This morning for the first time in a while, I rejoined my tradition of listening to the Bloomberg on the Economy series with Tom Keene. I've been putting in some head reorientation so that I can work on my new project and get in the proper groove for that, and it's put a few things aside. But here's the thing.
This morning the news was that both the UK and American journalists tend to make the mistake of thinking that their local economic screwups are the problem, when in fact the problem is truly global. There is no way of decoupling, in economic terms, and all the economists who thought so were chastened. But the problem is indeed global and China's current account deficit and buying of of US Treasuries is not an exacerbation the the crisis, it is part and parcel of the crisis.
So things may be going back to a refomation of the ideas before Bretton Woods II and an overturning of the kind of macroeconomic theories that helped us get to the place we are today. Which is to say, one of the operating theories of the 20th C was that the market is always at equilibrium - that everything operates at as efficient a clip as possible. People maximizing their enlightened self-interest and all that, may turn out to be rot. Now some people will think that takes us back from Friedman to somebody closer to Marx, but that's wrong too. So if capitalism is the worst, except for everything else, what happens when we have to rethink capitalism - on a global scale?
My inclination is to think of regimes of truth. I know this sounds Foucaultian and I'm not trying to entertain any relativism, but it does make sense that the Anglo American form of capitalism is different from the emerging Chinese form which is different from that driven by the values of India. Even though we are on a global capitalist planet, local economies count very much the way languages count, or so it seems to me. You cannot decouple education in India from education in America because labor will compete in global markets, but you also cannot simply teach what counts for education in America over in India, all colonial irony aside.
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Now on the other side of this coin, which is on the question of liberty, I got the following aphorism stuck in my head. The only freedom you deserve is the freedom you pay for.
I think about that when I think about who cares about Chinese human rights and civil rights in a global economy. On the one hand, there is a certain amount of literacy necessary and there is a lot of basic skills necessary to reach a certain baseline of social freedom. Call it basic self-sufficiency in a modern society. But as you ascend a financial ladder, more freedoms are available to you, whether or not you attain those finances through meritocratic means. Nobody stops Biggie Smalls from sipping champagne and nobody really stops to recognize the soveriengty of the homeless man. There's a continuum here.
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According to the Bloomberg reports, construction, automobiles and financial services industries are all going to be crawling on their knees through some downsizing for a good while. It doesn't matter how enlightened your self-interest is. If you're working in the economy of automobiles, you've got limits. It doesn't matter how much you are brilliant in designing automobiles - the meritocratic rug has been pulled from under your feet. Nobody's going to be designing a lot of new autos for a long time, and you can't just jump out and start designing computer systems. You are stuck in a feudal domain.
Now I'm probably saying something in too many words that are obvious to people who study economics and political economy. Sorry, but I didn't. But as I try to make sense of things, these connections are pretty interesting to me. What I think I've explained is how you can have a theory of market equilibrium that fails to account for inefficiencies that are baked into such feudal arrangements. There's nothing you can do to make the market for X serve in the same way as the market for Y even though they are connected and linked in a global economy. One king doesn't trade his knights to another. When the shogun gets defeated, ronin are on a rampage.
Or take my intellectual hero David P. Goldman. He has no reason to work for a hedge fund. Hedge funds are over, and now he's editing First Things. No money in that. No conversion of the acquired intellectual capital to work in the economy. He's working for a different king, one that doesn't pay anywhere near as much as his old king. And yet is he fulfilling some enlightened self-interest? I think so.
So there's a cultural component, as real as language, I think. That breaks us down into isolated regimes and the economic flows don't flow as smoothly as we would think, and yet we are all connected through a combination of dependencies that is dynamic and permanent.
Injustice anywhere is a threat to justice everywhere, but...
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