The horizon is not so far as we can see, but as far as we can imagine

Open Thread

Use this thread for discussions that are off topic to recent posts.


Republican Daddies and Democratic Mummies


Week-end Wrap – Political Economy – July 28, 2019


  1. When other people come to this country we expect them to obey our laws, and prosecute them when they do not. A$AP, whatever that is, went to Sweden and broke their laws, randomly punched – ratpacked, actually – someone walking the street, and needs to be prosecuted just as we would prosecute any Swede who would come here and randomly punch someone walking the street.

  2. When other people come to this country without permission, we give them a court date and no reason to appear for that court date, ship them hundreds of miles inland, house them in “host quarters” and give them free health care. We place no requirement whatever for them to follow our laws, because we allowed them to violate our laws simply by being here.

  3. Hugh

    There is a legal distinction between some one seeking asylum and someone who is undocumented. Asylum seekers are legally protected persons. And is leaving people in cages for a month, malnourished, with no place to sleep, and without showers part of this wonderful new free healthcare?

  4. Ten Bears

    You came here without permission, Bill, get the fuck out!

    Your kind’s not welcome here.

  5. Marcus

    My wife and I are thinking about moving to another community, preferably an intentional community and I’m wondering where in America can one live without being stuck in a one-sided culture of self-congratulatory progressives or convservatives, or – as is my case, in a midwestern town with a big progressive clique – stuck between both? Does such a place exist?

  6. Eric Anderson

    I guess not Marcus. My part of the country is full of raging asshole redoubters who vote republican but call themselves libertarian. I’ve resigned myself to insurgency.

  7. bob mcmanus

    Kinda for Wilder, though he does not have to respond, just trying to work something out. Not being smartass here, really sincere.

    Reading the followup to Nitzan and Bichler’s Capital as Power, Capital as Mode of Power which is just a set of monographs. N & B take off pretty faithfully from Thorstein Veblen’s Theory of Business Enterprise which I am also reading now. N & B remind me of much of what Wilder says, there are no markets, prices are administered and determined by power relationships, economy is constructed etc. Mostly they talk about Wall Street and asset prices which is fine.

    My question: Why can’t someone charge and get $1000 for a beer? I’m ok with a lot of prices being administered and not being determined by supply/demand/production function but I still see a market out there.

    PS: Somewhat prefer Christian Marazzi’s Capital as Language which says asset prices are part of a communication system most of which is about irrational preferences Keynes “beauty contest” and various rhetorical moves to move prices and values around.

  8. Eric Anderson

    bob mcmanus:
    “Why can’t someone charge and get $1000 for a beer?”

    You just stumbled upon the root of Democratic Socialism. You can’t get $1k for a beer b/c it’s not a necessity. It’s a luxury that people can easily do without if prices get too inflated. Thus, the market remains open to true innovation which drives competition.
    Not so much with necessities like medication, health services, prisons, education, communication infrastructure, and as StewartM commented — recycling.

    People need these things to effectively go about their daily lives and thus the market can be cornered.

    Privatize the luxuries – Socialize the necessities.

  9. bruce wilder

    “market” in neoclassical economics is a metaphor very loosely applied to all kinds of exchange of goods (and services) for money.

    the thing denoted is the money economy.

    so why say, “market economy”, while pointing at the money economy?

    it is to open the door to an ideological project that makes elaborate theoretical use of the concept of a market as a generalized class of institutional mechanisms for exchange.

    in the ideological project, the market metaphor is interwoven with an epistemology of arrogance, formalized as sufficiently complete knowledge.

    when the term market is used however broadly and loosely as a metaphor, the implicit analogy is to any of some generalized class of institutional frameworks or mechanisms for exchange where buyers and sellers meet and compete by bid and offer. true believers in the ideology of the market god (and it is no mere fatuous slander to take note of the overtones of a civic religion in various of liberal, libertarian and now neoliberal takes on economics) — true believers always narrate their analysis of market competition as if this competition of bid and offer is motivated and governed under conditions of sufficiently complete information. the narrator, like a hack Victorian novelist, assumes the god’s eye viewpoint of insight into the moral heart of all decision-making by the firms and households, themselves blessed by information sufficient to “optimally” decide their best offer and reserve.

    this combination of non-specific mechanism for bid-and-offer market competition and sufficiently complete information is the foundation for an ideology that attributes to “the market” god-like powers to allocate resources impersonally in the process of arriving at a competitive market price. an important sleight-of-hand in this narrative of the capitalist market economy makes money disappear into a mere numeraire: money has no role in this ur-tale other than to supply a convenient and “neutral” unit of account with which to enumerate market price. the money economy is transformed in this telling into a market economy with only a virtual, shadow money.

    of course, like divinity students employing the scholarly tools of philology to argue how many authors other than yahweh wrote the torah, academic economists love to pick apart this tale without overthrowing or rejecting it. they have their canonical list of market failures, including the famous and all-purpose externalities. (and, yes, they themselves say, “canonical” in this context with no sense of irony.) many of these failures revolve around shortcomings in the information available to some market participants — “asymmetries”. economists can study in great detail specific market mechanisms — there is a subfield called “mechanism design” that was pretty hot not long ago — without losing faith.

    my apology for this long-winded preface to answering your question is that i wish to emphasize that no one should underestimate the degree to which academic economics entails schizophrenic delusion. saying, “market economy” is opening the door to the asylum. a great engine of ready-made political rhetoric is attached to the long-elaborated story of market competition, in which generations of college students have been indoctrinated. a crazy-making big lie worthy of Goebbels floods out the asylum door every time a mainstream economist — even the best-intentioned liberal ones — open their lying, insane mouths.

    nothing i will say about the actual economy is original to me or anything but conventional and mainstream. if i was not so against the notion that economics should be a civic religion, i could truthfully term my arguments, orthodox.

    the critical step in my way of thinking about the way the economy works is to acknowledge uncertainty. we do not know everything, and we most assuredly do not know the bounds of either our knowledge or ignorance. we do not know what we do not know. we will learn some things in the future we do not know now as well as some things that will turn out later not to be true. our information is never really sufficient for our decision-making.

    i observe that there are few actual markets where bids-and-offers determine price. but my attack on the theory of the economy as a (loosely metaphoric) system of markets is theoretical. i am arguing that pervasive uncertainty implies production cost structures that exclude the possibility of market-clearing equilibrium. we do not see actual markets, because actual markets are impossible because equilibrium market-clearing prices are impossible.

    thinking about the economy “as if” it is organized by competitive markets makes for an effective civic religion and ideology, but as a theory, it isn’t even wrong. the actual economy is observably not organized that way, and i can make a good, entirely conventional argument for why the actual economy cannot, in the main, be organized by or around competitive markets: uncertainty and the nature of our limited knowledge (technology) mean that cost structures for firms will tend mostly to preclude market-clearing equilibrium prices.

    i will try to say more about the implications of administered prices tomorrow.

    as for the original question, “Why can’t someone charge and get $1000 for a beer?”

    i do not know that someone cannot. people have gotten some pretty outrageous prices for wines.

    firms have organized around getting crazy prices for all kinds of “luxury”goods.

    and we are witnessing ratchets on pharmaceutical prices in the U.S. that ought to give pause to market theorists.

    i am certainly not arguing that firms do not compete. i would argue that firms compete strategically. strategic competition rarely reduces to simple bid-and-offer price competition. more tomorrow.

    nor would i argue that industry sectors do not fall into stable patterns for sometimes prolonged periods, just that comparative statics is usually an inappropriate framework to build an understanding of the dynamic — and there is always a dynamic!

  10. Eric Anderson

    bruce … you’ve proven my general rule by citing exceptions to it.

    Thanks man.

  11. nihil obstet

    @bruce wilder
    In addition to uncertainty, doesn’t power play a big role in economic structure? Some is direct, in the difference between the power of employers and laborers. A lot is indirect. I think we underestimate the effect that veiled threats from the rich have — “you think your health care is bad now? If you support changes, we’ll make sure it’s worse.” The supposedly objective analysis of policy is frequently just the rich threatening punitive retribution to the rest of us.

  12. Hugh

    In other news, Cry Baby Mitch McConnell got his iddle bitty feelings hurt because the Left as represented by a conservative Establishment to the core figure in the person of MSM MSNBC figure Joe Scarborough called him Moscow Mitch for not allowing legislation to make US elections more secure to come up for a vote. It’s always entertaining to watch a rat (maybe he should move to Baltimore) like McConnell, one of the most powerful and evil people on the planet, play the poor, poor victim. What I think this is really about is that Mitch is up for re-election, unpopular in Kentucky, and petrified that the name might stick.

    Also from Kentucky and the Senate, Rand Paul offered to buy a ticket for Ilhan Omar to return to Somalia. I thought that Omar should have sent Paul a sheet and hood as his usual wear must be getting old and sooty by now. Alternately, I thought we should all chip in to get Paul a ticket to where he came from. But how do you get find a ticket to Nazi Germany or the Jim Crow South? I did think the response that perhaps Paul should go to Somalia instead was pretty good as Somalia is a Libertarian paradise: not much government, no regulations, and right to bear arms out the kazoo. Go Rand, go!

  13. bruce wilder

    In continuation of my response to bob:

    it is really hard to think clearly about the way the political economy works once you admit that uncertainty is pervasive

    all the shibboleths of conventional neoclassical economics fall apart including especially behavioral rules built around existential “maximization” and, of course, the possibility of market equilibrium organizing much of anything.

    it can become hard to even find a sensible voice to talk about the world once you have fully absorbed the pervasiveness of uncertainty. you can easily end up sounding like the legendary “impenetrable Nagel”. or Sam Goldwyn (nobody knows nuthin in this bizness)

    everything is contingent

    the sociologists have always been better at it: recognizing that we paper over uncertainty with a virtual reality of roles, rituals, conventions and pretence, playing games while reality lurks darkly beneath the surface, often critically unknown

    the key thing about capital, as i am forever repeating to deaf ears is that all capital investment is essentially sunk-costs. without a political power to extract a return — a return that would be unavailable in pure market bargaining — what is a capitalist to do?

    the thing is, if you have the political power secured, you hardly need to make the investment. You might as well go directly to extraction and skip the build-something part.

    assets are commitment devices, debt bondage to constrain behavior. does not always work out and a lack of public understanding of those functions creates opportunities to leave a greater fool holding the proverbial bag.

  14. bruce wilder

    the thing about uncertainty is that it isn’t really the case that no one knows nothing. we know some things, just not the rest. and, we expect to learn but not to learn everything. and we are never quite sure where the bounds are or when our own lights will go out from a chance encounter with chance

    the actual economy has many institutional features to create a virtual reality to paper over the chaos and create playable games. most of the effort in production of goods is directed at devising systems within which we can apply such technological knowledge as we have available to control the production processes in order to limit and contain waste and error. control of error is far more important than and tends to dominate considerations of allocative efficiency.

    economists like to imagine a world in which labor is substituted for capital or vice versa in response to changing relative prices, but that is not the world made by the industrial revolutions, which have been about combining scientific knowledge to create systems of technological control with energy. the farm tractor only has one seat and one steering wheel. no one cares about the relative wage rate.

    economists do a lot of hand-waving. it is not the logic of their formal theorizing that matters to their ideological beliefs — it is the hand-waving. the core bit of hand-waving for contemporary neoliberalism was Hayek’s notion of the market economy as a distributed information processing system — the market god as socialist planner (without the socialism).

    economists really like to believe that if you get prices right, if prices tell the truth, all the rest will follow. it is the fuzzy notion behind proposals for carbon taxes / emission permit trading. if we get the efficient price for carbon emissions, the capitalists will read the price, calculate the right allocation of resources and make the right investments. there is an unspoken idea embedded in the wave that hand that there is a more-or-less straight line from the transaction price to the asset price. transaction prices representing opportunity costs in the moment drive what is profitable to invest in. it is just a matter of calculating the right allocation of resources.

    it is such a total crock.

    the design of that farm tractor with its one seat and one steering wheel was not driven by considerations of substituting capital for labor.

    economists, in the wave of their hands, want to believe in a just world, where productivity is virtue and virtue is naturally rewarded. beneath the hand-waving, that is the intuition, an economy driven by moral factors. it is not what the theoretical logic says — not at all — but it is what they want to believe.

    the reality behind administrative pricing is not that prices are entirely arbitrary, could be anything and are somehow not an adaptation and reflection of real circumstances and conditions. when McDonalds adopts and administers a price schedule for hamburgers and breakfast sandwichs, they are calculating closely on the incomes and spending of their customer base.

    but the business imperative is to manage the flow of business and the utilization of sunk-cost assets
    for most business most of the time, marginal unit cost is not rising or anywhere near average — the prerequisites for a stable market equilibrium in price. Marginal unit cost is well below average and continuing to decline!

    business has to control prices — hold them constant in a schedule of many prices both to generate enough revenue from price discrimination and to reduce the chaos, the informational noise for themselves and for their customers.

    movie studios and movie theatres do not want to let ticket prices rise for a hit movie. a market-clearing equilibrium that filled all the empty seats on the odd Tuesday afternoon would drive all the studios and theatres out of business.

    allocation of resources, in abstract isolation, is just not that important. it is completely dominated in practice by efforts to control error and waste. most capital investment is effectively sunk-cost. its productivity has no claim on a return. if there is a return on investment, it is because some clever MBA has devised “a business model” that allows the construction of a game from property rights and business custom and other rules that results in a residual surplus from business operations. earning the return on a sunk-cost that makes it an asset is an exercise of political power, in other words. a creative use of political power, by the way, because it is making something from nothing — not the straightforward calculation of resource allocation from product prices imagined by academic economists. black magic or white magic, what entrepreneurs will into existence can be marvelously creative as it embodies an application of knowledge and learning to controlling economic processes.


    F*ck Tulsi Gabbard. Yet another AIPAC shill and come to find out, she’s listed as a member of the CFR just like Epstein was.

    Tulsi Gabbard Fails To Adequately Explain Anti-BDS Vote | Discussion


    Great article here on the ties that bind. The tactics the slumlords Kushner & Trump use on their tenants of a targeted building they want to gentrify & luxuriate are from the same playbook Israel uses to dispossess the Palestinians. Imagine that!

    Baltimore Slumlord Tells Palestinians How to Behave

  17. Eric Anderson

    “it is really hard to think clearly about the way the political economy works once you admit that uncertainty is pervasive”

    Totally agree. But it is made even more so by a factor I rail on that often falls on deaf ears. Economics is nothing more than an ever uncertain attempt to try explain how money responds to a legal regime. Change the law, change the economy. Everyone thinks the economy has some damn a priori existence. The only reason it isn’t total chaos (used literally) is because the law contains it.

    Here, spend some time browsing the topics over at
    It’s a bunch of law professors generally, and might be a little steep for most without a legal education, but if you want insight into the way an economy really works you’ll find it there.

    Fracking economists. They think they’re the entire universe when in fact they’re inhabiting a broom closet branch of the law. Plato’s cave allegory immediately comes to mind.

  18. Eric Anderson

    I mean, why do you think so many economists are free-market fetishists? Why do you think they’re willing to throw so many under the bus with their theories? It’s simple. Eliminating the “political” part of political economy makes it easier for them to predict outcomes. It reduces uncertainty. Substantially so.

    Not rocket science.

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