20 years of boredom

You might not guess from most of this blog - though the clue is in the title - but I consider myself to be on the “left” (let’s leave definitions aside). So I’m interested in Norm’s question. He asks: in “non-bullshit forms of inquiry, what meaning can we give to the original goals and aspirations that went under the name of socialism?”

My take on this is that the demoralization of the left began long ago. In this sense, I agree with Marc Mulholland – the war in Iraq is epi-phenomenal. For me, the left’s decline is rooted largely in the fact that it failed to respond satisfactorily to the collapse of the social-democratic post-war settlement in the 1970s. As a result, it allowed “rightist” economics to triumph.

Economics, then, must be central to the rebuilding of the left. After all, capitalism, poverty and inequality are economic phenomena. I’m sick and tired of getting the impression that leftism and economic illiteracy are coterminous.

So, here’s a very rough sketch of what I’d like to see the left do.

1) Answer the question: why exactly do we want redistribution? Too many on the left give the impression that inequality is somehow an aesthetic problem – that the pattern of wealth distribution looks ugly, that the Gini coefficient is too high. This just invites “rightist” replies – such as Nozick’s famous Wilt Chamberlain example – that any patterned distribution of wealth will be over-turned by free exchanges. Instead, I’d like to see the left argue for redistribution on other grounds. I think Dworkin’s argument for redistribution – that it’s a pay-out on insurance policies we would take out before we were conceived – has some merit. So too does Rawls' point that people's talents are arbitrary from a moral point of view and are, in a sense, common property. I’d also like to see the left rediscover its old tradition – that its job should be to protect people from injustice and oppression, not from their own stupidity. My type of leftists aren’t paternalists. Better still, I think the oldest left argument is the strongest. Gerrard Winstanley called for asset redistribution (which is better than income redistribution in my book) not to relieve poverty or reduce the Gini coefficient, but because wealth was the result of historic injustices. Reviving this argument would allow the left a reply to libertarians. Nozick famously said that “Whatever arises from a just distribution by just steps is itself just.” But of course, even by Nozickean standards, current wealth holdings don’t satisfy this criterion. And as Nozick said: “Past injustices might be so great as to make necessary in the short run a more extensive state in order to rectify them.”

2) Recognize bounded rationality – and use it. Too often, the left’s optimism about the potential for human improvement has shaded into an unreasonable faith in the unlimited ability of a central agency to manipulate the world for the better. The right has surely won this argument. All the evidence is, surely, that human ability to predict and control the world is limited; Jon Elster, among others, has written well on this. But this needn’t be a reason for the left to despair. Quite the opposite. First, it gives us a reason to oppose capitalist hierarchies in the workplace. We all know a centrally planned economy is a stinking idea. So why is a centrally planned company a good one? (This question was raised by Hilary Wainwright years ago in Arguing for a New Left. Disappointingly, it’s been ignored.) Hayekian arguments can be applied to company bosses as well as central planners. For me, what’s really offensive about capitalism isn’t (just) the huge wages paid to bosses, but the fact that their claims to justify such rewards – that they are capable of managing massive institutions – are utterly unfounded. If it was a good idea to turn Hegel on his head, wouldn’t it be a better idea to turn Hayek on his head? Second, this is an argument for prioritizing justice over more instrumental objectives. Possibly (this need arguing) it’s easier to identify just policies than efficient ones. For this reason, among others, I’d favour a basic income. This has the virtue of simplicity, and of ending the use of the welfare state as a means of controlling the poor.

3) Face the facts – markets work. Markets are the least bad mechanism we have for allocating scarce resources. Many of the problems the Left associates with markets are not, strictly speaking, problems with markets per se. Instead, some – such as the insecurity they bring – are the result of missing markets. Economists have known for 50 years that complete contingent markets can, in principle, offer complete security. More recently, Robert Shiller has shown in The New Financial Order how markets can be used to protect people from insecurity. And other results of market transactions – that they can lead to horribly oppressive or exploitative working conditions - are the result of workers’ poor bargaining position. That can be redressed by asset redistribution and a basic income. Another leftist objection to markets is that they lead to alienated social relationships; we regard people not as human beings, but as instruments for our own satisfaction. I’m not sure this is right. Markets can be a basis for satisfying human relationships; the pub and local shop are important parts of village community life. And isn’t the relationship between a small shopkeeper and a regular customer healthier than that between, say, benefit claimant and civil servant? The notion that “public service” is somehow more human than market relationships is surely just plain false, at an empirical level. It’s vitally important to distinguish between markets and capitalism. Markets, I guess, will exist under any economic system. But it is markets that deliver the goods – not capitalism. Making this distinction will help address the problem Marcus at Harry’s Place rightly sees – “people don’t want to upset the apple cart. It’s still delivering the apples.”

4) Ask: do we really need a big state? As I’ve said before, there’s a trade-off between big government and redistributive taxation. If the state is taking 40 per cent of GDP, the tax system cannot be a force for equality. As Julian Le Grand pointed out years ago, the middle class gets a better deal from the welfare state than the poor; although we all take it for granted, isn’t it just disgusting that the best state schools are in rich areas? As a means of delivering Left objectives, the evidence suggests the state is a failure. And what’s so intrinsically good about the state anyway? Surely, all history shows that it’s a force for the most evil oppression. Shouldn’t the left therefore look for ways in which the state might wither away?

Now all this is just the vaguest sketch. But I think hopes for the left lie along these lines. As for how they can be developed, can I suggest the work of Philippe van Parijs, John Roemer, Sam Bowles, Herb Gintis, Robert Shiller and Luigi Zingales as interesting starting points? (The last two wouldn’t consider themselves on the left. But that’s the point – it’s time the left started to engage with serious economics again.)

Two other things. First, I agree with Marcus that Marx’s materialist conception of history is one of his best ideas. The idea that social change is driven by changes in property relations in response to changes in the technical conditions of production is very fruitful. So fruitful, in fact, that it’s been taken up by neoclassical economists. I suspect Douglass C. North’s Structure and Change in Economic History has more in common with Cohen’s Marx’s Theory of History: A Defence than perhaps either man would like. I think that’s a good thing. What’s more, there are signs that traditional capitalism might be fading away. Physical capital is declining in importance as a means of production, relative to human capital. This change in the forces of production should call forth a change in the relations of production. Luigi Zingales has discussed this is non-Marxist terms in “In Search of New Foundations” here.

Secondly, Norm asks for non-bullshit forms of inquiry. Is this a reference to the analytical Marxism of the 1980s, whose supporters called it “Marxism without bullshit?” I hope so, because the analytical Marxists tried to connect Marxism with serious economics. This might not have pleased those who favour theoretical purity, but for those of us who’d like socialists to engage with the rest of the world rather than retreat from it, it was (and is) a breath of fresh air.

Comments

[dearieme]

Proposition: in countries like ours, all fruitful political debate is between liberals and conservatives (small "l", small "c".) Socialism is a dead-end: sterile, intellectually vacuous, economically destructive, inimical to liberty, a horrible wrong-turning. Give it up and start again.

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