KEY IDEAS: COERCION (PRISON & VIOLENCE) OFFSETS LIES OF ELITIST THAT EXPLOIT 99% of PEOPLE
Avner Offer, an Oxford economic historian and author of “The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain Since 1950.”
Cavernous gap between economic and social reality and ruling economic ideology.
Neoclassical economics = A “just-world theory” = good people get what they deserve + bad people get what they deserve. = “a warrant to inflict pain”
Mounting scarcities + Economic stagnation or decline = “Just-World” = ominous repression to sustain a vision that does not correspond to the real world. = A rationing systems in an age of scarcity = set up new, more egalitarian models of distribution = destroy social cohesion = state uses MORE coercion.
Enlightenment = Public discourse using reason tempered by reality and facts to achieve human objectives. = Science to confront reality and revised by reality. = Model for how we talk and things we assume. = But reality has not come out of this process. = only serve to justify existing relationships, structures and hierarchies.
A just-world = People get what they deserve = Rationalize away injustice = Blaming the victim = They only got what they deserved = The point is not that the good people get the good things, but the bad people get the bad things. = Neoclassical economics = a just-world theory = Milton Friedman: “distribution of income in a free market society is, ‘To each according to what he and the instruments he owns produces.’” = “everyone gets what he or she deserves and No one asks how he or she got this property. If they don’t have it, they don’t deserve it.” = just-world theory (NO Justice) provides a warrant for inflicting pain.
Just-world theories as models of reality used to derive policy = If Model is bad, then reality has to be forcibly aligned with it by Coercion. USSR had to use so much coercion that the credibility of communism was LOST. USA that professes freedom has highest PRISON RATE in the world + Inflicts violence around the world. + tolerates gun violence and a health service excluding millions. = Amount of violence inflicted indicates how well the model is aligned with reality making incorrect models endure for long periods of time. = USSR model. = Violence is Inefficient form of control. Consent is effective form of social control = Majorities Consent
Free market ideology = Abandonment + Impoverishment + Repression of minorities = Become outsiders requiring MORE coercion (PRISON) to control
JUST-WORLD Economic Doctrine = Individual self-interest builds up for the good of society = Never proven to work = No promoting of the public good.
Economics tells us to be motivated by “strategic” (CHEATING) self-interest.
Economists use the word ‘strategic’ to mean “cheating”
“Silent revolution” in economics in 1970s = “discovered opportunism” —a polite term for cheating.
Pre-1970s = Economics was “a just-world” defense of the status quo.
BUT 1960s made Status quo the welfare state = So Economics became all about cheating = Game theory + Public-choice theory + Asymmetric information = CHEATING
Public choice theory uses economic tools to guide politics = models voters, politicians, and bureaucrats as mainly self-interested. = Models their interactions under alternative constitutional rules. = “what ought to be” = how a system could be improved by changes in constitutional rules = Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior. = Voter behavior influences the behavior of public officials.
Asymmetric information = CHEATING in contract theory and economics = One party has more or better information than the other in contract transactions = imperfect information = “What We Don’t Know” = An imbalance of power in transactions causes transactions to go awry and the market fails. = Moral hazard + information monopoly + adverse selection = CHEATING WITH HIDDEN INFORMATION
Invisible-hand doctrine = Only one outcome = Always the best
World of cheating = No longer one outcome = Economists call it multiple equilibria = Outcome depends on how successful the cheater is. = Economists are AWFUL at telling society what to do. Yet Economics continues to guide our policies even with cheating introduced.
Doctrine of optimal taxation = Assume a world of perfect competition, where every person gets their marginal products, then you can deduce a tax distribution where high progressive taxation is inefficient. = Driver to reduce progressive taxation which PRODUCED NO gain in productivity but MASSIVE INEQUALITY = MODEL FAILURE IN REALITY = MORE VIOLENT COERCION AND MORE IN PRISON.
Modern society = GOV allocates 40% to 50% of output = Economic theory ignores GOV and assumes only Individual self-interest = MODELS WORTHLESS! = GOV benefits are overwhelming = Expounds doctrines through Economics of opportunism = NOT done in good faith = GOP taking away people’s food stamps will do them good is NOT DONE IN GOOD FAITH!
RATIONAL CHOICE = In Economics + political science + philosophy = embraced the idea that an individual has no responsibility towards anyone except himself or herself = Responsibility to anyone else is optional. = Public discourse = Hall of mirrors = Nothing is REAL. = Current economic model have NO VALUE in the age of ecological deterioration and growing scarcities. = New models of distribution are needed. = “hanging together or falling apart.” = If standards of living stagnate or decline other models for the economy are needed = A drop in living standards to what they were one or two generations ago would still permit a good quality of life. = Civilian economies adapt with rationing, as a possible model for collective action. = Serious scarcity creates necessity for sharing = egalitarian safety net principle. = A proven successful model with no people starving and society held together.
Clinging to model of “every man for himself” then serious Repression will be used. = free market WARS.
WEST’s current political economy = Similar to USSR Communism around 1970 = The gap between the model and reality is TOO vast so Those in power USE FORCE to bring reality into alignment with the model = The MORE coercion (PRISONS AND STATE VIOLENCE) the greater the indicator of how POORLY the model is aligned with reality.
Violence = Inefficient form of control.
Consent = A more effective form of social control
How does the system hold together = Economic model of the invisible hand = miracle of the market = PURE LIES since GOV allocates 50% of output and income.
‘Free’ market = DOES NOT promote prosperity
Market sector = Dominated by large market power = Monopolies
FREE MARKET Model = We are all selfish and somehow this generates the miracle of cooperation. = PURE BS Except for RICH with money in the bank. = VERSUS a world of hardship, misery and suffering. = WRONG invisible-hand.
Experimental economics = Proved most people do not behave as individualistic maximizers. = Adam Smith said “what drives us is not individual selfishness but reciprocal obligation. We care about other people’s good opinions. This generates a reciprocal cycle. Reciprocity is not altruistic.” = Obligation to others means that we do not always seek to maximize economic advantage. = Obligation + Compassion + Public spirit OVERCOME Financial SELFISHNESS = BETTER Model motivates a different type of political and economic aspiration.
Free market BS assumes a frictionless exchange which maximizes everyone’s well-being. But FORCE with prisons and an enormous military = SAYS DOES NOT WORK! = Big gap between what it pretends to be and what it is.”
Universities which were incubators of new and radical ideas = Were stripped of their ability to independently critique the widening gap between reality and the false models of reality that are disseminated by the elitists. = Open talk is not guaranteed for future scholars = No longer provide tenure deliberately = Stalin purged the best and the brightest. = A sense in government and business that there is too much independence in academia. = END The SPIRIT of free inquiry + Expression + Teaching + Communality = Alien to MULTINATIONAL Corporate and Political Culture AND ITS repressive hierarchies. = Academics who deviate from MULTINATIONAL Doctrines = Defunded + impose disciplinary norms.
“The golden age of the university was in the postwar years, especially in the 1960s. You saw great expansion. The university thrived under the auspices of the Cold War. But once the Cold War imperative disappears it is no longer as vital to maintain national capacity. Universities could be privatized…The idea of the autonomous scholar is disappearing. I am not sure many people even remember it.”
— Avner Offer, an Oxford economic historian