The profit surcharge

One of the oddities of American society is that in most cases you never know what something is going to cost until you are actually charged. The prices marked on the items on the shelves and on the restaurant menus are never exactly what you are going to wind up having to pay. The reason is that sales tax is only added into the cost when you complete your transaction. Growing up, this felt completely natural, if annoying, because it kept me from planning out exact change in advance. The first time I visited a country where the tax was already incorporated into the listed price, I couldn’t believe we would do it differently.

The reason, of course, is ideological: they only add in the tax later so that you feel that the tax is an extra imposition. Every American has to deal with a slow grind of daily annoyance at sales taxes, and any increase in taxes is immediately visible. Obviously this measure didn’t cause the US’s pathological tax-phobia — the very rationale for the Revolutionary War was largely to avoid taxes — but it certainly helps reinforce and reproduce it on the level of everyday practice.

On the level of policy design, it’s a minor feat of evil genius. And I think that left politicians should push to imitate it by proposing that profit margins be treated the same. The price on the shelf or on the menu should include the costs of production, distribution, and marketing. Only when you get to the cash register is the profit margin added onto the price. We get to know how much of our purchase price is going to fund public goods — why shouldn’t we also learn how much of it is enriching stockholders?

Continue reading “The profit surcharge”

Some thoughts on Leshem’s Origins of Neoliberalism

Early this summer, I received an unsolicited review copy of Dotan Leshem’s Origins of Neoliberalism: Modeling the Economy from Jesus to Foucault — true proof of divine providence, given that I was working on a project connecting political theology to neoliberalism. It is a fascinating study of the concept of oikonomia, with its center of gravity in the era of classical orthodoxy (Nicea and Chalcedon).

Leshem hit on the idea of a genealogy of oikonomia around the same time as, but independently of, Agamben’s study in The Kingdom and the Glory. The book evinces a certain anxiety to differentiate itself from Agamben, which in my view sometimes leads to overhasty critiques. I prefer to view them less as competitive than as supplementary to each other. Agamben focuses on the formative moment of Christian economic thought (Pauline and proto-orthodox), whereas Leshem focuses on developments within established orthodoxy itself. When we add Mondzain’s account of the decisive role of economic thought in the iconoclastic controversy, we wind up with a fairly comprehensive view of the role of oikonomia in pre-modern Christian thought. This is not to downplay the very real differences between the authors’ approaches, of course — a truly comprehensive account has yet to be written, but it will need to start with the labors of these three.

I learned a great deal from Leshem’s study, which in many ways does a better job of following up in detail on Foucault’s suggestions about the role of Christian pastoral in forming modern subjectivity. He also deals much more closely with Arendt, who is claimed as a major source of the Homo Sacer series but mostly stays in the background. His study is based around the “human trinity” of economic, political, and philosophical, and the text is punctuated by helpful diagrams illustrating how this trinity keeps getting reconfigured over time. This provides clarity and orientation to a study that is not afraid to delve into the fine details of doctrinal and pastoral theology. What worries me about this approach is that it pitches Christian doctrine primarily as a development of Greek and Roman thought — as in Agamben, the Hebrew roots of Christian thought are comparatively neglected. I wonder whether that same “trinity” would apply to the Hebrew biblical tradition, and if not (which is my suspicion), how that might require us to reconceive the genealogy of oikonomia.

The weakest point of the book, in my view, is the title itself. The warrant for the book’s claim to establish “the origins of neoliberalism” is that Christian Orthodoxy establishes the dominance of the economy over the other hypostases of the human trinity and neoliberalism also forcefully asserts the dominance of the economy over other areas of life. The genealogical connections provided are even sketchier than in the appendix to The Kingdom and the Glory, and explicit discussions of neoliberalism are few and far between. The subtitle is misleading as well, given that the pre-Christian Greek concept of oikonomia is the real starting point, not Jesus (who is not a major figure in this book, given the absence of references to oikonomia in the Gospels).

I like to imagine Leshem’s book with a more accurate title. What it achieves is an important and formative contribution to the genealogy of oikonomia, one that places him into an emergent “canon” alongside Agamben and Mondzain. From this point forward, anyone investigating the place of economy in Christian theology will have to engage with Leshem’s work.

Deserve’s got nothing to do with it

Tony Soprano Swimming


When politicians propose tax cuts, they often claim that they want people to be able to keep more of what they earn. I agree, with one stipulation: that we distinguish between “earning” and “being in a position to effectively demand.”

To take a baseline case of unambiguous earning, let’s look at the salary of a janitor. The janitor is doing necessary work, the success of which is easily verifiable. Meanwhile, the average salary for a janitor is far from extravagant — if anything, they get paid too little. So we can assume that someone who has been able to retain a job as a janitor for a few months is earning their salary by successfully carrying out socially beneficial work. (For the record, I have worked as a janitor.)

For the sake of argument, we can use the janitor as a unit of earning. I can imagine someone genuinely earning twice as much as a janitor — by doing more socially beneficial and/or demanding work. I could even imagine someone doing ten janitors’ worth of work in the same period. But there are people who get paid 100 or even 1000 times as much as our janitor, and I just cannot imagine what it could possibly mean to do 100 or 1000 janitors worth of work. I will concede that those people are often doing difficult and stressful work, even important and socially necessary work — but it just cannot be worth 100 or 1000 janitors. Unless accidental exposure to gamma radiation is involved, I’m going to call bullshit.

The money that comes to someone above and beyond their actual social contribution is “earned” in the sense that the mobsters on The Sopranos speak of “earning.” To be fair to the mobsters, they arguably do some beneficial work — offering security services, creating betting markets for sporting events, providing liquidity for those without access to traditional banks, etc. Perhaps we can concede that they deserve some compensation for those services. But the money they actually receive is overwhelmingly the result of extortion and violence. Referring to their income as “earning” is a euphemism — in fact, one imagines that it started out as an inside joke among the mobsters themselves.

The CEO or hedge fund manager doesn’t have to use threats and violence as directly as Tony Soprano does, because they have the power of the state to back up their claims. At a time when the state had different priorities, it was able, not simply to take away a good chunk of unearned income, but to make sure that it was never mis-distributed in the first place. The tool it used was a punitive 90% top tax bracket. To use contemporary buzzwords, this set up the incentives so that paying someone above a certain level simply didn’t make sense from the company’s perspective — it would effectively be an indirect donation to the government. Raising taxes back to that level would not be a case of taking away earned income. It would correct the error that allowed people to receive and retain so much unearned income.

We all suffer from the state’s choice to encourage and enforce the accumulation of unearned wealth. Money makes people more powerful, undermining democracy. It allows people to bid up prices for scarce goods, rendering housing in desirable locations like San Francisco or New York City much more expensive than it would otherwise be. And the existence of such disparities in wealth and power offends people’s sense of justice and hence is corrosive to society. Taking away people’s unearned wealth would therefore be a positive good in itself, even if the money collected were literally set on fire on the White House lawn.

Could capitalism exist without racism?

I’ve recently been working my way through the final volume of Hodgson’s Venture of Islam, the second half of which focuses on the original “disruptive innovation” — modern technological society. Hodgson is at pains to emphasize that the Old World at least had already been a world market, largely under Muslim auspices, for centuries at that point and that once any particular group hit upon modern technological methods, it was bound to spread throughout the rest of the world, giving that group a decisive advantage. He also does everything possible to head off Western self-congratulation, concluding that as far as we can tell, the fact that the West was where industrialism took root in a self-perpetuating way is essentially a matter of chance. Anyone could have stumbled upon the method, and in fact the Chinese almost did centuries previous. Finally, he also notes that Islamic societies emphasized commerce and social mobility and in that sense anticipated bourgeois values much more clearly than anything in the West (a label that he takes to be meaningful only if it’s a synonym for “the developed world”).

What haunts me is the question of whether the luck of the draw could have been better. We know that in practice, once the West did develop technological superiority, that created a durable and self-reinforcing power differential between the European nations and the rest of the world. Fully actualizing the powers implicit in modern technology in fact required European economic activity to reshape the rest of the world, disrupting settled arrangements and exploiting essentially all other nations to varying degrees.

And we know that the ideology that legitimated that power differential, in the last analysis, was racism. Europeans, it seemed, were made of better stuff — and from there an all-too-familiar hierarchy, terminating at Africans, unfolded, a hierarchy that continues to deeply shape the modern world and especially the United States.

In the case of racism, I believe there is a much clearer case to be made that the conceptual and cultural presuppositions were distinctively Western. Continue reading “Could capitalism exist without racism?”

The story of the first Black Friday

In those days a decree went out from Emperor Augustus that all the world should enjoy unprecedented savings on all their favorite brands. This was the first Black Friday and took place while Quirinius was governor of Syria. All went to their own towns to find their discounts. Joseph also went from the town of Nazareth in Galilee to Judea, to the city of David called Bethlehem, because he had his eye on a new laptop. He went to be registered at Target with Mary, to whom he was engaged and who was expecting a child. While they were there, the time came for her to deliver her child. And she gave birth to her firstborn son and wrapped him in the latest styles from Old Navy, and laid him in a shopping cart, because they were waiting in line to get into Walmart.

Society as Protection Racket

A familiar feature of organized crime is the protection racket. In this scheme, a mob leader demands to be paid to protect a business. If the fee is not paid, then that same mob leader attacks the business — hence you are first of all paying the fee to be protected from your protectors themselves.

The same logic repeats itself in mainstream society. Taxes are a protection racket in the sense that if you don’t pay them, you aren’t exposed to the violence of criminals or foreign terrorists, but first of all to the violence of the government itself. The labor market is another protection racket, because in the last analysis you’re not working just to earn money, but to avoid being excluded from the economic system altogether. Many religions also duplicate the same logic, as you are asked to be devout in order to avoid a supernatural punishment that would not be a factor if you didn’t already believe in the religion — so in mainstream Christianity, for example, God is giving you an opportunity to avoid God’s own wrath.

From this perspective, one can understand neoliberalism as doubling down on the protection rackets. The system demands ever more intensive performances of obedience in order to avoid the violence of the system itself. In the mafia scenario, you can pay your fee and go about your business, just as you could imagine paying your taxes or putting in your hours at work and going about your business. Under neoliberalism, though, you are expected to be constantly thinking about your taxes and how to game the complex system of tax credits and penalties, and you must also mobilize all of your resources (all your time, all your social connections, all your hobbies and preferences) in service of the labor market. Even the evangelical Christian groups most in tune with the neoliberal ethos demand more and more constant self-examination and church involvement — you can no longer go to church on Sunday and expect God to leave you alone the rest of the week.

Agamben’s political theory, whereby the signature gesture of sovereignty is to exclude, can be understood as a theory of the protection racket, and his quest is to imagine a political order not structured according to the logic of a protection racket. This is what provides its remarkable contemporaneity, despite its often esoteric and obscure content.

More broadly, I believe we can view the elimination of the protection racket as the ultimate goal of the radical left, and we can define causes as left-wing to the extent that they at least aim to mitigate the protection racket. Hence the push for universal health care, which keeps the job market from extorting one’s participation based on concerns about one’s physical health, or the more radical goal of universal basic income, which uncouples some minimal participation in economic life from the demand to work. It is important in both cases that the provision be in principle unconditional, so that the system of benefits itself does not become a new protection racket that can demand certain performances of obedience — as has happened most vividly in the UK’s welfare system.

The goal is not simply justice, then, but freedom — freedom from continual threats and demands, freedom from having to worry about things. This is surely a more meaningful form of freedom than the abstract freedom of “choice” offered by neoliberalism, a false freedom insofar as we can never be free of the demand to choose, can never go a single moment without getting hassled or evaluated. The goal of the radical left, at least in our contemporary situation, could be formulated as the creation of a world in which society leaves us alone.

The (somewhat) rational basis for the US-Israel alliance

As the Gaza crisis intensified, I’m sure I’m not alone in having wondered why the US’s support for Israel is so absolutely unconditional. What’s in it for America? Hasn’t it reached a point where Israel is a liability and should be cut loose?

This post is an attempt to account for the seeming unshakability of the US-Israel alliance, on the basis of what would seem like good reasons to the bipartisan political elite. It seems that the core “US interest” motivating it is the desire to maintain the overall stability of the global capitalist system, which means assuring an uninterrupted flow of oil from the main oil-producing region on earth. Please note that it’s not a question of the US itself directly wanting to steal the oil or something — it’s maintaining the overall equilibrium of the global system in which US corporations and the US military operate.

Once it is conceded that this goal makes sense, the politics of the Mideast do not look promising. You’ve got a lot of potentially hostile factions, some nationalistic, some religious, some a combination of both. The borderlines drawn as part of the decolonization process don’t help, but redrawing them would likely lead to instability and conflict. The religious element is a further problem — an Islamic state is likely to have goals other than the free flow of capital and to be less susceptible to the kinds of incentives the US can offer. Hence: lockdown. Anyone who can keep the oil flowing and keep a lid on the population gets US support.

Yet — and here’s where it gets even uglier, if that were possible — all those dictators, whatever their other merits, are swarthy Arabs. How can (racist) Americans trust such people? Better to go with the more natural ally: Israel, which is led by people who are basically white Westerners. This element of trust became all the more essential after the end of the Cold War, when Saddam Hussein demonstrated that even previously faithful clients can go rogue. Similarly, we can assume that the importance of the alliance with Israel only increased when the Arab Spring called into question the Americans’ traditional methods of controlling political outcomes in the Mideast.

On their side, as the political situation in the Mideast destabilizes, Israel sees increasingly clearly that they are the only game in town for the US and that they can basically do whatever they want without endangering their aid or privileged status. And so the vicious cycle continues.

Does anyone have a better explanation?

Why are inflation and deficits bad?

A disproportionate amount of political debate centers around vague abstractions: government spending, deficits, and inflation. The latter two are supposed to be particularly horrible, leading to hyperinflation (and therefore Hitler) or else mountains of debt that are impossible to pay off (and therefore Hitler). Meanwhile, government spending is always at risk of “crowding out” the presumably much more desirable private sector spending.

A moment’s reflection will reveal that these three technocratic abstractions are actually code words for “stuff that makes rich assholes powerful.” Inflation decreases the spending power of hoarded money, and when it is kept at a moderate pace (which does not, as in Weimar Germany, vastly outstrip actual growth in production), it tips the balance of power away from rentiers and toward people who make their money from wages. It’s a way of indirectly decreasing the power of concentrated wealth, and hence moderate inflation is profoundly pro-democratic in its effects.

The same goes for government spending, which designates economic activity that is controlled by democratically accountable representatives rather than by the whims of individual rich assholes. In practice in the U.S., the rich assholes wind up directing some of the flow of this spending, but the bulk of it — such as Social Security, Medicare and Medicaid, and other government benefits — reduces people’s reliance on being exploited by rich assholes. Hence we’ve got to rein in that out of control government spending! Which means: spending that is out of rich assholes’ control and leaves people out of rich assholes’ control.

Government spending at least has the benefit of being tax-financed and hence parasitic on the wealth of rich assholes. Worst of all, however, is deficit spending, where the government creates money over and above its tax revenue in order to spend it in ways not controlled by rich assholes. Our current system requires newly-created money to be matched by a Treasury bond, which I like to think originated as a crafty way of tricking rich assholes into buy into a powerful federal government that would be beyond their effective control. It also has the positive side effect of providing a 100% guaranteed savings vehicle for the general public.

The Treasury bonds that pile up as a result of deficit spending look like “debt,” but it doesn’t work like your credit card, because the government actually creates the currency in which the debt is paid — hence we can always go ahead and “pay off the national debt” by liquidating all our Treasury bonds, and foreign governments who hold our debt can only “punish” us by converting their interest-bearing asset into non-interest-bearing cash. In the last analysis, the federal government’s currency sovereignty can only be controlled by our own elected representatives (and by the need to keep the inflation rate from too greatly outpacing economic growth).

Why the explicit or implicit invocations of Hitler around these abstractions, then? Presumably because it reinforces the message that populism always leads to totalitarianism and disaster. In reality, though, we have plenty of examples of healthy societies that have struck a different balance between the power of rich assholes and the power of democratic deliberation about people’s needs and priorities, and it turns out that none of them are in any danger of producing a Hitler. The only real danger they’re courting is that their rich assholes might wind up being less rich in the long run, and that’s a price I for one am willing to pay.

The inertia of the suburbs

The Girlfriend and I have been watching The Wonder Years lately, and it’s striking how generic the setting is — if not for references to news events in the late 1960s, it could be any time period from 1965 to the late 1990s (and I only posit that cut-off point because of the advent of the internet). The suburban model that was built out starting in the immediate postwar era has proven to be remarkably resilient, and even now it has a kind of self-evidence as the “mainstream” American approach to family and community life.

In the immediate postwar years, it seems as though there was a level of “buy-in” across the population, as the prospect of one’s own house, a car, etc., seemed like wonderful luxuries. By now, however, the suburban model has shown itself to be costly, environmentally destructive, and in many cases isolating and community-destroying. Further, the concentration of good schools in the suburbs perpetuates an ongoing vicious cycle of “white flight” that reinforces the systemic racism of our society. And as the financial crisis revealed, the aspiration to suburban middle class status increasingly carries the risk of financial ruin.

More and more people are realizing all of this and don’t want to buy into the suburban model — yet except for the very wealthy, there seems to be no real choice for middle class people if you want to have children. And the reason for this surprising persistence of a model that no one really wants anymore is the power of state planning. Even if the population could be initially convinced to want suburban-style development, the decisive factor was a concentrated effort on all levels of government to create all the necessary conditions for that lifestyle, through physical and legal infrastructure and often through explicit subsidies (such as the mortgage interest tax deducation, which seems to be invulnerable). All of the stuff they created in that heroic era of American urban planning is still in place. The roads and schools have been built, and the legal structures for expanding suburban development if needed are already in place and ready to go. All the incentives for middle-class families still point outward into the suburbs.

While reading about the ongoing disaster of education “reform,” I once thought: “What if cities stopped trying to attract tourists and started trying to gain permanent residents by creating awesome schools?” As I thought about what that would entail, however, it became clear that no one city has the resources to fully reverse the trend — to really work, it would have to entail a complete reshaping of the school funding structures, a build-out of public transportation infrastructure to support the expanded population, etc., etc. In other words, it would take forceful state planning on the model of what created the suburbs in the first place.

Unfortunately, it appears that the U.S. only had one relatively brief window for such forceful state planning, extending from FDR to Nixon (only 40 years out of the 200+ of the Republic’s existence) — and it wasted it on the suburbs. Barring a new FDR, we’re probably stuck with it. The bright side, I guess, is that The Wonder Years will remain legible and relatable for generations to come.

Why do the Gremlins love Snow White?

gremlins watching snow white

It’s a strange moment. The Gremlins, having eaten after midnight and turned from teddy bears into evil reptilian creatures, find themselves in a movie theater. Suddenly, Snow White starts playing — and they are transfixed. They all sing in unison along with the seven dwarves: “Hi ho!” Indeed, their love of Snow White proves to be their undoing, as their absorption in the movie is what ultimately allows them to be defeated when the protagonists start a fire, burning down the theater.

The use of Snow White cannot be random. Gremlins was not produced by Disney, and so the producers had to pay extra to use the film. But what does it mean? Continue reading “Why do the Gremlins love Snow White?”