Henry

My Georgetown colleague and friend, Dan Nexon, has started doing interviews with sf/f authors for the New Science Fiction and Fantasy channel of the New Books Network. The first one up is Ken MacLeod, talking about _The Night Sessions_; Alastair Reynolds will be up soon, as will others. This is probably also a good moment for me to announce that we hope to do a Crooked Timber seminar on Ken’s work sometime around the middle of next year. We hope to have a good bunch of respondents – feel free to suggest others (especially women, given our consistent problems with gender ratio) in comments.

I was on holiday in Ireland over the last couple of weeks without regular Internet access; one of the things I missed was the Niall Ferguson debate. I liked how “these”:http://drezner.foreignpolicy.com/posts/2012/08/23/intellectual_power_and_responsibility “posts”:http://blogs.hbr.org/fox/2012/08/niall-ferguson-and-the-rage-against.html from Dan Drezner and Justin Fox identified Ferguson’s behavior as symptomatic of a broader structural change.

Drezner:

bq. Credentialed thinkers like Zakaria and Ferguson, once they’ve reached the top, become brands that can multiply their earning potential far more than was the case fifty years ago. The ways in which the Internet concentrates attention on a Few Big Things means that if you are good and lucky enough to become one of those Big Things, money will rain down on your door. … I’ve heard from a few sources that Ferguson resigned his professorship at Harvard Business School (but not Harvard University) because he calculated that if he gave four or five extra talks a year, he could earn his HBS salary without all the tedious teaching obligations.

Fox:

bq. The path to lucrative thought-leaderdom blazed over the past couple of decades was to establish yourself with dense, serious work (or a big, important job) and then move on to catch-phrase manufacturing (I spent a few weeks following Tom Friedman around in 2005, and learned that he had made this transition very deliberately). Nowadays ambitious young people looking to break into the circuit often just aim straight for the catch-phrases. Speakers bureaus need pithy sales pitches, not complex erudition — and while speaking fees might be spare change for Mitt Romney, for journalists and academics they often represent their only real shot at a top-tax-bracket income. The result is an intellectual environment that seems to increasingly reward the superficial, and keeps rewarding those who make it into the magic circle of top-flight speakers even if they don’t have anything new or interesting to say. Or at least: a part of the intellectual environment is like that.

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Given past history, I’m probably not the best person to write disinterestedly about David Graeber’s _Debt_. Still, I think that both critics and fans of his work ought to read this “comprehensive critique”:http://jacobinmag.com/2012/08/debt-the-first-500-pages/ by Mike Beggs in the new issue of _Jacobin._ Begg admires the energy and ambition of the book, but is also blunt.

bq. _Debt,_ then, does not need any more kind words from me. It’s enough to say that there is a lot of fantastic material in there. The breadth of Graeber’s reading is impressive, and he draws from it a wealth of insightful fragments of history. The prospect of a grand social history of debt from a thinker of the radical left is exciting. The appeal is no mystery. I wanted to love it.

bq. Unfortunately, I found the main arguments wholly unconvincing.

bq. The very unconvincingness poses the question: What do we need from our grand social theory? The success of the book shows there is an appetite for work that promises to set our present moment against the sweep of history so as to explain our predicament and help us find footholds for changing it. What is wrong with Graeber’s approach, and how could we do better?

Justin Fox has a “piece”:http://blogs.hbr.org/fox/2012/08/the-wall-street-book-everyone.html on Doug Henwood’s wonderful book, _Wall Street_

bq. These days, it’s not hard to find people who question the role that financial markets play in our economy, who argue that shareholder value is a flawed metric of corporate success, who say that linking pay to financial markets is a big mistake. In 1997, though, such arguments were pretty close to unheard of. Which is what makes Doug Henwood’s book _Wall Street,_ published that year, such an amazing document. Along with explaining in clear if caustic terms how financial markets work, the book prefigures almost every criticism of the financial system that’s been levied since the crisis of 2008. An overleveraged housing market? Check. A link between financial sector growth and income inequality? Check. A natural tendency toward instability in financial markets? Check. … There’s a saying in investing that “being early is the same as being wrong.” It’s not _quite_ like that in intellectual endeavors, but Henwood clearly hasn’t gotten his due. That’s partly because he was early, partly because he operates in an ill-defined border zone between journalism and academia, partly because, well, he’s a crotchety leftist. But he was describing a lot of important problems with the workings of our capitalist system at a time when practically everyone else was proclaiming the brilliance of the shareholder-dominated Wall Street way. We should have been listening to him then, and we should be rereading him (or reading him for the first time) now.

The “book is available for free download here”:http://wallstreetthebook.com/ (with a suggested donation to the author, who got a relative pittance for writing it; left-leaning publishers sometimes treat their authors like shit). It’s every bit as good as Fox says it is and better – there’s a very strong argument that it’s the best leftwing book on actually-existing-capitalism that’s been written in the last couple of decades. It _is_ a little out of date – a lot has changed in the intervening years. I would love to see an extensively updated second edition, both for purely selfish reasons, and because I think that it could play an important intellectual and political role (most people on the left don’t understand how finance markets actually work). From various conversations, I’m sure that I’m not the only person who thinks this. The obvious way to get such an edition going – if Doug were interested in writing it – would be a Kickstarter or similar. But it might help encourage Doug to do this if there were some evidence of public interest beforehand (again: if he wants to do this – I have not consulted him before writing this). Hence this post – if you would be prepared to kick in to see this book written then say so in comments, or elsewhere as you like. I’m in for a commitment of $100 or over myself (nb that this is _not_ a suggested donation – more a credible commitment and a signal that I personally really, really would love to see this book come into being).

A short note on something I’d like to have time to write about at further length someday. There’s a common perception among US lefties that Northern European states like Germany are (or at least were, until recently) the land of milk, honey, and organized capitalism. But actual European social democrats have more complicated feelings about organized capitalism than most of their American counterparts. “Helen Callaghan and Martin Höpner”:http://www.mpifg.de/people/hc/Publications/documents/2011-12-16%20Changing%20Ideas%20resubmitted%20to%20WEP.pdf have an interesting recent paper on this topic. As they point out, German social democrats used once upon a time to be in favor of organized capitalism, comfortable monopolies and so on. But then – Hitler!

bq. Organized capitalism appears conducive to leftist aims as long as the focus is on its contribution to economic coordination, and this explains the supportive attitudes of the German left up to the early 1930s. However, besides economic coordination, organized capitalism also affects political organization, as German labor leaders learnt painfully during the Nazi period. The radical reversal of attitudes after World War 2 reflects updated beliefs regarding the political consequences of organized capitalism, and the greater weight assigned to political over economic considerations. … Far from being a fleeting phenomenon, Leftist support for competition policy and market-enhancing corporate governance reforms has characterized German party politics throughout the post-war period. … During the “seven-year cartel battle” that led to the toothless competition law of 1957, the SPD supported the liberal ideas of chancellor Ludwig Erhard (CDU), unlike the majority of CDU/CSU representatives. … The joint-stock law reform of 1965, which ended up smaller than intended, featured a similar constellation. … Passage of a company network dissolution act that would have limited bank shareholdering in industrial companies was only prevented by the SPD’s removal from office in 1982. In 1998, during debates over the Control and Transparency Act introduced by Helmut Kohl’s CDU/CSU/FDP coalition, Social Democrats emerged as more favorable to radical corporate governance reforms than the Christian Democrats …. In 2001, during negotiations on the Takeover Act, the SPD turned down CDU demands to strengthen managerial defenses against hostile takeovers.

The logic here is pretty straightforward. Social democrats would like an organized economy in the best of all possible worlds. However, the more organized the economy is in actually existing capitalism, the more _political power_ accrues to big industrialists, and the more likely it is that they will use that power in the political realm in ways that disadvantage labour. Hence, the question of whether or not to favor an organized economy is an empirical one, and under many circumstances, leftists can be vehemently, and entirely consistently, in favor of market competition (albeit for political as well as/instead of economic efficiency reasons).

While I don’t have time to write much on this today, it’s relevant in the US as well as the EU context. “Karl Bode”:http://arstechnica.com/tech-policy/2012/07/op-ed-verizon-willfully-driving-dsl-users-into-the-arms-of-cable/ has an interesting piece in _Ars Technica_ on Verizon’s cable strategy.

bq. Back in April, you may recall that Verizon stopped selling standalone DSL, taking us back to the stone age of broadband when users were forced to bundle a costly landline they might no longer want. … Verizon has numerous reasons for wanting its DSL services to die off, including the fact that newer LTE technology is cheaper to deploy in rural areas and easier to keep upgraded. But one of the driving forces is that Verizon is eager to eliminate unions from the equation, given that Verizon Wireless is non-union. None of this is theory; in fact, it has been made very clear by Verizon executives. … It’s all an ingenious play by Verizon, though it will have a massive competitive and connectivity impact on the US broadband market that will be studied for decades. What’s most amazing is that nobody (analysts, regulators, or the press) seems to have really noticed what Verizon is up to: turning a massive swath of the country from a marginally competitive duopoly with union labor into an even less competitive and more expensive cable and telco non-unionized cooperative monopoly.

I’m not an expert on telcos, so can’t speak to the accuracy of this analysis. But if it’s right, it suggests a roughly similar logic. Labour unions prefer, _ceteris paribus_, to deal with large well-established incumbents than a congeries of smaller firms. The organizing costs are lower, and incumbents are more likely to have profits that they are prepared to share in order to guarantee predictability. However, once firms start getting _too_ big, they may be too powerful, in terms both of political and economic clout, for unions to bring to the negotiating table. They can furthermore redefine the market (as Verizon is plausibly doing) in ways that weaken unions and make it harder to organize. This makes me think that there’s more scope for a genuinely left-wing anti-monopoly movement (especially in sectors such as telecommunications, which are vulnerable to regulatory capture) than common perceptions would suggest. I’d really want to re-read JK Galbraith’s work to think this through properly. But since I’m crashing on a couple of deadlines, I’ll leave it for commenters to thresh out …

Attention conservation notice: contains spoilers and copious idle speculation about the Deep Political Meaning of popular cultural artifacts of the kind that is barely tolerable at blogpost-length, and surely intolerable beyond it.

I saw _Batman: The Dark Knight Rises_ on Saturday (I was a little nervous about copycat shootings). It has some excellent set-pieces, but is not a great movie. If the standard is ‘better than _The Godfather Part III_,’ it passes muster, but by a rather narrower margin than one would like. It wants to be an _oeuvre_, saying serious things about politics and inequality, but doesn’t ever really get there. This “Jacobin piece”:http://jacobinmag.com/blog/2012/07/the-dark-knight-is-no-capitalist/ by Gavin Mueller argues that it’s not a pro-capitalist movie, but a pro-monarchist one. I think that’s wrong. It’s a _pro-aristocratic_ movie, which isn’t really the same thing. Mueller’s observation that:

bq. There is barely any evidence of “the people” at all – it’s all cops and mercenaries battling it out. So instead of a real insurrection, the takeover of Gotham functions via Baroque conspiracies among elites struggling for status and power.

is exactly right – but a movie about “elites struggling for status and power” without some master-figure, however capricious, who can grant or deny them recognition isn’t actually about monarchy. It’s about the struggle between the elites themselves.

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Like some other CT bloggers, I’m long past the age where I could plausibly claim to be in touch with modern popular music, and rapidly approaching the ‘there’s nothing new that sounds at all interesting’ stage of advanced cultural decrepitude. I mostly listen to the stuff that I was listening to in my late teens and early 20’s. But not all of it. Some music that I thought was wonderful then, I still think is wonderful. Some … not so much. Some music that I didn’t listen to then that I ought to have. Some music that I liked and still like has gone on to be pretty influential, while other music seems to be completely forgotten. So – consider this an open thread on music (for those of us who have reached early middle age or later) from your generation that survives for you, or that ought to be revived, or (alternatively, for less senescent readers) on music from earlier decades that you like, or music from this decade that you think/hope will survive. To start things off:

Music that has (at least sort of) survived, and that deserved to: My Bloody Valentine (obviously), The Smiths (I used not like them, preferring the Cure, whose music I now find insufferable), Pulp, Primal Scream. Music that hasn’t survived, and that ought to have – The Boo Radleys (Giant Steps), The Blue Aeroplanes (Swagger, Beatsongs), the House of Love (Babe Rainbow, their masterpiece, received startlingly bad reviews at the time). Dance music I have less to say about, because the genre I liked the most – drum’n’bass – appears to have disappeared almost in its entirety, while the other people I liked (Amon Tobin; the various incarnations of Kieran Hebden; Bonobo) are still around more or less doing what they always did.

Disagreements? Alternative suggestions? Comments are open …

For those who wanted a more print-friendly version of the open data seminar that we’ve been running, here’s a “PDF”:https://crookedtimber.org/wp-content/uploads/2012/07/open_data-latex1.pdf (bog-standard memoir class document I’m afraid – I don’t have John H.’s design skills). It’s available under a Creative Commons non-commercial license – those who want to do their own remixes may want the underlying LaTeX file, which is available “here”:https://crookedtimber.org/wp-content/uploads/2012/07/open_data-latex.txt. Below, links to the various posts, in order of publication:

“Tom Slee”:https://crookedtimber.org/2012/06/25/seeing-like-a-geek/ draws connections between James Scott and the awkward relationship between open data and actual empowerment.

“Victoria Stodden”:https://crookedtimber.org/2012/06/26/reasoning-with-open-data/ suggests that people interested in the political aspects of open data should learn from the efforts of computational scientists to preserve the step-by-step process through which final results were produced.

“Steven Berlin Johnson”:https://crookedtimber.org/2012/06/27/searching-for-john-snows/ argues that open data platforms can attract, empower and even create people interested in solving complex problems.

“Matthew Yglesias”:https://crookedtimber.org/2012/06/28/open-data-journalism/ makes the case that open data is crucial to journalism, and that there is often a case for government to produce it.

“Clay Shirky”:https://crookedtimber.org/2012/07/02/cooperation-and-corruption/ argues that there are two different strands of open data advocacy, one devoted to improving services, the other to actually tackling corruption, and that the former works rather better than the latter.

“Aaron Swartz”:https://crookedtimber.org/2012/07/03/a-database-of-folly/ finds that open data and transparency don’t address _either_ structural problems of corruption, or help make life more efficient.

“Henry Farrell”:https://crookedtimber.org/2012/07/04/trish-reiner-and-the-politics-of-open-data/ argues that open data will not change politics, but would have advantages under a different political configuration than the one we have.

“Beth Noveck”:https://crookedtimber.org/2012/07/05/open-data-the-democratic-imperative/ sees open data as a foundation for complex democracy and a wellspring of innovation in government.

“Tom Lee”:https://crookedtimber.org/2012/07/06/open-data-better-politics-winning-politics-but-still-politics/ worries that open data advocates tend towards a blithe over-optimism, but maintains that it still has democratic benefits.

A somewhat different take on matters Hayekian – Martin Höpner and Armin Schäfer’s “article on Hayek and the EU”:http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=8638234&fulltextType=RA&fileId=S002081831200015X has just come out in _International Organization._ It’s been in gestation for a while (an earlier working paper version can be found “here”:http://www.mpifg.de/pu/mpifg_dp/dp10-8.pdf), but the argument is pretty straightforward – if you look at it right, the European Union looks rather more Hayekian than Polanyian-social-democratic.

bq. Instead of re-embedding markets, the EU is beginning to resemble Hayek’s blueprint of “interstate federalism,” where individual (economic and social) rights are located at the central level while the capacity for taxation and interpersonal redistribution remains entirely decentralized. What appears to be the nucleus of supranational social policy might turn out to be a recipe for less social protection and redistribution at the national level. … by granting non-nationals access to social transfers while being unable to oblige them to contribute financially puts pressure on the generosity given to all entitled persons. As economic liberals have aptly observed, divorcing rights from obligations limits the capacity for redistribution. … political initiatives to re-embed markets have become extremely difficult as EU members have grown ever more economically diverse. At the same time, integration through law (as opposed to political integration) continues apace and limits national governments’ ability to correct markets.

This article stems from a broader left-skepticism about the EU associated with people like Fritz Scharpf and Wolfgang Streeck (uncoincidentally the former director and director of the Max-Planck Institut where Höpner and Schäfer are based). Its argument is open to challenge but is also, at the least, highly plausible. Nonetheless, it’s the kind of argument that gets very little attention in the US, where, broadly speaking, leftists are in favor of the EU, and rightists (especially Hayekians and libertarians) against it. Much of this surely has to do with the tribalism that John Q. was talking about last week – a lot of US intellectual politics is based on affect. But it also suggests that the EU is a different kind of experiment than most Americans believe. If the EU manages to weather the tempest that still threatens to swamp it, and comes out the other end with a currency union, a banking union, and some kind of bond system, it will still look, as Höpner and Schäfer suggest, very Hayekian. Will it be politically sustainable over the longer term? I suspect not – increasing misery at the national level as a result of increased exposure to international exposure, combined with a withering of social protections will create the kind of political upheavals that Polanyi described (whether with happy, or unhappy consequences). Polanyi’s ideas suggest that Hayekian federal constitutionalism is almost necessarily self-undermining. But of course, Polanyi could be wrong …

(probably the last post I’ll be doing on these issues for a while)

“Tyler Cowen has a further response”:http://marginalrevolution.com/marginalrevolution/2012/07/how-to-improve-firms-treatment-of-workers.html. His argument – I think I am presenting it correctly – is that regulation may not improve the lot of workers facing specific depredations, because firms will find other ways to screw them, leading to “indeterminate” outcomes, which might or might not be to workers’ long term benefit. His preferred alternative is an improved welfare state, which will enhance workers’ bargaining position vis-a-vis firms.
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A response to “Matt Yglesias’s response”:http://www.slate.com/blogs/moneybox/2012/07/06/ten_theses_on_labor_market_regulation.html. I understand from email that his original post responding to me was intended to be read together with an “earlier post”:http://www.slate.com/blogs/moneybox/2012/07/04/labor_market_regulation_freedom_and_property_rights_are_red_herrings.html, where he separates out questions of freedom and economic efficiency, and argues, more or less, that the best way to increase the bargaining power of labour is by pushing full employment. This means that he does not, after all, treat market outcomes as being in some way natural. So consider those specific objections withdrawn. But I still think that there is something fundamentally wrongheaded about the way that he is analyzing these questions. And not only that – but Matt Yglesias himself (2004 vintage) would seem to agree with me.
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Corey Robin has “two”:http://coreyrobin.com/2012/07/08/hayek-von-pinochet/ “posts”:http://coreyrobin.com/2012/07/09/but-wait-theres-more-hayek-von-pinochet-part-2/ on Friedrich von Hayek’s admiration for Augusto Pinochet, quoting extensively from a new article by Andrew Farrant, Edward McPhail, and Sebastian Berger.

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“Matthew Yglesias has a post responding”:http://www.slate.com/blogs/moneybox/2012/07/05/life_is_good_for_skilled_workers.html to my post below. My original intention was to roll it into an update – I then decided it was worth responding to on its own because it exemplifies a number of common mistakes in thinking about markets. In order:

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“Tyler Cowen”:http://marginalrevolution.com/marginalrevolution/2012/07/david-gordon-emails-me-on-the-workplace.html thinks he has a gotcha.

bq. David Gordon emails me on the workplace

bq.

I enjoyed reading your excellent post on the Crooked Timber workplace coercion piece. Many of their complaints also hold for the university classroom, e.g., limits to free speech, students have no say in what work is required, etc.; and often there are costs to refusing to enroll in classes the student finds onerous, such as failing to obtain the desired degree. But I doubt Bertram and his friends would regard this situation as coercive.

bq.

Best wishes,

bq.

David

bq. Nor is it always easy to switch schools…

and who knows – when Chris, Corey and Alex start advocating for students to be penalized for having (or not having) abortions, being monitored at home, making, or failing to make, the right political donations, supporting (which was _far_ from a hypothetical question for Corey in his own graduate student experience – he notoriously was the victim of retaliation by one of his professors) or failing to support unionization drives or the like, it might actually _become_ a gotcha. But in the universe that we inhabit at the moment, this continues an extended (and indeed rather _ostentatiously_ extended) exercise in refusing to get the point, let alone addressing it.

Still, if Tyler is in the market for analogies of this sort, I do have one for him. He suggests in his “previous post”:http://marginalrevolution.com/marginalrevolution/2012/07/libertarianism-and-the-workplace.html that the problem is on the side of the employees rather than the employers:

bq. I am not comfortable with the mood affiliation of the piece. How about a simple mention of the massive magnitude of employee theft in the United States, perhaps in the context of a boss wishing to search an employee? … When I was seventeen, I had a job in the produce department of a grocery store. … I did observe … massive employee shirking … If I ponder my workplace at GMU, I see many more employees who take advantage of the boss, perhaps by shirking, or by not teaching well, than I see instances of the bosses taking advantage of the employees.

But let’s draw the comparison out a little. What would the world look like if GMU economics professors were treated similarly to workers in low-paid jobs with little protection? No offices – at best open cubicles, so that a supervisor could stroll by, making sure that the professors were doing the job that they were supposed to be doing. Monitoring of computers to prevent random websurfing. _Certainly_ no air conditioning. Compulsory random drug testing. Body searches, in case professors were sneaking office supplies back home. Monitoring – at best – of bathroom breaks, and written demerits and termination of employment for professors who took too many of them. Perhaps Tyler might want to argue that such pervasive distrust and supervision would hurt productivity rather than help it – but it would seem difficult plausibly to reconcile such an argument with his prior claim that mooching, slacking and skiving off is endemic among his colleagues.

Knowing professors quite well, including economics professors, I can very safely predict their reaction if they found themselves subjected to such vigorous supervision, (perhaps as a result of some general bill attacking academic privileges passed through the Virginia legislature). And it wouldn’t be a careful consideration of contracts, and a measured conclusion that given the inevitable incompleteness thereof, they would have to put up with it until they could find a job at some more enlightened institution. It would be sputtering, semi-coherent outrage at what they would perceive as a humiliating and direct assault on their professional and human dignity. Indeed, they’d have a point. But it isn’t only professors who have dignity as workers and human beings. And that’s a rather important point too.