Gary Becker, an Appreciation by Michel Foucault

by Kieran Healy on May 4, 2014

Gary Becker, University Professor of Economics and Sociology at the University of Chicago, has died at the age of eighty three. I am certainly not going to attempt an obituary or assessment. But something Tim Carmody said on Twitter caught my eye: “People sometimes talk about ‘neoliberalism’ as a kind of intellectual bogeyman. Gary Becker was the actual guy.” In a somewhat similar way, people sometimes talked about ‘poststructuralism’ as a kind of intellectual bogeyman, and Michel Foucault was the actual guy. It is worth looking at what one avatar had to say about the other. Foucault lectured on Becker and related matters in the late 1970s. One of the things he saw right away was the scope and ambition of Becker’s project, and the conceptual turn—accompanying wider social changes—which would enable economics to become not just a topic of study, like geology or English literature, but rather an “approach to human behavior“. Here is Foucault in March of 1979, for instance:

In practice, economic analysis, from Adam Smith to the beginning of the twentieth century, broadly speaking takes as its object the study of the mechanisms of production, the mechanisms of exchange, and the data of consumption within a given social structure, along with the interconnections between these three mechanisms. Now, for the neo-liberals, economic analysis should not consist in the study of these mechanisms, but in the nature and consequences of what they call substitutible choices … In this they return to, or rather put to work, a defintion [from Lionel Robbins] … ‘Economics is the science of human behavior as a relationship between ends and scarce means which have alternative uses’. … Economics is not therefore the analysis of the historical logic of processes [like capital, investment, and production]; it is the analysis of the internal rationality, the strategic programming of individuals’ activity.

Then comes the identification not just of the shift in emphasis but also point of view:

This means undertaking the economic analysis of labor. What does bringing labor back into economic analysis mean? It does not mean knowing where labor is situated between, let’s say, capital and production. The problem of bringing labor back into the field of economic analysis … is how the person who works uses the means available to him. … What system of choice and rationality does the activity of work conform to? … So we adopt the point of view of the worker and, for the first time, ensure that the worker is not present in the economic analysis as an object—the object of supply and demand in the form of labor power—but as an active economic subject.

At first glance it seems strange to see Foucault emphasize the “active economic subject” here. A standard—indeed, clichéd—critique of Becker’s approach is that economic agents are calculating robots that bear little resemblance to real human beings and that, furthermore, their disembedded and completely systematic choice-making takes us far away from any sort of first-person point of view of labor in the economy. If we want a proper account of economic action on the ground surely we will have to look elsewhere. Wasn’t Marx supposed to have been doing something like this, for example? But Marx inherited the classical economics of Smith and Ricardo, where economic actors divide quite naturally into great classes—workers, capitalists, and landowners—and the problems for analysis are the determination of prices and the dynamics of its decomposition into wages, profits, and rents. Individuals bob around on the waves created by these much larger forces. They are reduced in the analysis to the price of their labor power and the surplus value that can be extracted from it. Foucault emphasizes how Becker and those like him succeeded in providing an economic approach to labor that allowed for the use of existing tools more usually applied to firms, while preserving the emphasis on a unitary actor:

This breakdown of labor into capital and income obviously has some fairly important consequences. First, if capital is thus defined as that which makes a future income possible, this income being a wage, then you can see that it is a capital which in practical terms is inseparable from the person who possesses it … This is not a conception of labor power; it is a conception of capital-ability which, according to diverse variables, receives a certain income that is a wage, an income-wage, so that the worker himself appears as a sort of enterprise for himself. … [The idea is] that the basic element to be deciphered by economic analysis is not so much the individual, or processes and mechanisms, but enterprises. An economy made up of enterprise-units, a society made up of enterprise-units, is at once the principle of decipherment linked to liberalism and its programming for the rationalization of a society and an economy.

… The stake in all neo-liberal analyses is the replacement every time of homo economicus as partner of exchange with a homo economicus as entrepreneur of himself, being for himself his own capital, being for himself his own producer, being for himself the source of his earnings. … So, we arrive at this idea that the wage is nothing other than the remuneration, the income allocated to a certain capital, a capital that we will call human capital inasmuch as the ability-machine of which it is the income cannot be separated from the human individual who is its bearer. … In other words, the neo-liberals say that labor was in principle part of economic analysis, but the way in which classical economic analysis was conducted was incapable of dealing with this element. Good, we do deal with it. And when we make this analysis, and do so in the terms I have just described, they are led to study how human capital is formed and accumulated, and this enables them to apply economic analyses to completely new fields and domains.

The shifts in focus Foucault picks out here, and the concepts and methods that accompanied them, are why Becker’s influence has been so enormous, why his work has been the straw man in so many social science articles, why his methods allow for such broad application, why the imagery of choice and responsibility that so often accompanies them has proved so politically attractive, why the world is now full of economists who feel empowered to dispense advice on everything from childrearing to global climate change, and why the audience for this advice is so large.

One of the pleasing things about reading Foucault on Becker is the way he refuses to let his Parisian audience settle in to a dismissive reaction. He scolds them about finding an economic analysis of the family amusing by reminding them of Pierre Rivière’s description of his peasant parents’ marriage. (“I will work on your field, the man says to the woman, but on condition that I can make love with you. And the woman says: You will not make love with me so long as you have not fed my chickens.”) And a little later in connection with Becker’s analysis of crime we find this:

In his article “Crime and Punishment” Becker gives this definition of crime: I call crime any action that makes the individual run the risk of being condemned to a penalty. [Some laughter.] I am surprised you laugh, because it is after all very roughly the definition of crime given by the French penal code, and so of the codes inspired by it, since you are well aware how the code defines a criminal offence: a criminal offence is that which is punished by correctional penalties. … The crime is that which is punished by the law, and that’s all there is to it. So, you can see the neo-liberals’ definition is very close.

Here we see Michel Foucault using the work of Gary Becker to remind an audience at the Collège de France about a central insight of Èmile Durkheim. It’s a funny image. But again, he emphasizes the vital shift:

It is very close with, however, as you can see, a difference, which is a difference in point of view, since while avoiding giving a substantive definition of the crime, the code adopts the point of view of the act and asks what this act is, in short, how to characterize an act which we can call criminal, that is to say, which is punished precisely as a crime. It is the point of view of the act, a kind of operational characterization, as it were, which can be employed by the judge … You can see it is the same definition when the neo-liberals say that a crime is any action which makes an individual run the risk of being sentenced to a penalty, but the point of view has changed. We now adopt the point of view of the person who commits the crime … We ask: What is the crime for him, for the subject of an action, for the subject of a form of conduct or behavior? Well, it is whatever puts him at risk of punishment.

You can see this is basically the same kind of shift of point of view as that carried out with regard to human capital and work. Last week I tried to show you how the neo-liberals tried to address the problem of work from the point of view of the person who decides to work rather than from the point of view of capital or of economic mechanisms. Here again we move over to the side of the individual subject, but doing this does not involve throwing psychological knowledge or an anthropological content into the analysis … We only move over to the side of the subject himself inasmuch as … we can approach it through the angle, through the aspect, the kind of network of intelligibility, of his behavior as economic behavior.

More than any other single person, Gary Becker was associated with and responsible for propelling that shift in perspective, and all that has flowed from it for the social sciences and their engagement with the world.

{ 53 comments }

1

sn 05.04.14 at 9:37 pm

Not disagreeing, but to round it out here is Becker responding to Foucault. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2142163

2

Sandwichman 05.04.14 at 9:40 pm

“this is basically the same kind of shift of point of view as that carried out with regard to human capital and work.”

A point of view that appeals to those who don’t know shift from shinola.

3

bob mcmanus 05.04.14 at 10:20 pm

Becker on Foucault on Becker 2012, with Ewald and Harcourt

4

JW Mason 05.04.14 at 10:47 pm

This is interesting but I’m not convinced that Becker contributed anything to economics that wasn’t already present in Jevons, Menger, etc. Perhaps Corey will agree.

In this they return to, or rather put to work, a defintion [from Lionel Robbins]

Return to, yes.

Foucault emphasizes how Becker and those like him succeeded in providing an economic approach to labor that allowed for the use of existing tools more usually applied to firms

This sounds reasonable but I think it’s wrong historically. The whole apparatus of optimization under constraints was developed first with respect to household consumption and production by firms has always been an awkward add-on.

I’m not convinced that Becker mattered for anything.

5

Colin Danby 05.04.14 at 10:49 pm

He was paradoxically a key figure in the development of feminist economics because his work helped legitimate household and family as things economists could write about, and his conclusions were a useful foil for pioneers in the field. Here’s a nice piece by Marianne Ferber (who died just a year ago), written with her characteristic sympathy and care: http://cscs.res.in/dataarchive/textfiles/textfile.2008-08-28.1438924157/file

6

bob mcmanus 05.04.14 at 11:00 pm

1) As far as I can from Becker in 2 above, Becker had only read the two lectures by Foucault at the time of that presentation, nothing else, and had barely heard of Bourdieu.

2) Foucault’s intellectual history is very well known: Marxist then abandoned, phenomenology; existential psychology; Heidegger then abandoned; and a very strong interest in Nietzsche after around 1954. Canguilhem in there somewhere. etc. I await evidence that Foucault devoured Becker’s work in the 50s and 60s, as far as I can tell , Foucault read Becker in the late 70s.

3) Assuming for the sake of argument that the 60-70s ideas of Becker and Foucault are compatible, rhyme, their complete lack of demonstrable connection and inter influence during their developmental and productive periods strikes me as extremely strong evidence for a more material, even deterministic theory of production of intellectual ideas and milieus.

4) In other news, in 1968, students didn’t inexplicably and independently decide to riot in thirty different countries.

5) Currently reading about the persistence of the family farm in the Aka River Basin, Tohoku, Japan. I read contemporary American social scientists all the time, with their studies of economies and social systems “from the ground up” They mention Foucault and other French post-structuralists. They do not mention Becker.

7

bob mcmanus 05.04.14 at 11:07 pm

In other words, just as Marx didn’t invent or create Capital or capitalism, but described what was happening around him, so neoliberalism was first a social and historical fact and condition arising from material changes in production and realization awaiting its chroniclers and explicators.

8

js. 05.04.14 at 11:11 pm

I’ve suspected that “human capital” is some sort of brilliantly horrible obfuscation. This is amazing. Thanks!

9

Sandwichman 05.04.14 at 11:54 pm

Some thoughts on “human capital” from the early 19th century that evolved into the analysis of surplus value and exploitation:

Charles Wentworth Dilke, Source and Remedy of the National Difficulties, 1821:

The real labour of every man is, I say, of equal value, or rather, is equally paid for, the few exceptions of great talents, &c. not being worth distinguishing. Society neither presumes nor pays for extraordinary ability: all the income, then, that a counsellor, or a judge, or a bishop, or a landholder, or a householder, receives beyond the pay of a common labourer, is interest of capital. Some instances seem, and do perhaps in a trifling degree differ, where talents are brought prominently forward, but not enough to affect a general principle. If a clergyman or a lawyer receive two, or three, or five hundred a year, it is because two or three or four thousand pounds is presumed to have been expended in his education. It is the same with all persons, down to the lowest merchants’ clerks and others, who are paid only a trifle more than the labourer. The real remuneration for the labour of all men is much the same; and therefore the value of the labour of all ought to be estimated by the value of the labour of the lowest great body of labourers; for even the high wages of mechanics and other artizans, inasmuch as it exceeds this, is interest of capital; capital expended in their apprenticeship, in indentures, premium, food, or clothing, or loss of time.”

Thomas Hodgskin, Labour Defended against the Claims of Capital, 1825:

If we duly consider the number and importance of those wealth-producing operations which are not completed within the year, and the numberless products of daily labour, necessary to subsistence, which are consumed as soon as produced, we shall, I think, be sensible that the success and productive power of every different species of labour is at all times more dependent on the co-existing productive labour of other men than on any accumulation of circulating capital. The labourer, having no stock of commodities, undertakes to bring up his children, and teach them a useful art, always relying on his own labour; and various classes of persons undertake tasks the produce of which is not completed for a long period, relying on the labour of other men to procure them, in the meantime, what they require for subsistence. All classes of men carry on their daily toils in the full confidence that while each is engaged in his particular occupation some others will prepare whatever he requires, both for his immediate and future consumption and use. I have already explained that this confidence arises from that law of our nature by which we securely expect the sun will rise tomorrow, and that our fellow men will labour on the morrow and during the next year as they have laboured during the year and the day which have passed. I hope I have also satisfied the reader that there is no knowledge of any produce of previous labour stored up for use, that the effects usually attributed to a stock of commodities are caused by co-existing labour, and that it is by the command the capitalist possesses over the labour of some men, not by his possessing a stock of commodities, that he is enabled to support and consequently employ other labourers.

10

godoggo 05.05.14 at 12:11 am

“Let me put it to you this way. They won’t pay it to you if you ain’t worth it. Period”
– Jack Nicholson

11

godoggo 05.05.14 at 12:13 am

Obnoxious, isn’t he?

12

one wonders 05.05.14 at 12:32 am

One wonders if an “active economic subject” is precisely a calculating robot, rather than its presumably organic opposite, since calculating robots and subjects are both definitively human inventions.

13

Tom Slee 05.05.14 at 1:34 am

I disagree with pretty much everything of Becker, but I’ve always been surprised by the claim from other social sciences that portraying humans as schematic utility maximizers is somehow insulting, while claims of “false consciousness” or the Galbraithian (?) idea of consumers as tricked by Madison Avenue are not. And I do wish that Foucault (and his successors) made as much of an effort to be clear about their assumptions as Becker was.

14

Ed Walker 05.05.14 at 1:59 am

Perhaps someone could show a benefit from Becker’s theory. How does it explain any aspect of our current economic mess? Where is the homo economicus busily negotiating with McDonalds over wages?

15

Tabasco 05.05.14 at 3:56 am

According to Becker, discrimination in the workplace does not exist because it is bad for business. Donald Sterling, therefore, is a figment of everybody’s imagination. Who knew?

16

Tim Worstall 05.05.14 at 9:37 am

“According to Becker, discrimination in the workplace does not exist because it is bad for business. Donald Sterling, therefore, is a figment of everybody’s imagination. Who knew?”

Not quite. Becker argued that discrimination was costly to the discriminator. And therefore would happen less often in competitive industries where that discrimination would be costlier.

Sterling seems to be a pretty vile racist. But he didn’t discriminate against black basketball players: perhaps because doing so would be excessively expensive?

17

Anon. 05.05.14 at 12:04 pm

@15

Donald Sterling, while deeply bigoted, gladly hired black people for his team. Hell, he even hired a black woman for the position of Trophy Girlfriend. He is the perfect illustration of “discrimination in the workplace does not exist because it is bad for business”.

18

Tabasco 05.05.14 at 12:37 pm

@17

He discriminated against African American and Hispanic tenants in his apartment buildings. He got sued by the Justice Department and paid penalties which to him were chump change. Re basketball: he got sued by Elgin Baylor for racial and age discrimination.

Sterling is a poster boy for being flagrantly discriminatory in his businesses while incurring no economic cost, contra Becker. He got away with it for decades and made billions.

19

Tom Slee 05.05.14 at 12:40 pm

Ed Walker: “How does it explain any aspect of our current economic mess?” 30 seconds of googling produces this – http://www.newyorker.com/online/blogs/johncassidy/2010/01/interview-with-gary-becker.html.

and this ” Where is the homo economicus busily negotiating with McDonalds over wages?”
http://www.becker-posner-blog.com/2013/12/minimum-wages-employment-and-inequality-becker.html

Becker was always much stronger on exit than on voice, but argument by rhetorical question (without looking) gets us nowhere.

20

Tom Slee 05.05.14 at 12:43 pm

JWM: “I’m not convinced that Becker mattered for anything.”

As the OP says: he made economics “not just a topic of study, like geology or English literature, but rather an ‘approach to human behavior’.” And that mattered, for good or ill.

And closer to your home, surely the Sargent/rational expectations school of macroeconomics would not have existed without Becker.

21

jonnybutter 05.05.14 at 12:48 pm

I’ve always been surprised by the claim from other social sciences that portraying humans as schematic utility maximizers is somehow insulting

What’s insulting is the portrayal of humans as essentially ‘schematic utility maximizers’. Is that really surprising?

I do wish that Foucault (and his successors) made as much of an effort to be clear about their assumptions as Becker was.

This. Yes, me too. Would be useful here to know who Foucault’s ‘successors’ were/are in your estimation, or to characterize the views you are agglomerating. Not baiting, I just find it difficult to do.

22

UserGoogol 05.05.14 at 1:11 pm

Tabasco @ 18: I think that’s misrepresenting what Becker meant by costs. The cost isn’t that people who engage in racism will have their businesses fail horribly, the cost is that by artificially restricting their pool of tenants, it takes them slightly longer to fill vacancies and the tenants they pick are slightly less reliable that what they’d otherwise get, which means they get slightly less money.

Their are probably situations where discrimination can be actively profitable, by splitting people apart and taking advantage of the situation to exploit people. But this seems like a situation where Becker is right. The problem is that the cost Sterling payed was “chump change” so it didn’t actually prevent him from being racist.

23

Agunnoe 05.05.14 at 1:18 pm

Great post!

For those of you interested in a more thorough critique of the Bourdieuian use of class, as in human capital, social capital, etc. then check out:

Bourdieu, Marx, and Capital: A Critique of the Extension Model”
By Mathieu Hikaru Desan

Sociological Theory December 2013 31: 318-342,

24

Barry 05.05.14 at 2:09 pm

UserGoogol 05.05.14 at 1:11 pm

” Their are probably situations where discrimination can be actively profitable, by splitting people apart and taking advantage of the situation to exploit people. But this seems like a situation where Becker is right. The problem is that the cost Sterling payed was “chump change” so it didn’t actually prevent him from being racist.”

Or, the more that somebody is a racist, the more that they are willing to pay the cost, or don’t see the cost. Becker had assumptions, and I believe that cognitive psych has not been kind to them.

25

jake the anti-soshul Soshalist 05.05.14 at 2:33 pm

I am likely missing something here, was Becker’s view of labor that original, or was he just
successful in promoting it?
I suppose it is not as insidious a view as the “protestant work ethic”. To me the view of
work as a universal good in itself tends to lower that actual market value of labor.

26

Chris Bertram 05.05.14 at 2:55 pm

Although, Tom Slee, following your link to Becker’s minimum wage blog, it contains the argument from “it is no coincidence that” , a close cousin to argument by rhetorical question.

27

UserGoogol 05.05.14 at 5:47 pm

Barry: I was thinking more about the narrow point that racial discrimination imposes costs. Whether people respond to these costs by refraining from racism is a separate question.

28

Paine 05.05.14 at 7:50 pm

Haeven’t read all the comments yet

But the human as commodity ..chattel ..and other bondages
This is objectification and force all at once
Versus
The human as seller of her own marketable commodity her labor power
And the human as her own marketable “capital “

That strikes me as the great divide

Viewing oneself as commodity or capital
Relies on the distinction between the fully commodify labor power
And the skill set enhanced heterogenious labor power
that retains for its possesor
some rent producing market power
Perhaps from a guild or a union alone
Or perhaps thru vervain rare talent of scarce skill set

Marx liked to cut right to the essential commodity state

Historically ” the final , or steady state wage of a certain quality of labor power
Ie
The production price of a certain quality of laboring power
Where the – owner- “rents” are zero

29

Paine 05.05.14 at 7:55 pm

The concept of self exploitation is not within the Marxian categories of course
And in that system
the notion that part of the revenue for selling ones laboring power
Might be profit
Is a categorical error

The notion of any self accruing surplus either profit or rent
Must be the consequence of shared surplus extracted from primary producers
value added

Here the theory of mehr vert gets involuted but not incoherent if one proceeds with care

30

Paine 05.05.14 at 8:12 pm

The reduction of labor service to a commodity does not entail exploitation

The formal subsumption of a lawyers services for example by on staffing her
By itself does not entail subjection to exploitation
So long as the independent provision of that service on the market exists as an alternative

The radical transformation of a service into it’s capitalist form
Involves the substitution of co operating capitalist hired labor powers
That individually can no longer produce a marketable service

Marketable here meaning sustainably salable at the market price

31

Bruce Wilder 05.05.14 at 8:16 pm

Becker on the GFC 2008 and its implications for the Chicago view of economics:

What I have always . . . taught to be the Chicago view, is that free markets do a good job. They are not perfect, but governments do a worse job. Again, in some cases we need government. It is not an anarchistic position. But in general governments do a worse job. I haven’t seen any reason to change that other than, yes, we’ve seen another example where free markets didn’t do a good job: they did a bad job. But to me there is no evidence the government did a good job either, leading up to or during the process.

At base, the view being pressed forward is a fairy tale of the most simplistic kind. The purpose of the elaborate analysis is to eliminate any insight into how the actual system works and what relationships in that system produce. ‘Cause obviously racial discrimination systematically harms the rich white guy. And, a higher minimum wage is bound to hurt the minimum wage worker most of all. Everybody can see that.

32

john c. halasz 05.05.14 at 8:24 pm

Gary Becker, economics Nobel Laureate, dies at 83 Japan Times. I know it is not polite to be disrespectful of the recently deceased, but when I saw Becker speak at the Milken conference in 2008, it was the first time I saw toads hop out of someone’s mouth.

33

William Timberman 05.05.14 at 8:54 pm

If I were God — or even Dante — Becker would be spending eternity as a Walmart greeter.

34

gregor 05.05.14 at 9:58 pm

I am not an economist (though I did take a course in Economics in the sixties that used Samuelson as the textbook printed for us third worlders courtesy of US Aid), and had never, till now, heard of Becker or his work, but from reading this post and the comments he sounds like a guy who was too pleased with his analytical skills and applied it to every thing in sight.

As an engineer I understand the feeling.

35

Paine 05.05.14 at 10:04 pm

@ wilder
I think for the professional classes in accounting health education and perhaps even law
Who are now about to get devoured by the next wave of capitalist technical sublation of skills

The notion of human capital is a nice thought anchor to tie around their ankles

36

Paine 05.05.14 at 10:07 pm

@hazy

Excellent obit

37

Paine 05.05.14 at 10:10 pm

Btw
I hate the Gallicans Trope

Something great and world shaking something few have noticed let alone appreciated
is happening Here
Under this rock I’m about to over turn

All out side the tent hype no inside the tent mermaid

38

Tom Slee 05.05.14 at 10:36 pm

Paine.

It is too
much work

to extract the meaning of your comments from the frippery.

Plus, it’s infectious. That’s not
a good thing.

39

Tom Slee 05.05.14 at 10:37 pm

Chris Bertram #25. It’s a fair cop, but two wrongs don’t make a right.

40

john c. halasz 05.05.14 at 10:51 pm

@35:

That was from Yves Smith. The link didn’t survive the cut-n-paste. But it’s today’s news. Obviously, I’ve never attended a Milken Institute event. I’m just a red carpet fan, held safely behind the ropes and fences.

41

john c. halasz 05.05.14 at 10:58 pm

@37:

Some translations. “Vervain”- an herb to ward off vampires? “Mehrvert”- German for surplus-value. I have no idea what the superiority of the French king over the Pope is doing here. Nor mermaids.

42

Bruce Wilder 05.05.14 at 11:22 pm

Paine @ 34

Indeed.

“Human Capital”: shoelaces for concrete boots, part of the neoliberal fashion in swimming costumes

As an explanator, it’s a new version of atomistic personal virtue working its way in a just world. In addition, to starring under its own name, it makes many appearances, credited as, “skills” or “skills and education”.

I’m not sure I’ve quite grasped Foucault’s insight, or, perhaps, I’m not sure Foucault grasped the nature of Becker’s. Whether from the point of view of the magistrate or scofflaw, the notion that crimes are simply the acts liable to penalty, the code of law remains intact as the defining system, no? Law remains in the foreground, eclipsing moral method or critique. That’s not what Becker accomplished: by changing point of view, he eliminated the political structure of political economy, from consideration as explanator — it just fades away into the deep background, to remain unnoticed, as a narrative of personal virtue spins out. (In terms of academic imperialism, maybe that’s not the critical thing?)

In this narrative of personal virtue operating in a just world, there’s no worry that valuable investments might go unrewarded. It’s not like a law that sanctions feebly or randomly; it’s simply not there.

The hierarchy of power, which is the enterprise bureaucracy — the means of dominance and extraction as well as production and distribution, defining class by its ranks and authority — fades away, as individual income is explained by education and “skills”. Long-term trend: Skill-biased technology change explains increasing income inequality.

And, if education as a capital investment explains increases in personal income, then, as a matter of public policy, we should promote better and more education. That sounds pious and virtuous. But, we should also charge for it. It’s OK to ask students to finance their “human capital” investment with debt, because they will have increased income from that income, and that income should be transferred to capitalists willing to bear the risk, except they shouldn’t actually bear any risk, the government can guarantee the loans, and prevent the discharge in bankruptcy, but . . . I digress.

43

Anon. 05.06.14 at 8:53 am

@41

“except they shouldn’t actually bear any risk, the government can guarantee the loans, and prevent the discharge in bankruptcy”

Well, this is the reason student loans are affordable. A variable rate student loan right now costs almost nothing in real terms, less than half a percent. Rates would be very different if they were not subsidized.

44

bob mcmanus 05.06.14 at 9:18 am

I’m not sure I’ve quite grasped Foucault’s insight…as a narrative of personal virtue spins out.

Not personal virtue, maybe personal agency.

BW: eliminated the political structure of political economy, from consideration as explanator

F: ensure that the worker is not present in the economic analysis as an object—the object of supply and demand in the form of labor power—but as an active economic subject.

The subject and subjectivity, who is not an object to herself, requires a lot of effort to understand and perhaps can’t be understood from outside as an object to us. Foucault, who has more of a background in existential psychology than Marxism, I think was playing serious with Becker, who wouldn’t have a clue.

I could say “the worker creates Capital” but that’s is too objective. I, no we, create Capital, but only as revolutionaries in collective proletarian consciousness.

Does that sound mystical? It is the categories and sciences of liberal bourgeois political economics that is the fetishism and mystification.

45

Tim Worstall 05.06.14 at 10:46 am

@30. “And, a higher minimum wage is bound to hurt the minimum wage worker most of all. Everybody can see that.”

No one does actually say that. Rather, that a higher minimum wage will hurt those who end up without a wage.

fine to disagree with the argument but misrepresenting it is a little unfair.

46

RosencrantzisDead 05.06.14 at 12:10 pm

@44

Is this not splitting hairs? They also say that the people who will end up without wage are the low skilled (i.e. those on the minimum wage). An example from here:

Several decades of studies using aggregate time-series data from a variety of countries have found that minimum wage laws reduce employment. At current U.S. wage levels, estimates of job losses suggest that a 10 percent in crease in the minimum wage would decrease employment of low-skilled workers by 1 or 2 percent. The job losses for black U.S. teenagers have been found to be even greater, presumably because, on average, they have fewer skills.

There is also this quote from the same source:

In addition to making jobs hard to find, minimum wage laws may also harm workers by changing how they are compensated.

This is pretty close to what was said @30.

47

William Timberman 05.06.14 at 1:36 pm

bob mcmanus @ 43

I think you’re right that Foucault takes Becker more seriously than Becker takes himself, and agree that it may be because he finds it provocative to look at Becker through an existentialist lens. For my own part, I find Foucault’s analysis more than a bit capricious. How the individual should confront the otherness of the world is one thing; how — and why — society should promote the general welfare, provide for the common defense, etc., is quite another, and Becker, unlike Foucault, seems to have no idea which is which. Libertarians and their camp followers — and I would count Becker among them — are at best comic opera existentialists, in the sense that the one virtue which distinguishes an existentialist, his willingness to accept the consequences of his own actions, is invariably absent from their deliberations except as the burden they’re all too willing to impose on others.

And as long as we’re on the subject of provocations, it seems to me that Foucault on Becker exhibits some of the same defects as Corey Robin on Hayek and Nietzsche. Both are interesting propositions, but ring true only if one overlooks the far different metaphysical domains which they attempt to bridge. Fun, but not in the end persuasive, at least for me.

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awy 05.06.14 at 1:48 pm

huh. i thought foucault’s micro power thing would have the most to say when a simplified agency model’s rubber meets the road. he characterizes becker’s world view fine, but from what little i read, didn’t focus on how that vision deviates from actual workings.

the whole point of a labor/capital distinction is to make it clear that labor has some power deficit vs capital and it’s the latter that dictates production decisions. to erase the distinction is certainly ‘interesting’ but shouldn’t someone like foucault say more about what becker’s vision doesn’t capture.

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Consumatopia 05.06.14 at 2:51 pm

There are probably situations where discrimination can be actively profitable, by splitting people apart and taking advantage of the situation to exploit people.

Hasn’t housing discrimination historically been exactly that kind of profitable discrimination? White tenants only wanted to live next to other whites. Landlords want to sell to whites, so they discriminate. That discrimination excludes black tenants from bidding in markets that whites are interested in. Which can mean lower prices for white tenants.

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Bruce Wilder 05.06.14 at 7:18 pm

bob mcmanus @ 44

Now I know for sure I didn’t understand Foucault. Thanks.

Anon. @ 43: . . . this is the reason student loans are affordable.

Except, they are not “affordable”, they are a highway to debt peonage.

There’s an older form and tradition of economic analysis — before Becker — that would explain personal labor income in terms of political power and economic rents — unions, professional licensing, bureaucratic hierarchy — and in that framework, the expectation is that the specific benefits of investing in education would tend to diffuse away from the individual into the whole society. If increments to income from education ended up lodging anywhere in particular, it would tend to be in land rents, as the educated crowded into cities, where the productive activities that used education concentrated educated people. In that framework, one could recognize that investment in educating a large portion of the population had a huge social payoff, without imagining that any individual would be able to capture and monetize the incremental benefit long enough to pay off a mortgage on it.

Tim Worstall @ 45

No one does actually say that [a higher minimum wage is bound to hurt the minimum wage worker]. Rather, that a higher minimum wage will hurt those who end up without a wage.


fine to disagree with the argument but misrepresenting it is a little unfair.

I am not misrepresenting Becker’s argument. Becker’s argument is a misrepresentation, of the motives of the person making the argument, of wage-setting and of the likely effects of a minimum wage policy. Pointing that out is perfectly fair.

Becker’s argument re-locates the source of labor’s productivity from the system and organization of the production process, and assigns it as a personal possession, “human capital”, attached to the individual’s character. The worker’s marginal product — and the wage that person is capable of earning — is, in Becker’s accounting, a personal quality. Some workers, having very little “human capital” are only capable of earning $6.00 / hr, so a minimum wage of $8.00 / hr hurts them, by preventing them from working and earning what they can earn.

Common sense intuits, I think, that minimum wage workers have no bargaining power with employers, and their wages tend to be set too low as a result. Economics, honestly done, can rationalize this intuition, by acknowledging the apparent power of employers (e.g. in a monopsony model or a take-or-leave-it-offer in a game), and calculating on the likely effects of too low a wage. All that economic theory can say with assurance is that the effects of a minimum wage will vary with the relative level of the minimum wage. If the effect is to raise the wages of low-wage workers from an inefficiently low level, low-wage workers may or may not work more, but even if they do work fewer hours are likely to earn higher incomes. Ultimately, the effects of a particular rate for the minimum wage is an empirical question, but theory suggests that the minimum wage would have to be quite high before most affected workers actually saw their incomes decrease, as a result of an increase in the minimum rate.

Getting to an outcome where some significant number of particular individuals were actually excluded from the labor market — as opposed to enjoying a certainly higher income, and possibly fewer hours — by a minimum wage really requires that a worker characteristic — like Becker’s “human capital” — completely dominate political and organizational factors, in determining wages and productivity. Becker’s explanation requires a near total eclipse of a “labor market” as a setting for political negotiation of a wage, as well as firm management and organization of the production process, as a context for realizing factor productivity.

That’s quite a remarkable performance, but it is, essentially, a deception — hiding the more conventional and appropriate apparatus of economic analysis behind a curtain, while playing on false (and often ugly) intuitions and prejudices concerning why the low-wage worker earns a distressingly low wage. To the extent that Becker is addressing the social class (and political interest group) of employers, who think they benefit from cheating low-wage workers, I’m sure his arguments seem to have strong attractions and merit, but the only relation of merit to truth-value will be an inverse one.

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notsneaky 05.06.14 at 8:02 pm

Re 20: surely the Sargent/rational expectations school of macroeconomics would not have existed without Becker

Not sure what one has to do with the other except that both Becker and Lucas were at Chicago.

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notsneaky 05.07.14 at 7:18 am

I’ve always had a soft spot for Michel (not least because he was actually… funny. Lots of his writings have some quite good digs and kicks and jokes). He was more insightful than his critics allowed and smarter than his admirers deserved. Which, even though on the surface of it is about Gary rather than Michel, is sort of the point of Kieran’s post, whether intended or not. And Michel might have appreciated the fact that most of the commentators here completely miss the point in exactly the way he says they’d miss the point.

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john c. halasz 05.07.14 at 4:58 pm

Foucault obviously took up Becker because of his interest in elaborating on “technologies of the self”. But equally, he wasn’t dealing with him “straight”. There is always something parodic and even a bit perverse in the way Foucault deals with his sources and develops his notions. That the self consists entirely of its self-manipulations, in bending, folding, shaping the forces that impinge on and generate it is a case in point.

So it’s no accident, as the saying goes, that Philip Mirowski ends up relying in part on Foucault in his account of the persistent hold that neo-liberal ideology has on the very self-conception of those who must live under it.

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