John Kenneth Galbraith on financial bubbles

Galbraith, 1997:

Whether of tulip bulbs, of John Law's Louisiana promotions, of the stock of the South Seas Company or of RCA, the great speculative favorite in the stock market boom of the late 1920s, or of the deeply redundant real estate developments in the 1980s, prices were going up. The mentally vulnerable, of whom there is always a more than adequate reserve, were attracted and responded. Their response caused prices to go up more; this price rise then confirmed them in their superior wisdom and foresight.

Full post: https://brucemillerca.substack.com/p/john-kenneth-galbraith-on-financial

Paul Krugman and the coming fight with Republicans over austerity economics

Ron Wyden, the incoming chair of the Senate Finance Committee, is the only Democrat quoted on the record by Greg Sargent in this column, A hidden reason that Joe Biden is trying to go big Washington Post 01/15/2021. But I hope they all recognize the lesson from 2009 and the following years:

[M]any Democrats have lived through what happened when former president Barack Obama inherited another major economic crisis from another Republican president.

As has been endlessly hashed out, Obama opted for a stimulus that fell short of what was needed. Putting aside why that happened, what everyone now knows is that it was a serious mistake. Democrats lost the House in 2010 and spent the remainder of Obama’s presidency locked in brutal fiscal trench warfare with a GOP determined to starve the recovery with austerity to cripple his presidency under the guise of fake concerns about spending and deficits.

The actual position of Republicans in the Senate and House is the one Dick Cheney articulated back during his (and Bush II's) Presidency: "Reagan proved deficits don't matter."

That's their position. When they say something different, they are just trying to sucker Democrats into deals they then won't honor. As this article recounts, that was a successful *partisan* strategy for the Republicans during the Obama-Biden Administration because the economic results were so damaging.

Paul Krugman was warning about exactly that in real time during the Obama-Biden Administration. His current analyses are certainly worth following.

Neither defunct ideology, nor bogus economic concerns, nor the vain hope of comity should be allowed to stand in the way of delivering the policies America needs 1/ https://t.co/tWt0uHEq6r

— Paul Krugman (@paulkrugman) January 15, 2021

His four rules are:

1. Don’t doubt the power of government to help.
2. Don’t obsess about debt.
3. Don’t worry about inflation.
4. Don’t count on Republicans to help govern.

That last point is especially important, and something even the most left-leaning Members of Congress would say in that form: The Republican Party has no interest in bipartisanship as any kind of governing principle. Democrats may be able to pick off some Republican votes in Congress on particular issues. But the notion that make the hearts of TV pundits go pitty-pat that we will see some kind of Bipartisanship consensus on major issues is just wrong. The only exception would be issues on which a large number of Democrats are willing to capitulate to a Republican position.

Krugman caught some deserved criticism from the left for his seeming to pooh-pooh the importance of the $2,000 check issue last month. To his credit, he recognized that he was being tone-deaf on the politics of it. His larger economic argument wasn't wrong: extended unemployment insurance is more important to economic recovery than immediate $2,000 payments. But, as he recognized, that debate was taking place in a very particular political context.

Krugman has actually generally been good on the political side of economic issues. He even uses the term "political economy," which was what economics was called in the 19th century.

The central fact of U.S. political economy, the source of our exceptionalism, is that lower-income whites vote for politicians who redistribute income upward and weaken the safety net because they think the welfare state is for nonwhites 1/ https://t.co/R9CO8GK2kz

— Paul Krugman (@paulkrugman) January 1, 2018

In current economic trends, Krugman is a "neo-Keynesian," not a post-Keynesian or an adherent of Modern Monetary Theory (MMT). Although Keynesian is generally identified as a left-leaning economic theory, it's not inherent left or progressive. Keynesianism is a way of understanding how economies work. It can be employed for conservative as well as liberal/progressive ones. Andrés Velasco, who was Michelle Bachelet's Finance Minister in Chile 2006-2010, explains in Are We All Keynesians Again? (Project Syndicate 08/25/2020), "we must remember what Keynes taught: fiscal policy should be tightened during good times, precisely so that it can be expansionary during bad times."

That concept is known as balancing the budget across the business cycle with deficits during recessions and surpluses during expansions. But the idea of running surpluses during expansions is particularly inappropriate to the United States today. Jamie Galbraith provides an accessible description of why in his book, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too (2008). Short version: as long as the US is a net importer and the dollar is still the de facto world reserve currency, the collective federal, state, and local government spending will be in surplus only in years in which the private sector is in deficit, i.e., investing more than earning.

That is an accounting definition that is based on real-world phenomenon. But it means that assuming that government surpluses are automatically needed in expansionary periods would make for really bad policy. But Jamie Galbraith's father John Kenneth Galbraith had explained in The Affluent Society (1958) a very practical political reason that balancing the budget across the business cycle is near-impossible. That is because lowering taxes or increasing spending during recessions is much easier politically than raising taxes or cutting spending during an expansion.

After the $2,000 flap, I saw some progressive/social-democratic dismissals of Krugman as being just another neoliberal. At least on Twiiter ...

If you look at some of his columns from the 1990s, that might seem plausible, because he is an authority on international trade and he was generally friendly to the neoliberal deregulation trade treaties. But politically, he was one of the most visible critics of the Iraq War and the dishonest claims around it in his New York Times column. And on one of the most spectacular neoliberal fiascos, the imposition of brutal austerity policies on Greece in the 2015 euro crisis, he was severely critical of it. And more generally, he was intensely critical of austerity economics and its adherents' false claims after the 2007-8 crisis. He was also very specific in real time during the Obama-Biden Administration of warning about exactly what Greg Sargent write about in that recent column.

He also popularized the concept of the Very Serious People (VSPs), his mocking term for people like Alan Simpson and Erskine Bowles of Simpson-Bowles Commission fame, officially the National Commission on Fiscal Responsibility and Reform, aka, the Catfood Commission, as in let-Grandma-eat-cat-food, because of their focus on cutting Social Security and Medicare. In Krugman's use of the term VSPs, he saw them as people who were accepted by political and media elites because the VSPs repeated familiar ideas they found comfortable, even when there was little real-world basis for them. (See: Joe Wiesenthal, PAUL KRUGMAN: Alan Simpson Is 'All Wrong' And Conventional Wisdom On Economic Policy Is 'Stark Raving Mad' Business Insider 07/14/2012)

Krugman was particularly scornful of the media reverence for Paul Ryan, a once-prominent radical Republican Congressman who pimped austerity policies for years and was treated as a VSP by the media. "Look, the single animating principle of everything Ryan did and proposed was to comfort the comfortable while afflicting the afflicted." He called Ryan "an obvious con artist" who nevertheless managed to "get a reputation for seriousness and fiscal probity." (The Paul Ryan Story: From Flimflam to Fascism New York Times 04/12/2018)

Krugman has also been notable in stressing for years that the asymmetric partisan polarization in American politics was overwhelmingly due to the still-ongoing radicalization of the Republican Party. He was no friend of the lazy mainstream media convention of Both Sides Do It. (Joe Wiesenthal, KRUGMAN: It's Entirely One-Sided: Republicans Are To Blame For Today's 'Nightmarishly Dysfunctional Political Situation' Business Insider 07/12/2012)

In the column on Paul Ryan quoted above, he also addressed one of the key points in Sargent's 2021 column:

Some commentators seem surprised at the way men who talked nonstop about fiscal probity under Barack Obama cheerfully supported tax cuts that will explode the deficit under Trump. They also seem shocked at the apparent indifference of Ryan and his colleagues to Trump’s corruption and contempt for the rule of law. What happened to their principles?

The answer, of course, is that the principles they claimed to have never had anything to do with their actual goals. In particular, Republicans haven’t abandoned their concerns about budget deficits, because they never cared about deficits; they only faked concern as an excuse to cut social programs.

As Sargent puts it:

Many Democrats who lived through that, a lot of whom are still in Congress and some of whom are advising Biden — who himself experienced it as vice president — must be wary of a repeat.

Making them even more wary, one hopes, is the fact that Republican deficit concerns evaporated once a Republican (Donald Trump) became president. Indeed, the Trump economy was good (at least until the coronavirus shattered it) precisely because it was fueled by stimulus. [my emphasis]

So, yes, there are areas, especially on neoliberal deregulation "trade" treaties, where progressives will disagree with Krugman. But on some of the biggest and most urgent issues - the radicalization of the Republican Party and the damage of austerity economics - he has a solid record.

Andrew Bacevich’s "The Age of Illusions" (Review, Part 4 of 4)

The fact that the US is confronted with the kind of serious problems that Bacevich describes does not mean that the country will deal with them in a constructive way. His own description of the nature of Trump’s electoral coalition illustrates that.

The way forward – and what to do about the “deplorables”

This book is reminiscent in some ways of one that appeared at the beginning of Bacevich’s Emerald City period, John Kenneth Galbraith’s The Culture of Contentment (1992). He identified some of the large challenges and dangers for American democracy that he saw then. Including the central role that the fear of international Communism had played in the maintenance of the US’ massive military establishment:

The fear of Communism was also responsible for three major developments in the military power as that existed in the political economy of contentment. The first, supplementing and extending what was an already large expenditure, was a further enormous increase in military and defense spending as the constituency of contentment gained full power in the 1980s; this was the Reagan arms buildup. The second was the emergence of a largely autonomous military establishment standing above and apart from democratic control. The third was a series of foreign ventures designed ostensibly to arrest the threatening spread of Communism but with the further purpose of justifying the expanding role of the military establishment by providing a presumed enemy. [my emphasis]

As Bacevich himself has long been explaining, the internal political imperatives connected to the military-industrial complex create strong incentives for an aggressive, interventionist foreign policy. And if one enemy (the “Communist bloc”) goes away, there is not just vague psychological incentives but very material lobbies with ample funding that will be eager to create a new one. The Foundation for Defense of Democracies (FDD) has recently come under scrutiny for its years-long advocacy for war against Iran. (James Carden, “Will This Billionaire-Funded Think Tank Get Its War With Iran? The Nation 01/08/2020; Nick Wadhams, U.S. Official Central to Hawkish Iran Policies Departs NSC Bloomberg Politics 01/04/2020; John Judis, The Little Think Tank That Could Slate 08/10/2015)

Galbraith concluded his book on an explicit note of “sadness”:

Books of this genre are expected to have a happy ending. With awareness of what is wrong, the corrective forces of democracy are set in motion. And perhaps they would be now were they in a full democracy - one that embraced the interests and votes of all the citizens. Those now outside the contented majority would rally, or, more precisely, could be rallied, to their own interest and therewith to the larger and safer public interest. Alas, however, we speak here of a democracy of those with the least sense of urgency to correct what is wrong, the best insulation through short-run comfort from what could go wrong.

A key point of Galbraith’s notion of the contented majority is the low voter participation in the US. The 2018 midterm election produced a striking increase in voter participation which produced a distinct shift to the Democrats and away from Trumpism. As Galbraith emphasized, the wealthy and more affluent Americans have high voting participation rates, while the participation rate of the less affluent is distinctly lower. That means the portion of the electorate that votes is considerably financially better off, whiter, older, and more conservative than the American people, the potential electorate. The Republicans are acutely aware of this fact and want to preserve that condition. Thus, they have aggressively pursued segregationist voter-suppression measures against black and Latino voters, measures that also often affect poor whites, as well.

This is one of the fundamental challenges for actually fixing the serious problems that Bacevich describes. Another is the extreme effect of private money in political campaigns, already a serious problem in 1992, far more extreme now in the Citizens United era. Those are both serious limitations on American democracy.

And with the vast increase of Executive power that Bacevich identifies as one of the four basic markers of the Emerald City era, the undemocratic nature of the Electoral College system has become a bigger problem than ever now that, as he says, the Presidency is “overshadowing every other aspect of American politics.”

Moving away from neoliberal globalism is as necessary as it is difficult. This in itself requires not only confronting oligarchical power, but reducing it. And that inevitably involves not just limiting but reversing the current staggering concentrations of wealth and income. Rightwing populism will not fix those problems. But far-right populists like Steve Bannon do mobilize around those issues. The model “illiberal democracy” in the European Union right now is Viktor Orbáns Hungary that combines oligarchic rule with a certain level of social support for the less affluent with xenophobic nationalism and unaccountable oligarchic rule. In the United States, the progressive left offers a meaningful counter-appeal to that particular anti-neoliberal perspective. The corporate Democrats embrace corporate-deregulation neoliberalism. Any successful movement to build constructive political alternatives to neoliberal globalism will also have to be backed by a much-expanded labor union movement.

Moving away from militarized global dominance by the US will require a political movement that demands drastic changes in the current interventionist foreign policy, most obviously an end to the Forever War approach currently being pursued by Republican and Democratic administrations, including Trump’s. It will also require a major reduction in the US military budget and a major de-mystifying of the military in American political culture. As Bacevich points out in this book and elsewhere, the current idolatry of the military coincides with an unprecedented isolation of those actually bearing the burden of military service from the large majority of the American people. This situation needs to be countered either by military proscription (the draft) or by providing other concrete incentives to make military service more attractive to “middle class” families. But only a draft is likely to ensure that people like Trumps and Bushes would share even remotely equally in military service.

It’s less clear how the situation Bacevich problematizes as “freedom, empowerment, and choice became all but interchangeable terms” can be resolved in any short term. White racism is real, it’s damaging, and it’s wrong. It’s been an effective mobilizing tool for conservative and reactionary politics for the entire history of the Republic. Bacevich notes how not only did Obama’s election did not end racism against African-Americans, it was met by a militant racist counter-display. And gruesome elements of white racism like the often wanton murder of unarmed black men by white cops and the grossly disproportionate effect of law like prohibiting marijuana usage have had on African-American men.

Women’s rights have not yet been fully realized and the political assault on the core right to abortion – a right that is distinctly a woman’s right – is intense. Antiabortionists have gone a long way in many parts of the country to seriously restrict women’s access to abortion.

And as we’ve seen during the Trump Administration particularly, many Republicans are willing to literally howl in approval at Trump’s Nuremberg rallies for hostility to Latinos and immigrants, including the sadistic kidnapping of children from their parents and caging them in brutal and even life-threatening conditions.

And this is where a general appeal that “the proximate aim should not be to obscure differences but to sharpen them further and thereby give them meaning” misses a critical element of the current situation. In the “cultural wars”, the current polarization is asymmetrical. Black people aren’t demanding that unarmed, young white men be murdered by rogue cops proportional to how young black men are murdered. Democrats may be overly fond of partisan gerrymandering, but they aren’t aggressively purging white voters from voter rolls. Women’s rights advocates aren’t demanding that women who don’t won’t abortions have abortions forced on them. Latinos aren’t demanding that native-born white children be kidnapped from their parents, caged, and occasionally allowed to die on the concrete floors of their cages. And there are no Bernie Sanders or Joe Biden rallies where angry mobs howl for such things.

Bacevich notes, not entirely inaccurately that Hillary Clinton in 2016 “conveyed a distinct cluelessness, as illustrated by her infamous dismissal of Trump's supporters as ‘deplorables’.” But the truth is that people who enjoy the thought of immigrant children being kidnapped from their parents are deplorable. People who chant “blue lives matter” as approval of extralegal murders of unarmed black people are deplorable. Christian fundamentalists who want to not only ban abortion but also jail or execute abortion doctors and women who do get abortions – or even jail women who have miscarriages! – they are deplorable. And for a non-trivial number of those taking such positions, their prejudices and hatreds are generally more important to them than even the economic well-being of themselves or their children. White nationalist identity politics provides some real psychological rewards. And people who are strongly authoritarian are always going to be attracted to characters like Trump who they can image as a Stern Heroic Leader.

The point here is not that people firmly attached to such positions are incorrigible for life on such matters. Some of them are. Others are actually capable of having a real dialogue and altering their viewpoints and viewing their own experience in a more complex way. For the hardcores, as David Neiwert writes in his book Alt-America (2017), “There’s really no point in trying to reach out to people who will only return your hand as a bloody stump. The only thing they understand, in the end, is brute political force: being thrashed at the ballot box, and in the public discourse.”

In other words, white racism, sexism, and xenophobia have to be challenged and defeated for democracy and social equality to flourish. And in the current situation of asymmetric polarization, no mutual live-and-let-live attitude between white racists and minorities, between fanatical antiabortionists and women, between rabid xenophobes and decent people. Which means that anti-discrimination laws and regulations as well as special protections for electoral rights will be absolute necessary for the foreseeable future. Asymmetric polarization is real, and it can’t be ignored or wished away.

Part 1: From Boone City to the Emerald City

Part 2: The Emerald City Presidencies

Part 3: Bacevich’s political perspective

Part 4: The way forward – and what to do about the “deplorables”

Stanley Sloan and the state of NATO

The "crisis in transatlantic relations" is something that has been part of NATO politics pretty much since the day it was created.

This book was published in 2004 - complete with a blurb at the top from Status Quo Joe Biden himself!

In September 2004, the Wilson Center held a conference on the topic The Crisis in Transatlantic Relations.

The differences over the Iraq War didn't stop the expansion of NATO to include Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia in 2004, followed by Albania and Croatia in 2009 and Montenegro in 2017.

Trump's election to the Presidency has brought a new chapter in the Crisis in Transatlantic Relations. The latest episode made the news again this weekend when Stanley Sloan, a US expert on NATO, was vetoed by the State Department as a speaker at a scheduled NATO conference in Denmark, which as a result was cancelled by the Danish Atlantic Council, which was sponsoring the event. This kind of State Department intervention to veto a speaker with thoroughly Establishment credentials is unusual, as Mariel Padilla reports (NATO Conference Is Canceled After U.S. Ambassador Barred a Trump Critic New York Times 12/08/2019):

Mr. Sloan, a visiting scholar at Middlebury College in Vermont, a fellow at the Atlantic Council and a former analyst for the Central Intelligence Agency, planned to speak about the future of trans-Atlantic relations.

One day before he was set to leave for Copenhagen, Mr. Sloan was informed that the United States Embassy in Copenhagen had vetoed his participation because of his previous criticisms of President Trump, Mr. Sloan said on Facebook on Saturday.

Carla Sands, the United States ambassador to Denmark, did not want Mr. Sloan to participate, and the Danish Atlantic Council “had no other option” than to revoke his invitation to speak, Lars Bangert Struwe, the secretary general of the council, said in a statement.

Mr. Sloan said the decision had left him “stunned and concerned about our country.”

Sloan has been tweeting about the incident.

It is here for your viewing: https://t.co/S2eiZ9ruH0 https://t.co/ZwTAkcmlut

— Stanley R. Sloan - Defense of the West (@srs2_) December 8, 2019

The page he links contains further links to his work, including his notes for the speech that he couldn't deliver because Dear Leader Baby Trump doesn't want to hear people criticizing his bumbling, fumbling, laughingstock of a foreign policy, Crisis in transatlantic relations: what future will we choose? The speech itself is largely boilerplate Atlanticist assumptions and is thoroughly conventional. He states his perspective as follows:

• I support liberal democracy as the best, albeit not perfect, political system for our countries.
• My outlook on how to defend the West is influenced as much by this ideological bias as it is by the need for governments to defend against physical threats.
• Finally, in my years of working on transatlantic relations I’ve analyzed and written about many “crises.”
• It’s my judgment that the crisis currently facing the West is the most dangerous of any seen in the past seven decades.

NATO has never been overly disturbed by incidents of member states departing from liberal democracy, e.g., the military government in Greece 1967-1974, various military governments in Turkey and Tayyip Erdoğan's authoritarian Islamist government today, Viktor Orbán's authoritarian regime in Hungary.

Since NATO is an alliance focused on Europe, he takes a Eurocentric view:

Of course, “the West” is more than the transatlantic alliance

When the term is defined broadly, it certainly includes Eastern democracies such as Japan, South Korea, Australia and New Zealand.

Ultimately, however, the members of NATO and the European Union represent the heart of what we call “the West.’

We could quibble with how he uses "the West" as a normative standard, i.e., Japan is part of "the West" but Russia isn't? But it's not the kind of thing that would raise anyone's eyebrows on Morning Joe.

Sloan makes the sensible point that miltiary budgets are always a matter of political decisions, "so the transatlantic alliance will be perpetually plagued by a 'burdensharing' problem."

He does make an explicit if general criticism of the Trump Administration:

Meanwhile, the American guarantee of European security has, under President Trump, become very uncertain. Mutual trust among leaders of alliance nations is at an all-time low.

The [recent NATO] London meeting did little to reassure us.

And, the threat from Russia has become even more intrusive.

Russia’s Putin is getting a helping hand from our president as well as from radical right populist politicians here in Europe.

He sketches out his (also thoroughly conventional) view of challenges from Russia, China, and international terrorism.

Sloan's description of what he sees as the possibility of a "radical negative change" in NATO sounds like a lazy recitation of decades-old Cold War talk, with Moscow as the mastermind of a European Communist movement replaced by Moscow as the mastermind of a European fascist movement. Actually, Putin's government seems far more interested in encouraging political chaos where it can rather than promoting some ideology encouraging Putin-style governments in other countries.

And what would such a presentation be without an invocation of "Munich"? He describes in his "radical negative change" scenario:

In this hypothetical scenario, Trump continues the process of abandoning US international leadership and decides to remove all US forces from Europe.

Trump tweets that he and Vladimir Putin have agreed that such a move would promote peace and security in Europe.

In response, European allies discuss creating strong, integrated European defense structures to replace the transatlantic NATO one.

But they find it too challenging politically and financially.

Even the overwhelming cost estimate projected in 2019 by the IISS for the EU members to create a defense system as capable as that of NATO turns out to be overly optimistic.

Several member countries suggest that the EU should follow the US lead and sign a peaceful relations accord with Russia, in which both sides pledge to take no aggressive actions against the other.

Even though some commentators immediately label this “the 21st century Munich,” most European governments decide they have little choice.

In addition, this move toward accommodation with Russia strengthens illiberal pro-Moscow parties throughout Europe.

That leads to the election of several national administrations that lean toward fascist forms of governance and away from liberal democracy. [my emphasis]

Not a particularly creative formulation. But, as John Kenneth Galbraith observed, the "comfort of convenient belief" can be very attractive in itself. (The Culture of Contentment, 1992) But it often renders its adherents incapable of recognizing important changes and developments not included int he conventional wisdom.

Galbraith also reminds us of the consequences of the kind of threat inflation previously associated with Western views the USSR and justified by the Munich Analogy:

The natural focus of concern was the Soviet Union and its once seemingly stalwart satellites in Eastern Europe. Fear of the not inconsiderable competence of the Soviets in military technology and production provided the main pillar of support for American military spending. However, the alarm was geographically comprehensive. It supported expenditure and military action against such improbable threats as those from Angola, Afghanistan, Ethiopia, Grenada, El Salvador, Nicaragua, Laos, Cambodia and, massively, tragically and at great cost, from Vietnam. From being considered a source of fear and concern, only Communist China was, from the early 1970s on, exempt. Turning against the Soviet Union and forgiven for its earlier role in Korea and Vietnam, it became an honorary bastion of democracy and free enterprise, which, later repressive actions notwithstanding, it rather substantially remains.

Which is also a reminder of the risk of threat inflation in relation to today's Russia. And that's a big issue for NATO, an alliance that has expanded greatly in the last three decades but has nevertheless been an alliance in search of a mission since the fall of the USSR in 1992.

The comfortable conventional view of China that Galbraith described there has now been replaced by China as a pressing threat.

US and NATO foreign policy would be well served by a couple of changes: (1) a more pragmatic and realistic view of threats, which also means one not deferential to profit goals of the armaments industries; and, (2) burying the Munich Analogy, which main consequence has long been to encourage a dangerous habit threat inflation.

Ein Perestroika-Ära Blick auf Kapitalismus, Sozialismus und Demokratie (2 von 2)

Dies ist der zweite von zwei Teilen eines 1989 erschienenen Essays des sowjetischen Dissidenten Juri Burtin. Der erste Teil ist hier.

Kapitalism vs. Sozialismus, 1989

Ein Hauptargument von Burtin ist, dass sich der Kapitalismus als wesentlich anpassungsfähiger erwies, als Marx und Engels und ihre Anhänger wahrgenommen wurden. Und dass die wirtschaftliche Leistungsfähigkeit der sozialistischen Volkswirtschaften offensichtlich schlechter war als die der kapitalistischen Länder. Jordan Peterson könnte Teile dieses Teils des Essays in etwas aufnehmen, das er schreibt, und niemand würde glauben, einen Qualitätsunterschied zu bemerken. Einiges davon ist geradezu banal, mit anderen Worten. Einschließlich der Rede von konservativer Ökonomie als "Markt", tatsächlich (wenn auch vage) argumentierend, dass es Märkte in der Sowjetunion nicht gäbe.

Burtin streitet lange darüber, wie die tatsächliche Intensität der Arbeit und die soziale Bedeutung einer bestimmten Art von Arbeit absolut unermesslich ist. Und dann geht man weiter zu argumentieren, dass Menschen, die in einer Hierarchie höher sind, materiell am meisten belohnt werden sollten, weil sonst jeder faul wird und keinen Ehrgeiz hat. Lager Jordan Peterson Sachen.

Er gönnt sich auch eine republikanische Argumentation des College, indem er ein breites theoretisches Argument von Engels in Anti-Dühring darüber annimmt, wie eine sozialistische Gesellschaftsorganisation die Funktion des Sozialkapitals in der Arbeit des Einzelnen als der Kapitalismus. Und antwortet darauf mit einem Petersonischen Argument, oh ja, wie du das tun wirst, huh? Bedeutet das nicht, dass Sie immer noch einen Markt haben, der das ist, was Sie abbringen wollen, huh, huh? Mit anderen Worten, auf ein breites Argument über die Gesellschaft zu antworten, indem man fragt, was das mit der Verwaltung einer einzelnen Maschinenhalle zu tun hat. Es ist ein polemischer Debattieransatz, keine tatsächliche Analyse. Und dann endet mit dem Argument, dass es keine tatsächliche Möglichkeit gibt, Arbeitsaufwand und Intensität zu messen. (S. 186-8)

Der Aufsatz ist als Kritik am Marxismus strukturiert, aber eigentlich benutzt er oberflächliche Umrahmung mit der Annahme, dass der westliche "Markt"-Kapitalismus wirtschaftlich und (offensichtlich) sozial in jeder Hinsicht dem sowjetischen Modell des Sozialismus überlegen ist.

Burtin passt die kommunistische Kritik der Sozialdemokratie nach dem Ersten Weltkrieg an, dass die Zweite Internationale eine streng deterministische Vorstellung angenommen habe, dass der Kapitalismus unweigerlich durch einen mehr oder weniger automatischen Prozess in den Sozialismus umschlagen würde und ihn zu einem Kritik an der gesamten marxistischen/sozialistischen/sozialdemokratischen Perspektive.

Der interessanteste theoretische Moment des gesamten Essays ist der Teil, in dem Burtin die marxistische Vorstellung von der Transformation des Kapitalismus in eine klassenlose sozialistisch-kommunistische Gesellschaft beschreibt, die eine gewisse Analogie zu Hegels Konzept des Endes von Geschichte, das Ende oder die Kunst usw. Aber er verfolgt es nicht einmal so weit, Hegel an dieser Stelle zu erwähnen.

Er argumentiert ausführlich, dass Marx und Engels in ihrem Verständnis der Flexibilität der kapitalistischen Herrschaft versagt hätten. Er zitiert sie aber auch als voraussehend, was er ihnen vorwirft, weil sie nicht vorhergesehen haben:

Für uns ist im gegebenen Fall nicht so sehr die konkrete als vielmehr die sozusagen präzedenz-theoretische Seite der Marxschen Mutmaßung interessant: die Möglichkeit der Unterdrückung einer progressiven Bewegung durch eine andere, nicht weniger progressive, aber einer anderen Stufe (oder Begrenzung) des Prozesses zugehörige Bewegung. (S. 202)

Die Art von Themen, die Burtin als angeblich vernichtende Kritik elementarer Ideen marxistischer Ökonomie und historischer Philosophie aufwirft, liest sich tatsächlich eher wie routinemäßige und flache Argumente der Handelskammer gegen staatliche Beschränkungen von Unternehmen und gegen Gewerkschaften. Die Art von Argumenten, die er als blinde Flecken im Marxismus des 19. Jahrhunderts aufwirft, sind weitgehend Themen, über die nichtmarxistische Ökonomie, Soziologen und Managementtheoretiker schon lange vor 1989 diskutiert und studiert hatten.

Der sehr respektable Managementtheoretiker Peter Drucker etwa wies auf den Fall von Sportmannschaften hin, die Vorstellung in Frage stellen, dass Manager mehr bezahlt werden sollen als ihre Mitarbeiter/Untergebenen. Ein Star-Fußball- oder Basketballspieler oder Superstar-Entertainer kann in einem bestimmten Jahr mehr machen, als ihr Trainer oder Führungskräfte des Unternehmens, mit denen sie zusammenarbeiten. In Vertriebsabteilungen ist es auch nicht ungewöhnlich, dass ein einzelner Verkäufer, der für Abschlussprovision arbeitet, in einem Zeitraum mehr verdient als sein Manager oder Manager. Es gibt eine lange Diskussion darüber, ob es sinnvoll ist, dass ein Unternehmen die erfolgreichsten Verkäufer als Manager fördert, da die Fähigkeiten, die das Organisationsmanagement benötigt, nicht mit identisch sind, die erforderlich sind, um ein erfolgreicher Verkäufer zu sein. Ein Gegenargument ist, dass, wenn ein Unternehmen Top-Verkäufern keine Priorität für die Beförderungen einräumt, die Motivation der Verkäufer unterminieret würde.

Selbst in grundlegenden kapitalistischen "freien" Erwägungen spielt die Schwierigkeit des Arbeitsplatzes eine gewisse Rolle bei der angebotenen Bezahlung. Ich erinnere mich, dass sich in den 1990er Jahren ein republikanischer Politiker darüber beschwerte, wie einige Busfahrer in Los Angeles 70.000 Dollar im Jahr verdienten! (Das wäre heute eher 120.000 US-Dollar.) Er ging davon aus, dass sein Publikum darüber offensichtlich empört sein würde. Aber mein unmittelbarer Gedanke war, sich zu fragen, ob er über Fahrer sprach, die Überstunden und/oder die unbeliebtesten Schichten arbeiten. Aber mein Hauptgedanke war, dass es wahrscheinlich einige Gegenden von Los Angeles gibt, dass ich nicht für das Doppelte Busfahrer werden möchte.

Burtins Essay könnte den Eindruck erwecken, dass noch nie zuvor solche Vorstellungen ernst genommen wurden.

John Kenneth Galbraith, ein berühmter, wenn auch oft abweichender Ökonom, pflegte, in Thorstein-Veblen-Stil, die Verachtung über die Vorstellungen zu heben, dass CEOs aufgrund der großen Schwierigkeiten ihrer Arbeitsplätze enorme Gehälter verdienen. In seinem letzten Buch, das zu Lebzeiten veröffentlicht wurde, The Economics of Innocent Fraud (2004), schrieb er:

"Arbeit" beschreibt sowohl das, was erzwungen ist, als auch was die Quelle des Prestiges und der Bezahlung ist, die andere eifrig suchen und genießen. Schon jetzt ist Betrug offensichtlich, wenn man für beide Umstände das gleiche Wort hat.

Aber das ist noch nicht alles. Diejenigen, die die Arbeit am meisten genießen - und das sollte betont werden - sind fast überall die Bestbezahlten. Dies wird akzeptiert. Niedriglohnskalen sind für diejenigen, die sich wiederholen, mühsam, schmerzhaft. Diejenigen, die am wenigsten eine Entschädigung für ihre Mühen benötigen, am besten ohne sie überleben könnten, werden am meisten bezahlt. Die Löhne, genauer gesagt die Gehälter, Boni und Aktienoptionen, sind die größten, an der Spitze, wo Arbeit ein Vergnügen ist. Dies ruft keine ernsthaft nachteilige Reaktion hervor. Auch bis vor kurzem führten die überhöhten Vergütungen und umfangreichen Nebenleistungen funktionaler oder nicht funktionaler Führungskräfte nicht zu kritischen Kommentaren. Dass der großzügigste Lohn für diejenigen sein sollte, die ihre Arbeit am meisten genießen, wurde voll akzeptiert. [meine Übertragung aus dem Englischen]

Die Vorstellung, dass "der Markt" irgendwie mystisch gerechte und rationale Ergebnisse aus gesellschaftlicher Sicht hervorbringt, steht heute mindestens so viel in Frage wie 1848, als das Kommunistische Manifest zum ersten Mal veröffentlicht wurde. Auch wenn das aus der Perspektive von 1989 in der UdSSR für Juri Burtin vielleicht nicht ganz so offensichtlich schien.

A perestroika era look at capitalism, socialism, and democracy (2 of 2)

This is the second of two parts on a 1989 essay by Soviet dissident writer Juri Burtin. The first part is here.

Capitalism vs. Socialism, 1989

A key argument of Burtin's is that capitalism proved itself to be far more adaptable than Marx and Engels and their adherents perceived. And that the economic performance of the socialist economies was obviously inferior to that of capitalist countries. Jordan Peterson could take chunks of this part of the essay into something he writes and no one would think notice a difference in quality. Some of it is downright trite, in other words. Including talking about conservative economics as "the market," actually (albeit vaguely) arguing that markets didn't exist in the Soviet Union.

Burtin makes a long argument about how the actual intensity of work and the social importance of a particular type of work is absolutely unmeasurable. And then proceeds to argue that's why people higher up in a hierarchy should be materially the most rewarded because otherwise everybody gets lazy and has no ambition. Stock Jordan Peterson stuff.

He also indulges in a College Republican brand of argument, taking a broad theoretical argument from Engels in Anti-Dühring about how a socialist organization of society would recognize and do fuller justice to the function of social capital in individuals' work than capitalism does. And responds to it with a Petersonian argument of, oh yeah, how you gonna do that, huh? Doesn't that mean that you still have a market which is what you want to do away with huh, huh? In other words, answering a broad argument about society by asking what does that have to do with managing an individual machine shop. It's a polemic debating approach, not an actual analysis. And then winds up arguing that there's no actual way to measure work effort and intensity. (pp. 186-8)

The essay is structured as a criticism of Marxism, but actually it uses superficial framing with an assumption that Western "market" capitalism is economically and (apparently) socially in all ways superior to the Soviet model of socialism.

Juri Burtin adapts the post-First World War Communist critique of Social Democracy, that the Second International had adopted a strictly deterministic notion that capitalism would inevitably turn into socialism by a more-or-less automatic process and makes it a criticism of the entire Marxist/socialist/social-democratic outlook.

The most interesting theoretical moment of the whole essay is the part in which Burtin describes the Marxian notion of the transformation of capitalism into a classless socialist-communist society that highlights a certain analogy to Hegel's concept of the end of history, the end or art, etc. But he doesn't pursue it even so far as to mention Hegel at that point.

He argues at length that Marx and Engels failed in their understanding of the flexibility of capitalist rule. But he also cites them as foreseeing what he criticizes them for not having forseen:

In the given case, it is not so much the concrete side of Marx's presumption that is interesting for us, but rather the precedent-theoretical side of Marx's presumption: the possibility of suppressing a progressive movement by another, no less progressive, but a movement that belongs to a different level (or limitation) of the process." (p. 202; my translation)

The kinds of issues that Burtin raises as supposedly devastating critiques of elementary ideas of Marxist economics and historical philosophy actually read more like routine and shallow Chamber of Commerce type arguments against government restrictions on business and against labor unions. The kind of arguments he raises as blind spots in 19th-century Marxism are largely issues that non-Marxist economics, sociologists, and management theorists had already been discussing and studying long before 1989.

The very respectable management theorist Peter Drucker, for instance, pointed to the case of sports teams to challenge the notion that managers should get paid more than their employees/subordinates. A star football or basketball player or superstar entertainer may make considerably more in a given year that their coaches or executives of the corporations with which they work. In sales departments, it's also not unusual for an individual salesperson working on commission to earn more in a given time period than their managers or their managers' managers. There's a long-running discussion about whether it makes sense for a company to promote the most successful salespeople to be managers, because the skills required by organizational management are not identical to those required to be a successful salesperson. A counterargument is that if a company doesn't give top salespeople priority for promotion, it would undermine the motivation of the salespeople.

Even in basic capitalist "free-market" considerations, the difficulty of the job does play some role in the pay offered. I remember back in the 1990s hearing some Republican politician complain about how some bus drivers in Los Angeles earned $70,000 a year! (Which would be more like $120,000 or so today.) He assumed that his audience would be obviously outraged by that. But my immediate thought was to wonder if he was talking about drivers working overtime and/or the most unpopular shifts. But my main thought was, there are probably some areas of Los Angeles that I wouldn't want to be a bus driver for twice that amount.

Juri Burtin's essay could give the impression that no one had ever taken such notions seriously before.

John Kenneth Galbraith, a famous if often dissenting economist, used to heap Thorstein-Veblen-style scorn on the notions that CEOs earn enormous salaries because of the great difficulty of their jobs. In his last book published during his lifetime, The Economics of Innocent Fraud (2004), he wrote:

"Work" describes both what is compelled and what is the source of the prestige and pay that others seek ardently and enjoy. Already fraud is evident in having the same word for both circumstances.

But this is not all. Those who most enjoy work - and this should be emphasized - are all but universally the best paid. This is accepted. Low wage scales are for those in repetitive, tedious, painful toil. Those who least need compensation for their effort, could best survive without it, are paid the most. The wages, or more precisely the salaries, bonuses and stock options, are the most munificent at the top, where work is a pleasure. This evokes no seriously adverse response. Nor until recently did the inflated compensation and extensive perquisites of functional or nonfunctional executives lead to critical comment. That the most generous pay should be for those most enjoying their work has been fully accepted.

The notion that "the market" somehow mystically produces just and rational outcomes from a societal viewpoint is at least as much in question now as it was in 1848, when the Communist Manifesto was first published. Even if from the perspective of 1989 in the USSR, that may not have seemed quite so obvious to Juri Burtin.

China als „ehrenamtliches“ kapitalistische Land

Ich erwähnte in einem kürzlich veröffentlichten Post einen Kommentar von John Kenneth Galbraith über China. Es war in seinem 1992 Buch, The Culture of Contentment (Die Kultur der Zufriedenheit). In seiner Rede über die Ideologie des Kalten Krieges in den USA und die Rechtfertigung massiver Militärausgaben schreibt er:

Der natürliche Schwerpunkt der Besorgnis lag auf der Sowjetunion und ihren einst scheinbar hartnäckigen Satelliten in Osteuropa. Die Angst vor der nicht unerheblichen Kompetenz der Sowjets in der Militärtechnologie und -produktion bildete die Hauptsäule der Unterstützung der amerikanischen Militärausgaben. Der Alarm war jedoch geografisch umfassend. Sie unterstützte Ausgaben und militärische Maßnahmen gegen so unwahrscheinliche Bedrohungen wie die aus Angola, Afghanistan, Äthiopien, Grenada, El Salvador, Nicaragua, Laos, Kambodscha und, massiv, tragisch und zu hohen Kosten, aus Vietnam. Von der Sorge als Quelle der Angst und Sorge betrachtet, war nur das kommunistische China, von Anfang 1970s, befreit. Sie wandte sich gegen die Sowjetunion und vergab ihre frühere Rolle in Korea und Vietnam, und sie wurde zu einer ehrenhaften Bastion der Demokratie und „free enterprise“, die sie, die später repressive Aktionen trotz, im Wesentlichen bleibt. [meine Hervorhebungen]

(Die Übersetzung aus dem Englischen ist meine.)

China as "honorary" capitalist country

I mentioned in a recent post a comment by John Kenneth Galbraith about China. It was in his 1992 book, The Culture of Contentment. In talking about the US Cold War ideology and the justification for massive military expenditures, he writes:

The natural focus of concern was the Soviet Union and its once seemingly stalwart satellites in Eastern Europe. Fear of the not inconsiderable competence of the Soviets in military technology and production provided the main pillar of support for American military spending. However, the alarm was geographically comprehensive. It supported expenditure and military action against such improbable threats as those from Angola, Afghanistan, Ethiopia, Grenada, El Salvador, Nicaragua, Laos, Cambodia and, massively, tragically and at great cost, from Vietnam. From being considered a source of fear and concern, only Communist China was, from the early 1970s on, exempt. Turning against the Soviet Union and forgiven for its earlier role in Korea and Vietnam, it became an honorary bastion of democracy and free enterprise, which, later repressive actions notwithstanding, it rather substantially remains. [my emphasis]

John Kenneth Galbraith on the "market system" and related frauds

One of my all-time favorite books is a short one, less than 60 pages of text, is the last book John Kenneth Galbraith published during his lifetime, The Economics of Innocent Fraud (2004). In it, he talks about how "capitalism" earned a dubious reputation over time:

Capitalism emerged in Europe from the merchant era with the manufacture, buying, selling and transport of goods along with the rendering of services. Then came the industrialists, with power and prestige given by ownership, direct or indirect, and workers who suffered from their undoubted bargaining weakness - life as the alternative to often painful toil - and the resulting oppression. Marx and Engels, in some of history's most influential prose, outlined the prospect and the promise of revolution. At the end of World War I, in Russia and on its borders, the threat became the reality. Especially in Europe, the word "capitalism" affirmed too stridently this power of ownership and the magnitude of worker and larger subjugation. So came the more than plausible possibility of revolution.

Galbraith was heavily influenced by the great economist Thorstein Veblen and the "institutionalist" school of economic thought associated with him also known as "evolutionary" economics  but definitely not in the Social Darwninist sense. Galbraith's ironic prose style also shows a debt to Veblen, particulary his most famous work, The Theory of the Leisure Class (1899), which Galbraith cites in this book as "a deathless tract" on the pretensions and attitudes of the wealthiest Americans. Continuing in Veblenian mode, Galbraith elaborates his point on the economic system's label:

During World War I, sophisticated thought, extending to belief, held that the source of the conflict and its mass death and destruction had been the rivalry between the great arms and steel combines of France and Germany. In back of the slaughter were those who, for profit, made the guns.

Later, and more destructive to the reputation of capitalism in the United States, was the visibly insane Florida real estate speculation, the rising corporate and industrial voice and, most important, the stock market explosion of the late 1920s. Then came the world-resonating crash of 1929 and, for ten long years, the Great Depression. Capitalism all too obviously did not work. So denoted, it was unacceptable. [my emphasis]

Alternative labeling included the free enterprise system and social democracy, the latter in the form of the post-Second World War welfare state version, not the overtly revolutionary version of the late 19th century. Galbraith mocks the term that eventually became fasionable, the Market System. "There was no adverse history here, in fact no history at all. It would have been hard, indeed, to find a more meaningless designation - this a reason for the choice."

Galbraith always set himself apart from his more conventional economist colleagues by his focus on the importance of advertising and marketing - which effectively don't exist in the standard economic models - and by his willingness to point to social and financial influences on the analysis and recommendations of the economics profession. His discussion about the use of the Market System as a label for 21st century capitalism wasn't just an op-ed rhetorical flourish. It was part of his critical perspective on how the influence of corporate power and great wealth leads economists and the business press to favor positions that obscure the existence of those very interests.

Market fundamentalists typically present the Market as something like a sentient, intelligent subject. Mitt Romney once famously argued to a audience member, "Corporations are people, my friend." (Quoted by Philip Rucker, Washington Post 08/11/2011) The Market is more like a deity. But this Market is not assumed to be a moral agent. As Galbraith put it, "There is only the impersonal market, a not wholly innocent fraud." And he explains more about how the symbol of The Market functions, "No individual firm, no individual capitalist, is now thought to have power; that the market is subject to skilled and comprehensive management is unmentioned even in most economic teaching. Here the fraud."

The remainder of Galbraith's brief book covers some closely related assumptions about economic and political power that obscure the actual power relationships at work: the dominant role of corporations in the economy; the predominant power of corporate managers over shareholders; stigmatizing government as "bureaucracy" but pretending corporate organizations are something other than "bureaucracy"; the celebration of small business and family farms though their power is radically less than that of corporations; the extent to which the "public sector" is also effectively a part of the "private sector" in America, particularly in military matters; the questionable but conventional faith in the power of the Federal Reserve to guide the US economy.

Galbraith is clear that the current "corporate system" is "based on the unrestrained power of self-enrichment," resulting in "an economic system where those favored have freedom to fix their own reward, a not entirely innocent fraud."

2004 was the era where "Enron scandal" was a prime symbol of recent revelations of large-scale corporate corruption, crime, and irresponsibility. Since then we have had the financial and economic meltdown of 2008 with far more wide-ranging revelations of the same. And in 2019, we have the dystopian reality of a corporate-and-Mob crime family heading the US Government. So this observation of his is more relevant and urgent than ever:

Management authority, its abuse and personal enrichment, will continue. The prime hope must be full recognition by the public and by public authority of the opportunity it affords for socially undesirable behavior. Accordingly, there must be surveillance of the reputable enterprise and general attention to managerial self-reward. This is in the interest of both the public and the corporate world. The corporation, to repeat, is an essential feature of modern economic life. We must have it. It must conform, however, to accepted standards and requisite public restraints. Freedom for beneficial economic action is necessary; freedom should not be a cover for either legal or illegal misappropriation of income or wealth. Corporate management must have authority for action but not for seemingly innocent theft. Here the most challenging and, given corporate power, the most urgent need. A society of corporate economic misadventure and crime will not usefully survive and serve. [my emphasis]

He closes his book with an observation that reminds us that we are missing a very important perspective now that most people like Galbraith who experienced the Second World War as adults are now gone, referring to what he calls a "sadly relevant fact":

Civilization has made great strides over the centuries in science, health care, the arts and most, if not all, economic wellbeing. But also it has given a privileged position to the development of weapons and the threat and reality of war. Mass slaughter has become the ultimate civilized achievement. The facts of war are inescapable - death and random cruelty, suspension of civilized values, a disordered aftermath.

Thus the human condition and prospect as now supremely evident. The economic and social problems here described, as also mass poverty and starvation, can, with thought and action, be addressed. So they have already been. War remains the decisive human failure. [my emphasis]

Comparing countries: the New-Deal-was-fascism claim

Comparing countries is not something most Americans think about a lot. After all, when you're part of the Greatest Country in the World, you don't need to do a lot of comparing, amirite?

Or, as Hillary Clinton put it in 2016 speaking to a group from the Veterans of Foreign Wars (VFW), America is "the greatest country that has ever been created on the face of the earth for all of history." (Hillary Clinton addresses military veterans at the Democratic National Convention Telegraph 07/25/2016, just after 1:10 in the video)

But if we want to look seriously at the relative health of democracies, we have to look at something beyond campaign hyperbole.

I recently took the time to read a book by Wolfgang Schivelbusch, Entfernte Verwandtschaft: Faschismus, Nationalsozialismus, New Deal 1933-1939 (2005). It isn't a very good book. But I had seen it referenced as comparing the policies of the US, Italy, and Germany during the Great Depression. And there are comparisons to be made.

And that makes the level of comparison important. We could say that Sweden is a country, and Libya is a country, so they're both the same. And that's true, as far as it goes. But if we get a bit more specific, we would have to say that Sweden has a functioning national government, while Libya is generally considered to be a failed state. And that's a radical differnce.

So the level of comparison and the scope of it is important. John Kenneth Galbraith wrote in The Age of Uncertainty (1977):

The Nazis were not given to [economics] books. Their reaction was to circumstance, and this served them better than the sound economists served Britain and the United States. From 1933, Hitler borrowed money and spent - and he did it liberally as [John Maynard] Keynes would have advised. It seemed the obvious thing to do, given the unemployment. At first, the spending was mostly for civilian works -railroads, canals, public buildings, the Autobahnen. Exchange control then kept frightened Germans from sending their money abroad and those with rising incomes from spending too much of it on imports.

The results were all a Keynesian could have wished. By late 1935, unemployment was at an end in Germany. By 1936, high income was pulling up prices or making it possible to raise them. Likewise wages were beginning to rise. So a ceiling was put over both prices and wages, and this too worked. Germany, by the late thirties, had full employment at stable prices. It was, in the industrial world, an absolutely unique achievement.

That is a straightforward assessment by a leading Keynesian economist. And it looks at particular mechanisms of economic policy: debt, deficit spending, and infrastructure projects. He draws a contrast to the previous policies of the German Chancellorship of Heinrich Brüning government in Germany (1930-32) and the American Presidency of Herbert Hoover (1929-1933). Both governments had pursued austerity polities, which was the widespread orthodoxy in most of the world. Franklin Roosevelt campaigned in 1932 on balanced budgets. Even leading European Marxist Social Democrats like Rudolf Hilferding and Otto Bauer thought that budget-balancing was the appropriate response to the crisis. The same orthodoxy plagued the social-democratic Labour government of Ramsay MacDonald in Britain.

So it is possible to make meaningful comparisons between countries on how they handled the Depression. But it requires making sensible comparisons while noting differences. But Schivelbusch draws dubious parallels at a high level of generalization that make an unconvincing argument for the point his making about parallels among the New Deal, Italian fascism, and Nazi Germany. He writes:

Nimmt man dazu die heute unbestrittene Tatsache, daß die USA erst durch den 2.Weltkrieg die Wirtschaftskrise überwanden, so ergibt sich ein weiterer wundersamer Parallelismus zwischen Faschismus, Nationalsozialismus und New Deal. Alle drei bedurften zur Überwindung ihrer Wirtschaftskrise einer Rüstungskonjunktur und letztlich des Krieges.

[If one also takes into account the reality, undisputed today, that the USA first overcame the economic crisis by the Second World War, then a additional wondrous parallel among fascism, National Socialism, and the New Deal. All three required an armaments increase and finally the war to overcome the economic crisis.]

That odd statement raised my curiosity about the book's perspective. Because the economy in general was on an upward swing during the 1930s, beginning in 1933 and interrupted by a 13-month recession in 1936-37. A recession whose occurrence had a lot to do with the fact that, despite his militant rhetoric against the "economic royalists" in the 1936 election, FDR switched after the election to budget-balancing, i.e., toward austerity policies, which he had the sense to soon abandon.

But it's a common anti-New Deal and anti-Keynesian argument to say that, see, the New Deal didn't work! It took the war to end the Depression! In American politics, this goes comfortably together with a seemingly endless bipartisan faith in the virtue of military spending. (In the real world, government spending on war mobilization and armaments stimulates the economy in the same way building new posts offices did, by the borrowing money and spending it.)

Unfortunately, his analysis reflects that shaky assumptions and high level of generalization reflected in that statement. He cites a lot of comtemporary sources making comparisons of the New Deal to fascism and National Socialism. He also cites various Americans expressing admiration for Mussolini's policies, leaving a false impression that it was entirely mainstream and respectable in the US to do so. That was not the case.

The contemporary sources he cites include people distinctly on the left politically, including civil rights activist Oswald Garrison Villard; Alfred Bingham, editor of a left-leaning journal called Common Sense; V. F. Calverton, a pseudonym of George Goetz, a left radical who edited a journal called Modern Quarterly; and pro-New Deal writers Gilbert Montague and Ruth E. Shallcross.

But he also cites some very dubious figures as well. The rightwing crackpot isolationist John T. Flynn and the American activist for what he himself called "national socialism," Lawrence Dennis, were among "the sharpest analysts and critics of the New Deal," in Schivelbusch's view. If by that he means polemical, frivolous rightwingers, then I suppose we could agree with him. He or his editors chose to put that assessment in an epilogue. Which was good judgment on their part, because I would have probably stopped reading if they had put it in an introduction. The epilogue at least points out that Flynn was an isolationist and that Dennis is regarded as a fascist. The far right Mises Institute profile of Flynn praises him as a "master polemicist of the Old Right". Gary Younge provides additional biographical information in The fascist who 'passed' for white Guardian 04/04/2007

Schivelbusch includes an alibi comment showing that he's aware that calling Roosevelt and the New Deal "fascist" was a cheap polemical practice of his enemies:

Den Faschismusvergleich, den die Gegner Roosevelts in der tagespolitischen Rhetorik benutzten, können wir wegen seiner durchschaubaren propagandistischen Natur und Willkür unberücksichtigt lassen.

[The fascism comparison that Roosevelt's opponents used in daily political rhetoric, we can ignore because of his transparently propagandistic nature and and arbitrariness.]

But then he praises Flynn and Dennis as sound and insightful sources? Please.

Another of his comparison quotes comes from J.B. Matthews, who served as executive director to Joe McCarthy's Red hunting Senate Investigating Committee. A militant leftist in his younger years, who joined the Socialist Party and also co-authored a book on fascism with Ruth Shallcross publishe by the leftist League for Industrial Democracy in 1934. But by 1938 at the latest, he became a zealous rightwinger. In a biographical article that is balanced and even sympathetic, Nelson Dawson nevertheless leaves the impression that Matthews was an erratic character, at least when it came to political ideology. "It is sometimes difficult to determine precisely what Matthews believed and, indeed, when he believed it," he writes. His career as a Red-hunter pretty much ended after he published an article in the far right American Mercury charging, "The largest single group supporting the Communist apparatus in the United States today is composed of Protestant clergymen." That, Dawson observes drily, was "admittedly an assertion of considerable audacity." (From Fellow Traveler to Anticommunist: The Odyssey of J. B. Matthews Register of the Kentucky Historical Society 84:3; Summer 1986)

That some on the left and the right made (usually) disapproving comparisons of the New Deal with Italian fascism reflects the fact that fascism had the general reputation of being undemocratic and dictatorial. Even Herbert Hoover rolled out the accusation, which Schivelbusch quotes in English, "We must fight again for a government founded on individual liberty and opportunity that was the American vision. If we lose we will continue down this New Deal road to some sort of personal government based upon collectivist theories. Under these ideas ours can become some sort of Fascist government."

But "fascism" was also a useful epithet because, not entirely unlike today, most Americans had only a vague idea of what it meant. Writing in 1960, James Shenton explains (Fascism and Father Coughlin Wisconsin Magazine of History 44:1; Autumn 1960):

Americans have notoriously refused to ft define political terms exactly. Often a single term has been used to cover such a multitude of sins and virtues that the historian or political scientist is left with the impression that he has entered into a wonderland of nonsense. An excellent example of this propensity is the scope with which the word "fascism" was used in depression America. A person unfamiliar with the New Deal era might, after reading the popular magazines and journals of the day, be justified in assuming that fascism was the dominant political mood of America during the 1930's. ...

... fascism [has] been used to describe the Daughters of the American Revolution, Boss Frank Hague, the New Deal - and particularly its NIRA experiment - Huey Long, Franklin D. Roosevelt, the Roman Catholic hierarchy, local chambers of commerce, the American Legion, Tammany, and the Reverend Charles E. Coughlin, among others.

But why would people who were sympathetic to fascism, either overtly or very obviously implicitly, criticize the New Deal as fascist? Because they indulged in sectarian double-talk, for one thing. Part of Lawrence Dennis' schtick was to argue that the Roosevelt Administration and the New Deal were fascist, but a bad fascism. What he wanted to see was a good fascism. Rightwingers today still use this kind of quirky, double-reverse arguments.

Yes, comparisons between countries can be a challenge. One that Wolfgang Schivelbusch's Entfernte Verwandtschaft doesn't rise to meet.

Two 2019 "anniversaries" coming up: a flawed peace treaty and an amazing European transformation

Publishers of books, documentaries, and magazines use "round" anniversaries of multiples of 10 years to do retrospectives on important historical events.

I'm particularly interested in two "anniversary" events that are up on the calendar again in 2019.

The Revolutions of 1989

The fall of the Berlin Wall happened in 1989 and became the symbol of the process by which the Warsaw Pact countries first became independent of the Soviet Union and eventually resulted in 1991 in the end of the Soviet Union itself.

The process of independence was followed by mostly peaceful internal political revolutions in the former Warsaw Pact countries, a process former German Foreign Minister Joschka Fischer memorably described as "revolution by implosion". It was not a foregone conclusion that such a thing would happen. Even authoritarian regimes have a social basis. And a dissatisfying present can often look more promising than a change leading to a possibly more uncertain future.

In the 1999 and 2009 round 10-year anniversaries, a triumphalist "end of history" narrative shaped the public perceptions of those events in the US and western Europe. That's not the case in 2019. The End Of History has now clearly ended.

The Versailles Treaty

The treaty that ended the First World War in Europe signed June 28, 1919 in the palace of Versailles after long months of negotiations. It officially came into force in January of 1920.

The popular impression of the Versailles Treaty in the United States is that President Woodrow Wilson successfully negotiated the creation of the League of Nations with the reluctant heads of government in Europe. But Republican isolationists in the Senate refused to approve the treaty, thus tragically and short-sightedly undermining Wilson's visionary, idealistic image.

In reality, it was a bad treaty and its implementation and supplementary decisions by the Allies were also generally bad.

The reparations required of Germany were crippling, and made recovery from the world war more difficult. Germany's borders were drawn in such a way that encouraged revanchist sentiments, e.g., leaving the German city of Königsberg (now the Russian city of Kaliningrad) as accessable only by see. The French occuptions of the Ruhr District and the Rhineland particularly stimulated German revanchism in the 1920s.

The treaty did apply something like Wilson's principle of self-determination to the successor states of the Habsburg/Austro-Hungarian Empire. But all over the empire, people from various nationalities with competing territorial claims were mixed with each other, from Poland to Ukraine to Bosnia-Herzogovina. Romania wound up with the territory of Transylvania, which was also claimed by Hungary. It was the 1920 Treaty of Trianon that formally comfirmed that arrangement, because the Allies wouldn't negotiate with the Communist government in power in Hungary for a few months in the second half of 1919. Hungary's authoritarian President Viktor Orbán is still today promoting revanchist goals to recover the territory from Romania. Trianon also removed several other areas that had previously been considered part of Hungary, including Slovakia.

The groups that understood themselves as German, even in areas where they were a large majority, didn't all get German self-determination out of the deal. The last Habsburg Emperor, Kaiser Karl, made a fumbling attempt at the end of 1918 to reorganize the Empire on a new basis with more autonomy for the parts. His proposal very quickly provoked the empire's disintegration, in which the areas of Bohemia and Moravia were lumped into Czechoslovakia. Austria declared its independence as Deutsch-Österreich (German Austria), as illustrated by this stamp:

The new nation's position was that they wanted to become part of Germany, then in the beginning years of the Weimar Republic. But the Allies would not allow such a unification to take place. Austria, Bohemia, and Moravia all became revanchist targets of Nazi Germany, none of which the Allies defended militarily when Hitler annexed them.

As for Czechoslovakia, the Czech and Slovakian parts mutually agreed to form separate countries in 1993.

John Maynard Keynes was part of the British delegation to the Paris Conference in which the treaty was negotiated. He left in frustration at the course of negotiations, later publishing a perceptive book called The Economic Consequences of the Peace (1919). John Kenneth Galbraith talked about Keynes' perspective in The Age of Uncertainty (1977):

The mood in Paris in the early months of 1919 was vengeful, myopic, indifferent to economic realities, and it horrified Keynes. So did his fellow civil servants. So did the politicians. In June he resigned and came home, and, in the next two months, he composed the greatest polemical document of modern times. It was against the reparations clauses of the Treaty and, as he saw it, the Carthaginian peace.

Europe would only punish itself by exacting, or seeking to exact, more from the Germans than they had the practical capacity to pay. Restraint by the victors was not a matter of compassion but of elementary self-interest. The case was documented with figures and written with passion. In memorable passages Keynes gave his impressions of the men who were writing the peace. Woodrow Wilson he called "this blind and deaf Don Quixote." Of Clemenceau he said: "He had one illusion- France; and one disillusion, mankind . . . "

On Lloyd George he was rather severe:

How can I convey to the reader, who does not know him, any just impression of this extraordinary figure of our time, this syren, this goat-footed bard, this half-human visitor to our age from the hag-ridden magic and enchanted woods of Celtic antiquity.

Alas, no man is of perfect courage. Keynes deleted this passage on Lloyd George at the last moment.

I'm looking forward to the material that will come out this year on both anniversaries.