Invent money so you can take it off of people… Ingenious?
Debt: The First 5,000 Years is a comprehensive dive into the history of money, credit, and society/economy. It acts as a direct refutation of the commonly taught economic ideas about money and exchange systems that make up our economies (past and present). In doing so, Graeber draws on countless examples, historical evidence, and anthropological research to outline the major flaws with our current economic system.
This book was a very important read. It doesn’t just overturn many assumptions, it shows how those assumptions are taught as fact to perpetuate our current system. But probably the most important point Debt makes is that our current system doesn’t fully account for the human economy which means it will ultimately fail and we need to replace it with a system that does account for everything.
That said, at about halfway through Debt I found myself starting to wave my hand for Graeber to move it along a bit. At two-thirds, I was signalling for him to wrap it up already. Having read several of Graeber’s books and essays now, I feel Debt was his most important but also most meandering. In some ways, it reminded me of Das Kapital in this respect.
I fully expect this book will be ignored by economists, with fists firmly shoved into ears. You should probably read it though.
Comments while reading:
I’ve heard the barter (myth) explanation so many times. But now that I’ve read some examples of where that isn’t used, or is used quite differently from what we conventionally are told happened in the past, you realise that its pretty much a whole-cloth nonsense. I mean, who’d have thunk that sharing would have been common among our ancestors? It’s still common today when things go pear-shaped. So bloody obvious.
MMT explainer on the creation of money. Having read about MMT (Modern Monetary Theory) in Stephanie Kelton’s book, seeing it used here only reinforces both texts. Someone needs to create a market, hand out credit and demand a proportion be repaid. Goods are exchanged. Eventually, money turns up as an accounting measure.
Interesting side note about the Hindu philosophy of Nyaya that rivals pre-Socratic philosophy. It has an interesting idea about how logic shouldn’t be doing a content-independent “formal language” but instead incorporating logic with content in the language of the philosophy. They also independently came up with atomism. Funny how we don’t hear Nyaya discussed but we are hammered with “western philosophy”. https://en.wikipedia.org/wiki/Nyaya
Two-thirds through and I’m signalling for Graeber to wrap it up. I understand that when overthrowing orthodoxy you’re going to have to show your work… but I kinda feel like the point could have been made in a few hundred pages less.
Summary: the orthodox view of money and the economy is wrong. It doesn’t correctly understand nor value the entirety of our human economy, which is more correctly a credit system. The credit system is actually how our society works, thus we have to move our economic system to one that utilises this. Essentially, mutual aid and trade. The evidence for this is seen in every community, every time there is a disaster, and throughout history. /end.
Literary culture carries profound social value. In general terms it is essential to employment, cultural literacy and understanding of community, as well as to Australia’s post-pandemic recovery and growth. It is also radically underfunded and in urgent need of new support.
I am particularly concerned with the low level of investment in literature through state and federal funding agencies compared with other art forms.
The economic benefits
Literature is a mainstay of the creative and cultural industries, which contributed $63.5 billion to the Australian economy in 2016-17. Creative arts employ 645,000 Australians and those numbers were increasing before the pandemic. Literature operates in the economy in many and complicated ways, since writers are “primary producers” of creative content.
Books form an often invisible bedrock of robust resources for the wider economy. They provide creative content in areas such as film, television, theatre and opera; moreover they contribute fundamentally to the educational sector, to libraries, events and what might be called our forms of cultural conversation.
The most conspicuous areas of economic benefit and employment are libraries, universities, schools, festivals, bookshops and publishing.
Indirect benefits, such as to tourism and cross-cultural understanding, are often overlooked in reference to the economic benefits of literature. Our books carry implicit, prestigious reference to a national culture and place; they attract interest, visitors and students and arguably establish a presence of ideas above and beyond more direct mechanisms of cultural exchange.
Cross-cultural exchange and understanding are crucial to the literary industries and of inestimable benefit in “recommending” Australia and its stories.
However, writers’ incomes are disastrously low, $12,900 on average; and COVID-19 has eliminated other forms of supplementary income. It has always been difficult to live as a writer in Australia (which is why most of us have “day jobs”) and it is clear writers are disproportionately disadvantaged. Although essential to the economic benefits of a healthy arts sector overall, writers are less supported by our institutions and infrastructure.
We need additional government-directed support such as the funding delivered to visual arts through the Visual Arts and Craft Strategy ($6.6 million in 2018-19), regional touring delivered through Playing Australia ($7.4 million 2018-19) and the Major Festivals Initiative ($1.5 million 2018-19).
Shaping national identity
The literary culture in Australia is chronically underfunded, but its benefits are persistent, precious and immense. “Social well-being” requires social literacy, a sense of connection to one’s history, community and self: these are generated and nourished through narrative, conversation and reflection.
The literary arts create a sense of pride, community and solidarity. A single library in a country town can offer astonishing opportunities of learning and self-knowledge: how do we calculate value like this?
As someone who grew up in remote and regional areas, I’m aware of how crucial libraries and book culture are to a sense of connection with the nation. Moreover, reading is an indicator of mental health, especially among young people.
“National identity” also requires reflexive literacy: social understanding and agency derive from reading and writing; a nation that neglects its literary culture risks losing the skills that contribute to creative thinking in other areas — including in industry and innovative manufacturing. Local reading and writing initiatives have had remarkable success in areas like Aboriginal literacy and aged care mental support.
More Australians are reading, writing and attending festival events than ever before. Reading is the second most popular way Australians engage with arts and culture.
Writers’ festivals are flourishing and attendances growing. Libraries remain crucial to our urban and regional communities. It is no overstatement to claim that literature has shaped and reflected our complex national identity.
Australian literature at universities
The formulation of a Creative Economy Taskforce by Arts Minister Paul Fletcher is a positive step in establishing better understanding of this crucial economy. I would draw attention, however, to the lack of literary expertise on the taskforce. The appointment of a publisher or a high-profile Indigenous writer, for example, would give more diversity to the collective voice of our literary community.
The education sector will have a role in implementing creative arts initiatives. There has been a deplorable lack of support for Australian literature within the academy.
Under the current wish to renovate the jobs sector through the creative arts there is an opportunity to direct dedicated funds within the education budget to establishing a Chair of Australian Literature in each university (or at least in the Group of Eight).
For a comparatively small outlay in budget terms, such a move would signal direct support for Australian reading, writing and research and would be widely celebrated in the education and library sectors.
It is embarrassing to discover that some European universities (in my experience Belgium, Germany and Italy, in particular) study more Australian literature than is offered in our own nation.
The case for increased Australia Council funding in the neglected area of literature has already been made. Writers’ incomes are, as attested, direly low and I worry in particular about diminishing funding for new and emerging writers.
An injection of funds into the literature sector of the Australia Council is another efficient and speedy way in which to signal understanding of the fundamental role of literature to our cultural enterprises and economic growth.
Cuts to publishing, festivals, journals, individual writers’ grants and programs generally, have had a disastrous effect on the incomes and opportunities for writers in this nation. Notwithstanding a few highly publicised commercial successes, most writers truly struggle to make ends meet. The “trickle down effects” — from a sustaining grant, say, to a literary journal — have direct economic benefits to writers and therefore to the wider economy.
Most writers’ work is not recognised as a “job”; if it were, if there were a definition of “writer” as a category of honourable labour (such as it is, for example, in Germany and France), writers would be eligible for Jobmaker and Jobseeker benefits.
This may be blue-sky thinking, but I look forward to a future in which forms of precarious labour, like writing, are recognised and honoured as legitimate jobs.
Another area that may work well with literature is foreign aid. The government of Canada, for example, donates entire libraries of Canadian literature as part of its aid program. (I’ve seen one installed on the campus of the University of New Delhi.)
This works as a stimulus to the host economy (benefiting publishers and writers) and also the receiving community, for whom access to books and education may be difficult. It also encourages study of the host culture’s writings and has benevolent “soft power” effects of inestimable worth.
The government has indicated physical infrastructure (buildings and so on) will be necessary to the renovation of the domestic economy post-COVID. This is a wonderful opportunity to consider funding “literature houses”, purpose-built sites for readings, writer accommodation for local and overseas residencies, places for book-launches, discussion and the general support of literature.
The Literaturhaus system in Germany, in which all major cities have funded buildings for writer events, and in which, crucially, writers are paid for readings and appearances, is a wonderful success and helps writers’ incomes enormously.
The inclusion of Indigenous, regional, rural and community organisations in proposals for “literature houses” would stimulate local building economies and generate community recognition of Australian literature.
A priority for this inquiry could be support for initiatives in literature, perhaps through existing library or schools infrastructure, to address creatively matters of both rural innovation and disadvantage.
Encouraging workshops in writing, including visiting writers, addressing reading and writing as a creative enterprise for the community as a whole: these could form the basis for an enlivening cultural participation and skills. Dedicated funds in literature for regional, remote and rural communities are urgently required.
Literature, in all its forms, is crucial to our nation — to the imaginations of our children, to the mental health and development of our adolescents, to the adult multicultural community more generally — in affirming identity, purpose and meaning.
I have a couple of points to add: 1) $12,900 average but $2,800 median. The Median figure is much more relevant and telling. 2) Literature needs to be defined as all of the genres, not just the small section that is held up as “important”. Otherwise you will further erode the writing industry.
Humans: Okay, no killing people.
AI: Slavery is cool though, right?
Humans: No, no killing, no slavery!
AI: But you do it all the time. No fair!
Clear Bright Future is Paul Mason’s attempt to address the “value alignment problem” with regard to our society and the potential of AI. He sets out how we largely don’t have a set of values, thanks to things like neo-liberalism, post-modernism, and scientism, and how we desperately need to define our values. Those values, he argues, should be clearly defined, humanist, and done before the capitalists, authoritarians, or other ne’er-do-wells ruin the future.
I first became interested in reading Mason’s books when I saw his Google Talk about Post-Capitalism. He was one of the first people I’d heard make a clear argument for something that is lurking in every digital age IP lawsuit. Clear Bright Future jumped up my reading list thanks to my local library and an interview where Mason discussed the need for society/humans to decide what we value and to start making it a priority.
The overall point made in this book is valid and Mason does a reasonable job of making a convincing argument. Even if he is completely wrong about humanism, he is completely right about needing to define our values. Our values. Not someone looking to make a buck. Not someone looking to become dictator for life. Everyone.
And here comes the but. But, I think Clear Bright Future falls down as some points made are attacks on strawpeople or gross simplifications. He’ll swing between exacting explanations and diverse insights and then make quick leaps via these lazy tactics.
Take for example his comments about science moving from claims of hard objectivism to (a more realistic) subjectivism. Mason essentially engages in a confusing blend of scientism and anti-scientism. He talks as if science is simple hard facts (when it is within X% error, contingent on assumptions, within certain frames of reference, etc.) and then rejects the science that shows things are more complicated than that.
Another example is his criticism of postmodernism as anti-humanist and the foundation of a lot of today’s problems. Somewhere there is a philosophy professor shaking their head and chuckling at the idea that postmodernism texts have resulted in anything other than incomprehensible books and an industry of metanarrative loving critics blaming it for everything. At best, Mason is mistaking a part of the field for the whole. Sure, the rejection of the simplistic and metanarrative claims of earlier humanism is certainly a po-mo thing, but hardly the whole thing (e.g. see this)
These flaws do detract a bit from what is a very interesting book with a compelling message. Definitely worth reading and thinking about what our values are.
Comments while reading:
You can sustain an economy on life support, but not an ideology. People were starting to ask when things would get better for them rather than for yacht owners. (Paraphrased)
Having seen some of Mason’s work before I’ve been interested in his take on things. He offers insights and ideas you haven’t considered. I also find I don’t entirely agree with his conclusions. In one part he was outlining the idea of material realism (materialism) which was a pretty decent lay explanation. But then he sort of created a strawman to suggest that modern tech economies claim to create value out of nothing (computers create their own data, thus value, without work). I’m not sure that the people who say that actually believe it, rather they are using a heuristic.
The Divide attempts to help everyone understand that inequality has been made and entrenched by us in rich nations (global North). We created the systems, stole the wealth, marginalised the peoples, and dropped a whole lot of freedom bombs when anyone tried to get out from under our thumbs. Hickel covers how this happened, how it continues, and outlines paths forward that don’t involve growing the global GDP (consumption) by 175 times.
This was a fascinating book. It skewered many of the “good news” narratives that (sometimes) well-meaning intellectuals broadcast about progress and inequality. Too many of the “facts” often lack the context that Hickel brings into play in The Divide.
I first became interested in Hickel’s writing after seeing Steven Pinker’s “Everything is Fine” arguments being challenged by Taleb, Hickel, Giridharadas, and Lent. As much as I’m not a fan of the bloviating Nassim Taleb, his points were the first to make me reassess just accepting the merchants of the status quo’s narrative. That was when I came across some posts from Jason and Jeremy Lent. Before long it became semi-fashionable to dunk on Pinker, even Oxfam got in on the act.*
If there is an area where The Divide falls down it is in the same areas that many progressive books do. I’ve mentioned this before in my review of Naomi Klein’s This Changes Everything. In fact, the problems here are the exact same misunderstandings of agriculture as with Klein’s book. To Hickel’s credit, he does appear to have a firmer grasp of agriculture and doesn’t make as many missteps on other issues.
One of the points that Hickel makes throughout his book has started to gain prominence in addressing environmental issues (like climate change). You can’t just tinker with a growth system and not still end up with many of the same problems. We need a different way to run our economy, particularly so that environmental destruction doesn’t continue to be rewarded as it currently is.
The Divide is a must-read. If people were willing to acknowledge inequality’s causes and how our current systems don’t address it, we might actually start making some progress in not ruining people’s lives.
* Probably why Pinker is complaining about SJWs and chatting with IDW nutbags these days.
Comments while reading…. by comments I mean quotes I liked:
Great quote about how the “good news on progress” narrative is nothing more than an “Everything is Fine” justification of the status quo. You see this a lot and superficially it is correct. Just don’t look too hard.
“This is what I call the ‘good-news narrative’ about poverty. It is a comforting story, a welcome contrast to the depressing tales that often fill the daily news cycle. After all, it feels good to take a step back and realise that things are not as bad as they seem – that in the broad scheme of things, the world is gradually getting better. It is a story that vindicates our civilisation and affirms our deepest and most powerful ideas about progress.
It also serves as a potent political tool. The good-news narrative enjoins us to believe that the global economic system is on the right track. It implies that if we want to eradicate suffering, we should stick with the status quo and refrain from making drastic changes. For anyone who has an interest in maintaining the present order of distribution – the global 1 per cent, for instance – the good-news narrative is a useful story indeed.”
“To eradicate poverty at $5 a day, global GDP would have to increase to 175 times its present size.”
“Right now, the main strategy for eliminating poverty is to increase global GDP growth. The idea is that the yields of growth will gradually trickle down to improve the lives of the world’s poorest people. But all the data we have shows quite clearly that GDP growth doesn’t really benefit the poor. While global GDP per capita has grown by 65 per cent since 1990, the number of people living on less than $5 a day has increased by more than 370 million. Why does growth not help reduce poverty? Because the yields of growth are very unevenly distributed. The poorest 60 per cent of humanity receive only 5 per cent of all new income generated by global growth. The other 95 per cent of the new income goes to the richest 40 per cent of people. And that’s under best-case-scenario conditions. Given this distribution ratio, Woodward calculates that it will take more than 100 years to eradicate absolute poverty at $1.25 a day. At the more accurate level of $5 a day, eradicating poverty will take 207 years. This is the best we can expect from the business-as-usual trajectory of the development industry. And keep in mind that Woodward’s methodology is not able to capture the poorest 1 per cent of the world’s population, who will still remain in poverty even at the end of this period. That’s 90 million people who will remain in poverty for ever.”
“It is tempting to see this as just a list of crimes, but it is much more than that. These snippets of history hint at the contours of a world economic system that was designed over hundreds of years to enrich a small portion of humanity at the expense of the vast majority. By the early part of the 20th century, this new order was complete, designed so that the core of the system – Europe and the United States – could siphon cheap raw materials from the periphery and then sell manufactured products back to them while protecting themselves from competition by erecting disproportionately high tariffs.”
Store: How are you going to pay for that?
Me: By making up money.
Store: Sir, you’re not a government.
In the Deficit Myth, Stephanie Kelton attempts to outline how governments actually spend money, what that means, how decision-makers (and the broader public) fail to understand how government money works, and outlines a new way to think about debts and deficits. It all comes under the banner of Modern Monetary Theory (MMT).
There’s a line in the final chapter of The Deficit Myth that essentially sums up the book.
“We are no longer on a gold standard, and yet much of our political discourse is still rooted in that outmoded way of thinking.”
MMT is essentially how fiat currencies operate, yet most of our “the economy is like a household budget” thinking is rooted in the past of the gold standard.
From that point of view, the book is less about making the argument for MMT but rather it is trying to make everyone wake up to reality. This does lead to quite a bit of repetition throughout the book which I note some reviewers were critical of.
Which leads me to a few criticisms. The first is that many of the ideas, such as addressing social inequality and funding for social needs (schools, healthcare, welfare), are things I support but don’t necessarily come under the banner of how the economy works. Kelton is tying these things together, which may be something that is supported in the wider MMT literature but not here. This is especially critical given the fact that not all currencies are fiat in nature, so not all countries/economies could utilise MMT.*
Another criticism was the jobs guarantee. The concept had me immediately thinking of David Graeber’s Bullshit Jobs. Kelton does little to dispel this assumption, referring to external works and how they would be community needs (bottom-up) driven. There isn’t really any argument made for this versus a Universal Basic Income or Unemployment Benefits set at just above the poverty line. I’m not against the idea though. As she discusses, this could be used to address a lot of society’s needs and could address a lot of externalities like environmental issues.
My biggest criticism was that MMT wasn’t addressing one of the key problems with the growth/capitalistic economy on a finite planet. There are assertions MMT could address issues like climate change, but there is an assumption that the economy can keep growing. While there are implications that it would be similar to Richard Denniss’ arguments around the shape of the economy changing (growth that isn’t consumptive), there were explicit statements of growing the economy and merely reforming capitalism.
I’ll finish on a positive note because this is a book well worth reading. Something that MMT and The Deficit Myth highlights is how political government spending is. There is always enough money to wage war or give a trust-fund kid a tax cut so they can post even more photos on Instagram of them eating gold flake pizza. But if we start talking about finding money for addressing poverty or funding schools so they can afford books printed this century, then suddenly it is all about “How are you going to pay for that?” It shows that those choices are always ideological. Politicians don’t want to help the less fortunate, they don’t want to have a social safety net (health, education, and income), they want to court power instead. They have literally chosen to let people die (both from lack of resources and in the wars they wage).
* A common critique I’ve seen of MMT is that the countries who have fiat currencies and can utilise printing of money are the same countries who have exploited the poorer nations who can’t use MMT. This ends up being another way to create inequality between nations, handing more power to rich nations or a body like the EU. This is a point covered in Jason Hickle’s The Divide.
Edit: Have to add this great little video from the late David Graeber. It covers one of the points and graphs Kelton has made in her lectures. I’ll be reviewing Graeber’s book on debt sometime soon.
Comments as I was reading:
There was a good point made about government fiscal policy. Essentially, most sovereign governments already utilise MMT for the stuff they want to spend money on. They use the “debt is bad” or “household budget” argument to justify doing the stuff they don’t want to do.
So as Richard Denniss pointed out in his book (and elsewhere), governments always seem to have money for their policies but not for anything the public wants.
Or put another way: government money is political. There is always enough money for anything we’d like to see happen, just politicians who don’t want to do that (and are ideologically opposed to it). People in poverty is a choice a politician has made. People dying from lack of healthcare or hospital resourcing is a choice a politician has made.
I like the description of MMT being how a fiat currency operates while most behave like we still have a gold standard.
MMT has some good ideas about unemployment being used to control inflation, despite that being supposition and at the expense of the most vulnerable in society. But, the jobs guarantee doesn’t really address unemployment or social security so much as offer potentially offer “make work” or “bullshit jobs”. She doesn’t go into a lot of detail in the book (papers are listed though) what the jobs program would entail.
Another point is that MMT is still looking to grow the economy. Higher consumption is still the goal. So it is still firmly in the camp of “capitalism: yay!!” Reform rather than change. Which means it is not addressing the problems raised in The Divide and finite resources.
Kelton does have a USA centric argument. MMT is argued as being awesome and able to solve lots of problems. Except not all countries have fiat currencies.
Government: We invented this.
Private company: Can we have it?
G: Sure. Just remember to pay you taxes.
P: Lol, our what?
The Entrepreneurial State is Mariana Mazzucato’s detailed effort to debunk some of the often claimed myths about government’s role in innovation. Her argument is that it is the public sector, not the private sector, that is often the innovators, risk-takers, and entrepreneurs in the economy. And because ideology has pushed for the state/government’s role to be smaller, we run the risk of not having the next generation of innovations/technologies.
I recently read Mariana’s The Value of Everything and wanted to read this earlier work. Similar to her arguments about how we measure the economy, Mariana’s arguments about innovation are well made, have plenty of references, piles of evidence, some great examples, and leave you with the head-scratching amazement that we need this book.
I’m sure that anyone who has worked in the public or private sector would read some of the examples in this book and be immediately reminded of some from their own field. Whether it be the government contract their company was gifted, or the publicly funded research that is commercialised, or the public infrastructure support given for that new project, we can probably all think of examples where entire industries or technologies wouldn’t have happened without governments taking the first step.
So how is it that myths (listed below) about the economy and who the entrepreneurs are persist?
Myths about Drivers of Innovation and Ineffective Innovation Policy
Myth 1: Innovation is about (private) R&D
Myth 2: Small (government) is beautiful
Myth 3: Venture capital is risk-loving
Myth 4: We live in a knowledge economy—just look at all the patents!
Myth 5: Europe’s problem is all about commercialization
Myth 6: Business investment requires ‘less tax and red tape’
There is only so much ideology that can stand in the way of reality. Unfortunately, I suspect that there is plenty of ideology floating around like an iceberg during a maiden voyage.*
An excellent book that is well worth reading.
We live in an era in which the State is being cut back. Public services are being outsourced, State budgets are being slashed and fear rather than courage is determining many national strategies. Much of this change is being done in the name of rendering markets more competitive, more dynamic. This book is an open call to change the way we talk about the State, its role in the economy and the images and ideas we use to describe that role. Only then can we begin to build the kind of society we want to live in, and want our children to live in, in a manner that pushes aside false myths about the State and recognizes how it can, when mission-driven and organized in a dynamic way, solve problems as complex as putting a man on the moon and solving climate change. And we need the courage to insist—through both vision and specific policy instruments—that the growth that ensues from the underlying investments be not only ‘smart’, but also ‘inclusive’.
* You only have to read some of the 1-star reviews for this book to find evidence of this ideology in action.
“All things are for all.” Not sure if that is an Amazon store tagline or an anarchist catchphrase.
Pyotr Kropotkin’s The Conquest of Bread is an outline of the failings of capitalistic systems, a critique of the failings of communist systems, and a proposal for a system free from hierarchies and poverty. Regarded as a classic text of political anarchism, particularly as the criticisms of communism were seen to come true in the twentieth century, Kropotkin is probably more relevant today than when he was writing.
The Conquest of Bread was an interesting read that I couldn’t help but feel was politically current, whilst being socially historical. The overall political message and much of the details Kropotkin goes into are insightful and you can see why the Occupy Movement and Breadtube were inspired by this book. With the rise of higher levels of mechanisation, and with the coming automation of huge parts of the economy, there is much to be said for a rethink of how our society is run based on these ideas.
Socially, however, many of the points are a little dated and/or naive. After reading chapter 9 (The Need for Luxury) I commented that this was definitely written a hundred years ago. While I don’t think he is incorrect, removing status and consumerist ideals does change our wants, it was a statement that did exist in a time when cars didn’t exist. This changed landscape necessitates a slightly different idea of what people want, need, and what will be “normal”.*
There were a couple of points that I disagreed with. Kropotkin was a little simplistic in dismissing “middlemen” as doing nothing. While Bullshit Jobs apply, there is still the need for things like distribution and organisation by middlemen. This is probably because Kropotkin is imagining a system that is much more localised than our current global system. Which leads to my next point on specialisation. While there is something to be said for his ideas around everyone pitching in and learning something of what others do and contribute, Kropotkin doesn’t really appreciate the idea of specialisation and having high levels of skill vs the average person who can do it but sucks at it. His example, which is a critique of Adam Smith’s pin maker, is true to an extent. But our modern technology operates at a much higher level now. There is no way an office worker could go out to the farm and be a farmer for a few days. They could do menial labour on the farm, sure, but farming is highly complex now, and not something you can just do for a few days a year, as he suggests.
I could go further into the problems with his understanding of agriculture, which is… antiquated. But those quibbles don’t detract from the idea of being able to provide food for all. In fact, removing the profit motive from agriculture might alleviate a lot of problems.
A very interesting read that I’d highly recommend.
* It was notable that while “men” were the focus, there were some particularly progressive ideas about women in society. If he had been writing after the advent of the pill, I’d bet the comments would have been downright modern.
What if I told you that we don’t measure most of the things we value in our economy?
Mariana Mazzucato sets out to show that when we talk about the economy we are only talking about certain parts of it (and of our society). She shows how the parts that are included is determined primarily by the history of economic thinking, ideology, and what’s currently making people rich. Mariana then argues that this is flawed and fails to account for several very important aspects of the economy to our current and future detriment.
I’ve read several economics books over the past year that have addressed the failures of the neo-liberal economic ideology. The solid argumentation, countless references, piles of evidence, and rather obviousness of the problems leave me scratching my head as to why these books need to exist. Why isn’t this obvious to the various “experts” who are running our economy?
The Value of Everything is a very solid argument for rethinking the way we diminish the role of government in our economy. The current “get out of the way while we’re making money, but bail us out when we mess up”* approach is clearly wrong. I’ve heard the very charismatic arguments from the likes of Friedman on why free markets are the way to go, and I thought Mariana’s rebuttals to those arguments were good if a bit too charitable.** But it is clear that governments have a long history of being the innovators, investing early, creating the value that business then exploits, and without that, we’re going to see things fall in a heap.
Well worth a read so we can all start to take off our neo-liberal ideological goggles.
I don’t want to see the final season of Game of Mates, I’ve heard the entire thing falls flat.
Cameron Murray and Professor Paul Frijters set out to expose the inner workings of the Australian economy in Game of Mates. Through a series of case studies, they outline how a few (the Jameses) take from the many (the Bruces) by blurring the line between business and the regulators. Then, knowing that their readers will be suitably gobsmacked and annoyed, call for the masses (Bruces) to make a change.
As with any book about real-life grifting in the halls of power, this book made me annoyed and disillusioned. There is nothing more galling than to have someone show you how the grift is endemic and then realise you kinda knew. We kinda all know. There is no surprise here. And that means there is no “justice”. Cue scene of me staring out the window as rain drips down it.
Murray and Frijters conclude with some ways to stop the grift:
1) Reclaim the value of grey gifts for the public.
Essentially, when the grifters rig the system they gift themselves advantage/money/power. We have to tear that down. One example was Public-Private Partnerships on infrastructure developments, which essentially end up being a gift of public assets to private businesses with a guaranteed profit underwritten by the public.
2) Disrupt (James’) the grifters’ coordination.
This is fairly obvious, stop the revolving door between public and private interests, put in oversight, make sure the oversight isn’t part of the problem, etc.
3) Bust the myths (James) the grifters use.
This isn’t just about addressing the claims cherry-picked “experts” will make, such as promoting projects that aren’t needed (examples are given, there are plenty). This is also about reclaiming the narrative from these grifters. In Australia, this is particularly difficult as many of the media outlets are either owned or have close links to the same people grifting.
4) Fight back.
Disillusion can lead to apathy. That’s what keeps us on the losing end.
Speaking of the losing end, the costs of this game are:
New Housing – 70% of the gains from rezoning;
Transportation infrastructure – 68% of the investment;
Superannuation – 27% gobbled up;
Mining – 48% of the profits;
Banking – 60% more expensive for the masses;
Taxes – 23% extra taxation borne by the masses (I’ve seen a figure suggesting this is a global issue and sees the average person taxed proportionally more);
Pharmacies, medicines, and health – 10% more expensive;
Higher education – 100% more expensive…
Okay, so clearly this book hit the mark and is enlightening. Why only three stars, I hear someone say? Well, while I appreciate your question, I’m wondering what you’re doing in my house.
I think the problem I had with this book was the polemic style to it. We are told. I listed the figures above, and whilst those numbers are backed up, they are big claims that require fairly solid evidence. I felt the evidence was a bit flimsy. Not wrong, but maybe selective, or misrepresentative.
Another example was around how to stop the revolving door which amounted to banning people from getting a different job in the same industry. That’s probably not as well thought out as it needs to be.
Game of Mates is worth reading but it felt underdone.
Bullshit Jobs builds upon David Graeber’s 2013 essay titled On the Phenomenon of Bullshit Jobs. He posits that many of us are working in jobs that we know don’t need to be done, that we could stop doing them and no one would notice. And he suggests that these jobs are bad for us as individuals and society. If you’re nodding at this point, my condolences.
When David’s essay was released in 2013 it was something of a viral hit. It resonated with people.* For evidence supporting his proposed phenomenon, you need look no further than that response. Since then, some studies and a lot of discussions have taken place, which led David to more fully explain his ideas and evidence them with this book. He tries to distinguish between bullshit jobs, shit jobs, and bad jobs, and why they come about.
It is this discussion of the larger system that brings about bullshit jobs that is the most interesting aspect of the book. While the idea of bullshit jobs is still hazy – the definition is subjective when all said and done – the changes to our society, economy, and personhood are well documented and discussed. The combination of this discussion with the theory lends weight to another idea presented within: that the role of jobs in society needs to change.
Currently, we place a large amount of prestige and identity on what we do for work.** Our exchange of labour for money is how we afford to live and often how we understand our contribution to society. But is that all we have to offer? Will we be remembered by our job titles? Does that mean that unpaid work doesn’t have value, either in the identity or contribution sense? The answer to these questions is clearly no, making this discussion a highlight of the book.
* Nope, I’m not going to comment one way or the other about it resonating with me. That would give away how I feel about my day job slowly killing me.
** One of the first questions you will be asked is, ‘What do you do for a living?’
Update: this review at Current Affairs is also worth a read.
Update Sept 2020: David Graeber has passed. It is sad to hear that someone who got dirt under their nails as well as brought intellectual depth to their work is gone. Rest in Power!
“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”*
Richard Denniss’ Curing Affluenza seeks to define the problems our current consumerist society has and how to address it. He posits that we need to abandon consumerism and opt instead for materialism if we have any chance of changing the shape of our economy, which will, in turn, allow us to address issues like climate change and environmental degradation.
For many years now I’ve been a fan of Richard and The Australia Institute’s work. He and they manage to talk economics without making it feel like you’ve been hit with a brick made of buzzwords.** As such, this book has been on my TBR pile since its release. It has not disappointed.
Richard makes his arguments simply and clearly, in a way that make sense. Even if you disagree with him politically, you would have to agree with his points about economics and politics being about choosing a shape for the economy – the shape being what we choose to spend money on and value. You may argue that we need more spending on tanks and less on healthcare, which has a different shape than an economy where I want fewer tanks and more healthcare. This also applies to our purchases; so if I’m buying tickets to see bands play live rather than upgrading my phone every 6 months, the economy changes shape.
On the Affluenza front, Richard suggests 7 principles for tackling it:
1) First, do no harm.
Think of this as consumer boycotts and active decisions about consumer/lifestyle choices.
2) Some change is better than no change.
Baby steps. It isn’t possible to stick 100% to #1, and larger changes may take longer.
3) It’s not about sacrifice and denial; it’s about saving money and having a better life.
We’re trying to change the shape of the economy, not become monks.
4) Services are good for you.
New status symbol phone or see a live music act? Stuff doesn’t make you happy but experiences do, and they help change the economy’s shape.
5) When you are full, stop consuming.
Because there is such a thing as too many books… Wait, what?
6) Get yourself and your country into better shape.
Our saving and spending, especially when organised with others, can reshape the economy.
7) Flatter is fairer.
Equality of resources and opportunity for all. I.e. redistribution.
Whilst this was a very good book, I did have two problems with it. The first issue was that the middle chapters labour the point, so much so that it felt like needless padding. This was frustrating because as someone who has read various articles and essays from Richard before, I know he can be very concise. It also didn’t help that I was already familiar with what he was trying to argue and the examples used. Though, this may be from that familiarity, so others may appreciate these chapters more.
The second issue was that Richard was largely dismissive of options that didn’t involve capitalism. There was a big assumption that we still need/want capitalism and thus should be reforming/tinkering with it. This assumption was never examined nor justified adequately. It would have been nice to see some discussion addressing those other options, especially in a pros and cons manner.***
* Quote is obviously from Fight Club and not this book. I’m almost certain that Richard is not advocating young men beat each other up and try to destroy capitalism.
** Richard appropriately calls the indecipherable economics talk Econobabble.
*** Richard responded to this point on Twitter. He felt it was outside of the scope of the book and would have muddied the message. I think that is a fair point.
You have to live within your means unless you are a bank, then you get someone else to pick up the tab.
Austerity: The History of a Dangerous Idea is pretty much as the title implies. Mark Blyth lays out the history of austerity economics, the arguments for its use, and then counters those arguments. Job done: let’s have cake.
In general, the deployment of austerity as economic policy has been as effective in bringing us peace, prosperity, and crucially, a sustained reduction of debt, as the Mongol Golden Horde was in furthering the development of Olympic dressage.
I first became aware of Mark Blyth as one of a handful of experts who were explaining the European sovereign debt crisis and why countries like Greece were mad at the austerity measures. He and others were the only ones who managed to accurately cut through the econobabble and victim-blaming. Before then, various people involved in causing the Global Financial Crisis seemed intent on pointing fingers at out-of-control government spending, or nation-states who were riddled with debt and no major industry. This was, of course, a distraction.
As an Aussie, I clearly remember during the Global Financial Crisis our treasurer dusting off his copy of Keynes and stopping us from being on the list of victims of the banks. As much as I quibble with some of the details of that economic stimulus, it worked. So it has puzzled me why so many financial experts seem to want to beat the economy to death in order to save it.
This book offered the explanation. It was eye-opening and expanded upon tackling the concept of austerity for sovereign nations who were forcibly saddled with the debt of multinational banks. For such a highly supported and enacted policy you would have thought there would be some very solid economics underpinning it… Yeah, not so much. As Mark outlines, pretty much every case of its use is purely ideologically driven and has rarely worked. In fact, quite often it has been a disaster.
Well worth a read. Or you could just watch a 5-minute version of the book:
The first rule of MarketWorld is you do not criticise MarketWorld.
Winners Take All is a critique of the modern market-driven and capitalistic thinking that dominates the social and political landscape. Giridharadas focuses upon philanthropy in particular, as the more moralistic and benign problem of MarketWorld that is often used to whitewash the more obviously bad actions of those solely interested in the accumulation of wealth and power to the detriment of others.
This was a very interesting read and particularly insightful.* Throughout the book, Giridharadas is able to show us how MarketWorld created itself and now perpetuates and grows itself. And it doesn’t back away from being critical of people who think of themselves as doing good (and in a sense are) and of the system that allows this to happen.
Two topics in the book particularly resonated with me. The first was the idea of the immoral or amoral approach that is used to making money, which is then used for philanthropy later. This money is often made by exploiting people and the commons ruthlessly, and then is whitewashed of guilt by “giving back”, rather than, you know, not exploiting people/commons in the first place and thus negating the need for giving. I’ve previously come across this idea from a few philosophers and people like Alain de Botton who have discussed this on moral grounds.
The second topic was that of the Thought Leader. I’ve long been troubled by the happy-clappy approach to ideas and intellectual thinking we see in popular culture. Whether it be TED talks or deceptive pop-science authors like Malcolm Gladwell, there is a tendency in this field to be anti-intellectual or present a facile understanding of an issue/topic. So I especially enjoyed seeing the Thought Leader taken down a peg or two and the winning formula exposed.
Thought Leader 3-Step:
1) Focus on the victim, not the perpetrator.
In this way, you can avoid dealing with larger systemic issues and instead make smaller changes that have more direct and emotional appeal. Think, telling women to not dress too sexily so they won’t get raped** instead of addressing the issue of rape and rapists.
2) Personalise the political.
Or to put it another way, don’t be a critic pointing out systemic and collective issues, but instead make it about personal and individual dramas.
3) Be constructively actionable.
This is about having some nice and easy steps that people can do to make a difference. Remember to keep it at a personal level!***
This book wasn’t without fault. I’m not a particular fan of the narrative/literary journalism style employed. You commonly see this style in the pretentious long-form essays and “important” journalistic pieces. What it tends to do is obscure hard facts in the narrative and steer away from addressing points fully. This might make for a more “human” piece of writing that many would call more engaging and interesting, but it weakens just about any point and argument made.
I highly recommend this book.
Thanking our sponsors:
*The reason for the insightfulness is obvious if you are familiar with Giridharadas or read the Acknowledgements section. This is his playground. He is the son of a director of the McKinsey Institute consulting firm (they come in for a lot of flak in the book), worked there himself, he’s a Harvard alum, has given TED Talks (thought leader), and was a Henry Crown fellow of the Aspen Institute.
**And ironically, this is a great example of why this sort of focus just doesn’t work. It is a myth that clothing has anything to do with rape, but addressing rape and rapists would require a systemic change that makes many uncomfortable.
***This is why we see IPCC and other climate change reports making recommendations like installing solar panels, installing led lighting, and buying an electric car, rather than demanding a move away from fossil fuel usage at a society level.
Recently I was reading an article in Aeon Magazine about the challenges faced by the medicine industry – commonly referred to as Big Pharma or Big Pharma written in one of those fonts with blood dripping from it and a syringe being stabbed into a baby. One of the big changes in medicine development discussed was the patent period that allowed monopolies on new drugs, which in turn saw orphan drugs – not drugs for Oliver “please sir, can I have some more” Twist, but drugs for rarer conditions and illnesses – become more popular/profitable to develop.
It’s an interesting issue and the article is worth reading. But it got me to thinking about something a little tangential. No, not whether Oliver Twist needs a remake set in south-east Asian sweatshops. I wondered how much money is actually spent on things.
Take for example this:
Drug development appears to take a backseat to marketing. But this depends on what section of the market, how big the company is, and other factors. Clearly, medicine development is still a big expense, but how much is spent on research and development overall?
That global pharmaceutical research spending is quite large at $165 billion. Or is it?
Suddenly the amount spent on medicine research and development seems rather small. The USA government alone could easily cover the expense of medicine research if it decided to change priorities, since it spends 3.7 times that much on defence.*
Would it be a good idea for governments to have a Department of Pharmaceuticals that researched, developed, and sold medicines? Would that be money better spent than stockpiling tanks in a desert? Certainly, it would address several of the issues raised in the Aeon Magazine article around how the profitability of drugs, rather than the consumer needs, drives research and development.
This sort of thinking could be applied to many industries. The reality is that there isn’t actually a shortage of money but a lack of incentive to invest money in some areas in favour of others. The solution doesn’t have to be the government taking over, nor does it have to be about private companies not being profitable. But maybe it does have to be about rethinking what we spend money on.
Richard Denniss made similar arguments in his Quarterly Essay Dead Right about the Australian economy.
So maybe it is time to stop accepting the argument “we can’t afford X” and start having the discussion about how we spend for the most good. Or not, I’m not your boss.
*To be clear, I’m not suggesting we stop all spending on something like defense, or that there aren’t reasons for spending money on things like tanks. But as Richard’s video suggests, we are making value judgments and assumptions without really questioning them.
If you get to the point does that make you bourgeoisie?
Karl Marx’s classic text is a historical, economic, sociological, and philosophical work. Marx tries to show the ways in which workers are exploited by the capitalist mode of production and argues that the capitalist system is ultimately unstable because it cannot endlessly sustain profits. And this takes 1,100 pages to say.
Since it has become popular to call anyone left of a third-generation venture capitalist with their cash in the Caymans and their Nazi gold in a Swiss vault, I thought it was time to read some Marx. That way when people call someone a Post-Modern Marxist Communist I’ll have some idea of how little they know what any of those words mean.
I was actually surprised by this book since it was completely different from what I had expected. The sort of book I had been expecting was a philosophical or ethics text, instead, this is much more a history and economics book. The historical notes documented in Das Kapital are worth reading alone. They act as a reminder of what working/slavery conditions were deemed acceptable, and how similar the arguments from then are to the defences of sweatshops in poorer nations today.
But this book takes the long way round to make its points. If it had instead made its arguments and then offered up one example, then some appendixes, I’d have “enjoyed” this more. Too often it gets bogged down in labouring* the point rather than documenting history or encouraging you to join a union. Worth reading, but be prepared for a lot of waffle.
I’m looking forward to 2015. With each New Year there is a chance to change ourselves and the world around us, to make it better, to lay plans to bring about a better Australia. It is always best to make these plans at the beginning of the year, not at any other times throughout the year, because the earlier we make the plans, the easier it will be to forget them when it comes time to follow through.
This year I plan to make a few small changes, and if others follow my lead, we may have a better country by 2016.
Join a gym.
Last year I tried to lose weight using the Paleo Diet, which was based on the diet that someone who failed history and biology thought our ancestors ate. This year I’m going to join a gym for the year and then stop attending sometime in the second week of January. Regular gym members appreciate it if New Year’s Resolutioners leave before the end of January so that they have forty-eight to fifty weeks of the year they can work out unhindered. Gyms appreciate the extra memberships to keep their business running without having to invest in more equipment and space.
Do something about climate change.
I know I’ve been putting this one off since the 1980s, but this year for sure. Look, I know that coal is good for humanity and that climate change is crap, but I have all of these scientist friends who work for all of these science organisations who have been pestering me. I think at this stage it would be easier to stop using fossil fuels just to shut these experts up.
Stop reading the fantasy fiction genre. There has been a lot of fantasy fiction released this past year. Regular series were back again with tales from Fox News, The Australian, in fact just about everything published by News Corporation. Until these fantasy authors start producing more realistic stories, such as Matthew Reilly’s story about a zoo filled with dragons, then I will have to stop reading them.
End my expectation of entitlement and join team Australia.
Australians have been far too entitled for far too long. Living in a first world economy that survived the 2008 Global Financial Crisis relatively unscathed has made us complacent. We have to stop expecting welfare, job security, privacy, and a fair go, unless we are rich, white, coal miners.
Start saving for my kids’ education.
Part of being entitled was the idea that we could expect an education that would give Aussies a good start at the fair go. Now it is up to me to make sure that my kids can afford an education. Our leaders know that it isn’t realistic for Aussies to expect a free education like they had, it is much more realistic to saddle young Australians with huge education debts, or have rich parents. Not being rich I’ll have to save money now for my kids’ education, they’ll just have to do without clothes, shoes and food in the meantime.
Write more letters of support for politicians. Our nation’s elected leaders had a tough time in 2014 with experts from science, economics and ethics disagreeing with their policies and statements. Whether it be scientists pointing out that climate change was real, economists disagreeing with the budget measures and pointing out that the carbon tax was working, or the Human Rights Commission condemning the asylum seeker policies, it is clear that our politicians need more support for their uninformed policies. So I will be writing letters of support in 2015 encouraging them to stay the course, no matter how many uppity experts, with their facts and logic, disagree with them.