Policy wonks, pitchforks, and the contradictions of capitalism
Yves Smith has asked, not entirely gently, that I reconcile differences in my outrage towards health-care chicanery and what she perceives as “a clever defense of abuses by the powerful” in the sphere of finance. This post is a second response; the first is here. In a nutshell, Smith wonders, why so much outrage for rapacious hospitals when I give a pass to rapacious banks?
The premise of the question is mistaken. I’ve been writing interfluidity for about seven years, and precisely one post has been specifically devoted to health care. Mostly I’ve blogged about finance. Many, many of my posts about finance express outrage toward self-dealing and rapacity in finance, including both private sector banks and their public sector enablers. I’ve not been as prodigious or relentless a critic as Smith. No one on the planet has, and I mean that as a completely unalloyed compliment. But I can’t cop to the crime of giving finance a pass, and I don’t think any fair reader of this blog could characterize me as doing so. I hope that readers who wish to play judge and jury will read the posts that angered Smith, and check out many other posts as well. If you think my posts on opacity somehow mark a change in my politics or my views on finance, you are wrong.
But there is a different sort of inconsistency that I think Smith has correctly honed in on by juxtaposing the health care and the opacity pieces. Let’s consider the health care paragraph she excerpted:
As soon as you delve into the policy wonkery in cases like this, you are submitting to a conspiracy by the powerful against the many. The greater the sphere of disagreeable things that are “complicated”, the more it is possible to construct intricate and inscrutable bureaucracies to “arbitrate”. There will be think-tanks and policy papers, funded by people who are well-meaning (in a narrow, idiotically un-self-aware way) but very rich and powerful. The conclusions of which will be earnest and carefully researched but confined to a window not very upsetting to the very rich and powerful. Undoing the ability of plutocrat hospital “CEOs”, or bankers or lobbyists or whatever, to continue the sort of ass-rape to which their lifestyles have grown accustomed will not be on the table. A good society depends on an active public, first and foremost. A society that has allowed the predations of the powerful to become purely private matters mediated via “markets”, courts, academies, and bureaucracies, that has delegated “activism” to a mostly protected professional class, is nothing more than a herd hoping that today it is somebody else who will be slaughtered.
The majority of this blog could be characterized as “policy wonkery”. interfluidity is constantly, in my own words, “submitting to a conspiracy by the powerful against the many” by speaking the language of the wonk, using modes of argument and accepting norms of evidence set by “academies and bureaucrats” who are, per my own analysis, ultimately bought and paid-for. [*] The opacity thesis is, from a moralist’s perspective, perhaps the very worst genre of policy wonkery — the argument that suggests what normal people consider virtue is wrong for clever, counterintuitive reasons. There is an inconsistency between claiming that “[o]utrage and shame are primary” and arguing that “[s]ocieties that lack opaque, faintly fraudulent, financial systems fail to develop and prosper“.
I don’t have a good answer, except to say that the true art of politics lies in reconciling this sort of contradiction. It’s a dilemma I’ve considered at some length. A society governed by technocrats, which chooses what seems “optimal” according to some expert’s criteria without regard to morality, will not (and ought not) survive. Human beings are moral animals. Institutions cannot thrive without being supported and rationalized by a widely-shared ideology. On the other hand, simply following intuitions about morality can lead to technocratically untenable choices. A society that eschews violence might be well and good, until a neighboring tribe makes a different choice. A successful society must find an intersection, some set of institutions that are both technocratically effective and reinforced by a moral ideology. My opacity thesis claims we face a mismatch, which in the past we resolved by devaluing transparency and tolerating a degree of misbehavior in the shadows. I don’t say we should go back to that. But I do argue that it was an arrangement which, however distasteful, served important functions. My own attitude towards finance is the same outrage I bring to health care. I believe we ought to restructure finance into something we can live with morally. I oppose the technocratic impulse to sweep sinning under a rug while doubling down on ever-less-plausible “regulatory” palliations of predation.
But I think finance will prove a harder sphere to bring into line with moral ideas even than health care. “Opacity” is just the tip of the iceberg. The financial sector is where the growing social and economic contradictions of our society go to get papered over. How can we reconcile increasing polarization in wealth and income with our pretensions of being a middle-class society? We’ll invent a special purpose vehicle, stoke a bubble, make it work somehow. If, er, ownership of the means of production, including market-value-weighted labor power, is increasingly concentrated, how can we maintain demand without redistribution? We can lend, even though many of the people without purchasing power now are unlikely to earn a lot later.
We rely upon the financial sector to tell us sweet lies. We impose starkly contradictory requirements on financiers (“lend prudently!”, “support the economy!”), pay them incredible amounts of money when they somehow make it work, and are shocked, shocked that they evolve elaborate schemes to fudge things. I am not excusing anything. We gladly put drug kingpins into jail, even though we understand that high consumer demand plus aggressive criminalization makes the emergence of kingpins inevitable. While we have this cesspool, we’ll need to aggressively police it. But we won’t find our way to a “clean” financial sector until we resolve the contradictions that render dissembling essential to our social peace and economic development.
[*] On “norms of evidence”, Smith and other commenters have me dead to rights. I offered a very sweeping thesis that is internally consistent and that comports with my understanding of finance and history. That is weak evidentiary tea. I ought not to have written, in the second post of the series,
We must give the devil her due. It pissed a lot of readers off and pisses me off too, but the argument I offered in the previous post is true.I have no right or ability to adjudicate the history of the world.