Adam Smith: Father of Economics by Jesse Norman

I’m very glad I read this. I mainly knew of Smith that he wrote The Wealth of Nations and a rarely read book called The Theory of Moral Sentiments; that he explained how productive a division of labor can be; that he was a very good friend of David Hume; and that he is viewed as a champion of “the free market”, especially by libertarians and so-called “conservatives” (who sometimes wear Adam Smith ties around their right-wing necks). The most important thing I learned about Smith was that he wasn’t a libertarian at all. He understood that a market economy cannot work properly without government regulation. He also knew that economic decisions cannot be divorced from politics or morality.

I’ll quote from the book’s last chapter, “Why It Matters”:

How can the benefits of markets be safeguarded and extended, and their ill-effects contained?… We need a new master-narrative for our times. We need better frameworks of public understanding, better explanations … through which we can come to terms with these issues. But to create them, we must return to the dawn of our economic modernity and to Adam Smith himself. Not to Smith the caricature one-note libertarian alternately celebrated by his partisans and denounced by his detractors, but to what Smith actually thought, across all his writings, from ethics to jurisprudence to political economy…

The real Smith was not an intellectual turncoat who switched from altruism in The Theory of Moral Sentiments to egoism in The Wealth of Nations. He was not a market fundamentalist, an economic libertarian, or in that strong sense a laissez-faire economist. He was not an advocate of selfishness, … the creator of homo economicus or the founder of predatory capitalism… He is rightly called the father of economics, conceptually because he was the first to put markets squarely at the center of economic thought, and practically because there are few if any economists … who do not stand in his intellectual debt….But his political economy ranges far wider that economics alone, and he could with equal justice be considered one of the founding father of sociology….

For many people, Smith’s political economy will always hold center stage; both as a model of economic analysis and for his specific insights into human behavior, markets, trade, specialization and the division of labor, taxation and the negative effect of subsidies, bounties and protection. Others will admire his moral egalitarianism, his feeling for the underdog, his belief in the importance of dignity and respectability to people’s status and sense of self, the way he minimizes inequality within his “natural system of liberty”, his devastating attack on crony capitalism, his … theory of human development, his historical analysis of the supersession of feudalism by commerce and his extremely subtle exploration and defense of commercial society… Still others will recognize the foundational importance of his theory of moral and social norms….

We have a president who ignores moral and social norms, whose greed is without limit and who fully embraces crony capitalism. But he’s a Republican, so most people would say he’s following in Adam Smith’s footsteps. That does Smith a disservice. The truth is that a progressive Democrat like Senator Elizabeth Warren is much closer to Smith. She believes in capitalism but understands that the government has a crucial role in making sure markets work for the benefit of society as a whole. That is pure Adam Smith.

Advertisements

Can Democracy Work?: A Short History of a Radical Idea, From Ancient Athens to Our World by James Miller

The question in the title implies that democracy hardly ever works as it’s supposed to. That is one of the author’s conclusions. Another is that, even though the trend toward more democracy in the world has reversed in recent years, “government of the people, by the people, for the people shall not perish from the earth”.

The book begins with chapters on the ups and downs of Athenian democracy, the French Revolution, and America between the revolution and the Civil War. Next there are two chapters that summarize developments in Europe, America and Russia, including the Chartist working class movement in Britain; the Paris Commune of 1871 and the Russian Revolution. Woodrow Wilson’s academic writings on government and his efforts to make the world “safe for democracy” receive special attention, as do public opinion polls and the practitioners of “public relations”. The final chapter deals with recent events, beginning with the election of our current president and the mass demonstrations that immediately followed his inauguration. It concludes with an examination of “the advance and retreat of democracy worldwide”.

Throughout the book, Miller analyzes the tension between democratic ideals and the reality of governing a population that couldn’t fit into a traditional New England meeting house. How should the “will of the people” be discovered? How much leeway should the people’s representatives and other government officials have, since the voters cannot and should not make every decision? Miller also points out that there is much more to democracy than simply counting votes. A free press is necessary, for example. So is the right to a decent education. Given the complexity of the modern world, the absurdly unequal distribution of wealth, the amount of secrecy governments practice, and the manipulation and disinformation we are all subjected to, nobody should be surprised that democracy often seems inadequate to the role it’s supposed to perform.

I’ll finish with two quotations from the book that are especially relevant to our current situation.

In 2004, the political scientist Samuel Huntington “analyzed what he took to be the long-term implications of demographic and cultural trends on America’s sense of national identity”. He argued that “one very plausible reaction” to the declining “hold of white, Anglo-Saxon, Protestant men on the levers of political power” would be:

the emergence of exclusivist sociopolitical movements composed largely but not only of white males, protesting and attempting to stop or reverse these changes and what they believe, accurately or not, to be the diminution of their social and economic status, their loss of jobs to immigrants and foreign countries, the perversion of their culture, the displacement of their language, and the erosion or even evaporation of the historical identity of their country. Such movements would be both racially and culturally inspired and could be anti-Hispanic, anti-black and anti-immigration. They would be the heir to the many comparable exclusivist racial and anti-foreign movements that helped define American identity in the past [and] have enough in common to be brought together under the label “white nativism” [224-225].

The second quotation is from Václav Havel, the Czech dissident and eventual president of Czechoslovakia and the Czech Republic, writing in 1991:

“I am convinced,” Havel remarked, “that we will never build a democratic state based on rule of law if we do not at the same time build a state that is … humane, moral, intellectual and spiritual, and cultural. The best laws and best-conceived democratic mechanisms will not in themselves guarantee legality or freedom or human rights — anything, in short, for which they were intended — if they are not underpinned by certain human and social values”. And here Havel is insistent: “I feel that the dormant goodwill in people needs to be stirred. People need to hear that it makes sense to behave decently or to help others, to place common interests above their own, to respect the elementary rules of human coexistence” [243].

Or a substantial minority of white nativists could use supposedly democratic procedures to elect a person who never places common interests above his own and is blatantly contemptuous of democracy and the rule of law.

How Democracies Die by Steven Levitsky and Daniel Ziblatt

The authors are professors of government at Harvard. Their thesis is that democracies don’t usually die because of coups or violent revolutions. They usually die when leaders take advantage of their nation’s established procedures to give themselves more and more power. For example, a political party will pass laws that make it so easy for them to win elections that they no longer face meaningful competition, or a ruler will assume temporary emergency powers because of a crisis but never give up those powers.

How Democracies Die shows how easy it can be to make the transition from democracy to authoritarianism. All budding authoritarians need to do is break the unwritten rules, the norms of behavior, that make a democracy work. If enough unwritten rules are broken, a democratic government will no longer function. Anti-democratic laws will be passed, ideologues and cronies will be put in positions of power, opponents will be jailed or exiled. Democracies can disappear either gradually or quickly. The authors provide examples from around the world.

They also call special attention to the behavior of the Republican Party in the last twenty-five years. Leaders like Newt Gingrich, Tom DeLay, Mitch McConnell and our current president have all broken rules without necessarily doing anything illegal. The result has been an accumulation of power inconsistent with majority rule.

When American democracy has worked, it has relied upon two norms that we often take for granted — mutual tolerance and institutional forbearance. Treating rivals as legitimate contenders for power and underutilizing one’s institutional prerogatives in the spirit of fair play are not written in the American Constitution. Yet without them, our constitutional checks and balances will not operate as we expect them to [212].

The authors foresee three possible outcomes of our current political crisis. The most optimistic is that there will be a rebirth of democracy in reaction to the Trump presidency. The Democratic Party will be energized, the Republican Party will become less extreme, and “the Trump interlude [will] be taught in schools, recounted in films, and recited in historical works as an era of tragic mistakes where catastrophe was avoided and American democracy saved” [206].

The least optimistic is that America’s government will become increasingly authoritarian, possibly in response to a national security crisis. They believe this “nightmare scenario” isn’t likely, but it isn’t inconceivable either: “It is difficult to find examples of societies in which shrinking ethnic majorities [in our case, white Americans who call themselves Christians] gave up their dominant status without a fight” [208]. Resistance to creeping right-wing authoritarianism could lead to “escalating confrontation and even violent conflict”, which would bring more repression in the name of “law and order” [207-208].

They consider the third alternative the most likely:

… polarization, more departures from unwritten political conventions, and increasing institutional warfare — in other words, democracy without solid guardrails… When partisan rivals become enemies, political competition descends into warfare, and our institutions turn into weapons. The result is a system hovering constantly on the brink of crisis [208-212].

In order to avoid this outcome, the authors believe the Republican Party needs to be “reformed, if not refounded outright”. It must “marginalize extremist elements”; “build a more diverse electoral constituency”; “find ways to win elections without appealing to white nationalism”; and “free itself from the clutches of outside donors [like the Koch brothers] and right-wing media” [223]. They also believe that it would be counterproductive for Democrats to fight fire with fire, to behave as badly as Republicans have.

I think the only way the Republican Party will be reformed or replaced is if the rest of us become so fed up that the Republicans suffer devastating electoral losses, and that the Democrats use their improved position to address urgent issues, in particular, rising inequality. That might encourage “conservatives” to start behaving like conservatives again, instead of like radicals. America might then have a normal center-right political party again. Stranger things have happened.

Everybody Had An Ocean: Music and Mayhem in 1960s Los Angeles by William McKeen

I’ll quote a few blurbs from the back of the dust jacket and then add a few thoughts.

A widescreen, meticulously researched account of how Los Angeles — the seedbed of surf pop and folk rock — became the epicenter of American music in the 1960s. McKeen follows the thread from the Beach Boys’ sunny innocence to Manson’s noir horrors — via Phil Spector, Jim Morrison, and a supporting cast of hundreds — and brings the music of the City of Angeles brilliant to life. (Barney Hoskyns, author of Waiting for the Sun and Hotel California)

Everybody Had an Ocean offers a detailed snapshot of the creative fertility, debauchery and importance of a signal moment in pop music history. Highly recommended. (Charles Granata, author of Wouldn’t It Be Nice)

… a fascinating, hypnotic look at the underside of the California dream. With smooth prose and keen reporting, William McKeen peels back the facade of peace and love and thoroughly examines the dark heart behind a generation of music… (Michael Connelly)

… Once again, the Beach Boys reign supreme. (Douglas Brinkley)

As the title suggests, Everybody Had an Ocean concentrates on the Beach Boys, especially Brian and Dennis Wilson. But all kinds of musicians appear, including Bob Dylan and the Beatles. If you already know a lot about a particular musician or group, you probably won’t find much new here. The main thing I learned about the Beach Boys was that Dennis Wilson and Charles Manson spent even more time together than I realized. On the other hand, I learned quite a bit about Jan and Dean, the Mamas and the Papas, the Byrds and the Doors (as well as the Manson “family”).

The book’s prose is not “smooth”, however. The author often resorts to distracting clichés and slang expressions, especially when he’s discussing who was having sex with who. In general, it could have used a better editor. But if you’re interested in the music of that time and place, Everybody Had an Ocean is worth reading.

How Fascism Works: The Politics of Us and Them by Jason Stanley

Jason Stanley is a philosophy professor at Yale. He previously published a book called How Propaganda Works. His new book is a guidebook to fascism. He doesn’t spend much time on its history. His purpose is to explain how fascism and similar approaches to politics work.

The mechanisms of fascist politics all build on and support one another. They weave a myth of a distinction between “us” and “them”, based on a romanticized fictional past featuring “us” and no “them”, and supported by a corrupt liberal elite, who take our hard-earned money and threaten our traditions. “They” are lazy criminals on whom freedom would be wasted (and who don’t deserve it, in any case). “They” mask their destructive goals with the language of liberalism or “social justice”, and are out to destroy our culture … and make “us” weak. “We” are industrious and law-abiding … “they” are lazy, perverse, corrupt and decadent [188].

Among the mechanisms Stanley cites are: the idea that some kinds of people are inherently better than others; the creation of a mythic past; the widespread use of propaganda; the promotion of conspiracy theories; the use of contradictory statements to demonstrate power and obscure reality; anti-intellectualism; encouraging feelings of victimhood among the majority population; the celebration of law and order and military might; and respect for “traditional family values”.

Stanley doesn’t spend much time on the economic aspects of fascism, except for fascism’s general opposition to labor unions. Perhaps it’s enough to say that fascist leaders are authoritarians and wield extraordinary power over economic affairs. One possible problem with the book is that his use of contemporary examples may suggest that there is no significant difference between fascism and contemporary conservatism (or whatever we should call the reactionary politics of today’s Republican Party). His point, however, is that contemporary “conservatives”, in particular the current occupant of the White House, exhibit behavior that matches many of the distinctive behaviors of history’s best-known fascists.

Finally, one aspect of fascism that sets it apart is what Stanley calls the “Führer Principle”:

The father, in fascist ideology, is the leader of the family; the CEO is the leader of the business; the authoritarian leader is the father or CEO of the state. When voters in a democratic society yearn for a CEO as president, they are responding to their own implicit fascist impulses.

The pull of fascist politics is powerful. It simplifies human existence, gives us an object, a “them” whose supposed [defects highlight] our own virtue and discipline, encourages us t oidentify with a forceful leader who helps usmakese sense of the world, whose bluntness regarding the “undeserving” people in the world is refreshing…. If the CEO is tough-talking and cares little for democratic institutions, even denigrates them, so much the better. Fascist politics preys on the human frailty that makes our own suffering seem bearable if we know that those we look down upon are being made to suffer more [183].

Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America by Nancy MacLean

If you want to understand American politics, read this book. Professor MacLean is the William H. Chafe Professor of History and Public Policy at Duke University. Democracy In Chains was a finalist for the 2017 National Book Award and was named by The Nation as the most valuable book of the year.

The book is “deep history” because MacLean delves into the relatively obscure career of an American economist named James Buchanan. She shows how Buchanan’s teachings, beginning in the 1950s, were adopted by right-wing ideologues and eventually came to dominate the thinking of wealthy, powerful and well-connected Republicans all over America.

She uses the phrase “radical right” because today’s Republican Party is radically different from the Republican Party of the 1950s. The party’s leaders used to be conservative. Now they’re bound to an ideology that elevates property rights over almost all other considerations.The party’s guiding principal is that any infringement on a person’s right to accumulate wealth is inherently unfair. Human freedom consists in making money and holding on to it. Nothing is more important when it comes to political policy. In fact, taxation is only justified for national defense and otherwise maintaining order. This is not a conservative position. It’s a so-called “libertarian” position that translates into extreme policies unacceptable to most Americans.

There is indeed a “stealth plan”. MacLean shows how this plan was developed,  and how it was paid for by people like the billionaire Charles Koch. Its goal is to make the United States a very different country. She explains how various academics, lawyers and political operatives, often working for right-wing publications, business groups or think tanks, have been working together for decades to move America to the right, while being secretive about their ultimate goal.

Their many public goals are well-known by now. These goals include lower taxes for the wealthy, minimal regulation of business activity, less funding for social programs (the ones that can’t be eliminated entirely), greater influence of money on our politics, and the privatization of as many government services as possible, including schools, prisons and the military. They also support ever-increasing spending on the military budget and fewer restrictions on the police, so that everyone, here and abroad, is kept in line.

Their overarching goal is much less publicized. It’s to interfere with majority rule. The economist James Buchanan argued strongly that the majority cannot be trusted. Most people want the government to do things that benefit the nation as a whole. They like well-funded public schools, well-maintained public roads, government assistance for the poor, decent medical care for the sick, and clean air and water for everyone.

But those things have to be paid for. That means the government has to collect taxes. Taxes, however, are unfair, since they involve taking property (i.e. money) from people who would rather keep it. Therefore, Buchanan and his ilk concluded, the wrong people should not be allowed to vote. And if the majority does vote for “non-libertarian” policies, the courts should rule those policies unconstitutional. Thus, we see voter suppression and gerrymandering, and undemocratic actions like changing the rules so that newly-elected Democrats will have less power when they take office.

At times, the story MacLean tells is hard to believe. But the story is true. I’ll conclude with an example and a summary from Professor MacClean:

Again and again, at every opportunity he had, [Buchanan] told his allies that no “mere changing of the political guard will suffice”, that “the problems of our times require attention to the rules rather than the rulers. And that meant that real change would come “only by Constitutional law”. The project [i.e. the stealth plan] must aim toward the practical “removal of the sacrosanct status assigned to majority rule”... [184].

“Who will care for America’s children and the elderly”, [historian Ruth Rosen] asks, now that … “market fundamentalism — the irrational belief that markets solve all problems — has succeeded in dismantling so many federal regulations, services and protections?” But the cause [i.e. the plan] would argue that it has answered that question over and over again: You will. And if you can’t, you should have thought of that before you had kids or before you grew old without adequate savings. The solution to every problem … is for each individual to think, from the time they are sentient, about their possible future needs and prepare for them with their own earnings, or pay the consequences [221].

That is the kind of thinking we, the majority, are up against.

A Spy Among Friends: Kim Philby and the Great Betrayal by Ben Macintyre

This is the interesting story of the Cambridge Five, five graduates of Cambridge University who worked for the British government from the 1930s to the 1950s while they spied for the Soviet Union. Kim Philby was the most successful of the group and is the author’s principal subject. Philby was a double agent for 20 years, working for the British security services while delivering massive amounts of information to the Russians. The secrets he passed to the Russians resulted in many operations being blown and lots of people being killed. Eventually, he fled to the Soviet Union (although it’s very possible that Britain’s MI-6 encouraged him to leave in order to save the British government a great deal of embarrassment).

Philby and his fellow spies (Donald Maclean, Guy Burgess, John Cairncross and Anthony Blunt) all became convinced at Cambridge that the Soviet Union had the best available political system. That made it relatively easy to recruit them in service of the Russians. Three of them lived out their lives in Moscow. None of them were ever prosecuted for spying.

The principal theme of the book is that the Cambridge Five were able to remain undiscovered for so long because they were comfortable members of the British ruling class. The security services and the Foreign Office were primarily run by other members of the upper class who presumed that the men they worked and drank with were gentlemen and would never betray their country.

After Philby confessed to spying for the Russians, he could have been returned to England for prosecution or even assassinated. But he was permitted to circulate freely until he defected one night, boarding a freighter bound for Odessa. Other spies weren’t treated so gently:

I mention the fate of less favored traitors who did far less than Philby but spent years in prison for it.

“Ah well, Vassall –well, he wasn’t top league, was he?”

(John Vassall, homosexual son of an Anglican parson and clerk to the naval attaché at the British Embassy in Moscow, was sentenced for eighteen years for spying for the KGB.)

Mr. Vassall had not attended Eton or Cambridge, as Mr. Philby had, and never belonged to the right gentlemen’s club.