Monday, October 20, 2008

two sorts of profligacy

The remarks of Guardian Economics Editor Larry Elliott, quoted below, were made in the context of efforts by government and media to fob off the public with inadequate, partial explanations of the source of the current economic crisis. These explanations have tended to isolate one aspect of the overall story, taking it to be an explanation sufficient in itself. And this can serve as the basis for a moralising story against wickedness or stupidity. The blame is placed upon, for instance "predatory lenders" or "profligate traders". Larry Elliott does not do this (for that matter neither does Mark K-Punk), but he does make an inventory of spontaneous, popular explanations of the crisis (and like any good economist feels quite justified in taking these from the front pages of the newspapers):

"The changed mood is evident from the media backlash against hedge funds and short-sellers. One headline this week screamed: "Don't let the spivs destroy Britain". It appeared not in the Socialist Worker but in the Daily Express. For Middle Britain, the traders who bragged about their £1,000 bottles of Krug have now become as loathed as the bolshie shop stewards of the 1970s."

This could be working toward one of two things:

1. A sociology of popular explanations of the crisis

2. A sociology of media disinformation about the crisis

It would be relevent to carry out the former task, but this isn't really what Elliott is doing. It is more like he's substituting the latter category for the former. The second task strikes me as the more relevent one. This implies that one ought not to occlude disinformation by taking it to be popular error. One expects disinformation in the press but also some effort to repudiate the most threadbare disinformation. It is more important to isolate deliberate manipulation from popular error because the former is often presented as the latter and because there is some feedback between them. Disinformation could just consist of the skilled arrangement of ideas from popular culture. "May one hundred disinformers blossom!" Chairman Mao might have put it.

After all that, I'm not entirely sure for what reason the "profligate trader" is meant to be beyond the pale. It could be that these traders are meant to be profligate in the way they conduct their business or that they are profligate in the way they spend their money. In the second case this could be a way of suggesting that their income derives from monopolistic super profits rather than normal profits. Hence it could be that the game they're involved in is overly volatile, or it could be that it's rigged.

No one is talking about the rigged game. I don't see much appetite among politicians for breaking up Goldman Sachs or Lloyds TSB. In fact they seem willing to consent to greater consolidation. But it isn't that their way of thinking precludes having a theory of monopoly, (which is just an aspect of petit bourgeois common sense,) rather it is no longer the done thing to talk about monopoly.

To conclude, since the crisis began the political spectacle has more or less weened itself off the neoliberal theory that used to explain everything. There are two sorts of profligate traders you could blame for the crisis, but blaming neither represents an adequate explanation. One of these acts of scapegoating challenges the new orthodoxy, one of them doesn't. Neither is incompatible with the formerly orthodox neoliberal theory.

No comments: