Is Brexit the first sign of America's declining intellectual dominance?

For as long as most of us have been living, the United States of America has wielded the greatest world influence, both culturally and politically. But underneath the French fries and implanted democracies is a world economic doctrine that conceals America’s slip from the top.

Norbert Harling and Niall Douglas from the World Economics Association investigate how ideas about economics are propagated and maintained by powerful American institutions till they become the mainstream heterodoxy so as they can benefit the wealthy power elite and the USA as a whole. Particularly, Harling and Douglas express that power has gone from a central, to an almost non-existent consideration in mainstream economics. Surely this version of economics can only serve to protect those with whom power rests. Harling and Douglas argue vividly though anecdotally, in Economists and the Powerful, that American influence goes beyond pushing for free market style economies like in the cold war and takes a deceitful and self-interested stance of obscuring power.

One interesting way this domination takes place is in the academic community, where control is exerted over what research is seen to be reliable and what is seen as a ‘fringe’ or ‘unorthodox’ piece. The editors of the leading economic journals (which are U.S based) choose around 10% of submitted articles to get published, leaving plenty of room for bias. And that bias can be easily realised when one considers that these editors (of the American Economic Review; the Quarterly Journal of Economics; the Journal of Political Economy etc.) are unlikely to publish ‘fringe’ theories that challenge the economics on which they have built their academic careers. It’s much safer to stick with what you know.

But intellectual disposition doesn’t stop there. Economics departments in universities and prestigious economics institutions the world over are jam packed with American educated economists - the International Monetary Fund and World Bank almost see Ivy League economic training as a requirement. The notable exception of the London School of Economics is to be trusted to hold up the power-devoid, free-market mainstream economics, as it is the intellectual home in Europe of economic liberalism and one of it’s saints, Friedrich von Hayek.

An example of what exactly can maintain economic orthodoxy that favours the United States is Gross Domestic Product. GDP, by far the most popular method of measuring an economy, reduces all economic activity in a given territory to money terms, rather than describing the quality or style of work done and whom the work is done by. American style economies in developed nations, which have a high degree of people working in lucrative service industries like finance, seem empirically and entirely superior to other economies because of their higher GDP. Haring and Douglas point out that “if a hedge fund manager makes five billion dollars in a good year… this is just as good in GDP terms as 13.7 million people living on a dollar a day doubling their incomes”. This kind of explicit reduction to money terms is what makes measuring in GDP so controversial in they eyes of more critical economists, as it pushes attention towards relentless growth and away from power structures that benefit from the present system.

Are we doomed to live under lady liberty’s shadow for the foreseeable future? Perhaps. But the crack in the barrel of ‘power ignorance’ in the economy is Brexit. The vote for Britain (and let’s not forget Northern Ireland as the electorate did) to leave the EU completely forsake the wishes of economic elites. The Remain camp, which had the support of every respectable and dominant institution imaginable: the conservative leadership; the labour party; the SNP; the Treasury; the Bank of England; the CBI; the TUC and the US government, failed the wield power for the economic status quo. That’s because the campaign to Leave understood that for Brits, self-determination and national pride are more important than economics, especially the economics of the mouths of foreigners. The referendum wasn’t just about our economy but the kind of country we want it to be. Theresa May understands the vote to be “not just to change Britain’s relationship with the European Union, but to call for a change in the way our country works” she said at her party conference.

Will referendums and the public will be what does the most damage to American sponsored orthodoxy? It’s hard to say, but what the mantra of the Leave camp – ‘take back control’ – tells us is that people will favour some form of interventionism eventually, if they feel the economy is not working for them. Brexit might have been a libertarian’s dream, Daniel Hannen the Tory MEP campaigned on this, but Britain is now firmly in the hands of May’s interventionists.  

Tomás Crowe

An honorary yankee - https://www.ft.com/content/a67937a6-7af9-11e6-ae24-f193b105145e

Bibliography: Economists and the powerful: convenient theories, distorted facts, ample rewards - Norbert Haring, Niall Douglas c2012

Thank you for reading!

Are the economical crisis of 2007 and its bleak aftermath a result of the neoliberal anti-democratization?

            In their paper “misrule of experts” Engelen, Etrul et al. effectively argue (among other things) that the global crisis of 2007 was, essentially, a result of depolitization of economy made from the top that led to crisis.

To begin with, for a number of reasons in the 1980s western political elite became neoliberal, and from the neoliberal perspective economics should not be very “governed” and regulated, - instead the market should freely stabilize itself and the society, with possibly a few “light touch” regulations by the technocrats. Thus, the economy was seen separated from the democratic (at least in its name) politics. The economy – especially the finance sector - was essentially left to the technocrats, to the “experts”, i.e. to the statesmen who often used the system for their own profit without any regard for the general population, since the economy was conceptualized by the neoliberal ideology as something “outside” of the realm of political. In other words, the elite became corrupted and used the chaos of the free market for its own profit because it had no public to watch it, for economy became presented as something un-political, as something left to “specialists”, technocrats and professional politicians

Yet, technocrats are only human and without any public watch the economic elite became tied to political elite - Tony Blair, for example, “currently makes £3.5 million per year as a senior advisor to J.P. Morgan on top of the £500,000 per year as an advisor to Zurich Financial, another six figure sum as advisor to private equity firm Khosla Ventures and £1 million per year as a ‘governance advisor’ to Kuwait”. So, Blair is not only a politician, but also an agent in the finance sector with an obvious economic interest. However, he is also able to influence the market through his policies, and such an influence might be beneficial for him and those he represents as a social class, but not for the whole of population.

Of course, separation of economy from politics was theoretically justified by the wealth it would bring to the general population, i.e. such a system seemed profitable from the democratic point of view. Time, however, proved that it was not profitable – at least, not in the 21st century (as a matter of fact, the public who had basically no active role in the crisis suffered much more than the bailed-out super-rich who led the system towards the crisis).

So, it is fair to say that it is in the very nature of free market to produce corruption. One might argue that a market in which statesmen are involved is not a “real” free market, and a real free market would be a non-corrupt stateless entity. However the only way a free market can exist is with a government defending the free market from democratic regulation or lawless intervention. Yet, if the state creates a space outside of the reach of the public, but has an access to the market – and the state must have access to the market in order to support the rights of property, keep the interventionists away and etc. - it will lead to the statesmen using their privileged position for their private interest and would spoil the whole market system. 

The problem, however, is not merely that the crisis was caused by the depolitization of markets. It is that because of such a depolitizaion we cannot even properly try to overcome it (and no one even dares to think beyond the limits of markets), since the general “cure” is more technocratic involvement, which had been one of the reasons for the crisis in the first place. Instead, what might be necessary for the transgression of crisis and general dysfunction of contemporary state is a straight democratization of economy.

Inequality and the 1% Chapters 1 and 4

Inequality and the 1% by Danny Dorling

1.Can we afford the Superrich?

"The greatest problem that we are facing mow, today ... is rising inequality"

                                                                Robert Shiller, recipient of the 2013                                                                                       Nobel Prize in Economics

      Robert Shiller is suggesting that the rise in inequality is having worse effects upon society than even the financial crisis of 2008. This is quite understandable as, although the 2008 crash destabilized the world economy, the 1%, after a brief loss of wealth, have force the rest of society to pay for the crisis and ensured that they came out of the crisis richer than ever. This purposeful generation of inequality by super rich has and will continue to prove much more dangerous to society as has caused the growth of a consciousness among the 99% of this inequality which is demonstrated by the fact that "in 2010 75% of people who responded to the annual British Social Attitudes Survey said they believed the income gap was too large. By 2012 this had risen to 82%." This fracturing of society can also be seen in the fact that in 2006 there were 59 large protests recorded around the world while in the first 6 months of 2013 there were 112 protests of similar size recorded. Another facet of this growing inequality is that it exists only between the 1% and the 99% while inequality within the 99% has decreased according to research conducted by the Institute for Fiscal Studies. The 1% also spend a great deal of their resources promoting the notion that they deserve their enormous wealth as a reward for their innovative and competent leadership which in the words of Danny Dorling are "corroding the fabric of society". This idea causes great tension between the mass of people who's standard of living has largely either stagnated or fallen, between 2007 and 2012 the average real disposable income fell by £1,200, which is one of the fundamental causes of the disillusionment with establishment politics and the rise of populism. This increase in inequality has also served to leave the economic and social interests of the disparate groups that comprise the 99% more closely aligned. This is particularly damaging to the 1% as the 99% includes the upper middle class who's potential loss of support in essence removes the life support system that allow the elite 1% to rule.

4. Wealth

      Dorling argues that it is worth noting that there is also vast inequality among the tiny group that is the super rich. This group refers to themselves as - HNWI - high net worth individuals, people who have a spare million dollars' worth of wealth excluding their pensions and primary residence, of whom there were an estimated 12 million worldwide in 2012. This group collectively has a mean investable wealth of $3.85 million. However this figure pales in comparison to the $150 million mean wealth of the "Ultras", some 110,000 of the 12 million HNWI, which is itself dwarfed by the mean $12 billion of the richest 300 people in the world. This is both the result and cause of a lack of trust and organisation among the 1%, one can not realistically hope to squire or maintain such wealth without being dominated by self-interest. Dorling points out how these attitudes contribute to the continuing growth in inequality between the 1% and the rest of society is breeds mistrust between the super rich and everyone else. This mistrust is due primarily to a lack of contact between the different groups and by a lack of empathy on the part of the 1%. This seriously undermines social cohesion as the mass of people lose faith in their leaders, most clearly evidenced by the widespread existence of conspiracy theories with 12 million people in the US telling public pollsters that they "believe that shape-shifting reptilian people control our world by taking on human form and gaining political power to manipulate our societies". Similarly extreme views are held by the 1% with Dorling giving a particularly chilling example of a 2011 Etonian exam question that asked pupils to imagine a scenario in which Britain has run out of petrol and their are riots for which the army was called in to quell, killing 25 people in the process, and they were the Prime Minister writing a speech to justify this policy, which one commentator pointed out is a blatantly authoritarian act. Dorling notes how "inequality both creates and magnifies ignorance" which in turn greatly undermines the fabric of society. 

The Experts 

’The experts say you will be X amount worse off if you choose to leave the EU’ was a line repeatedly spread by the Chancellor, George Osborne at the time of the EU referendum.

(See BBC’s eight reasons why leave won : http://www.bbc.co.uk/news/uk-politics-eu-referendum-36574526) Polls and statistics showed that support for remain in declined due to the repeated use of these so-called experts. In a way it’s implying that the experts know what’s best for us and we should listen to them. But aren’t we capable ourselves as rational human beings? 

This brings into question of the experts v us. Therefore Brexit can be viewed as a revolt against the establishment or the ‘1%’.  However do the experts know better?  For example certain professions require experts i.e. medicine requires professionals as doctors follow procedures and for that one must be educated however many politicians follow the same path from being educated and going into politics (rise of the career politician) therefore does this mean they too are experts? 

I think not as many politicians are just working on behalf of the elite and they no longer serve our interests as Fischer explains in his book democracy and expertise, us , the public no longer think these so-called experts work in order to benefit us in other words it is a tyranny of expertise. 

Therefore, expertise and elite are intermixed with one another. Both are now perceived as being one rather than two separate entities i.e. the experts are the tool of the elite. The image of experts is now tarnished from the financial crisis through to scandals creating more and more scepticism.

The Curious Case of the 1%

Did you ever wonder where all the money went during the economic downturn to allow the share of income to be greater than 18% to the concentrated 1%? Or even the mysterious idea that American Government helped to produce this astonishing figure.  Hacker and Pierson in, ‘Winner-Take-All Politics’ gives us the set of clues to how the 1%, 0.1%,even the 0.01% have the biggest share of the cookie jar and the unconventional reasons that made it so.

Where did the middle go?

In order for there to be the ‘haves’ and ‘have-nots’, a clear separation between the rich and poor evolved over time. Hacker and Pierson give one main reason; the middle class is no longer in the middle. The 1% have excelled so much that the class system is now ‘us’ and ‘them’ and no sandwich filling in the middle. It begins with the passing of the GI bill. Led by veterans of war, it enabled them to receive four years social benefits. However, what was perceived to be a rise in unions was the very problem that caused its demise. After the 1970's union representation went on the decline, people stopped championing the middle class and this meant less voters motivated to vote, to rally, to advertise and ultimately to vote. It diminished the middle to a small whisper. During this organisational transformation groups such as EMILY’S list emerged, it helped shift the concerns of society to more affluent ones, less about the traditional economic issues but more on women’s rights and environmentalism.  Coupled with this, to finance American politics’ lavish campaigns the rich was crucial. The rich were not supportive of Medicare or social security because that meant increased taxes, but they were advocates of lowering taxes on dividends and capital gains. If society focuses less on the middle and those financing ‘society’s wishes’ also shift focus, the middle fades and no-one questions why.

Did you know?

They say knowledge is power and in this case it certainly is. Voters cannot make clear judgement on what to demand and how to hold politicians accountable because they simply do not know enough. This allows the 1% to slip through cracks. People of America appear to be tolerant of inequality compared to other economies because the fact of the matter is that they THINK inequality is less than it truly is.

9 second Rule

5,4,3,2,1 – cut. The media now lasts approximately 9 seconds on the same individual talking on a topic before they are interrupted. This used to be 40, but as the media has come under increasing pressure to become ‘entertainment’ and the mass public care more about entertainment the number of people informed about the ‘hard news’ is fast diminishing.

There is this and so much more, but ultimately the erosion of the middle has led to the corrosion of society, the 1% gain more zeros in their accounts than ever before, mainly due to American Politics pushing for this change. It may not be a problem if the lower were catching up, but they are not. Donald Trump and Hilary Clinton are the face of American Politics today, to show the true faces of just some of the 1% that we are now becoming aware of and the many more yet to appear for future years to come. 

The Crisis of our Representatives?

The Crisis of our Representatives?

Let’s talk about politics, and more precisely lets talk about the “fantastic and magnificent” relationship between politicians and the public, us. Yes, you and me. We are governed by an idealistic, indirect democracy where we are all being represented by the electors, those that we democratically, consciously and freely voted for to be our voices in the House of Representatives. They look after our interests as their owns, they argue and discuss relevant matters in order to come up with the most beneficial decisions for the community. They also repeatedly and constantly use of mediating institutions and organs as a means of becoming aware of our concerns and solve them. An infinite number of measures are carried out with full transparency, dedication, professionalism and volition. 

This could be real in another dimension, a fairy tale or a fictional film. Dewey, John & Rogers, Melvin L. ,in chapter 4 of their essay, demonstrated that unfortunately, reality doesn't match the idealistic world as just described. In contrast, we “rejoice” in having no voice. One that is silenced by the economical interests of the business powerhouse- the ones truly represented by the political sphere. They call themselves the “authors and guardians of prosperity”, legitimizing their interventions. The authors talk about an evolution of the first pioneers, who in today´s society are businessmen, who´s intentions have, ironically, devolved from genuity to self-interest. The political panorama is mainly comprised of inept and unqualified puppets unable to face their duties, such as solving the severe and significant problems that “govern” implies. As the text explains, “Political parties may rule, but they do not govern”. 

It is frightening as it is overwhelming. Well, but at least we are a democratic nation, where we can exercise our universal and fundamental right to vote. Aren't we? Instrumentally and judicially we are. However, recent data shows the systematic drop in participation during elections. The question is, why is this happening if, as Aristotle claimed, we are primarily “Zoon politikón” , individuals extremely engaged in the concurrence of politics? Where do we begin. Firstly, we are not informed. We don't have the initiative to analyze the current political, economical or social situation. As a substitute, the powerful provides us with the enough amusement and entertainment needed to keep us being viewers of the game instead of players. Moreover, the political spectrum is limited, is really voting among TWO parties a free choice or is it about choosing the one you dislike less?

The worst thing, as far as I am concerned, is that we easily fall into their trap. We are the perfect hunt, we prefer to be ignorant rather than knowing the painful, unpleasant but necessary truth, and that truth is that (versioning a quote from Nietzsche): “THE PUBLIC IS DEAD” (or nearly). We need to assert it because only by identifying what is the reason for our disconnection with the political issue, we will raised from the dead. In order to mark a new path in political history, a path where changes are not just possible but real, a path where citizens are included as active agents in the political affairs. Because, as the author of the chapter suggests,  “We cannot expect the causes of a disease to combine effectually to cure the disease they create”. We must interfere, and that means that we must exist. The crisis of our representatives is not real, because we don't have representatives, and something that ceased to exist can not be in crisis. Instead, we are living a crisis of the Public, and as the tittle of this chapter defines, a total eclipse of it.

BIBLIOGRAPHY 

Dewy, John & Rogers, Melvin L. The public and its problems; an essay in political inquiry. (Chapter 4, 101-119). Publisher:

Pennsylvania State University Press.

LABOUR IS THE NEW ELITE

Normally we tend to associate the elite with the upper class society: Aristocracy, royalty, unbelievable rich people, Wall Street, the Bilderberg club, Donald Trump… But what happen when the people who preach to be our representatives and claim to fight for everyone’s rights, end up being the new elite. R.A.W Rhodes spent few days fallowing members of Tony Blair’s government with the aim to describe their everyday life at the office, he spoke to Secretaries of State, ministers, Parliamentary Secretaries, ministerial advisers… among others.

The writer describes the main character of this chapter as the “elected politician who heads a central government”, which is, in my opinion, an appropriate definition of what a Prime Minister should be, and it is, in a small way. Because, yes, of course, the Prime Minister is elected, at least in democratic countries, and actually, his (generally and mostly “he”) main job is to lead a government. So far so good. But the Prime Minister usually fits in a reduce, really, really, really, (we get is small right?) reduce group of people. He is most of the times a man, middle-age, white, university-educated, Oxbridge, of course, and has done public service. Great Britain has had seventy-six Prime Ministers, 100% of them were white, two out of seventy-six were woman, almost half of them have studied in Oxford or Cambridge, forty-one out of seventy-six, and all of them have committed public service. It’s not me, anyone that has studied probability knows that this is not a coincidence. However, are we responsible about it? Not at all? Did we elect them? Or are we just playing the game they want us to play? Are we actually conscious? We just don’t care?

“Privilege go with the turf. He has the exclusive use of his own toilet although there are two others within twenty metres” If you take this phrase out of context and ask anyone, how will they react? I did this experiment with some of my friends, here are some of their answers:

-          An Egyptian Emperor

-          Are you reading about medieval times? I thought you were studying PPE not history

-          Spanish king

-          White family member during the USA segregation

-          An idiot

Imagine their reaction when I told them this was said in 2007 as a description of British Prime Minister.

The Labour Party's origins lie in the late 19^th century, when it became apparent that there was a need for a new political party to represent the interests and needs of the urban proletariat, in the 21^st century they don’t seem to follow that premise anymore, instead they talk about “the cocktail party test”, discuss “about how to win contract after the war”, and always have time for tea at five. This system doesn’t work, it’s simple. Let’s change it.

“The corporations don’t have to lobby the government anymore. They are the government.”

 Jim Hightower.

I leave here some links about few things I found interesting.

http://bilderbergmeetings.org/index.html

http://www.dailymail.co.uk/news/article-2736238/How-narrow-Oxbridge-elite-dominates-UK-public-life-More-75-senior-judges-half-cabinet-attended-university.html

Bibliography: Observing government elites: up close and personal -R. A. W. Rhodes, Paul 't Hart, Mirko Noordegraaf (2007)

Competitive Democracy and the 2016 Presidential Election

Democracy is having one hell of a year in 2016. Brexit has cast doubt on the European Union as the rosy future of European identity. Recession, economic slowdown and demographic changes, from immigration to refugees, have left current political systems reeling in response. Across the Western world, people have replied by boosting the popularity of far right and far left parties as well as ideas. From Golden Dawn in Greece to Podemos in Spain, groups from across the political spectrum have risen from the fringes to challenge contemporary thinking on government, economy, and social issues. In their wake, the current form of democracy has been rendered impotent and vulnerable to handle the “will of the people.” One could see this as a simple crisis of our time. Others like Austrian American Joseph A. Schumpeter, this is a symptom of a much larger problem in capitalist democracy which he seas as not representative but rather competitive. No more is this evident than in the 2016 race for president of the United States.

            US politics have always been the greatest spectator sport in American history. Ever since Andrew Jackson won the presidential election of 1828, Americans have elected their presidents through their candidates election campaigns. Through these campaigns, politicians became adept at morphing these campaigns into election cycles where competition outweighs the spirit of democracy. As in other liberal democratic governments, like Britain or France, these competitions give off the veer of a popular contest between two candidates selected by the citizens they have been serving as politicians. Though as Schumpeter notes, these candidates are in reality, chosen by their respective parties largely outside anything resembling a democratic process. Instead, we see that these processes do not represent the will of the people or even the majority of citizenry. In its place, political power is something already residing in within the state. Representatives of their respective party then compete for this power. This means that although the people choose them, these candidates truly represent their political party.

            This veer was in largely in place until the Trump campaign blew it off in its bid for the presidency. Trump accomplished this by reworking the usual loyalty to the party to loyalty to himself by almost completely throwing out traditional Republican Party doctrine. He has openly disregarded the Constitution with calls to deport all illegal immigrants and prevent Muslims from entering the United States even legally. He has not suffered setbacks despite open lies, past immoral behavior, or the general xenophobic flavor he gives to his campaign. He has instead found remarkable if not historic success in courting Republican voters.

            Trump’s legitimate shot at becoming president has exposed how fragile American democracy can be against economic anxiety and political gridlock. In many ways, Trump isn’t given the credit he deserves in exposing said flaws. He exploited, the fears and hardships of many average Americans despite, or likely because, of his complete lack of political experience. He confounds experts and analysts precisely because he does not play by the rules. If he wins, the future is so uncertain as to be maddening to attempt to predict. The only certainty is the figure he has created for others to model. Forcing Americans and indeed all Western democracies to consider whether their system of government are truly representative or just competitive.

Bibliography

Schumpeter, Joseph A. Capitalism, Socialism, and Democracy. Third ed. New York: Harper and Row Publishers, 1950. 269-83. Print.

http://www.theatlantic.com/politics/archive/2016/10/donald-trump-scandals/474726/