Correctly sensing the importance of this topic, Magnuson devotes two of Mindful Economics' core chapters—Chapter Eight ("The U.S. Capitalist Machine") and Chapter Nine ("The Growth Imperative") to its examination. He is resolute in his rejection of the GDP growth theology:
GDP is the premier measure of the economic machine's performance and growth of GDP is heralded as a supreme virtue It is rare to find an economist who would question this virtue of economic growth as a positive contribution to human well-being. Yet, GDP growth masks other indicators that would suggest that its ongoing growth is not necessarily good for human well-being...GDP is the dollar value of all finished goods and services produced in an economy in a year's time. As a single number, roughly $10 trillion [in the U.S.], it is a numerical measurement expressed as an undifferentiated mass of products and services. GDP does not take into account under what conditions the products and services are produced, whether they actually improve people's lives, the damage done to people and our environment resulting from growth, or how the output is distributed among the population. [W]]hen we attempt to reduce something as complex as a measurement of well-being of an entire population to a single number, much important information falls through the cracks. (ME, p. 193)
Naturally, the GDP error is far more serious in a deeply class-divided society such as the United States, where huge canyons of inequality increasingly separate different layers of the nation. But even if we treated a fairly egalitarian capitalist society (something of a contradiction in terms) the blindspots would continue, for, as Magnuson indicates, the problem is that the GDP is calculated in a way "that is heavily biased toward capitalist production." The meaning of that can be gleaned from the following:
Although GDP imputes some value that is created in the public sector, it primarily measures the dollar value of transactions that only occur in the capitalist marketplace. The capitalist machine will appear to be slowing down when people prepare their own meals, clean their own homes or do their own yard maintenance rather than pay businesses in the private sector to perform the same work. If people grow food in their own vegetable gardens, there is no change in GDP, but if they buy those same vegetables in a grocery store GDP rises. (ME, p. 193)
Same with home repairs and other activities. If we do it ourselves, the GDP does not move; if we hire a contractor, it rises. It's clear, as Magnuson points out, that the net amount of work does not change but given the way the U.S. economy is measured, the "machine" will accelerate when people pay businesses and will slow down when people work for themselves. According to this logic, the more self-sufficient we become, the more we court economic failure!
http://i238.photobucket.com/albums/ff262/walterRehm/milton_friedman.jpg" /> Milton Friedman: Unswerving priest of free-market fundamentalism. "Both the rich and the poor can sleep under the bridges if they want."
Unsolvable issues: ecological sanity, instability, social justice
As the preceding discussion suggests, the capitalist system suffers from enormous contradictions and compulsions not liable to be resolved within the framework of policy permitted by the system's chief beneficiaries. Most importantly, capitalism is a system that, by design, is on a lethal collision with nature. Endless expansionism is buried deep in its genes. (Joel Kovel, a "green economist", justly called his own 2002 volume, The Enemy of Nature). Can anything be done?
The growth mania is not likely to be abandoned any time soon, nor moderated in a manner satisfactory for ecological health. Besides the established requirements of constant competition, the by now well-entrenched "executive mentality" mentioned above (a sociological superstructure in its own right) is turbocharged and replicated at every turn by the catechism taught in business schools, western madrassas of business fundamentalism where far too many eager youths, not unduly burdened with too many moral scruples, converge to learn how to become Gordon Gekkos in the shortest possible time. Furthermore, the ever-expanding pie has some other less well discussed functions, such as social pacification (constantly rising income however minimal dampens cries for egalitarianism), and what some have called "redistribution of income at the margin" whereby huge transfers of wealth are effected from the middle and lower classes to the top with few if any ever noticing. Let the economy grind to a halt, or backslide, and the true face of Dorian Gray begins to show.
But if growth is non-negotiable, what about the other classical areas of social contention? Perhaps as a result of the tensions and popular resistance triggered by the push for globalization, and lately global warming, the last couple of decades have seen the rise of a new wave of "cosmeticization" of capitalism (in the 1970s it was "people's capitalism"), and this time the snake oil salesmen are saying that the problems of the market system—from economic instability to inequality, to jobs evaporation, and ecological destruction—can be neutralized through a technological fix according to which "everybody wins." The new golden byword is "sustainability." Magnuson devotes his closing chapters to puncturing this manufactured illusion.
Under the capitalist mode of production [and consumption], the purpose of economic activity is to make and accumulate profits. Respect for nature and humanity—critical elements for any sustainable system—may or may not occur depending on whether it is consistent with profit-making. The historical evidence is overwhelmingly clear that these purposes are not consistent, and are in fact opposite. (ME, p. 344)
Yes, social justice and an enlightened, generous attitude toward nature, away from dominionistic dogmas, what Magnuson calls a "respect for nature and humanity" are the foundation of a durable and highly stable economy. Problem is, they just can't happen under capitalism, or any other form of myopic, highly hierarchic, backward-looking system. And technology, per se, while important, is peripheral to this equation. For, as Magnuson is quick to add, "although technology can lighten people's ecological footprints, it does not solve the core problem associated with capitalism."
Some folks will surely take exception to this assertion, considering it a simple instance of leftist "extremist" thinking, or "radical environmentalist" bias. This is to be expected, because, far too many people, "rather than face the need for systemic change...prefer to believe in 'win-win' fallacies that suggest the capitalist system can be preserved and at the same time achieve the Three Es of sustainability." (By the way, the foregoing applies to people who accept that something is rotten in Denmark, so to speak, not capitalist diehards who still insist the Republican vision of the economy is the best of all possible worlds.)
The "win-win" fallacy attempts to connect the Three Es of ecology, equity, and economy to the compulsive dynamic of capitalism, chiefly its unrelenting drive for profits. In that manner it chooses to believe "that we can achieve ecological sustainability without compromising corporate bottom lines." As Magnuson notes, this has become a popular approach to selling the business community the notion of sustainability (which their own p.r. hacks have long advocated) but the foundations are shaky:
The win-win folks rely on a handful of companies as case studies in which business leaders found that by adopting more sustainable practices they became more efficient, reduce production costs, and actually become even more profitable...<> To be sure there are gains to be made by adopting energy and resource conservation and reducing waste. In some cases businesses may have achieved their goal of simultaneously become more sustainable and more profitable. But to conclude this can be true for all businesses and thus for the entire economy is classic reductionistic, non-systems approach. (ME, p. 344)
This brings to mind the old fallacy about the exceptions that always exist in any class or group of people larger than three. There have always existed lords who treated their inferiors with some humanity, entrepreneurs who took care of their employes ("paternalistic capitalism") and slaveowners who eventually granted their slaves their freedom. In fact, as two recent films, Schindler's List and The Pianist so forcefully implied, even the Nazis had a few good apples. But the problem presented by exploitative groups and classes is never in the exception but in the rule, which remains overwhelmingly toxic. The crux of the matter, as ME makes clear, is that,
[T]he only type of truly sustainable economic system is a steady-state system and capitalism cannot operate in a steady-state environment any more that a polar bear can survive on a vegetarian diet...This is because ongoing growth is not merely an aspiration of corporations operating with outdated assumptions; it is a systemic requirement. (Emphasis mine)
To the impartial observer the poverty of bourgeois economics is pretty much irrefutable. It cannot offer any better solutions to the great issues facing humanity in the 21st century than it did in the 20th and 19th centuries. The promises of a lasting prosperity on the basis of "an administrated capitalism" using the toolbox of Keynesianism came crashing down with the end of the postwar "Long Boom" in the 1970s, and the onset of stagflation. Today all that really remains is a melange of Friedmanism and military Keynesianism, without which the system could not possibly survive. Endless war is not only grotesquely profitable to the weapons manufacturers, it is indispensable to the viability of the modern capitalist state, and essential to the new global empire. Meanwhile, the noose keeps tightening around the system's neck. Automation will go on erasing jobs in all continents (China already has more than 100 million effectively unemployed) until the ultimate absurdity of the system will be revealed to all: a handful of people will produce a mountain of goods that only a handful of plutocrats can consume. The rest will be simply "superfluous" to the capitalist logic.
Capitalism has always drowned and faltered on its unjust social relations. The outrageously lopsided way it distributes income, the product of society, continually augmented by advances in technology, is a contradiction that has no economic answers because it is really a question of power, a question of politics. The constant elimination of jobs by automation, and their hemorrhage toward cheap-labor zones cannot be "cured" by job training programs or even better education for all (as Clinton cabinet member Robert Reich, the main evangelist for this pseudo-solution, never ceases to suggest). An advanced degree is no guarantee of employment in a job market that has no need for 100,000 applicants with such uber-credentials. The drift toward authoritarianism cannot be arrested, only slowed down or momentarily interrupted given the essentially undemocratic nature of the system. As we said earlier, living with capitalism is like living with a sociopath in the room, a maniac who bears constant watching.
In a recent article, my colleague Susan Rosenthal wrote:
By 2000, U.S. workers took half the time to produce all the goods and services they produced in 1973. If the benefits of this rise in productivity had been shared, most Americans could be enjoying a four-hour work day, or a six-month work year, or they could be taking off every other year from work with no loss of pay. (See, Globalization:" target="_blank">http://www.bestcyrano.org/cyrano/?p=181">Globalization: Theirs or Ours?)
These are the central questions that "economics" should be debating, that students should be pondering. But Samuelson, Friedman, Von Hayek and their numerous descendants throughout academia are silent on these issues, as they know only too well that to analyze them with scientific honesty would be to prepare an indictment of capitalism. By departing from such a shameful tradition of accommodation to the system, a book like Mindful Economics performs a signal service to society, as it arms people with the kind of knowledge they need to see through these multiple falsifications. Only the defeat of the prevailing false consciousness, to which orthodox economics has contributed so much, can open the road to a solution for the current crisis. Meantime, at the personal level, this book could be a turning point for many readers and the beginning of a robust understanding of a previously chaotic situation.
Media critic and former economist P.H. Greanville is Cyrano's Journal Online's founding editor. He has a lifetime interest in the defense of animals-helpless victims of human dominionism-and tries to keep his sense of humor about life's curveballs, especially those thrown by women.
It's rather unfortunate that so many words were used to describe capitalism, when they were REALLY describing imperialism. We have not had honest capitalism since 1600, in no place in the world. The US was close to it for a while, but it was steadily eroded. The U.S. could have never grown otherwise.
Most educators in economics are only there because they parrot what they are PAID to parrot. They don't sell out, because they had the wrong ideas from the beginning. If they were not wrong, they would not have been hired to teach. They would not have even made it through college.
But rewarding the wrong-headed, and denying the correct, worked like a charm, in all areas of government, education and religion. Lying by omission was utilized to cause most people to give up their natural-born self-defense of mind, body and soul. Economics is simply all about promises, that's the essence.It is promises that men live by. As you can plainly see in today's real estate market, keeping promises is not going so well.
Socialism produces the same results as imperialism. One's through the front door, the other is through the back door. Slavery results from of both. Honest capitalism is about keeping the promises you make, and not making promises you can't keep. Honest capitalism does not reward people who lie, steal or murder. Both parties profit from honest capitalism. Socialism, fascism and imperialism are simply they win, you lose. If you care, there's much more at
according to the lead-in here, is said to be "false consciousness." This is tantalizing and fascinating, and in fact caused me read the article, given that I'm something of a capitalist pig at heart (how can one grow up in America and not be otherwise?), and have had a long standing interest in consciousness (how can you be conscious and not be otherwise?).
Yet I couldn't find a definition of this main prop of capitalism in the entire four pages, and I have to say this was somewhat disappointing--particularly since each paragraph sounds like it will lead to something important.
I am well aware that the whole show is bogus, that Adam Smith's words are universally taken out of context, that we need a sustainable economy, that Milton Freidman was a scumbag, that Samuelson is a schill who can't or won't explain the inner workings of the system, that the GPD is an absurd measure of how well we're doing, and so on.
But I still don't know what "false consciousness" is... Perhaps you could try again with a comment here?
by
Daniel Geery (26 articles, 74 quicklinks, 123 diaries, 750 comments)
on Tuesday, December 25, 2007 at 8:00:02 PM
Let me offer you a definition that now appears on the WIKI
and to which I contributed a bit:
FALSE CONSCIOUSNESS is the Marxistthesis that material and institutional processes in capitalist society are misleading to the proletariat [i.e., anyone who MUST WORK for a living], and to other classes. These processes obfuscate the true relations of forces between various classes, and the real state of affairs regarding the development of pre-socialist society (relative to the secular development of human society in general).
This is essentially a result of ideological control which the proletariat either do not know they are under or disregard with a view to their own POUM (probability/possibility of upward mobility)[1]. POUM or something like it is required in economics with its presumption of rational agency; otherwise wage laborers would be the conscious supporters of social relations antithetical to their own interests, violating that presumption.
The concept flows from the theory of commodity fetishism — that people experience social relationships as value relations between things, e.g., between the cash in their wage packet and the shirts they want. The cash and the shirt appear to conduct social relations independently of the humans involved, determining who gets what by their inherent values. This leaves the person who earned the cash and the people who made the shirt ignorant of and alienated from their social relationship with each other. So the individual "resolves" the experiences of alienation and oppression through a false understanding of the natural need to compete with others for limited goods.
I left this out of the article because I thought false consciousness was clear enough in terms of the multiple examples I put forth, including the fact that mainstream, bourgeois economics, was a prime fount and validator for these mystifications.
In Marx's view—which I concur with—consciousness was always political, for it was always the outcome of politic-economic circumstances. What one thinks of life, power, and self, for Marx, is always a product of ideological forces.
For Marx, ideologies appear to explain and justify the current distribution of wealth and power in a society. In societies with unequal allocations of wealth and power, ideologies present these inequalities as acceptable, virtuous, inevitable, and so forth. Ideologies thus tend to lead people to accept the status quo. The subordinate people come to believe in their subordination: the peasants to accept the rule of the aristocracy, the factory workers to accept the rule of the owners, consumers the rule of corporations. This belief in ones own subordination, which comes about through ideology, is, for Marx, false consciousness.
That is, conditions of inequality create ideologies which confuse people about their true aspirations, loyalties, and purposes.[2] Thus, for example, the working class has often been, for Marx, beguiled by nationalism, organized religion, and other distractions. These ideological devices help to keep people from realizing that it is they who produce wealth, they who deserve the fruits of the land, all who can prosper: instead of literally thinking for themselves, they think the thoughts given to them by the ruling class.
I hope this clarifies the matter sufficiently. By the way, you're too educated and too smart to be a complete vassal of the "prevailing ideology". You have clearly seen its glaring limitations. Even so, you may still believe that for humanity there is no better road than more and better capitalism forever, and in that you'd be wrong, and still reflecting the emotional content of "false consciousness." This statement would be true with one exception, and that would be for you to be a member of the ruling class, in which case the falsehoods would have no real downside. —P. Greanville
by
Hernan Greanville (1 articles, 0 quicklinks, 1 diaries, 1 comments)
on Tuesday, December 25, 2007 at 8:30:20 PM
Nice review, well written. Sounds like an interesting and much needed book - thanks for the heads up. Another book you might find interesting is They're Building a Box - and You're In It - http://www.rudemacedon.ca/dlp/box/box-intro.html - covers some of the same things economically speaking, but in a more 'layman's' oriented way of talking about them - and a number of less directly economically topics, although in modern society most things are fairly directly tied to the imperatives of capitalism.
by
siamdave (4 articles, 0 quicklinks, 1 diaries, 79 comments)
on Wednesday, December 26, 2007 at 8:13:13 AM
4 comments
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