This is a tribute for Waheed Hussain, who passed away on January 30th, 2021, by the Members of the Economic Ethics Network, of which some CT-ers are part.

Waheed Hussain was a political philosopher whose work addressed some of the central questions faced by citizens living in contemporary capitalist societies. He thought and wrote about a wide range of topics at the intersection of moral and political philosophy, economics and business ethics, developing insightful work on issues from the ethics of consumption and competition to the nature and justification of the corporation. Across all of the rich and nuanced work that he produced was an underlying concern to address one fundamental question: how best can people live free, autonomous lives, relating on fair terms with their fellow democratic citizens, given the mystifications and constraints generated by a market economy? [click to continue…]

It’s been hard to miss the chaos that’s arisen from a bunch of Reddit users (on sub-reddit WallStreetBets) getting together to squeeze shortsellers on stocks including GameStop and AMC Theatres. Most of the attention has been confined to the stockmarket action, but I was struck by this piece in The Bulwark[1], making the point that the process has enabled AMC to issue high-priced shares, repay debt and thereby stave off impending bankruptcy.

I don’t have a view on whether AMC should go bankrupt or not, but this is the kind of decision about capital allocation that is driven, in large measure by stockmarkets. The efficient markets hypothesis says that stockmarkets do the best possible job of estimating the value of assets, and thereby guides the allocation of capital. In the absence of the WallStreetBets push, it appeared that the market judgement was that it would be better to steer capital away from AMC, and into some other activity. Now, it’s the opposite.

One possible response is that WallStreetBets is an episode of craziness that will soon pass. But once you strip away newsworthy bits like the role of Reddit and the scale of the price movement, this kind of squeeze (or conversely, short-selling raid) is available, and potentially profitable, to any group of traders who can mobilize the necessary few billion (using options, those billions can be magnified a fair way). That’s part of the reason why stock prices are far more volatile than would seem justified by the arrival of new information relative to future earnings.

If stock prices are more volatile than underlying value, the two must differ most of the time. That undermines the claim that financial markets do a better job of allocating investment capital than would, for example, a central planning board. Even if you don’t want to go that far, there’s no obvious reason why limiting stock trading to (say) once a week would impair the allocation of capital to an extent that would outweigh the savings from cutting the financial down to a small fraction of its present size.

fn1. A Never-Trump website, well worth a look.

Reading about the recent military coup in Myanmar, I’ve seen the view that Biden’s criticism of the coup is undermined by the fact that the pretext for the coup, a supposedly stolen election, was exactly the same as that raised by Trump and the Republican Party in response to Biden’s 2020 election victory.

There’s a problem in this reasoning which is easy to see, but harder to resolve. It makes intuitive sense to say that the United States should not point fingers at other countries when it has the same problems itself. But it seems strange to say that, having just defeated an attempt to overturn a democratic election in his own country, Biden is in some way disqualified from criticising a similar attempt in Myanmar.

The answer to this question is to recognise that Biden does not speak for “the United States”, but for the party he leads. To the extant that his party supports democracy in the US, it is naturally aligned with supporters of democracy everywhere, and against supporters of dictatorship, both at home and abroad. Conversely, Trumpists in the United States are naturally aligned with dictators everywhere and opposed to democrats (with both small and capital “D”).

[click to continue…]

Another open thread, where you can comment on any topic. Moderation and standard rules still apply. Lengthy side discussions on other posts will be diverted here. Enjoy!

Mike Konczal has a new book, Freedom from the Market (Bookshop.org locator, Amazon). I’ve been wanting to write about this book for a while, but first had to wait for it to come out, and then had my working life banjaxed by the madness of the last few weeks. But it is a great book that looks to remake the American debate about freedom and largely succeeds. Full disclosure: Mike is a friend of the ‘see very occasionally but like very strongly’ variety; I also read an early version of the mss and commented on it. [click to continue…]

Thinking back over the past two decades, which of the following events that took place since the fall of the Berlin Wall (1989) are the important moments when something different could have been done that might have saved us from being in the situation we are in? How might history have unfolded differently? Are there key events to notice in Asia, Africa and Latin American that ought to be on the list? What is cause and what is merely symptom? Please suggest additional key moments in comments.

• The decision of the US Supreme Court to award the Presidency to George W. Bush instead of Al Gore (2000)
• The attacks on the Twin Towers (2001)
• The decision by Bush, supported by Blair, to invade Iraq (2003)
• The failure of policy-makers to anticipate and avert the financial crisis (2008)
• The failure of European leaders to manage the Eurozone crisis so as to avert mass unemployment etc (2009- )
• The Arab spring (2010- )
• The “migrant crisis” in Europe (2015-)
• The Brexit vote (2016)
• The election of Donald Trump (2016)

I’m joining John in going all in on Covid research. In the Fall, I signed a contract with The MIT Press for a book about the digital aspects of the pandemic’s early weeks. Scoping is tricky with an ongoing event not just in terms of topical focus, but also time span. I imagine we’ll be trying to make sense of what happened and how people experienced the events with what long-term implications for quite some time. I’m taking on the digital aspects of the first month or so. I’m basing the book on survey data I collected in April and May in the US, and in April in Switzerland and Italy.

It’s a digital inequality story whereby people in more privileged positions were able to pivot to online resources better, which may not be shocking, but worth exploring in detail given the extreme reliance on virtual communication in these times and many assumptions that such resources are readily available to all. There are also interesting nuances. Not all groups that one may expect to experience the circumstances negatively necessarily did so. For example, people with disabilities were more active on social media discussing the pandemic than those without disabilities. Whether this was a good thing or not is, of course, another question, one I plan to dig into through looking at knowledge about the pandemic and also people’s feelings of social connectedness. (This being a cross-sectional study, however, will limit my ability to comment on changes concerning survey participants’ specific circumstances.)

After explaining why a focus on the digital is relevant and giving some general social context as well as digital context of people’s situations, chapters focus on communicating during lockdown, how people used social media to connect about the pandemic in particular, what information sources people used for pandemic content and how this related to their knowledge about the virus, and who was able to pivot to working from home and what types of online learning people engaged in during this time. The book is about adults only so I will not be addressing things like how children’s homeschooling worked out.

This may be putting the cart before the horse, but I’m not sure how to think about the title. I’ve been playing with different ideas and would appreciate input. I started with Digital Survival: Who Thrives in Unsettled Times, but some reviewers of the proposal thought “digital survival” was too extreme. I’m not ready to abandon it as I do think digital connectivity has been very important and survival is not always used as a life-death distinction, but perhaps in this context it doesn’t work. What do you think? Or should I just go with Digital Inequality directly? I’m concerned that’s a bit jargony. (The book will be an academic trade publication.) Regarding the second half of the title, another approach is to foreground Covid instead of referring to unsettled times, but the idea is that the lessons learned would apply to other situations as well (e.g. political upheavals, natural disasters) so I don’t want it to sound narrower than necessary. I welcome your thoughts on this.

If Crooked Timber readers have not had enough of Brexit reflections from me today, there are more over at the LRB blog where I use Benjamin Constant’s distinction between the liberties of the ancients and the liberties of the moderns to illuminate, I hope, the false promise that with sovereignty Brexit brings freedom.

I recently finished reading Quinn Slobodian’s excellent Globalists, which, for those who don’t know, is an intellectual history of neoliberalism focused on the “Geneva school”. As with all good history, the book did not contain quite what I expected it to. I expected to read of the European Union as a kind of realization of Hayek’s ideas from the 1930s aimed at putting economics (and private property) beyond democratic control, a reading that gives some support to “Lexity” narratives about the EU. But the picture that emerges from Slobodian’s story is much more complex than that. In fact, the Common Market emerges as a messy compromise between German neoliberals who did want a rules-based order putting economics beyond politics and French agricultural protectionism and neocolonialism. This results in a split within the neoliberal camp between those who see EU’s regional governance as a partial step towards the legal insulation of economics from the folly of economic nationalism and those who see the EU as economic nationalism writ large, with the latter camp putting their faith in international protections for markets, competition and capital embedded in the WTO.
[click to continue…]

Here’s the second of the regular open threads, where you can comment on any topic. Moderation and standard rules still apply. Lengthy side discussions on other posts will be diverted here. Enjoy!

There’s a lot of luck[1] in politics. If a handful of events had gone differently in 2016, we’d probably be discussing President Clinton’s second term right now. If the Brexit referendum had been held a few weeks earlier, Remain would probably have won, and David Cameron might still be PM. A few lucky breaks and Labor would have won the 2019 Australian election. And if things had gone slightly differently in Georgia (with the Repubs falling just short in the first round, then losing both runoffs), the prospects for a Biden Administration would be greatly worse than they are.

The first three of these events were unexpected wins for the Trumpist right. And while nobody much pays attention to Australia, the first two were interpreted by Trumpists as much more than lucky breaks. They fed a whole set of beliefs which built up to an expectation that, no matter how bad things looked, their side was destined (for a lot of Trumpists, divinely ordained) for victory.

It’s not surprising then, that Trump’s supporters expected victory in November, and were willing to believe, without any evidence that their victory had been stolen. But as it became more and more evident that the election results were not going to be overturned, cognitive dissonance started to set in. The options were to accept that, fairly or not, they had lost, or to embrace the apocalyptic vision of QAnon and the far right, manifested in the Capitol last week. From the polling evidence, it looks as if the Republican base split down the middle on this.

Now that the insurrection has failed, and Biden’s inauguration is about to take place, the choice gets even sharper. As those who rejected the election result and tried to overturn it are increasingly ostracised and increasingly forced to recant[2], there’s no middle ground between accepting defeat, at least this time around, and going all the way down the insurrectionist rabbit hole and into rightwing terrorism.

From the politics as usual viewpoint of someone like Mitch McConnell, the advisability of the first course of action is obvious. But to the extent that the energy of the Trumpists was built on faith in inevitable victory, that may be difficult to sustain[3].

As for rightwing terrorism, it’s bound to keep on happening. The history of events like the Beer Hall Putsch shows that clownish initial failure does not guarantee defeat (no inevitability, again). We have to hope that, having been directly and personally threatened by the terrorists, the Democrats won’t shrink from the responses necessary to suppress them and the Republicans won’t be willing to defend them.

[click to continue…]

That’s the headline[1] for my latest piece in the Canberra Times. It doesn’t appear to be paywalled, but I’m including the text over the fold.