Market Utopianism

Can we talk this week about market utopianism, a notable feature of anti-democracy bad economics in the conservative style that underlies fascist sentiment, and also about utopianism in general, as utopian anarchism or utopian communism? Seems a lot of it about these days.

What got me thinking about it was a quote from some random conservative, Republican voter opining things going south, that is, to hell in a hand basket, didn’t really bother him because, echoing Mr. Musk’s sentiments, things have to get worse before they can get better. Interesting idea. I wrote a storm previously on how, for conservatives, Republicans, failure is their path to success because when faced with difficulties of any sort, most US voters will move reflexively to the right, toward conservatism and the Republican Party. So the worse they can make things, the better. However, I suspect a different and independent mechanism that may play into the conservative, Republican quest to fail is the belief, possibly promoted by them, that things must get worse before they can get better, so the worse they make things, the more on track we are for better things to come. It’s an interesting rejection of what one supposes the more typical thought process, self correcting in the sense if one tries something and it fails, one doesn’t normally carry on heedless, convinced one day it will work, barring solid factual, historical, scientific reasons to think so.

Utopians have an unshakable belief their preferred system leads to good results, even though the evidentiary basis of that belief may be unclear at best, or let’s just say more typically missing entirely. It’s a conviction born and sustained in the mind with no real reference to evidence or fact. So for example, utopian communists suppose communism an ideal system, never mind the documented history of the many nations, brilliant minds, talented and hard working people who tried for so long to make it work. To a utopian communist, they all just didn’t get it right, but he or she surely will. One must wonder the rational basis for the belief. What great genius or insight does that person suppose he or she has that all who previously tried to make it work did not? What changes in technology, modes of production, patterns of ownership suggest different results now? That was a rhetorical question, not an invitation to talk rot. Let’s just say, it seems a bit unlikely to me, leave it at that. Similar for utopian anarchists, who despite the horror of every real anarchy, suppose it will all be different when they do it, create what they see as a “real” anarchy. But of course the most common form of utopian thinking in the USA is surely conservative, right wing, market utopianism, the belief something they call the “free market” will allocate goods and services in the normatively or ethical optimal way and generate the best outcome for everyone in society. No recounting of historical experience, no recitation of facts or figures, no international comparisons, no theoretical explanations, can shake the market utopian’s belief in the importance of preventing voters using democracy to “distort” or “interfere with” markets and market outcomes. Indeed, I would suggest market utopianism and its primary rhetorical justification, bad economics in the conservative style, is the main cause of the rise of anti-democracy, pro-fascist sentiment in the USA today, followed closely by bad religion and racism. 

But what manner of belief is utopianism anyway? It has the form of a positive statement predicting objective fact, “this will (in fact) happen,” but the evidence seems dodgy or missing and there is no sense in which the proposition may be refuted in any factual, objective, scientific way. I would suggest utopian thinking is fundamentally a subjective normative, ethical, moral, value mode of thought expressed in a superficially but not really positive, objective, scientific form. It’s not a sincere belief the utopia will appear; it’s the expression of a desire it appear, a wish.

Why would one be content with utopian pipe dreams? Just mind-numbing opiates? No, I propose because of some normative, ethical attraction to the system meant to produce it. One wants to imagine utopian results because one likes the ethics of conservatism, fascism, anarchism, communism, whatever. We arrive back at my overall contention the truly significant issues in economics, the issues that really divide us, do not concern positive economics so much as normative economics. It’s not a question of best policy in the context of shared goals; it’s a question of goals, objectives, values. The response to utopianism must go beyond simply challenging the ostensible factual basis. That will be shrugged off, any possible fact will be found inapplicable or irrelevant. It must involve addressing the normative aspects of the system associated with that form of utopian thinking. In order to address the root causes of our current movement toward fascism, one must go beyond facts, figures, statistics, history to address philosophy, normative beliefs, values, ethics, morals, as those found in anti-democracy bad economics in the conservative style and its sickly sequelae.

Actors and Roles

Can we talk a bit this week about an issue I call “actors and roles” in neoclassical welfare economics? I’ve mentioned it in passing but let’s just do a proper storm on it, shall we? Briefly, economic theory has different actors doing different things. Did you know?

Usually, when one hears people speak disparagingly of the representation of humans in the form of simplified, unreal ciphers in neoclassical welfare economic theory, they mean the portrayal of consumers of good and services in markets expressing their preferences. A great deal is often made of the false factual premises the ciphers have perfect knowledge and perfect rationality, also of the fact they seem to have preferences only about goods and service, not ethics, values, legal and political systems, economics, etc. Because that expression of preferences is sometimes tautologically, fatuously, and rather misleading presented as “maximizing utility” in neoclassical economics, that representation of humans often generates inapt criticisms of ethical utilitarianism as relating to simple self-interest, etc. However, not that, as “utility” carries no content beyond “preference” in modern economics, nor does it imply simple self-interest, nor is it meant to even exist or be relevant in the interpersonal context that makes up the lion’s share of any full ethical theory as utilitarianism.

Moreover, that same economic theory postulates producers qua producers, businesspeople, who maximize something rather more specific than their own preferences: profits, money, economic power. Just to stress the point, consumers aren’t meant to be maximizing some monetized equivalent of firm profits. Maybe they prefer more expensive goods. When it comes to consumer cipher preferences across goods and services, a great deal may be involved beyond money, the cost of one good or another. In that sense, nothing in modern economic theory precludes a cipher from preferring to pay more for some good or service for reasons related to interpersonal ethics, say fair wages and so on. The analysis stops at the level of preference, so the sky is the limit in regard to that sort of thing. That is to say, the theory does not involve any general normative argument “greed is good” in the context of consumer cipher preferences, nor does it even really utilize a false factual premise consumer ciphers are “greedy” in any conventional sense. 

Profit maximizing producer ciphers may be seen as “greedy” and that may be cast as good in certain contexts, but not generally. The greed of producers under conditions of market failure, certain non-competitive market structures, or to the extent it involves criminality, is not presented as good. Interestingly, producers in neoclassical economic theory are given less leeway to express their own preferences than consumers. For example, producers are meant to maximize profit even when choosing products to introduce. They can’t really trade lower profits for expressing their own preferences. However, these cipher actor categories overlap in the sense a producer maximizing profit in his or her official capacity may also be a consumer expressing preferences over attributes of goods and services beyond price. If one looks at the two ciphers, one might see one actor in different roles. Surely “greed” has no normative significance in economic theory for producers in roles other than as producers, for example, in their roles as consumers, citizens, voters. Basically, outside a very specific context, there is no real argument anyone is or should be greedy.

Next consider the actor that is the economist himself or herself, looking in from on high on what markets and society are doing, providing normative advice to someone on how to arrange things under certain normative views, values, objectives. Is the economist qua economist meant simply to be a consumer expressing preferences relating to a virtual good corresponding to the role and status of a professional economist? Or maybe as a producer of economic material and instruction he or she is meant to be simply maximizing his or her profit? Or rather is the economist qua economist meant to be in yet a different category, not simply expressing preferences he or she may not dispute, possibly another person’s, nor again maximizing his or her own profits, but doing something like making ethical arguments, philosophizing? And the audience for economists’ normative theorizing? Where are they in the theory? Are they too outside it? Consumer and producer ciphers in other, exogenous roles as thinkers, citizens, voters, who may also have preferences over normative views including interpersonal ethics?

Do you get where I’m going with this? Don’t get bogged down in false issues with neoclassical welfare economics. There is no general “homo economicus,” no “greed is good.” When considering the theory, think of theoretical ciphers, explicit and implicit actors and roles, real or unreal contexts. What’s in and what’s out as far as normative content, interpersonal ethics in particular, the context and factual propositions under which it is meant to be evaluated, its relation to reality, are the tricky bits. Think always, real person or cipher? What actor and role? In reality or fairy land? If one is interested in the loosely related rhetorical enterprise of anti-democracy bad economics in the conservative style, well, that’s a whole other kettle of fish, isn’t it? One will find “homo economicus” there, surely, and “greed is good,” and much more rot beyond. Different issue.