Monthly Archives: August 2012

The Ryan Plan: Part 2

As in Part 1 of this series, I will continue with the Introduction section of Ryan’s plan. Ryan continues with his ideology that progressives are expanding a culture of government dependency. Ryan states:

Equally troubling has been the effect on national character. Until recently, Americans were known and admired everywhere for their hopeful determination to assume responsibility for the quality of their own lives; to rely on their own work and initiative; and to improve opportunities for their children to prosper in the future. But over time, Americans have been lured into viewing government – more than themselves, their families, their communities, their faith – as their main source of support; they have been drawn toward depending on the public sector for growing shares of their material and personal well-being. The trend drains individual initiative and personal responsibility. It creates an aversion to risk, sapping the entrepreneurial spirit necessary for growth, innovation, and prosperity. In turn, it subtly and gradually suffocates the creative potential for prosperity.

Now America is approaching a “tipping point” beyond which the Nation will be unable to change course – and this will lead to disastrous fiscal consequences, and an erosion of economic prosperity and the American character itself. The current administration and Congress are propelling the Nation to the brink of this precipice.

This is a recurring theme for Paul Ryan. Ryan does not cite any data that progressives have corrupted substantial portions of Americans for not assuming “responsibility for the quality of their own lives”, failing to “rely on their own work and initiative”, not caring about wanting to “improve opportunities for their children to prosper in the future”, draining “individual initiative and personal responsibility”, creating an “aversion to risk”, “sapping the entrepreneurial spirit” and suffocating “the creative potential for prosperity”. He states these articles of faith as self-evident. I am sure that anecdotal examples of government dependency can be found to reinforce his position but his assertion here is that progressives have pushed us more and more to the “tipping point”, the “brink” of the “precipice”. This doomsday style of discussion was exhaustively and highly overused by the Bush administration to convince the American public of the need for two wars and for TARP. Alarmist rhetoric dismisses the need for evidence based on the need for expediency. While this may be warranted at times, it can also be used as a ploy for negating critical thinking. In retrospect, Iraq was called a mistake by many in the Bush administration, Afghanistan is still a hard sell with the American public and TARP has been questioned by the most ardent market fundamentalists. Likewise, it may be that Ryan is right about progressives pushing American to the brink or it may be merely a rhetorical ploy to adopt the faith of progressive fatalism in haste. There could also be another physiological explanation as I discussed in The Conservative and Liberal Brain. This is more evidence that the Ryan Plan is intended more for propaganda than a real economic plan but let’s not jump to conclusions; let’s let the reading play itself as it will.

In the section, “Public Policy: A Larger and More Intrusive Government”, Ryan continues with the theme of an ongoing progressive plan from the New Deal and the Great Society to destroy America. Here are the current cases that he cites:

Fiscal ‘Status.‘ With the slippery promise of “saving or creating” three-and-a-half million jobs, the Majority passed a $787-billion “stimulus” bill that failed to halt the rise in unemployment, but did include numerous policy changes consistent with the big-government agenda. By expanding Medicaid – a program in desperate need of reform – and launching a new “comparative effectiveness” health program, the bill started the movement away from patient-centered medical care and toward the planned government takeover of the health care sector. The “stimulus” also heaped another $1 trillion in debt onto the taxpayers’ already large burden.

The legislation rested on the Keynesian-inspired notion that government can somehow “manage” a free-market economy, commanding it to grow with heavy doses of borrowed money. All the measure really did was set off a weak and temporary spike in consumer spending, while unemployment continued to rise. Worse, the heavy borrowing used, unsuccessfully, to “prime” the economic pump drained resources the economy will need for sustained growth. Yet the House refused to accept reality, and in December 2009 poured another $150 billion into this failed economic doctrine.

The stimulus bill Ryan criticizes as failing “to halt the rise in unemployment” is wrong according to the real, actual data. Unemployment data does show a reversal of the increase in unemployment since the Obama has been in office. All the following charts can be found here: [NOTE 1]

Additionally, Ryan characterizes the Affordable Care Act as “the bill started the movement away from patient-centered medical care and toward the planned government takeover of the health care sector”. This ignores the almost exact similarity to the championed Republican plan that Bill Cassidy (R-LA) proposed during the debate (see Health Care in Louisiana and Massachusetts-Bobby Jindal and Bill Cassidy). Also, Ryan states that “The “stimulus” also heaped another $1 trillion in debt onto the taxpayers’ already large burden.” But a few sentences earlier he stated the stimulus was “$787-billion”. Even if you add the $150 billion dollar amount he cites latter the difference is still 63 billion dollars. Maybe the difference of $63 billion dollars is not real money for Ryan but most folks would have a hard time conveniently glossing over that amount of money. Again the gloss is for rhetorical affect.

Ryan goes on to state that

“The legislation rested on the Keynesian-inspired notion that government can somehow “manage” a free-market economy, commanding it to grow with heavy doses of borrowed money. All the measure really did was set off a weak and temporary spike in consumer spending, while unemployment continued to rise.”

Here he ties the neoclassical economic theory of John Maynard Keynes adopted by most conservative economists and politicians until recent history to a state managed economy with the implication being like communism. Without getting into the differences in the Ayn Rand [NOTE 2] inspired market fundamentalism of the present day with neoclassical economics, suffice it to say that from the chart above, an increase in GDP that resulted from the stimulus also resulted in an increase in government revenue. All economists recognize that growth can erase a mountain of deficit sins from the revenue side. Both Republicans and Democrats have used this reasoning to justify deficit spending for MANY decades.

The bump in GDP shown above also increases federal, state, local and regional tax revenue. In fact, fiscal stimulation is all about ‘stimulating’ GDP and consumer spending – growth, such that the increase in revenues offset the initial expense of the stimulus. One argument made by Republicans for defense spending is based on the growth in the economy that results. The growth in the 90s left us with four years of a budget surplus at the end of the Clinton administration, even with higher taxes, which resulted in huge revenue increases for the government. “Stimulus’ spending can be another word for investment in the economy. This is exactly what Keynes argued and has been accepted by conservatives and liberals for most of the history of the United States. The recent thinking that Ryan subscribes to in Ayn Rand styled, market fundamentalism has been discredited by most economists except marginal schools like the Austrian School. [NOTE 3]

Ryan continues his diatribe against the “intrusive government’:

TARP extension. The Troubled Asset Relief Program [TARP] was intended to thaw credit markets that seized up during the financial crisis – and it succeeded in its short-term objective. But it has now morphed into a $700-billion fund for whatever interventions the administration desires. These have included buying shares of two U.S. auto companies, launching new housing programs, and bailing out large insurance companies – in other words, effecting further transformation of America’s free-market economy.

In the latest version of the administration’s exploitation of TARP for purposes other than stabilizing financial markets, the House – with the President’s blessing – claimed to offset $75 billion in additional “stimulus” spending with a reduction in TARP authority. This move ignored carefully wrought statutory instructions to protect the taxpayer and not use authority to offset new spending. The package further enshrined TARP as Washington’s latest slush fund.

The TARP fund established by President Bush and his Treasury Secretary, Henry Paulson, was initially authorized for $700 billion dollars. However, the Dodd–Frank Wall Street Reform and Consumer Protection Act, harshly criticized by Republicans and Ryan, reduced the amount authorized to $475 billion. As the CBO report below shows $244 billion dollars has already been repaid. Only $11 billion has been written off to date. Total disbursements to date, beyond the CBO report cited below, are $431 billion dollars.

TARP is hardly reflection of nation destroying progressivism. It is sheer lunacy to blame TARP on progressives since it was created by Republicans. Only $80 billion was disbursed to the auto industry and $29 billion has already been paid back. The lions share went to banks under the Bush administration. These kinds of bailouts are hardly new, i.e., the Chrysler bailout in 1979, railroad bailouts starting in World War 1, Lockheed in 1971, savings and loans starting in 1974, and the LDS Debt Crisis during the Reagan administration. All bailouts in American history have been supported by Democrats and Republicans. There is no new destruction of American culture and crippling government dependency by progressives that can rationally be maintained in historical bailouts. Yet, rhetoric is not rational, it is emotional. So far, the data to backup Ryan’s claims has been lacking but the emotional appeal has been zealous and fervent.

Enough data for now, in the next part, I will start with Ryan’s comment on Cap and Trade.

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[NOTE 1] Here are more link for this data:

http://cbo.gov/sites/default/files/cbofiles/attachments/ARRA_One-Col.pdf

http://cbo.gov/sites/default/files/cbofiles/attachments/02-22-ARRA.pdf

http://cbo.gov/sites/default/files/cbofiles/attachments/11-22-ARRA.pdf

[NOTE 2] It is interesting that Rand took her inspiration from Nietzsche and Ryan thinks of Rand as a thinker or writer that laid out the “moral case for capitalism” (2005 Atlas Society event) better than anyone else. Here morality in any commonly recognizable form, especially by Christianity which Nietzsche harshly criticized, would not characterize Rand’s personal life which most would call hedonistic, her contempt for those not worthy of elitism, her rabid support of abortion to control the despicable masses and her unmitigated intellectual arrogance to the point of a totalitarian, secret, elite cult she headed up in New York during her life (that Alan Greenspan was intimately involved in by the way). When Ryan uses the word “moral” and Rand together to describe the best possible case for capitalism it affirms the worst possible notions of vulture capitalism for anyone familiar with Rand’s philosophy. It would certainly qualify as a “code” word to lull the Christian, fundamentalist sheep into a false sense of market well being while alerting the intellectual elite as to where he is really coming from. Nietzsche, the author of Beyond Good and Evil, would have no patience with altruistic, moral sheepishness. He simply looked at it as a tool that priests used to manipulate their flock.

[NOTE 3] See these discussions:

https://www.mixermuse.com/blog/2012/07/08/fundamentalism-in-market-economy-the-austrian-school/

https://www.mixermuse.com/blog/2012/07/11/fundamentalism-in-market-economy-the-austrian-school-and-regulation/

https://www.mixermuse.com/blog/2012/07/12/fundamentalism-in-market-economy-the-austrian-school-and-the-problem-of-suffering/

The Ryan Plan: Part 1

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In the introduction to Ryan’s report, he only shows one scenario from the 2009 CBO Long Term Budget Outlook. His scenario includes not allowing the Bush tax cuts to expire and paying doctors more money for their services than current law dictates (the “doc fix”).

Ryan’s Chart:

From http://roadmap.republicans.budget.house.gov/plan/#Intro

The Real CBO chart shows this:

From http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/102xx/doc10297/06-25-ltbo.pdf, Page 20 (pdf)

Ryan reports states:

According to the Congressional Budget Office [CBO], the President’s policies will increase spending to $5.1 trillion by 2019, nearly a full quarter of the Nation’s economic resources. His deficits never fall below $633 billion in the next 10 years, and exceed $1 trillion by the end of the decade.

Debt as a share of the economy is projected to exceed 60 percent this year (2010) – greater than the 2009 level, which was the highest in 50 years – and will reach 82 percent of GDP by the end of the next decade under the administration’s policies. (In nominal dollars, debt held by the public will triple over the next 10 years.) The U.S. has not seen debt at these expected levels since the end of World War II. Even the countries of the European Union, hardly exemplars of fiscal rectitude, are required to keep their debt levels below 60 percent of GDP.

All this would be bad enough on its own. But it only adds to a fiscal crisis already well under way. The status quo is unsustainable and unacceptable.

For several decades, fiscal experts have warned of the untenable and overwhelming nature of the Federal Government’s budgetary trends. The threat comes entirely from domestic entitlement programs, as clearly reflected in CBO’s biennial report, The Long-Term Budget Outlook, the most recent of which was released in June 2009. The report, looking forward 75 years, shows that within the next several decades, the government’s current fiscal path will lead to catastrophic levels of debt, even if Congress imposed substantial tax increases.

Important points about Ryan’s statement:

The Congress is responsible for the budget not the president. It is not the “President’s policies” or the “administration’s policies” but the congress’ policies that become law.
Medicare, part D was not “the president’s policies”. It was President Bush’s policy and cost 1 trillion dollars over 10 years, 100 billion more than ‘ObamaCare’.
The privatization option for Medicare, champion by the Republicans, the Medicare Advantage cost the taxpayer 12.4% more than the same benefits in Medicare. This is the same money that Reince Priebus recently said President Obama “stole” from Medicare in the Affordable Care Act (ACA). Actually, he took it from Medicare Advantage and put it back in Medicare to save the government money. Priebus is mad because the ACA saved the government money at the expense of his big business, Republican backers in Medicare Advantage. [NOTE 1]
Additionally, the Center for Medicare and Medicaid Services show ‘ObamaCare’ saves 575 billion dollars in ten years over doing nothing. [NOTE 2]
The current 2012 Long Term Budget Outlook projects the same scenario in the Ryan plan as “federal debt would grow rapidly from its already high level, exceeding 90 percent of GDP in 2022”. The other scenario sates “Federal debt held by the public would drift downward from an estimated 73 percent of GDP this year to 61 percent by 2022 and 53 percent by 2037” as opposed to “82 percent of GDP by the end of the next decade” which would have been 2019 from 2009. [NOTE 3]
The CBO 2009 report that Ryan quotes shows two scenarios. Ryan only shows the worst case scenario. The biggest hits to the worst case scenario are:
- The Bush tax cuts are permanently extended by congress
- The “doc fix” is enacted into law by the congress

President Obama cannot create the budget for the United States. He can give his idea of what the budget should be to the congress but Ryan is not referring to the president’s idea for the budget. He is referring to actual law that can only be made law by the congress. The president of either party never gets their budget made into law carte blanche. To blame current law on President Obama is tantamount to suggesting that President Obama created the entire actual, budget all by himself. This is a HUGE lie. This lie is also used with debt numbers are I have shown here (also, see this link for a discussion of mandatory and discretionary budget items). Ryan is using rhetoric to create an illusion. If people believe rhetoric over facts they will never be able to decide once and for all if their opinion is right or wrong. Ryan does not want people to believe the truth based on real facts. He wants people to believe his hyperbole. There is no integrity to this kind of approach, regardless of political party; it shows something important about the person that resorts to it.

Ryan states this about the Bush tax cuts:

Extension of Current Fiscal Policies. In a scenario that essentially extends today’s underlying fiscal policies, CBO assumes the 2001 and 2003 tax relief provisions and alternative minimum tax [AMT] “patches” are permanently extended. As a result, revenues grow slightly faster than the economy and equal 22 percent of GDP by 2080.

And this about the “doc fix”:

The projection also assumes Medicare physician reimbursement payments will track the historic growth of Medicare rather than the “sustained growth formula” [SGR], which has in recent years called for steep reductions in those payments. (Congress has repeatedly boosted physician payments, an action called the “doc fix.”)

Ryan thinks that the CBO puts an “artificial downward adjustment in the future growth rates of two health entitlements”:

The scenario projects that Social Security, Medicare, and Medicaid will grow faster than the economy. But CBO also makes an artificial downward adjustment in the future growth rates of the two health entitlements. Without this adjustment – applying historical rates of health care spending growth – Medicare and Medicaid spending as a share of the economy (currently 4.9 percent of GDP) would double in 20 years, triple in 30 years, and equal the size of today’s entire government in less than 50 years. Other spending is allowed to grow with GDP rather than inflation after 2011.

The 2012 CBO report states:

In addition, the scenario includes unspecified changes in tax law that would keep revenues constant as a share of GDP after 2022, and it incorporates the assumption that spending for programs other than Social Security and the major federal health care programs will generally represent a stable share of GDP in most years after 2022, as it has in recent decades.

This adjustment is only after 2022. The CBO states that we do not know what GDP is going to be but historically “spending for programs other than Social Security and the major federal health care programs will generally represent a stable share of GDP in most years after 2022, as it has in recent decades”. Ryan thinks that this will not occur and we are on the verge of an a-historic event – GDP going down in a dramatically unusual way. This is speculation on his part. It is perhaps not so odd that it also conveniently fits with his ideological interests. It is pure fantasy on Ryan’s part. The CBO prefers historic precedence.

Ryan states this about Federal revenues:

It is noteworthy that even without deliberate tax increases, tax revenue as a share of the economy is still projected to grow – rising from 15.5 percent of GDP in 2009, to 19.9 percent in 2050, and to 21.9 percent in 2080. For comparison, Federal revenues peaked at 20.9 percent of GDP in 2000. Yet even with revenues at historically high levels, spending still outpaces revenue by significant amounts, leading to more government borrowing and debt, and still higher interest payments.

The 2012 CBO report states in the section “The Long-Term Outlook for Revenues”:

Federal revenues have fluctuated between about 15 percent and about 21 percent of GDP over the past 40 years, averaging 18 percent. The composition of revenues has shifted over time, with payroll taxes producing a larger share of total tax receipts and corporate income taxes and excise taxes producing smaller shares.

This has nothing to do with President Obama as Ryan alludes; Obama has not been in office for 40 years. The CBO goes on to state:

After totaling nearly 18 percent of GDP in 2008, federal revenues fell sharply, primarily because of the severe recession, and were just over 15 percent of GDP from 2009 through 2011. CBO expects revenues to approach 16 percent of GDP this year. Under the current-law assumptions of CBO’s baseline, revenues would rebound over the next few years with expected improvement in the economy, the recent or scheduled expirations of various tax provisions, and the imposition of new taxes, fees, and penalties that are scheduled to go into effect. Revenues would keep rising relative to GDP thereafter, largely because increases in taxpayers’ real income would push more income into higher tax brackets and because more taxpayers would become subject to the AMT. As a result, revenues would reach nearly 19 percent of GDP in 2013 and over 21 percent of GDP in 2022.

With regard to Ryan’s assertion on spending under President Obama, spending has clearly decreased under President Obama than under Bush:

OUTLAYS BY AGENCY: 2000–2017

(in millions of dollars)

From The Office and Management Budget by agency (xls) or get spreadsheet with graphs here. See also this.

The bottom line is if you repeat rhetoric that is not based on fact, you are responsible for purposely confusing voters. Generally, facts cannot be put in sound bites but they can dispel ideological myths. When voters vote based on lies and manipulation, everyone that spreads that hyperbole is responsible for weakening our democracy. Next time someone tells you that Obama has spent us into oblivion you have the choice of dispelling myth or keeping silent and becoming part of the problem.

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[NOTE 1] The Continuing Cost of Privatization: Extra Payments to Medicare Advantage, Also http://www.pnhp.org/news/2008/july/lets_end_the_medica.php, Also, http://politicalcorrection.org/factcheck/201101250005, Also http://www.gao.gov/products/GAO-08-522T, Also http://www.gao.gov/products/GAO-08-359

Overview

The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, every MA plan in the nation is paid more for its enrollees than they would have been expected to cost in traditional fee-for-service Medicare. The authors calculate that payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare—an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004–2008, extra payments to MA plans are estimated to have totaled nearly $33 billion. Although Congress recently enacted modest reductions in MA plan payments, these changes will not take effect until 2010. Moreover, while the new legislation removes a few factors contributing to the extra payments, a number of other factors remain unaffected.

[NOTE 2] Center for Medicare and Medicaid Services, Affordable Care Act Update: Implementing Medicare Cost Savings, http://www.cms.gov/apps/docs/ACA-Update-Implementing-Medicare-Costs-Savings.pdf

Without reform, Medicare spending was projected to grow at an average annual rate of 6.8 percent, reaching an annual cost of roughly $978 billion by 2019. As a result of these reform measures, projected annual growth in Medicare spending has been reduced to 5.3 percent, reaching $852 billion by 2019—a ten-year savings of over $575 billion and a reduction of 13 percent in 2019 over previous baseline spending.

…

Conclusion

The passage of the Affordable Care Act marks a turning point in the unsustainable rate of cost growth in our health care system. Prior to reform, Medicare was marred by perverse incentives and inefficiencies that were obstacles to making meaningful quality improvements. This led to the hemorrhaging of billions of dollars in waste and misdirected resources. The Affordable Care Act reforms the Medicare program’s payment and delivery systems to incentivize high-quality care, appropriately price services, modernize the health care sector, and fight waste, fraud, and abuse. The new law will generate significant cost savings in both the near term and the long term, will help drive system-wide cost-savings and quality improvement, and will improve the solvency of the Medicare Trust Fund by 12 years.

[NOTE 3] Congressional Budget Office, THE 2012 LONG-TERM BUDGET OUTLOOK, http://www.cbo.gov/sites/default/files/cbofiles/attachments/LTBO_One-Col_2.pdf

Ryan’s plan is the extended baseline scenario. It assumes the Bush tax cuts are extended and the “doc fix” is enacted. The extended alternative fiscal scenario assumes the Bush tax cuts are allowed to expire, the “doc fix” is not enacted and we do not hit the “fiscal cliff”.

Alternative Scenarios for the Long-Term Budget Outlook

The two sets of long-term budget projections presented in this report are based on the following differing assumptions about future federal policy (see Table 1-1):

The extended baseline scenario generally adheres closely to current law. It follows CBO’s March 2012 baseline budget projections for the next decade and then extends the baseline concept beyond that 10-year window. The current-law assumption of the baseline scenario implies that many adjustments that lawmakers have routinely made in the past—such as changes to the AMT and to the Medicare program’s payments to physicians—will not be made again. Because of the structure of current tax law, federal revenues over the long run would grow significantly faster than GDP under this scenario, ultimately rising well above the levels that U.S. taxpayers have seen in the past (for more details, see Chapter 6).

The extended alternative fiscal scenario embodies several changes to current law that would continue certain tax and spending policies that are in place now or have been in place recently. Over the next decade, it follows CBO’s March 2012 budget projections for the alternative fiscal scenario. Versions of some of the changes that the scenario incorporates—such as those related to the tax cuts originally enacted in 2001 and 2003, the AMT, many other expiring tax provisions, and Medicare’s payments to physicians—have regularly been enacted in the past. Another of the scenario’s assumptions is that the automatic spending reductions required by the Budget Control Act of 2011 (Public Law 122-25), which are set to take effect in January 2013, do not occur (although the original caps on discretionary appropriations in that law are assumed to remain in place).

The Decision

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When all is said and done, the decision for the 2012 presidential election will come down to this: Do you believe the President Obama created the current economic and political problems? The Republican campaign has hammered the theme that President Obama is responsible. On rare occasions they will reluctantly admit that things were not so great in the Bush administration and then go on to bash Obama for the problems. I believe that there is real data that can prove whether or not President Obama is responsible as I have demonstrated on my web site at www.mixermuse.com/blog. However, I realize that data and facts are not how most folks decide who to vote for. So, the question remains, did President Obama create the current problems ex nihilo (out of nothing)? Those that believe he did will not and cannot be convinced otherwise. However, if rationality matters we should pay attention to these facts. Even the most devout national Republicans admit that there were problems before President Obama took office. The economic crash became most apparent in 2008 after eight years of practiced and enacted Republican ideology in the Executive Branch with Bush, six years of Republican Legislative Branch control with the congress and a Supreme Court majority in the Judicial Branch. President Obama took office in January of 2009. Has Republican ideology about how to govern changed in the least? They are still supply side (trickle down economics), against regulation, favor the wealthy (what they call job creators), defense and war hawkish and cutting taxes (which is indisputably the largest contributor to the national debt to the present day) while increasing spending dramatically (Medicare, Part D and Defense to name a few). Their ideology has not changed one bit. Their reign precipitated the largest decrease in GDP since the Great Depression, the largest increase in the national debt and a huge real income separation from the wealthy and the middle class in this country. The decision that people need to make is, did President Obama create this or did he have to deal with the aftermath? If you think President Obama created this – show it with specific credible data (I have shown the contrary here). If you want to blame ‘Obamacare’ you will need to explain how something can affect something else BEFORE the fact – Obamacare does not go into effect until 2014. The decision to be made is should we try the ideology that created the mess in the first place? If you are convinced the ideology that created the mess is Democratic you will probably not be reading this. If you are undecided and care about facts and credible data then the decision will come down to, will Republican ideology produce a different result this time? IMO this notion is insane as it implies doing the same thing and expecting a different result.

A Comment Concerning Gay Rights

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Concerning this essay…

It is funny how liberals in the U.S. see gay rights as a civil rights issue and conservatives cannot be enticed to go there. The party of Lincoln takes pride in abolition but they frame the argument on gays in a totally different way. [NOTE 1] I would say that it is a religious form of bigotry. When the U.S. had slavery, the religious groups, especially in the South, made slavery a theological tenant of their religion. Since then, only the extreme right has held on to such nonsense. I dare say that after, and when, the gay issue is resolved, the religious taboos against it will disappear…given a hundred years or so. I sincerely believe that the old line Republican Party would be considered liberals by the standards of our current batch of aspiratory, nouveau riche Republicans. I do think conservatives, as deriving values from the past, have more chance for error than liberals that derive values from the future (thus the liberal, negative slant as you suggest on the moral significance of the past). The error derives from the inability to retrieve a true and proper past and the ability to hermeneutically create a past the never existed. The liberal error derives from not fully thinking through the hermeneutically retrieved past that governs popular messaging. Change has to come from within culture and cannot be imposed from an exterior social structure (the communists made this particularly clear).

Culture (bildung) is bound by a fictional past (in the way it projects and gathers, re-members, significance) and compelled by its abysmal future. In this sense we are all conservative and liberal. However, the violence and indolence of the present, makes the current state of affairs deplorable and should make the status quo intolerable to our present situatedness (dasein), the French have referred to this predicament as mauvaise foi (‘bad faith’) and hypocrisy. I still maintain that the Austrian ‘free market’ turns a deaf ear to the present vis-à-vis human suffering in similar fashion. I like the way you put this, “you can tie yourself into knots trying to “prove” that you are a “proper” form of the human until you realise how monstrously improper the entire question is”. I find the notion of the ‘proper’ to be pervasive as it is thought, as the ‘serious’ and elevated form of human activity especially in academia. I also would note the way in which the serious and the ‘proper’ are rewarded and reinforced in capitalism (which Socrates might refer to as sophistry). I am not suggesting that it would not be rewarded in any economic system. I am only pointing out the innocuous affinity to authorize and reward the ‘proper’ in capitalism. The insidious nature of academic breakthroughs makes it feed on the milk of the ‘improper’, that which was heretical to the popular dogma of its day, the dominate paradigm.

I think all this momentum works against a contemporary gay person. I think it is quite admirable and courageous to openly face this amount of derision and ignorance. It is reminiscent of Nietzsche’s remark of untimelessness (Untimely Meditations), born out of season. It is a burden that Jesus would have known but, as “the last Christian”, orthodoxy has denied that Jesus in favor of the apostate ‘proper’ Jesus. Thus, with regard to “none so blind”…”Therefore I speak to them in parables: because they seeing see not; and hearing they hear not, neither do they understand.” [Matthew 13:13] It is ironic that I have heard so many Christians think that homosexuality is a sin but the ‘improper’ Jesus did this:

As he went along, he saw a man blind from birth. His disciples asked him, “Rabbi, who sinned, this man or his parents, that he was born blind?” “Neither this man nor his parents sinned,” said Jesus, “but this happened so that the works of God might be displayed in him. As long as it is day, we must do the works of him who sent me. Night is coming, when no one can work. While I am in the world, I am the light of the world.” Having said this, he spit on the ground, made some mud with the saliva, and put it on the man’s eyes. “Go,” he told him, “wash in the Pool of Siloam” (this word means “Sent”). So the man went and washed, and came home seeing. [John 9]

In unorthodoxy, could it be that the sin of blindness, the improper, sees and the ‘seers’ are blind?

[NOTE 1] The Republican pride in civil rights can be overdone at times. The Civil Rights Act of 1964 was not split along party lines as much as it was split along the Mason-Dixon Line. After the vote, the Dixiecrats changed party en mass to the Republican Party where they remain to this day. As a Southerner, I can tell you that bigotry is alive and well in the South but it has gone underground. However, the younger folks are not AS trapped in the sins of the past as their elders. Here was the actual vote count on the Civil Rights Act of 1964 – Of all the varieties of virtues, liberalism is the most beloved. Aristotle

Formalism: When a Lie Becomes Truth (really)

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It was shocking when Sarah Palin accused the Democrats of being corporatists. Are Democratic politicians influenced to make decisions based on corporate lobbing and money? The pre-‘Citizens United’ answer was yes, as for Republican politicians as well. However, this is no longer true, post-‘Citizens United’. With the Citizens United, Supreme Court decision, corporations are people too. Don’t corporations have the right to influence politicians just as private individuals? This is the decision of the Supreme Court. Did the Supreme Court legalize corporatism? If you do not believe that they did with the Citizens United decision then why would you accuse the Democrats of corporatism? Democrats are participating in free speech. If corporations are people too, they have the right to free speech just like anyone else. Just because they can speak with more money than most individuals, you cannot hold that against them. We all know that politicians and the electorate are not influenced by money, right? The politician and the electorate are free market agents that can make their own choice regardless of money, right? Technically, corporatism as envisioned by its most ardent fascist founder is:

“Fascism should more properly be called corporatism because it is the merger of state and corporate power.” – Benito Mussolini.

Also:

“Fascism: a system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism.” American Heritage Dictionary (Houghton Mifflin Company, 1983)

In a corporate merger there is always a controlling party, typically a parent company. In the common conception of modern corporatism, I suppose the controlling party would be the corporate side of the equation although in historical corporatism it was the fascist government. In any case, without a contract specifying explicitly that the corporation is the controlling corporate partner in corporatism, the Supreme Court has made the common thinking about corporatism obsolete. Now, the law of the land has deemed the common understanding of corporatism to be the right to ‘free speech’. It seems that the Supreme Court decision has been critical for helping us see the kinder, gentler side of corporate ‘speech’ as opposed to the fascist side of corporatism. Therefore, we should look at the actual decision (already referenced above).

First, some background:

The Supreme Court overruled a previous Supreme Court decision in Austin v. Michigan Chamber of Commerce which prohibited corporations from using treasury money to support or oppose candidates in elections. The previous decision ruled that this prohibition did not violate the First and Fourteenth Amendments. In Citizens United the Supreme Court overruled the previous decision. [NOTE 1]

In Federal Election Commission v. Wisconsin Right to Life, INC., a corporation, Wisconsin Right to Life, challenged a Federal Elections Commission injunction that made it a federal crime for a corporation to use its general treasury funds to pay for any “electioneering communication”. The court ruled that the “speech at issue is not the “functional equivalent” of express campaign speech” because it did not advocate for a specific candidate. It did not make an “appeal to vote for or against a specific candidate” only “that a group of Senators was filibustering to delay and block federal judicial nominees and telling voters to contact Wisconsin Senators Feingold and Kohl to urge them to oppose the filibuster”.

The Decision:

“In January 2008, appellant Citizens United, a nonprofit corporation, released a documentary (hereinafter Hillary ) critical of then-Senator Hillary Clinton, a candidate for her party’s Presidential nomination.” [Citizens United]

Here are the main components of the decision with my comments:

Austin was overruled. Expenditures by corporations on political speech could not be limited. The Bush administration law, Section 203 of the Bipartisan Campaign Reform Act of 2002, was ruled unconstitutional.

“The court ruled “the First Amendment provides that “Congress shall make no law … abridging the freedom of speech,”” and that “prohibition on corporate independent expenditures is an outright ban on speech”.

Because speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence. Laws burdening such speech are subject to strict scrutiny, which requires the Government to prove that the restriction “furthers a compelling interest and is narrowly tailored to achieve that interest.” This language provides a sufficient framework for protecting the interests in this case. Premised on mistrust of governmental power, the First Amendment stands against attempts to disfavor certain subjects or viewpoints or to distinguish among different speakers, which may be a means to control content. The Government may also commit a constitutional wrong when by law it identifies certain preferred speakers. There is no basis for the proposition that, in the political speech context, the Government may impose restrictions on certain disfavored speakers. Both history and logic lead to this conclusion.”

This invalidates any common, informal form of corporatism. According to our government, the Supreme Court, the line between corporate free speech and corporatism could be crossed with “compelling interest” that is “narrowly tailored to achieve that interest”. In other words, a breach would have to be an outright bribe (“quid pro quo corruption”) or a contract assigning control of the government to a corporation. Short of this, any other corporate activity in the political arena is now protected as free speech. Citizens United has effectively redefined corporatism to its most formal meaning.

In Section 2.c.1 of the ruling the court went on to suggest, “The First Amendment prohibits Congress from fining or jailing citizens, or associations of citizens, for engaging in political speech” and this would be violated if government were “to ban political speech because the speaker is an association with a corporate form”. The government cannot discriminate on the basis of gender, religion and now, corporate affiliation. “Political speech is “indispensable to decision making in a democracy, and this is no less true because the speech comes from a corporation.””

Additionally, the First Amendment protections “do not depend on the speaker’s “financial ability to engage in public discussion””. Therefore, “Distinguishing wealthy individuals from corporations based on the latter’s special advantages of, e.g., limited liability, does not suffice to allow laws prohibiting speech”. The wealthy cannot be discriminated against in free speech because they have money; neither can corporations. The “open marketplace” of ideas would not be open if advocates are discriminated against because they have money (or its corollary power). The court even went on to call restrictions on corporate involvement in politics “censorship”. [NOTE 2]

Conclusion:

Speaking for you, the court determined:

“this Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption. That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy.”

‘Influence’ is not corruption. Here again, corruption has lapsed into a more formal definition which obviously excludes influence (or influence peddling). The court even found that “Political speech is so ingrained in this country’s culture that speakers find ways around campaign finance laws.” so why have them? Murderers find ways around the law against murder so why have the law (but I digress)? Even more, there is no possibility for corruption with mere ‘influence’ no matter how strong the influence but the least little notion that a corporate contributor could suffer reprisal is enough for the court to sanction the right to not disclose where the ‘speech’ is coming from. The court found that contributors would not have to be disclosed “if a group could show a ” ‘reasonable probability’ ” that disclosing its contributors’ names would ” ‘subject them to threats, harassment, or reprisals from either Government officials or private parties”. In effect, the court has ruled that corporations can ‘speak’ and we do not have to know who is speaking.

In the Citizens United decision the natural antipathy previous generations, including Democrats and Republicans, had about corporatism and enacted into law was overruled. The court favored a much more formal definition of corporatism that made it the law of the land to evacuate any fuzzy notions of corporatism in favor of a very narrow and formal definition; everything else is fair game. Effectively the court has told us there is no corporatism in the United States because we have redefined corporatism. It is no consequence that every dictator redefines democracy to apply to their regime. Hitler did not exterminate ‘people’ (‘National Socialism’ was ‘socialism’ that only applied to real people). The real free market can solve all social ills.

Historically, anything can be justified by redefinition, appealing to the formal case. Academics have found this to be a very resourceful technique over the years. If corporatism can be redefined from the common understanding to a purely formal definition of a fascist form of government (which we are not by law), the previously understood common manifestations of corporatism can now be deemed ‘free speech’. Our government, the Supreme Court, has for all intents and purposes made the law of the land deny corporatism in the United States. It is ironic that the conservative decision would be ignored by folks like Sarah Palin (when it comes to Democrats at least) who insist there is corporatism in this country. You can’t have it both ways: Either we have corporatism in the United States or we have ‘free speech’. To play both sides is disingenuous.

[NOTE 1] It is interesting to note that public agencies are prohibited from taking political stands and contributing to political campaigns. Corporations are ‘subsidized’ by the public with a lower tax rate than most individuals who pay taxes. If corporations are now people too and protected under the individual’s right to free speech, shouldn’t they start paying individual income tax rates?

[NOTE 2] Free market fundamentalists should have no problem with the Citizens United decision. As the wealthy should not be penalized by the government for doing well, corporations should not be penalized for ‘speaking freely’. Influence and power have nothing to do with the government right?

Romney, CNN and Bain Capital

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After reading this article by Brianna Keilar at CNN I submitted this comment:

“Romney stopped his day-to-day oversight at Bain Capital in 1999 when he left to run the Salt Lake City Olympics, though he officially remained CEO until 2002.”

How do you get a CEO job where you do not have to do anything and you are not responsible for anything that happens on your ‘CEO watch’? There is clearly a right wing bias in this story. This tacit assumption takes Mitt’s rationalization as fact. What happened to critical journalism? As “Chief Executive Officer” you are chiefly responsible for executive decisions, right?….even if you would prefer to blame others for bad decisions, the buck stops with you…unless you are Romney or Bush – then you get special dispensation with special meanings to words that reporters should just parrot as fact!

CNN censored this comment. I do not want to believe they normally do such things on comments like this but it is a bit disturbing and Rush Limbaugh-like.

Marx Vis-à-vis Lorenzo

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In this essay, Lorenzo states:

“All of which has made it easier, alas, for one of Marx’s more profound errors to become part of many people’s common wisdom. An idea set out in the first chapter of Das Kapital:”

He goes on to quote Marx from Das Kapital:

“…[commodities of equal value] must, as exchange values, be replaceable by each other, or equal to each other. Therefore, first: the valid exchange values of a given commodity express something equal; secondly, exchange value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it.” (Chapter 1, Section 1)

After quoting Das Kapital Lorenzo, goes on to state:

“The notion that exchange is a matter of matching equivalences keeps turning up in the writings of anthropologists on money. It is a deeply wrong-headed way to look at exchange.” (Chapter 1, Section 1)

If this is the “The insidious reach of error” then Marx would agree. Lorenzo should take a closer look at the text. Let’s take a closer look at the actual text from Section 1 of Das Kapital. Das Kapital begins with this:

“The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,”[1] its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.

A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference.[2] Neither are we here concerned to know how the object satisfies these wants, whether directly as means of subsistence, or indirectly as means of production. ” (Chapter 1, Section 1)

Marx begins with an analysis of the ‘commodity’. He wants to think what is a commodity? What is a commodities value? The title of Chapter 1, Section 1 in Das Kapital is “THE TWO FACTORS OF A COMMODITY: USE-VALUE AND VALUE (THE SUBSTANCE OF VALUE AND THE MAGNITUDE OF VALUE)”. He starts out with a discussion of the utility of the thing [commodity] as its use value. He goes on to state, “Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value”. Therefore in the “form of society we are about to consider” [i.e., capitalism] the use value is the “material depositories of exchange value”. He is not stating that HE thinks commodities, as exchange values, are replaceable by each other, are equal to each other, but that this is how capitalism treats commodities. To the contrary, he is going to criticize this perception as Lorenzo also wants to do.

Marx goes on to state before the next paragraph that Lorenzo quotes:

“Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort,[6] a relation constantly changing with time and place. Hence exchange value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e., an exchange value that is inseparably connected with, inherent in commodities, seems a contradiction in terms.[7] Let us consider the matter a little more closely.” (Chapter 1, Section 1)

So, at first sight, exchange value is a quantitative relation and as such APPEARS to be something accidental and purely relative. In exchange value, commodities are thought as “a quarter of wheat is exchanged for x blacking, y silk, or z gold, &c. – in short, for other commodities in the most different proportions”. The exchange value thought in terms of quantity is taken as an intrinsic property of the commodity. Marx states that this “seems a contradiction in terms”. He goes on to state, “In the same way the exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity”. The “something common to them all” “cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use values. But the exchange of commodities is evidently an act characterised by a total abstraction from use value. Then one use value is just as good as another, provided only it be present in sufficient quantity”. Marx is suggesting that the equality of commodities in exchange value is a “total abstraction”. Marx further states, “As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value”. Marx thinks that the equality thought in terms of exchange value leaves out something very important about commodities – the labor value. Marx states:

“If then we leave out of consideration the use value of commodities, they have only one common property left, that of being products of labour. But even the product of labour itself has undergone a change in our hands. If we make abstraction from its use value, we make abstraction at the same time from the material elements and shapes that make the product a use value; we see in it no longer a table, a house, yarn, or any other useful thing. Its existence as a material thing is put out of sight. Neither can it any longer be regarded as the product of the labour of the joiner, the mason, the spinner, or of any other definite kind of productive labour. Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract.” (Chapter 1, Section 1)

Marx is criticizing the reduction, the abstraction, of value as purely and merely quantitative. He wants to claim that the value of a commodity is more than an ‘equality’, a number, a proportion. He wants to say that the labor that goes into making a commodity is not merely an abstraction but a real, concrete value of the commodity. Therefore, the question of the value of a commodity is not merely a question of the exchange of quantities but gets to what Lorenzo want to ask about money, where do we derive a sense of the value of money?

In Chapter 1, Section 3 (The Equivalent form of value) Marx states, “The body of the commodity that serves as the equivalent, figures as the materialisation of human labour in the abstract, and is at the same time the product of some specifically useful concrete labour. This concrete labour becomes, therefore, the medium for expressing abstract human labour”. Here again Marx wants to show how concrete labor gets articulated into abstraction when thought in terms of equivocation. It is interesting to note that Adam Smith also subscribed to the classical labor theory of value (see Wealth of Nations Book 1, chapter V). The labor theory of value can also be found in Aristotle’s Politics. Moreover, Plato has much discussion of techne [crudely technique or skill] as what, in effect, distinguishes human being and transforms the very being and origin of matter into created rather than natural beings [for an excellent discussion of techne and Aristotle see Heidegger and Aristotle The Twofoldness of Being, Walter A. Brogan, link].

Lorenzo takes this quote by Marx:

“The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity.” (Chapter 1, Section 1)

and states:

“This is wrong, for utility is utility to someone. So, the utility of a thing does have existence apart from that commodity, it exists in the relation of the thing to the purposes of anyone who has a use for it.”

Marx is not suggesting that utility exists only in the commodity and not in relation to someone. Marx’s theory of use value means that a coat may not have the same value in a tropical country as in a colder climate (“Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value” quoted below). Marx states there are cases where a thing with use value may not have value such as air and soil. He also states that a thing can have use value but not be a commodity if a person directly satisfies his wants with the produce of his own labor. In order for a thing with use value to be a commodity, Marx states that a commodity must have “use values for others, social use values”. When Lorenzo states that Marx “is wrong” and that “utility is utility for someone” he directly contradicts what Marx states below concerning use value as “use values for others, social use values”:

“A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.)[12] Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value. “(Chapter 1, Section 1)

Additionally, Marx clearly states that there are things that have use value that are not commodities. If they have use value for others, the product of labor gives the commodity value.

After getting Marx wrong on utility and exchange he goes on to get Marx wrong on the value of labor. Lorenzo states:

“Having got utility and equivalence wrong, Marx then moves on to the third false claim:”

He then quotes Marx as stating:

“if then we leave out of consideration the use value of commodities, they have only one common property left, that of being products of labour.” (Chapter 1, Section 1)

After quoting Marx Lorenzo states:

“Which is also not true. Commodities also have the qualities of being made of materials (what economists call ‘land’) and by tools (what economists call ‘capital’); labour on its own produces little or nothing.

Even more basically, to be exchanged, such things have to be controlled by someone. Locke’s metaphor that a person in the state of nature acquires something by “mixing his labour” with it is misleading: what they do is take control of it (and, more importantly, that control is acknowledged by others). Any contribution of labour to exchange—whether in production or the realisation of value in exchange—is framed by such control: as is also true of land and capital. Moreover, the control has to matter: the thing has to have sufficient scarcity and be sufficiently wanted by someone for such control to matter. We can control a twig, but who cares? (Acknowledged) control, scarcity and wanting are the bases of exchange.”

Yet, from the previous quote of Marx, we see that things can have use value that are not the product of labor as when the “case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows”. Marx is not suggesting that land cannot be bought and sold, he is simply stating that natural elements can have use value without being commodities. As far as I know air is not being sold yet. Lorenzo states commodities have to be “controlled by someone”. Does this contradict Marx when Marx writes, “To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange”? I am not sure what Lorenzo’s point is about ‘tools’ since tools are most often the product of labor.

It is astonishing that on virtually every point Lorenzo gets it wrong in direct contradiction to what Marx writes in the exact text that Lorenzo quotes. However, to be clear, apart from getting Marx wrong, I think I agree with some of his latter, main points. I like the way Lorenzo distinguishes between equivalence and intersection. Lorenzo states:

“The search for a “common property” in things exchanged is completely wrong-headed, because exchange is a matter of intersecting differences, not matching equivalences.”

Certainly we can see cases where labor does and should add to the value of a commodity. However, if a fine coat shop opens up in the Caribbean it would be no surprise to Marx that the labor value in the coats would not be worth much as previously stated. Yes, the value of a commodity will change with demand. I am fully aware that Marx wants to make the labor value of a commodity more solid, a “common property”, than the ‘abstraction’ of exchange values. I think Marx does want to erect a protectionist strategy for the laborer by encapsulating the value of labor in the commodity. However, the encapsulation is not an either/or scenario and does work within bounds and limitations as I have pointed out. In any case I think Lorenzo wants to make a more substantial break with value as residing in a commodity. In this sense I take Lorenzo’s point about “intersecting differences”.

I think it is important to have some understanding of Hegel to really make sense of Marx. Dialectical materialism, a phrase coined after Marx, was the science that “put Hegel’s dialectics back on its feet”. Dialecticism was Hegel’s method of thesis, antithesis and synthesis (aufhebung conserves the thesis and the antithesis and transcends them both). Marx thought that the idealism of Hegel got it wrong with its movement toward Spirit, the concretization of Truth in pure logic, in Hegel’s master work, The Science of Logic (Wissenschaft der Logik). Marx employed the dialectics of Hegel but in service of the history of class struggle. The ‘Spiritalization’ of Hegel was the domain of the bourgeoisie. It was a fairy tale the bourgeois told themselves while basking themselves in the materials of other’s labor. The bourgeois abstract away from the material and also devalue the products of laborers (in the material form of unfair or low wages or even slavery). They reshape societal values after their own abstract values of God, Truth, eternity and spiritualization at the expense of the working class. They make value a product of their abstract fetish and not a product of labor. The concretization of Truth does not happen in thought but in objective matter according to Marx. However, this concretization is not as simple as Lorenzo would have us believe. A noted Marxist scholar puts it this way [I apologize for the long quote]:

“Marx defines the concrete as ‘the unity of diverse aspects. [Marx, Contribution to the Critique of Political Economy] This definition may appear paradoxical from the standpoint of traditional formal logic: the reduction of the sensually given diversity to unity appears at first sight to be the task of abstract knowledge of things rather than of concrete one. From the point of view of this logic, to realise unity in the sensually perceived diversity of phenomena means to reveal the abstractly general, identical elements that all of these phenomena possess. This abstract unity, recorded in consciousness by means of a general term, appears at first sight to be that very ‘unity’ which is the only thing to be treated in logic.

…

When Marx defines the concrete as unity of diverse aspects, he assumes a dialectical interpretation of unity, diversity, and of their relationship. In dialectics, unity is interpreted first and foremost as connection, as interconnection and interaction of different phenomena within a certain system or agglomeration, and not as abstract likeness of these phenomena. Marx’s definition assumes exactly this dialectical meaning of the term ‘unity’.

…

This conception of unity in diversity (or concreteness) is not merely different from the one which old logic proceeded from, but is its direct opposite. The conception approaches that of the concept of integrity or wholeness. Marx uses this term in those cases when he has to characterise the object as an integral whole unified in all its diverse manifestations, as an organic system of mutually conditioning phenomena in contradiction to a metaphysical conception of it as a mechanical agglomeration of immutable constituent parts that are linked with each other only externally, more or less accidentally.

The most important aspect of Marx’s definition of the concrete is that the concrete is treated first of all as an objective characteristic of a thing considered quite independently from any evolutions that may take place in the cognising subject. The object is concrete by and in itself, independent from its being conceived by thought or perceived by sense organs. Concreteness is not created in the process of reflection of the object by the subject either at the sensual stage of reflection or at the rational-logical one.

In other words, ‘the concrete’ is first of all the same kind of objective category as any other category of materialist dialectics, as ‘the necessary’ and ‘the accidental’, ‘essence, and ‘appearance’. It expresses a universal form of development of nature, society, and thinking. In the system of Marx’s views, ‘the concrete’ is by no means a synonym for the sensually given, immediately contemplated.

Insofar as ‘the concrete’ is opposed to ‘the abstract’ the latter is treated by Marx first and foremost objectively. For Marx, it is by no means a synonym of the ‘purely ideal’, of a product of mental activity, a synonym of the subjectively psychological phenomenon occurring in man’s brain only. Time and again Marx uses this term to characterise real phenomena and relations existing outside consciousness, irrespective of whether they are reflected in consciousness or not.

For instance, Marx speaks in Capital of abstract labour. Abstractness appears here as an objective characteristic of the form which human labour assumes in developed commodity production, in capitalist production. Elsewhere he stresses that the reduction of different kinds of labour to uniform simple labour devoid of any distinctions ‘is an abstraction which is made every day in the social process of production’. It is ‘no less real (an abstraction) than the resolution of all organic bodies into air’. [Marx, Contribution to the Critique of Political Economy]

The definition of gold as material being of abstract wealth also expresses its specific function in the organism of the capitalist formation and not in the consciousness of the theoretician or practical worker, by any means.

This use of the term ‘abstract’ is not a terminological whim of Marx’s at all: it is linked with the very essence of his logical views, with the dialectical interpretation of the relation of forms of thinking and those of objective reality, with the view of practice (sensual activity involving objects) as a criterion of the truth of the abstractions of thought.

Still less can this usage be explained as ‘a throwback to Hegelianism’: it is against Hegel that Marx’s proposition is directed to the effect that ‘the simplest economic category, e.g., exchange value … cannot exist except as an abstract, unilateral relation of an already existing concrete organic whole ‘. [ibid.]

‘The abstract’ in this kind of context, very frequent in Marx, assumes the meaning of the ‘simple’, undeveloped, one-sided, fragmentary, ‘pure’ (i.e., uncomplicated) by any deforming influences). It goes without saying that ‘the abstract’ in this sense can be an objective characteristic of real phenomena, and not only of phenomena of consciousness.

‘It is precisely the predominance of agricultural peoples in the ancient world which caused the merchant nations – Phoenicians, Carthaginians – to develop in such purity (abstract precision)’ [ibid.]; it was not, of course, the result of predominance of the ‘abstractive power of thought’ of Phoenicians or the scholars writing the history of Phoenicia. ‘The abstract’ in this sense is by no means the product and result of thinking. This fact is just as little dependent on thinking as the circumstance that ‘the abstract law of multiplying exists only for plants and animals’.

According to Marx, ‘the abstract’ (just as its counterpart, ‘the concrete’) is a category of dialectics as the science of universal forms of development of nature, society and thought, and on this basis also a category of logic, for dialectics is also the Logic of Marxism.

This objective interpretation of the category of the abstract is spearheaded against all kinds of neo-Kantian logic and epistemology which oppose, in a crudely metaphysical way, ‘pure forms of thought’ to forms of objective reality. For these schools in logic, ‘the abstract’ is only a form of thought, whereas ‘the concrete’, a form of a sensually given image. This interpretation, in the Mill-Humean and Kantian traditions in logic (e.g., Chelpanov and Vvedensky in Russia), is alien and hostile to the very essence of dialectics as logic and theory of knowledge.

The narrow epistemological (that is, essentially psychological, in the final analysis) interpretation of the categories of the abstract and the concrete became firmly rooted in modern bourgeois philosophy. Here is a fresh example – definitions from the Philosophical Dictionary by Max Apel and Peter Ludz [Berlin 1958]:

‘abstract: divorced from a given connection and considered by itself only. Thus abstract acquires the meaning of conceptual, conceived, in opposition to given in contemplation.

‘abstraction: the logical process for ascending, through omission of features, from that given in contemplation to a general notion and from the given concept to a more general one. Abstraction decreases the content and extends the volume. Opposed to determination.

‘concrete: the immediately given in contemplation; concrete concepts denote that which is contemplated, individual objects of contemplation. Opposed to abstract.’

This one-sided definition (abstraction is, of course, mental separation, among other things, but it is by no means reducible to it) varies but insignificantly from dictionary to dictionary. It has been polished in dozens of editions and has become generally accepted among philosophers in capitalist countries. That is certainly no proof of its correctness.

A ‘concrete concept’ is reduced by these definitions to ‘designating’ the sensually contemplated individual things, to a mere sign, or symbol. In other words, ‘the concrete’ is only nominally present in thought, only in the capacity of the ‘designating name’. On the other hand, .’the concrete’ is made into a synonym of uninterpreted, indefinite ‘sensual givenness’. Neither the concrete nor the abstract can, according to these definitions, be used as characteristics of theoretical knowledge in regard of its real objective content. They characterise only the ‘form of cognition’: ‘the concrete’, the form of sensual cognition, and ‘the abstract’, the form of thought, the form of rational cognition. In other words, they belong to different spheres of the psyche, to different objects. There is nothing abstract where there is something concrete, and vice versa. That is all there is to these definitions.

The problem of the relation of the abstract to the concrete appears in quite a different light from Marx’s point of view, the point of view of dialectics as logic and theory of knowledge.

It is only at first sight that this question might seem a), merely ‘epistemological’ one, a question of the relation of’, a mental abstraction to the sensually perceived image. In; actual fact its real content is much wider and deeper than.’ that, and it is inevitably supplanted by quite a different problem in the course of analysis – the problem of the relation of the object to itself, that is, relationship between different elements within a certain concrete whole. That is why the problem is solved, first and foremost, within the framework of objective dialectics – the teaching of the universal forms and laws of development of nature, society and thought itself, and not on the narrow epistemological plane, as neo-Kantians and positivists do.

Insofar as Marx treats the epistemological aspect of the problem, he interprets the abstract as any one-sided, incomplete, lopsided reflection of the object in consciousness, as opposed to concrete knowledge which is well developed, all-round, comprehensive knowledge. It does not matter at all in what subjective psychological form this knowledge is ‘experienced’ by the subject – in sensually perceived images or in abstract verbal form. The logic (dialectics) of Marx and Lenin establishes its distinctions in regard of the objective sense and meaning of knowledge rather than in regard of the subjective form of experience. Poor, meagre, lopsided knowledge may be assimilated in the form of a sensual image. In this case, logic will have to define it as ‘abstract’ knowledge, despite its being embodied in a sensually given image. Contrariwise, abstract verbal form, the language of formulas, may express rich, well-developed, profound and comprehensive knowledge, that is, concrete knowledge.

‘Concreteness’ is neither a synonym for nor a privilege of the sensual-image form of reflection of reality in consciousness, just as ‘abstractness’ is not a specific characteristic of rational theoretical knowledge. Certainly we speak, as often as not, of the concreteness of a sensual image and of abstract thought.

A sensual image, an image of contemplation, may just as often be very abstract, too. Suffice it to remember a geometric figure or a work of abstract painting. And vice versa, thinking in concepts may and even must be concrete in the full and strict meaning of the word. We know that there is no abstract truth, that truth is always concrete. And that does not mean at all that only the sensually perceived image, the contemplation of an individual thing may be true.

The concrete in thinking also appears, according to Marx’s definition, in the form of combination (synthesis) of numerous definitions. A logically coherent system of definitions is precisely that ‘natural’ form in which concrete truth is realised in thought. Each of the definitions forming part of the system naturally reflects only a part, a fragment, an element, an aspect of the concrete reality – and that is why it is abstract if taken by itself, separately from other definitions. In other words, the concrete is realised in thinking through the abstract, through its own opposite, and it is impossible without it. But that is, in general, the rule rather than an exception in dialectics. Necessity is in just the same kind of relation with chance, essence with appearance, and so on.

On the other hand, each of the numerous definitions forming part of the conceptual system of a concrete science, loses its abstract character in it, being filled with the sense and meaning of all the other definitions connected with it. Separate abstract definitions mutually complement each other, so that the abstractness of each of them, taken separately, is overcome. In short, herein lies the dialectics of the relation of the abstract to the concrete in thinking which reflects the concrete in reality. The dialectics of the abstract and the concrete in the course of theoretical processing of the material of living contemplation, in processing the results of contemplation and notions in terms of concepts is the subject-matter of study in the present work.

Of course, we cannot claim to offer an exhaustive solution to the problem of the abstract and the concrete at all the stages of the process of cognition in general, in all forms of reflection. The formation of the sensually perceived image of a thing involves its own dialectics of the abstract and the concrete, and a very complicated one, and that is even more true of the formation of the notion connected with speech, with words. Memory, which also plays an enormous role in cognition, contains in its structure a no less complex relation of the abstract to the concrete. These categories also have a bearing on artistic creativity. We are compelled to leave all of these aspects out of consideration, as subject-matter of a special study.

The path of cognition loading from living contemplation to abstract thought and from it to practice, is a very complicated path. A complex and dialectically contradictory transformation of the concrete into the abstract and vice versa takes place in each link of this path. Even sensation gives a rougher picture of reality than it actually is, even in direct perception there is an element of transition from the concrete in reality to the abstract in consciousness. The transition from living contemplation to abstract thought is by no means the same thing as the movement ‘from the concrete to the abstract’. It is by no means reducible to this moment, although the latter is always present in it. It is the same thing only for those who interpret the concrete as a synonym of an immediate sensual image, and the abstract, as a synonym of the mental, the ideal, the conceptual.” (Ilyenkov, The dialectics of the Abstract & the Concrete in Marx’s Capital, Chapter One – Dialectical & Metaphysical Conception of the Concrete, The Definition of the Concrete in Marx, link)

There is some common ground with “the unity of diverse aspects” and Lorenzo’s “points of intersection, not points of equivalence”. To reiterate, Marx thought of “points of equivalence” “against Hegel that Marx’s proposition is directed to the effect that ‘the simplest economic category, e.g., exchange value … cannot exist except as an abstract, unilateral relation of an already existing concrete organic whole”. The “concrete organic whole” for Marx is the physical product of labor.

What I hope has become evident in this pitting of Lorenzo and Marx is the leap that I think Lorenzo would make (which I think has some better articulated similarities with some Postmodernists) that is a leap away from the consolidation of value in labor, in the material commodity, and an absolute break in the notion of any kind of unity in the commodity or even perhaps (?) the isolation of the commodity as a thing ‘in the market’ of exchange. I would be interested in how far he would like to take this in more detail. However, there is one danger I would flag along this way, we should pay attention to: At what point does this non sequitur, this undecipherable point of intersection (in terms of intrinsic value and market/labor causality), become a abstract rationalization for the impoverishment of the laborer (yet again)? This epistemological move would constitute the mystification in service of the bourgeois that Marx criticizes in the equivalence and free floating form of exchange. Personally, I am not decided as I think I could assist putting even more flesh to the bones that Lorenzo wants to articulate in light of contemporary philosophy. However, that would be another book. In general, I think I like many of Lorenzo’s directions but I think he has taken some lumps where a better defense and point of attack could be made for his positions. I would hope that this essay has been an attempt of one case and point of this.

I think the best Marx can do for us at this juncture in history is to provoke our sense of integrity. Should we have any values to preserve or protect the laborer or the middle class? Is lassie faire sufficient? By extension, should we have any concern for those with immediate and vital human needs and if so, at what point should we be concerned? Is the environment worthy of regulatory concern? More generally what constitutes ‘regulatory’ and what are its legitimate bounds? [Note 1] These more direct concerns still circulate around the issues Marx articulates and the potential for the oblivion of the free market to fairness (justice in the Greek sense). Is ‘fairness’ a concept we should even think together with the free market or is the free market just another name for the war of all against all, in a ‘social contract’ sense at best, and an inevitable, perpetual revolution at worst? Is the materiality of the commodity the locus of value or is value a random and ultimately disconnected concept [free floating and prone to manipulation]? These are all questions Marx and other philosophers have raised in quite intricate and thoughtful detail. We can content ourselves with platitudes about these thinkers or let the force of the original questions they posed shake our foundations.

[Note 1] For example, is The Bill of Rights a regulatory document par excellence (i.e., religion, speech, press, assembly, right to bear arms, petition, quartering of troops, search and seizure, grand jury, double jeopardy, self-incrimination, due process, jury trial (criminal and civil), right to confront and to counsel, excess bail or fines, cruel and unusual punishment, non-enumerated rights, rights reserved to states)? Do rights also effectively regulate? If so, are these the only allowable regulations? Why, especially considering the Ninth Amendment [non-enumerated rights]?

Musings

Thoughts on Philosophy, Politics, Physics, Religion, Music and Economics

Monthly Archives: August 2012

The Ryan Plan: Part 2

The Ryan Plan: Part 1

The Decision

A Comment Concerning Gay Rights

Formalism: When a Lie Becomes Truth (really)

Romney, CNN and Bain Capital

Marx Vis-à-vis Lorenzo