Jack Goldstone is delusional

In response to JP Morgan's announcement that it lost $2B recently.

Let’s not fool ourselves that any rules will be a perfect solution — traders will always be looking for new instruments and methods to increase their profits.  But at least we should start with the presumption that certain rules for the safety of bankers and their clients are in everyone’s interests, and we need to find sensible bargains on rules.  Without that presumption — if the starting point is that no rules at all are best — we will swing from one extreme to the other, from inadequate regulation that leads to crises to over-reactions that burden companies with too much regulation and red tape.

We are in that over-reaction phase now, with Sarbanes-Oxley (in reaction to Enron’s fraud and collapse) and the Volker rule (in reaction to the Lehman collapse) burdening or threatening corporate action.  Yet the reaction of the business community has been to push all the way back to the “no regulation is best” and decry “job-killing regulations.”   Actually, it is the absence of regulation that is job-killing in the same manner that running an Indy 500 with no rules or caution flags, or a championship football match with no referees, would lead to efforts to win that result in people being killed – or in financial markets, in major companies going bust.

Because obviously all the years S-O has been in place have been a time of excessive financial conservatism. Oh, wait, no.

But here's the thing, if it really was better for "bankers and their clients" that there be clear guidelines on financial, why aren't either the former or the latter (including institutional investors and major corporations who don't lack the resources to influence law- and rule-making) pushing for them? The contemporary finance industry isn't an alien colony: it has grown into its current form in the political-economic environment of the past few decades, and so it is probably a best initial hypothesis that it is in some way adapted to that environment. If that form is crisis-prone, it shouldn't be taken for granted that this is not a necessary condition of its adaptation.

A slightly more comprehensive interpretation of the crisis in Europe

This includes centrality of bank solvency to fiscal crisis (esp. in Spain and Ireland, though it only mentions the former), as well as the long-term background of the way in which German labor market "reforms" in the 2000s substantially relied on relative price rises in its Eurozone trading partners. By the way, other than its success at price competition, why is it that Germany has become the new chief representative for neoliberalism? If they get what they want, are we going to be talking about a "Berlin consensus"?

So, here we have it: Spain is being screwed into the ground so as to, supposedly, impress upon it the ‘precarious state of its public finances’. What claptrap! Spain had a surplus in its budget in 2008 and has had a debt-to-GDP rate less than Germany’s. Behind Mr Weidmann’s subterfuge hides an unfathomable truth: Having gutted the rest of the eurozone for years, by squeezing German price and wage inflation below agreed limits, German policy makers are misrepresenting the cause of the Periphery’s woes. Rather than acknowledging the need to europeanise banking supervision, and a part of the eurozone’s public debt, they are offering trinkets in the form of an above average inflation rate. Why trinkets? Because, in view of the deflation that is coming to the deficit countries, having German inflation rise above average is as inevitable as it is useless.

Cultural turn checklist

An abstract from the Journal of Historical Sociology.

• Meaningless wordplay (roots? routes?) - CHECK
• Non sequitors posing as definitions ("shared (i.e., social)") - CHECK
• Not so much about historical events as about their representation (or the "experience" of them) - CHECK
• Totally implausible (or else trivially obvious) claim for relevance ("potential for explosive conflicts") - CHECK

All it's missing is a heavy does of jargon and neologisms (though bonus points for the obscure noun form 'traumata'). This is not my historical sociology.

This contribution focuses on the Indian experience of the Partition. The personal and shared (i.e., social) memories regarding the history of India and Pakistan will inform the examination of the temporal dimension of the Partition, i.e., its “roots”. Tracing the re-established and new interconnections in terms of trade, travel, transportation, and communication between India and Pakistan along historical lines gives insight into the spatial dimension of the Partition's aftermath, i.e. its “routes”. The main argument of this analysis is that the traumata resulting from the Partition are still not overcome and contain the potential for explosive conflicts in the future.

Everything is history

Not even French in general, but from Normandy in particular.

DEPICTIONS OF BRAZILIANS ON FRENCH MAPS, 1542–1555

SUREKHA DAVIES

 Birkbeck, University of London

ABSTRACT

This article explores the impulse behind the outpouring of extraordinarily ornate maps representing the inhabitants of Brazil that emanated from Normandy in the mid-sixteenth century. It aims to understand the reasons behind the iconography of Brazil, a region of particular commercial interest for the French. Whereas maps produced elsewhere in this period emphasize the presence of fierce cannibals in Brazil, Norman examples highlight peaceful relations, particularly the dyewood trade. By analysing the maps in comparison with extant maps from other centres of production (particularly Portugal and the German lands), travel accounts, and wider visual culture, this article explores their relationship to possible sources and considers the extent to which their iconography had a basis in experience. By investigating the use of these maps as gifts to French kings, it suggests that the mapmakers’ selective use of trading imagery also played a persuasive role in the Norman maritime world's disputes with the Portuguese crown over the extent of Portugal's Atlantic empire.

conservative fatalism * inclusive neoliberalism = ?????

The econoblogosphere is abuzz with a resurgence of "what we need is not short-term stimulus but instead long-term reform," predictably pissing of the Keynesian and being warmly praised by their opponents. Peter Frase reads two specimens of the species and observes:

Philosophically, the Brooks and Rajan essays are interesting for the way they awkwardly combine an old-fashioned style of conservatism (the poor will always be with us, accept your lot) with a more modern form of inclusive neoliberalism (accept deregulation, and you too can be rich!) By itself, the first style of argument is simply intolerable to modern sensibilities, but the crisis has rendered the second increasingly implausible. Together, however, the two arguments add up to nonsense.

Sure, it's nonsense, but I don't think it's particularly distinctive nonsense. That is to say, neoliberalism has always combined both elements: criticism of the "rigidity" of labor market controls and welfare state protections that are pushing against the necessary tide of market competition, and the promise of increased prosperity in the long-term from the efficiency promoted by the market. If there's a relatively recent twist, it's a slight muting of the promise by reference to secular changes in the economy (Rajan cites Tyler Cowen's Great Stagnation), which only serves to highlight the ostensible hard realism of the claim that we need to accept the costs of adjustment.

The question is, adjustment to what? Sure, the Germans and Northern European "flexsecurity" welfare states crammed down their wage costs in the 2000s and began to eat everyone else's lunch in the export market. Will this really look like such a promising model when everyone else lowers their wages to match? As Frase says, it's somewhat galling that these people have appropriated for themselves the label 'structural,' as in "structural unemployment" or "structural reform."

Paper writing

An idea always seems most beautiful in the moment before it is written out.

An alternative, more pretentious title: A Model of the Composition of the Public Sphere in U.S. Late Capitalism

This post at Gin and Tacos is titled "Red Meat," which is straightforward, if uninventive. Leaving out the parts about the particular piece of trash posted on a blog at the Chronicle for Higher Education, which does not deserve to be any further discussed:

. . .

I am increasingly annoyed by the extent to which no-name hack writers and peripheral media personalities have taken to relying on shock value to draw attention to themselves and advance their careers to some level beyond complete obscurity. We see the anonymous guests on Fox News trying to say the most ridiculously outlandish things they can imagine – "Maybe I'll be the next Glenn Beck!" – and legions of fourth-rate Free Republic commenters filling blogs with as much vitriol as possible to attract attention. Basically anyone who can figure out how to use Blogger is trying to one-up the herd. There are Regnery book deals to be had, after all. And the situation is only exacerbated by highly trafficked, even mainstream media outlets giving a platform to these voices due to the same need to stand out and get attention.
. . .
There are two ways to make it as a writer, and one of them – having some combination of talent, creativity, or intellectual merit – is unavailable to this author. So she does what every other unknown, unaccomplished hack toiling away in obscurity realizes is his or her only chance to be noticed. She sits down and basically writes a 500 word version of "HAHAHA NIGGERS AMIRITE? LOL!" and waits for the call to appear as a guest on O'Reilly. Maybe she'll even get booted from the Chronicle and become the latest right wing martyr to get a speaking tour and book deal. "I was ostracized by the Liberal Establishment!"

I am going to puke blood the next time I have to watch, listen to, or read these blatant attempts by failures to throw a bunch of red meat into the public sphere and kick back and wait for that call from Fox or the Daily Caller. In truth she and her drivel are hardly worth our attention – and the Chronicle goddamn well knows it – yet here we are. Congratulations, Naomi. You've got our attention now. Too bad writers like you (i.e., shitty ones) are a dime a dozen, or else your plan might have worked.

Basically, there are institutions for material support for writers from certain perspectives. There are far more people who want to make a living as an "intellectual" than there are sufficient space in the ecosystem, if you will. The result is an intense competition that selects for not just orthodoxy but even fanaticism. How much output of journalism and commentary would this model account for?

Bismarck and Roosevelt?

Jack Goldstone:

The successful capitalism of Bismarck and Roosevelt remembered that it had to provide for workers too, and limit the excessive accumulation of the rich; they therefore engaged in building social support, unions, and enough regulation to ensure vigorous competition but without companies overrunning workers.

Today, it seems that capitalists have forgotten that they cannot extract unlimited wealth from economies whose ordinary workers are suffering long-term stagnation, unemployment, and loss of their savings and assets, and expect the workers to accept it for very long.

With house values, salary, and unemployment now ticking along at recession-levels for the fifth year in most countries, patience with austerity programs or giving more to the rich in the hope that they would lift others is running out.

Watch out, conservative parties and wealthy elites:  far right wing populists as well as left-socialists are out to bring you down to earth.  Either support policies that quickly give some benefits and relief to ordinary workers, or they will turn on you and the capitalist system that they believe is benefiting you, and only you.

Three points: first, this is the good old center-left argument-from-threat-of-radicalism. This is going to convince no "conservative parties and wealthy elites," because they've learned to call the bluff. Second, "successful capitalism of Bismarck and Roosevelt"? Ok, New Deal, fine, but paternalistic welfare programs and repression of the Social Democrats, even if ultimately futile? Also, Roosevelt didn't so much "remember" this as have it forced upon him by probably the largest wave of mobilization in U.S. history. Third, are "far right wing populists" really out to bring capital down to earth? Last time around, they adopted some anti-capitalist rhetoric while out in the wilderness but dropped it post-haste when they had a shot at power. On a much smaller scale the whole Tea Party thing showed a similar pattern.

By virtue of the transitive property . . .

If a = b and a = c, then b = c. Unintentionally truthful words from the nyt:

. . . Mayor Michael R. Bloomberg of New York, whose name is all but synonymous with Wall Street clout and nonpartisan politics.

Why Tyler Cowen is my favorite bourgeois economist

It actually surprising how hard it is to describe why something like this tickles me so much at the same time as it annoys me. Here's an attempt: it's the way we musters rhetorical turns of self-conscious sophistication--"multiple equilibria," "quality of institutions," "rebuilding trust," "classes beyond 101," "empirics of public choice"--that are more typical of critics of neoclassical economics in order to argue for mostly orthodox (even, as Marx would say, vulgar) neo-liberal positions. He is like a walking disproof of the types who think the way to argue against economists' policy positions is to attack their oversimplifications of social life and human behavior. It doesn't hurt that his criticisms of left-of-center bourgeois economists are not entirely off-the-mark: there very well might not be a politically neutral, technical solution; that is to say, employment and income might not be pushed into self-sustaining growth simply by adding more aggregate demand, no matter where it comes from.

Yet here again, Cowen's sophistication is in the service of vulgarity, because it enables him to simply ignore the systemic irrationality that Keynesianism claims to provide a technical solution for. That is this: there seems simultaneously to be over 10% of the American population that wants to work but is unable to find employment and an immense quantity of money that should in principle be available for investment piling up on corporate balance sheets and in the financial system (as seen, for instance, in rising stock prices and rock-bottom interest rates on U.S. treasuries). If the two could somehow be brought together, then the overall level of economic activity would be higher and everyone would be better off. The Keynesian (and in a different vein, the monetarist) position is that this "failure of markets to clear" can be overcome by preventing large drops (or even extended stagnation) in the overall quantity of spending in the economy.

The problem with this argument is that it is far from clear that the models on which it is based are actually sufficiently accurate descriptions of the economy to make strong predictions. Instead, it often seems like models are chosen because they can possibly express some stylized fact such as the failure of labor markets to clear, regardless of whether or not the mechanism they use to get that (empirically real) result reflect the causes at work in the economy. Such for instance is the talk of sticky wages: labor markets fail to clear because the prevailing wage is too high, and everyone is reluctant to bid down the nominal rate of wages. The absurdity comes out when the left-of-center Keynesian immediately denies the obvious conclusion to cram wages down on the basis of some vague hand-waving.

The hand-waving is necessary because the conclusion is so clearly perverse to the left-of-center Keynesian: businesses are wary about investing so everyone else needs to take a pay-cut. Cowen's genius is that he embraces the perversity. So, as he liked to say for a while, it's probably the case that some significant proportion of the unemployed workforce is "zero marginal product" (ZMP). ZMP workers cannot, in any job, contribute more to the economy than it would cost to pay the overheard costs and their wages. On one level, this is trivially true in any decent model of the capitalist economy: if employing them could yield additional net revenue to any existing business, they would probably be hired by it. But this is precisely the perversity: they shouldn't (and even in our degraded age, can't really) be "fired" from the society as a whole. Just because they can't generate any marginal product profit for a capitalist firm, why shouldn't they be allowed to contribute whatever they can to economic life? After all, it's not like there isn't enough food, shelter, clothing, entertainment, and so on to provide decent lives for them.

Admittedly, the argument is more complicated than this, but Cowen doesn't address it at all. He doesn't have to. To paraphrase the introductory monologue of The Big Lebowksi, "Sometimes there's a man--I won't say a hero, 'cause what's a hero?--sometimes there's a man who, well, he's the man for his time and place, he fits right in there--and that's Tyler Cowen in the twilight of neoliberalism." He doesn't have to address the argument because he lives--we all live--in a political world in which there is no force that demands it be addressed, that can say in response to the idea that wages are too high or that the "marginal product" of employing the unemployed is less than zero that, no, it's the "wages" earned by the bosses that are too high and it's the owners whose existence doesn't contribute anything to society.

Ironically, sometimes left-of-center bourgeois economists will nostalgically warn that if their advice is ignored, such a force will reappear, and its arguments will be much less civil than those of the economists. The economistic right wing--of which Cowen is a preeminent member, not least because his impeccable sophistication separates him from so much of the rest of it--exists to eternally call their bluff, and so far they've been right.

However, to turn the wheel one last time, it's not just that the threat of political unrest is a bluff. It cannot be taken for granted that even if the threat were real--or if the bluff was fallen for--that everything would go as promised. So far in the history of capitalism, there have been four periods of prolonged economic depression, and none of them have been solved by a waving of the aggregate-demand wand to produce full employment and rising wages. The first, in the 1870s, falls suspiciously at the opening of a period of international competition among the industrial states, which carved up the world into empires and ended only in the fire of the Great War. The second, in the 1930s, continued until WWII, in which the U.S. economy was converted to a war machine and the the industrial base--along with a significant chunk of the population--was all but totally destroyed in Europe and Japan. It is true that this was also the period of the birth of the institutions that shaped the broad-based prosperity of the postwar era, in which a stable income and "middle class lifestyle" could be enjoyed by most of the working population. However, this does not mean that the institutions that enabled that trajectory of development in the context of an overall boom that was set off by and for the reconstruction of the civilian economy were themselves contributors to that boom, or even necessary conditions for it. Indeed, those very institutions were perfectly consistent--and at the very least were blamed for--the onset of the third great period of depressed growth, in the 1970s. This time, many of the post-war era's constraints on business activity and the labor market were sacrificed on the altar of "reform" meant to restore profit, and hence the incentive to invest and from that, growth. Over three decades later, probably 4/5ths of us have nothing to show for this, and now we seem to be back in another depression. The left-of-center bourgeois economists would have us believe that there is, this time, a way to restore growth and the broad-based prosperity that has been missing for decades.

Among radicals, one of the deadliest accusations has, historically, been "reformist!" This amounts to the charge of "getting in bed" with the center-left promise of a mutually fruitful capitalism. Yet, the implication of the weight of this accusation is that there is a strange intellectual infinity between the radical left and the staunchly bourgeois right. The two agree in dismissing the promises of the center-left as wishful thinking in the world as it exists; the capitalist economy is, they would both say, a harsh mistress. The left-of-center economists' vision of a rationally managed capitalism is a distraction from what the other two see as the real question: is the harshness (and the irrationality, and the perversity) part of that "realm of the necessary" that human beings have no choice but to adapt themselves to? As has been so often pointed out, this was once--at least into the middle of the twentieth century--a question of active debate, so much so that even a figure like John Stuart Mill felt obligated to concede, for instance, the principle that property rights were a construct of social convenience. Yet, now, outside academic departments--philosophy, sociology, perhaps anthropology and political science, rarely economics--it is no live question at all, so much so that a movement of at most a few tens of thousands that succeeded only in putting the mere fact of economic inequality briefly back into the newspapers and the fulminations of intellectuals and pundits is hailed as an historic achievement.

In a world like this, who can begrudge Tyler Cowen his smugly sophisticated vulgarity?

From the comments, on downturns, fiscal policy, and multiple equilibria:
From Tall Dave:

We were less wealthy than we thought we were.

Call me an AD-denier, but I still think the basic issue here is that you can’t consume more than you produce. Production exists to satisfy demand, but at the same time demand is limited by production. We had a long boom built on the notion we could boost demand and thus supply and thus demand again in a virtuous cycle, and now we are seeing the cycle work in reverse as demand/supply seek their natural levels.

One way to justify this model is in terms of multiple equilibria, and that we have been walking (bouncing our heads?) back down the escalator.  Arguably for the United States this downward bouncing is over.  Along the way we are sending signals about the quality of our institutions and thus shaping the course of the future.

In this model there is still a useful role for fiscal policy.  For one thing, fiscal policy can smooth that ride down the escalator, by spreading the losses out over time, at the cost of future debt of course.  This may be needed if only to make the political economy of decline less bitter; see Spain and Greece.   Nonetheless fiscal policy cannot make up for the output losses at will.  We are not standing in an IS-LM diagram where the difference between “what we have” and “what we could have” is thwarted only by some supposed Austerians who won’t shift the proper curve and yet somehow have taken over some of the biggest spending social democratic, insider-leaning governments in world history.  The IS-LM approach fits in nicely with the view that policy improvement is all about yakking about the obstructionists.  Instead, policy is also about rebuilding trust, not just maintaining ngdp on a decent keel.

There is another possible role for fiscal policy, as there usually is in models of multiple equilibria.  If you ran some super-duper fiscal policy, and invented the flying car, a cure for cancer, and other marvels, the market might suddenly latch its expectations on to a much more positive scenario.  There could be a significant upward bounce to a much higher equilibrium of output and employment.  In any case, the quality of fiscal policy matters, and Keynesian ditch digging probably doesn’t do much for inferences about institutional quality and for the selection of multiple equilibria.  “Spend the money, anywhere” is in my view a deeply pernicious attitude, somewhat akin to thinking you can create a good NBA team, with a strong ethic for quality and work, by tanking for better draft picks at the end of every season.  But no, the internal ethic matters and cannot be first destroyed and then recreated at will.  Good teams don’t usually work that way, and neither do good fiscal policies.

Right now we Americans are building back up to better equilibria, slowly, by showing that our economic institutions are not totally crummy.  This process can take a good while, but in fact our recovery is going better than many people believe.  The eurozone is far — very far — from being on that kind of rebuilding track.

There is plenty of talk about various commentators don’t understand the lessons of Econ 101.  There is a reason why we teach classes beyond 101, and why we spend so much time studying institutions and the theory and empirics of public choice.

A comment on my internal illogic

When I get to worrying about problems in my life, I seem to be most troubled not by the problem itself but instead the possibility that I've been denying or underplaying the problem. Thus, recalling for myself that yes, it is something I've admitted as a problem already helps me to calm down.

That doesn't really make a whole lot of sense. I'm not going to complain, though I suppose there's a risk that eventually I'll be gripped by a panic that maybe it is actually a way for me to minimizing and avoiding dealing with my problems.

Dialectics is not for amateurs

This deserves a skeptical 'hmmm.'

Where to begin?

What is significant and revealing is the basic outline of the collapse: an elite sanctioned enterprise is challenged, loses its capacity to claim expertise and, ultimately, its privileged status. This trajectory was recapitulated on many occasions outside of the world of music and the arts. Carried to its extreme, elite privilege and impunity is at the core of why many of us now find ourselves on the streets. And so the larger drama which is now being played out is more than a little familiar to composers of my generation, as the brief recapitulation of that which I will call our nakba will reveal.

The ostensible topic of this essay is the lost of status of high-art music, i.e. the "classical" tradition, over the course of the 20th century. First, I'd observe that this passage is only the first of three uses of the term 'nakba', which seems to me to be in poor taste, but whatever. He takes detours through the travails of the academic humanities, especially English, for the past several decades and then the rise and fall of Economics as the universal social science. These sections are some mix of pointless and muddled, but the reason I feel compelled to comment on this comes towards the end.

Returning to music, he makes a temporally dubious connection between the eclipse of art music by other popular forms:

For with the complete triumph of market fundamentalism within economics, and its close relative market-populism within the world of arts and cultural production, there are more than a few indications that discontent is simmering, not only with the social conditions the market has wrought but with the inevitable limitations it imposes on the range of creative expression.


There is an increasing recognition that within the capitalist marketplace music is necessarily consigned to a utilitarian function, as a delivery vehicle for commercial solicitations or at best the expression of life style choices and social identities achieved through consumerist acquisition. It was predictable that the three-to-four minute song would increasingly define the exclusive limits of musical form as neo-liberalism tightened its grip. This limited formal vocabulary contrasts starkly with the musical culture of the canonic period which, while containing a substantial song literature, is notable for the centrality of instrumental music making use of autonomous, as opposed to textually based, musical forms. The engagement with instrumental works requires the immersion in a world whose logic is dictated by its own self-contained and self-sufficient rules — of antecedent and consequent phrases, diminution and augmentation, perfect, imperfect or deceptive cadences, motivic transformation and development. As these have nothing to do with system of control and domination which defines our lives elsewhere –the exploitation of labor, the provision of services or the acquisition of raw materials — so-called pure music constitutes a realm of experience in which homo economicus has no status. And it is for this reason that the appreciation of autonomous, non-referential musical structure, while admittedly constituting a form of escapism for most, is, at its best, a fundamentally subversive act through recognizing that another world is, at least in a metaphorical sense, temporarily possible.

So, catastrophe? But maybe it's not all bad:

The basic sound world and musical syntax of popular music defines a distinct language, one which is inextricably linked to the medium in which it is communicated. It has become the musical lingua franca of our day and all attempts to speak the language within the literate medium tend to come across as stilted and unnatural. Most musicians in my generation and younger are now more or less equally fluent in both languages and are to give both languages their due: just as it is impossible that this could have been conceived within a non-literate medium, it is equally unimaginable that this could be inspired, created and performed within the medium of notation.

Prokofiev and Prince? Wtf? But anyways: so does (American) popular music have a legitimate "distinct language" constituted by its own "sound world and musical syntax," or is it the product of "the capitalist marketplace" that is "necessarily consigned to a utilitarian function" with "inevitable limitations . . . impose[d] on the range of creative expression"? Seriously, I want to know. This ambiguity is hardly a solid ground on which to build this "extreme" analogy:

At the risk of pushing the analogy to an extreme, we might speculate that we are now at the beginning of a liberation of political energies comparable to that of the musical revolution of the sixties. Elite expertise having been undermined and repudiated, elites of all stripes are increasingly viewed as debased, clueless, cynical and corrupt. And it stands to reason that the leadership structure of the left has reflected this awareness, its own elites having been replaced by a horizontal democracy in which, in principle, all are given a voice and expected to participate. It seems quite likely that at some point, the General Assembly hootenanny will come to an end, and some form of top down organization will impose itself, either under duress or out of the recognition of practical, political necessity. At that point, it will be time to resuscitate what were assumed to be those moribund traditions centered around the conception of structuring large scale social arrangements for the benefit of tens of millions rather than ad hoc solutions relevant to achieving impressive but nonetheless limited activist goals. For the moment, we should recognize the nakba of the elites as the first step and welcome and celebrate the productive anarchy which has necessarily accompanied it.

This manages to be simultaneously condescending ("general assembly hootenanny") and delusionally optimistic ("a liberation of political energies"; "productive anarchy"). Never mind that he never actually explains what "energies" were released in "the musical revolution of the sixties." Not to mention the problem that neoclassical economics hasn't exactly suffered a "nakba" since 2008 (oh dear).

I say dialectics is not for amateurs because as a mere form of writing, it serves to justify simple inconsistency and fuzzy, even contradictory, thinking. I'm actually inclined to think that any discussion of the history of music since, say 1951, needs to be sufficiently dialectical to take in several different developments: the decline of the cultural status of the contemporary practitioners of modernist music, the ossification of "classical" music into a kind of living museum of concerts and recordings of the same pieces over and over again, the rise of the various (primarily recording-based) popular music forms, and the internal conflicts within those genres over authenticity vs. commercial success. I doubt it has much of anything to do with neoclassical economics, and if it has anything to do with the academic literary studies, it is in the ramifications of the fact that at some point almost all contemporary composers were ensconced as university professors.

Not the whole story

From a random econoblogger:

One way to think about the political economy of macropolicy is to divide people into two camps, those who are motivated primarily by threats to income and those by threats to wealth.  (I will emphasize threats rather than enhancements for simplicity, and in recognition of the force of loss aversion.)

Threats to income take the form of unemployment, wage loss and the loss of public benefits (the social wage).  The policies attractive to this group are generally Keynesian: looser fiscal and monetary policy, measures to increase wages, and other interventions to prevent the economy from producing below its potential due to insufficient demand.

Threats to wealth take the form of inflation and default.  The policies these people are drawn to are what we usually call orthodox: tight monetary policy, restrictions on new borrowing (particularly by the public sector) and hostility to measures that would reduce the profitability seen as underlying asset and credit markets.  The latter often comes dressed as labor market flexibility.

This is a variant of the theory of a net-savers bloc as the deciding force in U.S. policy (and elsewhere). Put in these terms, it becomes particularly clear that there's something missing from the account. Ok, so there's a large group of the population that depends on ongoing income, above all based on employment but secondarily on state action. Note that these two are not exactly the same, and also that in addition to Keynesian macro-economic stabilization, this group also probably has an interest in greater intervention in the labor market (or greater state provision of services outside the labor market) even in the best of times.

The other group is supposedly concerned about threats to the value of financial assets, especially fixed-income assets like bonds. Yet here again, he sneaks in the slightly different concern about profitability, which in turn motivates an interest in labor market flexibility.

What's missing is a recognition that the balance between profits and labor is a powerful, independent issue. The fact that this maps onto the income/asset value preference distinction so closely--as is implicit in his slightly heterogeneous description of the two--is an accurate reflection of the current political climate, but it doesn't really explain it. As he says later: "Do these perspectives correspond to class interests?  Yes and no. . . . There are high income individuals, for example in upper-level management positions, whose vulnerabilities arise far more from their future employment prospects than their portfolios." Except that insofar as he's baked the profit rate into the "wealth" side means that even executives with relatively little financial wealth (ha) will be strongly inclined toward that side. Yet, remove that stipulation, and it does seem as if in principle corporate management could do either way. Indeed, they did go the other way for 3 decades after WWII.

It's all pointless

Well. One of the writers on the Economists' politics blog (the one who recently announced his desire to become a novelist) has taken the occasion of the complaints of a tech reporter to air some of his own sense of futility in his profession:

Reflecting too often upon the ultimate triviality of almost everything we write about does no good for technology or politics writers, or for their readers. The illusion that the next thing will be truly meaningful has always meant more to us than the reality of the next thing. I agree . . . that there is something quite sad in the way Mr Madrigal, after having discovered that he has been reporting on nothing of significance, does not then go on to draw the well-warranted conclusion that he has wasted some of the best years of his youth foolishly yammering on about ephemera, but instead doubles down and declares "we all better hope that the iPhone 5 has some crazy surprises in store for us later this year". But it's only sad because life is sad. Really, why not roll the rock back up the hill?

Ah, if only this wasn't so totally in line with my own attitude at the moment.

Ironically self-referential or unintentionally self-parodying?

There's no way to tell which the lede to this story in the Times is:

Parents are feeling sticker shock as high-end junior baseball gear becomes as common as expensive test-preparation courses and lavish birthday parties.

Not that I intend to read the story. Nor would it be any less unforgivable if the new york times style sections was self-conscious of the way it constructed the reality it claims to report.

The Cold War never happened

My favorite paleoconservative reliably skewers the stupidity that still issues forth from the hawkish right in the U.S. He points to the following:

Seth Mandel responds to Bandow with the non sequitur of the year:

Really? If President Obama saw Russia establishing allies in the West, he would … [1] enable the slaughter of thousands by shielding murderous dictators like Bashar al-Assad at the UN Security Council? Bandow thinks he would [2] aid, abet, protect, and hide the illicit nuclear weapons program of the world’s foremost sponsor of terrorism? He would [3] steal elections? He would [4] jail bloggers? [5] Assassinate whistle blowers on foreign soil and at least tolerate the assassination of journalists at home? [6] Cut off energy supplies in the dead of winter from those who refused to do his bidding? Which one of these things does Bandow think is the appropriate reaction to the enlargement of NATO, and which of these things does Bandow think Washington would do?

Larison, however, fails to score the easy points by just observing that actually, Washington did do more or less all of those things in the Western Hemisphere in the name of anti-communism. (I added the numbers.) What follows is just off the top of my head.

1. Nicaragua, Chile (widening the scope: Saudi Arabia, pre-revolution Cuba and Iran, Indonesia, South Vietnam . . .)
2. Ok, not in Western Hemisphere, but come on, Israel
3. Probably not at home, but certainly abroad, see #1
4. See #3. But also, McCarthyism, the FBI surveillance of lefists and civil rights groups
5. Maybe not journalists, but that doesn't make it any better
6. I'm sure something like this happened, but hell, let's give him one out of six

Biding one's time

One's goals cannot be accomplished in an instant. They must be pursued with patience, building up from a base that for a long time little resembles what it is meant to become. It is pointless, if not impossible, to try to do this long work without break. During the necessary lulls, it makes sense to seek distraction. But if the goal is so distant as to be out of sight, how to recognize the line between seeking a distraction from the pursuit of it and trying to fill up one's time while, in reality, the goal grows no closer? At some point, it is difficult to dispel the fear that one is biding one's time in a hollow life that is not destined to become full. At that point, what is one to do? Continue on, now distracting oneself from that fear as well? But if not that, what, as long as one remains convinced that one's is fundamentally the right one?

Surprising wisdom of general-audience japanese historiography c. 1963

Inoue Kiyoshi, Japanese History Vol. 1, pp. 166-7:

それは貨幣・商品流通の発展にともない、御家人の生活がぜいたくになったからであると、多くの歴史書には書かれているが、ぜいたくというよりも、旧式の所領―収益権―にあぐらをかいて、現実の村の掌握ができない、つまり社会の変化にうまく適応できない、というところに、彼らの窮乏の真の原因があった。

"In much historical writing, it is said that this was because, going along with the development of money and commodity circulation, the lifestyles of the shogunate's vassals became increasingly extravagant, but more than their supposed luxury, the real cause of the poverty of [some of] the shogun's vassals lay in their tendency to rely on the old type of territorial lordship--i.e. rights to revenue [within the court-centered estate-ownership system]--with the consequence that they could not exert real control of the villages, which is to say that they could not adapt well to the social changes ongoing there."

Holy crap it is hard to translate Japanese as anything other than turgid. But other than splitting this point into multiple sentences, my only revision would be to emphasize competition among elites as what the losers among the shogunate's vassals were unable to adapt to.

A contrast of two arguments

Acemoglu and Robinson (do they really co-author their blog posts?)

Next comes the original part of Krugman and Wells’s argument: the main corrosive effect of this inequality is in preventing Keynesian policies to combat the recession 2007-2008 and the sharp increase in unemployment that resulted. The idea here is that the “right” (the GOP) opposes any government intervention, and Keynesian fiscal policies and work programs that would have increased employment and combatted the recession are opposed by the right because, with increased inequality, they have become more beholden to the very wealthy.

Though intriguing, this idea is not backed up with direct evidence by Krugman and Wells. It may well be true, but it is also a curious thesis. Here are some of the things we find less than fully clear about this thesis.

First, the distinction between “right” and “left” (or perhaps pro-elite and anti-elite) is not a natural one when it comes to Keynesian economics and policies. Many conservative politicians, and not just Nixon and Reagan, have embraced Keynesian economics.
. . .Third, even in the current US context it is not clear why the wealthiest Americans should be opposed to Keynesian policies. After all, wealthy Americans are the owners of the major corporations or at the very least are strongly vested in the US corporate sector, which would also be one of the main beneficiaries of expanded aggregate demand.
. . .Having said all of that, Krugman and Wells are probably right to some degree. Republicans prevented more aggressive Keynesian measures. . . All the same, the reasons for this hostility to Keynesian economics are still mysterious. Perhaps it was just politicking, with small p — a way of frustrating Obama’s economic policies. Perhaps it was based on a “slippery slope argument” — if the government starts being active now, what is there to stop it from becoming even more active in the future? Perhaps and just perhaps, it was for the same reason that some economists had a blanket opposition to Keynesian policies — on “ideological” grounds not clearly based on pure economic interest. Not as big a story, but a possibility.

Brad DeLong in response (leaving out the parts about Hitler)

My second reaction is that I do, to some extent, understand what Acemoglu and Robinson's impulse is here. The idea that we should engage in technocratic interventions in the macroeconomy to provide a stable economic environment in which free men and women can make their plans live their prosperous lives is, as John Maynard Keynes wrote back in 1936, "moderately conservative": it is in its essence neither left nor right, but merely sane.

The question of what technocratic interventions work best--pegging the price of gold, constant reserve stock, stable money growth rule, lender of last resort, nominal GDP targetting, automatic stabilizers, deposit guarantees, expansionary fiscal policy at the zero nominal lower bound--is not a question of values and goals, but rather a pragmatic question of what works, of what macroeconomic policy is properly "neutral" rather than deflationary. And that is an empirical-technocratic question, rather than a value-philosophical one.

But, even so, right here and right now both the policies of fiscal expansion in a depression advocated by John Maynard Keynes and the policies of massive quantitative easing in a depression recommended by Milton Friedman are strongly left-wing policies--not right wing ones. And, right here and right now, higher income and wealth inequality in our system of money-driven politics has strengthened the right.
. . .
I think that, once one recognizes this fact that both Keynes and Friedman are to the activist left of even the left edge of today's policy spectrum, one cannot then escape the conclusion that today the entire right wing and a good part of the center is simply not sane.
. . .
Acemoglu and Robinson, I think, want at some level to be thought of as Very Serious People, as part of the Bipartisan Center. They do, I think, fear that if they took those additional logical steps that they would find themselves dismissed as "shrill"--as like Paul Krugman and company.


So they try to avert their own--and everybody else's--gaze from the fact that right now to be truly technocratic and nonideological is to be advocating policies that are left of the entire political structure.

DeLong doesn't seem to notice that he is shifting from two very different claims. The first is that right-wing policies correspond to the influence of money on politics; thus they are the policies of those with the resources needed to wield influence in this environment. The second is that the policies advanced by the Republican party and abetted by "centrists" among the Democrats are "simply not sane." A&R acknowledge the possibility of the latter at the end of their post, though they label it as ideology "not clearly based on pure economic interest." This, for them, is "not as big a story." As what? As the first claim, that austerity is the agenda of a specific social group, namely the economic elite (and ultimately, as they note, business). This is at least the implication of trying to link inequality to the current political balance in Washington, but A&R's point is that it is far from clear why this should be so based on the interests of elites and the business community. Why, when business or other even more right-wing forces have in the past been perfectly willing to endorse the stimulation of demand by fiscal means, is there such intense opposition to it today? To repeat, it might just be "insanity" i.e. a kind of ideological blindness, but this is a boring answer. Of course, for the foot soldier in the battle over the management of the capitalist economy, such as DeLong, the degree to which the answer is theoretically interesting is totally irrelevant: it only matters that they are wrong, and must be shown to be wrong (and even pernicious) at every possible opportunity, and any analysis that does not highlight that is no more than a distraction. From DeLong's (and Krugman and Wells') perspective, they are simply championing the technically correct response to a problem in the economy; they are "political" only insofar they are defending the interests of everyone in the economy from a force opposing the correct response ("high unemployment because we will not repair our magneto is a choice, and a disastrous one, and an insane one, and a right-wing one").

However, politics is not an accidental by-product of the existence of an "insane" political party. It is the result of real conflicts of interest among different groups in society, and indeed, when they refer to inequality, or the influence of economic elites, or even to the "right-wing" as a meaningful modifier, they are implicitly at least appealing to this non-accidental level of politics. A&R's point, however, is that far from the simplistic explanation given by Krugman and Wells, it is not at all clear how the Keynesian/anti-Keynesian debate maps onto it, since it is easy to not only sketch out why economic elites (with their interests tied to corporations and the capital markets) could be expected to favor macro-economic re-inflation but also given plenty of historical examples of them doing so. The politics, in this sense, of anti-Keynesian policy is problematic.

Though perhaps it is less so than A&R claim: capital sees an opportunity--in the context of its hegemonic bloc with net savers--to definitively cripple the capacity of the state to intervene in the distribution of economic resources and more specifically the labor market (hence, again, the constant talk of social security and medicare). It might depress revenue a little in the short to medium term--though profits have been perhaps surprisingly buoyant--but that's a small price to pay. Sure, it sucks for the rest of us, but that's politics--as opposed, despite what Krugman and DeLong would like to believe about themselves (though there's evidence the former has been gradually educated), to mere technocratic policy.

Radicalspeak

There, I think that's a good term for it. An example from here via here.

[T]he “non-affiliate” is the central element that both shapes the administrative gaze and reveals its operative logic. Structurally, the “non-affiliate” plays a similar role to the “outside agitator” (a figure that has for its part also made some significant appearancesin recent East Bay struggles), those excluded bodies that transgress the constitutive boundaries of a particular political formation or community. What is at stake in the definition of the “non-affiliate” is a spatial politics of both inclusion and exclusion, since by defining who is excluded this language at the same time defines who is included. To the extent that the target of protesters at the UC and beyond has been precisely the privatization of public education, these protests — which have consistently faced repression at the hands and batons of UCPD — are about redefining the spatial logic of inclusion/exclusion that drives the decision-making of the UC administration.

I understand what this is trying to say, I really do. But I just can't get over all the shibboleths: "administrative gaze" "excluded bodies" "spatial politics of inclusion and exclusion." What's being described is the fact that the UC administrations (with a special attention to UC Davis, about which a report just came out), in responding to protests, have used the supposed presence of "non-affiliates" (and associated warnings that they might rape your daughter) as a pretext for clearing camps, violently if necessary. There's a way in which bringing to bear all of this radicalspeak amounts to taking this mere pretext far too seriously. The administrations wanted the occupiers gone, and they hit upon this as a way to present that, but it's strong odds that if it had not been available, they would have thought up something else.

I. The Crises of European Feudalism

A Sketch of the Capitalist Revolution in Europe (I)

The political and economic structures of Europe in the Middle Ages were at the same time distinctive and entirely typical of precapitalist societies. Despite some mercantile or small-scale industrial enclaves, they were on the whole predominately rural and agricultural, both in terms of population and economic activity. Rural economic life was, moreover, governed by traditional practices geared towards maximizing not total income but instead peasants' probability of subsistence in a highly precarious environment. Peasant communities' strategies to ensure their subsistence were balanced against the claims of armed elites for work on their fields or payment of various dues. This much, again, Europe shared with almost every other settled agrarian society in human history. What was distinctive--indeed, what was immensely variable in different societies and over time--was how exactly those elites were organized, which went a long way in determining the form and degree of success of their claims on the peasantry.

In Medieval Europe, there developed three broad, inter-related types of elites: the landed nobility who directly ruled over particular manors and lords, a clerical hierarchy that both held land and claimed a special tax (the tithe) on all agrarian land, and the direct officers of the monarchy, who collected taxes and resolved disputes. These types were, in practice, deeply intertwined: clerical benefices were often doled out to non-inheriting members of the nobility, either on the prerogative of landed lords or of the monarchies--this itself being a matter of hot contention at various times--and royal office (as well as the income that came along with it) was often granted as a reward to loyal nobles, or conversely favored officials could often obtain landholdings through purchase or marriage.

There were, nonetheless, three deep fault-lines in these polities, which led to repeated crises in medieval and early modern periods. The first was the struggle between all elites and the productive classes, especially the peasantry, for the goods produced by the labor of the latter. Elite's attempt to claim revenue from the direct producers could take various forms--labor services on the lord's estate, fees for monopolies such as the lord's mill, or dues, taxes, or tithes whether in money or in kind--but whatever the specific form, it largely represented a zero-sum tug-of-war: more paid to the lord, bishop, or king was less for the peasant. The problem was exacerbated by the inherent economic and demographic tendencies of a premodern agrarian economy, in which the peasantry has a tendency to grow in number and subdivide the land. To some extent, the opening of new land for cultivation or more intensive cultivation of already cultivated land can increase output along with population, but the incentives and capacity for deep innovation in cultivation simply do not exist, and so eventually the margin of survival of the peasantry begins to narrow. This exacerbates the conflict with the lords, since if there is less food per person in the village, the burden of paying the same overall percentage of the crop to the lord is that much worse.

Added to this, while in this kind of society individuals are not generally exposed to the economic competition in the market that is characteristic of capitalism, there does exist a general tendency to political competition among elites. This competition takes two main forms. On the one hand is conflict within the feudal polity: between the monarchy and its nominally vassal lords and among lords for advantageous positions in the monarchy. On the other is the territorial conflict among the feudal political units. The logic of the two is actually quite similar: especially in the context of declining agricultural output per capita from decreasing ratios of land to peasants, the primary avenue for elites to increase their income is to expand the scope of their extraction. The simplest form of this is territorial expansion through warfare: invade a neighbor, kick out the existing lords, and add it to one's own lands or those of one's followers. For individual lords who are vassals of a single overlord--e.g. the King of France--there is the added complication that the King does not look kindly on his vassals invading one another. The monarchy itself is in large part the arbiter of the fortunes of individual lords, and this is the incentive for lords to participate in military campaigns but also, to the monarchies' incessant chagrin, to engage in factional intrigue for advantageous position in the royal court.

Together, these tensions are a recipe for war driving the expansion of royal military machines (and in turn requiring a greater extraction of material resources), internal dissension verging into noble rebellion of civil war, and widespread popular suffering driving uprisings and (when exacerbated by epidemics or war) demographic crises. Every region of Europe fell into some combination of these crises: the entire Continent in the 14th century, England and France again during or after the Hundred Years War in the 15th, France again along with the German principalities this time in the 16th (the Wars of Religion), Germany and France once more in the 17th (the Thirty Years War and the Fronde).

However, if the process that produced these crises was cyclical, it was not symmetrical. That is to say, political and economic institutions did not remain unchanged once the convulsion had passed. Each region had its own characteristic trajectories of development, but at least one general trend can be discerned: the military competition of feudal states steadily increased the "fixed costs" of territorial viability. If in the 12th and 13th centuries warfare was carried out by feudal levies--in which vassals served their lieges with specified numbers of heavy cavalry and largely untrained peasant infrantry for part of the year. By the 14th and 15th centuries, it was already increasingly necessarily to be able to pay troops, often raised by semi-independent commands, in cash. In the 16th and 17th centuries, the size of armies and the cost of equipping them with firearms increased explosively. The consequence of this was that if a political entity did not want to become the spoils of war among the great powers--as actually happened to the city-states of Italy and later to the Kingdom of Poland--then it was forced to invest in a large military machine, which could only be done with high levels of taxation, which in turn required an expansion of the administrative apparatus that extracted payments and maintained order. It is incorrect to say this dynamic always strengthened the monarchical states, since for instance it led to the consolidation of the various German principalities at the expense of the Holy Roman Empire. Nonetheless, though the specific institutional patterns varied from case to case, it was this process that led to consolidation of what are generally known as the absolutist monarchies of Continental Europe in France, Spain, and some of the German principalities.

However, there was no singular "crisis of feudalism" that marked the "exhaustion" of the developmental trajectory of the feudal mode of production. Absolutism was not, in this sense, a development out of feudalism, let alone a half-way house between it and capitalism. Such a way of talking imparts an almost mystical character to modes of production, as if some spirit of history had marked the historical role, with its entrance and exit, for each. Yet, it is the case that specifically capitalist social property relations emerged out of the internal dynamics of feudal relations, in a particular context that rendered the adoption of capitalistic economic strategies the best available option for actors conditioned by the characteristic rules for reproduction of feudal society. It is all too easy to falsely identify the "seeds" or "embryo" of capitalistic activity within the social life not just of medieval and early modern Europe but also of agrarian societies in many other times and places. However, their natural tendency was never to "grow" into capitalism but instead to follow the cyclical rise and fall of feudal economic life. The transition to capitalism occurred only as the result of a special--perhaps unique--conjunction of the feudal economic cycle and specific political and economic institutions.

Oh right, now I remember why I ran away from home (metaphorically speaking)

No, mercantilism did not involve the promotion of capitalist production relations. No, colonial trade was not a particularly important stimulus to commerce, let alone capitalism. No, the commercial exchange of commodities, whether the traditional inter-town trade or the new colonial long-distance trade or the activities of state-supported corporations, did not "bring about a revolution . . . in the structure of production." And good god no, Colbert's hyperactive regulation of textile production was not evidence of the expansion of capitalist manufacturing in France.

Another thing I don't entirely want to admit to myself

To be reading german philosophy once again feels like a homecoming. (Specifically, Habermas' The Structural Transformation of the Public Sphere.)

A theory of U.S. political economy

From interfluidity, making the always-virtuous argument that perhaps the powers-that-be understand their interests better than the pundits criticizing their supposed short-sidedness:

That’s true. But the revealed preference of the polity is not balanced. It is not some cartoonish capitalist-class conspiracy story, where the goal is to maximize the wealth of exploiters. The revealed preference of the polity is to resist losses for incumbent creditors much more than it is to seek gains. In a world of perfect certainty, given a choice between recession and boom, the polity would choose boom. But in the real world, the polity faces great uncertainty. The policies that might engender a boom are not guaranteed to succeed. They carry with them a short-to-medium-term risk of inflation, perhaps even a significant inflation if things don’t go as planned. The polity prefers inaction to bearing this risk.

This preference is not at all difficult to understand. The ailing developed economies are plutocratic democracies. “The people” do have power, but influence is weighted in a manner correlated with wealth. The median influencer in these economies is not a billionaire, but an older citizen of some affluence who has mostly endowed her own future consumption. She would like to be richer, of course. But she is content with her present wealth, and is terrified of becoming poorer. For such a person, the depression status quo is unfortunate but tolerable. The risks associated with expansionary policy, on the other hand, are absolutely terrifying.

There's a lot that's reasonable about this, although it fails to account for all of the changes to labor and tax laws of the past few decades that were indeed "cartoonishly" skewed towards business. Yet, the conspiracy of net creditors is a plausible candidate for the "hegemonic bloc" that pulls in a significant portion of the well-off-but-not-wealthy population (the "median influencer") under the umbrella of elite leadership. It is no accident that fighting inflation was the sign under which the original attack on employee bargaining power was carried out. Again, the never-ending hew and cry over fiscal deficits--even if it is in bad faith--is likewise pitched toward stoking fears of the undermining of savings via inflation or a fall in the value of bonds.

The beauty of this political agenda for the real elite is that by preventing the types of state interventions that would tends to tighten up the labor market--in terms of monetary policy, social programs, and direct regulation--is that the ongoing churn of improving labor productivity enables employers to continually squeeze down labor costs, securing the immense bulk of the gains as surplus of one kind or another (whether this is reinvested profits, dividends, executive pay, interest on bank loans, or whatever). The 10-20% of the population who are the de facto co-conspirators of this policy do not enjoy nearly the same benefits, as can be seen in the fact that the top quintile and decile of income have at best held their shares in place while the top percent has pulled away at the expense of the rest.

Note also, that this would account for why reductions to social security and medicare remains the horizon of the political agenda: constantly mentioned but never implemented because it would invite too much opposition.

His prescription is also interesting:

But if we want to change the behavior of the polity, it’s not enough to argue over clever policies that, if implemented, might do the trick. We’ve got to change its preferences, which means either buying off the median influencer, or changing her identity via political struggle. Alternatively, we can wait until what are now problems of aggregate demand morph into supply problems (after people become unemployable and capital decays), or into threats of political and social unrest. The median influencer may change her views if tight supply makes goods costly despite fiscomonetary conservatism. Or if her neighborhood is on fire. But I’d prefer we avoid all that, and take a more proactive route.

His "alternatively" is the functionalist hope held out so often by left and left-ish commentators: that the elite will be forced into reinflation by the profit imperative or else by the need for systemic legitimacy. What is strange, is that it is clear from his discussion that his "median influencer" is at the middle of only a highly restricted sample. Instead of "buying off" or "changing the identity" of the "median influencer," isn't the fundamental problem changing the distribution of "influencers" so that the limited interests of relatively secure asset-holders are no longer the political lowest-common-denominator?

Well, yeah

Anti-politics movement
The individualization of change in fair trade discourse

Kara D. Newhouse

Dialectical Anthropology, 2011, Volume 35, Number 1, Pages 83-110

• Download PDF (256.1 KB)
• View HTML

Abstract

Does fair trade operate as economic development for farmers and artisans of the Global South, or is it a social movement that speaks to neo-liberal political subjectivities of the Global North? Fisher’s (Cult Agric 29(2):78–88, 2007) framework of “articulating modes of social transformation” allows both interpretations to be relevant. I use interviews, participant observation at a Chicago fair trade organization, and discourse analysis of fair trade materials to “study up” (Nader in Reinventing anthropology, Vintage Books, London, 284–311, 1969) the side of fair trade partnerships that exercise more economic power. I argue that participation in fair trade offers Northerners a way to reconcile their recognition of possessing disproportionate wealth in the global economic system with their uncertainty of how to create structural change in that system. Because fair trade calls on Northern consumers to make change at the individual level, the identities of Southern producers at the “underdeveloped” end of trade relationships are constructed in depoliticized, acontextual ways, thus limiting the possibilities for conceptualizing more radical transformation of poverty in the Global South.