April 28, 2008

Metaphor of Equivalence

Filed under: Derrida, Economics, Philosophy — duncan @ 3:44 pm

Borges’ story ‘The Zahir’ ends with his narrator’s thoughts entirely occupied by the image of a coin – and with the ambition to “wear it away”, through thought. This obsession is a metaphor, arguably, for our obsession with money. But a coin seems to give itself better than the other figures of the Zahir to the total domination of consciousness. “The thought struck me that there is no coin that is not the symbol of all the coins that shine endlessly down throughout history and fable… any coin… is, in all truth, a panoply of possible futures.” The function of a coin derives from its power of symbolism, circulation, and equivalence – because, in the system of circulation and equivalence that is a capitalist economy, a coin can in principle be substituted for or symbolise anything that falls within that economy. Thus a coin seems uniquely well placed to usurp consciousness – provided we understand consciousness as the ability to represent the world.

The coin as infinitely applicable, infinitely substitutable, infinitely exchangeable symbol; the coin as the material instantiation of an abstract power of equivalence. The coin is a material object that functions like thought. And thus the coin can take the place of thought – or, rather, the coin can make thought subordinate to it. “It is not as though the Zahir were made of glass, since one side is not superimposed upon the other” – the coin is not a medium through which the objects of possible substitution are perceived – “rather, it is though the vision were itself spherical, with the Zahir rampant at the center.” Once a concrete instantiation of absolute substitutability has been established, this instantiation becomes the still centre to which all else must be referred. It is the transcendental, empirical, final referent – because it can in turn refer to anything at all.

We are now used to thinking the necessary materiality of thought. Since Derrida – and Wittgenstein – we know that the ideality of thought always depends on the materiality of the signs and symbols that enable thought. Nonetheless – this materiality has more often than not been understood as the materiality of language – the materiality of words, of text; perhaps, for Wittgenstein, of social practices. But not the materiality of a coin, not “a common twenty-centavo coin into which a razor or letter opener has scratched the letters N T and the number 2…”

At crucial moments in Derrida’s work (I’m focussing on Derrida; we’ll get to Wittgenstein, perhaps, eventually, at which point everything, I hope, will change) the coin looms large; the coin (the infinite substitutions of capitalist economies) seems to dominate the language with which Derrida articulates his thought of infinite substitutability as language.

Near the start of ‘White Mythologies’, his essay on metaphor, Derrida quotes from Anatole France’s ‘The Garden of Epicurus’. “Polyphilos:… I was thinking how the Metaphysicians, when they make a language for themselves, are like… knife-grinders, who instead of knives and scissors, should put medals and coins to the grindstone to efface the exergue, the value and the head. When they have worked away till nothing is visible in their crown-pieces, neither King Edward, the Emperor William, nor the Republic, they say: ‘These pieces have nothing either English, German or French about them; we have freed them from all limits of time and space; they are not worth five shillings any more; they are of an inestimable value, and their exchange value is extended indefinitely.’ They are right in speaking thus. By this needy knife-grinder’s activity words are changed from a physical to a metaphysical acceptation. It is obvious what they lose in the process; what they gain by it is not so immediately apparent.” (quoted in ‘Margins of Philosophy’, p. 210)

Coin as metaphor for language. Coin as metaphor for metaphor. The sensuous meaning of language is rubbed away, to produce abstraction –abstraction conceals a hidden sensuousness.

But it seems strange of France’s Polyphilos to use this metaphor for metaphor. The coin is (of course) already an abstraction, a materially instantiated abstraction – a ‘sensuous non-sensuous’, to use the language of ‘Capital’ (or of Hegel; or, I’m told, of Goethe’s Mephistopheles). To rub away at the coin to make it abstract – to efface the head – is to remove its connection to the abstract (to the head). A coin without inscription loses its value as a coin. And so Polyphilos’s satire, that ridicules metaphysicians for effacing the real meaning of the words they use – a real meaning that is sensual, tangible, non-abstract, metaphoric; this ridicule is rerouted by the metaphor Polyphilos uses to describe metaphor – this metaphor makes metaphor already abstract, makes sensuousness already abstract. And it does so through the power of the coin.

Derrida of course critiques Polyphilos (or Anatole France) in ‘White Mythology’. But he does so while also deploying a metaphorics of the coin – of capital and surplus value.

“In signifying the metaphorical process, the paradigms of coin, of metal, silver and gold, have imposed themselves with remarkable insistence… Inscription on coinage is most often the intersection, the scene of the exchange between the linguistic and the economic. The two types of signifier supplement each other in the problematic of fetishism…” (p. 216). But this “supplement”, which imposes itself upon us, also disrupts the metaphorical strategy of Derrida’s work. For though Derrida is not a ‘linguistic philosopher’, his deconstructions of the philosophical canon focus on the treatment of the sign; and to extend the features of the sign to all aspects of the world is one of the basic manoeuvres by which Derrida aims to undermine philosophies of presence, or of ‘the proper’.

Yet this extension of the philosophy of the sign to the whole of life is also the question of the relation between philosophy and non-philosophy. And, as Derrida tells us in the passage I’ve just quoted, “the analogy within language finds itself represented by an analogy between language and something other than itself… [T]hat which seems to ‘represent’, to figure, is also that which opens the wider space of a discourse on figuration…” If it is “the paradigms of coin” that have “imposed themselves with remarkable insistence” when treating this analogy between language and non-language, might this not tell us something about the sources of Derrida’s own work – and about his strategy of extending or totalising the linguistic? For the metaphor of metaphor, the literary or philosophical space that precedes and makes possible any discourse on equivalence of non-equivalents, here seems to be the coin – or, more generally, the economic.

Derrida remains, in many ways, a transcendental philosopher, searching for the conditions of any discourse of empiricism. Yet if Derrida’s search for quasi-transcendentals leads him again and again into the realm of economic language (as I think it does), is it not legitimate to search in turn for the empirical conditions – the empirical sources – of the figures he deploys. How can coin, usury, capital be any kind of quasi-transcendental? Are these not in the first place material and social phenomena of our real world, our world of capitalist exchange and exploitation? To place Derrida’s discourse on the sign within a discourse on the economy; and then to place that in turn within the changes and self-understandings of capitalist society – this would be to historicise deconstruction to a degree that Derrida himself doesn’t seem to envisage.

And let me point you all again to Le Colonel Chabert, who seems to be doing that very thing as we speak…

More on Derrida and Marx

Filed under: Blogroll, Derrida, Economics, Marx, Philosophy, Politics — duncan @ 1:42 pm

I’m a little bit tired at the moment, so no proper post just yet. But for anyone interested in Derrida and Marx, let me put up a pointer to Le Colonel Chabert, who has recently started a Marx-oriented critique of Derrida.

From the conclusion of the outstanding first post:

“It is against the project (of explanation, critique and action) expressed and referred to here in the Grundrisse that Derrida’s intellectual product most consistently militated, undertaking a defence of liberalism’s doctrine of sacred property in the most mystical and mystifying possible manner, discovering private property, and indeed, eventually, capital specifically, to be not only the natural law of human relations but the the very primal matter-energy of which the phenomenal world is made, the force that is found spectrally filling the void from which being and presence have always already absconded (to be forever pursued, their imaginary loss forever mourned), the foundation of the universe itself, the creator and all creatures, eternal, indestructible.”

But read the post in full.

April 20, 2008

Behind the Coin

Filed under: Uncategorized — duncan @ 9:36 pm

In Borges’ fantasy story ‘The Zahir’, a snobbish lovesick narrator, ‘Borges’, becomes monomaniacally obsessed with the image of a coin. The coin, he tells us, is ‘the Zahir’.

“In Arabic, ‘zahir’ means visible, manifest, evident; in that sense, it is one of the ninety-nine names of God; in Muslim countries, the masses use the word for ‘beings or things which have the terrible power to be unforgettable, and whose image eventually drives people mad.” There can only be one Zahir, Borges tells us: “the All-Merciful does not allow two things to be a Zaheer at the same time, since a single one is capable of entrancing multitudes.”

At the story’s end, ‘Borges’ faces the certain knowledge that he will soon be unable to think of anything except the image of the Zahir, “a common twenty-centavo coin…”

“In the waste and empty hours of the night I am still able to walk through the streets. Dawn often surprises me upon a bench in the Plaza Garay, thinking (or trying to think) about that passage in the Asrar Nama where it is said that the Zahir is the shadow of the Rose and the rending of the veil… I long to travel that path. Perhaps by thinking about the Zahir endlessly, I can manage to wear it away; perhaps behind the coin is God.”


In Borges’ story the aspect or nature of the Zahir changes with the changes of history (“In Gujarat, at the end of the eighteenth century, the Zahir was a tiger; in Java it was a blind man in the Surakarta mosque, stoned by the faithful…”) and it is of course no accident that Borges chooses a coin as his and our time’s monomaniacal obsession. What I want to do over the next few weeks or months is follow some of the themes touched on in this story.

To get more specific, and tedious: we’re about to descend into a rather deep ‘Specters of Marx’-shaped hole. I’m going to be trying to understand some of the implications of Derrida’s take on commodity fetishism – and how it relates to the ‘messianicity without messianism’ that Derrida offers, in ‘Specters’, as a source of progressive hope in the face of the horrifying contemporary dominance of neo-liberal capitalist ideology. My claim, I think, is going to be this: Derrida’s ‘weak messianicity’ is not an alternative to neoliberal hegemony, but is, rather, one of its expressions. The religious themes that circulate (“like capital, or poverty”) behind Derrida’s deployment of the theme of messianicity can be connected to the hidden theological or onto-theological self-justifications of capitalist economics. For capitalism (it’s embarrassingly cliched and glib to say) is a religion without God – a religion where God, or the emotional and social forces that produce Him, inhabits the coin. So we’ll start from the Zahir, and ask, among other, better, questions: what lies behind the coin (if not God)?

April 17, 2008

Oh For Fuck’s Sake (Nassim Nicholas Taleb’s ‘Fooled By Randomness’)

Filed under: Philosophy, Sarcasm, Science, Self indulgence — duncan @ 9:44 pm

[A ranting post very much not worth your time, I’m afraid.]

I’m proud to say that I’ve been writing a deconstructionist-inclined blog for almost a year now, and have never once engaging in a bitter assault on the popular detractors of continental theory. You’ll notice that no interminable post excoriating Sokal and Bricmont has yet appeared. I am a saint.

On the other hand, I’ve just started reading Nassim Nicholas Taleb’s bestseller ‘Fooled By Randomness’. (In a no doubt misguided attempt to dip my toe into the glibber end of popular accounts of probability theory; I guess I should buckle down and read some real books.) As soon as I figured out the tone, I guessed that an ignorant and philistine invocation of Derrida as charlatan wouldn’t be far away. And, sure enough, on page seven (so soon!) we get an approving reference to a Ph.D. thesis in philosophy. “But not the Derrida continental style of incomprehensible philosophy (that is, incomprehensible to anyone outside of their ranks, like myself).” I gritted my teeth and continued. (Still no ranting blog post! I have the patience of Job!) But then on pages 72-3 we get this – and I boot up my computer.

“Increasingly, a distinction is being made between the scientific intellectual and the literary intellectual – culminating with what is called the ‘science wars’, plotting factions of literate nonscientists against literate scientists. The distinction between the two approaches originated in Vienna in the 1930s, with a collection of physicists who decided that the large gains in science were becoming significant enough to make claims on the field known to belong to the humanities… The Vienna Circle was at the origin of the development of the ideas of Popper, Wittgenstein (in his later phase), Carnap, and flocks of others.”

This is like shooting fish in a barrel. I mean – don’t you think the distinction between the scientific intellectual and the literary intellectual might have had some force before 1930s Vienna? Can the Vienna Circle be entirely accurately described as “a collection of physicists”? Does the later phase of Wittgenstein really originate there (even as a reaction against it)? Be all that as it may; next we get this:

“I suggest reading the hilarious Fashionable Nonsense by Alan Sokal [it’s just inevitable, this reference; the pages might as well be blank; we can fill them in ourselves]… (I was laughing so loudly and so frequently while reading it on a plane that other passengers kept whispering things about me) [Probably ‘what an arsehole’]… Science is method and rigour; it can be identified in the simplest of prose writing. For instance, what struck me while reading Richard Dawkins’ Selfish Gene is that, although the text does not exhibit a single equation, it seems as if it were translated from the language of mathematics.”

Superficial detractors of continental theory often invoke Dawkins as the exemplar of scientific rationality. Don’t get me started on him. (In a word, ‘The Selfish Gene’ is precisely not translated from the language of mathematics, because half the point of the thing is to develop a metaphor – a metaphor, of the ‘selfishness’ of the gene, which may or may not be helpful (and there’s a whole endless debate to be had about the validity of ascribing intentional states to apparently mindless objects, or to parts of/systems within organisms), but that only works as metaphor. Which isn’t to say that Dawkins doesn’t have strictly ‘scientific’ claims to make – but Dawkins himself is perfectly clear (in, for instance, the first chapter of ‘The Extended Phenotype‘) that ‘a change of aspect’, rather than a scientific hypothesis, is the main thing he hopes to advance in his popular science writing.) Anyway.

“[T]here is another, far more entertaining way to make the distinction between the babbler and the thinker. You can sometimes replicate something that can be mistaken for a literary discourse with a Monte Carlo generator but it is not possible randomly to construct a scientific one. Rhetoric can be constructed randomly, but not genuine scientific knowledge.”

If I understand him right, Taleb means, by “Monte Carlo generator”, a computer program that is capable of churning out vast numbers of imaginary events, according to a set of predetermined rules. I can’t pretend to understand [which is why I’m reading this stuff, after all] – with my knowledge of computers, it’s amazing this blog is still in one piece. But (in a fairly superficial way) what Taleb’s saying here is surely wrong. A ‘Monte Carlo generator’ can construct scientific knowledge – as Taleb has already told us.

“It is a fact that ‘true’ mathematicians do not like Monte Carlo methods. They believe that they rob us of the finesse and elegance of mathematics. They call it ‘brute force’. For we can replace a large portion of mathematical knowledge with a Monte Carlo simulator (and other computational tricks). For instance, someone with no formal knowledge of geometry can compute the mysterious, almost mystical, Pi.” (p. 47) If existing mathematical knowledge can be replicated in this way, I find it hard to believe that new mathematical – or scientific – knowledge can’t also be so produced. [Okay, I just did my googling. Wikipedia informs me that in mathematics “[t]he method is useful for obtaining numerical solutions to problems which are too complicated to solve analytically.” I need to learn about this sort of thing.] At any rate, the ability of ‘Monte Carlo generators’ to supply Taleb with knowledge and understanding seems to be the main reason he likes them so much.

Anyway. Next we get this:

“This is the application of Turing’s Test of artificial intelligence, except in reverse. What is the Turing test? [We get a description. Taleb continues:] The converse should be true. A human can be said to be unintelligent if we can replicate his speech by a computer, which we know is unintelligent, and fool a human into believing it was written by a human. Can one produce a piece of work that can be largely mistaken for Derrida entirely randomly?”

Well – let’s charitably put down to ‘humorous’ license Taleb’s ‘reversal’ of the Turing test. And lets ignore the fact that the so called ‘random’ production of any text is random only within incredibly limited bounds – most of the game’s effectiveness depends on the non-randomly selected phrases and rules for the combination of phrases that whatever program Taleb’s describing would consist in. (Just as Taleb’s method of ‘randomly’ computing the value of Pi isn’t random at all except in one of the program’s particular functions.) All that said – the answer to Taleb’s last question is: obviously yes. Of course you can ‘randomly’ produce a piece of text that can be mistaken for Derrida – by people who know fuck all about Derrida. In fact, I’d go further – if the program that produces phrases is sufficiently intelligently set up, I daresay I could be fooled by – or at least not confident in my judgement of the provenance of – some phrase or short sequence of phrases. At some point that would collapse – you’re not going to be able to generate an intelligible essay, or even a longish piece of text, using a ‘random’ method. (And if you can, maybe you should apply for that Turing Test prize money.) But I have no idea what Taleb thinks he’s demonstrating here.

“[T]here are Monte Carlo generators designed to structure such texts and write entire papers. Fed with ‘postmodernist’ texts, they can randomize phrases under a method called recursive grammar, and produce grammatically sound but entirely meaningless sentences that sound like Jacques Derrida, Camille Paglia, and such a crowd. Owing to the fuzziness of his thought, the literary intellectual can be fooled by randomness.”

What bullshit. What copper-plated, cast-iron, dug from a farmer’s prize bull’s ditch of prize bullshit bullshit. According to ‘Fortune’ magazine (I know, I shouldn’t expect much, why did I even buy the fucking thing?) ‘Fooled by Randomness’ is “One of the smartest books of all time.” Well, not so much. Not if it has stuff that even vaguely resembles this in it. Good lord. Why do people take this sort of thing seriously? What’s going on?

I was planning to write more, but I think I’ve reached a pitch of intemperance that requires a hasty close. Don’t buy ‘Fooled by Randomness’. I’ve got it here now, and I’m wondering whether to try to finish it or burn it. I guess I should toss a coin.

[Apologies for this nonsense post. Unusually, I have too much time on my hands today.]

If. Derrida.

Filed under: Derrida, Philosophy, Vitiated by Ignorance — duncan @ 3:42 pm

It’s pretty clear that you can’t get any kind of a grasp of economics without understanding probability – the theory & philosophy of probability. I don’t. This post is just a place marker; a note to self that’ll shame me if I don’t spend time on probability.

Initial thoughts: Derridean that I am, I’m interested in the function of signs. Derrida sees (IMO) the quest of philosophy as the quest to abolish the sign – or, rather, the quest to abolish the distance between a sign and its object. This is also, of course, the quest to abolish uncertainty – because uncertainty is the difference between our representations of the world and the world itself.

Epistemology, then, is the attempt to understand the connection between signs and their objects; and, it’s often thought, a successful epistemology is one that guarantees a certain form of connection. Derrida works at undermining such guarantees – or at undermining the guarantees’ unassailability. This is what leads to the view of Derrida as a sceptic – a philosopher who also undermines any connection between our view of the world and the world as it really is.

This view of Derrida is based, however, on a vision of epistemology that Derrida’s thought also works to undermine. For seeing epistemology as an attempt to understand the link between representations and things in themselves presupposes an unmediated, guaranteed relationship between the subject of knowledge and the subject’s representations. This is the familiar flaw of much epistemology – at least the kind I was taught when learning analytic philosophy. It produces such wacky ideas as ‘qualia’. And an infinite regress always opens up: aren’t representations themselves a certain kind of thing-in-itself? The project of much phenomenological empiricism seems to be to create a new, subjective object of knowledge, that isn’t separated from us by a dark glass; an object we can possess as absolutely our own.

But, of course, a ‘subjective’ object is vulnerable to the same sceptical arguments as an ‘objective’ object. What is the subject’s relation to qualia? And if this is a relation of any kind, can’t that relation in principle also be broken, just as the relation between qualia and the world they potentially represent can be broken?

Derrida’s sceptical arguments are not directed at the ‘objective’ world, but at the ‘subjective objective’ of phenomenology. He does not argue that the link between signs and objects is always already broken – he has no interest in this question. Derrida argues that the sign itself is always already broken; that no sign can be fully apprehended or possessed. It is only the belief in an unmediated relationship between subject and sign – which is contrasted to a relationship between subject and object mediated by the sign – that allows scepticism, in its normal philosophical sense, to get started. Derrida’s arguments about signs are therefore profoundly anti-sceptical, on my read; but they also have a great deal to say about traditional epistemology, and the themes of certainty and uncertainty it meditates upon.

All this is clearly connected to Time, in a way that I don’t have much of a handle on. The locus of a guaranteed relation between subject and sign is the present; it is only present experience that possesses this quality of absolute belonging. And thus the claim that there is no such thing as the present – as it has been traditionally understood by philosophy – is at the heart of Derrida’s work.

I think that all this is probably very relevant to probability theory. But I don’t know how: it’s just a hunch. What I want to do, then, is try to get to grips with probability. For instance – it’s interesting to me that Keynes’s first major work (which he spent something like ten years writing) is a treatise on probability. From what I’ve gathered (from, like, paragraph-length summaries) Keynes’s thesis is that relationships of probability are logical in the same way as relationships of necessity. It’s interesting to me that Keynes developed this thesis in an intellectual environment (early 20th century Cambridge) that was also giving birth to analytic philosophy. Keynes’s philosophical mentor was G.E. Moore – and Keynes has remarked that Moore was just as important, for his intellectual development, as his economic mentor Marshall. I’d be interested to try to understand the connections between Keynes’s treatise and modal logic, as it subsequently developed in analytic philosophy. (I’ve never studied modal logic). And I’m also interested in Quine’s attempt to demolish modal logic – an attempt that, as I understand it, relies heavily on Quine’s belief that the ‘opacity’ of signs must be eradicated from logical analysis. This Quinian argument, it seems to me, is staggeringly vulnerable to Derridean critique.

But all this, as I say, is just a quick jotting down of ambitions and connections. As if this blog wasn’t already ambitious enough.

April 14, 2008

An Advertising Breakthrough

Filed under: Media — duncan @ 2:45 pm

I know this blog has many avid readers in the advertising community. And a lot of people would like me to spend more time highlighting new commercials from around the world. Unfortunately, I’m pressed for time – so let me instead ‘advertise’ (!) a valuable new resource. ‘The Ideas Brothers‘, a viral new blog, provides brainstormed content for a 24/7 world. These brothers are true creatives – catch them now before they become Saatchi and Saatchi!

April 13, 2008

Textbook Lore

Filed under: Uncategorized — duncan @ 7:53 pm

Reading the excellent ‘EconoSpeak‘ (to my knowledge the best lefty economics blog out there, after Robert Vienneau), I come across this comment thread, discussing the flaws of undergraduate textbooks. Sandwichman (one of the blog’s authors) writes:

“My impression was that textbooks are corporate projects that are endorsed by a celebrity academic “author”. What fascinates me is not what is left out of the textbooks but “textbook lore” that is repeated in textbook after textbook but has no scholarly basis in the discipline itself.”

This is the kind of thing I worry about, as I try to teach myself economics from elementary textbooks. Presumably the textbooks’ mad claims sometimes don’t have much relation to the mad claims of economics proper – even after taking into account the supposedly ‘necessary’ (but often ideologically motivated) oversimplifications that characterise any beginners text. I’m not sure what to do about this – whether to keep on plugging at the simple stuff, or try to dive in to the real deal and endure months or years of total incomprehension. If anyone has any suggestions about the best way to approach things, they’d be appreciated.

[This post, I fear, inaugurates the ‘any passing thought’ era of the blog…]

April 10, 2008

I Has Teh Internets!!!1!!

Filed under: Uncategorized — duncan @ 7:55 pm

I am now officially a member of the online web-based community.  I can browse, surf, post, e-mail, and indulge in interminable bitter comment thread disputes from the comfort of my very own home.  I’m not sure what effect this’ll have on the blogging.  Most likely, it’ll herald a drastic drop in quality.  Between the laptop keyboard and the internet cafe falls the shadow.  The shadow’s wealth of second thoughts has saved me from many a foolish post before.  No longer!  Now, within seconds of an unconsidered thought grazing the edge my mind, it’ll be written up, posted, and regretted.  So it goes.  The main plus point: it hopefully won’t take me a week or more to respond to comments now.

I was going to put up a load of pictures up to celebrate, but the internet won’t let me into Flikr, because I can’t figure out how to turn off my anti-porn software.  Ah dear.  Here’s a laughing out loud cat instead.

April 6, 2008

Hume on the Balance of Trade

Filed under: Uncategorized — duncan @ 7:32 pm

Frustrated and embarrassed by my apparent inability to understand even the basics of economics (but it all connects up, and every piece of polished marble floor, offered as solid ground, is a trapdoor into a whole other area of the discipline, the floor of which is in turn all trapdoors. I feel like Indiana Jones, only without the charm, or the unreconstructed colonialism) – frustrated and embarrassed, let me spew out a few thoughts. I’ve been reading Hume on the balance of trade.

“Suppose four-fifths of all the money in GREAT BRITAIN to be annihilated in one night… what would be the consequences? Must not the price of all labour and commodities sink in proportion…? What nation could then dispute with us in any foreign market, or pretend to navigate or to sell manufactures at the same price, which to us would afford sufficient profit? In how little time, therefore, must this bring back the money which we had lost, and raise us to the level of all the neighbouring nations? Where, after we have owned, we immediately lose the advantage of the cheapness of labour and commodities; and the farther flowing in of money is stopped by our fulness and repletion. [kudos for ‘fulness and repletion’; this phrase should be used more as a technical term in economics]

Again, suppose that all the money of GREAT BRITAIN were multiplied fivefold in a night, must not the contrary effect follow? Must not all labour and commodities rise to such an exorbitant height, that no neighbouring nations could afford to buy from us; while their commodities, on the other hand, become comparatively so cheap, that, in spite of all the laws which could be formed, they would run in upon us, and our money flow out; till we fall to a level with foreigners, and lose that great superiority of riches, which had laid us under such disadvantages?

Now, it is evident, that the same causes, which would correct these exorbitant inequalities, were they to happen miraculously, must prevent their happening in the common course of nature, and must for ever, in all neighbouring nations, preserve money nearly proportional to the art and industry of each nation.”

The logic of Hume’s argument, I think, would imply that the world economy moves towards an exact, or almost exact, equivalence of value. A bagel in Connecticut will eventually be worth a bagel in Baghdad, all else being equal. The argument itself seems reasonably convincing, from where I’m standing. But since there are in fact large inequalities of value across the world (equivalent goods are not exchangeable for equivalent or nearly equivalent amounts of money worldwide; not nearly), and since there doesn’t seem to be much of a movement towards the equilibrium of value-equivalence either, there must be something wrong or missing here, one would think.

I don’t understand; I know nothing. But –

First thing: Hume seems to assume a single currency; or the equivalent of a single currency – fixed exchange rates. That’s to say, he ignores monetary sovereignty, which is surely an important, though I guess perhaps not a necessary, feature of the system of distinct nation-states that his consideration of the problem in terms of national wealth presupposes.

Second thing: Hume’s argument would seem to imply that there are equivalent and opposite movements of commodities and money in the world economy. At one level, this must be true. But I would be inclined to believe – based on, like, New Statesman articles or something – that historically, by and large, both money and commodities have tended to move in the same direction: from the weak to the strong; from the militarily powerless to the militarily powerful; from the third world to the first – and that this is part of the hegemony that has made global free trade possible. I’ll try to find some books that will tell me about this without drowning me in rhetoric (like the rhetoric, but want to understand). But I would imagine one could argue that the structure of international debt, for instance, might be at least in part a way of draining developing economies of money, which in turn cheapens those economies’ products on the world market, which in turn allows the purchase, or appropriation, of those commodities for a steal. (Is this true? I don’t know! I know nothing!!) In short, and to put things more generally: the movement of money and of commodities need not cancel each other out, as Hume implies, in the movement towards value-equivalence. They might, on the contrary, supplement each other, as the movement of money from country A to country B (or from person A to person B) enables the movement of commodities in the same direction, which was the purpose of the original money transfer.

The point, I guess, is that money is not in the first place a means of exchange or of valuation, but is either itself a commodity, which obeys the same laws of appropriation as any other commodity, or is alternatively a kind of contract – and contracts, as we know, always favour the most powerful party. Or both – a commodity that is a contract; the contract as commodity.

I’ll stress again how little I know and understand. So let me end by point you to a post that does know what it’s talking about – Limited Inc’s latest post links up with some of what N. Pepperell was saying the other day about Derrida’s take on Marx – specifically Marx’s use of the metaphor of the head. Sample:

“Marx was a man who wanted to seize society and make it stand on its feet – on its own two feet – and in that ambition he was serious – an avatar of seriousness. But since that seriousness was realized in images of standing on one’s head and inversion, his seriousness would slip away into ilinx as he analyzed the upside down society, as he corrected the reigning ideology, as, indeed, he spoke for revolution. For even though revolution was on the side of play, was the realization of the society of seriousness, it was entangled from beginning to end in ilinx – the irrepressible euphoria of the revolutionary act.”

All this post written at speed; apologies if nothing useful said.

April 4, 2008

Keynes Aphorism of the Day

Filed under: Economics, Keynes, Sarcasm — duncan @ 8:41 pm

“Banks and bankers are by nature blind….  A ‘sound’ banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him.”

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