June 14, 2013
The News is one of my favourite shows, but over the last few years it’s been replaying the same old story with slightly different characters. Every week, some new evil big company will be accused of paying beancounters to manufacture complex legal frameworks in order to avoid paying the ‘correct’ amount of tax, as defined by a group of angry protestors. Google and Apple are the latest villains of the piece, and have variously protested that they’re forced to pay the minimum amount of tax by law and that if we don’t tax them less they’ll just keep all the money.
If this was any other show, reviewers would be complaining about recycling tired old plotlines, but somehow the real world is immune to tedium. The political debate in the UK over this issue can be summarised thusly:
AGAINST TAX AVOIDANCE – The Government needs money to deliver vital social services, and everyone should play their part. Attempting to avoid playing your part, as tax avoidance is interpreted as, is therefore immoral. If countries compete to attract multinational companies by offering very low tax rates, then there will be less money available for social services in all countries, particularly developing ones.
NOT AGAINST TAX AVOIDANCE – Tax avoidance is different to tax evasion, which is breaking the law to evade paying tax. Tax avoidance works within the law to minimise the tax liability to companies, which companies are obligated to do in order to deliver returns for shareholders. ‘Moral’ doesn’t mean anything when it comes to tax, as you can only pay your tax in accordance with the law, and if the law is immoral then it’s up to politicians to change it. If we tighten up our tax code too much, we’ll drive companies away.
Political debate is only meaningful if the public actually pay attention, because only then can one side ‘win’. This debate is entirely pointless, as both sides are talking only to themselves . Tax avoidance as an issue has traction with the British public, but not for the reasons that anti-avoidance campaigners would want and not for reasons that avoidance defenders can admit. This is because the debate as characterised above is tribal: it’s a re-run of social democracy versus liberalism. The public don’t see the debate in those terms, as some helpful polling by Christian Aid reveals.
It’s true that over half of the population – 56% – does see tax avoidance by multinationals as morally wrong. It’s also true that 37% of the population would use the same avoidance methods as corporations if they knew how. The latter statistic is highest in my age bracket (25-34) at 54%, while 47% think it’s morally wrong, implying that there are people my age who both think avoidance is wrong and that they would do it themselves if they knew how. What a charming generation we are. Two thirds of those who think it’s morally wrong think so because it reduces money available for services.
However, while the above would indicate at least a plurality of people who tax avoidance as morally wrong, an astonishing 71% of people think that low rates of tax help attract investment and deliver economic growth, and 70% think that countries being able to set their own tax rates helps them compete for investment. 47% think that if the Government were to collect more taxes from corporations, there may be no benefit to the public. The public seem to simultaneously believe that tax avoidance is morally wrong and that low tax rates are good for growth. Both sides apparently win.
To explain this paradox, consider one of the highest levels of agreement found by the polling: 75% of people agree that corporations receive much more lenient treatment by the taxman than individual taxpayers. This reveals that this issue is seen as more a question of fairness than a question of ideology. The public see corporations as having an easier time of avoiding tax than they do.This feeling of unfairness will contribute to the feeling that tax avoidance by multinationals is immoral, as ‘fairness’ and ‘morality’ are often conflated, but doesn’t necessarily tell us anything about peoples’ attitudes towards tax avoidance per se. Indeed, of the over 60% of people who wouldn’t offshore their accounts, it would be interesting to find out how many have an ISA.
This result is useless to the tax justice crowd, who want peoples’ feelings about the unfairness of corporate tax avoidance to translate into support for the State. They can’t admit that the public appeal of this particular issue is a question peoples’ sense of fairness rather than ideology. It’s similarly dangerous to the avoidance enablers, because if they accept that tax planning on the corporate rather than individual scale is unfair then this implies that corporations and the rich are able to buy special access to the law. If a law is complex and access to the facilities it offers (in this case, lower taxes) is only possible through the purchase of specialist knowledge about an area, then it is tantamount to bought privilege. Admitting that money can buy privilege is anathema to the majority of this side of the debate, who believe that the restrictions on the rich it would imply in order to secure a level playing field for all are morally wrong in themselves. The closest they come are the rather disingenuous calls from the likes of the Taxpayer’s Alliance, which involve simplifying the tax system to make it easier for everyone to engage with. While this is not without merit, it only works as an answer on this issue if you forget that the avoidance under discussion has to do with the setting up of legal frameworks in order to get money away from the UK tax system, regardless of how simple it is.
As a result of the above this debate is necessarily interminable, as neither side can talk to the public directly without compromising their own position. Tax avoidance is not morally wrong, but it is socially corrosive. It diminishes the bonds of trust between different sections of society, and trust is the fundamental thing we require in order to make this thing where we all get along on our small island work. It would be wonderful if both sides could sit down and work out how to organise things so that they could both win without losing face, but instead I suspect we’re in for many more re-runs yet.
May 17, 2013
I’m a man. I’m in crisis. At least, this is the contention of Diane Abbott and Laurie Penny, who claim I’m currently being oppressed by outdated gender stereotypes about my role in society, and that I feel under constant pressure to get out there and win some bread.
Obviously, they’re not referring to me personally, but to men in the abstract. This Abstracted Man doesn’t understand his place in the world now that women are in the workplace, because he’s been told that he’s got to get out there and earn money for his family while the little woman stays at home looking after the kids.
Who is it who’s saying this? Laurie Penny claims it’s a conglomerate of evil Tories and enigmatic Forces of Conservatism who push the idea that a woman’s place is in the home. Unfortunately for this argument, the forces of Conservatism are exceptionally bad at their job:
Source: European Values Survey, GB Data
People think that women working doesn’t harm children and that both men and women should win bread. More significantly for the argument to hand, they see both men and women having the same responsibilities for homelife:
Source: EVS Data. This question was only asked in the 08-10 wave.
But regardless. We men are suffering from these social changes, which is why we’re killing ourselves in greater numbers than ever before:
UK Suicide Rate
Clearly more men kill themselves than women. It is absolutely true that the suicide rate amongst males rose between 2011 and 2010. It’s also true that it rose amongst women as well. What’s not true is that we have a sudden onset crisis of masculinity that is just begging to be solved; men and women clearly kill themselves at different rates, and may always have done so.
What is a problem is the fact that gender roles continue to be reinforced. Take this example, from someone talking about encouraging employment amongst young men:
“The decline of heavy industry and manufacturing jobs has left a lot of men in a position where they don’t feel the jobs on offer – particularly service jobs – are ones they feel comfortable with.[...] We need more advanced, rigorous vocational courses and a new focus on technical learning and skills”
Apparently men are only men if they bang bits of steel together. I’ve spent my entire life being told that men will lose out in the ‘new’ workplaces because we don’t have ‘soft skills’. Unaccountably this hasn’t happened; by and large, men still run the world. However, working class men – to whom the author of the quote was apparently referring – aren’t given the sort of ‘soft’ skills that the men who went to private school and now run the country were given. This is because people like the person who wrote the above, which was taken from Diane Abbott’s speech, keep reinforcing gender roles which require working class men to feel bad about taking service sector jobs. I can guarantee you that middle class men never have this problem.
An extremely limited understanding of the roles that men play in society – which for Diane Abbott is apparently either gang members in Hackney or traders in the City, with nary a fella in between – should disqualify you from pretending to say anything useful about issues relating to men. There are specific issues for working class men which are related to the impact of globalisation & immigration on unskilled labour, but those issues also apply to women with the same skill sets. If demand is increasing for employees in the service sector (which is a big ‘if’) our politicians need to stop banging on about how apprenticeships and big factories are what we need for our young men, and start saying that there’s nothing wrong with men being secretaries. If they don’t, we’re going to continue seeing people with limited viewpoints banging on about a crisis of masculinity year after year.
March 12, 2013
‘INDIVIDUALISM RAMPANT!’ the headline might as well of read, rather than the more demographically mealy ‘Generation Self‘. Apparently the youth of today are a source of concern to their elders, this time less in the form of angry old Colonel Blimp types despairing about their lack of a work ethic and more in the form of decrepit socialists bemoaning their lack of attachment to the mighty institutions of the Collective Good.The young ‘uns don’t see the NHS as something they must lay down their very lives for, and are more likely to view those on benefits as being lazy scroungers rather than noble souls down on their luck.
And yet paradoxically (to the Guardian at least) they are bang-on message on subjects like gay rights, not being horrible racists, and women being equal to men. The notion that there could be some kind of connection between a belief in individualism and freedom to live the life you choose unconstrained by society is something that eludes that newspaper’s fine people of letters.
Liberalism is stronger in the coming generation, which should be a cause for celebration amongst liberals everywhere. However, it is important to understand why individualism is on the up. There are two competing narratives:
- The Guardian reaches for the handy lefty trope of Thatcher being to blame for all the bad things that have ever happened. The children brought up under her austere regime know that this is a dog-eat-dog world and are determined to not be eaten by dogs of any kind. Indeed, some of them are breeding bigger and bigger dogs just to avoid this. Then, in a sign of how ruthlessly capitalistic these young people are, they’re selling them for a profit.
- Conservatives blame the over-mighty State for taking away things people used to do together and making them the preserve of the faraway man in Whitehall. Remember those wonderful days when the only way to afford healthcare was by clubbing together with the other people who worked at the factory in the scant few hours you had outside of work to build collective institutions, and how if you weren’t working and got sick you basically just died? Weren’t they wonderful? LET’S GO BACK TO THAT.
The wonderful thing about these narratives, like so much political messaging, is that they can both be true at the same time. It is true that Government-promoted individualism will encourage individualism. It is also true that removing the responsibility of looking after your fellow man engendered by his or her need by shifting it into something you do at two steps removed through the taxation system will excuse you of the guilt of failing to help. You can then blame the NHS when it makes mistakes, because it’s making you guilty by proxy.
Outwith my sneering at both ends of the political spectrum, I do agree with them on the point that they share, which is that compassion is a virtue which should be fostered regardless of how individualistic you are; you can believe in absolute freedom from the individual, zero taxes on everything and a nightwatchman state and still think you should care about the least well off. Lack of compassion is a serious character flaw. The institutions originally charged with fostering compassion, the churches, still do good work at a local level, but at a macro level have bafflingly decided to devote their time to reacting against the sweeping tide of liberalism, which in itself says nothing about the compassion their creed requires. Compassion remains a requirement of a society in which people actively want to participate: a liberal society requires that people have the minimum of compassion for their fellows sufficient to be in favour of their freedom.
We therefore do require some kind of civil institution charged not with fostering a vision of the collective good, but with the compassion that can lead to people freely agreeing to such visions. . It can’t be the State; it will never be the job of Government to prescribe morality in a way which goes beyond the law. It can’t be the churches; the metaphysical commitments they require for their compassion are now beyond the interest of much of British society. And it certainly can’t be the unions; they have too frequently revealed themselves to be the guardians of sectional interests. So what can it be?
Answers on a postcard, please.
December 1, 2012
No, not the contemporary kerfuffle about whose prerogative beats whose, but rather a rather silly argument made about press regulation by those who should know better. The original impetus behind the Leveson Inquiry was that journalists had been discovered to be scurrilous bastards willing to do anything for a story, including spying on peoples’ private communications and paying coppers for juicy stories. The Public were naturally outraged about the lengths that these people were willing to go to to satisfy The Public’s lust for info-style news titillations, and demanded action through the locus of People’s Champion Hugh Grant. As a result, the XIIXVth inquiry of this Parliament was born, which made for tremendous copy.
When Lord Leveson reported that it would probably be a good idea to have some kind of statutory solution to curb the problem of journalists being dirty scumbags, some commentators stacked a donkey on top of a horse and a pony on top of that. Atop these bestial constructs, they made the following argument:
“What the journalists were doing was already illegal. We don’t need new laws, we just need to properly enforce the ones we have.”
If you have made this argument, you have missed the point by so much that in debating terms you’re standing on the Mid Atlantic Ridge. Here’s why.
Laws, to have any force in a moral argument, rely on assuming that the Rule of Law is in place and fully functional. The Rule of Law, like all human social constructs, is fundamentally fragile and liable to break as soon as someone sufficiently powerful figures out how to subvert it in their interests. It relies on a balance of power between different institutions in order to avert the possibility of someone becoming sufficiently powerful for that subversion to take place.
During this whole fandango, we’ve seen the amusing spectacle of centuries-old institutions pretending like they can be the guardians of something as fundamentally effervescent and chaotic as free speech. In reaffirming their institutional mandate within Britain’s inchoate constitutional arrangements, they hope to distract from the fact that they’ve proven capable of subverting the rule of law by suborning other institutions (in this case, the police) to the point where they could acquire immunity to large-scale prosecution by the occasional tossing up of sacrificial lambs and arranging lovely lunches for people in a position to investigate them. What this implies is that the current state of the law is irrelevant to this issue: this is about power, and how much power any institution should have.To say that laws weren’t being enforced properly is to actively swerve out of the way of the point: they couldn’t be enforced properly because the very rule of law itself no longer applied. The very fact that Leveson was prompted by revelations in another newspaper is in itself telling; institutions should be kept in balance by other institutions, not by hoping that everyone just goes the decent thing. The rule of law does not function by hoping that everyone obeys it.
Changing institutional frameworks to prevent the press doing this again may require changes in the law, because Britain likes to have meta-laws that govern the application of other laws rather than an actual constitution. Laws about who gets what power and laws about what is forbidden to everyone are fundamentally different, and attempting to conflate them is why this argument is just wrong.
October 11, 2012
The childishly simplistic maxim, ‘Thou shalt not intitate force or fraud against the property or person of another’ lies at the heart of libertarianism, and by proxy much of ideological climate scepticism. It is a credo that appeals to those who believe that the moral consequences of the exercise of power can be coherently divided between politics and economics; typically because they have rather more of one sort of power than another. Holding that only the use of force in a physical sense is morally problematic ignores a whole category of other kinds of harm that economic power permits one to perpetrate. Regardless, this principle is useful inasmuch as it provides a clue as to the ultimate downfall of climate scepticism: the fact that, by this principle, contributing towards climate change is a crime.
If you steal from me – if you procure through force what is mine – I must have recourse to justice under. Assuming that some kind of government exists and my access to justice is not limited to beating you up, some kind of ruling is required in order to ascertain the facts of the matter. My own testimony that you initiated force against my property is insufficient for conviction if you deny it; justice is not conditional on my evidence alone. It requires a body to whom we have both given exclusive rights to the use of force to adjudicate.
The reason this is a problem for climate scepticism is that ultimately the debate is about a crime, albeit a crime we are committing against ourselves on a civilisation-wide scale. By your emissions of greenhouse gases, you are harming the biosphere I from which I acquire air, water and the sustenance of the industrial civilisation I have come to rely for the amenities of modern life. My side of the debate claims that this crime has happened and is happening, while climate sceptics, here playing the role of the defendent, insist that it is not.
We do not normally conceptualise climate change as a crime because it has unpleasant implications: namely, that we are all criminals. I am currently writing this on a computer with a 300watt power supply. Assuming it is running at full tilt, by the time I have used this computer for an hour I will have committed offences against myself and my fellow citizens totalling about 150g of CO2 and its equivalents. This is not illegal, and yet – given the above principle – it is clearly immoral. I have initiated force against you and your property, and there is nothing you can legally do about it. I am a criminal in the broadest sense of the word, and yet I walk free, because to incarcerate me would require that everyone else be imprisoned too.
Instead, we subject policies designed to counter climate change to the court of public opinion. Our efforts to rehabilitate ourselves through low-carbon measures only make sense if we have genuinely committed a crime, and so message boards and blogs throng to the sound of people furiously protesting their innocence. Discourse will never solve this issue by itself, because – much like the claim and counterclaim of stealing given above – it is merely one set of persons’ word against another. As a result, the debate has begun to shift into the courts, where resolution can be reached. The case in March this year in which a climate sceptic state attourney general attempted to prosecute a university under US legislation designed to prevent fraud against taxpayers is an illustration of things to come. It is interesting that it has been climate sceptics in the main who have started the legal bandwagon rolling; this makes more sense if one considers these court cases as less about discrete matters of science and more as appeals against an Establishment view that has already found itself guilty of this crime and is beginning to institute punishment.
So far, the sceptics are losing, and I would expect them to keep doing so. There is only so many times that a court can rule against a position before it loses all credence, and I expect that the climate sceptics will attempt to reach this limit before finding another reason to be resentful of a world rapidly changing around them. It is possible, if the rule of law is sufficiently subverted, that they may win a few rounds, but the end outcome is not in doubt. They will seek to appeal our own innocence on behalf of us all, but ultimately this will be their downfall. We have initiated force against ourselves, and justice must be served.
October 4, 2012
Timmy has put up something very silly about abortion this morning. Here’s my response from the comments:
Of course it’s a fucking feminist issue, Tim. If the Government forced you to have someone clamped to your todger for nine months in order to save their life, you’d be screaming about civil liberties and demanding that someone be strung up. But somehow because it’s about wombs and biology, it’s ‘different’. It’s not. Governments are notoriously not to be trusted when it comes to deciding whether something should be allowed on the basis of ‘biology’. And as long as people like yourself who are otherwise bang-on when it comes to liberty think otherwise, it will remain a feminist issue.
June 21, 2012
A new website has been launched by Clifford Singer, the excitingly named chap behind The Other Taxpayers’ Alliance and MyDavidCameron.com. It’s called whofundsyou.org, and attempts to highlight the transparency of the funding arrangements behind 20 prominent thinktanks.
As such, it’s something that fans of Public Choice Theory should welcome. For those not in the know, you can find an excellent primer on the subject on the website of the Institute for Economic Affairs. Broadly, it covers the application of the methods of economics to Government and to its influencing parties. It rests upon the key insight that incentives apply to the people that comprise Government and the interest groups that attempt to lobby them – not just markets. These incentives can lead to ‘Government Failure’ – regulation or Government action which fails to produce the outcomes it was ostensibly intended to deliver. This can be down to incentives on particular politicians or the corrosive influence of interest groups attempting to capture political action for their own cause. The primer puts it like this:
“In this struggle between interests, small groups with sharply focused interests have more influence in decision-making than much larger groups with more diffused concerns, such as consumers and taxpayers.”
“Because of the enormous benefits that can be won from the political process, it is rational for interest groups to spend large sums on lobbying for special privileges – an activity known as ‘rent seeking’.”
In order to be able to properly understand who is lobbying for special privileges, we need to understand who is spending large sums on doing so. In this context, whofundsyou.org is a welcome addition to the political landscape, by providing pressure upon interest groups to reveal their backers.
However, it has not been universally welcomed. This Guido Fawkes post highlights the response of the Adam Smith Institute to the site, which is to say that they have been ranked top for respecting donor privacy – the ‘E’ category of whofundsyou.org, reserved for the least transparent. This would be amusing, if the author of the primer on Public Choice Theory quoted above was not Dr Eamonn Butler, who is a Director of the Institute. It is difficult to not suppose that the large sums spent by the ASI on lobbying are being used to seek special privileges for their funders – not least for their advocacy of lower taxes for higher earners, which would directly benefit a minority.
Yet, somehow the ASI seems to be claiming that it is immune from incentives by declaring that it is independent and does not need to be transparent. It is bizarre for an organisation bearing the name of Adam Smith to claim that the fundamental insight of economics, that incentives matter, does not apply to it. It is difficult to believe that the kind of robust constitution advocated by Public Choice Theory advocates would not require any organisation seeking to influence Government policy to be wholly transparent, in order to ensure that all rent-seeking activities are on full display to the demos. Doing so is the best way of minimising the risk of Government failure, a fact to which the ASI seems to be blind.
June 19, 2012
Mr Carr avoids tax. By doing so, he reveals himself to be one of those gruesome rich people who refuse to pay their proper moral share of their income into the coffers of the Treasury. You see, it turns out that the Government can legislate morality, that the laws passed by our earthly Parliament can pierce the veil betwixt our world and the eternal Forms of Taxation and render it just that Jimmy Carr pays a 50% rate on his earnings over £150,000.
This is, of course, nonsense; I do not care in the slightest what Mr Carr does with his money as long as he doesn’t break the law. There is a strong argument that the rich do not necessarily need to recover their social consciences so much as recover their commitment to social cohesion; conspicuous consumption in a time of austerity doesn’t help prevent resentment for those upon whom the cuts fall most deeply. This is largely irrelevant to Mr Carr, though – I’ve canvassed his house (he wasn’t in) and it’s nothing particularly fancy.
One thing Mr Carr is, though, is a hero. By this single act of avoiding tax, he’s exposed the danger of presuming that comedians can be relied on to provide representation of your political views in a public forum. As I’ve previously discussed, politically aggressive comedy is about consumption, rather than representation. It’s not about changing the system, but rather providing its audience with an engaging political experience. Somehow, this has been interpreted in some quarters as comedians being better at representation and political scrutiny than politicians themselves.
This was never going to be the case, and Mr Carr has heroically demonstrated why. Comedians are only accountable for being funny; they’ll only lose market share if they stop being amusing. As long as they’re funny, it doesn’t matter if they’re inaccurate, if their analysis is shallow and misleading, or indeed if they fail to engage with politics at all. Mr Carr will continue to be a successful comedian, and there’s nothing the tax morality mob can do about it. He has sacrificed his personal standing with that particular section of society in order to bring this truth to the world, and for that, he is a Tax Hero.
Of course, I’m sure all the money helped Mr Carr make this virtuous decision, but I’m confident that was a secondary consideration.
April 24, 2012
This is Jon Stewart:
He is a funny man. He is also an influential man; in 2010 he was ranked as the most influential man in America.
This is Jimmy Carr:
He is a less funny man. He also is much less influential; 10 O’Clock Live is intended as a British version of Jon Stewart’s The Daily Show, but the plummeting ratings the first series experienced indicates that the accolade of Britain’s most influential man remains well outside his grasp.
The reason behind 10 O’Clock Live’s relative lack of success has been discussed multiple times, and rightly so. If comedy can have political influence – and clearly it does across the pond – then anyone interested in politics has an interest in understanding how and why that influence comes about.
The answer lies in a picture of a stuffed dog holding a sign:
This is part of David Shrigley’s Brain Activity exhibition at the Hayward, which I strongly recommend to anyone who enjoys darkly whimsical art. It also provides an interesting way of understanding how Jon Stewart’s brand of satire is judged to be more influential than that of Jimmy Carr’s.
To explain this, the above artwork is not a joke about dogs, dead or otherwise. The humour of the piece is given when one attempts to combine the concepts within; concepts which sit at odds with one another (a dog announcing its own state of deadness). The juxtaposition of these concepts causes the person attempting to organise them to be amused; humour is produced from engagement with the art, rather than something that is a feature of the piece in and of itself.
It may seem trivially obvious that something can only be funny if you engage with it on some level, but there is a subtle distinction to made: the humour of the above is wholly given within the confines of the art, and does not require the provision of a surprising additional concept from outwith it to make it humorous. The continuum between the artworld and comedy that Shrigley’s work represents allows us to consider how aesthetics can apply to humour. For example, consider Kant’s theory of aesthetics: that which is art is that which provides us with concepts with an impression of purposiveness when considered together, but does not contain purposiveness within itself. It is through our engagement and our organisation of those disjunctive concepts within our judgement – or our recognition of our inability to organise them – that we can derive pleasure from art.
Compare and contrast this with Jimmy Carr’s opening salvo in the video above:
“Andy Coulson resigned this work. Some people have questioned what qualified him to the chief Tory spindoctor in the first place. And the answer is B – he’s a sneaky little shit.”
And Jon Stewart’s response to a video of noted madman Glenn Beck:
“I’m not saying that believing that there should be a minimum standard for how much lead should be in our paint might lead to the Government having the right to sterilise and kill Jews, I’m not saying that might be the case. I’m saying that’s the case.”
In the first quote, Jimmy Carr provides us with a question which he resolves for us in an amusing fashion. In the second quote, Jon Stewart draws our attention to an absurdity and invites us to consider its our absurdity for ourselves. The second quote requires engagement on behalf of the audience, the first does not.
Jimmy Carr’s style is to provide us with his opinions in an amusing fashion on issues of the day. Jon Stewart’s style is to draw our attention to the absurdity of a given situation and allow us to derive our own opinion from it. The first meets the disjunctive criterion of humour and art on the basis of a described situation and a surprisingly presented opinion, the second meets the criterion based on a description of the situation itself.
It is not at all surprising that satire aimed at encouraging the audience to engage with a political situation on their own terms is more successful with liberals, in both the American and British senses of the word. Deriving one’s own opinion is a pleasure, if one values the process of questioning and deliberating in itself. If, on the other hand, one derives more value from having one’s opinion confirmed, then one will prefer a presentation of opinion that takes that opinion very seriously. The implication of this is that American television has succeeded in delivering political programming that appeals to both sides of the divide: opinion-affirmation on a plate for the conservatives, and pleasurable engagement with issues for the liberals. 10 O’Clock Live appears to be attempting to straddle this divide, which I can only conclude is unlikely to be a successful strategy.
February 23, 2012
I had meant to follow up my earlier post in this series with an analysis of the praxeological approach taken by the Austrian school, but have yet to have the time to properly read Mises. While On Human Action is on my bookshelf awaiting attention, it seems unfair to criticise praxeology without full familiarity with it.
However, Crooked Timber ran a series of posts on David Graeber’s Debt yesterday, and there is much there to consider – and much to leave to one side, such as Graeber’s bizarre insistence the entire international monetary system only exists thanks to the backing of state force. What I’d like to pick up on is, again, his illustration of different models of economic interaction and how they relate to contemporary debate.
Graeber distinguishes between diffuse reciprocity (or as he calls it, ‘communism’), hierarchy, and market exchange. The latter we know and love to a greater or lesser extent, the middle is simply being told what to do with your resources, and the latter is a ‘fuzzier’ version of exchange, in which you don’t exchange anything with anyone for a particular value, but rather distribute your resources to society in expectation that you may, at some point, have your needs looked after in a manner which does not necessarily equate to the value you gave up.
At this point Graeber normally points to primitive tribes to illustrate this model, but I’d like to use an example of something much closer to home with which most people will be familiar. On Wednesday, I brought a box of chocolates into the office for my colleagues, because it had been my birthday two days before. It’s a tradition in the office that the person whose birthday it is supplies the chocolate or cake, which works in reverse to the standard tradition of presents for the birthday-haver.
Now, my action would be seen as irrational from a market-exchange point of view. I do not receive anything directly in exchange for my submission of chocolates to the office society, nor do I guarantee that the chocolates that others purchase for their birthdays will be of the same quantity or quality as the chocolates I buy. I do not even guarantee that others will buy chocolates; I do not have access to information about my colleagues’ birthdays, and so do not know who is shirking their chocolate-buying responsibilities. However, I am content to enter into this fuzzy exchange, which is not with any one of my colleagues, but rather with all of them. On the Austrian view, this is irrational.
You could go down the Polanyi route and say this is because I’m embedded in social networks, but this is tantamount to saying that social networks make one into a non-rational exchanger. You could talk about game theory, but that rather presumes that there’s a hell of a lot of processing going on inside my head that I don’t have access to, which is something you’d have to prove. Instead, I want to outline why this is a problem for the Austrians, one based on the understanding that Man is rational, and that so is a person, but a human is not.
It is irrational for me to buy chocolates for my colleagues, but it is not irrational for a species to share resources; in doing so it avoids substantial risk. However, describing a species as rational seems odd. Or does it? Is there some process whereby individuals can be selected for the contribution they make to the survival of the species, rather than just the propagation of their own particular genes? We could perhaps call this process ‘evolution’. Such a process would need to include some way to ensure that any one individual was not being short-changed by this sharing of burdens, which we could call a sense of unfairness. You could certainly apply game theory to it, which would perhaps allow us to describe it as ‘rational’ for a very narrow definition of the word.
Therefore, our genes and their expressions in emotion and instinct can be seen as rational if one assumes their goals are the continuation of the species, rather than a particular individual, although one should of course be careful to avoid teleology when talking about such things. However, this presents a problem: the goals of our genes which relate to the survival of the broader species may not relate to our particular goals as an individual. They are expressed to our consciousness as emotion and instinct, and our rational pursuit of our individual goals may come into conflict with the evolutionary goals to which they point. So while we can be rational about our own goals, and our genes as expressed in instincts like reciprocity could be construed as rational from the perspective of the species or society, the package that is our mind and our emotions together – i.e. our entire self – is not.
This is a problem for Austrians, because they assume that man as a rational being will always have a single prioritised goal. But we are not simply individuals, but expressions of a species too, meaning that we are incapable of having that single goal. This is not a conflict of instinct and reason, but of competing rationalities, bound together in a single form. And so, I buy chocolates on my birthday, having been assured by my instincts and similar instincts in my colleagues that this is a good thing to do.