Nazism and Neoliberal Mythmaking, Part II: The State as Killer

In the first part of this series we laid out how those who wanted political power in post-war Western Germany sought out a myth with which they could at once wipe of the Nazi past and push their ideological line. As we saw the ordoliberals were the ones who were successful in gaining power over the German myth-machine. They claimed that Nazism was simply the natural outgrowth of rampant statism gone wild – a mythic interpretation shared by their ideological cousins and fellow Mont Pelerin Society members, the Austrian school. We now examine in detail the relationship between Nazism and the state.

Nazism as Anti-Statism

In the minds of many today, on both the right and the left, Nazism is associated with a big totalitarian state. On this the Austrians, the ordoliberals and Western Marxists agree. Yet in practice Nazism destroyed or at least vastly reduced the state’s power and this was quite well recognised at the time. Hitler and the Nazis saw modern state-forms – both liberal and socialist – as being entirely degenerate. They believed that these state-forms were, in a way, not ‘natural’ enough in that they alienated people from their true Essence and Destiny – not to mention their race and their kin. Hitler himself put forward quite explicitly the idea that a state must exist in Nazi society but that it also must be wholly subordinate to other goals. In his chapter on the state in Mein Kampf he writes:

The State is only a means to an end. Its end and its purpose is to preserve and promote a community of human beings who are physically as well as spiritually kindred. Above all, it must preserve the existence of the race, thereby providing the indispensable condition for the free development of all the forces dormant in this race. A great part of these faculties will always have to be employed in the first place to maintain the physical existence of the race. (pp306)

 We see here, of course, the germs for the extermination programs that were carried out by the Nazis when they came to power. However, at the same time we see that for the Nazis the state is a wholly secondary concern – a “means to an end”, as Hitler says. The goal of the Nazis was not to ensure that the state reached into every crack and crevice of German society and take it over, as is the typical modern day characterisation of what so-called totalitarianism is supposedly all about, but instead the state was seen by the Nazis as something that needs to be wholly subordinated to the peoples’ community – the Volksgemeinschaft.

Although people today do not generally recognise this aspect of Nazism, the first generation ordoliberals had lived through the period of Nazism and tarried with the stated goals of Nazism in a far more sustained manner than your average lazy Austrian or neoliberal ideologue does today. They understood what the Nazis were aiming at but they claimed that they had achieved exactly the opposite. The ordoliberals recognised that the Nazis wanted to completely subordinate the state but they claimed that the economic planning that Nazism required led to the necessity of a massive totalitarian state which was all-encompassing. The French philosopher Michel Foucault in his lecture series The Birth of Biopolitics which is essential reading for anyone interested in the origins of neoliberalism, ordoliberalism and Austrianism, summarises the argument as such:

Deciphering the situation [that Nazism aimed at subordinating or even destroying the state], the ordoliberals reply: Don’t be deceived. The state is apparently disappearing; it has apparently been subordinated and reduced. Nonetheless it remains the case that if the state is subordinated in this way, it is quite simply because the traditional forms of the nineteenth century state cannot stand up to this new demand for state control that the economic policy of the Third Reich calls for. In fact… you will need a super-state to make it work. (pp112)

The ordoliberals reasoned that Nazism’s reduction of the state was precisely what gave rise to the totalitarian super-state that invaded every aspect of peoples’ lives. No longer was the state confined to the courtroom or the bureaucracy, but now leisure activities would be organised by the state and mass state rallies would play the same role as team sports plays in other societies. The ordoliberals then made the further claim that when the state began to extend its reach in democratic society – as, for instance, in Keynesian economic planning – those that held power would suddenly begin to feel a surging desire for infinite power and the state’s tentacles would weave their way through all of society and finally, presumably, a Hitler would spontaneously sprout at the head.

Not only does this, to repeat, not square with the actual history of the Nazis’ rise to power, but it also completely misunderstands the nature of the rise of Nazism. Nazism did in fact succeed in subordinating and reducing the state and it was certainly not born because of state expansion. Under Nazism the state became a completely peripheral entity – a means of administration and not an end, just as Hitler had written. It was not what was important at all in the mobilisation of Nazi society. Rather the Führer, the Party, the Volk and the Volkgemeinschaft were the real players and this was precisely what the Nazis wanted.

The Führer, the Party, the Volkgemeinschaft and the Volk

The Führer – the leader, Hitler – was the direct embodiment of the will of the Volk – the people. It was through him that they could properly form into a Volksgemeinschaft – a peoples’ community. The Party was a sort of administrative bureaucracy that carried out the will of the Führer which, of course, was also by definition the will of the Volk. The Party manipulated the levers of the state which played a purely passive, functional role in carrying of the will of the Führer. This was how Nazism ruled – literally. This was not some vague, emotionally charged Nazi rhetoric deployed to cover up the formation of a super-state. This was the underlying structure of Nazi society as theorised by the Nazis and as reflected in their practice of governance.

The growth of the state under Nazism, to the extent that it was much more significant than Western war democracies, was a mere effect. The state had no real autonomy of its own – and this was by design and can, as shown above, be found in Hitler’s own writings on the topic. To make the case that the real essence of Nazism was the growth of a super-state and all the other elements – the Führer, the Party, the Volk and the Volksgemeinschaft – were just peripheral outcomes of this is like saying that guns kill people rather than that people kill people with guns. And that is precisely what the ordoliberals and the Austrians would go on to say – not that Nazism killed people and encouraged barbarism as a matter of ideology, but that the state in the abstract, which is not even an inanimate object but a concept, killed people and encouraged barbarism. This is, in philosophy, known as the reification fallacy.

The gun analogy is both provocative and instructive because it is rather obvious to thinking people that banning guns likely does lead to lower gun deaths. It does not, of course, follow that guns kill people but rather that people may be more inclined to kill others if they have an easy, detached and somewhat romanticised way of dispatching their target to the hereafter. The same, however, cannot be said of the argument that the state kills people. Why? Well, let us think about this in some depth. Those who claim that legalising guns may lead to more killings are implicitly calling for banning guns. In such a circumstance people living in a given country will then find it much more difficult to gain access to guns and thus will presumably be less inclined to kill people.

Implicit in this argument is the idea that we can ban guns through a state apparatus. We can use the power of the state to ensure that violent people who desire to kill others cannot get access to guns. The argument when it comes to Nazism is entirely different as the Nazis sought to gain control over the state itself and subordinate it to their will. Thus even if we regulate the state as we might regulate firearms, if Nazi or other nefarious types ever gained power they would simply reverse this. Our would-be gun murderer, on the other hand, has no such recourse.

The causality is thus entirely different and so too are the implications. First of all, as we have stressed already, the growth in the state did not historically lead to Nazism – the causes were entirely different. Secondly, the idea that minimising a state will reduce the risk of Nazism, just as minimising the ownership of firearms will reduce gun murders, is a complete misunderstanding of the problem. Thirdly, the Nazis themselves only saw the state as a vessel for their program which had nothing to do with the spread of the state, but rather the realisation of the will of the Volk and the realisation of the Volksgemeinschaft through the figure of the Führer. It is to the reality of this last point that we turn in the third and final part of this series.

Nazism and Neoliberal Mythmaking, Part I: German Reconstruction as State-Phobia

In a previous series of pieces about the origins of neoliberalism (available here: Part I, Part II, Part III and an interview) I put forward the idea that neoliberalism – and its extremist offshoot, libertarianism as represented by the Austrian School – was founded on a very specific myth. This myth I called “Hayek’s delusion” and it holds that any sort of economic planning will inevitably lead to totalitarianism. Thus even well-intentioned Keynesian policies of economic planning contain within them the seeds of the next Third Reich.

In the first part of that series I tried to show that this myth had its origins in the thoughts of one man desperately struggling to make sense of Hitler’s rise to power. That man was, of course, Friedrich von Hayek and the manner in which he made sense of this trauma was simply a projection of his own a priori ideology onto a past which he himself had lived through. To repeat the general theme of that piece, but not to belabour it, Hayek ignored the fact that Nazism was largely an anomaly which was given fertile soil to sprout by the fierce reparations payments demanded by the Allies after the First World War together with other humiliating conditions set out in the Treaty of Versailles and finally gained power due to austerity policies enacted under Heinrich Brüning after the Great Crash of 1929.

Hayek’s delusion is, of course, preposterous and it was probably taken up and established as the founding myth of neoliberalism by people who simply wanted to push their ideological agenda. However, it may perhaps be worth exploring the idea that economic planning inevitably leads to totalitarianism in a little more detail, if only to bring to the surface its historical and logical nonsensicalness. In order to do this we must turn once more to the German ordoliberals – whom we encountered in the third part of the previous series – and the part they played in the reconstruction of the German state after the end of the Second World War.

The Founding Myth of the Modern German State

In 1995 the BBC aired a series by the British filmmaker Adam Curtis – probably the finest filmmakers and perhaps even one of the finest thinkers of our time. The series was called The Living Dead and it examined how those in power manipulate our sense of collective memory in order to exercise power. In the first film Curtis scrutinised how the Allies at once created the myth of the “good war” and at the very same time buried Nazism. The latter was undertaken, according to Curtis, by using public events like the Nuremberg Trials to turn the leading Nazis into monsters. Curtis makes the case that what was done after the war was to single out certain individuals and turn them into quasi-mythic figures that came just about as close to anything a modern person might consider a demon or some other unworldly entity.

The leading Nazis, to this day, continue to hold this rather unusual aura around their ghostly historical presence. Perhaps, of course, this is not without reason but for anyone interested in the way supposedly rational people continue to hold beliefs that we usually associate with more primitive cultures it is truly fascinating. (The lesson, of course, being not that we should paint as absurd those who think Hitler a manifestation of a sort of otherworldly evil but that we should probably think twice before snickering at the Pacific Islander who claims that the leader of the enemy tribe who brutally murdered his family members is actually a demonic entity placed on earth by bad spirits.)

Curtis’ case is a good one and my intention is not to dispute it but instead to complement it by taking a slightly different angle. How did those within the German state reconstruct this past, what did it result in and what was the past that it repressed? We must understand that this particular instance of political mythmaking was an altogether delicate operation. After all, if we take real history – as opposed to myth – as our guide then we know that Nazism was largely the result of the Allies’ policies toward Germany after the First World War. However, it was precisely bitterness over this that had led to Hitler. So to have this true history as the foundation stone for the new German state may well have risked once again sparking off this bitterness and the effort at reconstruction might have proved entirely self-defeating. A metanarrative or Grand Myth was thus needed. Some sort of logic had to be identified as being responsible for the rise of Nazism. In positing such a logic it could be fought by the new politics. The new German state could primarily constitute itself as an attempt to fight against this terrible logic. This may have been a puppet fight but it was likely better than a truth that may have derailed the entire process of reconstruction.

Germanic Left Anti-Statism and Germanic Right Anti-Statism

After the war two such logics were offered, both by German émigrés who had by then returned from exile. One such logic came out of the Frankfurt School and is generally today known as Western Marxism. The Frankfurt School reasoned that Nazism was, in fact, the inevitable result of a degenerate capitalism in its last stages of decay. The Frankfurt School – who were anti-Soviet communists – were not given a voice until protestors clashed with police in the streets across Europe in 1968. The police, in the case of Germany, were defending a state founded on the logic of the other group of German émigrés. This group was known as the Freiburg School or ordoliberals and as I showed in the series on neoliberalism they were firmly tied to the Austrian School through the Mont Pelerin Society.

The ordoliberals, as discussed in the third part of our previous series, were similar in many ways to their Anglo-Saxon neoliberal cousins who would rise to power in the late-1970s and early-1980s. However, they tended to allow for strong state institutions and they believed that labour unions had a firm place in civil society – albeit one which was mainly geared toward the suppression of wages. The ordoliberals also rose to power far quicker than their neoliberal cousins. While most of the rest of the advanced Western world was being governed by broadly Keynesian-style economic planning, the German economic minister, later Chancellor and member of the neoliberal thought collective the Mont Pelerin Society Ludwig Erhard, was trying with some success to push the anti-Keynesian line in West Germany after the war. Erhard was never completely successful, of course, and Germany developed into a social market economy, but the ideas he laid out – especially those related to so-called “competitiveness” – essentially form the base of Germany’s export-led economy today.

Most importantly for our purposes is what the ordoliberals said about Germany’s past. If the Frankfurt School claimed that Hitler was the end result of a degenerate capitalism what myth were the ordoliberals trying to propagate? In fact, the ordoliberals essentially made the exact same claim as Hayek and the Austrians. They claimed that Nazism was the result of statism gone mad. They said that when the state is given power over economic planning its power begins to grow and grow and soon its desired reach becomes infinite and we get Nazi totalitarianism. As already stated this is pure nonsense – Nazism was largely a reaction to the Versailles treaty and the poor government response to the severe economic downturn in Germany after 1929. However, there is another aspect of history that shows this up for the silliness that it is and that is the theory and practice of Nazism itself. In the second part of this series we will examine this in detail.

The Dresden Dolls are Shallow and Could be a Lot Better if They Wrote More Honest Music

Acting is like lying. The art of lying well. I’m paid to tell elaborate lies.

— Mel Gibson

I never really write on this blog anymore because Yves Smith of Naked Capitalism now publishes my ramblings on the economy and like matters. I return to write a short piece on music — which I used to do from time to time on this blog, so it seemed an appropriate place to publish it.

This week I encountered a band called The Dresden Dolls. Apparently they’re rather popular — and that doesn’t surprise me too much. At first I thought their music was quite good, even though I found their presentation rather distasteful. They dress up in funny costumes, a bit like Rasputina except with Rasputina there was less of the sense of over-the-top theatrics and craving for fashion shoots that you get from the Dolls.

Anyway, I kept listening to the music and I eventually started moving from liking it to disliking it. This rarely happens to me. More often I initially don’t ‘get’ something and then, after a period of growing accustomed to it, I finally begin to like it. But in this case it was completely the opposite. I started off by thinking I’d found a new band I could listen to a great deal and then gradually moved toward disliking the music.

At first I couldn’t really figured it out. The music was good, especially the drumming which was fantastic (you can really hear the influence of Einstürzende Neubauten and The Birthday Party and the like). But there was something putting me off. And then I realised that it was a combination of two things that were by no means unrelated to each other.

First of all there is the theatrics. The music is self-consciously theatrical. Theatrical for the sake of being theatrical, even. By that I mean that the theatrics don’t follow from the emotive power of the music, as is the case in Neubauten or The Birthday Party (or, even more recently, in Gogol Bordello). Rather the music is a sort of vehicle for the theatrics. The band refer to themselves as ‘Brechtian Punk Cabaret’ and this is quite accurate — except that they’re more interested in the ‘Brechtian cabaret’ than they are in the ‘punk’.

This leads to the second problem with the band, namely the shallowness of the lyrics. They are, to put it bluntly, paper thin. Some of the lyrics are very clever and well put together but they sound like something lifted from a script rather than an attempt at self-expression. Again, we return to the theatrical aspect of the band. My impression is that when they write lyrics the Dolls are doing what Mel Gibson and other actors do when they act. That is: lying.

The lyrics, it seems, are largely about having sex. But they’re not about sex itself. They’re not erotic. They’re more so just about having sex. I’d almost go as far as to say that the lyrics are as sex-obsessed as most contemporary pop music but are actually less erotic. Even in pop music you get crude allusions to the act of sex itself, why it is desired, what it feels like etc. With the Dolls you just get sex as a sort of shallow act discussed endlessly but never truly broached in any real terms.

Compare this with some of the Dolls predecessors. Again, take The Birthday Party or its offshoots (The Bad Seeds etc.). That music was pretty sex obsessed too. It was also, like the Dolls, a far cry from the pop music of today. But it was darkly erotic. It harked back to the old Romantic and Gothic traditions of dark and death-obsessed eroticism (a trend that has been resurrected in a more shallow way by the recent Twilight series of films for a mass audience).

The Dolls have none of this. They hint at it, yes, but they never really embrace it. It’s almost as if they ‘sell’ the aesthetic without ever truly taking it upon themselves. In many ways, even the Twilight series is more honest in this regard.

The tragic thing is that I think the Dolls could be a great band if they dropped the theatrics and engaged with their lyric writing and presentation more honestly. The Dolls’ drummer Brian Viglione, for example, played on a recent Nine Inch Nails release (Ghosts I-IV) to great effect. That album was far more emotive and honest than anything the Dolls themselves are putting out.

The Dolls need to stop hiding behind their theatrics if they want to fully realise their potential. And in a sense you can detect that they know this. In their song (‘Sing’) — the last on the Yes, Virginia… album — Amanda Palmer sings that “life is no cabaret”. Perhaps she should take her own advice and write her lyrics accordingly. In the meantime, they should probably also lay off the photo shoots.

The Dolls remind me of an immature art student who nevertheless has great potential (the Dolls’ target audience?). Just beneath the surface you can see an articulate talent which cannot come to fruition because it is halted by a slightly confused personality lacking self-assurance. All the pomp and bluster that the student puts forward — pomp and bluster that usually takes a crude politicised form — is just a means to avoid the truths that could make them a great artist. While the Dolls don’t (usually) degenerate in politics, their theatrics serve a similar role. But “life is no cabaret” and neither is good art or music.

The interested listener would be wise to check out some of the older bands that started the tradition the Dolls try to pull off. Chief among them — excluding those already mentioned, of course — are a somewhat forgotten band from Britain and a never remembered band from Australia.

Sex Gang Children are a fine example of early-80s British death punk (yeah, I hate labels too…). And The Moodists are a curious creation that emerged from the excellent punk scene in Australia in the 1980s. Below I’ve posted a song by each to give the interested listener a taste.

Intro to Cook Piece

What follows is a complicated piece by Chris Cook, former director of the International Petroleum Exchange (IPE). While there is no way to improve upon Chris’ own nuance and knowledge of the oil industry, as an outsider I had to study the argument rather hard to make sense of it – reflecting my limited knowledge of the industry rather than anything else. So, I provide a short summary of Chris’ overarching argument for the interested layperson.

Basically what has occurred in the oil markets in the past few years is that oil has begun to be traded as an inflation hedge. Investors trade dollars for oil to ensure that, in the event that the value of the dollar is eroded by inflation, they possess something that holds its value. It’s a bit like the strategy of the gold bug. Fearing inflation they give away their dollars that they think to be declining in value for something ‘tangible’ that they believe will hold its value or appreciate.

On top of this Chris tells us how Big Oil and Big Finance have locked arms in this regard. Each has something the other wants: Big Finance has access to dollar loans that can be used to ensure that, should oil decline in value, Big Oil has ample amounts of dollar liquidity lying around. Meanwhile, Big Oil has plenty of barrels of crude lying around that can be exchanged for dollars, thus allowing Big Finance to hedge against any inflation that may take place.

Such an institutional arrangement has given rise to a highly opaque and unstable market that few can see into. Indeed, no one really knows just how much oil is being ‘held’ as an inflation hedge by Big Finance. These stockpiles have even gained themselves an ominous name within the industry (recently christened by Izabella Kaminska over at FT Alphaville who has been doing some of the best work on this): Dark Inventory.

Looking at recent market trends Chris raises concerns that we could be seeing the beginnings of the end of a bubble that began to inflate in the oil market after the crash of the previous bubble in 2008. This bubble, Cook argues, was inflated due to inflation fears after the QE programs undertaken by the Federal Reserve and the Bank of England. With the markets awash with dollar and sterling liquidity, banks and investors piled into commodities to escape what they saw to be a looming inflation.

In recent months Cook focuses on the move of the market from a position of ‘contango’ to a position of ‘backwardation’ – which he sees as evidence of a bubble deflating. While some investors read in this that the short-run demand for oil has risen, Cook points out that with the global recession grinding along there is no fundamental reason that this should be occurring. Instead Cook sees in this move a sign that the long-run demand for oil is falling as the current bubble begins to burst.

Cook thinks that the price collapse is going to be very painful – falling possibly as low as $45-$55 a barrel. In response to this OPEC will try to ramp up prices by cutting production and a financial crisis of sorts will occur as inflation hedged investors see their net worth cut in three.

–        Philip Pilkington

 

Here’s the piece.

Mirowski Bibliography

Acemoglu, Daron  (2009), ‘The Crisis of 2008: Structural Lessons For and From Economics’, CEPT Policy Insight no.28.

Akerlof, George and Paul Romer (1993), ‘Looting: The Economic Underworld of Bankruptcy for Profit’, Brookings Papers on Economic Activity,.2,  1–73.

Akerlof,   George  and  Robert   Shiller  (2009a),  Animal  Spirits,  Princeton,  NJ:  Princeton

University  Press.

Akerlof,    George   and Robert Shiller   (2009b),   ‘Disputations:   Our   New   Theory    Of Macroeconomics’, New Republic, http://www.tnr.com/article/books-and-arts/disputations- our-new-theory-macroeconomics.

Bernanke,  Ben (2004), ‘The Great  Moderation’, http://www.federalreserve.gov/Boarddocs/ Speeches/2004/20040220/default.htm.

Bernstein,  Peter (1992), Capital Ideas, New York: Free Press.

Blanchard, Olivier (2008), ‘The State of Macro’, NBER Working Paper 14259.

Buiter,  Willem (2009), ‘The Unfortunate Uselessness of Most “State of the Art”  Academic Monetary  Economics’,   Financial  Times   blog,   3   March,   http://blogs.ft.com/mavere- con/2009/03/the-unfortunate-uselessness-of-most-state-of-the-art-academic-monetary-eco nomics/.

Cassidy, John (2009), How Markets  Fail, New York: Farrar Strauss.

Cassidy, John (2010), ‘Rational  Irrationality’, Chicago Interviews, New Yorker, 21 January, http://www.newyorker.com/online/blogs/johncassidy/chicago-interviews/.

Clarke,   Gregory   (2009),  ‘Dismal  Scientists:  How  the  Crash  is  Reshaping  Economics’,

Atlantic, February.

Clarke,  Conor  (2009), ‘Interview  with  Kenneth  Arrow’,  http://correspondents.theatlantic. com/mt-42/mt-tb.cgi/12601.

Colander,  David  (2007), The  Making  of  an Economist  Redux,  Princeton,  NJ:  Princeton

University  Press.

Colander,  David,  Peter  Howitt,   Alan  Kirman,   Axel  Leijonhufvud and  Perry  Mehrling

(2008),  ‘Beyond  DSGE  Models’,  American  Economic  Review,  Papers  and  Proceedings,

98(2), 236–240.

Colander, David,  H. Föllmer,  A. Hads,  M. Goldberg,  K. Juselius, A. Kirman, T. Lux and

B. Sloth (2009), The Financial Crisis and the Systematic  Failure of Academic Economists,

‘Dahlem Report’, http://www.debtdeflation.com/blogs/wp-content/uploads/papers/ Dahlem_Report_EconCrisis021809.pdf.

Coy, Peter (2009), ‘What Good are Economists  Anyway?’ Business Week, 16 April.

De Grauwe,  Paul (2010), ‘The Scientific Foundation of DSGE  Models’, Public Choice, 144,

413–443.

Diamond, Douglas and Philip Dybvig (1983), ‘Bank Runs, Deposit Insurance and Liquidity’,

Journal of Political Economy, 91, 401–419.

The Economist (2009), ‘What Went Wrong with Economics?’ 18 July.

Fama,   Eugene  (1965), ‘The  Behavior  of  Stock  Market   Prices’,  Journal  of  Business,  38,

34–105.

Festinger,   Leon,  Henry Riecken  and  Stanley  Schachter   (1956),  When  Prophecy  Fails, Minneapolis, MN: University of Minnesota Press.

Fischer, Peter,  D.  Frey, C.  Peus and  A.  Kastenmüller (2008), ‘The Theory of Cognitive Dissonance:  the State of the Science’, in Peter Muesburger, Michael Welker and Edgar Wunder (eds), Clashes of Knowledge, Berlin: Springer, pp. 189–99.

Frank, Robert  (2009), ‘Flaw in Free Markets:  Humans’, New York Times, 14 September. Friedman, Milton  (1953), ‘The  Methodology of  Positive  Economics’,  Essays  in Positive

Economics,  Chicago,  IL:  University  of  Chicago  Press;  reprinted   in  Uskali  Mäki  (ed.) (2009), The Methodology of Positive Economics, New York: Cambridge  University Press, pp. 3–44.

Fox, Justin (2009). The Myth  of the Rational Market, New York: Harper Collins.

Galbraith, James  K.  (2009), ‘Who Are  these  Economists,  Anyway?’  Thought  and Action, Fall, 85–97.

Grossman, Sanford  (1989), The Informational Role of Prices, Cambridge, MA: MIT Press. Grossman, Sanford  and  Joseph  Stiglitz  (1980), ‘On  the  Impossibility  of Informationally

Efficient Markets’, American Economic Review, 70, 393–408.

Hayek,  Friedrich  (1945), ‘The we of Knowledge in Society’, American Economic Review, 35,

519–530.

Holcombe,  Randall (1989), Economic Models and Methodology, New York: Greenwood. Howitt,  P. (2006), ‘The Microfoundations of the Keynesian Multiplier  Process’, Journal of

Economic Interaction and Coordination, 1, 33–44.

Howitt,   P. (2008), ‘Macroeconomics with Intelligent  Autonomous  Agents’,  in R.  Farmer  (ed.), Macroeconomics in the Small and the Large, Cheltenham, UK  and Northampton, MA, USA: Edward Elgar, pp. 157–177.

Kirman,  Alan (2009), ‘Economic Theory and the Crisis’,  http://www.voxeu.org/index. php?q5node/4208.

Klamer,   Arjo  and  David  Colander   (1990), The  Making  of  an  Economist. Boulder,  CO: Westview.

Knowledge@Wharton  (2009), ‘Why  Economists   Failed  to  Predict  the  Financial Crisis’, http://knowledge.wharton.upenn.edu/article.cfm?artcleid52234.

Kocherlakota, Narayana (2010), ‘Modern  Macroeconomic Models as Tools for Economic

Policy’, The Region, 4 May, 5–21, Federal Reserve Bank of Minneapolis.

Krugman (2009), ‘How Did  Economists  Get  It  So Wrong?’  New  York  Times Magazine, http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html.

Latsis,   Spiro  (ed.)  (1976), Method  and Appraisal  in Economics,  Cambridge:   Cambridge

University Press.

Lo,   Andrew   and  Craig  MacKinlay  (1999),  A  Non-Random   Walk  Down  Wall  Street, Princeton,  NJ: Princeton  University Press.

Loewenstein, George and Peter Ubel (2010),. ‘Economics Behaving Badly’, New York Times,

14 July.

Lucas, Robert  (2009), ‘In Defense of the Dismal Science’, The Economist, 6 August. MacKenzie,  Donald, Fabien  Muniesa  and  Lucia  Siu (eds)  (2007), Do Economists  Make

Markets?, Princeton,  NJ: Princeton University Press.

Mäki,  Uskali (ed.) (2009), The Methodology  of Positive Economics, New York: Cambridge

University Press.

Maskin,   Eric  (2009), ‘Economic  Theory  and  the  Financial  Crisis’,  interview  with  Sophie

Roell, http://fivebooks.com/interviews/eric-maskin, accessed 7 August 2010.

Meeusen,   Wim  (2010),  ‘Whither   the  Microeconomic Foundations  of  Macroeconomic Theory?’ http://webcache.googleusercontent.com/search?q5cache:FqRtjNQ9ZMcJ:www. wise.xmu.edu.cn/Master/News/NewsPic/20106309239228.pdf1Microeconomic1Founda tions1%22Wim1Meeusen%22&cd52&hl5en&ct5clnk&gl5us.

Mehrling,  Perry (2010), ‘A Tale of Two Cities’, History of Political Economy 42, 201–220. Mirowski, Philip (2002), Machine Dreams: Economics Becomes a Cyborg Science, New York:

Cambridge University Press.

Mirowski,   Philip  (2009), ‘Why  There  Is  (As  Yet)  No  Such  Thing  as  an Economics  of Knowledge’, in Harold Kincaid  and Don Ross (eds), Oxford Handbook of Philosophy of Economics, Oxford: Oxford University Press, pp. 99–156.

Mirowski,  Philip (2010), ‘Inherent Vice: Minsky, Markomata, and the Tendency of Markets  to Undermine Themselves’, Journal of Institutional Economics, 6, 415–443.

Mirowski,   Philip  (forthcoming),  ‘The  Cowles  Anti-Keynesians’,  in  Pedro  Duarte   and

Gilberto  Lima (eds),

Mirowski,  Philip and Wade Hands  (1998), ‘Harold Hotelling  and the Neoclassical Dream’, in Roger Backhouse, Daniel Hausman, Uskali Maki and Andrea  Salanti (eds) Economics and Methodology: Crossing Boundaries, London: Macmillan,  pp. 322–397.

Mirowski,  Philip and Dieter Plehwe (eds) (2009), The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective, Cambridge, MA: Harvard University Press.

Posner,   Richard  (2009a),  A  Failure of  Capitalism,  Cambridge,  MA:  Harvard  University

Press.

Posner,  Richard  (2009b), ‘Shorting Reason’, New Republic, 15 April.

Quiggin, John (2010), Zombie Economics, Princeton,  NJ: Princeton University Press.

Rabin,  Matthew  (2002), ‘A Perspective on Psychology and Economics’, European Economic

Review, 46, 657–685.

Reinhardt,  Uwe  (2009),  ‘An  Economist’s   Mea  Culpa’,  NYT   Blog  Economix,   http://

economix.blogs.nytimes.com/2009/01/09.

Rizvi,   Abu  (2006),  ‘The  Sonnenschein–Mantel–Debreu  Results  after  30  Years’,  in  P. Mirowski  and  W.  Hands  (eds),  Agreement  on  Demand:  Consumer  Theory  in the  20th Century, Durham, NC: Duke University Press.

Rosser, J.B., Richard  Holt and David Colander  (2010), European Economics at a Crossroads, Cheltenham, UK and Northampton, MA, USA: Edward Elgar.

Samuelson,   Paul  (1965), ‘Proof  That  Properly  Anticipated Prices  Fluctuate  Randomly’,

Industrial Management Review, 6, 41–49.

Scheiding, Tom and Tiago Mata (2010), ‘The Only Disinterested Source of Funds: Embedded  Science, Lobbying,  and the NSF’s Patronage of Social Science’, paper presented  at 2010 meetings of History of Economics Society, Syracuse, NY.

Sent, Esther-Mirjam (1998), The Evolving Rationality  of Rational Expectations,  New York: Cambridge  University Press.

Sherden,  William (1998), The Fortune Sellers, New York: Wiley.

Shiller, Robert  (2006), Irrational Exuberance, rev. edn, New York: Broadway.

Stiglitz, Joseph (2002), ‘Information and the Change in Paradigm  in Economics’, American

Economic Review, 92, 460–501.

Stiglitz,  Joseph  (2003), ‘Information and  the  Change  in Paradigm  in  Economics’,  in R. Arnott, B. Greenwald, R. Kanbur and B. Nalebuff (eds), Economics in an Imperfect World, Cambridge,  MA: MIT Press, pp. 569–639.

Stiglitz, Joseph (2009), Selected Works, Oxford: Oxford University Press. Stiglitz, Joseph (2010a), Freefall, New York: Norton.

Stiglitz, Joseph (2010b), ‘The Non-existent Hand’, London Review of Books, 22 April. Stiglitz, Joseph and Bruce Greenwald  (1993), ‘Financial Market  Imperfections and Business

Cycles’, Quarterly Journal of Economics, 108, 77–114.

Szafarz,  Ariane  (2009), ‘How Did  Crisis-based  Criticisms  of Market  Efficiency Get  it so

Wrong?’ http://ideas.repec.org/p/sol/wpaper/09-048.html.

Weintraub,  Roy  (ed.) (2002), ‘The Future of the  History  of Economics’,  Supplement  to

HOPE  24.

The Deleuzian Philosophy of Julian Assange

Julian Assange: A Geometry of Politics

Well, I don’t know about you – but I’m getting really sick of the circus that is taking place around Assange. Even the more serious publications are taking interest in what is clearly a farce. What’s more, I’m now seeing typically affected quotes from that washed-up old pseudo-intellectual fart Hitchens turning up in the various articles I read (“Assange has but yet to consider that he, as a member of our humble species and our august culture, should not but show deference at the altar of our expansive, regal and sustaining Civilisation” – okay, that’s not a direct quote, in fact it’s probably less pretentious and thesaurus-heavy than the original… but you get the idea).

So, I’m done – wake me up when the outcome is announced.

In the meantime, let’s look at something far more interesting: Assange’s general philosophy, as he himself has written it. An outline of which can be found in these papers – written in 2006.

The first thing that strikes the reader is the overlap of vast theoretical speculation with extremely down-to-earth observations. Here’s a baroque chunk of high ‘Assangian’ theory:

We will use connected graphs as way to harness the spatial reasoning ability of the brain to think in a new way about political relationships.

The complexity of this is clear for all to see – indeed, the language is taken from the cognitive neurosciences – but now compare this to some of the more earthy passages in the piece:

The more secretive or unjust an organization is, the more leaks induce fear and paranoia in its leadership and planning coterie.

We move from the lofty thoughts of a man who is clearly very intelligent and well-read (trained in high physics – something of an expert in cognitive neuroscience and computer science, apparently), to an extremely interesting observation. This cocktail of sharp, precise analytical ability and pragmatic, well-planned calls to action are characteristic of Assange’s entire approach.

His overarching structure is interesting too. He takes as his starting point the conspiracy-model. No, I don’t mean that Assange starts out on a paranoid quest to find a cabal of ethnic evil-doers that are manipulating things from on high. Instead, he tries to conceptualise the contemporary world – which he sees as being predominantly controlled by structures of corporate government (that is, the alliance of transnational corporations and national governments) – as a sort of informal conspiracy. Assange lays it down himself in his inimitable style:

Where details are known as to the inner workings of authoritarian regimes, we see conspiratorial interactions among the political elite not merely for preferment or favor within the regime but as the primary planning methodology behind maintaining or strengthening authoritarian power.

What Assange means is that modern powers – which, in their tendency to make decisions behind closed doors, he views as inherently authoritarian – engage in conspiratorial behavior as a matter of course. For Assange, modern powers cannot operate openly, so they find it necessary to operate in secrete. Are these the deranged rantings of a computer obsessed lunatic? Well, if the diplomatic cables have proved one thing, it’s that there is certainly a strong tendency toward secrecy on the part of modern powers.

Here I must go into an aside – one which I hope clarifies Assange’s point. When the leaks took place many said that they were not revealing anything new. It was argued that any intelligent and educated person would have already known their content prior to their release. First of all, this was blatantly untrue in some cases (such as the leaks on China and North Korea or the leaks on Putin and Berlusconi). But in the cases this was true, it can be said to point to a very important characteristic of corporate and government power in the world today: namely, that we know these powers to be extremely opaque; we know that what they say they are doing is all lies and that we have to use our analytical powers in order to figure out what is going on around us. I ask you: does this not confirm Assange’s key point?

Assange claims that in order to break through this conspiratorial network of power, people must disrupt the power-brokers’ ability to communicate with one another:

We can split the conspiracy, reduce or eliminating important communication between a few high weight links or many low weight links.

Or again:

We can deceive or blind a conspiracy by distorting or restricting the information available to it.

We can reduce total conspiratorial power via unstructured attacks on links or through throttling and separating.

A conspiracy sufficiently engaged in this manner is no longer able to comprehend its environment and plan robust action.

Assange views corporate and government power as one might view a computer network. If this network is unable to communicate effectively with itself, errors occur and it begins to break down. A similar analogy might be drawn from the human brain. If different centers of the human brain are unable to communicate with each other – say, due to destruction of certain brain-centers due to a lesion or a stroke – then cognitive defects will result and the person finds themselves, in some sense, disabled.

Assange sees information leaks as lesions or strokes for the giant brain of corporate governance. Every time a leak is released a breakdown of communication results between various actors on the national or international scene. Consider the breakdown of diplomatic relations after the leaks; could this not be seen, in Assange’s framework, as a breakdown of communication between various ‘conspirators’?

It should be noted that this seems to be Assange’s goal. Freedom of information – the reason why many people, myself included, support Assange – seems only to be secondary.

Assange sees ‘conspiracies’ – once again I’ll remind you, these are metaphorical – as ‘closed-systems’. Closed-systems are systems that do not have any outside inputs – so, that would be a group of people who make plans among themselves (this group is the ‘system’) and don’t bother taking in any information from outside of themselves, say, by looking at what is happening in the world at large (this information would be the ‘input’).

Assange claims that by destroying communication between conspiracies – that is, closed-systems – more open-systems will form. Open-systems being, of course, systems that do take in inputs from outside – or, continuing our example, groups of people who do look toward the world around them when considering what action to take.

So, that’s the essential content of Assange’s philosophy – now lets turn to the form.

As already shown, Assange borrows heavily from the information sciences – more specifically, cognitive neuroscience and computer science. This is extremely interesting because this leads his philosophy to resemble certain contemporary post-structural philosophies – most specifically, that of the 20th century French philosopher Gilles Deleuze.

Deleuze too borrowed heavily from the information sciences to support his theories – and, unsurprisingly, he too came to very similar political conclusions as Assange. Deleuze saw political organisations – and organisations generally – in terms of what he referred to as ‘structures’ and ‘multiplicities’.

For Deleuze, ‘structures’ were closed-systems – closed on themselves and resistant to anything outside of themselves – while ‘multiplicities’ were open-systems, which communicated freely with the world around them. Throughout Deleuze’s two works of political theory, ‘Anti-Oedipus‘ and ‘A Thousand Plateaus‘ – both written in collaboration with the French psychoanalyst Felix Guattari – he deals with many of the same ideas as Assange does.

Deleuze, like Assange, uses complex metaphors derived from mathematics and science to explain the world around him. And like Assange, he sees the solution to the problem of ‘closed-systems’ as to attempt to break through congealed structures and promote communication and the free spread of information.

I won’t pass any judgments on Assange’s politics or his philosophy other than that I appreciate his freeing up certain information and recognise that he is an extremely intelligent individual. But I will say that Assange’s philosophy – and WikiLeaks as an organisation – is perhaps one of the purest manifestations of a Deleuzian political movement ever to come into existence (Deleuze referred to such a political movement as a ‘War Machine‘).

If nothing else, WikiLeaks is a fascinating chapter in the history of ideas.