Friday, March 31, 2006

Mechanics of history

Yes, economics is a dreary, peripheral subject. Should talk about something more essential but it has been on my mind lately listening to the shrill, shortsighted political discussion in Finland and elsewhere in the West. An interesting dichotomy in fact echoing larger, deeper themes: the discussion is shrill I think largely because there is such a clear political and social consensus that increased marketization is not the direction we should go. Yet, it is the direction: mechanics of history at work.

Defenders are shrill because powerless, the cheerleaders of change shrill because in minority and intellectually shallow: both at heart bystanders, witnesses to history. Debate does not much matter, it is more a concequence than a cause. Blind structural change, change that is born from the logic of the chaotic situation, easily beats all reason and democracy. I don’t much blame the new elites or the loud irrational voices around them. People don’t use power, power uses people: you get a role, briefly, you get your lines and your moment, and then it’s over, power moves on. Institutions have a life of their own, a life span of their own, powered by an ever changing cast of individuals focused on the short views, the claustrophopic decisions.

Surely, echoing Frederic Manning, history is not only a crime, it is also a punishment for a crime. Yet, how harsh should we be in our self-condemnation? It is not easy to think of any individual as completely innoncent - but also not as completely guilty: we are animal creations of circumstances, not naturally suited for reason, moderation and mercy. The more you contemplate humanity, the more you think of us as a powerless, migratory species, destined for disaster – destructive, fearful and cruel no doubt, but eternally also hoping for improvement, for a transformation, working ineffectively towards it.

Who knows, it might not be beyond us in the end. In the meanwhile we struggle on, focusing on the short or the long views, varyingly guilty, varyingly innocent. Perfectly poised between hope and despair. With enlightenment, moral and ethical awareness and responsibility, many have embraced hope, progress and transformation but we should not be too judgemental of those who have the short views, roles dictated to them by harsh power, those more guided by fear than hope. In these iron structures no-one can afford moral superiority, all are tainted, all innocent.

Thursday, March 30, 2006

Economics of reason

I believe it illustrates this certain general slowness on the part of the free market fundamentalists that they have not thought of asking the obvious counter question to my previous posting, namely what would then disprove my conception of economics? Maybe even luckily for them as it would not really be a showstopper. So, let us continue unasked and describe how one should rationally deal with economical questions. First of all I must say that I don’t regard the economical arrangements of a society as any fundamental question about its nature. To quote a famous pioneer of capitalism “all cats are dark in the night – it only matters if they catch the mice”. I would use economical structures pragmatically as tools to maximice liberty in the society (from all constricting structures such as extreme poverty, steep unequality of social status, having freedom to think and organize politically, freedom to develope according to one’s abilities and inclinations, freedom from irrational power and belief structures etc. etc.). All constellations in our chaotic history are pretty unique: you can’t beforehand have an exact blueprint on which particular arrangement in a given historical moment would be the best. You have to rely on empirical observation and reason.

Currently the debate centres on the roles of the state and the market forces. The market fundamentalists have a very primitive slogan: “government bad, market good”. This regardless of actual empirical observations, actual situations - the Grand Theory tells them what to see and what to do, and what not to see, no counter arguments are accepted as legitimite. As I already wrote in a previous comment: these two need each other to work, especially the free market desperately needs the strong state to keep the playing field level and the competition honest and free. But even more importantly, these questions should be resolved without existing bias. Sometimes government action is far better and more efficient than the market forces. Often of course this is not case, especially in the traditional "purely" economical fields. But not always even there. We should not let ideology and irrational blind faith predetermine our decisions. It is very unfortunate that this dangerous, disastrous and reckless attitude is spreading so rapidly in our societies.

So, we should balance the roles of government and the market forces rationally on case by case basis. There are areas where the market forces are inherently quite unsuited – namely the areas where values are not best measured in money and profits, where overproduction is sometimes crucial; in areas where human value and dignity are paramount, such as health care and education, the market forces should be strictly guarded and given only a very limited space to operate. But they still can be harnessed even there to do the work for which they often are very suitable: to maximize long term productive efficiency. Unguided and unregulated they tend to devalue and dehumanize these sensitive areas (the same goes of course for the security field) leading to gross distortions and endangerment of liberty. On the other hand on the level of individual private interactions the state is usually not a very useful direct player. To concentrate too much power into same hands does not only lead to inefficiency but also to abuses and misrule. We have to be accordingly very careful when deciding into which private areas we can allow government safely to intervene. So, to encapsulate: firstly, I don’t have an all encompassing economic theory that would predetermine my attitude before seeing the particular state of affairs, the particular constellation, and secondly, my specific positions can easily be proven wrong using empirical observation and logical reasoning. Economics as non-religion.

Tuesday, March 28, 2006

On closed belief systems

I suppose it is a measure of my current lack of focus on very meaningful things that I have lately been having repeated arguments with free market enthusiasts. Not a very fruitful nor entertaining activity as they usually are not the most intellectually inspiring thinkers. In any case, I have now been reminded several times why I used to so much dislike Freudianism - there was no way to disprove the argument, the position was formulated in such a hermetically closed fashion that there simply was no way to prove it wrong. There was no falsifibiality. Now the free market fundamentalism goes about like this: the markets work absolutely perfectly. Fullstop. Then you go and say that no they don’t, what about this and this. Well, the answer always goes, no matter what's the specific point, that that’s a concequence of the fact that the markets are "artificially" prohibited from working perfectly. Beautiful. My question would be what kind of an empirical or logical observation would then disprove this free market theory? Out of sheer perverse curiosity: what would it take?

Of course the actual fact is that even when the markets would be allowed to operate at full efficiency (a logical impossibility in itself) they never would do it. It is too often in the rational interest of market operators not to go for full free competition, or in the irrational interest for that matter. There are all sorts of inherent psychological and cultural hindrances that will permanently prohibit market from functioning “purely”, as in a void – or a laboratory. The world is not a void. Or a laboratory. Concequently there is then no such thing as a perfect market, and there never will be. That should be the starting point of all debate. But that does not count as a legitimite counter argument at all for those that have embraced the faith. Excactly like no observations ever penetrated orthodox Freudianism or Marxism-Leninism. They were outside all rational debate – not a good thing to be for a philosophy or a political ideology but there you go.

Friday, March 24, 2006

The good old times when we sang Horst Wessel

Finland is a unique country in the West in the sense that our 1970’s generation of student radicals turned towards orthodox Marxist-Leninism and the Soviet Union and not towards more utopian socialist traditions. Even more curiously they largely embraced the “Stalinist” minority faction of the Finnish Communist Party and not the more independent minded majority. (It is debatable to what degree the quotation marks are in order: in spirit that faction had a direct genealogy from the Stalinist mentality hardened and traumatized by the embraced purges.) In any case it was a colossal failure of intelligence and morality. Especially the latter – but in many ways quite excusable in the burning youthful radicalism, in that natural search for a fixed identity, all explaining faith.

But what I find very hard to accept is this rueful, amused nostalgia that most of the educated class and the ex-radicals themselves seem to feel about those times. There is almost a universal absence of any serious, even half-serious moral reflection. You can see the hammer and sickle on t-shirts, I would not wonder if one day there would a KGB (or even NKVD) logo on the chests of young idealistic people. Swastikas on the other hand are quite a bit more rare. I freely grant that Nazi-Germany in its brief, awful history advanced even further into the darkness, but not radically further when you think of the sheer number of the victims of Marxism-Leninism. 

Stalin’s system was actually more dangerous in the sense that it survived much longer and was thus able to murder even more people – finally even becoming the object of half-amused nostalgia, having logos on t-shirts. The names of Vorkuta and Solovetsk should lead to similar chilling, horrified feeling as Dachau and Auschwitz – for me, for many people they actually do, but there is no real public awareness of those millions of nameless graves, no real collective sense of a living historical memory. The victims and the crimes are forgotten: it seems it’s all right to murder masses of innocent people if you can disguise your bloody hysteria into few stolen enlightenment dregs.

Tuesday, March 21, 2006

Why market control is crucial for liberty

Libertarians I think are the most short sighted people around since Communism went out of business. As with their Marxist-Leninist fellow anti-social liberals, libertarians totally ignore the base, irrational human nature - which is to act aggressively, fearfully and shortsightedly especially as collectives. What would happen in a society without any progressive taxation, income levelling and strong welfare structures? A very easy question to answer: property would accumalate, there would not be money for high quality public education and healthcare. As capitalism inevitably requires losers and steep income unequality, a large proportion of the population would not be able to pay for decent, competitive education, nor would they receive adequate and effective health care. In concequence both poverty and wealth would be increasingly inherited: the children would not have anything approaching a level playing field, talent would be wasted and the lack of talent would often be rewarded just because your parents (or more likely, foreparents) would have been succesful or plain lucky in the unpredictable, irrational market conditions.

A totally libertarian society would exist for about few seconds before dissolving into mob rule and violence. Victorian type raw capitalism would speedily create class hatred, blatant injustices and political extremism. It is a natural human tendency to create monopolies and closed elites, in short injustice and bondage. This of course is just as true about the total public control of the economy as well as the grave lack of it: total concentration of public power as in the Stalinist command economy leads to irrational terror (and needs it to be established at all). The same goes for the total anarchic absence of any concentrated power. Short term personal gain wins over long term overall good: that is why capitalism works at all. That is also why those who gain by capitalism would make decisions and act in the way that would counteract the work of the free market forces: companies would establish monopolies and limit competition, individuals would buy their non-intelligent offspring high quality education and influential places in society. This is why we need the strong state and social democratic structures to mitigate the negative concequences of the market forces and to ensure that the majority benefits from the growth. Liberty requires constant protection.

Thoughts on the morning bus

Once again strange morning glimpses of the hard working modern Finland: busy, tired people on their way to work, to school. I always aim to look at our Western post-industrial civilization, any civilization, like an anthropologist would: there have been a myriad ways to live and there will be a myriad more to come. This, our current way, is just one them, and so, very, very odd, very exceptional. I look at the cars, the buildings, the street advertisements, clothes, TV programmes, and can often reach a state of pure wonder – how strange, how inexplicable that we should have arrived to this particular constellation. And how ephemeral it will turn out to be: one day, historically not a very long time from now, we will be one with Niniveh and Tyre.

There have been so many before us, strong beliefs, deep structures, self-evident truths now completely forgotten. On many levels this has already happened to my grandparents’ and my parents’ generations: the deeply rural, agricultural Ostrobothnia vanishing during their lifetimes, so rapidly replaced by the post-industrial, high-tech commercial society. In our village in January 1918 at a pietist prayer meeting was the local White Civil Guard established, very eager to fight against the Finnish Reds and Russian revolutionaries. I can just about imagine that mental and spiritual world: the sounds and smells of it, the pitch dark winter nights, horses and sledges, the burning and self-confident faith, that strange rural civilization, so permanent seeming – now one with Niniveh and Tyre.

Friday, March 17, 2006

On cats

The crucial subject of cats has already been raised in the comments sections, so why not address it upfront - I freely confess to being a serious cat lover from ever since my early childhood. In my opinion the domestic cat (felis catus) is effortlessly the highest life form on the planet. No question about that. We "have" an elegant looking (though fairly lighthearted and non-serious) grey tabby (by the the name of - well, Cat) at home. When I do home office work, he usually takes the sofa opposite me as his sleeping place, selecting variously ecstatic, deeply unconscious positions - when not eating or playing or looking meditatingly into the eternity. His life quality is about zillion times higher than ours: a clearly superior being. Strange that liberal and progressive bloggers seem to be very often cat lovers while the conservatives (along with Hitler and Stalin) seem to prefer dogs. I don't mind dogs - they are very nice, warm hearted, unconditionally obedient people, but cats simply are in a class of their own combining an esthetic, independent existence with a deep philosophic Zen unity with the world. Maybe one day we will evolve to some equivalent level but till that, there are always open positions for can openers.

Thursday, March 16, 2006

How to counter Market Leninism?

Especially in the Anglo-Saxon world there is a fairly vibrant school of thought that seriously believes that we have found the Ultimate Solution for the human condition, namely, supply and demand. The absolutely free market economy is for them the highest form of civilization: once this pinnacle is somehow achieved, all problems have been solved and all politics can end. This idea is then defended in the circular fashion that is very familiar for any person that has encountered Marxism-Leninism – there is a certain chilling disregard for the messy, contradictory polyphony of humanity, all exceptions from perfection are explained as deviations from the Absolute Model that of course does not exist, that never can exist. Humanity as a Theory of Exchange.

To counter this is not an intellectual problem at all. Exactly like Marxist-Leninists that were fairly annoying in their blind faith that was formulated to withstand all empirical observations and simple logic, the extreme libertarian-conservatives are not a serious philosophical challenge as they strictly speaking don’t really have a philosophy or only a very primitive, rudimentary one. The problem with Communism was not the correctness of the absurd doctrine, as it so obviously wasn’t correct, but the existence of actual hostile Communist power structures. Primitive or not, they certainly were there and once threatened to take over the Western world. Their very simplicity and undeniable power guaranteed a certain level of support, no matter any intellectual defeats and ridicule. Power and faith are sadly always more influential than reason and logic.

The faith in the absolute freedom of market forces is of course politically very limited: in no Western country does a major political party advocate it. In all Western countries a clear majority of the intellectuals are actually actively hostile to it. Nevertheless the liberalization of capital and the rapidly increasing globalization are leading all Western societies towards this direction. Why is that, given the little faith we actually have in it? Well, the defenders of the welfare society have one very significant disadvantage: the welfare state was based on the social democratic compromise with the market economy. It was the growth and dynamism generated by the markets that made the distribution of wealth and the building of safety nets and the guaranteeing the level playing field (by high quality public education and health care) so painfree. The very efficiency of capitalism ensured that we were also able to tend to its negative effects and were able fairly painlessly to control it.

In some ways we are then victims of our success. The market economy is indeed highly efficient, we grew very wealthy, we also grew fully integrated with market structures. Capital became the highest form of power – it generated very persuasive, very powerful organizational and mental structures. The desperate historical struggles were forgotten, the memory of the dark side of capitalism gradually faded in our comfortable and secure welfare conditions, finally even the Soviet Union collapsed and there were not very coherent and powerful counter forces remaining. The case for further liberalization was actually very persuasive: in the past higher growth had meant lessened social conflicts and the strengthening of safety nets – a minority supported the reforms ideologically, the majority pragmatically, not seeing the freedom of market as an absolute value in itself. Moreover, it has been done in small, logical steps, each leading to new ones.

So, here are we are then: successfully defeating market leninism intellectually and philosophically – but actually, historically, our societies are rapidly progressing towards more and more destructive forms of pure capitalism that are fundamentally hostile to the social liberal structures of civil society, democracy and equality. The sheer power and influence of the market structures will guarantee strong and shrill voices in favour of the change, the majority of the population is admittedly hostile but feeling powerless as no political choices seem to matter. The ideological and philosophical opposition is paralyzed: those that regonize the dependency of the welfare structures on a dynamic market economy are confused in the face of this recent and seemingly irreversible change, the radical minority is mostly living in a painless dream world or hoping for destruction and collapse.

The question then fundamentally remains unanswered: we can easily defeat intellectually and philosophically this blind faith in market forces many times over, but how do we do it politically when the enemy is not any coherent ideology or movement but the structure of historical change itself? It is easily predictable that unchecked this change will ultimately lead to its own undoing, but to wait for that is not a coherent political strategy, not for people believing in democracy and rational political action. Surrendering in the face of this challenge, is in effect surrendering any belief in rational political control of social change. A plan of effective, practical action is urgently needed: the old strategies and tools are not working, the old rhetorics are irrelevant.

Saturday, March 11, 2006

We are the hollow men

These thoughts on reading that the UPM share price rose sharply on the news of 3600 people being laid off.

What values are inherent in capitalism? I would think thrift, efficiency, transparency, respect of property law, personal responsibility, competition. What else? I think that if a company announced that it will start using selective euthanasia as a part of its pension plan, the share prise would plummet. It would be against the law and current mores, the effect would be negative. But why is that? Largely the respect of human life in the West, regardless of its productivity and station in life, is the influence of Christianity and its secular social democtratic and social liberal successors. If we would see euthanasia as morally legitimite, it would mean a cut in costs and increased profits. The stock market would automatically respond positively. Capitalism is an economic arrangement, an effective means to maximise the return on investment: it automatically seeks increased efficiency, increased profits. This is pure arithmetic; profits can be calculated, are being calculated very objectively and accurately. Return on investment is not a gray area, it is not in itself a matter of morality and ethics. They are outside influences, imported into the market economy by the surrounding society and culture.

The servant is rapidly turning into the master. Gradually we are losing our moral bearings and more and more things will get their value purely from supply and demand. Including human beings - homo economicus has been born. In some sense this is what real communism attempted: to turn people into agents of production, and production to be the sum of all things. We are getting hollow: efficient hedonistic consumers. If we are not able to earn money for consumption, if we are not productive enough, we are worthless, bad news for the stock market. That is why it was excellent for UPM that those 3600 people will lose their jobs. Admittedly it has negative concequences for the public economy: if only it would have less obligations or if it would otherwise be able to get rid of these unproductive people and their families. Maybe we will find an efficient solution some day.

Tuesday, March 07, 2006

Iron in their souls

When historians are good they are really good: Kimmo Rentola, Veli-Pekka Leppänen and other young Finnish historians have done amazing work on the tragic history of Finnish Communism. I still say tragic as hateful as I find their creed: the seeds were sown by the White terror of 1918. Of course they had a heavy responsibility in the events that led to that terrible time, but nothing justifies the crimes then committed, and a tradition of hate was understandably created by that awful repression. Iron entered their souls. Thousands, tens of thousands escaped to the promised land, the Soviet Union which in its Leninist phase was still not completely psychotic, it still contained some genuine optimism and progress. For a few years: then the full darkness descended.

Stalin slaughtered the Finnish Communists, scattered and demoralized the remnants. The paradise turned out to be a bloody, hysterical nightmare. But iron was in their souls. They had embraced the awful doctrine voluntarily, out of hatred. Those that survived (mostly in prison in Finland or fighting in Spain, some random people in Comintern and around Kuusinen) by and large did not give up the faith. And that is were my sympathy leaves them: Elvi Sinervo composing lines for the two persons killed in the Kemi strike of 1949 – what did she write of the millions murdered, that were still being murdered? Tuure Lehén, Armas Äikiä, so shrill in the service of Stalin, the killer of countless of their comrades, actively working to stalinize the democratic and Nordic Finland which would have resulted in unimaginably more suffering than the White efforts in 1918 (which ended in the democratic and orderly elections of 1919).

Their much worshipped hero Stalin was their undoing: the whole Communist movement was paralyzed and traumatized by his insanity and paranoia. The Red Army did not, was not risked to do the work for them in Finland - at every point the Communists were outplayed in non-violent parliamentary politics. The deadly pincer movement of Paasikivi and Kekkonen at the state level and the militant, self-confident social democrats in the labour organizations, work places and factories was too much for the rigid, orthodox Stalinist leadership of SKP.

Leninist flexibility and daring had been bloodily purged out of the Party, those that remained always waited for instructions, always covered their backs, never deviated from the orthodoxy even if the local reality was demonstrably not conforming to it. They had iron in their souls: first planted by the White terror, but the most awful aspect was hidden, denied, a dirty family secret – that Stalin had proven to be a far worse, far bloodier enemy of the Marxist-Leninist left than Mannerheim ever was. You could not talk about that, not really even after 1956. When the rift between the "euro communists" and the orthodox minority became institutionalized in the early 70’s, the famous big wave of the youth radicals entered a paralyzed tradition with a dead void in its centre. So much energy wasted into so worthless, so hateful ideology

Friday, March 03, 2006

Tell me, Ramon Fernandez, if you know

One of the last fading thoughts before falling asleep yesterday was of "The Idea of Order at Key West". It was the poem that introduced me to early Wallace Stevens, to this unexpected, brilliant mixture of profundity and lightness. That was back in 1998, I termed the process "falling in love", it was pure exhilaration to read those fireworks of language and thought. The blessed rage for order, pale Ramon... The theme in The Idea of Order is of course very serious: I have not encountered as concise intellectual analysis, demarcation of art and artist in a single, fairly short poem. The exposition is at times almost bone dry, theoretical, and then the text dances away with unexpected imagery and rhythm - a profound, eternal question is asked, answered or half-answered and simultaneously formed as flawless poetry, as art. This is breathtaking, joyous skill fusing form with content: meaning and language polyphonically echo in reader's mind...