Sunday, August 24, 2014

Failures of Imagination

When I saw the book Imagine: Living in a Socialist USA on the shelf of my local library, I was not sure what to make of it. Given the usual types of "non-fiction" political books acquired by the small library in the mostly upper-middle-class Maine town where I live, I thought it might even be a right-wing scare tract. "Imagine the horrors after just a few more years of Obamacare!" A quick glance at the list of contributors on the back cover assured me otherwise.

For someone who considers himself a socialist, the question to be asked in considering a book like this is, will it serve the purpose of making more people into socialists? Which is where we get to the book's first failure of imagination: that it is a book. Yes, it is published by HarperCollins, so it's a snazzy looking trade paperback with decent distribution. Decent enough to end up on the shelves of a small-town library in Maine. But how many people will pick it up off the shelves of libraries and bookstores, and check it out or buy it? (I note that only two people checked it out before me. I have a feeling I know who one of those people is.) Are books the primary way that people today engage with points of view with which they do not necessarily agree?

The next failure of imagination is embedded in the title: "Socialist USA".

This is not to say that there is not some value in imagining what a particular country might be like after capitalism. Even the fellow whose picture I put up there once wrote an essay entitled "If America Should Go Communist". It's even got something about neckties. Apparently, American workers were big into neckties eighty years ago.

But the international significance of a transformation of U.S. society is almost wholly unremarked in this new book. There are essays about seemingly every topic under the sun--as well as a poem and a science fiction story--but none focusing on warfare or the role of militarism in U.S. society. To the extent that imperialism and war make an appearance, it is only as a costly waste of resources, whose reduction might help to fund the types of social programs the more reform-minded of the authors tend to advocate. Only one author--Terry Bisson, in his science-fiction story "Thanksgiving 2077"--dares to suggest that socialism might mean a temporary decline in U.S. workers' living standards, for the betterment of the rest of the world.

"If co-op farms are so good, how come we only eat meat twice a week?" grumbled Les.

"So others around the world can eat it once a week," said Grandpa. "What kind of world would it be if half the people were skinny so the other half could get fat?"

One barely gets a sense, from the story or from the other contributions, of the kind of cultural transformation that would be needed for such a conversation to take place, especially in regard to that most American of viands, meat. Certainly neither Bisson nor any other contributor contrasts this international altruism to the nationalist protectionism of the book's most famous contributor, Michael Moore, with his usual shtick about how "our jobs are our most important national treasure".

Even from an opportunistic perspective, this narrow focus on what takes place within a given set of national boundaries is a problem: Returning to our hypothetical not-yet-convinced reader interested in socialism, that part of what puts her off about the capitalist present in the U.S. is the militarism. In my experience, there is a strong correlation between openness to the one and questioning of the other. From a principled perspective, though, it's just appalling.

So the next question we have to ask about our hypothetical reader is whether, if she decides to check it out from the library and gets a chance to open the book, will she be convinced by the contents. The problem here is that one gets the sense, reading the book, that the contributors did not read each other's essays. There are no open polemics between contrasting views, only implicit contradictions between different standpoints. Our hypothetical reader could be forgiven for surmising that the socialists are not clear on what exactly they collectively stand for.

Consider, for example, the first three contributions in "Part 2: Imagining Socialism," in which Joel Kovel, Ron Reosti and Rick Wolff each lay out their visions of how socialism, as distinct from capitalism, will function economically. The theses of Kovel's and Reosti's essays can be read in their titles: "The Future Will Be Ecosocialist, Because Without Ecosocialism, There Will Be No Future" (Kovel) and "A Democratically Run Economy Can Replace the Oligarchy" (Reosti). Wolff's "Shape of a Post-Capitalist Future" will be familiar to anyone who has heard him speak--an emphasis on workers' self-management of individual enterprises, with some mechanism for community input, albeit still on a local scale. In contrast to Wolff's localism, Kovel's vision of ecosocialism can only be conceived on a global scale--though, like the other contributors, Kovel is vague about the types of international political and economic collaboration his vision would entail. The democratic will of the hydraulic fracturing crews of North Dakota to continue fracking and burning would have to be subordinated to categorical imperative of human survival. Reosti can be read as advocating a kind of pragmatic, federalist balance between various levels of local, regional and national collaboration, though like Wolff his emphasis is on the formal mechanisms of democracy rather than a substantive direction toward which human productive activity must be transformed. Unlike Kovel, he hardly even gestures toward the global as a scale for meaningful decision-making.

That I most agree with Kovel should not surprise readers of this blog. What is disappointing, however, is the degree to which the three essays are siloed off from one another. Each addresses separate issues, all of which are important, in apparent isolation. Our hypothetical reader, if she comes in with little prior knowledge of what "socialism" is, may emerge even more confused.

This is not the only example where different essays implicitly contradicted one another, but in the interest of length it is the only one I will give. There were even some cases where individual essays sketched a vision of socialism that I found frankly repellent. Unfortunately, most of those were the ones that attempted to weld a socialist perspective with a feminist one. By which I mean to say, not that I oppose socialist-feminism--I do not--but that if the essays in this book were fully representative of that spectrum of thought, we would need a better socialist-feminism. Fortunately, they are not.

An even bigger problem than that is that "Section 3: Getting There: How to Make a Socialist America," does not live up to its billing. While some essays (Clifford D. Conner and Paul Le Blanc) give fairly orthodox Marxist accounts of how socialist revolution could come about, and one ("The Capitalist Road: From Chinese Sweatshops to Detroit's Decay" by Dianne Feeley) puts forward promising tactical ideas applicable to at least one locality--Detroit--none of the essays bridges the gap between what is happening now and what could, plausibly, take place in the hopefully-not-too-distant future. Our hypothetical reader could be forgiven for thinking that not even the socialists believe that their visions realistically could come about.

One thing that is not a weakness of this book is its attitude toward the Democratic Party. While there are contributors whom I know for a fact called for votes for Obama not only in 2008, but even more shamefully in 2012, they thankfully maintain a tactful silence about their own lesser-evilism. The contributors who reject that as a strategy do so forthrightly. So our hypothetical reader, if she were able to overlook or at least be gracious about the book's self-contradictions, could plausibly come to the conclusion that the Republicans and Democrats are both capitalist parties, and what we therefore need is a socialist party.

"And how would I join that?" she might ask.

To which I would reply, click here.

But I would be dishonest if I did not tell her before she joins that she won't be meeting the authors from this book at party functions. Either they belong to other parties and organizations, or they belong to none, preferring to maintain a regal, ivory tower autonomy, or if they do belong to the SP on paper, they aren't particularly active. And she might ask, "Why?"

Well, it's complicated. And unfortunately, the book won't give you any insight into that, either.

Friday, August 22, 2014

Accessing the Future: A Skinseller's Contribution

The folks at The Future Fire are crowdfunding an anthology of science fiction focusing on issues that come with disability, and they have asked science fiction writers and readers to participate in a blog hop. Here is my contribution:

1. Tell us about your Work In Progress (WIP) / Current Read (CR) and the world it's set in.

My Current Read is not fiction, but On SF, a collection of Tom Disch’s critical writing. One could, as a speculative exercise, read it in such a way as to answer these questions, with Tom as the protagonist set against a disappointing literary landscape in which he must wage a losing battle with his own mental demons. I never knew him personally, though, so I’m not comfortable doing that.

And I don’t have a Work In Progress: As a short fiction writer, most of my stories are written in sporadic short bursts, and then edited just as sporadically. In less than three years, I have written more than 20 stories, of which four have been published and three more purchased, awaiting publication. The rest are out in submission, and who knows if or when they will be published. I have some ideas for new stories, but none have crystallized enough to be called a Work In Progress.

So instead, I will tell you about my Next Story to Be Published (NS2BP). The story is “Thirty-Eight Observations on the Nature of the Self,” and it appears in Phantasm Japan, which is coming out from Haikasoru next month. The world it is set in is basically this one. The only difference, other than the fact that it has a town called “North Glamis, Maine” that does not appear on the State Gazetteer in this world, is that in the story-world, it is possible for a person’s true self--what is called the honne in Japanese--to take on a separate existence from that person’s constructed social front--known in Japanese as the tatemae. As you may imagine, such a bifurcation proves catastrophic for the person to whom it happens.

2. Who are the most powerful people in this world?

The most powerful people in this world are much like those in world in which we live: white, male, straight owners of capital. Yet those people do not appear within the frame of the story. In a small town, power is expressed and mediated through rumor and ostracism, reinforcing tendencies toward social, sexual and behavioral conformity.

3. Where does their power come from?

Power is not a substance that can come or go anywhere, at least not in the world of this story, insofar as it resembles the world in which we live. It is a relationship between human beings that inscribes itself in their bodies as a differentiated ensemble of situationally determined dispositions. To have power is, in part, to know how to behave as if one has power.

Where the world of my story differs from the world in which we conventionally live is that the honne, the true self, is allowed the temporary illusion of being able to exercise its power undetected, in pursuit of desire.

4. What physical and/or mental characteristics underpin their positions of power?

Within the frame of the story, those who are in a position to enforce social norms do so not on their own behalf, but as agents of powers that extend beyond the frame of the story, abstract universalities such as the State, the Family, the University. The mental characteristic that allows them to perform this function is the belief that they are whole unto themselves, responsible for their own actions and therefore capable of holding others responsible for theirs. The protagonist of the story has lost both this belief and the basis for this belief, which weakens him in comparison to the social expectations others hold of a person in his position.

5. How does this affect the weakest people in the world?

Though the protagonist is weak--and in writing I enjoy violating the expectations of a strong protagonist, so this is not the only story of mine with a weak protagonist--he is not the weakest of people in the world of the story. The weakest are the children, as ever, and they suffer, as ever.

I nominate the following three people to continue the blog hop:

Thursday, August 21, 2014

Phantasm Japan

It is gauche to review collections in which one's story appears. So this is not a review. And while I have a vested interest in Phantasm Japan doing well--the more people who buy it, the more who will read my story, and one writes in order to be read--there is no financial conflict of interest to lead me to engage in uncritical boosterism. My contract paid a flat per-word rate, no royalties, so I make no more money if it sells 10,000 copies than if it sells 100. This post is therefore neither a review nor an advertisement. It is one reader's early opinion, highlighting what I consider to be the most interesting stories of the collection.

First a contextual note: Phantasm Japan is the fantasy follow-up to Haikasoru's The Future Is Japanese. The latter title introduced me to Japanese authors Toh Enjoe and Project Itoh, and contained what I still consider to have been the best science fiction short story of 2012, Ken Liu's "Mono no aware". Similar to Future, Phantasm mixes stories translated from Japanese with new pieces in English. The boundary question, of where to draw the line between science fiction and fantasy, doubtless came up in the discussions between editors Nick Mamatas and Masumi Washington over what to include. I do think there is a line that can be drawn, that it is not an entirely meaningless question, but I do not mind at all that some of the stories might be considered, by my definitions, more science fictional. Those tended to be among the stories I liked. Another difference from Future is that the English-language authors in Phantasm offer a more multinational cross-section of the genre.

But as you'll see, for me the highest points were reached by Japanese contributors. I do not intend this either as a slam against my fellow English-language contributors, or as some aw-shucks false humility. Most of those stories were entertaining, or thought-provoking, and several were both. What I suspect, based not only on the stories in Phantasm but on other pieces of Japanese fiction I have read recently (such as Hisaki Matsuura's Triangle, which I read and reviewed back in June), is that Japanese writers are taking bigger risks than their Anglophone counterparts. And where the most important distinction comes in, is that rather than being punished for those risks, they are being rewarded, by publishers, readers, award committees, and translators.

So let me give you a glimpse of some of those risks.

Dempow Torishima's author-illustrated novella "Sisyphean," perhaps the most astonishing piece in the collection, can be read in many ways: as a thought experiment about the "real subsumption" of labor by capitalist bio-power, as a literalized allegory of alienation, or as an examination of what it is to be human so thorough that it turns the object of examination inside-out. Just don't make the mistake I made this afternoon and try to read it while eating lunch.

The more things I read by Project Itoh the more saddened by his death, five years ago, at the far-too-young age of 34. To explain why I loved "From the Nothing, With Love," would likely provoke howls of "spoiler!" So let me just quote the blurb on the back cover--it's the "secret history of the most famous secret agent in the world"--and add that it is also a meditation on consciousness, selfhood and textuality.

New to me was Yusaku Kitano, whose "Scissors or Claws, and Holes" imagines a rather painful form of collective intelligence. The story's understated humor reminded me of parts of Toh Enjoe's Self-Reference Engine. I would definitely like to see more from this author in English translation. I would also love to see more from Sayuri Ueda, whose "The Street of Fruiting Bodies" combines the uncanniness of ghost stories with the nausea of a fungal infection.

These four pieces alone would be worth the cover price of $14.99. The rest are a bonus. We owe much to the translators as well, who produced at-times lengthy translated texts whose freshness and literary quality meets or exceeds some of the best in contemporary English-language prose.

Based on what I have been able to see of Japanese literature through the prism of translation, I regret that I never studied the language, and that my knowledge of it extends little beyond the few kanji I was able to sprinkle into my piece.

As always, feel free to comment, as critically as you wish, but by all means, first buy this book and read it.

Monday, August 18, 2014

Shameless Self-Promotion, and Some Props for Others

My story "Bonfires in Anacostia" has been getting some critical attention:

Part of me wonders if some of the interest and traffic has been driven by the recent events in Ferguson, Missouri. Would I rather that Michael Brown had lived and my story sank like a stone? Of course. All respect due to those in the streets demanding justice.

In other news, a story of mine is now in print:

That is the first page of "Thirty-Eight Observations on the Nature of the Self," from my contributor's copy of Phantasm Japan.

In some ways this feels more real than my other publications, because I am old enough that I am still more habituated to reading ink on paper than pixels on screens. Now I need to figure out how to keep it out of my kids' hands until they're each well into their teens.

A final note: If one is ever in danger of getting a swelled head about one's writing, the cure is to read Thunderstruck & Other Stories by Elizabeth McCracken. In particular, the first story in the collection, entitled "Something Amazing," which is indeed something amazing.

Saturday, August 16, 2014

Reading Capital... in the 21st Century (part 10 of 10)

This will be my last post on Piketty, for the simple reason that I need to return the book to the library. It will not be the last word, nor will the last word be mine.

Early on in the book, Piketty makes a strong claim for the essential interdisciplinarity of the social sciences. Yet there is, in the 21st century, a social phenomenon with the potential to upset all his calculations, which receives only token attention. One can refer to this as "coupled natural and human systems," i.e., situations where natural systems and human systems, each following their own dynamical laws, have a transformative impact on one another. Anthropogenic, carbon-driven climate change is only a special case of this, albeit the one with the greatest destructive potential. (Another example can be seen in the recent algae bloom on Lake Erie.)

None of the demographic or economic projections on which he relies seem to take the effects of climate change into account. The fundamental assumption that runs through his book, that absent either a catastrophe on the order of the World Wars, or a major change in political climate, the rate of return on capital will return to historical norms of 4-5% per year, takes no account of that either. His discussion of the phenomenon is limited to a single two-page subchapter entitled "Climate Change and Public Capital" (567-569).

Even the title of the subchapter shows with what little seriousness he has considered the problem, as climate change poses a threat not only to public capital, but to capital as such. The very thing on which Piketty's entire research program is based is the ability to assign monetary value to the existing capital stock. This, in turn, is based upon the presumption of the predictability of the various natural inputs into the productive process. Farmland--which Piketty shows accounted for a significant share of total national capital in all wealthy countries until the end of the 19th century--is assigned a value based on its ability to produce a certain set of crops in an average year. Urban real estate, whose increased share of the national capital stock in the last 100 years corresponds roughly to the decline of farmland's share, has value to the extent that it can either be rented out as residential real estate or serve as a site for productive economic activity. In either case, the ability to reliably transport sufficient food and potable water into the urban conglomeration is a precondition for that value. Both the value of capital and its rate of return depend conceptually on the ability of markets to approximate long-range average estimates for future productivity.

Climate change (and other coupled natural and human systems) call this fundamentally into question. Not only does the year-to-year volatility of natural inputs increase, but the very physical configuration of the asset threatens to change from decade to decade. Consider Miami: It is only a matter of time before it is swallowed by the sea. Yet the population continues to grow, new buildings continue to be built, and real estate prices continue to rise. Operating in abstraction from natural processes, the social sciences, whether separately or together, can only assign quantitative measure to the frenzy of a collective delusion. It is necessary to measure such delusions, but it is far from sufficient.

Both bourgeois political economy (of which Piketty is a peculiar example--I suspect one could call him neo-Ricardian, but my grasp of the history of political economy is not quite strong enough to defend that as a thesis) and the type of vulgar Marxism exemplified by Soviet planning, treat of nature in a purely extractive manner. Nature is just there, a trove from which human labor can, with a greater or lesser degree of success depending upon the extent of scientific knowledge and technical capacity, extract needs or wants that, even if they derive from a biological substrate, are defined through predominantly social processes. Nature may be fickle but it is unchanging, or at least, functions more or less cyclically according to laws which are gradually uncovered through human ingenuity.

That picture of nature should have gone out the window more than a hundred years ago when Arrhenius first hypothesized the greenhouse effect. But human beings learn slowly, especially when there is money to be made by remaining ignorant.

In effect, Piketty makes a case for fundamental unity of the social sciences at a moment in history when what we should be learning is how to think about the complex articulations between social and natural processes. He makes a necessary case, 100 years too late.

I will let Piketty have the last word, however, because his last words are good ones, that in an understated manner make a claim with which I strongly agree: "Refusing to deal with numbers rarely serves the interests of the least well-off."

Tuesday, August 12, 2014

Reading Capital... in the 21st Century (part 9 of x)

A passing reference on page 504 to August Bebel and Eduard Bernstein reminds me, apropos of my last post, that I should review the role of taxation in the SPD revisionism debate. Not that century old debates among Germans are or ought to be decisive for socialist strategy today, but any controversy in which Rosa Luxemburg was a participant is sure to clarify one's thoughts.

One Piketty subchapter heading that summarizes the contents well: "Confiscatory Taxation of Excessive Incomes: An American Invention". It seems paradoxical that, of the wealthy countries, the one in which organized socialist movements and political parties have been weakest is the one that pioneered in that area. A political historian would do well to review the discursive environment, during the New Deal and World War II, in which that apparent paradox arose.

"In 2012, the total budget of the Egyptian ministry of education for all primary, middle, and secondary schools and universities in a country of 85 million was less than $5 billion. A few hundred kilometers to the east, Saudi Arabia and its 20 million citizens enjoyed oil revenues of $300 billion, while Qatar and its 300,000 Qataris take in more than $100 billion annually. Meanwhile, the international community wonders if it ought to extend a loan of a few billion dollars to Egypt or wait until the country increases, as promised, its tax on carbonated drinks and cigarettes." (538)

Since then, a democratically elected president has been overthrown in Egypt and replaced with the military oligarchy that held power before the overthrow of Mubarak. The "international community" has gotten what it wanted. Just another reminder that the whole arbitrary, ridiculous system of postcolonial states in the Middle East needs to be destroyed, and the IMF and World Bank along with them.

If nothing else, I hope Piketty succeeds in destroying the Keynesian hard-on for public debt. It should be obvious that "it is normally preferable to tax the wealthy than borrow from them," (540) but somehow when Richard Wolff points this out he gets dismissed as a radical wacko.

There's another sighting of Piketty's Straw Marx on page 565, where he once again refers (falsifiably) to Marx "implicity assum[ing] zero demographic and productivity growth". When I first read that claim I thought, surely that can't be all there is to his argument against the tendency of the rate of profit to fall. Surely this guy is smart enough to have a more sophisticated up his sleeve. No, he did not. When I hypothesized earlier that someone could write a book about Piketty's Straw Marx, I was wrong. At most, it should be a fairly concise review article suitable for publication in a journal like Historical Materialism.

Even more absurd is that, what he wields against the falling rate of profit is his own law, β = s/g, which he characterizes early on as "asymptotic". For a reader familiar with Marx's presentation of the falling rate of profit tendency, the concept of an "asymptotic law" is familiar, as that is exactly what Marx's law is. Piketty, who insists that readers indulge his own asymptotic law, refuses, for obviously polemical reasons, to extend the benefit of a similar doubt to Marx.

There is one historical fact, though, that makes things more awkward for Marxists, namely, the political economy of the Soviet Union and allied states: "the state claimed to serve the common good by accumulating unlimited industrial capital and ever-increasing numbers of machines: no one really knew where the planners thought accumulation should end." The statified capitalism of the Soviet Union was the historical incarnation of Piketty's Straw Marx, a golem fashioned from blood and steel.

Monday, August 11, 2014

Reading Capital... in the 21st Century (part 8 of x)

Though overall I think Piketty intends his book as a counter to the logic of austerity, there are several places where the permeation of that logic into all segments of the mainstream political spectrum, including European social democracy, are made quite evident. One such place is his discussion of pay-as-you-go (PAYGO) pension systems (such as the public pension systems in most of the world's wealthy nations). From his prediction that growth, both economic and demographic, will be slower in the 21st century than in the 20th, he deduces--as have most pundits--that PAYGO pension systems are unsustainable over the long run. The conclusion follows from the premise only if you presume that the financial structure of such systems will remain politically unalterable, with flat or even regressive social insurance payments taken as a portion of younger generations income, to finance older generations' retirement in a manner that is proportional to their pre-retirement work incomes, regardless of whether they hold any other wealth or have any other forms of income. For someone who frankly (and honestly) labels his own central policy proposal--the global tax on wealth--as "utopian," such a presumption should clearly be regarded as unfounded. Particularly given that the "fixes" to the creaky old social reforms of the interwar period do not even need to be particularly radical: For example, in the US social security system, eliminating the income cap above which FICA is not withheld, and applying FICA to capital income as well as earned income.

Even worse, from his own inequality r > g he comes to the conclusion that some sort of tricky transition from a strict PAYGO system to a partially capitalized pension system, in which public pensions are invested in capital assets and are paid from the return on the investment, is necessary. Without using the word, he shamefacedly comes out for privatization, even while admitting that there are tricky inequities inherent to the process that would need to be smoothed over.

The more that reformists like Piketty help to create the appearance that genuinely beneficial reforms are impossible, even unthinkable, the more evident becomes the necessity of revolution rather than reform.

In contrast to pensions, where I think Piketty's analysis is useful to those socialists (as opposed to social democrats) who see the need for intervention into elections and participation in elected governmental bodies, is on the question of taxation. He shows how taxation does not only serve the purpose of redistribution, but also the purpose of information gathering. No economic planning is possible without reliable information on the stock, flows, inputs and outputs of capital, both financial and physical. Information gathered universally, under penalty of law, tends to be more reliable than information gathered voluntarily from statistical samples. There is a tendency in sections of the revolutionary left to be dismissive of tax policy, on the correct grounds that partial redistribution through a still capitalist state does not change the fundamentally exploitative structures of the economy. But, to use a Foucauldian term, taxation if strategically applied can become a kind of power/knowledge, undermining a key element of capitalist power--the ability to obscure their wealth under the mantle of trade secrets--through the extension of knowledge.

His analysis is helpful also in terms of teasing out the progressive and regressive elements of existing taxation structures. Consider, for example, the property taxes that, in the United States, are the main revenue stream for schools and local governments in most areas. In principle it is a tax on capital. However, to the extent that it is charged regardless of whether there is an outstanding mortgage, and charged to an owner/occupant rather than to the mortgage holder, a significant portion of the capital (that belonging to the bank) goes untaxed, and is replaced instead by a consumption tax on the owner-occupant, who is effectively being charged tax upon the rent paid to the bank. Even in cases where someone owns a house "outright", at least a portion of the property tax is in effect a consumption tax: We all have to live somewhere. While an owned house functions as a capital asset in that it tends to appreciate in line with the cost of living, and that the owner saves money that otherwise would be paid in rent to a landlord, for most houses that return on investment will not make much appreciable difference in quality of life. The median house price in the U.S. is approaching $200,000: For the most part, taxes paid on the value of a house below that price are effectively consumption taxes. Only the tax on the portion of a house's value above that level functions as a tax on capital, or at least, a sumptuary tax on luxury (e.g., the luxuries of an extra bedroom or bathroom, or a location in a better-than-average school district).

Considering all this, it is no wonder that property taxes are so unpopular in the United States. And thus little surprise that the right has been so successful in mobilizing opposition to social programs, investments in education, and the like, under the populist banner of opposition to property taxes. (The most important example of this being Prop 13 in California.) To the extent that the left, in defending such programs, allows itself to be backed into the corner of defending property taxes as such, it is bound to lose. By demanding specific reforms in how such taxes are collected--zero tax or a de minimis registration fee for property valued less than the median; taxes applied primarily to mortgages and only secondarily to equity; higher rates for non-residential property, non-year-round residences, or property valued greater than $500,000--it re-draw the class line within the populist bloc.

Sunday, August 10, 2014

Reading Capital... in the 21st Century (part 7 of x)

Piketty repeatedly resorts to the sarcastic comment that "Earth must be owned by Mars" when referring to the recurrently negative global balance of payments, a phenomenon which his frequent collaborator Gabriel Zucman has been able to trace to unreported financial assets held in tax havens. Yet as someone who writes science fiction, I find it an evocative image, and cannot help but begin to think of a story in which the colonization of Mars starts out as a tax-avoidance strategy.

Another subchapter in Piketty that is likely to be of greater interest to those of us who work in elite higher education than to the general public (see my last entry for a prior example) is the one entitled "Do Educational Institutions Foster Social Mobility?" (484-487) Here's the super-short version: No. The details are worth reviewing, however, because the data systematically undermine the basic theses of meritocratic ideology.

  • As anyone capable of comparing job listings today with those twenty years ago has likely suspected, "qualification levels shifted upward... a college degree [represents] what a high school diploma used to stand for". (I would add, having reviewed job listings for which I am eminently qualified by virtue of experience, Masters' degrees and even PhDs are becoming "requirements" for positions in which they are utterly useless. Credential inflation, in which academic institutions tend to lead the way, becomes a means not of ensuring a requisite level of preparation but of screening out those who may not have acquired a certain type of cultural capital through prolonged education.)
  • "The intergenerational correlation of education and earned incomes, which measures the reproduction of the skill hierarchy over time, shows no trend toward greater mobility over the long run, and in recent years mobility may even have decreased." (484, citing work by Bjorklund and Lefranc in Sweden and France respectively. I seem to recall having seen sociological work in the U.S. which shows this even more strongly, though the citation is not coming readily to mind.)
  • Intergenerational reproduction of class stratification is highest, among the wealthy countries, in the United States. (On this, Piketty cites the work of Markus Jantti. Again, I suspect there are others who have been working in this area.)
  • He also cites a Russell Sage Foundation-funded study by Duncan and Murnane showing that "the proportion of college degrees earned by children whose parents belong to the bottom two quartiles of the income hierarchy stagnated at 10-20% in 1970-2010, while it rose from 40 to 80 percent for children with parents in the top quartile.
  • As Piketty's earlier statistics show, however, Duncan and Murnane's division into quartiles does not adequately capture the class stratification in U.S. society: We need to look at the 1% and the 9%, and then further stratify the remains of the "patrimonial middle class". If 80% of the top quartile's kids are earning college degrees, we need to look in more detail at where different strata are earning their degrees, who are going on to earn advanced and professional degrees, and what are their post-graduation earnings. The Obama administration's plans for issuing "rankings" of U.S. colleges and universities have (rightly) been criticized by many in higher education, both for potentially adding a new level administrative burden (and with it, new administrative staff positions that will have to be filled, adding to the cost-bloat syndrome of higher education), and for focusing attention on the purely transactional aspects of higher education. Nonetheless, where you go to school does make a difference in terms of what you can hope for afterward, and the administration's plans will likely add a new set of data which social scientists can mine.
  • This is good, because Piketty's explication of how class privilege translates into admissions decisions at elite universities devolves into clumsy innuendo. He cites, for example, a study by Meer and Rosen showing that "gifts by graduates to their former universities are strangely concentrated in the period when their children are of college age." (485) This is the famous "legacy" issue, which deserves attention (though, frankly, I would be more suspicious of alumni legacy gifts having an influence on admissions if they were concentrated when their kids were of high-school.). But there are far more subtle and widespread ways in which parents' combination of wealth, income, education and social capital can and do translate into their kids' college admissions process than simple bribery.
  • At some point I should probably review the data in Piketty's online technical appendix through which he estimates the average family income of Harvard students as $450,000, since I am skeptical. I suspect that this is a mean, not a median, and that in a manner typical of Pareto distributions the mean is far higher than the median due to some very high-income outliers. In terms of gauging the access of those who are not the richest of the rich, the median is actually a more relevant measure. And given the fact that more than 70% of Harvard undergraduates receive aid, I suspect that the median is much lower. This is an area where Harvard, by virtue of its massive endowment, is able to do much better than places such as my employer.
  • "It would be naive, however, to think that free higher education would resolve all problems. In 1964, Pierre Bourdieu and Jean-Claude Passeron analyzed, in Les héritiers, more subtle mechanisms of social and cultural selection, which often do the same work as financial selection." (486) This is first time I've seen Bourdieu favorably cited in a book by a non-Marxist economist.

On balance, one should be very skeptical of any theory of social change which is premised upon access to higher education as a means toward greater social mobility.

Saturday, August 9, 2014

Reading Capital... in the 21st Century (part 6 of x)

I have now finished reading the Piketty book, so this and any further posts will be retrospective in nature. If you work full-time and have a family, budget at least three weeks for reading it. That may need to be on a sliding scale based on how much prior knowledge of economics you have.

"The logic of r > g implies that the entrepreneur always tends to turn into a rentier. Even if this happens later in life, the phenomenon becomes important as life expectancy increases. The fact that a person has good ideas at age thirty or forty does not imply that she will still be having them at seventy or eighty, yet her wealth will continue to increase by itself." (395-396)

In other words, it is absurd that Bill Gates gets to make decisions having global impacts on public health and education policy solely by virtue of having capitalized upon DOS. That absurdity obtains independently of whether or not one considers DOS to have been a "good idea". This passage, like so much of what Piketty is written, is an example of what I called "data-driven statements of what should have been obvious. And as I went on to say in that tweet, "It's not Piketty's fault that our intellectual atmosphere is so stale."

Lest we fixate solely upon Gates, however, Piketty does not allow us to lose sight of Liliane Bettencourt, the L'Oréal heiress, "who never worked a day in her life," and points out that her fortune has grown "exactly as fast as that of Bill Gates". (440)

Note that, at some point, it may be worthwhile to read Michèle Lamont's Money, Morals and Manners: The Culture of the French and the American Upper-Middle Class, an anthropological work that Piketty cites to show how widespread meritocratic ideology is. In general, Piketty is deservedly scathing toward this ideology, arguing that it "could well lay the groundwork for greater and more violent inequality in the future," based upon "a race between supermanagers and rentiers, to the detriment of those who are neither." (417)

There is a subchapter of Piketty that is likely to be of far greater interest to me than to most readers, since it deals with institutional endowments at colleges and universities in the United States ("The Pure Return on University Endowments", pp. 447-452). As someone who works at a private, liberal arts college with a larger-than-average endowment (albeit one that is smaller than most of the institutions to which we are usually compared on grounds of selectivity and educational quality--comparisons which I have heard at least once a week since starting work there), the endowment has intrinsic interest for me, touching as it does on the long term sustainability of the institution by which I am employed. For Piketty, its interest is incidental, in that the data collected by NACUBO (The National Association of College and University Business Officers), combined the various financial statements published by individual institutions, provide an unusually transparent dataset for comparing the rate of return on fortunes of varying sizes.

Regardless of whether they have interest in the broader questions of income and wealth inequality that animate Piketty, his analysis should be read by most people who work at private institutions of higher education, whether as faculty, fundraising staff, or in roles requiring financial management. The results, presented on Table 12.2 (page 448), are sobering. He presents the "average real annual rate of return (after deduction of inflation and all administrative costs and financial fees)" within the following classifications:

  • Harvard, Yale and Princeton [I have a bit of a quibble with his decision to not include Stanford in the top rank, since its endowment is comparable in size to Princeton's, which leaves me wondering if he engaged in a bit of statistical cherry-picking.]
  • Endowments highter than $1 billion
  • Endowments between $500 million and 1 billion
  • Endowments between $100 and $500 million
  • Endowments less than $100 million

For each of those categories, the average real rates of return are 10.2%, 8.8%, 7.8%, 7.1%, and 6.2%, respectively. In sum, Piketty's hypothesis that larger fortunes earn greater rates of return than smaller ones, because they are better able to secure the services of talented money managers and take advantage of certain investment types that require a large initial capital position, is supported by the data from college endowments.

There are three nationally regarded liberal arts colleges in the state of Maine. Of the three intermediate categories of endowment listed by Piketty (>$1b, $500m-$1b, $100-500m), one is in the first category, one is in the second category, and the third--my employer--is in the last. Identifying them more precisely is left as an exercise for the reader.

Piketty's data suggest that it is foolish for any of my colleagues to hope to catch up with [Super-Rich College down the block], and that it is highly unlikely even that the most effective capital fundraising campaign, paired with strategic portfolio management, would even get our endowment up on the level of [Other Rich-but-not-quite-as-Rich College in the other direction]. This is also troubling when you realize that, if you look at our educational expenditures (but not our expenditures in other categories), our per-student costs are roughly on par with [Other Rich College] and not far behind those of [Super-Rich College]. Of course there are examples of institutions successfully playing catch-up--Middlebury in Vermont comes to mind--but the nature of exceptions is precisely that they are exceptional, that they do not happen all the time. Exceptions like Middlebury get averaged with other institutions who squandered their endowments and missed critical fundraising opportunities, including some that went out of business entirely.

[Also, as a former employee of a community college in the beleaguered CUNY system, I am honor-bound to greet my recitation of the fiscal moanings of my present colleagues with a heartily sarcastic "Waaaa-hoot-waaah!"]

Nor can employees of institutions with smaller endowments take comfort that, at least their endowment managers aren't betting the house: Piketty observes laconically that "It is interesting to note that the year-to-year volatility of these returns does not seem to be any greater for the largest endowments than for the smaller ones: the returns obtained by Harvard and Yale vary around their mean but not much more so than the returns of smaller institutions, and if one averages over several years, the mean returns of the largest institutions are systematically higher than those of the smaller ones, with a gap that remains fairly constant over time." (450) So this is not a case of the better capitalized institutions making a calculated risk-vs-reward trade-off and getting lucky, but of their greater capital enabling them to access more sophisticated investment strategies in which rewards outweigh the risks.

So, for those of you who find yourselves working in higher education and thinking more about endowment than you ever thought possible, remember: Size matters.

Sunday, August 3, 2014

Reading Capital... in the 21st Century (part 5 of x)

Another important contribution that Piketty has made to the study of economic inequality is to remind us all of the importance of gift-giving in the intergenerational transfer of wealth. This is made possible in part by the fact that France has strict laws requiring the registration and taxation of such fiscal transfers, dating back to the French Revolution, which have made it possible for Piketty and his collaborators to estimate, in a quite consistent time series spanning more than two centuries, how much inheritance takes place before death.

His data have led me in turn to reflect upon the role of such transfers in my own class standing. As I mentioned in my last post, in terms of both income and wealth my household is somewhere around the 10th percentile in the U.S. In both those metrics, the roles of hereditary class, education, race, gender, family dynamics, ability, effort, and luck overlap and are difficult to de-compose. They are a bit easier to de-compose in terms of wealth, though, for the simple reason that, while we have substantially more than most, we don't have very much.

My wife's family is as close as one could get to a pure example of the 20th century U.S. "patrimonial middle class" (to use Piketty's term). Her grandparents were white and Jewish in New York City, two generations removed from the immigrant experience, and worked union jobs in New York City at a time when that made it possible (for white ethnics) to buy and maintain houses in the outer boroughs. Her parents both attended Queens College when it was still both tuition-free and excellent. Her father, now retired, worked as a sociology lecturer at CUNY. (The job title "lecturer" means something a bit different in CUNY than it does in most U.S. institutions of higher education--at CUNY, it refers to a long-term, full-time, tenured member of instructional faculty who, however, does not have a PhD or other terminal degree. It's a job title that is being phased out.) By the time they set up household in the early-to-mid-1970s, NYC had gotten a reputation (among white ethnics) as "not a good place to raise a family," so they moved out to the suburbs. They bought a house in a relatively affordable town in the far north of Westchester County, from which my father-in-law made a two-hour commute 3-4 times a week for his entire working life, and never missed a mortgage payment.

My family's class background is more complex, due to my father's immigrant status, his entrepreneurial tendencies, and our overall dysfunctionality. A belated divorce has effectively re-proletarianized my mother, and left me no longer having to give a fuck what my father does with his life. While they were still married, their financial standing fluctuated wildly. At times, they were wealthier--on paper--than my in-laws, and at other times, they were broke, with near-zero income and negative net assets. My mother's upbringing in a Jewish, middle-class milieu on Long Island meant that I was raised with the expectation-cum-aspiration that a college education would serve as a path to a secure middle-class status, a status which she had neither the educational background nor the financial capital to sustain on her own.

So the fact is that, while by virtue of education, effort, whiteness and luck, my wife and I have been able to accumulate some wealth through savings--both of us have been working full-time, and constantly, since leaving graduate school--at key moments we received gifts from both my in-laws and (at times when they were relatively flush) my parents that we were able to leverage--again, with the help of some luck--into more significant accumulations than would be possible through savings alone. The most important examples were the gifts we received at our wedding (which helped my wife complete her second Master's degree without taking on any debt) and the gifts that, together with our savings, formed the down-payment on the Queens apartment we bought in 2003 and sold (for a significant profit, though not as much as if we had sold before the bubble burst in 2008) in 2012. To the extent that we own anything more than the balances in our pension funds--the equity on our house in Maine, the funds in our savings account, college funds for the kids--it has been made possible through the appreciation of that first asset, and the savings made possible by the reduction of our monthly housing costs through owning rather than renting. Without the well-timed intergenerational transfer of wealth through gifts, that would not have been possible.

This is worth bearing in mind any time you hear someone claim that "everything I have, I earned it through hard work." In some rare cases, it may actually be true. In many cases, it is an understandable illusion: The person making the utterance may well have worked hard their entire lives, and thus can deceive themselves into believing that such work is the sole cause for their possessions. Commodity fetishism takes advantage of the human ability to forget inconvenient facts and refashion oneself as the hero of one's own story. In most cases, however, it is largely bullshit. Each of us is born into an already hierarchized society, with parents or grandparents who have greater or lesser resources to provide not only in terms of money, but in terms of education, nurturing, and what educational psychologists call "self-efficacy," the necessary illusion that we can be the masters of our own destiny. For most people, wealth is a phenomenon with which they have no direct experience, a kind of inscrutable force of nature, effectively a lottery. Those of us who have something were born with much of that something. Luck and money follow one another closely, with sometimes one or the other leading. Rarely do they have much to do with virtue.

Saturday, August 2, 2014

Reading Capital... in the 21st Century (part 4 of x)

Important point from Piketty:
"The concentration of wealth is actually nearly as great within each age cohort as it is for the population as a whole. In other words, and contrary to a widespread belief, intergenerational warfare has not replaced class warfare." (245-6)

So if a commentator with a reputation for being somewhere on the left nonetheless throws around terms like "Baby Boomer" and "Millennial," that commentator has something to hide. Most likely: A trust fund.

If for nothing else, we should be glad that Piketty has provided data and conceptual tools for thinking clearly about the difference between inequality of income and inequality of ownership, as well as the difference between income from compensation and income from capital ownership. An example of such service:

"The most striking fact is no doubt that in all these societies [i.e., the various European & North American countries for which he has gathered data], half of the population own virtually nothing: the poorest 50 percent invariably own less than 10 percent of national wealth, and generally less than 5 percent." (257)

Even in comparatively egalitarian Scandinavia.

So much for that outdated, 19th century concept of the proletariat.

A key part of the significance of Piketty's economic historiography becomes clear in the subsection entitled 'From a "Society of Rentiers" to a "Society of Managers"' What he demonstrates with the data is that, even for the top 1 percent of the income distribution, managerial compensation remains a significant portion of income as compared to profits on capital. It is only the top tenth of a percent that consists primarily of the classic rentier. This is a major change: "In 1932, this social group was 5 times larger; in the Belle Epoque it was 10 times larger."

How did this come about? The tremendous destruction of capital values in the period of 1914-1950, through war (2 world wars), revolution (especially the Russian), economic depression, decolonization, and a series of social-democratic reforms that saved capital from itself while cutting sharply into its profitability. The thirty years afterward--what some left economic theorists in the U.S. have called "the postwar boom," and is popularly known in France as the Trente Gloriouses--were an historically anomalous period of reconstruction.

Reading Piketty and looking at his charts from a communist perspective, one cannot help but think that for about a generation, the capitalist class was on its knees, no longer able to rule in the old way. But instead of a proletarian revolution (on a global scale), what we got were a series of managerial (counter-)revolutions, the rise of bureaucratic regencies that would maintain the fundamental conditions in place for an eventual capitalist resurgence--the resurgence through which we are now living.

To think about class it is not sufficient just to speak of the 1%, but also of the 0.1%--the surviving kernel of classic rentierism--the 9% (well-compensated managers and specialists in the rest of the top 10%, who might have some hope of rising into the 1%), and the 40% (those wedged between the 10% and the classic proletariat, the labor aristocracy and small-time middle class of whom it cannot be said anymore, or yet, that they have nothing to lose but their chains).

What the last 60+ years show is that, politically, this is a far more tenable distribution than the steep Pareto curves of the Belle Epoque. But the logic of accumulation means that it will soon be a thing of the past, as more members of the 1% join the 0.1% in rentierism, while the 40% loses grip on its tenuous remaining assets. (Full disclosure: By Piketty's statistics, I am part of the 9% in the U.s.)

When Piketty isn't bastardizing Marx, there are moments when he sounds like he's plagiarizing him:

"We are free to imagine an ideal society in which all other tasks are almost totally automated and each individual has as much freedom as possible to pursue the goods of education, culture, and health for the benefit of herself and others. Everyone would be by turns teacher or student, writer or reader, actor or spectator, doctor or patient."

Now where have I read that before...?

For the "fascism is good for business" file:

"Interestingly, the top centile's share of German national income increased rapidly between 1933 and 1938, totall out of phase with other countries: this reflects the revival of industrial profits (boosted by demand for armaments), as well as a general reestablishment of income hierarchies in the Nazi era." (325)

Interesting, indeed.

Also for that file: "Colombia... is one of the most inegalitarian societies in the [world]: the top centile's share stood at about 20 percent of national income throughout the period 1990-2010...." (327)

Given what I've already said about Piketty's misreadings of U.S. history and politics, it's little wonder that he is on weak ground when he tries to divine in his statistics the reasons for the differences between U.S. and European political discourse. It is to the relative weakness of the U.S.'s postwar boom as compared to Europe's--due to the obvious fact that the world wars were not fought on its territory, and thus the destruction of capital values in the first half of the 20th century not as great--that he attributes the weakness of statist forms of anti-capitalism in the U.S.:

"In a sense, a (white) patrimonial middle class already existed in the nineteenth century. It suffered a setback during the Gilded Age, regained its health in the middle of the twentieth century, and then suffered another setback after 1980.... In the United States, the twentieth century is not synonymous with a great leap forward in social justice.... Hence the lost US paradise is associated with the country's beginnings: there is nostalgia for the era of the Boston Tea Party...." (350)

There is at least one error of analysis in each of the sentences above, and each of them have to do with race and mass immigration. Identifying them is left as an exercise for the reader.

Friday, August 1, 2014


The August issue of Clarkesworld went live today, with fiction by Ian MacLeod, Naomi Novik, James Patrick Kelly, Kat Howard, Caroline M. Yoachim, and some nobody who calls himself Joseph Tomaras. Like Odysseus in the Cyclops' cave, I am Nobody.

If you, like me, believe that science fiction has had too few proletarian uprisings and too little ass-play since Nick Mamatas announced his retirement from the genre, then you might appreciate Bonfires in Anacostia. If you don't appreciate it, and you don't think that Twitter provides you with enough characters to tell me all the ways in which I am horrible, please feel free to comment here at length.