Those Metropolitan Critics of Capitalism

Regular commenter and blogger, Magpie, has brought to my attention the third chapter of Ludwig von Mises’ The Anti-Capitalistic Mentality, which delivers an amusing diatribe under the heading Literature Under Capitalism. The sections entitled “Remarks About the Detective Stories” and, especially, “The ‘Social’ Novels and Plays” caught my attention. It is the anti-capitalist strain in the work of many writers that is the cause of Mises’ ire. Having once authored an obscure anti-capitalist novel, now long out of print, I feel entitled (just call me a “taker”) to comment.

Mises’ sophisticated reading of the anti-capitalist can perhaps best be summed up as “they are frustrated by a lack of worldly success”. I don’t know if this is true, but it seems awfully tactless to say in Polite Society.

It is thwarted ambition and jealousy that underlies the “bigotry of the literati” and explains left-wing opposition to systematic exploitation, starvation amidst plenty, war, environmental destruction, and adoption of the “fundamental dogma” that “poverty is an outcome of iniquitous social institutions”.

As a result, progressives advocate policies “they pretend” would alleviate suffering such as “increasing the amount of money in circulation” and “minimum wage rates” as well as “control of commodity prices and rents and other interventionist measures”. However, “the economists have demonstrated that all such nostrums fail to bring about those results which their advocates want to attain”.

Without wishing to get in the way of a good wheeze, “the economists” have shown no such thing. Newer readers may wish to consult some older posts on this point concerning the Cambridge Capital Controversies (here, here and here).

The jealousy of anti-capitalists comes out very clearly, for Mises, in detective stories, which are read by “the frustrated man who did not attain the position which his ambition impelled him to aim at” and who “is prepared to console himself by blaming the injustice of the capitalist system”.

When it comes to the social novel, “authors who deal with the lives of the poverty‑stricken can be divided into two classes. The first class are those who themselves did not experience poverty, who were born and brought up in a ‘bourgeois’ milieu … to whom the environment in which they place the characters of their plays and novels is strange”.

And then there is “the second class of authors … those who were born in the proletarian milieu they describe in their books. These men … can draw from their own experience”, which teaches them that “gifted and hard-working sons of parents living in modest conditions are not barred from access to more satisfactory positions”. If any of these writers are “prosocialist … they are insincere”. Their works are “nothing but trash”. At least the bourgeois authors “believe in what they are writing”.

So Mises has offered a twofold insight. Rags-to-riches authors who criticize capitalism are hypocrites, while those born into wealth who do the same lack the necessary personal experience.

I have no idea what kind of anti-capitalist Mises could have in mind:

Mises, however, forgets a category of writer that has not only personally experienced poverty but can criticize capitalism without a hint of insincerity. I refer here to the “downwardly socially mobile” anti-capitalist. Whether due to voluntary poverty or blithering incompetence, there has undoubtedly been a long line of well known and not-so-well-known writers through the centuries who have fallen into this honorable category, though I am not inclined to do a google search to uncover the list. They are not wealthy, quite sincere, and, above all, never had a trace of ambition, thwarted or otherwise.

Readers will be reassured to learn that knowledge of this downwardly socially mobile category was not gleaned from a film or book. It is knowledge hard won through real-life experience. You only ever get the good stuff here at heteconomist.

19 thoughts on “Those Metropolitan Critics of Capitalism

  1. It seems some people suffer from MDD, mathematical deficit disorder. This makes that them valuate others and themselves orders of magnitude out of common valuations.

    Mises and other praxeologists suffered and suffer of documented chronic MDD. This cognitive impairment is also quasi universal among political and business decision makers at the so called “developed” countries and very prevalent at the other countries.

  2. Hey Pete

    So, you are also a writer… Tell us something about your “obscure” book.

    In this, I have to agree with Mises: in a passing moment of lucidity, even he recognized that commercial success does not necessarily equates with literary quality!

  3. Paulo: Interesting thought. Mises’ worldview certainly seems universes away from mine. That probably says as much about me as him.

  4. Magpie, yeah, I do try to write (fiction, screenplays, pop music), sometimes on my own, sometimes with a buddy.

    The “obscure” novel (no need for scare quotes, actually) fell without a trace on first publication, so it is almost as if the book never existed.

  5. I was curious to read it long time ago, Peter, when you first mentioned it to me.
    Would be nice if you can publish it again.

  6. Hi Peter
    can i ask you your opinion about degrowth? degrowth theory critizice deficit spending so it is against mmt, what do you think about it?

  7. “Mises’ worldview certainly seems universes away from mine. That probably says as much about me as him.”

    Yes, one actually can “judge a book by its cover” as people in mental health, counseling and related professions know. The cover is behavior and with experience one can quite quickly come to know “what is going on inside” by examining what others say and do. “What is going on inside” is the why a person interpretes experience and image, and this is a reflection in part of the person’s worldview.

    This is called mindset in psych and there are normal and abnormal ones, the normal ones facilitating coping with other people and events, and abnormal ones inhibiting coping. Theoretical people attempt to explain the phenomena and figure out how to improve coping in cases of abnormality, and clinical people do the hands-on work, now relying heavily on changing biochemistry chemically in extreme cases. Psychotherapy and counseling are used in less extreme cases of abnormality in order to assist people to “adjust.”

    Self-improvement is about inducing higher level functioning and even extraordinary performance in ordinary life, while spirituality aims at unfolding maximum human potential.

    What strikes me about the way economics is pursued is that it is from a rather low level mindset and in many ways an abnormal mindset, absorbed in self-gratification and self-aggrandizement, which are bound to lead to individual disorder and exacerbate it, thereby also leading to social dysfunction. See, for example, Abraham Maslow’s work on “eupsychian management,” where he applies the findings of humanistic and transpersonal psych to managing for efficiency and effectiveness in a human way rather than a mechanical one, as most theories and practices do.

    Management überguru Peter F. Druker acknowledged his debt to Maslow’s thinking but took issue with Maslow’s contention that when a need lower on the hierarchy of needs is satisfied then interest turns to satisfying higher needs.

    Peter F. Drucker pointed out that top managers never satiate their want for more money and more power, and don’t move up the hierarchy toward self-actualization. Maslow would have replied (I don’t know his actual response, if he made one) that wants are different from needs and pursuing wants rather than needs is a psychological aberration. Screw loose in the mindset.

    This is the problem with capitalism. In selecting by want rather than need, it selects psychopaths.

  8. I should make clear that there is nothing inherently amiss with wants v. needs. It’s satisfying unnecessary wants before actual needs that leads to aberration. It’s a major source of individual and social dysfunction.

    The priorities are misplaced and so the action become to that degree ineffective and inefficient, “increasing friction and therefore entropy,” if one wishes to express it mechanically. The “machine” is producing inferior output and wasting time, energy and resources do so.

    On the organic level it is wasting life on frivolity rather than organizing and adapting to meet challenges emerging due increasing complexity, and on the spiritual level is it “selling diamonds for the price of spinach,” as one my teachers put it.

  9. Pete

    “I do try to write (fiction, screenplays, pop music), sometimes on my own, sometimes with a buddy.”

    That is actually pretty cool, Pete. Don’t let a misstep stop you and don’t be too demanding with yourself. I haven’t read the novel, to judge by myself, but even if you are right and there are parts that would make you cringe, the next one will be better. You know, great writers also need to start from the beginning.

    Besides, not even great writers are consistently good.

    Further, although I can’t say I am well informed, I think there may be some possibilities to explore, what with the web and all: self-publishing, short-stories, comics, game development. Maybe you could start something like a hobby, and then, according to how things develop, you could think about making that for a living.

    The only thing I don’t feel too enthusiastic, and judging by the videos you’ve linked to here, is about you writing song lyrics… :-)

    This is more my kind of thing:

    Nine Inch Nails – Every Day Is Exactly The Same
    http://www.youtube.com/watch?v=dqXmaFPn604

  10. LOL about the lyrics remark, Magpie.

    Actually, I have always been more focused on the music than the lyrics. When it comes to the mechanics of writing a pop or rock song — as opposed to the way it ultimately is interpreted — I find there is very little difference between the construction of a Nine Inch Nails song (great song, by the way) and the most sugary of Tang’s ditties.

  11. Good question, Jan. My view is that degrowth would not be inconsistent with the insights of MMT, even though MMTers do favor growth. We could have full employment (a job for anyone who wanted one) with negative growth. The MMTers’ job guarantee could be used to pick up the slack in the broader economy. There would still be a budget deficit if the non-government wished to spend less than its income, but GDP might be lower, and total government expenditure and tax revenue might be lower than in previous periods.

    But I’m not sure that what the degrowth advocates are calling for really requires an end to growth. The question is what type of growth? Technological innovation basically involves learning, and technology is essentially the sum total of society’s knowledge and know-how. We could have a society that is forever becoming more knowledgeable, building on past knowledge, and doing more with less expenditure of resources, if productiveness is conceived in its broadest sense as the production of life. Environmentally and socially sustainable growth of this kind would be enabled the more output took immaterial forms, including the kinds of activities that the degrowth advocates favor.

  12. Pete,

    For some reason, I was reminded of a conversation I had with a girl I met many years ago (after some age, you’ll find that nothing happens recently, everything already happened long ago).

    I was living overseas then. I female friend and I were having some drinks, it was late and I offered to take her home, because it could be risky for a lone woman to be around in the city at that time.

    She told me not to worry, because she was a big girl and could look after herself.

    And added, more or less verbatim, with a funny smile: “Anyway, if I’m going to be raped by a bunch of wild men, at least let’s hope they all are good-looking”.

    ——–

    I guess the morals of the story is that if one has to play by rules one does not like and did not chose, let’s hope there is at least some compensation.

    All those musicians and writers do that…

    ——–

    By the way, thank goodness, she got home safely: she never had to look at the bright side of the bad situation.

  13. “We could have full employment (a job for anyone who wanted one) with negative growth”
    How would it work? I mean, if the state steps in to fill the gap, it does fill the gap… so we don’t end up with negative growth… Am i wrong?

  14. The government fills the gap, but not necessarily by maintaining the level of GDP.

    Suppose that in period 1 GDP is $200 and employment is100 and at the full-employment level, with workers employed in the broader economy getting paid $1/period and gross profit amounting to the other half of GDP..

    Then in period 2 a negative demand shock causes employment in the regular economy to fall by 20. That, taken in isolation, would wipe $20 of wage income and $20 of profit income off GDP, leaving GDP at $160. However. rather than attempting to stimulate the broader economy directly the government just offers a job-guarantee position cleaning up the environment to anyone who wants one at the pay rate of $0.50/period. This would add back $10 to GDP if all unemployed workers accepted the offer. GDP would then be $170, lower than in period 1, even though full employment has been maintained.

    But more important than this is what is happening to the composition of employment and output. If workers, whether in the broader economy or the job-guarantee program, are getting switched into, for example, services production or environmental cleanup rather than investment-goods production, this will lower the future growth path of GDP (though not necessarily the growth path of life quality), even though full employment is maintained.

    I gave the above simple example just to make clear that employment need not move in lock-step with GDP, even though as a rule of thumb it does roughly do so (approximating Okun’s Law) under current institutional and policy arrangements.

  15. One of the observations regulars of this blog often make concerns why common people in places like Australia (perhaps in the US) can be so mean-spirited.

    In my opinion, this fragmentation of the population is partly a consequence of the conception of welfare state in these countries.

    This article (h/t Matías Vernengo), read carefully, suggests this:

    Esping-Anderson’s Welfare-State Typology, Social Stratification, and Unintended Consequences
    http://nakedkeynesianism.blogspot.com.au/2013/03/esping-andersons-welfare-state-typology.html

    And in the article below you see things happening in reality.

    The coming inter-generational war
    http://www.macrobusiness.com.au/2013/03/the-coming-inter-generational-war/

  16. Magpie, psychologically this is basic to Marx’s analysis of commodification and alienation as a predictable outcome of the breakdown of community and the commons on which it is based. As we are coming to realize more and more now, the commons is shared “space” and this is not only physical space.

    Murray Rothbard calls for privatizing everything that can possibly be privatized in order to remove the tragedy of the commons permanently. This would be to create a world based on competition among narcissists based on ruthless competition in which there are only two rules, the right to personal liberty and the the right to private property. He claims that it would not be a dog-eat-dog world because everyone would agree to the principle of non-coercion and non-agression, so government would not be necessary.

    Neoliberalism on the other hand uses the power of the state to enforce the principle that the purpose of the society is identical to the purpose of its economy and the most effective and efficient economy is a free market one in which the efficiency of capital is optimized by ruthlessly suppressing costs through competition, especially labor costs. So workers must be forced to bid against each other in an environment in which there are always fewer jobs than qualified workers. In doing this fictitious persons (firms) are given more legal right than natural persons (workers), and a double standard of law and justice is instituted that is based on privilege.

    Until folks wake up and realize there is no compromising with either of these positions,since neither is willing to compromise other than to buy time to extend power, the workers of the world will continue on the road to serfdom, and the only escape will be to the underground, which is fast disappearing due to privatization and the surveillance state.

    Marx may be dated in some respects but he got the sociology and politics based in it right. It’s about class struggle over commodification of persons and the rape of the commons.

  17. So, there, the same thing I said, but said by The Guardian:

    Who takes the harshest anti-welfare line? Those on state benefits.
    “I talked to families directly affected by the cuts and many wanted benefits themselves – yet resented anyone else getting them”.
    http://www.guardian.co.uk/commentisfree/2013/feb/12/anti-welfare-rhetoric-families

    This is the result of the “deserving/working poor”, “working families”, “battlers” rhetoric we all have heard in Oz (I figure, in the US, Canada, UK they probably have their own equivalent), combined with welfare cuts: people competing against each other for whatever is left.

    And things don’t end there. I know a guy, nice fellow too (and I am saying this quite seriously, no irony whatsoever), chartered accountant, second generation Cambodian. His parents arrived in Oz on boats, over 30 years ago.

    Believe it or not, he is in favor of sending the Sri Lankan and Afghan asylum seekers to detention centres. His parents, he says, were real refugees. These guys now aren’t real refugees, he says. They are queue-jumpers.

    In a way, this reminds me of the Stockholm Syndrome:
    http://en.wikipedia.org/wiki/Stockholm_syndrome

  18. Magpie: This is off topic, but I thought you might be interested in this link.

    Thanks for the link to the Guardian article — depressing stuff — and also the series of posts at Wolff’s blog, which I am still to get to, but will. I agree that it is an excellent blog, but haven’t seen the specific series you linked to as yet. (I think it was also linked to at Naked Keynesianism.) Cheers.

  19. “Who takes the harshest anti-welfare line? Those on state benefits.”

    Well known in psych as, e.g., codependency and Stockholm syndrome.

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