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April 30, 2017

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Theories of Relativity
From The New Criterion June 30, 2013.
Paul Krugman, Hammer of "Austerity"

Perhaps it is one of the less obvious consequences of the credentialism which is the bane of our era that even quite ordinary people seem to have been persuaded that, in order to be taken seriously, they must think and talk and write like intellectuals. Every self-respecting media commentator, for example, now approaches the news as the Doctor in Alban Bergís opera Wozzeck does the symptoms of his eponymous patient: as redundant confirmation of his pre-conceived diagnosis. "Oh! meine Theorie!" he cries triumphantly. Nor, in the present case, is it just the media punditís own intellectual vanity to which we owe his theory. Those he writes for expect it of him. Along with the news, they want some explanation of why things happen and what they mean at the same time. And, as such theories tend to fall into one of two broad classifications more or less corresponding to conservative and progressive political tendencies, all this theorizing tends to increase the already-existing tendency for the media to fragment along partisan lines.

That, in itself, might not be so bad, but the increasing moralization of partisanship over the past half-century or so has made its own baneful contribution to the process. That is, the belief on both sides that the political struggle is not just between different political philosophies or visions of the good society but between right and wrong or even good and evil has meant that the rival theories and their theorists are (to say the least) often a little lacking in rigor. And whatever weaknesses may appear in their theories ó particularly the theories about the theories that they attribute to those who are in opposition to their own theories ó are not always quick to be noticed by those who are pre-disposed to believe in them.

That, at any rate, is one theory about how it is that theory these days is so often unpersuasive and so often outruns the facts ó as in the briefly notorious post by David Sirota on Salon.com in the wake of the Boston Marathon bombing in April: "Letís hope the Boston Marathon bomber is a white American," he wrote, bizarrely. Well, while weíre wishing, why not just wish the bombing never happened? The idea is no more absurd. Thereís not much to be said in defense of such an idiotic conceit, but one thing that might be is that Mr Sirotaís real purpose was not so much to put forward a half-baked theory of his own ó though heís pretty sure something must be linking all the white male loners who murder randomly in schools, colleges or movie houses, even if heís not entirely sure what it is ó as it was to deprecate at least some of the half-baked theories that would have been treated by their holders as having been confirmed should the bombers turn out to be ó as in fact we learned they were, sort of ó Islamicist jihadis.

I say "sort of" because the story of the Chechen Tsarnaev brothers, in the opinion of the FBI, "doesnít fit with the pattern of radicalization" familiar from earlier terrorist outrages. What does this mean? How can we make their evil deed fit in with a larger idea about why things happen? The most persuasive theory that I read was that of Peter Watson, author of The Age of Nothing: How We Have Sought to Live Since the Death of God, in The Times of London who called the brothers "Nike terrorists" ó that is, terrorists who "Just Do It" without any serious religious or ideological foundation of belief but simply as a "lifestyle choice." The trouble with that theory is that itís not terribly useful qua theory. Lifestyle choice terrorists, unlike the Islamic jihadis, can presumably pop up anywhere at any time and for any reason ó not only without leaving a trail to help the police catch them and forestall their atrocities but also without giving very much in the way of satisfaction or sense of vindication to either side of the political divide with a theory waiting to be confirmed.

I have a suspicion that this will prove true of most theories: that is, that the most accurate of them will also be the least valuable to those in the media ó which sometimes seems to mean almost everybody in the media ó whose chief interest is in scoring political points against those who disagree with them. But there I go, pushing my own hypothesis. "Oh! meine Theorie!" cries the doctor. "I shall be immortal!" For the worst thing about all this promiscuous theorizing is that you canít escape it. Even if you try resolutely to refuse proposing any theory of your own, you are likely to have one imposed on you by the theorists of the other side, eager to refute it and the more likely to do so in that they have invented the thing themselves for that very purpose. My view is that that style of argument ó making a straw man to take the place of those you dislike only to knock it down ó is more common on the left against the right, but thatís only my theory, if not an unsupported one.

Letís consider a couple of examples. I have written here and here about the supposed theory of "trickle-down economics" in this connection ó a theory invented by its detractors in the bizarre form of an attribution to those they donít like of a belief in gravity. In the theory world, perhaps, things may trickle up, but in any case the "trickle-down" theory has no avowed adherents but only those who are skeptical of the benefits of government intervention in the economy who are unfortunate enough to have had this belief in economic gravity attributed to them by their political opponents. Those standing far downstream from the money-source with their mouths open, waiting for it to reach them, are understandably disposed to believe the assurances of those who regard the trickle as insufficient or even non-existent and who promise them a place further up. Unless they can come up with a better offer, those who doubt the governmentís ability either to create or to redistribute wealth would do better to renounce trickle-downism pre-emptively.

The latest such straw man theory is that of "austerity," which has taken a hell of a beating in the press since I wrote of it here a few months ago (see "Herb Steinís Law" in The New Criterion of January, 2013). On that occasion, I mentioned the work of the economists Carmen Reinhart and Kenneth Rogoff of Harvard, who never set out to champion an economic elixir called "austerity" but merely to provide some specifics for the common sense proposition that the more the government has to pay to its bond-holders the less money will be available in the economy as a whole for the sort of productive investments necessary for economic growth. But when some other economists from the University of Massachusetts at Amherst found an error in the Reinhart-Rogoff arithmetic ó whether this error was material in arriving at the magic number of 90 per cent of GDP as the point at which the debt level makes the economy go all wobbly is still a matter of dispute ó the discovery won them far more attention than their original paper did. Suddenly, at the very moment when their theory was widely proclaimed to have been discredited along with all those of a conservative persuasion who had ever cited them (as I did) in arguing for even a quite modest degree of fiscal restraint, Reinhart-Rogoff found that they had become the "theorists of austerity."

The anti-austerians were quick to press their advantage. Jíaccuse! they cried. "So, did an Excel coding error destroy the economies of the Western world?" asked Nobel Prize winning economist Paul Krugman in The New York Times. Er no, Paul. Not even close. But it would be typical of the economistís hubris to suppose that such a thing could happen. "Austerity doctrine is exposed as flimflam," claimed Katrina vanden Heuvel in The Washington Post ó though she was far from the first to dignify austerity as a "doctrine." Similarly: "How much unemployment did Reinhart and Rogoff's arithmetic mistake cause?" screamed the headline in The Guardian to an article by Dean Baker of the Center for Economic and Policy Research. Also, presumably, when did they stop beating their respective spouses. "This is a big deal, wrote Mr Baker, begging the same question, "because politicians around the world have used this finding from R&R to justify austerity measures that have slowed growth and raised unemployment." Therefore, presumably, and not only in his view, the alleged theory of austerity had no leg left to stand on. What another Guardian writerís headline referred to as "all this economic sadomasochism" imposed by Britainís Liberal-Conservative coalition government over the past three years could be safely junked in favor of yet more debt-financed stimulus.

The European experience was often cited by American critics of austerity like Professor Krugman, who never seems to tire of making post hoc ergo propter hoc arguments attributing the dire condition of (especially) the southern European economies of Greece, Spain and Italy to the austerity medicine which has been administered to them in the hope of curing it. Even in Britain, the much derided austerity measures of the Conservative Chancellor of the Exchequer, George Osborne, will have increased the debt by 75 per cent over that inherited from the profligate Labour government of the Blair-Brown era, which increased the size of government in Britain by 53 per cent. Meanwhile, real cuts (assuming they happen) will by 2017 amount to only 2.7 per cent of that much larger behemoth. This is what the media consider sadomasochistic austerity.

Thatís one measure of the extent to which "austerity," like "trickle-down," has became something that nobody wants to be associated with ó not even Ms Reinhart and Mr Rogoff, who published a piece in The New York Times disavowing any connection between their theory and the conservative proponents of austerity who had been wont to make use of it (as I did) to bolster their warnings about unsustainable levels of debt.

The politically charged discussion (they wrote), especially sharp in the past week or so, has falsely equated our finding of a negative association between debt and growth with an unambiguous call for austerity. We agree that growth is an elusive goal at times of high debt. We know that cutting spending and raising taxes is tough in a slow-growth economy with persistent unemployment. Austerity seldom works without structural reforms ó for example, changes in taxes, regulations and labor market policies ó and if poorly designed, can disproportionately hit the poor and middle class. Our consistent advice has been to avoid withdrawing fiscal stimulus too quickly, a position identical to that of most mainstream economists.

Austerity? Good heavens, no! I tell you, I do not know the man. Yet one may seek in vain for the man or woman whose call for austerity is unambiguous and who does advocate a too-quick withdrawal of stimulus. The latest plan by Representative Paul Ryan ó the avatar of austerity to Professor Krugman and the only named conservative from whom the on-line appendix to the Reinhart-Rogoff op ed sought to dissociate their own theory ó calls for a balanced budget in ten years and envisages in the mean time a growth in spending of 3.4 per cent a year. The Ryan "Path to Prosperity" proposes spending $41 trillion in ten years as compared to the $46 trillion proposed by President Obama. Call that frugal if you like, but itís hard to make the case for it as "austere."

Of course that didnít stop the mediaís increasingly vocal anti-austerity tendency from attributing to their imaginary enemy a desire drastically to cut or even abolish government spending. Mark Blyth, author of Austerity: The History of a Dangerous Idea, thought he could safely transition from "Dangerous Idea" to "Delusion" in an article for Foreign Affairs where a savage attack on his straw man was assisted by a survey of the last centuryís economic history in which every bad decision made by governments during that time ó and what a lot of them there were! ó was attributed to "austerity." That, we are to suppose, is the same "doctrine" (as its opponents call it) guiding Representative Ryan. Reviewing Professor Blythís book in The New Republic Ruy Teixeira raised the stakes by calling austerity not just a dangerous but "a pernicious idea." And little wonder, too, when he also has before him The Body Economic: Why Austerity Kills by David Stuckler and Sanjay Basu.

But is austerity an "idea" at all, in the sense that these writers mean it ó let alone a "doctrine"? Being in the business of economic magic themselves, these writers imagine that those they oppose must be in the same line. They have their "doctrines" and "ideas" aplenty, all of them promising to make everyone prosperous and happy, so that those who are perverse enough to oppose them must have corresponding "ideas" and "doctrines" designed to make everyone poor and miserable. But austerity, like war, is not a pernicious idea. It is a pernicious necessity. And, also like war, it affords us only the option of embarking on it now or later. Usually, in both cases, now is better than later. There is a considerable overlap, too, between the anti-austerity faction of today and the anti-war faction of a decade ago. That may be why the tendency of their arguments is so often similar. Both, that is, engage in the straw man technique noted above. I have here to hand the latest mailing from the libertarian Cato Institute, for whose work I generally have a lot of respect. Yet in it, the president and chief executive officer, John A. Allison, tells me that "many on the Right accept the neoconservative definition of American Exceptionalism which seems to amount to praising our ability to defeat any nation of our choosing (and they seem to have a long list) on the field of battle."

Really? Who are these many on the Right? Who, indeed, are these neoconservatives whose extraordinary ideas are accepted by them? Can he name even one? But if you are trying to raise money, as Mr Allison is, the media myths of the Iraq War era, in which a bunch of crazy neoconservatives waged a "war of choice" in the Middle East for no better reason than that they could are apparently long-lived enough still to serve his cause. Cato has a better plan, you see. Donít go to war. Genius! Itís just like the Krugman plan for the economy: spend lots more borrowed money and generate all the growth youíll ever need to pay it back some day in the future. Whatís not to like? You would have to be the sort of fool or knave he imagines the "austerity" party to be to oppose him.

The more important similarity between the anti-war and anti-austerity partisans lies in their common tendency to make a false dichotomy between the status quo and, if not perfection, at least an ideal state approaching it, and aligning themselves with the latter. Thus they talk of the policies of their opponents as not "working" ó as if those policies, like their own, were part of a utopian project to make the whole world comme il faut and not merely the best option available to them to forestall a disaster of one sort or another. "Look here," they cry, bringing their newest Theorie into the marketplace of ideas. "We have designed a system which will create peace and prosperity for everyone, and what have our opponents to offer in its stead? A system which instead promises war and penury only short of destitution in the short term and no promises for the wonderful world beyond that which we have in store. You would have to be insane" ó another word that could be found popping up from time to time in connection with the austerity debate, as it did with the war debate before it ó "to choose their system over ours."

"But, but. . .," we default austerians may stammer, "we have no system. Not even austerity, such as it is, is a system but rather what we consider to be the best of a very bad lot of alternatives with no promise of anything but avoiding ruin, or something approaching it. Moreover, we are skeptical of the capacity of any system to produce the ideal world promised by the theories of the utopians on the other side. Neither peace nor prosperity can come from a theory or a system but only from people working in their own self-interest either to produce more, in the one case, or to make others afraid of them, and so unwilling to go to war against them, in the other. The arguments, in other words, are not on all fours with one another. But the view of the media, in need of simplicity and not too scrupulous about where they find it, tends to be that both sides must be proposing a path to happiness and that, therefore, if the one path does not lead to happiness, and in double quick time, then itís time to try the other one. Thatís my theory, anyway, and Iím sticking to it.




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