Gaius Publius: Defining Neoliberalism

By Yves Smith

Source: Naked Capitalism

For years I’ve been using the term “neoliberalism” (or sometimes neo-liberalism*) and I’m always uncomfortable, since it sounds so academic. So I usually add one-phrase definitions and move on. For example, this from a recent piece on Puerto Rico:

If neoliberalism is the belief that the proper role of government is to enrich the rich — in Democratic circles they call it “wealth creation” to hide the recipients; Republicans are much more blatant — then the “shock doctrine” is its action plan.

That’s sounds pretty blunt, but it’s a true statement, even among academics. See this great interview (start at about 6:15) with Professor Philip Miroski of the University of Notre Dame on how modern neoliberals have come to see the role of government in society. It’s weedy but excellent.

I want to offer our readers a better description of neoliberalism though, yet not get into too many weeds. So consider these excerpts from a longer Guardian essay by the British writer George Monbiot. (My thanks to Naked Capitalism commenter nonclassical for the link and the idea for this piece.)

Neoliberalism — The Invisible Water the West Is Swimming In

We’ll start with Monbiot’s brief intro, just to set the scope of the problem:

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Ask people to define “neoliberalism,” even if they’ve heard of it, and almost no one can. Yet the comparison of our governing ideology to that of the Soviet Union’s is a good one — like “communism,” or the Soviet Union’s version of it, neoliberalism defines and controls almost everything our government does, no matter which party is in office.

The Birth of Neoliberalism

What is neoliberalism and where did it come from? Monbiot writes:

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

Neoliberalism is an explicit reaction to Franklin Roosevelt and the welfare state, which by a quirk of history was called “liberalism” at the time, even though, in the nineteenth century, “liberalism” had roughly the same meaning that “neoliberalism” has today. In other words, “FDR liberalism” is in many ways the opposite of classical “liberalism,” which meant “liberty (freedom) from government,” and a quirk of history has confused these terms.

Back to Monbiot and Hayek:

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international” [a term modeled on “the Communist International]: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Note the mention of Milton Friedman above. Neoliberalism is a bipartisan ideology, not just a Clintonist-Obamist one.

Democrats, Republicans and Neoliberalism

As Monbiot explains, for a while neoliberalism “lost its name” and was more or less a fringe ideology in a world still dominated by the ideas of John Maynard Keynes and Keynesian economics. When neoliberalism later came back strong in the Republican Party, it wasn’t called “neoliberalism” but “Milton Friedman free market conservativism,” or something similar.

Only when Bill Clinton and his Democratic Party allies adopted it in the 1980s did the term “neoliberal” re-emerge in public discourse.

[I]n the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. [emphasis added]

Note the role of Jimmy Carter and start of deregulation in the late 1970s. For that reason, many consider Jimmy Carter to be the “proto-neoliberal,” both for the nation and the Democratic Party.

Neoliberalism — “Just Deserts” for Predators and Prey

What makes “neoliberalism” or “free market conservatism” such a radical — and destructive — ideology? It reduces all human activity to economic competition. It creates and glorifies, in other words, a world of predators and prey, a world like the one we live in as today:

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

In a world where competition is right and good, a world in which the “market” is the defining metaphor for human activity, all social ties are broken, the individual is an atom left to survive as an individual only, the strongest relentlessly consume the weakest — and that’s as it should be. (It’s easy to imagine how the apex predators of our social order would be attracted to this, and insist on it with force.

Thus the bipartisan world we live in today. Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast.

The Role of Government in a Neoliberal World

Since for neoliberals, the “market” is the source of all that is good in human interaction, non-interference in “the market” is rule one for government.

Over time that has changed, however, as winners have grown more successful and their control of government more absolute. The proper role of government in today’s neoliberal regime is not merely to allow the market to operate for the benefit of wealth-holders; it’s to make sure the market operates for the benefit of wealth-holders.

In other words, the role of government is to intervene in the market on behalf of wealth-holders, or, as I put it more colloquially, to proactively enrich the rich. The interview with Professor Mirowski, as I noted above, makes that same point, but from an academic standpoint.

From this it should be also clear that until we free ourselves of rule by neoliberals and the pain and misery they create, we’ll always be victims to the predatory giants — the very very wealthy and the corporations they use as power-extenders — those, in other words, who want merely to own everything else in the world.

This means we need to free ourselves from neoliberals in both parties, not just the ones in current seats of power. But that idea seems to have been excised from most discussions these days. Fair warning though. If the Age of Trump ends with the Restoration of Mainstream Democrats, we’ll have won almost nothing at all.

____________

* I sometimes spell “neo-liberalism” with the hyphen to suggest the following connection: Neo-liberalism is “new liberalism,” and has the same relationship to FDR liberalism as New Labour has to Labour — the two are exactly opposite.

Newsletter: From Neoliberal Injustice To Economic Democracy

By Kevin Zeese and Margaret Flowers

Source: Dissident Voice

The work to transform society involves two parallel paths: resisting harmful systems and institutions and creating new systems and institutions to replace them. Our focus in this article is on positive work that people are doing to change current systems in ways that reduce the wealth divide, meet basic needs, ensure sustainability, create economic and racial justice and provide people with greater control over their lives.

When we and others organized the Occupation of Washington, DC in 2011, we subtitled the encampment ‘Stop the Machine, Create a New World’, to highlight both aspects of movement tasks — resistance and creation. One Popular Resistance project, It’s Our Economy, reports on economic democracy and new forms of ownership and economic development.

Throughout US history, resistance movements have coincided with the growth of economic democracy alternatives such as worker cooperatives, mutual aid and credit unions. John Curl writes about this parallel path in “For All the People,” which we summarized in “Cooperatives and Community Work are Part of American DNA.”

Mahatma Gandhi’s program of nonviolent resistance, satyagraha, had two components: obstructive resistance and constructive programs. Gandhi promoted Swaraj, a form of “self-rule” that would bring independence not just from the British Empire but also from the state through building community-based systems of self-sufficiency. He envisioned economic democracy at the village level. With his approach, economics is tied to ethics and justice — an economy that hurts the moral well-being of an individual or nation is immoral and business and industry should be measured not by shareholder profit but by their impact on people and community.

Today, we suffer from an Empire Economy. We can use Swaraj to break free from it. Many people are working to build a new economy and many cities are putting in place examples of economic democracy. One city attempting an overall transformation is Cooperation Jackson in Jackson, Mississippi.

Economic Democracy in response to neoliberalism

In his new book, Out of the Wreckage: A New Politics for an Age of Crisis, George Monbiot argues that a toxic ideology of greed and self–interest resulting in extreme competition and individualism rules the current economic and political culture. It is built on a misrepresentation of human nature. Evolutionary biology and psychology show that humans are actually supreme altruists and cooperators.  Monbiot argues that the economy and government can be radically reorganized from the bottom up, enabling people to take back control and overthrow the forces that have thwarted human ambitions for a more just and equal society.

In an interview with Mark Karlin, Monbiot describes how neolibealism arose over decades, beginning in the 1930s and 40s with John Maynard Keynes, Friedrich Hayek and others, and is now losing steam, as ideologies do. Monbiot says we need a new “Restoration Story.”

We are in the midst of writing that new story as people experience the injustice of the current system with economic and racial inequality, destruction of the environment and never ending wars. Indeed, we are further ahead in creating the new Restoration Story than we realize.

Cooperatives

New research from the University of Wisconsin–Madison’s Center for Cooperatives (UWCC) has found there are 39,594 cooperatives in the United States, excluding the housing sector, and there are 7 million employer businesses that remain “potential co-op candidates.” These cooperatives account for more than $3 trillion in assets, more than $500 billion in annual revenue and sustain nearly two million jobs. This May, the Office of Management and Budget approved including coop questions in the Economic Census so that next year the US should have more accurate figures. The massive growth of cooperatives impacts many segments of the economy including banking, food, energy, transit and housing among others.

In cooperatives, workers or consumers decide directly how their business operate and work together to achieve their goals; it is a culture change from the competitive extreme capitalist view dominated by self-interest.

In Energy Democracy: Advancing Equity in Clean Energy Solutions, editors Denise Fairchild and Al Weinrub describe energy cooperatives that are creating a new model for how we organize the production and distribution of energy, which is decentralized, multi-racial and multi-class.

Lyn Benander of Co-op Power, a network of many cooperatives in New England and New York, writes that they transform not just energy but also their communities:

First, people come together across class and race to make change in their community by using their power as investors, workers, consumers, and citizens ready to take action together. Then, they work together to build community-owned enterprises with local capital and local jobs to serve local energy needs. It’s a proven strategy for making a real difference.

In Lancaster, CA, the mayor has turned the town into a solar energy capital where they produce power not just for themselves, but also to sell to other cities. They are also moving to create manufacturing jobs in electric buses, which more cities are buying, and energy storage. Research finds that rooftop solar and net-metering programs reduce electricity prices for all utility customers, not just those with solar panels. The rapid growth of rooftop solar is creating well-paying jobs at a rate that’s 17 times faster than the total U.S. economy. Rooftop solar, built on existing structures, such as homes and schools, puts energy choices in the hands of customers rather than centralized monopolies, thereby democratizing energy.

Including housing cooperatives would greatly increase the number of cooperatives. According to the National Association of Housing Cooperatives, “Housing cooperatives offer the more than one million families who live in them several benefits such as: a collective and democratic ownership structure, limited liability, lower costs and non-profit status.”  Residents of a mobile home park in Massachusetts decided to create a housing cooperative to put the residents in charge of the community when the owner planned to sell it.

Related to this are community land trusts. A section of land is owned in a trust run as a non-profit that represents the interests of local residents and businesses. Although the land is owned by the trust, buildings can be bought and sold. The trust lowers prices and can prevent gentrification.

Universal Basic Income

Another tool gaining greater traction is a universal basic income.  James King writes in People’s Policy Project that “. . . a universal basic income (UBI) – a cash payment made to every person in the country with no strings attached – is becoming increasingly popular in experimental policy circles. . . payments  [would be] large enough to guarantee a minimum standard of living to every person independent of work. In the US, that would be roughly $12,000 per person based on the poverty line.”

The wealth divide has become so extreme in the United States that nearly half of all people are living in poverty. A small UBI would provide peace of mind, financial security and the possibility of saving money and building some wealth. A report by the Roosevelt Institute, this week, found that a conservative analysis of the impact of a UBI of $1,000 per month would grow the economy by 12.56 percent after an eight-year implementation, this translates to a total growth of $2.48 trillion.

Public Finance

Another major area of economic democracy is the finance sector. At the end of 2016 there were 2,479 credit unions with assets under 20 million dollars in the United States. Members who bank in credit unions are part of a cooperative bank where the members vote for the board and participate in other decisions.

Another economic democracy approach is a public bank where a city, state or even the national government creates a bank using public dollars such as taxes and fee revenues. Public banks save millions of dollars that are usually paid in fees to Wall Street banks, and the savings can be used to fund projects such as infrastructure, transit, housing, healthcare and education, among other social needs. Public banks can also partner with community banks or credit unions to fund local projects. This could help to offset one of the negative impacts of Dodd-Frank, which has been a reduction in community banks. In testimony, the Secretary of Treasury, Stephen Munchin, said we could “end up in a world where we have four big banks in this country.”

North Dakota is the only state with a public bank, and it has the most diverse, locally-owned banking system in the country. Stacey Mitchell writes that “North Dakota has six times as many locally owned financial institutions per person as the rest of the nation. And these local banks and credit unions control a resounding 83 percent of deposits in the state, more than twice the 30 percent market share such banks have nationally.” Public banking campaigns are making progress in many parts of the country, among them are Oakland, Los Angeles, Philadelphia, Santa Fe, and other areas.

Mutual Aid

When crises occur, no matter what their cause, people can work together cooperatively and outside of slow and unresponsive state systems to meet their needs. This is happening in Athens, Greece, which has been wracked by financial crisis and austerity for years. People have formed “networks of resistance” that meet in community assemblies organized around needs of the community, such as health care and food. They started with time banks as a base for a new non-consumer society.

Similar efforts are underway in Puerto Rico following the devastation of Hurricane Maria. A group called El Llamado is coordinating more than 20 mutual aid efforts, and providing political education and support for self-organizing at the same time.

As George Monbiot describes it, this is consistent with the truth about what human beings are:

We survived despite being weaker and slower than both our potential predators and most of our prey. We did so through developing, to an extraordinary degree, a capacity for mutual aid. As it was essential to our survival, this urge to cooperate was hard-wired into our brains through natural selection.

As we face more crises, whether in lack of access to health care, education, housing, food or economic and climate disasters, let’s remember that we have the capacity to meet our needs collectively.  In fact, every day, people are putting in place a new economic democracy that allows people to participate based on economic and racial justice as well as real democracy. As these alternatives are put in place, they may become dominant in our economy, communities and politics and bring real democracy and security to our lives.

 

Kevin Zeese and Margaret Flowers are co-directors of Popular Resistance. Read other articles by Kevin Zeese and Margaret Flowers.

No Man’s Land

fence

By Steven Stoll

Source: Orion Magazine

A chainlink fence topped with razor wire surrounds fourteen acres of thistle and grass at East Forty-First Street between Long Beach Avenue and South Alameda Street in Los Angeles. These two city blocks occupy a transitional environment of sorts. In one direction the sight of small houses stretches for miles toward the Pacific Ocean, but turn around and the neighborhood becomes industrial, consisting of a textile factory, a scrap metal recycling company, trucking terminals, and warehouses. The tracks of the Southern Pacific Railroad run parallel to Long Beach Avenue. There are few trees or anything green and growing but the drought-resistant thistle.

In 1986, the City of Los Angeles acquired the land from a group of owners through eminent domain, but then folded plans to build a waste incinerator when the community resisted. The land ended up in the holdings of the Harbor Department. It had been two years since the uprising that followed the acquittal of four Los Angeles police officers, tried for beating Rodney King. Perhaps looking to make a gesture and lacking its own use for the site, the Harbor Department invited members of a local food bank to plant a community garden.

They did. Between 1994 and 2006 hundreds of families grew a profusion of food plants on what had been a blighted lot just a few years before. One visitor identified a hundred species, most of them native to Mexico and South America— chayote, guava, tomatillo, sapodilla, and sugarcane, in addition to maize, beans, avocados, bananas, and squashes. The South Central Farm was not misnamed: photographs show the land in robust cultivation, producing a wealth of food.

But in 2001, one of the prior owners filed a lawsuit against the city. The property had never been used to build the incinerator, and so, he argued, Los Angeles had no reason to seize it. The city settled the case in 2003 by selling the fourteen acres back to the prior owner.

In the ensuing confrontation a single absentee negated the sustained labor and improvements of 350 families, representing around a thousand people, now accused of squatting. They refused to leave. Lawyers filed briefs. Gardeners swore resistance. (One said, “Just think if we assemble, two from every family, and you know we’ll each grab a hoe, and no one will get past us.”) Movie stars showed up with camera crews. A foundation offered millions of dollars as a purchase price, which the owner rejected. A date was set for the forced removal of the stalwarts. On June 13, 2006, Los Angeles County Sheriffs arrested forty people. Bulldozers destroyed the farm. A decade later, the land remains vacant.

In the case of the South Central Farm, ownership for profit triumphed over use for subsistence, which, of course, is the way of the world. Nothing could be more ordinary than a landowner asserting his rights. And yet, just five centuries ago, what happened on those fourteen acres in south Los Angeles wouldn’t have made sense to anyone.

In 1500, no one sold land because no one owned it. People in the past did, however, claim and control territory in a variety of ways. Groups of hunters and later villages of herders or farmers found means of taking what they needed while leaving the larger landscape for others to glean from. They certainly fought over the richest hunting grounds and most fertile valleys, but they justified their right by their active use. In other words, they asserted rights of appropriation. We appropriate all the time. We conquer parking spaces at the grocery store, for example, and hold them until we are ready to give them up. The parking spaces do not become ours to keep; the basis of our right to occupy them is that we occupy them. Only until very recently, humans inhabited the niches and environments of Earth somewhat like parking spaces.

Ownership is different from appropriation. It confers exclusive rights derived from and enforced by the state. These rights do not come from active use or occupancy. Property owners can neglect land for years, waiting for the best time to sell it, even if others would put it to better use. And in the absence of laws protecting landscapes, the holders of legal title can mow down a rainforest or drain a wetland without regard to social and ecological cost. Not all owners are destructive or irresponsible, but the imperative to seek maximum profit is built into the assumptions within private property. Land that costs money must make money.

Champions of capitalism don’t see private property as a social practice with a history but as a universal desire—a nearly physical law—that amounts to the very expression of freedom. The economist Friedrich Hayek called it “the most important guarantee of freedom, not only for those who own property, but scarcely less for those who do not.” But Hayek never explained how buyers and sellers of real estate spread a blanket of liberty over their tenants. And he never mentioned the fact that the concept, far from being natural law, was created by nation-states—the notion that someone could claim a bit of the planet all to himself is relatively new.

Every social system falls into contradictions, opposing or inconsistent aspects within its assumptions that have no clear resolution. These can be managed or put off, but some of them are serious enough to undermine the entire system. In the case of private property, there are at least two—and they may throw the very essence of capitalism into illegitimacy.

The first of the system’s contradictions points to its origins. Land in the English countryside during the sixteenth century was regulated by feudal obligations so obscure and so thick that few people today can make sense of them. An English peasant could use a run of soil for a term of years or for her entire life, but it did not belong to her. Village elders, representatives of the local lord, and even the deacon of the church might have claimed an interest in how this or that field was planted. Everyone from monarch to serf received a different slice of the realm. These use rights could be exchanged only in very limited ways: a lord occupied his ancestral house and manor for as long as he lived, but he could not sell them.

All sorts of events caused the demise of feudalism. The Black Death of the fourteenth century killed so many millions that the labor market tipped in favor of those who survived. The spread of money gave things exchange value and made buying and selling easier. Food production increased during the sixteenth century, creating more calories for work and more commodities for trade. And an international wool market inspired lords to change common fields into sheep walks.

The problem was that lords could not put sheep where they wanted. They lived within the feudal assemblage of obligations and rights attached to social orders and scraps of landscape. Faced with declining returns and proliferating opportunities, they began to curse the old rules—they wanted land for themselves.

Enclosure is just what it sounds like: the physical and legal bounding of an area. In practice it meant the seizure of villages, common fields, and outlying forests and marshes. It allowed lords to evict former residents so that they could do new things with land. Sometimes it happened by agreement, with peasants giving in to demands they feared to contest; other times there was violence. In 1607 at least one thousand peasants tore up hedges in Northamptonshire and filled in ditches that demarcated property lines. The rebels made a statement: “Wee, as members of the whole, doe feele the smarte of these incroaching Tirants, which would grind our flesh upon the whetstone of poverty.” King James didn’t flinch from the whetstone. His forces killed forty insurgents and hanged their leader.

The king’s involvement tells us that grasping lords did not do this dirty work by themselves. Parliament legalized their land grab by granting them something that had never before existed in human history: ownership. Lords could now act without regard to tradition or the needs of residents. Some demolished whole communities. The word pauper dates from the seventeenth century to describe poor people who wandered the roads homeless, eating anything they could scavenge and turning up cold and wet at church doors. Peasants became workers as their only option for survival. Some stooped for a wage on the very land they once tilled as members of villages.

Enclosure created two things at once: private property and wage labor, the essential preconditions for capitalism. Like all social practices, private property has a degree of flexibility. Some of its advantages can and should be diffused among as many people as possible. By eliminating messy titles to land and its embeddedness in tradition, enclosure made possible a new measure of innovation and abundance. But that’s also the first of its contradictions. It generates wealth and unprecedented social power for some by making others poor and dependent.

All of this matters because enclosure never came to an end. It jumped continents and kept on going. The colonial wars for North America, in which Britain and then the United States seized land from hundreds of tribes, can be understood as a rolling dispossession—by purchase, treaty, and ejectment. Enclosure also took place in Australia and South Africa. Wherever nation-states became landowners they turned the commons into private property. The epicenter of enclosure today is Africa. A resident of the village of Dialakoroba, in Mali, which has lost thousands of acres to foreign investors, recently said this: “I do not know, in ten to twenty years, how people will live in our villages because there will be no land to till. . . . Everything has been sold to rich people in very opaque conditions.”

Private property’s second contradiction comes from the odd notion that land is a commodity, which is anything produced by human labor and intended for exchange. Land violates the first category, but what about the second? As the historian Karl Polanyi wrote, land is just another name for nature. It’s the essence of human survival. To regard it as an item for exchange “means to subordinate the substance of society itself to the laws of the market.”

Clearly, though, we regard land as a commodity and this seems natural to us. Yet it represents an astonishing revolution in human perception. Real estate is a legal abstraction that we project over ecological space. It allows us to pretend that a thousand acres for sale off some freeway is not part of the breathing, slithering lattice of nonhuman stakeholders. Extending the surveyor’s grid over North America transformed mountain hollows and desert valleys into exchangeable units that became farms, factories, and suburbs. The grid has entered our brains, too: thinking, dealing, and making a living on real estate habituates us to seeing the biosphere as little more than a series of opportunities for moneymaking. Private property isn’t just a legal idea; it’s the basis of a social system that constructs environments and identities in its image.

Advocates of private property usually fail to point out all the ways it does not serve the greater good. Adam Smith famously believed that self-interested market exchange improves everything, but he really offered little more than that hope. He could not have imagined mountains bulldozed and dumped into creeks. He could not have imagined Camden, New Jersey, and other urban sacrifice zones, established by corporations and then abandoned by them. Maximum profit is the singular, monolithic interest at the heart of private property. Only the public can represent all the other human and nonhuman interests.

Unbelievably, perhaps, the United States Congress has done this. Consider one of its greatest achievements: the Endangered Species Act (ESA) of 1973. The act nails the abstraction of real estate to the ground. When a conglomerate of California developers proposed a phalanx of suburbs across part of the Central Valley, they came face to face with their nemesis: the vernal pool fairy shrimp. In 2002, the Supreme Court upheld the shrimp’s status as endangered and blocked construction. It was a case in which the ESA diminished the sacred rights to property for the sake of tiny invertebrates, leaving critics of the law dumbfounded. But those who would repeal the ESA (and all the other environmental legislation of the 1970s) don’t appreciate the contradiction it helps a little to contain: the compulsion to derive endless wealth from a muddy, mossy planet.

Of course, in the era of climate change, those invaluable laws and the agencies they created now seem too limited in their scope and powers to take on the spectacular collision between Economy and Ecology now in motion. But maybe the most radical way we can treat the ownership of Earth—the single most subversive notion we can have about private property—is that it’s merely a social relationship, an agreement between people to behave in certain ways. It can be challenged, changed, and contained. Much of what holds failing social systems together is that those in power succeed in eliminating the mere thought that things could be otherwise.

Should private property itself be extinguished? It’s a legitimate question, but there is no clear pathway to a system that would take its place, which could amount to some kind of global commons. Instead I suggest land reform, not the extinguishing of property rights but their radical diffusion. Imagine a space in which people own small homes and gardens but share a larger area of fields and woods. Let’s call such legislation the American Commons Communities Act or the Agrarian Economy Act. A policy of this sort might offer education in sustainable agriculture keyed to acquiring a workable farm in a rural or urban landscape. The United States would further invest in any infrastructure necessary to move crops to markets.

Let’s give abandoned buildings, storefronts, and warehouses to those who would establish communities for the homeless. According to one estimate, there are ten vacant homes for every homeless person. Squatting in unused buildings carries certain social benefits that should be recognized. It prevents the homeless from seeking out the suburban fringe, far from transportation and jobs (though it’s no substitute for dignified public housing). Plenty of people are now planting seeds in derelict city lots. In Los Angeles, an activist named Ron Finley looks for weedy ground anywhere he can find it for what he calls “gangsta gardening,” often challenging absentee owners. In 2013, the California legislature responded to sustained pressure from urban gardeners like Finley and passed the Urban Agriculture Incentive Zones Act, which gives tax breaks to any owner who allows vacant land to be used for “sustainable urban farm enterprise.”

Squatting raises another, much larger question. To what extent should improvements to land qualify one for property rights? The suppression of traditional privileges of appropriation amounts to one of the most revolutionary changes in the last five hundred years. All through the centuries people who worked land they did not own (like squatters and slaves) insisted that their toil granted them title. The United States once endorsed this view. The Homestead Act of 1862 granted 160 acres to any farmer who improved it for five years. Western squatters’ clubs and local preemption laws also endorsed the idea that labor in the earth conferred ownership.

It’s worth remembering that there is nothing about private property that says it must be for private use. Conservation land trusts own vast areas as nonprofit corporations and invite the public to hike and bike. It’s not an erosion of the institution of property but an ingenious reversal of its beneficiaries. But don’t wait for a land trust to be established before you enjoy the fenced up beaches or forests near where you live. Declare the absentee owners trustees of the public good and trespass at will. As long as the land in question is not someone’s home or place of business, signs that say KEEP OUT can, in my view, be morally and ethically ignored. Cross over these boundaries while humming “This Land Is Your Land.” Pick wildflowers, watch sand crabs in the surf, linger on your estate. Violating absentee ownership is a long-held and honorable tradition.

The arrest of the South Central Farmers was deeply disturbing in Los Angeles. So much so that citizens began to call for other farms, in other locations throughout the city and county. Ten years later community gardens abound. More than a hundred of them are thriving, including the Stanford Avalon Community Garden, which was established by some of the very families evicted from the South Central Farm. It runs one mile long and 80 feet wide underneath power lines, on city property. There is space for 180 plots, each about 1,300 square feet. The farmers compete with each other for the greatest yields. They pay a small fee for a plot and absorb all the food into their households, to be eaten and sold.

Building this garden movement has not extinguished any of the rights of private or public landowners. But only sustained resistance and protest could have forced these entities to accommodate thousands of household farmers. Yet nothing could be more ordinary or more radical than the desire for autonomy from the tyranny of wages, a dream that persists in billions of humans striving in slums and factories, ready for their moment to reclaim the commons.

 

Steven Stoll is Professor of History at Fordham University, where he teaches environmental history and the history of capitalism and agrarian societies. He is the author of Larding the Lean Earth: Soil and Society in Nineteenth-Century America (2002) and The Great Delusion (2008), about the origins of economic growth in utopian science. His writing has appeared in Harper’s Magazine, Lapham’s Quarterly, and the New Haven Review. He is finishing a book about losing land and livelihood in Appalachia.

Life in the Algorithm

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By Douglas Haddow

Source: Adbusters

The searches we make, the news we read, the dates we go on, the advertisements we see, the products we buy and the music we listen to. The stock market. The surveillance society. The police state, and the drones. All guided by a force we never see and few understand.

A series of calculation procedures that come together to constitute capitalism’s secret ingredient — the all holy algorithm, that which binds and optimizes. Those strange numerical gods who decide whether or not you’re a terrorist and what kids’ toy is going to set the market on fire this Christmas. But what are they, where did they come from and how did they get so powerful?

Algorithms are not new. You can trace their origin all the way back to a 9th century Persian mathematician by the name of Muhammad ibn Musa al–Khwarizmi (Algoritmi in Latin) from whom the word derives its name. Then there was Abu Yusaf Ya’qub ibn Ishaq al–Kindi, a contemporary of al–Khwarizmi’s at Baghdad’s House of Wisdom. He discovered and developed the science of frequency analysis, or code–breaking, providing a basis for code breaker Alan Turing to develop his Turing Machine, the theoretical prototype for the 9 billion devices currently sending and receiving signals through the Internet.

When we talk about algorithms, when they come up in conversation, often tied to latent and emerging fears, we’re not talking about the mathematical models behind them, we’re talking about the models that the models were modeled on. Most people have never heard of a polytope, Boolean Logic or the Hirsch Conjecture. But everyone has a credit score, whether they like it or not.

If we want to interrogate the true nature of these numbers, the wizard behind the ghost in the machine, we need to look no further than Adam Smith, that dour Scot who lived with his mum and accidentally created the modern world.

Smith was neither a modernist nor a cosmopolitan. He was an absent’minded hermit who never married, had few friends, suffered from alternating fits of depression and hypochondria, travelled outside Britain on just one occasion and demanded that all his personal writing be burned upon his death. He was the supreme king of unintended consequences, a humble and misunderstood moral philosopher who became the patron saint of greed.

Most famously, and most tragically, Smith was an ambitious writer who got a bit flowery with his language on occasion, and, as a result, his entire legacy was reduced to two words: invisible and hand. As in, the Invisible Hand — that mysterious market force that secretly and surreptitiously guides all our actions and decisions. Or so we’ve been told.

In The Wealth of Nations, the blueprint for what became known as capitalism, Smith drops the phrase but once. It’s situated in a rather dry discussion on trade policy and is used as a metaphor in a straightforward critique of mercantilism’s excessive restrictions.

And that’s it. Just a cursory metaphor used for poetic flourish in an otherwise obscure and forgettable passage. And for the 150 years that followed the book’s publication, that’s exactly what it was — obscure and forgotten. Smith didn’t mention it, his contemporaries didn’t mention it, nor did his critics. Nary a soul on Earth repeated those two words or paid them any heed.

That is, until 1948, when everything changes.

If you look at a Google NGRAM chart of “invisible hand,” you’ll see that there was little to no interest in the phrase up until the 1930s and ’40s, at which point it begins to bubble up a bit, gaining traction in a few peripheral spheres here and there. Then in ’48, Chicago School economist Paul Samuelson writes a book called Economics: An Introductory Analysis, which would go on to become the best–selling economics book of all time.

In his book, Samuelson grabs hold of Smith’s wordplay and freebases meaning from it until a mere metaphor mutates into the economic doctrine that would define the shape and form of global finance for the remainder of the century, and beyond.

“Every individual, in pursuing only his own selfish good, was led, as if by an invisible hand, to achieve the best good for all, so that any interference with free competition by government was almost certain to be injurious,” writes Samuelson. And with that, not only is it justifiable to be callous in the pursuit of wealth, your callousness will somehow, vis–à–vis the invisible hand, uplift those you trample on your way to the top.

Picture Gordon Gekko, hair trickling with high–end product, walking with the gait of limitless sprezzatura, saying, “Greed is right, greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.”

Samuelson would later go on to regret the liberties he took with Smith’s words, but the meme had already been injected into the passive hive mind of economics. What followed was a long and tangled game of economic telephone wherein Smith’s fatalistic conceit gradually took on mythical qualities. From turn of phrase to doctrine, from doctrine to dogma, from dogma to metaphysical law. The invisible hand became the celestial justification of the free market and the economic rationalist’s negation of anything that stood in its way.

Austrian economist Friedrich Hayek even went so far as to develop an entire theory of human interaction based on the myth. It was called Catallactics, and proposed that we did not live within an economy, but rather, a Catallaxy — a complex and self–organizing system in which every individual sent out a constant stream of complex signals that mixed to create overall market behavior.

Knowledge, Hayek argued, was distributed on an individual level, each person containing their own fraction of the whole.

The vast repository of human knowledge was inherently decentralized. Because of this, no central body or government agency could ever hope to contain enough of it to know what was really going on. But if allowed to move freely without meddling, these messages would come together to create order and equilibrium in the market.

This, he argued, is why the government should never meddle in the market. And why order could never be “planned,” and was instead “brought about by the mutual adjustment of many individual economies in a market.” As long as the signals, our private info–snowflakes, could float freely, the market would reach equilibrium.

Through Hayek, dogma became revelation — the invisible hand was not merely a magical presence promising equilibrium, it was also pointing us toward a not–too–distant utopia. And if we didn’t follow the hand? Oppression and despair would follow mankind into a dark hole of tyranny.

Hayek’s ideas spread swiftly through a series of think tanks connected to his economic clique, The Mont Pelerin Society, which counted Karl Popper, Ludwig von Mises and, of course, who else but Milton Friedman among its members. Together they successfully launched what we now call “neoliberalism” into the political consciousness.

Neoliberalism found its champions in Margaret Thatcher and Ronald Reagan. Thatcher regularly corresponded with Hayek and used the slogan There Is No Alternative (TINA) to explain her affection for its concepts. Reagan hired Friedman to be his economic advisor. And together they carried out an economic revolution that smashed trade unions and deregulated and privatized anything and everything that could be guillotined. From this axis of Anglos, it spread to other parts of the Commonwealth, then to Europe, Asia, South America and beyond.

But no matter how much they stripped away government meddling, somehow the “abstract signals” still weren’t getting through. The hand remained clenched and crises endemic. Asia, Argentina, the Eurozone, the 2008 meltdown, the flash crash. The market continually failing to magically self–correct and achieve equilibrium.

The faithful kept their faith and stuck to the program. The crisis, both economic and existential, were met with a recommitment to the faith in the form of austerity and technology and the dream persisted.

The problem was obvious to anyone outside the neoliberal thought–bubble: the invisible hand wasn’t real and it didn’t exist. It never had existed. It wasn’t just invisible, but immaterial, made from the twisted fantasies of economists obsessed with achieving an impossible “equilibrium.” You couldn’t touch it, and it couldn’t touch you.
Until now.

In 2010, when the Dow Jones Industrial dropped 1000 points in under a minute, the biggest one–day point decline in history, it received far less attention then it deserved, because everything returned to normal a few seconds later. Now, miniature flash crashes occur constantly throughout the day. But this crash was a turning point, demonstrating that something had changed. That something was that the neoliberals had achieved what communists, socialists and Christians never could: they made their god real, and in doing so, achieved their utopia. They just didn’t let the rest of us in on it.

The critical flaw in Hayek’s vision of the hand was that a “central body” could never gather enough information. We know this to be untrue, and with big data and the analysis and manipulation of that data through algorithmic equation, the missing link between money and the machine was discovered.

The searches we make, the news we read, the dates we go on, the advertisements we see, the products we buy and the music we listen to. The stock market … All informed by this marriage between mathematics and capital, all working together in perfect harmony to achieve a singular goal — equilibrium. But it’s a curious sort of equilibrium. Less to do with the relationship between supply and demand, and more about the man and the market.

All these algorithms we encounter throughout the day, they’re working toward a greater goal: solving problems and learning how to think. Like the advent and rise of high–frequency trading, they’re part of an optimization trend that leads to a strange brand of perfection: automated profit.

And their current day use, no matter how impressive the specs, is still rooted in 7th century code–breaking. Only now it’s about breaking our individual codes. Throughout the day we send out thousands of our own individual abstract signals and the algorithms figure out how best to streamline our existence into the market’s needs. We’re all just cyphers waiting to get cracked.

This is not the stuff of Orwell and Huxley, but Amazon and the NSA.

There is an overwhelming feeling of inevitability surrounding all of this. With computational capacity still threatening to double every two years, the algorithmic estate will continue to expand and become more sophisticated. All of this development, testing and research is leading to a predictable outcome. Given that they are leading investment and research in the sector, Wall Street financiers will develop the world’s first fully functioning Artificial Intelligence.

If any of this feels inevitable, it’s because it was designed to make us feel that way. If the algorithms that organize the world of money were turned on their head and used to analyze the defects in their guiding philosophy, they would shred it all on one razor sharp fact: the world beyond the market is still a real one. And no matter how sophisticated the math, how brilliant the AI, we will always be living in it.

Outside of The Wealth of Nations, Smith employed the Invisible Hand concept on only two other occasions. Once in his Theory of Moral Sentiments, where he slags off the rich, and the other in the History of Astronomy, where he says:

For it may be observed, that in all Polytheistic religions, among savages, as well as in the early ages of Heathen antiquity, it is the irregular events of nature only that are ascribed to the agency and power of their gods. Fire burns, and water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; the invisible hand of Jupiter was never apprehended to be employed in those matters.

These days, the “savages” kick back, polish their yachts and let the machines do their thinking for them. Their god is a primitive and cruel one. Worse yet, it lacks imagination. The future it sees is just an optimized version of the present. Everything that falls within its gaze is predictable, because mathematical sequences are predictable. What remains to be seen is whether or not human beings are as predictable as the machines think we are.