This collection of articles edited by Samuel Bowles examines the power relations that underpin markets and presents analyses of politics from an economic perspective.
It is striking how it has taken so long for economists to realize that the assumptions of neoclassical economics are so far removed from the real world of raw, naked power. Instead of perfect competition, we observe oligopolies and monopolies dominated by rent-seekers who cozy up to, or are even sometimes, elected politicians. So much ink was wasted on stating the obvious.
I was also annoyed by the constant use of formal models for theories that can be explained by one or two sentences. Perhaps I just don't understand them, but rather than illuminate, I see them as exercises in obfuscation. If the point of inquiry is understanding, then models that only a select few can understand, and yield very few testable propositions, do not advance the cause of knowledge at all. It is doubtful, therefore, how economics has helped clarify the nature of power.
Monday, October 20, 2008
Monday, October 13, 2008
Imperialism
Lenin, supreme leader of the Soviet Union, wrote this pamphlet as a revolutionary intellectual. He argues that imperialism, far from being simply territorial conquest, is actually the highest stage of capitalism. Paradoxically, he sees capitalism as decaying from competition into monopoly capitalism as exemplified by the trusts that then dominated industry such as Standard Oil. He also observes that these cartels are usually controlled by very few financial magnates and contends that the impulse to monopoly is what drove the great powers to scramble for colonies beginning in the late 19th century.
Lenin's analysis, like that of Marx, is incisive and makes for interesting reading, not least because of his polemical style. And in the middle of a global financial crisis in 2008, perhaps there are lessons to be drawn about the excesses of finance capital. Yet much of his thesis has simply been dismissed by history: capitalism, though wounded, is alive and well; huge corporations exist, but it is hard to say there is no competition; decolonization brought an end to the era of imperialism; and the Soviet Union has long since ceased to exist.
Lenin's analysis, like that of Marx, is incisive and makes for interesting reading, not least because of his polemical style. And in the middle of a global financial crisis in 2008, perhaps there are lessons to be drawn about the excesses of finance capital. Yet much of his thesis has simply been dismissed by history: capitalism, though wounded, is alive and well; huge corporations exist, but it is hard to say there is no competition; decolonization brought an end to the era of imperialism; and the Soviet Union has long since ceased to exist.
Monday, October 6, 2008
Beyond Good and Evil
Nietzsche has been vilified for declaring that God is dead. His writings on the overman has been criticized as a precursor to Hitler's attempt to make the Aryan race master of the world.
Reading Nietzsche, however, I strangely find his work positive and empowering. Instead of a Christian morality that preaches acceptance of one's lot as God's will and an outlook that is centered on the afterlife, he reminds man of his innate will to power, the will to life and to growth, the will to master oneself and one's environment. The true philosopher, he argues, creates his own values. If these ideas sound similar to self-help books that tell us to be proactive rather than reactive, that we make our own choices and create our own lives instead of surrendering to circumstances, then perhaps that is the best proof that Nietzsche has triumphed.
A logical consequence of the will to power is the overman, one who is beyond good and evil. This idea is threatening for those reared with Christian and democratic concepts, which exalt equality, perhaps even mediocrity - brotherhood before God, equality before the law. Yet for those who do not settle and are never complacent, those who see no limits to their achievement, it is but a description of what they can become.
Reading Nietzsche, however, I strangely find his work positive and empowering. Instead of a Christian morality that preaches acceptance of one's lot as God's will and an outlook that is centered on the afterlife, he reminds man of his innate will to power, the will to life and to growth, the will to master oneself and one's environment. The true philosopher, he argues, creates his own values. If these ideas sound similar to self-help books that tell us to be proactive rather than reactive, that we make our own choices and create our own lives instead of surrendering to circumstances, then perhaps that is the best proof that Nietzsche has triumphed.
A logical consequence of the will to power is the overman, one who is beyond good and evil. This idea is threatening for those reared with Christian and democratic concepts, which exalt equality, perhaps even mediocrity - brotherhood before God, equality before the law. Yet for those who do not settle and are never complacent, those who see no limits to their achievement, it is but a description of what they can become.
Tuesday, September 30, 2008
Politics
At a time when most people view politicians with disdain, Aristotle's argument that a man who has achieved the highest good is identical with the man who has participated fully in the life of the polis, which includes ruling and being ruled in turn, sounds rather strange. For him, politics is so essential to man that he considers a man outside the political community as either a beast or a god.
As a political science graduate of the national university, Aristotle's views give me hope that there is redemption for politics. Not only can public service be a force for good, it is actually the highest good. I continue to believe that I, and people of my generation, have a duty to enter politics and reform society. Politics is simply too important to be left in the hands of corrupt and incompetent politicians. As yet, however, I do not know how to translate this sense of duty into action.
As Aristotle's teacher said, there will be no justice in this polity until philosophers become kings.
As a political science graduate of the national university, Aristotle's views give me hope that there is redemption for politics. Not only can public service be a force for good, it is actually the highest good. I continue to believe that I, and people of my generation, have a duty to enter politics and reform society. Politics is simply too important to be left in the hands of corrupt and incompetent politicians. As yet, however, I do not know how to translate this sense of duty into action.
As Aristotle's teacher said, there will be no justice in this polity until philosophers become kings.
Sunday, September 14, 2008
Reinventing Government and My Brief Stint as a Functionary
Osborne and Gaebler wrote this book nearly two decades ago yet its ideas have yet to have a toehold in the Philippines. Some of its ideas, like school vouchers, have been implemented in developed countries and have yielded success. Here, however, bureaucratic sclerosis is still the norm.
For six months, I worked for the government as a defense analyst and there I saw firsthand how taxpayers' money was being wasted. I worked for an office that employed more than fifty people, but spent most of its time providing poorly researched advice to the chief of staff and to other government offices. Officers went on an annual junket to the US ostensibly to discuss the mutual defense treaty, but I heard more about stories of late night drinking. Taxpayers paid for a monthly team-building/drinking session and for two lechons to celebrate the promotion of the big boss. Communication was so inefficient they had to be cleared by five layers before they reached my supervisor's desk, and my own response had to go through the same number of layers before it reached its destination. Worse, instead of email, it had to be hard copy documents with a disposition form on top, and they were hand-carried by enlisted men who either slept or surfed for porn when they had no messenger duties. I myself was guilty of wasting the very taxes I paid by coming in late most of the time and suffering no consequences at all.
I am fortunate to have found a better job after a few months, but I saw how corruption, mediocrity and a sense of entitlement slowly afflict the soul even of the most idealistic of college graduates.
For six months, I worked for the government as a defense analyst and there I saw firsthand how taxpayers' money was being wasted. I worked for an office that employed more than fifty people, but spent most of its time providing poorly researched advice to the chief of staff and to other government offices. Officers went on an annual junket to the US ostensibly to discuss the mutual defense treaty, but I heard more about stories of late night drinking. Taxpayers paid for a monthly team-building/drinking session and for two lechons to celebrate the promotion of the big boss. Communication was so inefficient they had to be cleared by five layers before they reached my supervisor's desk, and my own response had to go through the same number of layers before it reached its destination. Worse, instead of email, it had to be hard copy documents with a disposition form on top, and they were hand-carried by enlisted men who either slept or surfed for porn when they had no messenger duties. I myself was guilty of wasting the very taxes I paid by coming in late most of the time and suffering no consequences at all.
I am fortunate to have found a better job after a few months, but I saw how corruption, mediocrity and a sense of entitlement slowly afflict the soul even of the most idealistic of college graduates.
The Impossible Dream
Don Quixote is an absolutely delightful read. It is, on the surface, hilarious, yet, at the same time, sorrowful. It is hard not to laugh at the absurdity of Don Quixote's adventures, or the witty, proverb-laden language of Sancho; yet, it is also hard not be sad at Don Quixote's nobility and Sancho's good nature being subjected to tricks and pranks by those who are sane, and should know better.
Don Quixote, when he dispenses advice during moments of lucidity, and Sancho, when he handed down judgments during his brief stint as governor, were both wise and worthy of respect, not ridicule. They demonstrated that, despite the outward madness and folly, each had a soul worthy of any of the gallant knight-errants that Cervantes so brilliantly parodied.
Don Quixote, to the point of literal madness, showed the value of an unswerving commitment to an ideal, displaying fortitude and grit in the face of physical and emotional pain. Sancho, at the risk of being branded an even greater fool, showed the value of loyalty, and, despite his ambition, appreciation of the simple things that make a man truly happy. Both of them, one by finding gentleness in the other's foolishness, and, the other, by finding nobility in the other's madness, demonstrated the true nature of friendship.
This work is a true classic, the measure of all novels that succeeded it and Cervantes, without a doubt, is a genius.
Don Quixote, when he dispenses advice during moments of lucidity, and Sancho, when he handed down judgments during his brief stint as governor, were both wise and worthy of respect, not ridicule. They demonstrated that, despite the outward madness and folly, each had a soul worthy of any of the gallant knight-errants that Cervantes so brilliantly parodied.
Don Quixote, to the point of literal madness, showed the value of an unswerving commitment to an ideal, displaying fortitude and grit in the face of physical and emotional pain. Sancho, at the risk of being branded an even greater fool, showed the value of loyalty, and, despite his ambition, appreciation of the simple things that make a man truly happy. Both of them, one by finding gentleness in the other's foolishness, and, the other, by finding nobility in the other's madness, demonstrated the true nature of friendship.
This work is a true classic, the measure of all novels that succeeded it and Cervantes, without a doubt, is a genius.
Economics of Money, Banking and Finance and the Great Recession
Mishkin's text on money, banking and finance has illuminated my understanding of the financial world. The relevance of learning about monetary economics cannot be understated because we are now one year into the credit crunch with no end yet in sight, and, personally, because I have just began investing in equities, reasoning that we are likely to have hit the bottom, or, if not, that I have a long time horizon anyway. Furthermore, the efficient markets theory has further discouraged me from pursuing technical analysis more seriously than simply checking for support and resistance levels.
Inflation has truly affected the economy, including my family. Philippine economic growth has slowed down, and there are fears that we are only about to enter a global recession. I am still able to save and invest a substantial amount every month, but it is hard not to feel the effect of rising costs on my discretionary spending. I am lucky to be working for IBM, which continues to grow despite the general downturn in the US because of its global presence. The rising dollar, however, makes it likely that growth this quarter will be dampened. Overall, however, I still see a lot of growth, and I remain optimistic about the future. I just hope the economy recovers soon.
Inflation has truly affected the economy, including my family. Philippine economic growth has slowed down, and there are fears that we are only about to enter a global recession. I am still able to save and invest a substantial amount every month, but it is hard not to feel the effect of rising costs on my discretionary spending. I am lucky to be working for IBM, which continues to grow despite the general downturn in the US because of its global presence. The rising dollar, however, makes it likely that growth this quarter will be dampened. Overall, however, I still see a lot of growth, and I remain optimistic about the future. I just hope the economy recovers soon.
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