In Praise of....Political Economy

Trust the Germans to spot a winner!

Some 18 months ago I bought a small book which I have carted from the Carpathians ….and back…briefly dipped into but then abandoned - from my impatience these days with economics….Its title, Austerity (2013), was hardly calculated to bring me to orgasm but its subtitle – “history of a dangerous idea” – should have told me that this was no ordinary pseudo-technical stuff. It took author Mark Blyth’s electrifying youtube performances (a more sedate performance is a recent presentation at the University of Glasgow) to bring the book back down from my shelves (metaphorically – since the book is still in the Carpathians) for more careful reading. 
What I found is a book I would rate as the best read of the new century! 

Mark Blyth is that rarity – a Scot and political scientist (but with an American post-graduate specialism in “economic ideas and political change in the 20^th century”) whose book reminds us of the Scottish tradition of political economy. Since 2009 he has been Professor of International Political Economy at the Ivy League Brown University - quite an achievement for a Dundee lad from a poor working class background who generally pays warm tribute to the support he owes to the welfare state....  

The book can be read in its entirety at Austerity – the history of a dangerous idea and you can get a good sense of the respect with which its being treated by colleagues in the special symposium Comparative European Politics ran on the book in 2013 – with this being Blyth’s powerful response

For those impatient with academic jousting, Le Monde Diplomatique ran this good summary

Blyth’s book is divided into two parts. The first is an account of the crisis, starting with the United States and moving on to Europe. Blyth’s narrative does not drown in financial jargon. He sets out to explain as simply as possible what the jargon means and what role it played in the crisis.

For those interested in understanding collateral deals in US repo markets, the structure of mortgage-backed derivatives, repo transactions, correlation and tail risk, Blyth’s book is a good place to start.

His explanation of the crisis is compelling: innovatory financial instruments were allied with a set of ideas about how the economy works, and in particular about how one should evaluate risk in the economy, which together contributed to a build-up of risks within the global financial system and their explosion in 2008. These ideas also facilitated the transfer of the crisis from the US to Europe.

Blyth dismisses the popular notion that the crisis is somehow the result of the moral failing of particular individuals — the ‘Fred Goodwin problem’. It is, for Blyth, a failure of the private sector as a whole. That it has been paid for by the public purse can only be explained by the contradictory set of ideas, which prevail today, about the dangers of state intervention. It is these ideas that Blyth calls ‘austerity’. 

The second half of the book is a great primer in political economy. Describing the intellectual origins of the idea of austerity, Blyth gives us potted accounts of the ideas of Hume, Locke, Smith and Ricardo. He ties these ideas together with political developments, presenting us with a picture of the 20th century that sees Keynesian ideas fighting it out with older ideas about austerity and government probity. A short-lived victory for Keynesian economics after the Second World War was eventually overthrown by a mixture of economic crises, public choice theories of democracy and the rational expectations revolution in economic theory.
This journey through the idea of austerity ends with a chapter on its implementation.

This is a devastating account of how attempts at putting the idea into practice — from the struggle of governments with the Gold Standard in the 1920s and 1930s to the travails of more recent ‘austerity successes’ like Sweden and Ireland — never seems to work.

But it took those canny Germans to appreciate Blyth’s genius. Given the choice last year to award a prize for the economics writing of the year which included Thomas Pikety’s highly profiled (but, I suspect, seldom read) "Capital", they chose Mark Blyth’s "Austerity" – for reasons they explain here  

"Political economy" sank out of fashion in the 1970s as the pretensions of economics to be treated as a science overwhelmed academia......Blyth's book (and chair at an Ivy league University) is yet another welcome sign of the grip of "scientific" pretensions being broken..... 

historical note

The phrase économie politique actually first appeared in France in 1615 with a book by Antoine de Montchrétien - Traité de l’economie politique - with the world's first professorship in political economy established in 1754 at the University of Naples, Vienna University following suit soon thereafter (in 1763). And it was to be Thomas Malthus who, in 1805, became England's first professor of political economy, at the East India Company College.

As it happens. I graduated (in 1964) with an MA (Hons) in ”Political Economy and Politics” from …..no less than the University of Glasgow where Adam Smith occupied a chair (in Moral Philosophy) from 1753 for more than a decade – attracting students from many parts of Europe to his lectures which increasingly focused on the causes of national wealth. He then acted as tutor on the Grand Tour (engaging then with the French physiocrats) but returned after a few years to Kircaldy to write his magnum opus “The Wealth of Nations” which appeared in 1776. 
The Glasgow course in Political Economy must be one of the longest running - it disappeared (as a name) only in the early 1990s....

What Happens after Postmodernity?

The ice and cold (minus 20 during the nights and minus 14 during daytime) are huge incentives to curl up with a good book (or documentary). The “Century of the self” documentary series I covered in my last post resonates with me – not least because it throws light on the huge changes which were taking place as I was growing up….

I was in my mid-teens when Vance Packard’s The Hidden Persuaders (1957) began to make waves and I do remember the excited talk, in the aftermath of the Korean war, of “brainwashing” techniques……This article nicely captures the debates of the time – and JK Galbraith’s The New Industrial State (1967) confirmed the view of our generation that large companies basically gave us what they considered good for them – rather than for us….

The youthful rebelliousness of that period, I have to confess, left me behind. What I hadn’t realized was the role encounter groups then played in the direction young American activists took post-1968 when they became disillusioned with political action – and turned instead to personal or group therapy as a new form of politics. Social change, for this generation, was apparently to take place  by osmosis – rather than through political parties. I was certainly aware of “flower power” in the 60s but missed its (alleged) “social edge”.

Where the documentary is perhaps more convincing is in its portrayal of the concern of the corporate world that the “live for today” attitude of that generation was threatening the impetus generated by the second world war for higher living standards…and how psychologists and social scientists were enrolled to deliver - through focus groups - a sophisticated understanding of the new individualism – and how it could be corralled for corporate interests…

The Protestant ethic may have been dismantled at one level (with its notion, for example, of “saving for the future”) but at another it was arguably being reinforced – as the new breed of “modern” social scientists (such as myself) were given the tools to question and ridicule the thinking of the generation which had emerged successful from the ravages of the second world war ….

Of course young people have been rebelling against their elders since eternity – but this time there were some huge differences –

- We had just emerged from the world’s biggest killing spree

- With mass industrial methods finely tuned

- Social science departments were being founded everywhere

      - Student numbers started lift off – from less than 10% of the relevant age group to more than 50% within a generation  

Scores of cheap books whose titles blazed with the phrase “What’s wrong with..……?” gave us in this period the same sort of discontent in our civic lives which we were being encouraged to exhibit in our consumer selves….So now each of us has our direct line, if not to God then to “the truth” as revealed in whichever of the hundreds of thousands of books (or blogs) vying for our attention gets through our defences….

”Modernisation” became the slogan of the 60s – and still resonates today as we continue to dismantle all that went before…..even as it is postmodernism which legitimises so many different ways to make sense of the world  

From Freud to Focus Groups

Television is banned from two of the three places I currently call home but a Torrent service I have access to in Sofia has, over the past few months, allowed me to view, on my PC, films (but of of my choice), presentations - by people such as Varoufakis - and documentaries.

The experience makes me begin to question my previous reluctance to allow moving images into my home…..and Frankie Boyle is all to blame……He is perhaps one of the most outrageous comedians ever to walk a stage (more risqué by far than my old favourites of Little Britain) and has recently taken the unusual step of starting to write for the Guardian.  I almost split a rib laughing at his article in today’s paper. I do understand that humour doesn’t easily cross borders (and his accent certainly doesn’t) but this excerpt will give a sense of his style…   

The Labour party has, from the beginning, been made up of diverse factions; that’s its beauty – asking it to become cohesive is like trying to find one shampoo that will care for the hair of everybody in Angelina Jolie’s house. Until recently, Labour politicians have been scared to tell anyone their opinions as they had to have one that appealed to every single person in the country. Under Ed Miliband the current manifesto would just say: “Good Adele’s back, isn’t it?”

A certain nostalgia in the parliamentary party is inevitable: it’s hard to deny Blair helped to create a powerful movement. Unfortunately that movement was the Islamic State.

I started to read the discussion thread (2425 comments already!!) but, typically, got sidetracked early on by a reference to a documentary about the role of Saudi Arabia in post-war politics which turned out to be a mind-blowing piece - Bitter Lake - from Adam Curtis, the Director of a powerful series I saw some years back called The Century of the Self which 

advances the thesis that Freud's views of the unconscious set the stage for corporations, and later politicians, to market to our unconscious fears and desires. It shows how advertising once aimed to influence rational choice. This gave way in the early 20th century to advertising aimed to connect feelings with a product.

Amazingly enough, at the root of this change was Sigmund Freud’s nephew, Edward Bernays, an American propagandist in WWI, who applied his wartime experience and his uncle’s theories of the unconscious to peacetime commerce. He invented the field of public relations, popularized press releases and product tie-ins, and changed public opinion about matters ranging from women smoking to the use of paper cups — all to increase sales.

Viewing politics as just another product to sell, Bernays also helped Calvin Coolidge stage one of the first overt media acts for a president, and helped engineer the 1954 coup in Guatemala on behalf of his client the United Fruit Company, by painting their democratically elected leader as communist. This and more happens in just the first hour of the documentary, titled “Happiness Machines.”

The second part focuses on the ascendancy of psychoanalysis and Anna Freud’s consolidation of power. The point here is that the unconscious was seen as a dangerous menace that needed to be kept under lock and key. Rational choice, especially by crowds, was unreliable under its influence, so “guidance from above” (in Bernays’ words) was needed from political leaders and corporations for the public good.

The conformity and mass-marketing of the 1950s reflects this view of a public that cannot be trusted to think for itself. The pendulum swings the other way in the third and best installment, “There is a Policeman Inside All Our Heads [and] He Must be Destroyed.”

By the 1960s the human potential movement urged the expression of impulses instead of their repression. Business was eager to help. By marketing products as a means of self-expression, business turned from channeling public impulses to pandering to them.There is a fascinating discussion in the film about political activism being co-opted in this process: making the world a better place gave way to making oneself better in ways that, not coincidentally, required buying more goods and services.

The final segment, called “Eight People Sipping Wine in Kettering,” follows this impulse-pandering into politics. Instead of political leadership we now have politics led by focus groups. The public gets what it asks for not what it needs (healthcare and infrastructure improvements).

You can read the full script here and view the documentary itself here. 

Good documentaries require a rare combination - knowledge of the subject, experience of filming, appropriate selection and editing of text, images and music, and appreciation of how to fit them together
One of the best websites for challenging documentaries must be Thought Maybe – which I thoroughly recommend. You might also like this list of the best 50 documentaries of all time - from the excellent Sight and Sound journal.

Update; just come across this reference to the US documentarist Ken Burns - who recently put an Netflix a documentary about the Vietnam War which is more than 100 hours of viewing! 

David Bowie's "Must-Read" list

Most of us resist the idea of our own mortality but, come the sudden passing of younger people who had some significance in our lives, we develop an almost morbid fascination with the prospect……

We expect 98-year olds like Denis Healey, Helmut Schmidt and Albert Hirschman to pass away but the sudden deaths of David Bowie and Alan Rickman bring a powerful wake-up call to people of my age

I was, as it happens, in the middle of a large biography of Hirschman - Worldly Philosopher: The Odyssey of Albert O. Hirschman (the link gives an excellent overview of both the man and the book) - who died 3 years ago and was one of the greatest exponents of the nature and importance of challenging the “conventional thinking” and of “intellectual trespassing”…This has inspired me to devote a post to him…,,

But bear with me for a day or so while I collect and edit the numerous other goodies which cyberspace offers about the various sides to his life which I think his biographer has caught well with the term “odyssey”.

In the meantime, Daniela and I were intrigued by the list of David Bowie’s 100 “Must-Read” books which is part of a current exhibition in Ontario. Daniela is Romanian and had access in the 70s and 80s to the Romanian translations of not only Western classics but contemporary American and European texts which (despite the repression) were available after Ceaucescu struck his maverick stance in the Eastern bloc (most Romanians are proud of their country’s refusal to join the 1968 repression of Czechoslovak liberties).

But she recognized only a few of the titles in Bowie’s list – and has raised the interesting question of the “East-West gap” in mutual understanding of one another’s literature (and cultures generally).

My Balkans residency of the past decade has made me more sensitive to the wonder that was 20^th century Central European literature (my five page recommended reading list for Romania can be accessed at section 4 of Mapping Romania - notes on an unfinished journey – although I cheated by including some English novels with a Romanian theme!).

The reading public, it seems, are developing a new interest in translations of older writers such as Joseph Roth and Hans Fallada who, however well-known in their home country, made little or no impact in English-speaking countries. The New York Review of Books classic series started a few years back to repair this fault – and there are also some great titles of mid-century central european books at small publishers such as the Pushkin Press.

Most of the works offer much more powerful writing than that from contemporary writers of the English-speaking world – however hyped the latter is. So there is every incentive to start using these catalogues.

Five years ago, the Guardian actually ran a fascinating series on world literature, inviting readers to suggest books eg this was its Polish invitation and this a nice tabular presentation of the final results. Chinese and then Russian literature were also presented in the same way -

No fewer than 200 books get close analysis in these results of a reader’s survey about French literature – and more than 150 in this survey of German literature. Almost 100 novels get the treatment in this table about Indonesia

Indian literature is analysed here – and Columbia rounds up the survey with this table

Other countries were covered but without the tabulated results s but, with this link, you can hunt down the ones of interest...... 

But a few hundred responses don’t suggest English readers’ familiarity with foreign – let alone “Eastern” - literature. And of course most of this material covers novels – whereas Bowie’s list is more general. It also makes me realize that there at least three types of lists of what we might call “significant reads” 

- Those we once liked - which made an early personal impact eg early seminal reading – some examples of mine were captured in this 2009 post
- Those which matter - which made an impact on our collective social understanding (many of which we may not actually have read personally - let alone liked. (here's a short list I made for for the period from the 1970s)

- Those we like now - which might be recommended or bought for family and friends. I have apparently done one list of favourite book – but it was some time ago (December 2010)

Interestingly, central Europeans dominate that second list (although, thanks to Hitler, many of then wrote their most famous work in American English). And that's where perhaps a major shift has taken place.....in the 1930s European intellectual and literary writing was at the heart of the world's thinking - now it's at the periphery..... 

Five years on - and while the snow lies thick on the ground, it will be interesting to do an update of the last list

British Exit? Sleepwalking again???

The Introduction to my book In Praise of Doubt – a blogger’s year reviews its 130 plus posts and suggests that the” Elephant in the Room” (ie the big issue which failed to be mentioned in my late posts of 2014 or those of 2015) was……..Brexit - ie  the possibility of British exit from the European Union and the knock-on effects on Europe……

My blog may have a clear policy of ignoring the chatter which passes for political commentary but I do not avoid big issues eg the nature of contemporary capitalism; the health of our democratic institutions; or the swings of public opinion…I did, after all, devote a lot of posts last year to the question of Scotland leaving the “united kingdom”. 
My failure to devote even a single post to what is the increasing possibility of British withdrawal from the EU was not a deliberate decision; rather a reflection of the absence of any SERIOUS discussion in British journals or publications about the issue….

As long as the referendum which the British PM had promised on the question of continued British membership of the European Union seemed to be in 2017 - and we were sitting in 2014 (when a Scottish breakaway was the threat) or 2015 (when so many other issues jostled for our attention), 2017 seemed so far away.

But here we are in 2016 and there is suddenly talk that the government might put the issue to a vote in the summer of this year!! And I don’t see any serious discussion of what’s involved. Or rather, I see a lot of press coverage of the Prime Minister’s tactical discussions with European partners as he attempts to negotiate a new package which would satisfy the majority of his party (and citizens) - who profess increased distaste for the European project (see this European Council for Foreign Relations briefing for graphs on how the support for Europe has trended in recent years).

But I am aware of very little which would be of any help to the citizen who actually wants a reasoned assessment of what withdrawal would actually mean – in economic or political terms. A couple of Labour MPs have written about it – Pat McFadden in a pamphlet What would Out look like? and Dennis McShane in a book Brexit – how Britain will leave Europe whose argument is rather sullied by his recent conviction for over-zealous expenses claims….

The European Union is its own worst enemy. Reform of such a sclerotic system of policies, institutions and above all power does indeed seem to be almost impossible. Behind the rigid institutions and policies lies the apparently invincible power of the permanent technocrats with their inflated salaries and protected status (I know because for almost a year I worked there!!)

And yet the idea of the UK’s withdrawal fills me with deep unease. 
I’ll try to explain why in future posts – while still trying to retain the respect i always try to grant the specific arguments I encounter…..

Women in Romania

Yesterday’s visit to the “Equal - Art and Feminism” gave us access to some wonderful paintings from some 20 of Romania’s women artists of the early part of the past century,

1916 is selected as the starting point since that was the date of the formation of the first woman artists' association in Romania - instigated by Olga Grecianu on her return from Brussels. The paintings on display cover the free period until King Carol established  in 1938 what was to be the first of the dictatorships which so disfigured the country for the next 50 years ...
I was well aware of Elena Popa, Cecilia Cuţescu-Storck (see side pic) and Rodica Maniu – the last being a particular favourite. But I had not seen the works of artists such as Olga Grecianu, Nina Arbore, Nadia Bulighin, Maria Ciurdea Steurer, Irina Codreanu, Milita Petraşcu, Merica Râmniceanu, Magdalena Radulescu and Mina Byck Wepper.
I will now add some of these painters to my Introducing the Romanian Realists of the 19^th and early 20^th Centuries

I assume the exhibition's title is ironic since it would be difficult to argue that this 20 year period of this misogynist Latin country was characterised by respect for women's rights (however much Queen Marie may have made up for her husband's fickleness) A better title might have been that of an important essay of the 1970s - Why have there been no great women artists? 

Fascinating though the paintings were, they mostly displayed the society women or domestic scenes – hardly signs of liberation. Elena’s Popa’s market scenes were the only exception – with Rodica Maniu (who is reputed to have painted many of husband Sam Mutzner’s works) celebrating Breton peasants at work in the fields with somewhat romanticising colours..

The gallery's walls contain some extended text, presumably to explain the "thinking" behind the selection but it's only in Romanian. What does it take to produce one page in at least English for the foreign visitor? The failure to do that simple thing shows the sheer arrogance of this genre of people....

National galleries in this part of the world suffer from being part of the political spoils system. They are “managed” by their respective Ministries of Culture whose Ministers (having so little else to do) obviously take full advantage of the power of appointment (and sacking) which goes with the job.

I have to admit, however, that the National Gallery apparatniks here do occasionally mount an interesting exhibition – I remember one at the National Gallery a few years back which actually brought together Bulgarian, Greek and Romanian painters (sadly their website has no archives - although it now boasts a lovely virtual tour of each of its rooms) – but it missed the opportunity to challenge the indifference these nations now display to one another…..

I have two other complaints about the management of Bucharest's National Gallery -

- Although a catalogue (172pp) is available, it is entirely (as always) in Romanian  

- They also try to charge 30 euros for taking photographs 

Hardly surprising therefore that Romanian art remains unknown. I have referred before to the greater accessibility in Bulgaria to works of the early 20th century. Romanian "Collectors" - generally the dubious family members of old communists - have successfully squirrelled away most of the Romanian painting tradition in their large houses. 

Artmark is Romania's auction house has become almost the only way to see this work - as it is transferred from one rich owner to another (the prices are ten times more than in Bulgaria!). See for yourself in their glossy catalogues - which can be sent to you on request eg this one from September 

This, of course, makes the task of art curators all the more critical - and raises the larger question of how creatively art curators understand and practice their function – those at The Netherlands came in for some criticism recently for hiring philosophy-populising Alain de Boton to write some provocative tags/slogans….

ps interesting that the renaming of the title of this post seems to have attracted more viewers....I wonder why???? 

The book of the year!!

And here it is - the long-anticipated book - In Praise of Doubt!!

Weighing in at 250 pages – the book of last year’s posts…..
A trailer for its contents can be read here

Feast on it while you can…..

It joins Bulgarian Realists – updated edition and another couple of E-books (which can be accessed at the top right corner of my blog).

Sunday saw the temperatures here drop by 30 degree - from plus 15 to minus 15!! The snow started slowly but soon had a grip....So my run down to Sofia is pushed back until Friday which looks a lovely day for the route from Bucharest through Russe and Pleven to Sofia......

The Collected Edition

Some bloggers take Montaigne as their patron saint but John Updike deserves a place in that Parthenon. Updike was such a prolific writer that he inspired envy – “a penis with a thesaurus” was one cruel comment. Not for nothing perhaps was the male hero in his long-running series of novels about small-town America named “Rabbit”!

Like a blogger, everything he did seemed to turn into published prose – or verse.

And, in a typical pre-emptive strike on biographers, he actually published an autobiography “Self-Consciousness” so frank about, for example, his ailments that, as he put it, “it was criticised as a parading of my wounds”. But, as the first of the book reviews which formed his 2007 collection “Due Considerations” puts it, “the wounds were mine to parade and not some callow inquisitor’s”.

I know all this because I have just brought home from Bucharest’s English bookshop a lovely hardback edition of that collection - coming in at 700 pages.  

My blog’s masthead has a ringing statement that a post of several years back is as good as yesterday’s. But the architecture of blogs honours only the most recent.

In a spirit of defiance I have therefore, in the past few months, been preparing a book version of the last year’s posts – with a preface and introduction which celebrate blogging as a modern version

It will be available here in a day or so…….I thought of calling it “Chairman Ron’s Collected Thoughts” (as my own preemptive strike on sarcastic friends) – but settled instead on “In Praise of Doubt”. Of course such an endeavour smacks of egocentricity – but bear in mind that one of the purposes of the blog is to give (posterity?) a sense of what it was like to be in the skin of an engaged man of second half of the 20^th century….. 

Rereading one’s posts of the past year or so is a salutary experience – the book’s Introduction gives an overview of the subjects treated over the period so I thought it would be useful here to identify the books which had engaged my interest sufficiently for me to devote a post to them during the year. I was fairly critical of five -

Why Nations Fail – by a couple of American academics 

Stand and Deliver – a rather superficial and angry analysis of how the British system of public management could be improved. In a long line of such critiques….

The Tyranny of Experts – by a World Banker who’s had enough…

Amateus Etzioni’s autobiography “My Brother’s Keeper”

How Good Can We Be? By a well-read British journalist - Will Hutton

But very positive about the others which, now that I see them listed, form a fairly formidable list -

The Capitalism Papers by Jerry Mander

Democracy Incorporated by Sheldon Wolin

Buying Time – the delayed crisis of democratic capitalism; by Wolfgang Streeck

Death of a Nation; a new History of Germany

Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness by Frederic Laloux

The Puritan Gift – a lovely book by a couple of octogenarians about the fall of American capitalism

Cooperatives – a post about a couple of books

Our Carbon Democracy – a very thoughtful book by an anthropologist

The Confidence Trap by David Runciman

Naomi Klein’s This Changes Everything about how to avoid the doomsday scenario

Some light relief was brought by -

The Scots’ Crisis of Confidence Carol Craig

What you really need to know about the internet by John Naughton

Peeling the Onion Guenther Grass’ so poetic autobiography

Being Mortal – illness, medicine and what matters in the end

The World of Yesterday by Stefan Zweig

The Hidden Pleasures of Life by Theodor Zeldin

Key Books of the Century was an important series in which I tried to identify texts which had made an impact on our thinking – many of which have echoes today….