Ping Pong 50: Empires of Chance
The previous two Rants have attempted to understand how new conceptions of possibility and nationhood warped, from the 1930’s onwards, our conception of what we were, and what was just. We gained the right to both a national government but also a domain of possibility. We lived then in this world as a people and in another as an individual spliced across many (cinematic) lives. But the incompatibility of these two dreams raised a new problem. Was it possible to synthesize the two and to create a single account of modern humanity, and the kind of states which they ought to live in? This problem lies at the heart of the economist Keynes’s attempt in his 1936 general theory to form a single account of modernity, and the strain and stress it places upon humanity and their societies. Economics being for Keynes merely the tool by which one built both viable communities and situated individuals within them. The full details of this theory are incidental to this series of Rants. What matters here, are rather the cardinal assumptions which Keynes built upon, and used to create his theories, assumptions that changed our conceptions of government (and justice) forever. Perhaps six distinct Keynesian principles might be identified. These are: Risks, Psychology, Temporality, Flow, Structure, and Mass Responsibility, Each of these principles will be briefly articulated in turn.
Keynes argued that the effect of economics is to change the nature or perhaps spread the nature, of risks. My risk stops being simply my own if I, in ruining myself, affect you. I might make or ruin you too, and then of course your change will have ramifications of its own. Economics is therefore to be founded on the idea that communities are in things together. They are all caught up within each other, and need to understand themselves in terms of that being caught. Risk is therefore never simply the confrontation of an individual: and one needs to define systems capable of understanding how and when it catches up others. The effect is that risk will need to be spread across societies. If someone fails (loses their job) then it will be the responsibility of everyone to, in part, suffer as well. That is wider society will support them in the endeavour to find new work, and carry on their own lives. More than that, it is the role of society to ensure that fair wages are paid for jobs, and that workers are not simply squeeze by the dictates of the market.
It is therefore the role of the state to mitigate and distribute bad luck, watering it down across a community to ensure that it never cripples one part of it (this was also the original intention of the IMF). However with hindsight perhaps three rather deep problems have emerged with this attempt to share risk. Firstly, humans really appear to be not too good at having the risks removed from their lives. They appear to go mad. Or rather the lack of risk to themselves kicks away their awareness of their affects of the system, and there single fragility. They assume that the state or whatever will help them (and should help them) come what may (and whatever they do). This feeling is the same in workers who strike and bankers who resell the same product again and again. Both assume that someone else will take the risk on, and in the safety of that knowledge their desire is unfettered and exaggerated to the point of utter danger and folly. In short it is a mistake to dissolve the very personal idea of risk into collective responsibility. It loses the individual’s confrontation with the unknown, and ceases to be risk at all (collective risk is simply not the same). Secondly the bodies that take over and manage the risk will of course ultimately have undue power. They take on, in a sense, the role of the unknown (which risk itself was always up against), but this unknown is no longer about the confrontation with ‘the other’. It is rather all too frequently an ‘unknown’ contained within a series of economic mantras and doctrines. The IMF therefore demands that economies change in certain ways (irrespective of local customs), and conform as far as possible to certain types. It replaces risks with external imposed theory, and destroys diversity and difference in the process. Thirdly the very idea of creating a single organization capable of holding all risk appears wrong headed. This is surely the lesson of the last seventy years or so - that risks simply cannot be forecast, and we really need to get used to the fact. The idea then that one can form an economy on the basis of mitigating risk to come, is folly, but worse than that, in opening us to the idea of a false hope (the end of risk) it warps our actual understanding of the nature of the world itself.
At the base of much modern economy lies a series of fairly basic assumptions about how humanity responds in certain situations. These assumptions remain firmly on the horse sense level. One is therefore allowed to assume that humans have rationality and act according to their own (or their local) interest. Humans are therefore condemned to behaving relatively rationally given the information that they have. However of course again the problem is that both these assumptions are probably wrong. On the one hand, humans and rationality is a curate’s egg. We are rational sometimes, and in parts. We do not necessarily behave according to plan. On the other hand, and far more critically, it is never safe to assume that knowledge is anything more than partial. It is rather both selective and evolving. It is selective in the sense that humanity tends to be bounced along in the latest ideas and latest things. One knows then what one wants to know about. One might even defend this want and deny other perhaps more useful knowledge. Ignorance (or perhaps partial knowledge) becomes a thing which we defend and deploy. But also and at the same time, what we knew is constantly changing and evolving in time. The sense of knowledge and how we link it together, need not then have the same pattern in a year’s time to how it does now. The move across times is simply not predicable. Even more interestingly these two elements are often caught up in each other. I make a decision based not merely on where I am now but also in fidelity to other dreams, other versions of myself at other times or other places. My decisions now are therefore very far removed from the rational self interested individual, located in a moment of time, and any system that fails really to grasp this fact is problematic and limited.
Keynes prided himself on the idea that he changed the nature of time within economics. That before him, the rubric went, classical economics was marked by the belief that everything would always be all right in the end: that all one had to do was wait, and wait and wait. Keynes quipped that the problem with this view is that in the end, things will of course always go right, and anyway we are also all in the end dead. The problem of government was never therefore about the ‘end’ of the process. It was rather the problem of mitigating it in action and as it developed. One needed therefore to govern within recessions and ensure that they were as small as possible. Keynes therefore demanded in effect that economics took responsibility for time. The role of economics was to devise in the now, policies that would get one into the preferred future, and do so as soon as possible. The resources of that future (borrowing) were then put at the disposal of the present so long as they were used to ensure that a desired outcome actually occurred (or at least made it likely).
The problem of course is that this very notion of temporality is highly problematic. Whatever the future might be, it is unlikely that it could (always or perhaps at all) be located within a simple economic grid imposed upon the present. I might know where I want to go, but borrowing now in the name of that knowledge might well change the parameters, and make my getting there, less likely or simply different. Where I am now therefore reflects back into the system of what I will become, and makes mixing and matching tricky. The upshot then being that if I do end up in the ‘wrong future’, I will do so with debt which I incurred in the name of the future I thought would come. Debt might then blight or warp whatever world I then live in. In short, to manage time is always itself a gamble. Risks therefore seep into the system, and change how it needs to function.
The image then of such an economics is firmly that of the river. The river of money is like other flows: a temporal construction which is gloriously predictable and understandable. It flows as times progresses, and all that one needs to do is to understand the mechanics of that flow, and the future is relatively assured. The game of economics therefore becomes the game of ensuring that the right levers are in place in the right places, to manage the flow of money and the flows of people that a modern economy creates. Economics becomes then in a single blow, merely a branch of engineering. The problem of course is that the very notion of ‘flow’ implies a simple account of time. Time becomes merely about watching a substance move in predictable manners across a series of circumstances. Different politicians can then be judged according to how they change and modify this external system. One judges them as one chooses between car engines. A Vision that is at once beautifully secure and apparently ‘just’ and yet highly problematic. The central assumption of a similarity in basic behaviour between machines, rivers and the economy, is highly contentious and tangential to say the least.
The only way the assumption is made reasonable is if one devises a single system, or structures a machine to contain the flow and ensure that it moves in the right direction. It is this structure which economics of course sees itself as defining. That is, in inventing certain concepts (such as money supply or wage labour) it invents ways to locate movements within societies. It thereby allows these movements to be taken and riveted down into certain processes. Processes which can then be arranged in a logical order. So that it is the task of economics to ensure that a system of flows is made manifest and real. Economics therefore is always suspended between ‘discovering’ and devising a system (and Keynes delighted in the fact). It conjures up realities which then become orthodoxies and frame the only possible understanding of what will happen.
However, with again some degree of hindsight, one might doubt this ability. It is impossible for politicians really to hold the line that an economist would want them to. The economist sees themselves of course as the ‘philosopher kings’. They define the circumstances and the politicians follow. However the fact that their polices both define and manage the system, opens but the politician to a temptation that the logic of democracy makes irresistible. That is the temptation to endlessly tinker with the assumptions that devise the system in the first place. The very channels which create flows are therefore endlessly fiddled with, and the entire enterprise of a single system or set machine, is put at peril. That is, the logic of democracy and the desire of the politician to be seen to be doing something ‘historic’ unpicks the very assumptions on which a set system operates. Keynes is therefore betrayed by fact that ‘we are all chiefs now…’. Underpinning all these moves is the same basic argument: This assumption that people en mass behave in ways that are relatively predictable and understandable (if complex). This is undoubtedly true. However it opens out that other (Durkheimian) problem. How does one understand the link between humans en mass and single instances of humanity? Can one indeed find any straightforward connection or not? The economics that Keynes understood or even created was one that was certainly good, as long as everyone was captured within the same system, and followed the same series of rules. However this catching up is itself a problem That is, an economic system will form itself come what may (as long as one has money and lots of people). It does not need to be therefore, always in the same form. It will grow up and change from below as it were. The Keynesian approach only works as long as this below is regulated and managed. It would therefore work if everyone did it. Hence Gordon Brown endlessly banging on about general rules and the global system. If anyone breaks rank or attempts to act in their own national interest (‘British jobs for British workers’) then the entire system is liable to keel over, or more realistically become something else. The ‘system’ and the mass which it conjures, is therefore only one moment of time. That is, one possibility; and one only formed given all that all the actors in that system behaved in a certain manner or way. It requires then endless hectoring to enforce, as well as endless policing. This hectoring and this policing might have worked in the 1930’s (although it was never actually tried) and possibly worked in part in the 1950’s but appears hopelessly problematic in the far more complex world of today.
Keynes’s system shared the problem of all prophets and visionaries. To prophesy is to see one future. A good prophet is the one that sees a future that really could be, and offers a hope that is actually possible. Keynes’s system certainly could work. However he is caught up also in the prophet’s problem. A prophet sees only the one future, when many other are also possible (and open to their own prophecies). To follow such a thinker is therefore to strike off in the desert and to follow a certain path. The problem of course is that others might not be following one’s own course, or even worse they might be developing prophecies (and Gods) of their own. A fact which could always ruin the system and create new dimensions within it. It is to this ruin that the next Rant will turn.
