Never Let A Serious Crisis Go to Waste. Philip Mirowski

       Source: Federal Reserve FOMC Transcripts, Graph created by Daily Stag Hunt

      Sometimes the best response to crisis fatigue is not an injunction to recover your flagging sense of humor, or to aspire to the status of he who laughs last. Levity might not be a universal nostrum.

      The filmmaker Adam Curtis has written in disgust, “Despite the disasters we are [still] trapped in the economists’ world.”¹⁵ Yet it will become necessary for us to differentiate the world of the economists and the world of the neoliberals. This conflation is an affliction of many on the left. A major sticking point here is that neoliberals themselves generally do not believe in the comic-book version of laissez-faire sometimes promoted by the economists. They may profess it to the masses; they may even propound it in Economics 101; but it does not characterize their sophisticated internal discussions, and is belied by their political activities.

      Moreover, advocacy of economic inequality can lead to parallel advocacy of epistemic inequality: this is something we will probe in depth in chapter 2. Readers of Foucault and his followers are familiar with the idea that neoliberalism involves a reconstruction of the ontology of what it means to be a person in modern society; where some Foucauldians have fallen down, I propose, is that they have neglected to plumb the symmetrical ontological transformation of what it means for a “market” to even exist.

      Maureen Tkacik caught a glimpse of what is disturbing about the plenitude of Monday-morning quarterbacking:

      What was easy to convey was that something about the past ten years had been unsustainable. But the truth—that an entire ideology had been unsustainable—is one that we have not yet grasped. And that is why so many journalists, economists, intellectuals and financiers now scramble to churn out books that for the most part read like the memoirs of people trying to make themselves feel less stupid. The current financial system was constructed to make us all feel stupid, and in the process of building it the architects allowed themselves to become stupid as well.¹⁶

      The crisis has not only wrought the economic insult mutely suffered by so many; it has also inflicted a breakdown in confidence that we can adequately comprehend the system within which we are now entrammeled. It has been de rigueur to denounce the antics of groups like the Tea Party, Golden Dawn, the True Finns, and the Front National; but can the left really claim it has been all that more sober, thoughtful, and incisive since 2007? The problem I grope toward in this volume is: How can people dismayed at the unexpected fortification of the Neoliberal Ascendancy feel less stupid? What would a useful intellectual history of the crisis and its aftermath look like?

      Everyone seems to champion their own personal favorite candidate for Nostradamus of the Crisis—and I will deal with this whole vexed issue of “prediction” in chapter 5—but here I want to consider those on the nominal left who long ago discarded the Marxist eschatology of the Collapse of Capitalism and the Transition to Socialism, only now to retreat to a position of unabashed professions of ignorance. To pick on one journalist at random (I will deal with the economists later), I here point at Ezra Klein:

      “Inside Job” is perhaps strongest in detailing the conflicts of interest that various people had when it came to the financial sector, but the reason those ties were “conflicts” was that they also had substantial reasons—fame, fortune, acclaim, job security, etc.—to get it right.

      And ultimately, that’s what makes the financial crisis so scary. The complexity of the system far exceeded the capacity of the participants, experts and watchdogs. Even after the crisis happened, it was devilishly hard to understand what was going on. Some people managed to connect the right dots, in the right ways and at the right times, but not so many, and not through such reproducible methods, that it’s clear how we can make their success the norm. But it is clear that our key systems are going to continue growing more complex, and we’re not getting any smarter.¹⁷

      The fact that some representatives of the “level-headed left” have felt compelled to attack the popular documentary Inside Job is itself a token of just how dire things have gotten in the interim; even more telling is the way in which fundamental neoliberal precepts concerning epistemology and the sociology of knowledge are baldly taken as presuppositions. After the crisis, professional explainers from all over the map were throwing up their hands and pleading that the economy was just too complex to understand. Better to treat the Great Recession like an Act of God, and simply move on. This is a cultural debility that predated the crisis but has worked wonders in immobilizing responses to the debacle. As described in chapters 2 and 3, and anatomized in chapter 6, the neoliberals have developed a sophisticated position with regard to knowledge and ignorance; getting a grip on how they manage to deploy ignorance as a political tool will go some distance in dispelling the onus of having been transparently duped. It may also suggest that the time has come for the left to reinvent its own plausible sociology of knowledge.

      The first step toward a history and sociology of knowledge about the crisis is to acknowledge that the intellectual response has occurred on a range of different levels, with counters situated at each level sometimes diverging in content and timescale, but eventually achieving rendezvous and resonating in such a manner as to stymie any political responses not controlled by the banks and financial sector. One must be nimble to manage these variant levels. There is the level of the culture at large, where entrenched neoliberal images of human flourishing had to confront the palpable onset of collapse of a whole way of life. There is the level of public elite wisdom, momentarily blindsided, in tandem with the Mont Pèlerin Society, which found itself enjoined to improvise new understandings of the outpouring of academic chatter concerning the world turned upside down. There is (I will insist) a general Neoliberal Playbook as to how to strategically respond to really big crises. And then there was the economics profession. While not the only priesthood brandishing the key to something they diffidently called “the economy,” it turned out that academic economists have played a critical role in the aftermath to the crisis, in a manner I believe has been poorly appreciated by both insiders and the general public. The neoliberal resurgence after the crisis has been heavily reliant upon the interplay of contemporary orthodox economists with the other levels of cultural response and elite generalist knowledge, even though no one tradition could be reduced to any other. Neoclassical economics was not intrinsically neoliberal over its entire one-and-a-half-century history; but it sure looks like they are working in tandem now. That is why this volume, in chapters 4 and 5, devotes a fair proportion of attention to what economists have said and done after 2007.

      When considering the relationship of formal economic knowledge to social movements, it has become commonplace for pundits to quote the dictum of John Maynard Keynes in the General Theory: “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”¹⁸ However stylish was Keynes’s prose, the rudimentary sociology of knowledge propounded therein has turned out badly flawed. Far from ectoplasmic missives from the late lamented, a simulacrum of a genteel Edwardian séance, the injection of economic ideas into quotidian politics has been conducted in ways both more concrete and yet more convoluted than is suggested by this rather tendentious bit of economists’ self-flattery.

      Economic doctrines rise to dominance because they have been built up from compelling intellectual trends located elsewhere in the culture, and often, in other sciences; and, in turn, depend upon promoters and funders to impress their importance upon other economists,