One of the side effects of the current pandemic is the incredibly clean air we all are having everywhere. I almost wrote ‘absurdly’ clean air, though of course what was absurd was the recent past, or our ‘real’ present, the contemporary of global modernity, when a weather front might clean out the desperately polluted air of large cities, but within days, if not hours, ‘normal’ city traffic brings back the polluted air and the smog. In these days from our home we have an unprecedented view of the hills of Fiesole, but also the entire countryside, spotting distant mountains that we have never been able to see before. And it stays, except when clouds and the rain come, bringing humid air but no smog, and so when the front goes away the air becomes again fully transparent; even better than before.
When the current pandemic will pass, no doubt many people, all around the world, will remember this fact, reflect on it, and will even try to do something to prevent the return of our ‘normal’ smog. What have we done to deserve such a polluted air? What is going desperately wrong with our very image of normality? The rulers of our world, like Bill Gates, repeatedly stated publicly that we have never been so rich as right now. The untenability of such claims has now become evident. Perhaps he and his friends and neighbours have never been so rich, but even the absolute sense of such a claim is questionable, depending on what we mean by ‘rich’, or what is the connection between richness, in the contemporary sense, and the good life, in the classical (and Christian) sense. Aristotle certainly could not have imagined the current environmental situation, the problems of pollution. But the general point is valid, and not limited to classical Greece, but extends to the – at least late – Palaeolithic, the period of ‘cave art’. What makes us so ‘rich’? That we can own electric gadgets by which we can waste our time inside, ignoring nature, so even forget the meaning of what is ‘natural’? When all we do anyway is wasting our time in the meaningless rat race of bland corporations, and eat rubbish brought home from supermarkets?
Let me mention here a simple episode of my own childhood, in the 1960s, in Hungary, under communism. My grandfather was a judge in the previous regime, dismissed personally from his position by one of the highest potentates of the first Communist regime, Zoltán Vas. He did not even get a pension for many years, and then got a sum that was itself an offense, about a fifth of the – very low – normal wage received then in Hungary, and he lived on that with his wife (who eventually got as housewife a nominal pension half his). But they had a garden, with many fruit trees, including peach trees (the house was sold over half a century ago, then resold, with the garden parcelled out to Budapest residents who wanted to leave the city, the trees all cut). Now, I could eat in their garden anything, directly from the trees, but peaches. The peach trees only he alone could touch, not even my grandmother, mother, or aunt – though otherwise everything in the house was run by my grandmother. This is because picking the right peach was a difficult job, requiring very proper knowledge and judgement, he explained later. If you pick an unripe fruit, it will not taste good. If you leave it too late, it will get over-ripe, and – horror of all! – might even fall on the ground. But you could not test the fruit by your own hand. If you touched a peach, it stopped maturing, and on the spot touched started to get rotten. So he alone could pick the right peach, and when he picked one and gave me, it indeed tasted magnificent. Who in our world is ‘rich’ enough to eat such a peach? Our friend Bill probably does not even know and understand what I’m talking about. So what makes ‘us’ so rich? To be able to buy in the supermarket peaches which are so stone-hard that they could kill a bird? Or having a ‘broadband’ by which we can entertain ourselves with all the non-sense circulated in the Internet, and which – as our governments now start to realise, as calls voiced earlier to China that the only thing worse than an epidemic is panic about it were promptly replaced by panic-mongering in which governments, official media and social media are excelling each other – is particularly efficient to control all of us?
Today hardly anybody picks a fruit from one’s own garden, which – generalising from the concrete case – led to the ‘exchange economy’ in which we live, where everything must be sold, transported and bought, and where suddenly many people, potentially entire countries, might enter an unprecedented case of general true scarcity. How did we get here? What is the – thoroughly Kantian – logic of the modern economy, which is a ‘trickster logic’, and which does its best to diffuse a radically corrupt mode of existence which has done everything possible so far to destroy the planet?
Before going further, let me make here a general point. My aim is not to hold Kant personally responsible for ‘everything’. Evidently, Kant was not even an economist. Rather, I consider Kant as both an agent and a symptom of the situation; a kind of ‘concrete symbol’. He was certainly an agent, as his impact on modern thought is unparalleled. But to a large extent his thinking is only a symptom, in the sense that it belongs to a broader pattern of modern thinking, focusing on the drive to context-free generalisation, and an excessive, indeed unlimited, not-well-thought-out application of scientific facts and methods – and often a considerably misunderstood ‘science’ – to transform irreparably our reality.
A central claim of this series of short articles is that economic theory does not contain a series of valid statements about how to conduct our lives in order to be happy and enjoy wellbeing in a general and basic sense, even less is it a genuine science, rather it is a bunch of tricks that under certain conditions indeed work – or, rather, which produce, as if performative speech acts, the conditions under which they could be said to work. This claim is not a hypothesis to be tested, as this game – hypothesis-testing, presumed foundation of modern social science – has an extremely limited value concerning genuine truth and genuine meaning, nor a thesis based on an idea that somehow occurred to me and that I try to prove. It rather has the status, or presumed status, or a recognition, meaning an insight that matures after a very long familiarisation with the question – in my case, well over 40 years (sorry to be so slow). It is since my undergraduate degree in economics, started in 1976 in Budapest, Hungary, that I try to understand what exactly is the status of economics, and by now, after well over 40 years, having a 1987 PhD in Economics from a Texas university, I understood that it has no serious status – it is just a bunch of tricks which, however, due to a number of reasons, among others the rise of the modern state, scientism, and the rule of Kantian thinking, gradually gained the widely accorded recognition it has today. It shouldn’t, as it is just an ideology that promotes and justifies nothing else than the destruction of our world (planet Earth, nature, society, community, culture, tradition, personality, everything that we hold dear). It is much worse than an actual conspiracy, as it destroys more efficiently, and is less risky.
Why this discourse could have gained such an ascendency in thought is a question that cannot be dealt with here. I can only point to one of the main reasons: Marxism. Since a century and a half somehow any ‘critical’ view of the economy came to be associated with Marx and Marxism; otherwise, it was just forgotten and swept aside. Marxism, however, apart from being a political ideology, in its economics is nothing but a version of Ricardo’s perspective, as it was demonstrated long ago by Piero Sraffa, so it simply has no bite concerning the real havoc created by economics. It is pointless to discuss Marx – one must rather take on Ricardo, also recognised by Foucault in his epochal Order of Things as the central figure of modern economic thinking.
If economic theory is just a bunch of tricks, then the economy simply follows and is entrapped in a trickster logic, in the classical anthropological sense – and it of course is; while economists, whether willingly or not, are propagators of a trickster logic (this is discussed in the book on “Tricksterology” which was written together with Agnes Horvath and published in 2020 – see a review in the March 1 2020 issue of VoegelinView by Tom Boland), thus – whether they realise it or not – are effectively trickster figures (of course, such figures also dominate modern politics, art, the media, and even ‘critical’ theory, but this again would lead too far). This is best visible in one of the most basic, and blatant, tricks around economic theory, the claim that it does not matter that the assumptions of economic theory are unrealistic as long as they ‘work’. In any meaningful sense, such a claim invites to give up the meaningful pursuit of truth, as truth assumes a serious concern with reality. The best equivalent of this claim is the standard trick of illusionists: ‘look at my hands’! Of course, this trick is done in order to lure away the attention of spectators from the tricks the illusionist conjures up in the background (or prepared in advance). Under any other conditions, such a claim about the unimportance of the unreality of assumptions would not even be taken seriously, but economics got away with it. This is partly because at the intellectual level, here as everywhere Kantian a priorism prepared the way for accepting such – nonsense.
Let me offer here, before going into details, two quick examples. One is linguistic, and concerns ‘prestige’. Economics is widely considered as the most ‘prestigious’ of the social sciences, while the richest businessmen or entrepreneurs are the most prestigious people in our societies. But what is the etymology of the word ‘prestige’? It is Italian prestigiatore, meaning, simply, fairground illusionist. How on earth the meaning of a word could have changed so significantly? Well, because the main agents of our ‘market’ economies are nothing else than modern versions of fairground impresarios or charlatans – the descent is direct, and the change of meaning simply documents this descent. An important testimony is Charles Dickens, and the way in which in Little Dorrit a main character, Mr. Merdle, a stockbroker, is presented, repeatedly, as a figure of immense prestige, as his dealings in the stock-market made him incredibly wealthy. However, this worked only until his tricks were called, his manoeuvres collapsed, bringing down everyone who trusted him, leading to his suicide. The problem is that we all, in the ‘modern Western world’ – and not only – came to trust and accord prestige to these prestigiatori – whose identities were already signalled.
The second example concerns rational expectations theory, an astonishing case of economic tricks. This theory makes a very simple claim: the government simply cannot conduct an effective economic policy, as all his actions would be anticipated by everybody on the market; practically by every citizen. How so? Because all the information available to the government is also available to every citizen, who are all rational actors, possessing full information, and therefore they would anticipate what the government would do, and therefore anything the government tries to offer as an economic policy would be ineffective. The only way a government can act through economic policy is by misleading the citizens.
Anybody not familiar with the details of contemporary economic theory has a hard time following the argument – or would be astonished how such a bunch of nonsense can be taken seriously. As, to start with, how could it be assumed that every citizen, or even every firm, can possess the same amount of information as a government? And what does the ‘rationality’ of the individual mean in this context? That every citizen, every human being, behaves in everyday life according to the same principles that guide the behaviour of a governmental agency, or a firm? Well, what any economist would tell you is that, yes, exactly, this is what we assume: rationality and full information. Without the assumption of full information, ‘markets’ don’t produce equilibrium (the very term ‘equilibrium’ is a serious problem, or trick, as it only applies in mechanics, while anybody vaguely familiar with biology knows that any living organism only reaches ‘equilibrium’ in death), so the mechanism does not work. So it has to be assumed; and what the inventors of rational expectations theory did – and for which they, at least 3-4 of them indeed got their Nobel Price! – is that if we assume all this, then indeed the government cannot do anything about markets; all regulation and interference is meaningless; so let’s leave markets alone so that they could work. But of course the assumption of everybody having full information is nonsense, governments (or whatever, a possible council of elders, as the point is not to justify any state action) could act if they wanted to, but economists, enclosed in their own closed ideological system (or rather: set of tricks) simply followed suit, instead of questioning the reality of their assumptions – which they could not do, as being an economist means to accept as a starting point that the question about the unreality of assumptions cannot be raised. Which, however, is a nonsense – q.e.d., or we can start again, from the beginning.
This said, even we let’s go back and start our reconstructing of the trickster logic of economics with Ricardo.
Modern economics is based on the ideas of Ricardo, and central to this is the universalization of exchange. Everything should be exchanged, and procured by exchange; this is the only rational way of behaving for every individual, and every community – this idea was first systematised by Ricardo, and is one of the cornerstones of the modern, universalistic Kantian episteme.
Before going further, let me again illustrate the radical novelty and unprecedented character of this idea by two points. First, the ‘traditional’ perspective – not some kind of ‘before the deluge’ atavistic primitivism, but the taken for granted normality of every human community before ‘Ricardo’ (I take him as a concrete symbol, just as Kant and Kantianism), humans only exchanged what was excess or superfluous. The basic underlying principle was the opposite: not that everything must be exchanged, but that everything has a given or gift character, and therefore must be appreciated, cared for, and to be sure kept. Giving something away for money was almost always considered by every decent human being in every community in history as a shameful act.
The second point concerns the Greek polis, more specifically Athenian ‘democracy’. The three basic principles of Athenian constitution, or politeia (etymological source of our words ‘police’ and ‘policy’, which has its considerable importance for our current situation, as the fourth part will argue in detail), as I was made to memorise in Greek in my Hungarian high-school, when under communism Greek was no longer taught, but some of my teachers – who taught in high school only because they were prohibited to teach in university – still knew Greek, were autonomia, autarkhia, and eleuthereia. Autonomia did not mean Kantian autonomy, or the principle of the radical self-government of the isolated individual, the Romantic illusion in Kant (understood in the Girardian sense of a ‘Romantic lie’, according to the original title of his Deceit, Desire and the Novel, that was Mensonge romantique et vérité romanesque, ‘Romantic lies and novel-like truths’), indeed taken from Rousseau, rather the ability of every polis to give itself its own laws, close to the modern sense of sovereignty. Eleuthereia simply meant the freedom to pursue one’s own life concerns. These two principles are therefore not at all different from central modern values or human rights. Autarkhia, however, is something radically anti-modern, as it indeed meant autarchy, or the need for every polis, and in so far as possible every oikos, or household, to provide itself the necessities for not simply its ‘survival’, but a good life. The very idea of autarchy, still much present in classical republicanism, was simply wiped out of European culture by economic thinking, much under the impact of Ricardo. So let’s now see in some detail Ricardo’s arguments for the universally beneficial character of exchange.
In this article, I will focus on two aspects only, both quite central to Ricardo and up till our days in a matter of fact way repeated as axioms by economists. The first concerns the origins of exchange or an exchange economy, while the second the principle of comparative advantage, the basis of the universally acknowledged idea of free trade.
Concerning the first, Ricardo starts with a seemingly common sense argument, which however simply takes off from Defoe’s Robinson Crusoe as a true historical fact (which Defoe actually claimed!). In this storyline, our distant hunter ancestor killed two animals, but only needed one to eat, so decided to exchange the other for something else that he needed but did not possess. This is the origin of barter. Eventually, a general equivalent was introduced in the process (say, cow), rendering it more ‘efficient’; then it led to the emergence of markets; then money was introduced; and step by step, gradually this processes led, through the progress of civilisation, to the rise of the modern economy.
There are two major problems of this seemingly common-sense storyline. First, as any historian or anthropologist knows, it has no reality content whatsoever. Things did not and could not happen in this way. Isolated individuals did not exist in the Palaeolithic; banning somebody from the community was the greatest possible punishment, still practiced in classical Greece as ostracism; and again the Greeks considered the isolated individual as an idiotes, distant source of our word idiot, a point Voegelin repeatedly emphasised. The argument is a nonstarter, and indeed is nothing else but the extension of the Robinson Cruse story into actual history. It can be compared to Hobbes’s ‘war of all against all’; and there is indeed something deeply disturbing in the fact that the foundational works of modern political science and economics start with an unacceptable, even absurd historical account. Of course, ‘our’ textbooks explain that they did not really mean it, but sorry, yes, they actually did so, and all this had a major impact on the radical omission and ignorance of history in these disciplines.
The second, even more serious and even less realised point is that the storyline of Ricardo is not only faulty at the beginning, but just as seriously faulty at its last point as well, which derives the rise of the modern economy out of local markets. This, however, is not true, as the modern market economy developed not out of markets, but fairs. The stock-market, which is equivalent in current terminology with ‘the markets’ (when our media talks about the reaction of ‘markets’ to a political or other significant event, they mean whether the stock-market indexes went up or down), grew not out of local markets, but out of international fairs. However, and closely following the footsteps of Ricardo’s identification of the origin of the modern economy in local markets, not fairs, the stock-market is simply ignored in modern economics, including standard textbooks. And here Ricardo should really be already caught and identified as a genuine trickster, as he actually was a broker on the stock-market, and made a significant amount of money before he retired from there and wrote his Principles of Political Economy. So he really knew what he systematically omitted from his book.
Concerning the second point, the principle of comparative advantage, Ricardo starts his narrative by the idea of absolute advantage. The example given is again seemingly trivial, but as always, we must watch not only the hand of the trickster, what he actually writes down, but what is omitted or assumed as given. So the example concerns the trade between England and Portugal: Portugal sells wine to England, while England sells cloths to Portugal. ‘Absolute advantage’ means that due to climatic reasons England cannot produce wine, so must procure it from abroad; say Portugal. This is indeed very evident, but it leaves open a number of questions: why England ‘needs’ wine, or rather who in England consumes wine; even further, why consider an alcoholic drink as the example of a foundational economic book (the answer is quite interesting, as Ricardo’s ancestors were actually Portuguese wine merchants, so the example is almost autobiographical). At rate, one can conclude that the example is trivial, but it only concerns an extremely minor issue.
But here comes the next step, and the big trick in the argument. As now our trickster moves from the trivial ‘absolute advantage’ to the idea of a comparative advantage. What it means it that he offers the example where one of the countries actually produces both goods more efficiently. Behind this, one can easily see ‘civilisational’-type argument: England is better than any other country, so produces every good ‘more efficiently’. So, one would expect that there is no point in trading. Yet, Ricardo shows, through simple calculus, that this is not the case: as the advantage of England is greater in one of the goods, it should specialise in this good, and leave the production of the other good to the other country. All this again is made to sound trivial; indeed, why not? And this is no small matter, as this is the principle on which all our governments and intergovernmental organisations like the European Union came to work, promoting free trade all around the world; simply this is the underlying principle of globalisation – by being extended to the trade of any good between any countries. And the damage it could do was probably first demonstrated through the forced trade of cloths with India, where the lives of countless people were destroyed by the importation of British textile – of course, solely in the interest of India, given that Ricardo has conclusively demonstrated that such trade cannot but help the ‘development’ of India.
And yet, as it can be shown simply, this is not a plain, self-evident truth, but a trick; one that is a modernised version of what fairground illusionists or charlatans were producing in Renaissance or early modern fairs – we should not forget that the modern economy grew out of fairs, and that both our prestigious businessmen and economists are direct descendants of fairground prestigiatori. As a prelude, let me make the point that modern, enlightened tricksters frequently use mathematical arguments, often making use of the characteristics of the zero, this (non-)number that Greeks and Romans refused even to consider, given their hostility to the very idea of non-being (about this, see Plato’s Sophist). In fact, any operation that uses the zero is by definition a trick, as produces – especially by multiplication, but even more by division or raising to powers – truly absurd results.
Here, however, Ricardo is using mathematical tricks is a different manner. The trick is that our attention becomes focused on understanding the correctness of his demonstration of the counterintuitive idea that it is ‘rational’ to trade in spite of having ‘absolute advantage’ in both goods; and we forget what really is going on. This means, first – and here is the Kantianism in principle! – that we can talk about ‘goods’ in a generic sense, ignoring the specific concreteness of most ‘goods’. Thus, going back to Adam Smith’s famous example concerning the ‘division of labour’ – not surprisingly, just another trick! – which concerned pins (another extremely specific ‘good’, helpful to understand the concrete argument, and then to ignore the specificity of this good when the argument became generalised in a universalistic sense – and, by Durkheim, this most Kantian of all sociologists, at least until Habermas, generalised beyond economics into the very principle of ‘organic’ social life, where our Kantian trickster inverted the sense of Toennies’s famous categories, Gemeinschaft and Gesellschaft), of course a ‘pin’ is indeed just a generic good, and hardly matters – beyond trivial issues of quality control – whether it was produced in England, Portugal or China. However, most other goods do have certain characteristics that are very different not just in different countries, but different regions, even concrete places. And so the application of a generic name is highly problematic.
As a concrete example, let me mention now cherries. Today, in a supermarket, one only buys these fruits as a generic good, perhaps indicating the state of origin. Now, ignoring for the moment whether it makes any sense to buy cherries from South Africa in Ireland in winter at high prices – of course not, in any meaningful sense – let me just evoke that in the already mentioned garden of my grandparents there were a dozen cherry trees, but most had a different name, as they were giving different cherries: some early, other late; some lighter red, other almost black; some very hard, while other quite soft. And the main point, of course, was that you could really only eat the cherry from the tree, as if you plucked them ripe and put into a bag or even a plate, already in the evening it was not possible to eat them. One might consider again that this is a very trivial and minute example, but my challenge is that it is this concrete example that should be in a way ‘generalised’, for every other concrete ‘good’, whether fruits, other products of nature, or even almost any other products, from table to knives or baskets, as each of them had many different ways of making, and different countries, regions or even concrete individuals made them differently, in their own concrete manner, and their value lay in this concreteness. Even further, and going back to Greek autarkhia, one’s own cherry, or anything from one’s own yard, garden, or hand is by definition different from anything else that could be procured by exchange. Until the rise of the modern economy this ‘general principle’ ruled everywhere in the world. Not economics – as there was no ‘economy’ in the world anywhere until about the 17th century.
One of the reasons for the success of his argument was that in his numerical example Ricardo ignored the cost of transport. Of course, this can be incorporated in some way in the calculus, but the point is that modern economics ignores real time, just as it ignores real place, so the issue of communication and transport does not even occur at a theoretical level. This has two consequences, absolutely central for us in this very moment. First, instant communication through the Internet is so central for globalisation that this as if makes Ricardo’s omission irrelevant. Now we do have instant communication, so the unreality of this assumption of economics no longer matters. This seems a serious objection to my argument, yet it isn’t, as Internet and digitalisation also do have their again much-ignored costs: for example, the energy that is needed to keep the machines and storage capacities running; or – even more centrally – the way in which we all are increasingly exposed to a kind of radiation whose real impact – on us, but also on ‘nature’ – we still ignore. This is a vital issue in the current virus pandemic madness, as the problem of 5G internet, and its apparent connection to the spread of the virus, the way certain individuals fight against this, and especially the weapons they use, the aggressive labelling of anybody presenting such arguments as liars who deny scientific evidence shows how much is going on in the background, where we cannot see the trickster hands.
The second issue, transport, has just as much and even more evidently direct relevance. Again just two aspects will be mentioned. First, any good that is transported risks losing some of its qualities, the longer is the place to which it is transported, especially if it has to do with nature, with direct proportionality. This of course is well known, and is the reason for the ‘zero km’ movement (a somewhat unfortunate word, using the (non-)number zero), but it is well worth to indicate how this exposes a central flaw in standard economic theory. But let me offer another, again concrete and personal example. Everybody knows the exceptional qualities of Florentine pastry. The best bars in Florence all bake their own pastry; and if some sell these to a nearby bar, already there it is not the same. Now, you say that this is an extremely limited example, concerns only one of the most famous cities in the world, with no general validity. However, I say that, quite on the contrary, why cannot this practice be generalised, instead of McDonald’s or Starbucks? What would it take for every city in Europe ‘imitating’ Florence in the quality of coffees and pastry? This takes some culture, it can be said, and of course this is indeed so – but why not follow this as a cultural practice? What prevents this to happen, in our enlightened and progressive globalised world? The rule of the market, one could say – and indeed, this is what is wrong with ‘markets’, working following Gresham’s law everywhere. The second aspect concerns the manifold costs of transport, again simply ignored by Ricardo, but brought out particularly clearly by the current crisis. One element, the sudden impossibility of travel and traffic, is certainly just a matter of emergency, but it exposes the shortsightedness of ignoring not just the costs, but risks involved in transportation. The other element concerns the evident environmental damage done by ‘efficient’, or fuel-based transport.
Here we need to combine two central aspects of the current crisis: that it on the one hand exposes the risks of basing too much on distant goods; and that, due to the drastic improvement of the quality of air, it reveals how much it makes no sense of relying on the regular transporting of goods and people to ever greater distances, at the price of ever greater pollution and ever greater risks, while at the same time losing the quality of the transported objects – or, as in the case of cherries from South Africa, even having hardly any genuine qualities from the start, being by necessity picked unripe.
The simple mathematical trick of Ricardo, through fatefully deviating our attention, has transformed our world beyond recognition. The current situation could help us to recognise the radically erratic nature of such Kantian modality – abstract, a prioristic arguments about generic ‘goods’, ignoring anything that has to do with concreteness, with nature, with living beings and natural goods, with concrete times and places, instead of thinking in terms of abstract universals.
The ultimate result is that this logic of unlimited exchange and substitutability is extended to any kind of social relationship, central to Chicago economics. Its prominent members, like Becker, Stigler, Schultz or Posner, extend economic reasoning to the heart of family life, law, or even the value of life, talking about ‘human capital’ – a terminology unfortunately imported into sociology by Bourdieu. The professor for whom I was a TA in 1982, already then long retired, had only scorn for this mode thinking, just as most of his older colleagues, and loved to say that Gary Becker certainly is a great expert in the value of marriage, having married at least four times. But they belonged to a dying breed of economists.
Something must be done so that such a realisation about the meaninglessness of abstract, a priori universalistic generalisations would not be lost. Any moment of liminal crisis is a moment of decision – and this now concerns truly planetary levels. Our current situation could lead to increasing power being assigned to Internet companies (arguing that they deliver without the need for physical presence; a true disaster for education and human contact in general), to multinationals who could survive, while smaller businesses might be forced to close down; to governments (and their polices), national or local, who again got a taste of their real power, being for long undermined by certain aspects of globalisation. Or, if we somehow manage to start thinking and retrieving our better selves, individual and communal, we might start to realise the madness of the kind of Kantian, and economic, thinking which led to the current situation.
This liminal situation certainly cannot last. It might go back to business as before, but this is unlikely. We all must contribute to make things happen to the right direction, and not resign ourselves to the inevitability of the former option.