Primitive Accumulation, Negative Externalities and Growth

Over the years, Stefano Bartolini has modeled economic growth, showing that whereas most models of economic growth feature accumulation and technical progress as engines of growth, a third engine is needed to ensure self-perpetuating economic growth. History, the theory of Polanyi & Hirsch, and Bartolini’s models suggest that third engine is 2 negative externalities that combine to drive growth: 1) positional externalities, and 2) externalities that reduce social and natural capital.

Pagano 1999 defined a positional good: consumption by an individual of a positive amount of a positional good involves the consumption of an equal negative amount by someone else. Power and status are fundamental positional goods; others include education and housing.  The positional goods/services/externalities theoretical tradition extends from Veblen 1899/1934 and Hirsh 1976. In addition to Bartolini, Robert H. Frank (“Falling Behind”) has continued to explore this tradition as well as Bowles and Park 2002, Schor 1998, and Corneo and Jeanne 2001.

“Industrial revolutions are the paradigmatic example of this (Growth as Substitution) mechanism: they are the most striking processes of labor supply and accumulation increase because they are the most striking processes of social and environmental devastation recorded by economic history” (Stefano Bartolini, “Beyond Accumulation and Technical Progress: Negative Externalities as an Engine of Economic Growth.” 2003: 9).

Williamson 1995, Krugman 1995, and Bartolini et al have shown that the transition to an industrial economy has always been associated with explosive growth in the labor force participation rate.

Such growth-propelling negative externalities are discussed within the Marxist tradition as primitive accumulation. To further explore: The relationship between primitive accumulation and other capitalist strategies of promoting profit-restoring growth to the point of increasing contradiction / social and environmental irrationality.

Bartolini’s growth-model can better explain the failure of conservative economics’ predicted relationship between growth and happiness (Bartolini 2003). Inter alia, political scientist Lane 2000 shows that American growth is not associated with increased happiness.

The How & Why of Privatization Touts

At the Ivies, the students are instructed by only the most high-status, most fail-tastic privatization marketeers (AKA conservative economists) that only the best-funded gentlemen’s networks can float.

How privatization and class warfare is sold to future US leadership: with lies, covering obscene kleptocracy and its further socialized costs.

Note: Larry Summers may have long since lost his royal Harvard throne, but not just because of his sexism (the putative cause) and racist ecological imperialism (There’s that too.), or even just being an evil overlord of the rampant social, economic and environmental mega-destruction that is neoliberalism. Rather, his Harvard departure is likely due to this: Summers decided to use Harvard funds to pay the costs (The US Justice Department fined Shleifer $26.5 million) of Andrei Shleifer’s massive kleptocratic privatization profiteering in post-communist Russia.

Yee-ha! Good ole fancy boys! Creme de la…uh… I’m guessing Summers himself has enjoyed many, many such back-scratching indulgences over the years, and it’s all par for the course for that highly-oiled and polished ruling mafioso. What was that? Did someone mention Goldman Sachs owns the Fed and the US government? You don’t say. Now what were we talking about? Berlusconi?

Harvard University: You will never find a more wretched hive of scum and villainy. We must be cautious.

Dean Baker’s Critique of Capital Rents

I think “The Rent is Too Damn High” is one of Dean Baker’s best arguments.

But still, Desai’s critical examination of the limitations of the conservative Anglo interpretive and political tendency applies. She recalls the limited sociological imagination that emerged in Britain in response to the Great Depression:

“(During the Great Depression) the ‘responsible and judicious’ British intellect saw the new political task and sought to harness all its native (liberal and individualist) resources to its fulfilment…Thus in Britain, as Elizabeth Durbin has shown, the newly founded microeconomics was used to justify state intervention so as to increase social welfare and the Fabians, who constituted a distinct segment of the new intellectual stratum and who had already examined and rejected Marxism, used it in their theory of ‘rents’ and ‘unearned incomes’ to justify socialist goals” (Desai 1994: 47).

Crisis is based in Maldistribution

In “Celebrating Consumption,” Sasha Lilley (“Against the Grain”) interviews (and clarifies) economic historian and “residual marxist” James Livingston’s study of the structural problems of capitalism.

Lilley’s clarifications are integral to this discussion, because Livingston’s project seems to be taking Marxism and rebranding it and making it palatable to Cold War-scarred, pro-capitalist and Judeo-Christian Americans. While this ambition I think creates problems in his diagnosis, on the other hand, it must be said that Dr. Livingston nonetheless seems to be a remarkably gracious gentleman and a scholar. For now, I think it would be unsporting to begrudge him his reframing experiments.

Private investment is not key to productivity or growth in capitalism

Livingston:

Empirically,
Private investment is not historically key to increasing productivity, to growth in the US.
Private investment has been atrophying since 1910.
What has increasingly promoted growth is consumer spending, government spending (officially classified as investment), residential investment.

Against Brenner, the problem with the decline of manufacturing in the US is not the loss of productivity, but the loss of wages and unions, leading to the maldistribution of income and wealth.

In view of the historical evidence (private investment atrophy), what happens when we drop the assumption that private investment is key to growth? What kinds of policies can we work on that move us out of crisis mode?

Livingston’s use value-exchange value discussion (TBD)

To get to innovative policy formation, we need to address a cultural block. Livingston: to advance structural development, we have to address the moral question. We need to move from attaching income to waged work to attaching it to need. The cultural revolution Livingston advocates: Making things should not be so important. “People deserve an income that allows for a decent, humane life, that allows for freedom, mobility, dignity.”

Lilley points out that that’s communist (From each according to her abilities to each according her needs). Livingston would prefer to identify this value as historical religious culture.

Livingston observes that crisis arises in capitalism as we socialize risk but let the 1% decide everything. Where bankers won’t invest, we need to socialize our ability to use the tremendous store of wealth.

Toward market socialism: We collectively decide, will this investment create the kind of jobs that afford everyone a decent, humane and dignified life? Use value re-enters politics.

Talk About Repression: Weber! Nietzsche! Freud! Anybody but M__x!

Crises are problems internal to the economic structure. According to Livingston, the problem is the distribution of income. There is too much surplus capital. Crisis is not a problem of money, monopoly, the Fed’s choices, or morality.

Why do Americans lean so heavily on the morality explanation? Livingston follows Weber, blaming this dependence, this urge to personify the cause of crisis, on the Protestant ethic. But the Weberian approach plays a larger role in Livingston’s explanatory scheme. Repressive protestant culture is the cause of, or primary impediment to Americans’ inability to switch out of crisis-prone economic relations to a more rational, constructive grasp of work and wealth distribution.
What can replace Protestant repression?, he asks. What can transform our characters? His overdetermined answer is a more libidinal culture. Livingston wants to start by valorizing the libidinal culture that currently exists–as is promulgated by advertising and consumer culture.
However, empirically, it’s very hard to say that such libidinal culture hasn’t been emphatically encouraged and harvested–and we have the austerity agenda. If Livingston is attempting a reframing experiment, I fail to understand the strategy in that I fail to understand how a political historian’s weight can modify the trajectory of the great mass of marketeers’ raison d’etre. Consumer spending and advertising have been dominant cultural institutions (See Michael Dawson’s The Consumer Trap.), and they have not freed us from Protestant repression–and I doubt they can be hitched to anti-austerity. I would argue that is because repression and libidinal excess are two sides of the same coin, capitalist culture in dialectic. They do not exclude one another. They constitute each other as two ends of a cultural teeter totter. But it’s possible there’s a strategic grappling hook in there.

Here is Ehrenreich’s alternative theory on what needs changing in US culture (elite belief in and reification of a “culture of poverty”)…that I think could get us to a rational approach to work and distributive justice. (It also contains of story of how neoliberalization happens to good socialists who just want to be heard…but at what a price.)

2nd part of Livingston’s book: It kind of goes off the rails

It is Livingston’s market-aficionado thesis that commercial culture is liberatory and solidaristic. Commercial culture is disfigured utopia, but tells us that after work is when we become unalienated, and advertising reminds us of that. Livingston feels that this is culturally important because work should not define us. Basically, commercial culture, he feels, can lead to libidinal liberation.

Lilley reminds us that advertising touching on and co-opting desires isn’t the same thing as unleashing desires. We can contrast Livingston’s capitalist dichotomy, ascetic Protestantism / libidinal carnival, to Marxist Epicureanism. Elaine Scarry’s The Body in Pain is much, much better than Livingston on the psycho-social / cultural theory of work and making. Perhaps because she’s not afraid of M__x.

Purchasing commodities is social, Livingston insists.

Citing consumer movements, Livingston argues that consumption does not negatively impact the environment. If consumers have requisite income, then they reduce their footprint (modified Bruntland argument). That is not a strong argument, see Jevon’s Paradox, ecological footprint/slaves analyses. I don’t know why anti-austerity should entail abandoning the headway the Left has gotten from Red-Green coalition-building.  That seems unstrategic.

Another Anglo Fabian in want of a Marxist backbone?

Livingston’s arguments can at times seem to be overblown sophistry or excessively solicitous of current hegemons. But he’s trying to do interesting things, seeing ways of looking at capitalism’s problem institutions (the capitalist Protestant Ethic abstemiousness/libidinal commodity consumption–which he doesn’t recognize as intertwined) as potential sites of market socialist development. I think though that James Livingston would be more effective if he re-read Scarry, picked up Dawson, checked out Epicurean ethics, and if he engaged Sasha Lilley as his co-author.

…Or maybe I just need to write an article on the Marxist approach to making / unmaking, production and consumption, as an alternative to the austerity dogma. Eureka.


“Such discrete, theoretically-unintegrated critical impulses attacked the irrationality and inhumanity of capitalism. The common aim was to reform it piecemeal into a more rational and human social order in which inequalitites of wealth and incomes would be drastically reduced and democratic rights extended and substantiated, and in which the still-marginalised and -alienated working class would be integrated into the political system. In a(n Anglo) cultural landscape dominated by laissez-faire Liberalism, these concerns made a shift from individualist to collectivist thought a ‘necessary intellectual adjustment’ on the part of the more socially conscious liberal intellectuals. This was the common temper of the New Liberals as well as the Fabians” (Desai 1994: 47, describing the conservative Anglo inteligensia’s tepid and temporary “radicalization” to Fabianism in response to working class disruption).