost ground relative to the lower class was not as important as its perception that it had. ''It has to do with the transfer of their status onto their children,'' Moynihan said.

''And, by God, they want it.''

Such perceptions, and their economic consequences, may be rooted in changes in attitudes brought on by the quick prosperity experienced by the middle class in the last couple of generations. Some families are pressed, for example, because they are trying to send two or three children through college simultaneously, whereas their own parents might have attempted to send only one at a time. With their standard of living based more on credit these days, families also may not have the savings in the bank that traditionally financed a college education.”

Ah, the factors are all there for the inversion – the middle class was on the brink of much easier credit, and much worse salary increases; it was on the brink of seeing social goods –education and health – skyrocket; it was on the brink of seeing the wealthy gain, first, an enormous tax advantage, and second, due to the de-regulatory impulse that has gone through thirty years, now, of governance, the advantage that comes from offloading costs of production onto third parties; and of course the breaking of what Moynihan called ‘middle class altruism’ – the willingness to spend taxes on helping the lowest income group. Because the latter factor outraged the narcissism of the middle class, it had to be accompanied by a myth that the lowest income group was, magically, so in charge of the State that it was directing all kinds of advantages its way. Why, the poor, in contradiction to every social law known to man, were living like kings! Getting that affirmative action; all those welfare payments; and all that terrible anti-discrimination law – it was so good bein’ poor in America that it was a wonder the middle class didn’t migrate en masse to the lower reaches. But, being virtuous and hard workin’ folks, they didn’t. That, of course, is the sour, reeking hypocritical attitude that colors one’s genuine affection for the poor old middle class. It is hard not to think at least sometimes: fuck em! Let the rich skin their fat asses! After all, they have voted all too often to get themselves into situations in which only aggressive fantasies – such as those feeding into the GWOT – offer them any escape. And that has been hard on the rest of the world. So far, no counter view has achieved any mass in the U.S. since 1979. We’ll see how much worse things have to get before such a view emerges again. Interestingly, the Middle Class has definitely become aware, since 1979, of the appreciation in the value of their houses. They seemed dimly aware that this was inflation, but since inflation was seemingly to their advantage, it drowned out the noise from other inflations. Now that this is not happening, it will be interesting to see how sensitive people get to the currents in the price system. They might just get very sensitive, indeed.

smash goes the clown

“Doubt everything at least once”, as Lichtenberg once encouraged himself , “even if it concerns the proposition two times two equals four.” The doubt, according to Lichtenberg’s belief, set autonomous thought in motion, and autonomous thought sets aside the veils that cover the world. Once these have finally disappeared for good, the true will prevail over the false everywhere, and the world will at last become better. Thought produces clever people. In a better world, however, humans are happier, and who says that the clever people won’t finally win their share in this happiness?

Nestroy, the contemporary of Schopenhauer, puts an end to this legend out of the siècle des lumières, bold and confident of the future. He goes through with the whole thing: he uses his understanding, he emerges from intellectual immaturity, he doubts. He rips apart the veils that cover the world and what does he see? The dummies win. They are the happy ones. They earn the big money. In another monolog from the wings of the stage he recounts how some have even called him a dumb lug and continues, “if only that were a prediction, then I would still have, at the end, some hope of happiness.” We doesn’t overhear the deep bitterness that hides in this nimble joke!” - Wenzeslaw Konstantinow

As Konstantinow points out in his article, ‘clown’ is a word derived from colonnus, to cultivate the soil. Clowns were originally from the country – and, as in Shakespeare, are funny because they had brought the savage’s manners – Europe’s Indians - into the court, or into the city. I want to do a couple of posts that zig zag along one of the crucial breaks in my narrative of happiness triumphant – that is, 1848. That means going from Nestroy, who hardly anybody in the English speaking world has heard of, to Alexander Herzen, who more people have, I hope, heard of. I’ve been immersing myself in Herzen lately. Luckily for all of us, the greatest introduction in English to Herzen is on-line – Isaiah Berlin’s famous essay, published in the New York Review of Books, The Great Amateur. This was published in 1968 – and, as Anthony Grafton points out in a recent essay in the same mag, Berlin by this time was ready to admit that Herzen died a revolutionary socialist, which he had rather marginalized in his earlier, 50s essays on Herzen, written for the CIA’s favorite intellectual front, Encounter magazine. Grafton’s essay is not on Herzen per se, but the Herzen who appears as the hero in

Tom Stoppard’s trilogy, the Coast of Utopia”

“As Stoppard himself has made clear, he drew this interpretation of Herzen—like much of the material with which he supports it—from the writings of Isaiah Berlin. In a series of articles, four of which appeared in the journal Encounter—a magazine created in 1953, as is well known, in part for political ends, to give Western intellectuals a stage on which to dramatize the powers of the free mind—Berlin portrayed the origins of the Russian intelligentsia.[4] His brilliant, colorful essays combined analysis of texts with dazzling sketches of characters and situations. They provide the model for Stoppard's effort to combine the portrayal of these men and women's world with an analysis of their thought.

Berlin insisted on the vitality and originality of these Russian thinkers, who, he argued, had invented a new kind of social criticism. He laid special weight on what Herzen and Turgenev had accomplished. These two, Berlin argued, had seen through what Orwell once called "the smelly little orthodoxies"; they had rejected the idea that any thinker had access to absolute truths. Herzen with his portraits of radicalism and its discontents, Turgenev with his all-seeing fictions that laid open the hearts of conservatives as ably as those of liberals, offered a powerful model of tolerant liberalism—one highly appropriate for exposition in a journal that existed to showcase the vitality of the free world.

The history that Stoppard offers here is somewhat one-sided—rather more so, I think, than Berlin's history, as it developed over time. In the mid-1950s, Berlin emphasized Herzen's moderation, his discovery that absolutes could do absolute damage. In 1968, however, when he published his introduction to the vast and protean text that is My Life and Thoughts, he acknowledged that no single formula could accurately describe the multiple changes and colors of Herzen's thought. He also made clearer than he had before that Herzen's radicalism was a deep part of his thought and being—not just a political program that he swore to as a boy and an early, deceptive passion, but a thread that appeared again and again, at the center of the fabric of his mind“

Herzen was one of those figures around whom, in the cold war era, the anti-communist liberals and social democrats wove a certain dream play. In this dream play, Lenin plays the part of the monster who destroyed the beautiful onward tendency to a worldwide U.S.A., one with a bit stronger of a New Deal – more social insurance from the government. So, in the preface to the last translation of From the Other Shore, which was, I think, done in the seventies, the translator dismisses the idea that Lenin could even have read Herzen, much less have learned anything from him. This had to be said because, in fact, Lenin wrote a preface to the reissue of Herzen’s philosophical works, and said kindly words. Anybody who reads From the Other Shore – and all should read it! will find plenty that Lenin absorbed. For instance, Lenin’s famous doctrine of encouraging the contradictions within a capitalist society so that they achieve a critical mass is certainly foreshadowed by a dialog concerning 1848, in which one of the figures (usually identified with Herzen, a totally stupid misreading of why one choses the dialogic form) says this, analyzing the reaction that was bringing an end to the 1848 revolutions:

"I repeat, desire and love of mankind are not enough to take an active part in the world that surrounds us. These are merely vague will-o'-the-wisps. What is love of mankind? What is mankind itself? To me, this smacks of the old Christian virtues rehashed in a philosophical oven-. People love their country, men. This is natural. But the love which embraces everything that has ceased to be a monkey, from Eskimo and Hottentot to Dalai Lama and the Pope, is something I cannot understand, it is too broad. If it is the love with which we love nature, the
planets and the universe, I do not believe it can be especially active. It is either the instinct or an understanding of the environment which leads to activity. You have lost your instinct. Now lose your abstract knowledge and manfully face the truth. Understand it, and you will see what sort of activity is needed and what sort is not. Do you desire political activity in the present scheme of society? Then become a Marrast or an Odilon Barrot and you will have it. You do not want this? You feel that every decent man should be a complete stranger to all
political issues -and must not seriously worry as to whether the republic needs a president or not, or whether the Assembly may or may not sentence people to hard labour without trial; or, better still should he vote for Cavaignac or for Louis Bonaparte. Which of the two is the better? You may think for a month, for -a year: and you will not be able to decide because, as children are fond of answering: "both are worse." All that is left to a man who respects himself is not to vote at all. Have a good look at the other questions a I'ordre du jour they are
quite the same: they are ready to give up the ghost and past praying for. What does a priest do when summoned to the bed of a dying man? He neither cures him nor attempts to cope with his ravings, but gives absolution. Grant absolution, pronounce the death sentence which must be carried out not in a matter of days but of hours. Convince yourself once and for all that not
a single one of the doomed will escape the hangman: neither the autocracy of the Tsar in St. Petersburg nor the freedom of the philistine republic; and pity neither the one nor the other. Better try to convince the superficial, light-minded people who applaud the fall of the Austrian Empire and pale over the destiny of the semi-republic, that the fall of the latter is as great a step towards the liberation of the people and of thought as the fall of the Austrian dynasty, that no exception and no mercy is needed, that the time of compassion has not yet come. Say
it in the words of the reactionary liberals: "'amnesty belongs to the future." And instead of love of mankind demand hatred for everything that impedes its progress. It is time to bind all enemies of freedom and progress with one rope, as they bind their convicts, and to lead them through the streets for everyone
to see that the French Code and the Russian Ukase, Radetzky and Cavaignac, are equally responsible. That would be a great lesson. He who will not be sobered after these shattering world events, never will be, and will die a Knight Toggenburg of liberalism, like Lafayette. The terror beheaded the
people but our task is easier: we are called upon to execute institutions, to destroy beliefs, to deprive the people of old hopes, to break down prejudices, to lay hands upon everything sacred, without mercy or reservations. We should smile upon and welcome only that which is rising, the dawn alone. And if we are unable to hasten its hour, we at least can indicate its nearness to those
who cannot see."
"Just like the old man on the Place de Vendome, who in the
evenings offers his telescope to the passers-by so that they can
admire the stars?"
"Your comparison is apt; that's just what you must do: show every man who passes how the rising waves of retribution are approaching nearer and nearer. Show him, too, the white sail of the ark barely visible on the horizon. Here is your work. When everything has gone down, when all that is superfluous has been dissolved in the brine, when the tide subsides and the ark of salvation comes safely to earth, then people will have something else to do, a great deal to do. But not now!"

LI can't resist the temptation to connect this to the news of the last week – the smash of the financial swindle that is such a perfect reflection of the neo-liberal regime is going on quite independent of any demonstration, any hand lifted against it, and as the machine eats itself it sucks in billions and billions that the hyperaggressive hyperpower can ill afford. One couldn’t have planned a ruin this immense from the outside. But, of course, unlike in the days of Lenin, or even Herzen, there is no party to take advantage of the opportune moment – the parties have long ago been absorbed in various third way isms, or have turned their ‘leftist critiques’ to high and mightily fighting each other through thickets of theory, or have reproduced Madison Avenue, shilling and thrilling to each bump and grind of the entertainment industry. There is no left left. And liberals like myself, the New Clowns, are on the very outskirts of the commentariat, in the slum. So we can just watch the disaster as a disaster. No creative destruction here.

News Flash!

We live in a time of few issues. Everything is going great. But underneath, people are thinking, do we really live in paradise? Isn’t there some issue we should be concerned about somewhere? Or is it just gonna be the cabana boys and ice cream from now on out?

Oh, how the West doth sleep! The answer is here, and it is grim: the Russkies are at it again! You remember when they used to wave their missiles at us. Now those bastards are trying to connect Extra terrestrial carnivores, no doubt to gain allies and wipe us out!

In the old days, we would have found this out from Weekly World News. Sadly, our only source for the secret information that we all need has gone bust – although with this news about the Russkies, I think we know now who was behind closing down our only unbiased source of news! Luckily, the Guardian is filling the gap.

“ET stay home
We should resist the efforts of Russian scientists to contact aliens who could threaten our very existence”

Says ever frowning David Cox.

“… a very different exercise has been undertaken by the Russian Academy of Sciences in Moscow. It depends not on listening for signs of life from outside, but on transmitting powerful radio signals deep into space in the hope that these will be recognised and decoded by alien lifeforms. People have toyed with this idea (now known as "active Seti") since the 19th century, and messages were once sent to supposed inhabitants of the moon. Now, however, Alexander Zaitsev, the chief scientist at the Moscow academy's institute of radio engineering, has been using a 70m-wide radiotelescope at the Evpatoria Deep Space Centre in the Ukraine to project state-of-the-art active-Seti messages to nearby star systems.

The problem is obvious. If we discover alien life ourselves, we can decide what, if anything, to do about it. If, on the other hand, we alert aliens to our own existence, we'll be at their mercy. There's no reason to suppose they'd be friendly. On the contrary, Independence Day may provide us with a more useful model than Close Encounters.”

The bastards! The fucking bastards! Luckily, with the Guardian in on this caper, diplomatic efforts will be used – before, that is, we invade Russia – in order to stop this heinous conspiracy. Never have I felt so grateful to a newspaper ‘of the left’ for publishing one neo con after another in its comments section, for if we had not been told about this, a couple years from now we’d be having to deal with giant jellyfish in flying saucers.

“So far, there's no reason to suppose that, if the Russians manage to discover any alien life, they'll be seeking to marshal its firepower in the new cold war against the west. All the same, there's clearly a danger that they might inadvertently prompt intergalactic annihilation. This may not be as pressing a matter as the perils being faced in Russia by the British Council's plucky staffers. Yet perhaps our formidable foreign secretary should none the less add active Seti to his growing list of concerns.

Many astronomers believe that any active Seti activity should have to be authorised in advance by the world's assembled governments. Isn't it time for Mr Miliband to tell President Putin in no uncertain terms that HMG will accept nothing less? Thereafter, we could all sleep safe in our beds once more.”

Unfortunately, Cox wasn’t able to penetrate the message the nefarious –Vitches of the Moscow Cosmological and Cosmetic center are sending. Luckily, LI’s far flung correspondents have broken through the corridors of sinister silence at great expense, as well as casualties that amount to four secret agents down and ten NKVD/FSB officers. This is the message they are sending! Jeepers, I don’t think the world has been threatened this much since Penguin escaped from prison that last time and threatened to set off the doomsday machine! But as I remember, we called on "Mission Accomplished" Bush - David Cox's favorite superhero - to fix that problem, and man, did he! We might need him again. How the wheel, as Cox might say, doth turn.