Ye Olde Politickal Oeconomie

Neal Stephenson is what most bloggers would wish to be, able to describe the shape that people want of things to come. His Snow Crash divined the natural result of computers, aging, inter-networking, combined with a decaying post-industrial and service economy. People would root themselves in imaginative virtual worlds, and seek to hit human nerves at the lowest level, while rent seeking. While the theory of psychology presented was wrong then, and even more wrong now, it was what a certain sloshing, screaming, screwed up vat of humanity wanted to believe, that slurry of stupid that rushes from website to website and grabs standards quickly and relentlessly applies them. The city of 4chan scavengers.

With Cryptonomicon  he hit that people would use cryptography as a rent, and this inspired him to ponder on The Baroque Cycle. The reinvention of Ye Olde Politickal Oeconomy has happened, we are living in a mercentilist age, one where the piling up of immobile tokens is seen as the source of national strength, and profits are made by trying to turn first mover advantage into a rent, often one created by patent to the crown. The same mentalities are at work, and one can point to the same, bad, ideas being returned to the fore. For almost any currently hip paper answer to real problems, there is a direct analog in the 18th century.

Littered behind us are failed theories of everything, because each time what seemed obviously right was a reflection of how society wanted to be organized, and in each case, what seemed natural was the most unnatural part of our social organization. Take, for example, the hyper-selectionist neo-darwinian theories of the 1990’s. Selection is a powerful idea, and results in powerful formalisms. And yet, the big predictions, testable ones, one by one have been proven dead wrong. To take a few: the number of genes in the human genome, the death of the “Y” chromosone, kin selectionism, memes. All of them are dead wrong, and in each case the people who promulgated them are still toweringly important in the field. Fail upwards, even at the top. The reasons is that we do not reward people for being right about nature, but being right about the vast mass of the drones that make up an activity. No one toils away at anything without having one of two things: a vision of nirvana in their field, and a personal hope of rewarded Elesium. The reward is to tell the toilers that there is a road, doing what they do now, to both. This takes three parts: extending the small steps, describing an almost incoherent sense of perfection, in which the first grinders will be elevated to the priesthood of ease. The key is to convince people to burn stored up resource in a made rush to get there.

The above is a general theory of anti-genius. Tell people that they can turn dross into gold. When actually the are turning gold into slag.

Let me take an easy example: the Iraq War. In it, Bush convinced Americans to use up the small advantage that the 1990’s boom had generated, using the military industrial complex that they liked to work in, to impose the unregulated franchise model, on an oil bearing country, to afford their suburban sprawlconomy. This sprawlconomy could be packaged as mortgage backed securities and sold to the world. Nirvana was the end of managing the middle east, and this was personified in the endless trouble in managing Saddam Hussein, who was not a threat, but only kept that way by tireless inspection. This narrative unified technocrats and plutocrats. It managed to hulk out 20 years. We are about halfway through that.

So what is Ye Olde Politickal Oeconomie? It is the creation of a relationship between state and market participants meant to encourage the accumulation of the tokens of transferable wealth. One of the driving forces is that there are goods of global availability, pushing towards a single global currency system, and local national competition, driven by leading actors that are far more self-directed. The goal is to create the ability to project force outwards, while maintaining political cohesion internally. What makes this political order different, is what is valued as the core of the wealth of the nation. In the previous era security was the hegemonic value: the US provided the center of a counterweight to the Soviet Bloc. This security rested on expansion of the capital system, to make the sinews of war, and manpower, to run them.  Thus activities such as consumer protection, universalization of access, increase in civil rights, and social insurance were not done merely out of the goodness of the hearts of political elites, but because handing out rights and social insurance was seen as crucial to the ability to create participation in the capital system, and willingness to support the activities required, which includes mass mobilization warfare.

What made the age of Absolutism was the need to gut the old privileges of subsistence agriculture, and replace them with the ability to move factor labor. One reason England industrialized in the 18th century is that the displaced agrarians had a difficult time relocating to Europe, and thus either drained down to London, or were available for use as colonists or in the navy. The same process is happening now with the reduction of industrial workers in the developed world, they are being reduced.

This is a familiar story, but what connects the wider era from 1648-1789 to the present is what the basis of national wealth is, and how you reward people for getting it. In the 1500’s the Atlantic European world discovered two great sources of wealth: the gold and silver plundered from the New World, and access to the goods of Africa and Asia. The way this was encouraged was simple: letters of marque, and what might be called the “liberalization,” of all old privileges. As well as the creation of new ones: the Vice-roys of the New World, the vast patent grants, the British East India Company. In each case a more or less indefinite rent was handed out.

The times thought that the leaders of expeditions, the backers of colonies, were the key to the state. The rest, was just a matter of forcing people into labor.

Ye Olde Politickal Economie then, is a view of what matters, who matters, and has to be treated well, versus who can be crushed into submission. Men could be “impressed” into military service at sea, peasants made into landless laborers. By forcing the prices of necessities ever higher – the period of time from 1648-1789 is an extended period of grain inflation – it forced people to work. Real wages mushroomed in the 1500’s for skilled labor, and then grew at a quarter of that rate. Real wages for unskilled labor fell in Paris and London, but even with the high mortality, people continued to move into both cities from the country-side.

Then, as now, there were two relatively extreme views on money. One was the belief of people such as John Law, who thought that money had no role as a store of value, and as a result could be printed in unlimited quantity, so long as there was the hope of trading. This lead to paper money, and a massive bust when the bubble burst. During the period very sophisticated credit scheme based on the state selling notes for silver, backed by the ability to pay future taxes with the notes. These notes also burst, when it was realized that taxes would just be raised, and that it was always possible to move further away from the tax collector.

On the other hand, the idea of hard money as the wealth of the nation, to pay for the military, was the root of the system of political economy we now call “mercantilism.” In the 1620’s Thomas Mun wrote, but did not publish, a treatise on running a trade surplus based on reducing consumption. He was not alone in extending the simple idea of hoarding as the goal of the national economy. What the 17th century writers contributed to the situation was the understanding that high tariffs and hoarding alone, were not enough, that money had to circulate within a country, and rapidly. The other key feature of the system, was the belief that the lower classes were lazy wastrels, who need not be educated, but to live at subsistence, so that the be constantly available.

In our own age, neo-mercantilism drove the economy of China, but has now become the policy of the center: Germany is attempting to establish a neo-mercantilist norm in Europe. While immiseration of the working class is an ever popular activity, the understanding of the Victorian as to its purpose was quite different. In the Smithian political economy, the value of labor was central, and immiseration seen as a conflict with the good of the state, where as in the mercantilist order, it was seen as a strength. In the Smithian order, tariffs and patents were seen as weaknesses, while in the mercantilist age, while often decried as corrupt, were seen as necessary.

Core beliefs of the time are now conventional wisdom, on the left and the right. Austerity of the right, that is the problem is people consume too much, and austerity of the left, that is the problem is people consume too much, are both hard wired into the discourse. In both cases the “hard limits” turn out to be not so hard.

In our own age, it is no stretch to see the dynamic at work of manipulation of law and currency, for the purpose of creating concentrated wealth, the belief in austerity, the assurance that ordinary movements do nothing. This is in direct contrast to the Smithian goal of small economic actors, no one of whom can set prices, of democracy of small groups and shifting interest, in general of an emergent order of small pieces, loosely joined. Instead, only big solid things matter. At bottom the view of the 18th century was that the king was the focus of the country, and everyone else should be happy to pay rent on that.

Which returns us to Stephenson, and the phenomenology of the state. What people feel about the state.

In Stephenson’s universe, control of some critical bottleneck, such as the ability to “hack the brainstem,” in Snow Crash, is the ultimate currency. His structure of “aperts” and their use of neo-matter in Anathem another; he makes many of his character’s members of the Cabal in the baroque cycle. The historical process, of masses of people, their behavior, and its results, spread by open means is largely a wash, all great effects occur by the control of hidden knowledge or bottlenecks. Conspiracism in Stephanson, is reality. While one can trace the roots of his ethos to counter-culture illuminatism and the “paranoid style,” combined with the deconstruction of the “great man” school of history, it goes much father.

This view is not limited to freakish outsiders, because in a world of concentration of wealth and absence of governance, manipulation really is possible.

We can see this when we are told that central bankers, Irwin calls them “alchemists,” heroically wined and dined to save the world.

From the larger perspective of conspiracism, most of the time, human history is a war of attrition, doing nothing and making no progress. Then there are a few moments which change everything. This has been said about football. There are a few “big plays,” the rest don’t matter. The natural extension is that those who can tilt the few important moments are the ones who will win. The rest of the time, they merely need to sit by, and watch, and of course, collect the rents. When a few actors, a few conquistadors, a few oil companies, a few billionaires, a few bankers or traders, can bring down an empire, with others seemingly helpless, the conspiracy is no longer insanity, it is a description of what people see, every day.

A core sign of the shift is the belief the ability to loosen coin as the core of the social system, means that “innovators,” that is demand brokers, who find ways of creating demand for what society can easily supply, as the “job creators,” is the mainstream conservative economic belief. Not scientific genuises, not artists, but business people, says the Gallup organization, are what we should educate people for. “Serious” people like Thomas Friedman agree.

But what connects the view that the elite are the society, with the bottom level view that history is foam? How is that a society that valued great men, and great movements, turned into one that believes that great corporations, are the source of power? What drove the rebirth of Ye Olde Politickal Economy.

One part is the nature of extremely large concentrations of capital, but in specific it was the increasing need to mediate between rent seeking stake holders. As the desire to invest in capital grew less, so as to have more available for consumption, more and more of the stability of society, became about the people who could do this negotiation. These people, in Wall Street parlance, are “the talent.” The celebrities that people cling to, the politicians as celebrities: the CEO as celebrities, and the pseudo-intellectuals as celebrities became the heuristic. Sports team or political team, as long as yours was winning, all was right with the world. This, even though the public’s own sense of its well being contradicted what the stock market was saying.

The answer is that both the top and bottom want it that way, is not popular, but it is true. The top wants to blame the bottom. That is neo-classical economics in a nutshell: make the poor pay. The theory of the top is that if there is inflation, or shortage, or crisis, then the bottom lived too well, and must be reduced. The bottom wants to blame the top: if there is crisis, it must be manipulation. This is a direct echo of a fight early in mercantilist theory: was it, as Gerard Malynes argued, bankers that drove England’s troubles in the 1600’s, or was it, as Mun argued over-consumption of foreign goods? The exact tangle one can read about between populist financial blogs, and the mainstream of the financial press.

The top sees itself as the providers of the good life, and therefore entitled, the bottom sees itself as the reason for the good life, and so is entitled. To the “Free Monarch” of that time, using the national resources to greatest effect, was the reason for the monarch’s glory, to the “Delvers” the labor was the base of everything. What differentiates this from what comes after, is the understanding that the capital and national base, are not the product of one class alone.

One reason that libertarianism fits so well with the present, is that its arguments were crafted to take on government and manipulation of the economy to make winners of those in and around the king. To the extent that government funnels money to a winner or a loser by regulatory scheme, the old arguments are easy to make, because they are part of our civic religion. George III taught a generation of English speaking authors, starting with Benjamin Franklin, who argued against the Iron Act of 1750, and the Currency Act of 1751. Tyranny, at bottom, was seen as the use of law to shape economic winners, precisely because there was an eroding sense that the government did anything but war, and war did anything but cause destruction and mischief.

As long as we believe that there is one source of good, we will also be forced to believe that where that good is thwarted, it is because of a tiny conspiracy of elites, or because of the uselessness of the vast mass of people. As long as the public longs for a strong military to wage perpetual wars, then there will be no larger social project. This in turn brings us back to the world of Luddites, Delvers, Cabals, and the other assorted ideas of the 18th century.

Thus cryptography, secrets, and manipulation are seen, by both top and bottom, as the tools that will change history, whether drones, or Anonymous, Quantitative Easing, or anti-fragility, whether Total Information Awareness, or Al Qaeda, it is the conspirator that is the unacknowledged legislator of the age.

9 comments to Ye Olde Politickal Oeconomie

  • hvd

    As always there is so much in your post that it is hard to decide how to respond without the risk of high jacking the thread to ones own more pedestrian and limited ends. Nevertheless I will venture a few observations. It is no surprise that both the 17th and 18th centuries as well as our own benighted age have seen the rise of all powerful anonymous corporations chartered by the king but then absolved of all responsibility even to the king. These have become the prime actors. While individuals are regaled with high minded urgings to personal responsibility the ability to actually act has been weighted and freighted with rules Andy accounting to the point where actual action is virtually impossible. The king wages war on all on behalf of the largely anonymous stakeholders in his corporations.

    It is no surprise that the American revolutionaries with their own self interest in mind rebelled as much against the kings corporations and the taxes they imposed both obvious and hidden as they did against the king himself and his taxes. It was also no surprise that the corporation was largely prohibited and only very limited charters were permitted in the early days of the republic.

    It is the breaking of the back of this unholy alliance that is I think the principal necessity of this age as it was then. Without this the preachments of both the libertarian right and the statist left and every one in between are just so much babble leaving in place the central power structures while creating excuses for the predations of the soulless and personal responsibility less actors at the center.

    Again thank you Stirling for setting loose so many thoughts.

    • Jeff Wegerson

      England around 1750 was on a path of abolishing slavery. the hip southerners aware that england considered its colonies ultimately subject to its own law convinced the north to revolt with it. the south conviently left unsaid that the war was over slavery for them.

  • Thomas Lord

    I’m struck that:

    (1) We are in a period of history characterized by the rapidly increasing scope, quality, and accessibility of what I guess we could call geo-ecological knowledge and its relationship to economy and power.

    For example, we have unprecedented and rapidly growing scientific understanding of the world’s potable water resources and we’re able to think about implications like “water wars”. It’s not just one or two areas like water, though. Our knowledge “like this” is exploding.

    (2) Urgent expansion of that geo-ecological domain of knowledge is driven largely by increasing belief and suspicion that, as a species confined on this particular planet, at this particular time in history, we are running into larger and larger numbers of hard and permanent limits, and coming up against negative and lasting changes to global geo-ecological systems.

    For example, our confidence that we will always have power sufficient for desired levels of production is waning whereas as recently as 100 years ago that wasn’t even a question. Similarly our belief that we can rely upon a relatively stable climate, at least over long periods of time.

    Stirling refers to “anti-fragility” projects which I understand to mean things like permaculture, the resiliency movement, and a variety of self-sufficiency aspirations in pop culture.

    Perhaps this anti-fragility stuff is one example of the new geo-ecological discourse combining with what Stirling is describing as the rebirth of political economy.

    Political economy has a lot to say about the material world, particularly as pertains to trade.

    Similarly, the new geo-ecological discourse has a lot to say about the material world, particularly as pertains to trade.

    In fact, now that I say it that way it seems clear that there’s something big here because the integration of geo-ecological discourse with the discourse of political economy is a large, persistent point of contemporary contention:

    Examples: Contention in pop forums about the actuality, causes, and implications of global climate change; Politically operative debates over the sustainability and risks of various means of food production / harvesting.

    These topics are available to – and perhaps most at home in scientific discourse. Yet because of what they are about they inevitably wind up confronting the discourse around political economy.

    So to speak: your theory of money or of the pricing of commodities may be all well and good but this new geo-ecological discourse has quite a bit to say about what might in the past be casually brushed aside as “externalities” and rare “black swans”.

    That discursive confrontation occurs and it plays out in both directions, in a way. For example, technocrats try to adjust political economy discourse to support the market manipulation of emissions controls — that’s one direction. Elite resistance tries to adjust the scientific and academic discourse to support the institutional manipulation of changing who gets credentialed and published and why — a push to change who counts as an expert (sometimes framed under the Orwellian title of a fight for academic freedom).

    The evidence of that confrontation suggests that many, high and low, recognize big stakes in how those differing ways of accounting reality are to be reconciled.

    No one toils away at anything without having one of two things: a vision of nirvana in their field, and a personal hope of rewarded Elesium. The reward is to tell the toilers that there is a road, doing what they do now, to both. This takes three parts: extending the small steps, describing an almost incoherent sense of perfection, in which the first grinders will be elevated to the priesthood of ease. The key is to convince people to burn stored up resource in a made rush to get there.

    One question for me is what impact geo-ecological knowledge might have, eventually, on the plausibility of promoted images of nirvana as it relates to the scientific coherence of those images.

    For example, while many people in the US might still hold out hope for an eventual restoration of what Kunstler calls the “happy motoring” nirvana of greased-lens suburban paradise — many do not and they do not find it plausible for geo-ecological reasons. So that is an example of a constraint on the discourse of political economy: a kind of material promise it can no longer quite so easily make.

    I just want to say in conclusion that I don’t mean to imply that virtuous scientific realism in the form of geo-ecological knowledge will finally correct the political and economic discourse into something progressive and wonderful. It is not hard to imagine it having the exact opposite effect.

    • Jeff Wegerson

      buckminster fuller used to say that the universe was full of intelligent life and that if this was one of the planets that didn’t make it wel…

      but he was also fond of the way we always managed to do more with less. the fact that coal and oil and nuclear are now rapidly becoming uneconomic versus guess what would not surprise him.

    • Stirling Newberry

      “For example, while many people in the US might still hold out hope for an eventual restoration of what Kunstler calls the “happy motoring” nirvana of greased-lens suburban paradise — many do not and they do not find it plausible for geo-ecological reasons. So that is an example of a constraint on the discourse of political economy: a kind of material promise it can no longer quite so easily make.”

      A good point, car driven suburbanism is still an ideology, particularly it its lust for safety, and part of our legendary past, but increasingly, not part of our future.

  • Jeff Wegerson

    me i always look for the economic references to marx. but that you can dance around him is fun. i referenced bucky fuller above and perhaps i’ve told you before but your extremely dense writing reminds me of his.

    • Stirling Newberry

      I treat Marx as the first sociologist, and the last of the classical political economists, in the line of Smith, Ricardo, Mills, and Malthus. He so throughly debunked the notion that emergent capitalism would lead to the best for everyone under a labor theory of value, that effectively it required creating a new theory of value, the marginal theory, to rebut his claims.

      History has also rebutted Marx’ claims. But it doesn’t end there, in that Marxian analysis is of the best shovel in the shed.

  • KingElvis

    Stirling, so glad to see you back in the saddle at Agonist. I do find it amazing the way you see “Adam Smith” and/or “The Wealth of Nations” invoked as a DEFENSE of quasi-Mercantilist practices. I feel like it happens all the time and all I can do is the *facepalm* and think “It’s exactly 180 degrees from what you are arguing.”

  • KingElvis

    This is a slight tangent but germane to the topic of the super elites. I heard Sotomayor pimping her new memoir on NPR a month ago, and it really struck me how the Obama era ‘liberal’ is just about, as blacks say, “getting over.” In other words, not actually improving health, wealth or welfare of the working class but just becoming an ‘arriviste’ and climbing out of the stinking barrel of working class scum and into the Versailles court. This is reflected in Obama’s notion of “education” being the answer to America’s working class prayers. We’ll all be trained to be architects, high price lawyers, hedge fund managers…and…there won’t be a working class anymore presumably.

    Hey, no need for unions if there are no people actually doing any hard work! It’s a perfect myth suited for big money donors. We’ll get rid of the damn pesky workers by just all being professionals with briefcases and really cool Macintosh computers and hybrid luxury cars. Sotomayor and Obama both are not actually going to do anything to help the working class, but – and this has got to be the absolute nadir of ‘identity politics’ – certain special snowflake Puerto Ricans or blacks will see Sotomayor or Obama and get a warm fuzzy feeling and say “Yes I Can!…one day become a big shot MBA and pack up American jobs and send them to China – or even, yes, join the (Supreme!) court at Versailles!”

    We’ve seen this masochistic dynamic on the left when Obama does some terrible thing and then we are given an explanation that, hey, just because we got this guy elected doesn’t mean he’s going to, you know, actually DO anything to help us. We’ve got to keep the pressure on him! And we can pressure him by…being small time donors to his campaign! You know, the small timers who aren’t “stakeholders” with a “seat at the table.” We’ll just stand on the sidelines and cheer him on for being cooler than John McCain or Romney.

    The ‘struggle’ from BHO’s perspective is getting elected. Mission accomplished. Now’s the time to make the ‘hard choices’ and screw the working class that elected him. So BHO is not actually going to represent the interests of the workers who voted for him. His being POTUS is a purely symbolic victory for the average worker. Like when the Bears or Bulls win my Chicagoan heart should swell with pride.

    So it’s actually quite embarrassing to witness Sotomayor get a lump in her throat talking about indefatigably pushing her way into the big, big BIG time and expecting us to be ‘inspired’ by her ‘struggle’ – the struggle to leave us behind in order to stand at the top of the mountain. You GO girl!

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