and a related new column by Jan Sampiemon
Outsize controversies attending two much awaited top political meetings held this week – the G20 and NATO – should awaken the world to the fact that the various crises confronting us can also be seen as being linked to a huge conceptual crisis. Being discussed are the two areas of activity that will probably more than anything else decide the medium-term future of the world: the collapse of part of the global financial system and American foreign policy. The latter has been made almost invisible in the news by the former, but continues to be a weighty factor. The shallowness of the talk reaching us from these meetings should worry us. Lack of political will is of course one reason for it, but another one, directly related to that, is the huge conceptual crisis.
Conceptual crises may follow from intellectual sloppiness, a dearth of imagination and other symptoms of idle brains. But I think more important in this case is a loss of knowledge that cripples otherwise very active brains. The loss of knowledge in the past few decades has been horrendous. A loss caused partly through illusions created by the forceful propagation of false stories. We must not forget that false stories crowd out true stories – or those more closely approximating the truth – from the front and opinion pages of newspapers (which, for all their decline and diminishing importance, still direct the non-frivolous fare on TV and the Web).
There are many ways in which false stories are amplified and come to us from different directions. Big false stories, the ones that protect many smaller ones against critical examination, tend to have a long life and crucially influence the way in which people live their lives on large patches of territory, spanning many countries, of our globe. Those big false stories are usually rooted in older stories that may have been partially true. And so it is with the two main false stories that I think have more than any other influenced the life on our planet for the past 20 years or so – the period we could call the post-Cold War era. One of them is composed of the ideas that have collectively been labelled ‘neoliberalism’, and the other one – the term ‘realist theory’ covers much of it – consists of a set of ideas around the notion that we basically cannot trust other countries. Both false stories have been forceful not because of their intellectual attractiveness or emotional appeal, but because their proponents have not emphatically enough been told to shut up. I am back here at the theme of the first of my jottings.
That most monumental fount of false stories, neoliberalism – less charitably known as market fundamentalism – has recently been exposed by irate voices reacting to the suffering caused by foreclosures, loss of business and pensions, and global economic uncertainty. That does not mean that it has stopped spouting. From what I hear, professors continue to propagate the same sets of apolitical and ahistorical neoclassical assumptions in economics courses and business schools, which have allowed neoliberalism to flourish. To be sure, sub-theories and sub-sub-theories vary a great deal and scholars and policy makers use them as weapons to fight each other, but for convenience sake, and because it is mostly true, we may identify the monumental fount of false stories as ‘mainstream economics’ with its Rational Expectations component, intellectually linked to neoliberalism, as the staple for almost all economics courses at almost all universities around the world.
Neoliberalism could be sold to large numbers of people because they were seduced by the notion that we lived under circumstances of TINA (There Is No Alternative), as Mrs. Thatcher had most famously put it. People with lots of money in the United States and Europe liked that story about there being no other way to organize economies. It meant that their money was relatively safe, that inflation was not going to reduce its volume, and that optimum circumstances were being created for using their money to make a lot more money, from investments in poor countries with guaranteed high returns to the derivatives that are now the object of scorn. And people with lots of money can have a lot of influence over the manner in which people without lots of money are informed about the supposed realities of our world.
At the same time, in the attempt to turn something that could never be a science like physics into a science claiming exactitude, mainstream economics became more and more ideological, and served the class of money-makers marvellously as an ideology.
Ideology is horse medicine against doubt. It serves the general longing for certainty. It is a substitute for and closely related to religion, as many have observed. This is why it is so powerful and tenacious. One thing it does is to elbow knowledge out of the way; the kind of knowledge that may be gnawing away in the back of your brain creating uncomfortable doubt.
The ideology of mainstream economics has caused knowledge loss by pushing out of the way all manner of approaches used earlier to make sense of real-life political economies. It has been purposely ahistorical and very impatient with the notion that economic relations and transactions are always embedded in a political setting. The damage this does to productive conceptual thought is illustrated continually by the predictably wrong assumptions about Japanese economic affairs. There has never been sufficient attention among supposed experts for the possibility that in Japan, South Korea and, yes, China, economies have been managed in quite an alternative way and with rather different incentive structures when compared to the system for which, according to Mrs. Thatcher, there could not be an alternative.
A fateful development was the cancelling of the history of economics courses at most universities. The recent interest in what John Maynard Keynes had to say, while being a laudable development, is not soon going to repair the deficiency that most of the entourage of rich countries at the G20 can be counted on to be suffering from. The officials of the IMF, which appears now to be subcontracted by the G20 to oversee the hesitant first attempts to arrive at a new economic world order, are steeped in the orthodoxy that has misled them again and again. Great riches of institutionalist economic thought, which benefited their predecesssors working for Franklin D. Roosevelt, are closed to them. Here is one window to that.
When optimist commentators count on American policy makers not to allow ideology to get in the way of pragmatic solutions, they ought to see how orthodoxy has for decades been in the way of storing huge amounts of knowledge now necessary to deal with their situation.
NATO continues to exist because of a shared transatlantic blockage of responsible political thought. This part of the conceptual crisis is a result of habit, cowardice and great industrial interests. After the collapse of the Soviet Union, which gave it its reason for being, it might have had a further reason for being if proposals for incorporation of the former Warsaw Pact countries had been heeded and it could have been turned into a collective security organization.
It is, today, a liability. For Europe, as it stands in the way of a highly necessary redesigning of European policy toward Russia, and as a barrier to European diplomatic and strategic independence. For the United States, as it helps encourage American belligerency through its moral support and as a reservoir of auxiliary troops for American military purposes. To the extent that it has required an intellectual defense, this is derived from so-called ‘realist’ theory of international relations, which was developed during the Cold War, and was inspired by a world of feuding states in earlier centuries; a world that no longer exists. ‘Realist’ theory has gained ideological strength. Its threat to clear thought is that it is based on the supposition that all countries have enemies, and that they must forever be engaged in a grand balancing exercise.
Ideological tenacity of ‘realist’ theory derives from the very sad fact that for domestic political reasons the United States needs to have an enemy, as I have analysed on an earlier occcasion. After the demise of communist Eastern Europe, a newly invented category of ‘rogue states’ had to make do, but this was not so convincing. The Grand Enemy fantasy gained new staying power with the ‘global war on terrorism’ justified by the September 11 attacks. The ‘war on terrorism’ became the umbrella lie under which a proliferation of political deceit florished, and it deserves a jotting of its own (and more that I am working on).
President Obama appears to have dropped the ‘war on terrorism’ terminology, which must be applauded. But it raises the immediate question: Why are you still in Iraq, building permanent bases and a citadel city within Baghdad? And why are you expanding your military presence in Afghanistan? The American public still thinks that by being in Iraq and Afghanistan their soldiers and mercenaries are keeping terrorists down, a delusion without which Obama could probably not continue the militarist policies of his predecesssor. It has only brought further disaster to that devastated country, as Jan Sampiemon reminds us in his latest column.
As for the Europeans, they are asked to believe that their security is served by NATO efforts behind the Hindu Kush. They cannot possibly believe this, but along with other factors it helps keep the European political class infantile. If that is not the mark of a conceptual crisis, what might it be instead?