Where slavery thrived, inequality rules today

More than a century later, some experts say, a terrible institution is still exacting its price.

By Stephen Mihm  AUGUST 24, 2014

EARLIER THIS MONTH, Standard and Poor’s Rating Services, a credit rating firm that rarely weighs in on social issues, published a scathing report on income inequality and social mobility in the United States. The firm warned that current levels of inequality were “dampening” growth, and predicted that “inequalities will extend into the next generation, with diminished opportunities for upward social mobility.”

This unusual report on inequality, like Thomas Piketty’s best-selling book on the same subject, addresses unequal fortunes, declining mobility, and stagnating economic growth as national or even global problems, which demand similarly large-scale solutions. But scholars are also well aware that these problems vary greatly from place to place. Consider a recent, much-publicized study of social mobility by economist Raj Chetty and his colleagues at Harvard and Berkeley. As the illuminating map generated by that study shows, children born in some regions—Salt Lake City and San Jose, Calif., for example—have a reasonable shot of moving up the social ladder. By contrast, many parts of the former Confederacy, it seems, are now the places where the American dream goes to die.

Why is that true? At first blush, you might guess race could explain the variation. When the study’s authors crunched the data, they found that the larger the black population in any given county, the lower the overall social mobility. But there was more to the story than blacks unable to break the cycle of poverty. In a passing comment, Chetty and his co-authors observed that “both blacks and whites living in areas with large African-American populations have lower rates of upward income mobility.” Far from being divergent, the fates of poor blacks and poor whites in these regions are curiously, inextricably, intertwined.

Institutions are Built to Maintain, Automate Collective Action

Slavers Built Inegalitarian Institutions

Instead of chalking it up to race, recent research points toward a more startling and somewhat controversial explanation: When we see broad areas of inequality in America today, what we are actually seeing is the lingering stain of slavery. Since 2002, with increasing refinement in the years since, economic historians have argued that the “peculiar institution,” as it was once called, is dead but not gone. Today, in the 21st century, it still casts an economic shadow over both blacks and whites: “Slavery,” writes Harvard economist Nathan Nunn, “had a long-term effect on inequality as well as income.”

His work is representative of a new, more historical direction within economics. Its proponents believe that institutions devised centuries ago tend to persist, structuring economic reality in the 21st century in ways that are largely invisible. Their hope is that, by tracing these connections between past and present, they may be able to point the way toward more effective solutions to today’s seemingly intractable economic problems.

Engerman & Sokoloff’s (2002) Institutional-econ Hypothesis Explains Inequality and Economic Stagnation

IN 2002, two economic historians, Stanley Engerman and Kenneth Sokoloff, published an influential paper that tried to answer a vexing question: why are some countries in the Americas defined by far more extreme and enduring levels of inequality—and by extension, limited social mobility and economic underdevelopment—than others?

The answer, they argued, lay in the earliest history of each country’s settlement. The political and social institutions put in place then tended to perpetuate the status quo. They concluded that societies that began “with extreme inequality tended to adopt institutions that served to advantage members of the elite and hamper social mobility.” This, they asserted, resulted in economic underdevelopment over the long run.

More specifically, they observed that regions where sugar could be profitably grown invariably gave rise to societies defined by extreme inequality. The reason, they speculated, had to do with the fact that large-scale sugar plantations made intensive use of slave labor, generating institutions that privileged a small elite of white planters over a majority of black slaves. These institutions, their later work suggested, could encompass everything from property rights regimes to tax structures to public schools.

Harvard economist Nathan Nunn offered a more detailed statistical analysis of this “Engerman-Sokoloff hypothesis” in a paper first published in 2008. His research confirmed that early slave use in the Americas was correlated with poor long-term growth. More specifically, he examined county-level data on slavery and inequality in the United States, and found a robust correlation between past reliance on slave labor and both economic underdevelopment and contemporary inequality. He disagreed with Engerman and Sokoloff’s claim that it was only large-scale plantation slavery that generated these effects; rather, he found, any kind of slavery seemed to have begotten long-term economic woes.

Nunn also offered a more precise explanation for present-day troubles. In Engerman and Sokoloff’s narrative, slavery led to inequality, which led to economic underdevelopment. But when Nunn examined levels of inequality in 1860—as measured by holdings of land—these proved a poor predictor of future problems. Only the presence of slavery was a harbinger of problems. “It is not economic inequality that caused the subsequent development of poor institutions,” wrote Nunn. “Rather, it was slavery itself.”

Soares, Assuncao & Goulart (2012) clarify that not race but slavery intensity begets long-term economic inequality

This finding was echoed in a study by Brazilian economists Rodrigo Soares, Juliano Assunção, and Tomás Goulart published in the Journal of Comparative Economics in 2012. Soares and his colleagues examined the connection between historical slavery and contemporary inequality in a number of countries, largely in Latin America. The authors found a consistent correlation between the existence—and intensity—of slavery in the past and contemporary inequality. Moreover, this relationship was independent of the number of people of African descent living there today. As Soares said in an interview, “Societies that used more slavery are not more unequal simply because they have relatively more black people.”

The question, then, is how exactly did slavery have this effect on contemporary inequality? Soares and his colleagues speculated that limited political rights for slaves and their descendants played a role, as did negligible access to credit and capital. Racial discrimination, too, would have played a part, though this would not explain why whites born in former slaveholding regions might find themselves subject to higher levels of inequality.

Inequality-transmission Mechanism: Public Institutions are Stunted in Slavery Zones

The Toll of Inegalitarian Anti-public Institutions Over Time: A Dearth of Public Infrastructure Translates Inegalitarian Economic Growth into Economic Stagnation

Nunn, though, advanced an additional explanation, pointing to an idea advanced by Stanford economic historian Gavin Wright in 2006.

In lands turned over to slavery, Wright had observed, there was little incentive to provide so-called public goods—schools, libraries, and other institutions—that attract migrants. In the North, by contrast, the need to attract and retain free labor in areas resulted in a far greater investment in public goods—institutions that would, over the succeeding decades, offer far greater opportunities for social mobility and lay the foundation for sustained, superior economic growth.

As it happens, a contemporary critic of slavery took it upon himself to measure some of these differences between North and South. In 1857, a Southerner named Hinton Rowan Helper published an incendiary book titled “The Impending Crisis.” Though a virulent racist, Helper was no friend of slavery, and he quantified in excruciating detail the relative number of schools, libraries, and other institutions in both free and slaveholding states, finding time and again that his region failed to measure up to the North.

In Pennsylvania he found 393 public libraries, but in South Carolina, a mere 26. In the South, he observed, “the common school-house, the poor man’s college, is hardly known, showing how little interest is felt in the chief treasures of the State, the immortal minds of the multitude who are not born to wealth.”

Antisociological Denouement, or Even Institutional Economists are Professionally, Dogmatically Adverse to Admitting Preferences Are Socially-constructed through History

Institutionalized Hegemony Can Divorce People from Their Own Interests: Southern Whites Surprised to Find They Benefit When Public Institutions Imposed

WHAT SOMEONE like Helper may not have foreseen is that the abolition of slavery would not cure these ills. The destruction of slavery did not destroy all the political institutions, social mores, and cultural traditions that sustained it. Nor did it make public institutions, of the kind that the north had been building for decades, suddenly come into being.

This notion about the “persistence” of economic institutions is part of a larger dialogue within economics. Economists ranging from MIT’s Daron Acemoglu to Harvard’s Melissa Fisher have examined how institutions and practices adopted centuries ago can shape economic reality. But not everyone buys the idea that the past can structure the present in such an enduring, predictable fashion. Wright is among the critics of this approach; he is skeptical of Engerman and Sokoloff’s hypothesis. “The persistence of inequality per se is a myth,” he says, pointing to research that highlights the degree to which inequality has ebbed and flowed in Latin America.

Wright counts himself “unconvinced” regarding comparable claims about the United States. “No doubt slavery has played some kind of background role,” he concedes. But he sees the relationship between historical slavery and contemporary inequality as an interesting correlation, not a directly causal one. Correlating one variable with another across the centuries “isn’t the same as writing history,” he notes. “If you don’t connect the dots, you’re just groping.”

Another criticism of the “persistence” school is that it may justify passivity. If counties or countries have always been poor or unequal because of something that happened so long ago, what chance do contemporary policy makers have at deflecting the dead hand of the past?

But there is room for hope, as Wright’s own research would suggest. In “Sharing the Prize,” an economic history of the civil rights movement published in 2013, Wright found that efforts to end discrimination paid substantial, enduring benefits to black Southerners. Perhaps more surprisingly, he found that the movement benefited whites, too. Many poorer whites found that that the destruction of the old order—the end of poll taxes, for example—ushered in increased levels of public funding for schools, newfound political power, and a host of other economic, political, and educational benefits, particularly in the years immediately following the passage of the Civil Rights Act.

Positive Affirmations for Liberals

That revolution, of course, is still a work in progress. As we’ve been reminded over the last two weeks by the clashes in Ferguson, Mo., between mostly black protesters and a mostly white police force, there’s a long way to go before the vestiges of slavery are fully and finally made a thing of the past. But this new body of research may help us grasp that solutions to persistent inequality will require more focused policies. Increasing the level of food stamps, as economist Paul Krugman has suggested, might help, but it is perhaps too diffuse and indiscriminate a solution.

Instead, the best way to deal with the lingering effects of dead institutions like slavery may be to create regional institutions aimed to promoting social mobility and economic growth. Georgia, for example, has tried to level the field with the “HOPE Scholarship,” which enables high schoolers with a “B” average or higher to attend in-state public colleges and universities for free and private in-state schools at a heavy discount.

Such programs, with some modifications, could go a long way toward promoting social mobility in the former slaveholding regions of the United States. That’s not to say that the problems will be easy to solve. But the progress we’ve already made, both politically and economically, would suggest that while we may live in slavery’s shadow, we are not prisoners of the past, either.

Stephen Mihm is an associate professor of history at the University of Georgia, and co-author, with Nouriel Roubini, of “Crisis Economics: A Crash Course in the Future of Finance” (2010).

This article was published online in the Boston Globe in 2014; but as of 2019 it is no longer available online, so I have added it here. I have added my own subtitles to help Sociologists navigate through Mihm’s disciplinary metaphysics and personal politics.

References

Chetty, Raj, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez. 2014. “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.”

(Note for Community Economic Development research: Patrick Kline is the econometrician in this group. He also publishes comparative economic assessments of “place-based policies.”)

Engerman, Stanley and Kenneth Sokoloff. 2002. “Factor Endowments, Inequality, and Paths of Development Among New World Economics.” NBER Working Paper 9259.

Helper, Hinton Rowan. 1857. The Impending Crisis of the South. New York.

Mihm, Stephen. 2007. A Nation Of Counterfeiters: Capitalists, Con Men, And The Making Of The United States. Harvard.

Nunn, Nathan. 2008. The Long Term Effects of Africa’s Slave Trades. Quarterly Journal of Economics 123 (1) : 139-176.

Piketty, Thomas. 2014. Capital in the 21st Century.

Soares, Rodrigo, Juliano Assunção, and Tomás Goulart. 2012. “A Note on Slavery and the Roots of Inequality.” Journal of Comparative Economics 40(4):565–580.

Wright, Gavin. 2006. (Note: Berkeley’s Wright is retired. I cannot locate this reference. Might have to email Mihm.)

Wright, Gavin. 2013. Sharing the Prize: The Economics of the Civil Rights Revolution in the American South. Cambridge, MA: Belknap.

 

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The US is militarized because it is a global class-contested territory

There are four outlier countries in the affluent world, each characterized by an extremely high percentage of the working-class population employed in guarding property from the rest of the working-class population: Greece, the US, the UK, and Spain. Depending on how you count it, 1 out of 4 (or 5) of every US workers is guarding property from other workers. That proportion increased over fourfold in the US between the late 19th century and today. By contrast, there is only 1 guard for every 20 workers in Sweden.

Brought together, empirical analyses by Bowles and Jayadev (2007), and Gourevitch (2015)  reviewing Brecher (2014) and Mitrani (2013), identify correlates of the guard labour market & militarized police state: 1) socio-economic inequality; and 2) a strong history of class contention. Bowles & Jayadev caution that though these factors, and not others, correlate with the policed society, by themselves they cannot explain the extent of guarding and policing in a society, because in the US, guarding continued to rise as a proportion of employment even in the exceptional, lower-inequality Trente Glorieuses period following WWII and prior to 1975. However, as Gourevitch will clarify, even during the short period of reduced aggregate socio-economic inequality in the US, at a finer-grain level of analysis we recognize that inequality reduction was very patchily distributed (Fraser 2017), and quiescence was even briefer, as the Civil Rights Movement was organizing during that period to more widely distribute novel social citizenship and welfare state protections from expropriation.

Although the state is designed to protect large domestic (and some global) capitalists from expropriation, only white male smallholders enjoyed new state protection from expropriation during the short Trente Glorieuses (Fraser 2017), spurring other social groups to organize to expand those protections and state accountability to the entire working class, including African-Americans and other racialized groups, women, and indigenous peoples in the US. This organization was famously met by expanding US police forces and militaries as warfare, and it was met by politicians with carceral expansion (Murakawa 2014), contributing to continued guarding and policing expansion. Moreover, as we see below, in 1947, at the outset of the Trente Glorieuses, the US cemented in an extraordinary legal regime for hobbling working-class people in the US.

While there are surely automatic structural mechanisms, both macro and meso-institutional, favoring capital and crippling working-class people in capitalism, the briefness of the Trente Glorieuses is well explained by the extraordinary level of capitalist organizing to restrain and divest the American working class of collective action capacity, including by diverting work into guarding and militarized policing, as well as via legal mechanisms (Pistor 2019). On both sides of the pond, of course, deregulation of finance, beginning in the City of London only a third of the way into the Trente Glorieuses, permitted the reorientation of US capital from national to global class alignment, permitted inflation coordination as a form of capital strike, and thereby permitted the dismantling of working class-accountable institutions (social citizenship, the welfare state, public infrastructure) within the US state–converting nascent US state capacity to protect workers from expropriation into military, militarized policing, and guarding property, a Nightwatchman state exclusively protecting global capital from expropriation.

But why did the working class, which had developed independent, leading ideas about the good, democratic society, had been highly organized in previous decades, and had innovated and led policy in the FDR era, acquiesce to this massive state conversion, to its tremendous neutralization and increasing disadvantage? Given its former independence and leadership, why did the working class allow itself to be co-opted into a giant police force merely doing the bidding of economic Masters, circling a drain of decreasing capacity to protect itself as a class from expropriation?

There are intermediary steps to this conversion, and path-dependency can be a factor. However, if we explain the rise of the policed society by returning to the question of Why Greece, the US, the UK, and Spain (with NZ, Australia, and Belgium in hot pursuit)?  it becomes reasonable to suggest that in the late capitalist era, these places may be distinguished as the most desirable combined markets and territories from both a capitalist and labour perspective. These are the contested territories of capitalism.

The US and UK contain the globe’s leading financial institutions, all of the top four policed societies feature brash traditions of conservativism and antihuman repression targeting the working class, and Greece, the US, and Spain contain some of the globe’s most liveable territory, from a human perspective, combined with at least moderately-developed economies and institutions. I hypothesize that what distinguishes surveilled, militarized, policed societies is an ongoing history of class warfare over primo global territory. This explanation has the virtue of also explaining the observed correlates of socio-economic inequality and bursts of civil warfare. Greece, the US, the UK, and Spain are barely nations. Riddled by class and regional internal divisions, they are nations in the sense that they are cemented together by heavy resource expenditure on force and nationalism.

We can return to the issue of increasing guard labour in the US during the Trente Glorieuses with the explanation that, despite the cross-class consensual drive to continue the economic expansion initiated with high state-capital coordination during the war, the class conflict over the territory was not closed, and the domestic police force was being built out of the imperial military post-war in order for global capital to resume control of the territory by 1980. This hypothesis is confirmed by the 1947 passage of the Taft-Hartley Act, and its perpetual institutional maintenance, preserving the absolute rejection of workers’ human rights in favor of limitless, global capitalist liberty in the US. When the US built global capitalism back up following WWII (Varoufakis 2011), it was rebuilding global capitalist class collective action capacity to storm the lands that everyone wants to claim.

Because it’s capitalism, the global capitalist class has secured the hierarchical social order and regulated collective behaviour in the heavily-policed societies. Interesting follow-up project: A working-class Moneyball TM analyst would recommend the (relatively-neglected) best places for labour to migrate to based on attractive features without the Policed Four’s military level of surveillance, co-optation,  repression, thin citizenship, and mounting expropriation.

Though, a Geographic Economist I once knew said that capital follows labour. Could the working class even abandon the US, UK, Greece, and Spain in significant numbers? Or are compensating factors, and the complicating factors of migration, so overwhelmingly on the side of these four lands that the class conflict and militarization of society cannot help but lurch on?

Certainly the Anglophone model provides a steam valve in its repressive framework. It directs social subsidy to capital, incentivizing a large portion of the American working class to migrate into and through precarious small-business ownership (Nail salons!) as an alternative to suffering the obscene state-reinforced class dehumanization and unfreedoms.

**************************************************

In Lawrence 2014, pp. 205-206 are particularly succinct and poignant summaries of the stand-out manacled life of the American working class. The legal mechanisms for shackling the American working class include the following:

  1. Following its codification by US Supreme Court Justice Charles Evans Hughes in the 1937 NLRB v. Jones & Laughlin Steel Corp (affirming the Wagner Act), American law denies “the fact that the coercion and intimidation inherent in a threat of discharge (firing) are intrinsic to virtually all employment contexts” in capitalism (Lawrence 205). US law refuses to recognize and regulate capitalist powers, including capital strike.
  2. Preserving absolute private property right, Taft-Hartley section 2(5) prohibits workers from bargaining (contributing information or decision-making to) many issues affecting their work, the business, the community, and the socio-economy: layoffs, plant closings, production decisions, investment decisions, product pricing, etc.
  3. Enforcing “Right to Work” TM laws, Taft-Hartley section 7 enables vulnerable workers to forfeit to state-protected, politically-mobilized, wealthier employers the workers’ own, human collective action capacity.
  4. Taft-Hartley section 8(b) prohibits the following repertoire of worker solidarity and collective action: sympathy strikes, solidarity strikes, support strikes, industry-level agreements or cross-class planning (in an industry, or in an industrial council).
  5. Taft-Hartley section 303 illegalizes sympathetic boycotts.
  6. Taft-Hartley section 301 enables employers to use their superior economic resources to sue and break labor organizations via US federal court. This includes, when an employer repeatedly violates an employment contract, and if the union responds with a strike, the US courts enable the employer to sue and financially cripple the labour organization; and if a wildcat strike breaks out, the US courts enable the employer to sue and financially cripple the workers’ labor organization.
  7. Taft-Hartley section 14(a) provides a grotesquely-expansive definition of the workers who are not allowed to unionize, whom employers can force to serve as scabs: Any worker whose work includes any sort of “coordination” or “guidance” to other workers.
  8. On behalf of absolute private property right, Adair 1908 established in the US the unilateral managerial right to fire any worker “at will.”
  9. On behalf of absolute private property right, Mackay 1938 established in the US the unilateral managerial right to replace workers with scabs.
  10. US law denies working-class peoples’ rights as human rights (Lawrence 2014: 204). The 2000 Human Rights Watch report highlighted how US labor law violates fundamental human rights.
  11. In labor law, the US stands out as preserving property owner (employer) absolute liberty, based on servitude, per American slaver John C. Calhoun’s and others’ influential formulation.
  12. That is why the US Supreme Court features so many jurists educated in the ancient conservative Catholic legal tradition, developed to support warlords’ feudal privileges.
  13. This extreme anti-worker legal framework, treating working-class people as second-class citizens (or third-class in the case of slaves, prisoner-slaves, immigrants, and immigrant prisoners and prisoner-slaves), is unique in the world for its dogged enforcement and lack of modification over the years (Lawrence 2014: 199). It is also probably why investment capital flooded into the US when Nixon took the dollar off the gold standard in 1971, and why global capital is attracted to the US. The US has committed to sacrifice its own people’s freedom and suppress their human development, in order to most faithfully service domestic and global elites.

 

References

Abraham, David.

Bowles and Jayadev (2007)

Brecher (2014)

Fraser, Nancy. 2017. “From Exploitation to Expropriation: Historic Geographies of Racialized Capitalism: Roepke Lecture in Economic Geography.” Economic Geography 94(1): 1-17.

Gourevitch, Alex. 2015. “Police Work: The Centrality of Labour Repression in American Political History.” Perspectives on Politics 13(3): 762-773.

Klare, Karl E. 1977-78. “Judicial Deradicalization of the Wagner Act and the Origins of Modern Legal Consciousness, 1937-41.” Minnesota Law Review 61: 265-339.

Lawrence, Andrew G. 2014 Employer and Worker Collective Action: A Comparative Study of Germany, South Africa, and the United States. Cambridge.

Lambert, Josiah Bartlett. 2005. If the Workers Took a Notion. ILR Press (Cornell University).

Mitrani (2013)

Mittelstadt, Jennifer. 2015. The Rise of the Military Welfare State. Harvard.

Murakawa, Naomi. 2014. The First Civil Right: How Liberals Built Prison America. Oxford.

Orren, Karen. 1991. Belated Feudalism: Labor, the Law, and Liberal Development in the United States. Cambridge.

Pistor, Katharina. 2019. The Code of Capital: How the Law Creates Wealth and Inequality. Princeton.

Reply to Reader:

Thanks to the contribution of the reader with an institutionalist meso-level hypothesis on how the US (ignoring the other countries discussed above) produces extreme guarding (not including policing) of the American population. Meso-level, institutional facts, such as high levels of litigation or insurance requirements in the US, suggest a couple of the possible mechanisms for how the US arrives at extreme policing and guarding, and nest under and support the above socio-geographic explanatory (why) framework. Logical modesty begs a distinction between identifying mechanisms and inferring causality. (Causal explanation would have to be able to address the factors the explanatory frameworks address: Why have the mechanisms changed in the top four policed & guarded countries? Why aren’t they as important factors in some other countries? Are they as important in Spain, Greece, and the UK?)

Without assessing common incentives and sanctions driving mechanisms, and without even acquiring a fuller map of mechanisms and their relative contribution to building policed societies, collectives could organize to address a couple of the mechanisms–insurance incentivization and sanctions, and litigation capacity, as suggested in this case. Liberal and conservative political collectives do that all the time. No one really wants to stop reformist organization. I only suggest here that identifying a couple of mechanisms cannot be the be-all and end-all of knowledge. Such undertheorized, piecework reforms are a lot of grinding work, take a lot of coordination and a long time to organize, fail to avoid conflict, still redirect and consume lots of resources, and in the end, the George Bush IIs of the world can keep chortling about how they make the world and the underlings only tap-dance in reaction. The hazard of accepting a couple of institutional mechanisms as a fulsome explanatory framework (accepting how for why) is that if you intervene to suppress these identified mechanisms without considering the underlying cause, you’re just playing whack-a-mole. Whack-a-mole may be profitable for lawyers, and it may occupy political wonks and unfree bureaucrats while more powerful collectives make the decisions, but we pursue social scientific knowledge to improve collective agential contribution to change. They’re two types of knowledge with different functions, built for advancing different types of societies: technocratic v. democratic.

Alternative to using technocratic knowledge to preoccupy the staff, a scientific research contribution for an institutional, meso-level analyst would be to run a regression testing those (litigation rate, volume of insurance requirements for guard protection) and other theorized mechanisms proliferating guard labour (such as extent of military welfare/keynesianism (Mittlestadt 2015), carceral growth rate, etc). If a researcher were able to do that (using rate of change data) across countries, that would be particularly helpful towards mapping out the mechanisms by which policed societies are built. Again, that’s not explanation. It’s not philosophy, and it’s not science. But it would contribute  toward science, a collective knowledge, and thus, unlike technocratic knowledge, would not foreclose against democratic development at the outset.

My thesis presented above is distinctively designed to explain not only Bowles & Jayadev’s comparative findings (About guarded and policed societies, inclusive of, but not just lost in the blare and glare of the US. Because they are comparative, they can support more disciplined, valid hypotheses.), but also the work of political historians (also comparative data, across time). As Gourevitch points out in his review of Mitrani & Brecher’s historical work, we can observe the connection between, on the one hand, the historical, high levels of impactful working class (and Civil Rights Movement) organization and the subsequent growth and militarization of policing in the US, solidified into the extremity and comparative absoluteness of working-class repression in the US, see also the notes on US labour law above (per Lawrence 2014), and changes in citizenship law & administration (See legal theorist David Abraham’s work) since 1970. The macro-level explanatory thesis presented here is designed to explain both the political history of militarized policing and labour law & administration in the US, and Bowles and Jayadev’s comparative studies of guarding, as it is reasonable to explain the coincidence of quantitatively-extreme guarding with quantitatively- and qualitatively-extreme policing, though they may have different arrays of mechanisms of implementation, particularly as we have observed change over time and variation across countries in guarding and policing. (Particularly given policing is a state function, insurance or legal “markets” is not a response that can provide adequate insight or explanatory power.)

Explanatory power: The contribution of the macro-level explanatory thesis, here highlighting the relationship between human preferences in geography, climate, and institutional development–particularly state capacity to protect groups from expropriation (Fraser 2017), (as well as aversion to dislocation and loss of financial, cultural, and social capital), is that it supports and guides a number of reasonable, useful consequent hypotheses concerning support for the ongoing development of social conflicts, policing, militarization, surveillance technology, domestic and international politics, racial formation, gender relations, and migration, within the US and similar policed societies (Greece, Spain, the UK).

For example, some of these consequences even impact lawyers. Consider a consequent hypothesis about the spectacular growth of disciplinary student debt amongst lawyers. A fair question that people have asked is: Why do American lawyers put up with that expropriation? With the theory in this post I suggest: Because despite the fact that debt, expropriation, is a major cost to many lawyers, the US still presents globally-comparative benefits (along with the constraint of illiquid smallholder assets): climate, geography, and state protection from even more expropriation (directly or indirectly transferring capacities and assets to financial metropoles). As well, we can add the hypothesis that a litigious market contributes another offsetting benefit to lawyers. This cost-benefit constellation continues to reduce workers’ strategic degrees of freedom; they cling on, with no recourse to voice and no exit strategy. (As well, in the highly-policed society, the voice of the policed is replaced with the sovereign’s voice (See Scarry 1985).) There’s no effective voice for democratic change–it’s bound and gagged by militarized policing and guarding, and as yet there is no substantial defection (exit). So the expropriation– in this case, law school debt– stays. For now, even lawyers are impotent to protect themselves in significant ways.

I also suggest that even taking into account the adverse conditions that exiting the US would impose within the human lifespan (and which Americans, observing, exploiting, and violating immigrants, are very familiar), this individual cost-benefit rationality is not in equilibrium: The structural and political tendency has been and continues to be toward increasing expropriation. In this sense, global capitalists are all the more committed to claiming the hot, policed societies, because they can easily and cheaply mine them. However, that understandably-strong preference (even backed up by state support and a sense of class entitlement) is also a strategic constraint in the changing context of expropriation.

 

Scenario Analysis

Best-Practices Management: Scenario Analysis

A common form of risk-reduction management in industries, like finance, where results matter, Scenario Analysis is increasingly being adopted to assess the impact of policy proposals on climate change, another field where growing consensus holds that real-world, in-situ results need to be optimized. There is also enough at stake in seemingly small middle-management decisions made within institutions that collect and house valuable public and private assets and income to warrant the adoption of Scenario Analysis to mitigate risks to the enterprise.

At stake: Reducing Perverse-incentive Spillover

One of the standard problems over the past half century of institutional reforms has been the adoption of Isolated Optimization analysis and decision making throughout institutions. In the Isolated Optimization management approach, variables that the policy designer can control are optimized in isolation from the context that they will operate in. Factors that the manager cannot immediately control are excluded from the analysis and the decision-making process.

It is one thing to distinguish controllable, “Close to Home” factors from environmental factors. It is a serious overstep to ignore those environmental factors, or dismiss them prematurely as unknowable, in a strategic analysis and in making organizational decisions. Analytical reduction generally can be a useful tool for making decisions; however, it would be a mistake to equate the Isolated Optimization analytical reduction with analytical reduction generally. Isolated Optimization is just one, excessively-parsimonious variant of analytical reduction, and the risks and costs associated with this reductive variant  over the past half-century have proven too high.

Isolated Optimization policies are generally understood to be the product of the best of intentions, including positive intentions expressed toward growth, efficiency, seniority, and diversity. The problem that Isolated Optimization policies create is not bad intentions. The problems they create when they hit the road include insufficient decision-making method, and resulting bad decisions and perverse incentives.

The perverse incentive epidemic we have lived through ranges from the tax reduction movement’s perverse incentivization of labour oversupply and wage and economic stagnation, to excess carceral build up on behalf of rationalization and its perverse incentives to war, concentration camps for immigrant children, and the far-reaching reduction of public, working class life-supports in expensive economies, to financial deregulation and socio-economically perverse incentives resulting from automatic state convertibility responses to financial failures. The empirical record of perverse-incentive spillover resulting from management optimizing “controllable” immediate variables in isolation from their context goes on and on and on. It is unfortunately the management aesthetic that we have known in our era. But we have enough data on the results to respectfully require  managers to adopt the more fully-specified cost-benefit risk-assessment and decision-making methodology that is used when resources are at stake and outcomes matter.

Scenario Analysis: The Benefits

Scenario Analysis by contrast is designed to mitigate the avalanche of unintended consequences of Isolated Optimization decisions. It can be particularly appropriate and beneficial for those institutions and organizations that have insufficiently accounted for their own access to assets, income streams, and benefits relative to that same accounting made by better-organized, for-profit institutions like finance and investment firms, tech and management firms, and management-directed accounting consultants.

By extrapolating the introduction of proposed policy changes to a fully-specified environment of institutional connections and their operational mandates, including and analyzing Best and Worse-case Scenarios within policy proposals, Scenario Analysis allows a decision-making collective to make better decisions–still optimizing controllable variables, but with respect to the context they operate within.

Key benefits include:

  • Future planning – gives public-sector stakeholders a peek into the expected returns and risks involved when planning to shift budgets.
    • The goal of any business venture is to grow–to increase revenue over time, and it is best to use informed calculations when deciding to begin a transfer of public budgets to private businesses.
  • Proactive – University communities can avoid or decrease potential losses that result from uncontrollable factors by being aggressively preventive during worst-case scenarios, by analyzing events and situations that may lead to unfavorable outcomes. As the saying goes, it is better to be proactive than reactive when a problem arises.
    • Worst case scenario example:In 2012 Bain Financial (owners of Dollar Stores, inter alia) famously identified regional (hinterlands) universities as under-tapped resources for investors wanting low-risk publicly-provided assets in their tranches and portfolio mixes. In 2019 the Republican government of Alaska reinterpreted the financial industry’s asset vein interpretation of universities to mean that the public was excessively larding universities with income and assets. In lieu of inter-regional income transfer, the conservative government of Alaska stripped 41% of university funding, targeting 1,300 university workers for layoffs.

      What will happen to 40% of each regional university’s budget over the upcoming years? Will it be diverted to investment portfolios and for-profit management and software sales/data-accumulation firms? Or will it be stripped by governments and converted into regional tax reductions? Can university stakeholders and managers identify strategies alternative to facilitating or  private v. public income and asset mining?

  • Avoiding risk and failure – to avoid poor budgeting, priorities, planning, and policy decisions, scenario analysis allows the university organizations and communities to assess prospects detracting from or fortifying institutional integrity and degrees of freedom. It takes the best and worst probabilities into account so that stakeholders can make an informed decision.
  • Projecting investment returns or losses – the analysis makes use of tools to calculate the values or figures of potential gains or losses of an investment. This gives concrete, measurable data that stakeholders can base the approaches they take for a better outcome.

Case Study: Replacing University Courses with Software Rental

Let’s take the scenario of a project by a regional university’s management to replace first-year university courses with renting educational software from an international for-profit Health and Education Management and Software corporation with national and regional offices. The Isolated Optimization management approach would both design and market the policy as optimizing controllable immediate, organization variables, while black boxing how those variables will perform within the context of the same business environment it institutionalizes. In the Isolated Optimization approach, management would be simply required to present outcomes of this policy that we would expect if the organization and institution were operating in a black box, rather than in a specifiable context.

Rose colored glasses: For example, sans context, the replacement of first-year courses with capital-intensive, reduced-labour costs training software could be expected to a) allow scholars employed by the university to better use their skills, concentrating on university-level education and research (assuming the university has previously established loose income-driven or immigration-driven admissions criteria, flooding first-year courses with seriously-underprepared education-credential consumers). Sans context, and less realistically, the replacement of first-year courses with training software might be hoped to be designed to b) professionally, neutrally, incrementally introduce students of all identities to the university experience and basic work expectations, or perhaps instead to c) efficiently, objectively weed out underprepared education credential consumers after they have contributed income to the university. Sans context, the replacement of first-year courses with capital-intensive, reduced-labour costs training software could be expected to d) allow management to institute a “cost-saving” (substituting capital for labour) managerial strategy recognized by the business community and its legislatures for its contribution to profits or economic control, or e) build strong, portable relationships within international Health and Education management and software market networks. In an Isolated Optimization analysis, the policy change is presented–marketed–as a win-win all-benefits proposition. It lacks a realistic accounting of probable costs in situ. Yet in a specifiable context that such policy change will help institutionalize and operate within, these win-win scenarios can very well fail to pan out, or even produce the perverse incentives that have been a hallmark of Isolated Optimization.

Financial management corporations such as the ubiquitous Bain Capital (owner of Dollar Stores, inter alia) are part of that identifiable context that should be incorporated in analysis and accounted for in decision-making. They have long advised that privatizing multiple functions and assets of regional universities and redirecting regional universities’ public funding into financial instruments channeling organization income into private investors’ income streams will permit investors around the world to expand their opportunities to earn income on their otherwise-underemployed wealth, while the financial advisors themselves enjoy income and profits from managing these privatized assets and innovating the financial instruments that are built upon investor credence that these assets will provide lucrative income to financial firm shareholders.

The perverse incentive characteristic of an era in which a small number of people around the globe own more assets than they can productively employ in wealth-generating production is that commonly–as in the famous case of Lehman Brothers inter alia–the real, amassed assets that global shareholders rely upon to deliver market-busting returns, such as those contained in the regional public university–are simply depleted, the debts owned by financial firms are transferred into the depleted organization, and that underlying productive organization feeding the financial-instrument strategy is allowed to die, stripped of assets and burdened with transferred debt.

Financial advisors identify regional universities in particular as promising sources of private income and debt sinks because global investors are thought to be distant from the effects of regional asset liquidation. The current financial system is awash in moral hazard. As well, dedicated to private wealth, legislatures can be relied upon to let the public resources die rather than restore the public institution by taxing the very investors (possibly beyond the jurisdictional state’s reach, and due to wealth transfer, increasingly wealthier and more powerful than regional actors) whose financial investment earnings were taken out of the public resources, and debts transferred to the public resources, to boost private wealth in the first place. Socially-rational taxation currently violates wealth entitlement. Under current conditions, the perverse incentive cascade can only be nipped in the policy proposal stage, for example with effective barriers to the privatization/expropriation of public budgets.

Fortunately, the management corrective to analysis overlooking these salient contextual factors is available. Organizations can require their management to pursue a more fully-specified analysis, the Scenario Analysis. The key is requiring management modeling to incorporate context research and specification, which management will deploy in crafting Best and Worst-case Scenarios concerning the policy innovation.

If organization members have adequate freedom to hold management to competent research into contextual factors and analysis of Best and Worst-case Scenarios, these scenarios will allow management to make more valid analyses, and will allow the organization to make better decisions preserving member goals and organization integrity, including as that integrity supports regional socio-economic integrity.

The Scenario Analysis Method

Identifying Optimization Parameters

The first step is asking the members of the organization what it is that they value about their work, in this case as scholars. Compiling these answers will inform the organization’s policy optimization parameters, which will be reintroduced after the contextual identification and analysis and the Best and Worse-case Outcomes analysis stages.

Contextual Identification and Analysis – TBD

An organization needs to understand the nature of the market-related risks and opportunities it may face.

  • Each organization faces a different blend of market-related risks and opportunities.
  • The enterprise impacts related to market change may vary significantly depending on the economic sector(s)/sub-sector(s) in which an organization operates.
  • Enterprise impacts may also vary significantly depending on the following:
    • the geographic location of the organization’s value chain (both upstream and downstream).
    • the organization’s assets and nature of operations.
    • the structure and dynamics of the organization’s supply and demand markets.
    • the organization’s customers.
    • the organization’s other key stakeholders.

Best and Worse-case Outcomes Analysis, Prep

There are 3 major categories of considerations organizations face in constructing scenarios and conducting scenario analysis: parameters/assumptions, analytical choices, and impacts.

Parameters/Assumptions

Discount rate – what discount rate does the organization apply to discount future value?, see Best-case/Worst-case Scenarios, below.

Labour & technology commodity prices – what assumptions are made about how labour v. technology prices would develop over time, including economic incentives and disincentives to the in-house or outsourced development and maintenance of the skilled v. deskilled or unskilled university labour force, and multiplier effects and their social and geographic distribution? How does the distribution of in-house v. outsourced skilled v. unskilled labour impact socio-economic inequality and attendant political shifts recursively impacting university funding? How does the distribution of multiplier effects impact socio-economic inequality and attendant political shifts recursively impacting university funding?

As technology inputs allow private for-profit companies to monopolize data on stratified consumer-products (students and their households) over time, how will private data pricing impact the cost structure, to the university, to the public financers, and to its consumer-products and their end-users, of the education commodity?

In the university enterprise, as with online media, the consumers are also the product. As management and technology allow higher-education and credentialing inputs to be standardized, optimized for efficiency, and cheapened, what conclusions does the organization draw about the development over time of quality and market prices for the student consumer-product outputs of public financing, private financing, labour, and technology? How might optimizing efficiency of production in regional universities, v. flagship national universities, impact the consumer-product’s capacity to penetrate the higher-value labour markets increasingly concentrated in metropoles in a period of declining economic mobility, or contribute to stagnation or exceptional economic dynamism in regional networks?

Work demand and mix – what would be the resulting total work demand and work mix across different sources of primary work (labour, technology)? How does this develop over time assuming supply/end-use efficiency improvements? What factors are used for work conversion efficiencies of each source category and for end-use efficiency in each category over time?

Macro-economic Variables – what public financing rate, consumer-financing rate, employment rate, and other economic variables are used?

Demographic variables – what assumptions are made about population growth, migration, labour mobility and its distribution, economic mobility, socio-economic network development, and socio-economic inequality?

Institutional, social and economic distribution of benefits and costs – to what extent are distributions of income and assets, efficiency (type specified) gains and losses, sovereignty and strategic degrees of freedom gains and losses, clean energy transition, and ecologically-driven regional physical changes incorporated into scenarios, priorities and planning?

Geographical tailoring of transition impacts – what assumptions does the organization make about potential differences in input and output parameters across regions, countries, asset locations, and markets?

Technology – does the organization make assumptions about the development of performance/cost and resulting levels of deployment over time of various key supply and demand-side technologies (e.g. education and research labour, and technologies in interested sectors including financial, managerial, data accumulation, and patent rentiers)?

Policy – what are assumptions about the strength of different private-public policy coalitions and signals, and their development over time and across jurisdictions (e.g. provincial university funding, university managerial independence, collective bargaining and organized labour, Academic Freedom, Collegial Governance; subsidies for technology; subsidies for construction; marketing budgets; accounting budgets; Black Budgets; managerial and other administrative budgets; the university as conduit for increasing the public funding of international private marketing, management, education services, social services, immigration services, and financial services providers). What can we assume about the upcoming likelihood of private-public growth political parties v. anti-public political parties and governments?

Expropriation sensitivity assumptions – assumptions of privatization increase v. taxation stagnation or decrease; increased demand by financial, technology, and managerial firms for income streams, public access; assumptions about university consolidation in Canada v. spinning off regional universities or their parts into online course credential sales?

Analytical Choices

Scenarios – what scenarios does the organization use for transition impact analysis and which sources are used to assess physical impact both for central/base case and for sensitivity analyses?

Quantitative vs. qualitative or “directional” – is the scenario exercise fully quantitative or a mix of quantitative and qualitative?

Timing – how does the organization consider timing of implications under scenarios e.g. is this considered at a decadal level 2020; 2030; 2040; 2050

Scope of application – is the analysis applied to the whole value chain (inputs, operations and markets), or just direct effects on specific organization units / operations?

Financial, tech, and managerial models/data sets – which models and data sets support the assessment of privatization-related risks?

Risks to scholarship, schools, and the university – when assessing market risks, which specific risks have been included, including tje severity of their probable impact? To what extent has the organization assessed the impact to its portfolio (e.g. largest assets, most vulnerable assets) and to what extent have risks been incorporated in future organization strategy?

To what extent has the impact on prices and availability in the whole value chain been considered, including knock-on effects from suppliers, infrastructure, and access to consumers?

Enterprise Impacts/Effects

Earnings – what conclusions does the organization draw about impact on earnings and how does it express that impact (e.g. as EBITDA, EBITDA margins, EBITDA contribution, dividends)?

Costs – what conclusions does the organization draw about the implications for its operating/production costs and their development over time?

Revenues – what conclusions does the organization draw about the implications for the revenues from its key commodities/ products/ services and their development over time?

Assets – what are the implications for asset values of various scenarios?

Capital Allocation/ investments – what are the implications for capex and other investments?

Timing – what conclusions does the organization draw about development of costs, revenues and earnings across time (e.g. 5/10/20 year)?

Responses – what information does the organization provide in relation to potential impacts (e.g. intended changes to capital expenditure plans, changes to portfolio through acquisitions and divestments, retirement of assets, entry into new markets, development of new capabilities etc.)?

Enterprise Interruption due to physical impacts – what is the organization’s conclusion about its potential enterprise interruption/productivity loss due to market impacts– both direct effects on the organization’s own assets and indirect effects of supply chain/product delivery.

 

Best case-Worst case Scenarios

When performing the analysis, managers and executives at a university, school or department will generate different future states of the university, higher education, and the economy. These future states will form discrete scenarios that include assumptions about supplier business plans, product prices, student-consumer data, operating costs, politics and public funding, and other drivers of the  enterprise.

Managers typically start with 3 basic scenarios:

  • Base case scenario – this is the average scenario based on management assumptions.
    • Note: When calculating the net present value, the rates most likely to be used are the discount rate, or the cash flow growth rate.
  • Worst case scenario – considers the most serious or severe outcome that may happen in a given situation.
    • Note: When calculating the net present value, one would take the highest possible discount rate and subtract the possible cash flow growth rate.
  • Best case scenario – this is the ideal projected scenario, and is almost always assumed by management to market and institute their pre-existing preferences.
    • Note: When calculating the net present value, use the least possible discount rate, highest possible growth rate, or lowest possible tax rate.

 

Preventing Garbage In, Garbage Out: Distributed Power in Organizations

While a significant improvement on Isolated Optimization, Scenario Analysis is not immune to GIGO–Garbage In, Garbage Out hazard. Though we would like to believe that all managers are competent at identifying and analyzing environmental factors and their likely interactions with policy, it also remains that managers can often have seriously-compromised incentive to constructing effective Scenario Analyses.

This is not just because Scenario Analysis requires more work of managers, but because the same firms with a business model tapping into public-organization budgets standardly also provide incentivizing career-building, income-enhancing, and network opportunities to helpful agents within the target organization. This business model has been particularly common within sales to the public sector, which labor market is subject to legislatively-imposed income compression, stagnation, and in the course of anti-public campaigns, status degradation. In fact, recognition of this standard business model–selling both products to organizations and managerial job opportunities to helpful agents within those organizations– should be built into the Scenario Analysis, as the business model itself imposes environmental costs upon the organization.


It is easy to identify whether this business model is an environmental factor: Does the firm selling the product also support helpers’ career advancement within customer organizations, or, more ostentatiously, hire helpful agents from within client organizations? Is the for-profit goods or service provider also a management or consulting firm? Huron Consulting Group is an example of such a firm (see appendix), advertising to cooperative health care and university managers and purchasers career-mobility opportunities in its own international management and sales network expansion.


An important cost of this business model to be analyzed in decisions to adopt their products, to transfer public funding to the private for-profit corporation, is that organization members serving as agents of private firm product adoption are opening exclusively for themselves a wider field of credible employment opportunities, an advantage in employment negotiations that can allow them to command a larger share of organizational resources at coworkers’ expense. These employment opportunities may also engage moral hazard by incentivizing predatory, organization-depleting decisions from which the facilitating agent is uniquely shielded by virtue of their employment mobility through their relationship with the management and product sales firm.

The integrity of the cost-benefit analysis requires that managers not be allowed to exclude this prevalent contemporary context from analysis, and regardless of whether organization intermediaries admit an intention to take advantage of perks on offer, no policy change proposal should be allowed to proceed until such cost-benefit distribution factors are incorporated in the Scenario Analysis and Best- and Worst-case Scenarios. After all, even respected and well-remunerated professionals like medical doctors have been known to overprescribe medications under pharmaceutical rep influence.

The safeguard against disincentivized, half-hearted, ineffective Scenario Analysis is an organizational structure of distributed power, wherein organization members have the capacity to push managers for analytical improvements and policy options based on fully-specified analysis.

This is also to point out another common contextual factor today: Because hierarchical decision making undermines the conditions required for effective, fully-specified Scenario Analysis, and so permits greater opportunities for predatory decision-making capture, interested corporations, such as financial, technology, and management-consultant firms, have an especial, compelling interest in supporting hierarchical decision making in the organizations whose income and assets they target, as Bain Capital has also indicated. Therefore, in universities, active Collegial Governance is an institution essential to fully-capacitated policy analysis and sound decision making.

 

References

Bain Capital. 2012. “The Financially Sustainable University.” https://www.bain.com/insights/financially-sustainable-university/

Corporate Finance Institute. “Scenario Analysis.” https://corporatefinanceinstitute.com/resources/knowledge/modeling/scenario-analysis/

Kishita et al. 2016. “Scenario Analysis.” https://www.sciencedirect.com/topics/earth-and-planetary-sciences/scenario-analysis

Pistor, Katharina. 2019. The Code of Capital: How the Law Creates Wealth and Inequality. Princeton.

TCFD. “The Use of Scenario Analysis in Disclosure of Climate-related Risks and Opportunities.” https://www.tcfdhub.org/home/scenario-analysis

 

Appendix: Tech Sales-Driven Management Goals, Stage One

The following images summarize institutional optimizations that for-profit management and tech sales corporations are geared to sell to universities via their managers. Recall also that most tech sales firms have a less-public, longer-term business plan to eventually monopolize and monetize the data (eg. on consumer-products) that they will gain through organizations adopting their technology; this typical, staged business strategy in the present era of private property law-making can create and lock in future increased–constraining and possibly prohibitive–costs for the technology-adopting (university) organization and its (student) consumer-product base.

Aziz Rana’s Internationalist Platform

Aziz Rana’s (2019) policy-development prescription (somewhat reformulated by me) for Justice Dems and labor organizers, as a polity-challenger coalition:

1) Labor organizing, building networks capacitating internationalist immigrant organizing leadership.

Problem: “The overwhelming tendency–and not just on the Right–is to present immigration as an issue that begins at the national border, with virtually no attention paid to the particular histories, international economic pressures, and specific US foreign policy practices that generate migration patterns” (Rana 2019).

2) Democratic budgeting exercises reworking the security state budget, to demonstrate popular capacity to democratize foreign policy, and to reintegrate foreign and domestic policy beyond the shallow, corporate-military “America First” working-class appeasement campaign.
3) Policy ideas for transitioning the US from overgrown military keynesianism on behalf of global capitalists to a wealth-circulating, democratic-tech developing, social reproductive economy appropriate to an “overdeveloped” (rentier capitalist) economy.
4) Develop trade policy with constraints on transnational property rights, linked to the domestic economy via enforced labor and environmental standards throughout supply chains, as well as policing redirected toward repatriating (sharing across production-impacted countries) excess profits and other private accumulation stockpiles.
I would add:

5) Organizing needs to address the great portions of the American working class materially and symbolically co-opted by the capitalist security state, particularly guard labor and owners of marginal businesses. These are the American working class, herded by right wing orgs and socially- subsidized into supporting global, militarized rents extractivism at the astronomical cost of global, social and environmental destabilization. Besides designing and investing in a democratic social reproductive economy to reincentivize this working class population, how can as many as possible of these co-opted working-class Americans be reorganized into supporting a transition to democracy, demilitarization, and a social reproductive economy? David Graeber’s lesson in “Army of Altruists” (2007) can be a starting point in organizing strategy: People want to work together for a great purpose.

6) Required: an assessment of policing and military capacity to tolerate v. oppose advancement to a democratic economy and polity in the US. Assessment needs to include an inventory of tools of suppression at police and military disposal.

7) Required: an assessment of the implications of US demilitarization and democratization on international investors, private and state, and their capacity to tolerate v. oppose, including an inventory of tools of suppression at their disposal.

8) Required: an assessment of antidemocratic imperial state partners’ capacity to tolerate v. oppose US demilitarization and democratization, including an inventory of tools of suppression at their disposal.

9) Note that the fight for social democracy in Sweden required that political organizers concentrate on building unions and a union confederation across the country for three decades before launching into the polity with a political party.

This planning sketch recognizes that much of finance-organized capital, as well as the conservative-Catholic US judiciary, and most of the polity are organized against democratic development. As well, it also recognizes historical structural shifts, including those identified by Rana, that can enable organizing toward stymied social, economic, and political democratic emancipation.

KEVIN KRUSE wrote One Nation Under God: How Corporate America Invented Christian America

I have to post this because I always get Kruse confused with Thomas Sugrue, and I forget the title of this book.

Years ago, back before Evil Annamaria Tremonti killed off her good twin sister Good Annamaria Tremonti, The Current interviewed Kruse about this book.

The carceral core

the carceral state 21st c

From Bauman, Valerie. 2018. “Incarceration vs. education: America spends more on its prison system than it does on public schools,” The Daily Mail, 25 October.

Spooks

Elite British Spooks Had Sovereign Agency

“If in the years 1941-3, when the Russians were carrying almost the whole burden of the war against Germany, they were dying in substantial numbers because (Britain) denied (them) the war’s most important source of secret information (the “Ultra” intelligence), the actions of the (socialist) Cambridge (double-agents) at that time must appear in a better light. What justification could the British advance for withholding this information – the military radio traffic of the enemy – from their own ally? Only one: that Britain’s best interest was to stand aside and watch Nazi Germany and Soviet Russia slaughter each other to the last man. Nearly forty years later, we have drifted so far to the right that many young people of liberal mind can accept that as a good policy” (N. Ascherson’s 1980 LRB 2(2) review of A. Boyle).

“British Intelligence, in Boyle’s chronicle, remains as weird a community as ever, in spite of all the author’s new information and captures of confidence. Amateurism, class prejudice and what Boyle calls ‘the sad pleasures of sodomy’ composed its peculiar flavour. The circumstances of my own unhappy brush with the service only confirm it. My background was ‘right’, and I was duly recommended as a likely lad by a Cambridge don (Boyle rids us of the myth that Cambridge tutors recruited assiduously for Russia, but does not add that they recruit assiduously for the home side). There followed a lunch at the Reform Club, where this 23-year-old ass received the proposal that he should go to the new Communist state of Betelgeuse in order to write a biography of its ferocious leader. An argument about where Betelgeuse was had to be settled by a visit to the Times Atlas, dated 1910, in the Club library. My real assignment, they said, was to approach leading Betelgeusians and ‘get them round to our point of view’. Uneasy, I objected that I knew nothing of the place or its language. ‘Old D. will put you in the picture,’ they chortled, returning to their port. A few days later, I was summoned to meet D. in his home. After a silent but delicious dinner, D. asked me to sit next to him on the sofa. I supposed that I was at last to be put in the picture, but D. merely grasped me tightly and wordlessly by the penis. I extracted myself and ran away, and after some days of great confusion, wrote to say that perhaps I was not mature enough for this service.

An outfit like that – and these events took place years after the ‘flight of the diplomats’ – deserves everything it gets. I suppose there was a wild brilliance about the Betelgeuse project, which would almost certainly have cost me my head. But what most impresses me, in retrospect, is their sublime confidence that after that lunch and dinner I would still be their loyal man and true” (N. Ascherson 1980).

An analysis of the inegalitarian, totalitarian liberal conditions that create double agents out of elites: The British double agents “all leave one with the odd impression, even Philby in his early years, that they became Soviet agents faute de mieux. What they needed was something else: a British movement of total opposition to the régime which was both respectable and formidable. They needed a divided Establishment, an alternative régime-in-waiting which they could join. Continental republics know this dualism… In Britain, still an ancien régime in this respect, Labour did not offer such an alternative, while the price of CPGB activity would obviously be impotence and ostracism. The spies didn’t see why they should be impotent and ostracised.” (N Ascherson 1980).

The advantage of the US (v. 1930s UK) is that the spy agencies can rely on the dogmatic, even mysticist, sons and daughters of Chamber of Commerce ideologues, and don’t have to risk Cambridge free thinkers.

“The Thirties were a decade of rapid social change and improvement in popular living standards, as well as a time of poverty and misery for many. But Britain remained governed, financed, exploited and largely represented by the upper class…Labour was a party which, as far as the student leftist could see, would deferentially leave the old élite in place. The Cambridge spies wanted something else for Britain, something which now sounds absurd: a socialist revolution which would both smash the patrician hegemony to which the spies were such guilty heirs, and restore British greatness and independence…one could argue that the Cambridge spies betrayed their friends, in this instance, but not necessarily their country.”

https://www.lrb.co.uk/…/neal…/what-sort-of-traitors

As a political sociologist, I am intrigued about Ascherson’s analysis of what liberal totalitarianism and a grand tradition of inegalitarianism created within the elites at the heart of the beast. (Obviously, it wasn’t all that disruptive, though.) It strikes me as a little analogous to the more-consequential class betrayal of the pro-Enlightenment female Swedish nobility in the early 19th century. The ideas lying around…

The CIA, James Jesus & the Lovestone Empire

Jay Lovestone (nee Liebstein) built and ran the Lovestone Empire for the CIA, under the direction of James Jesus Angleton. The Lovestone Empire consisted of anticommunist unions. An anti-Stalinist, Lovestone was groomed by David Dubinsky to direct labour union organization and resources to anti-communist and pro-war causes. Lovestone had started out a socialist before his eventful hard-right move, like so many men of his social background in the 20th c. He insisted that the US could never become socialist; and he influenced the antistatist economic modernizer Bukharin.

James Jesus Angelton was a Latino-Anglo son of a Chamber of Commerce guy who invested in ATMs. Angelton was an anticommunist who worked with the Israelis and Jay Lovestone to kill off communist organization in unions. Angleton’s work ensured the electoral victory of Christian Democrats over communists in Western Europe. Angleton supervised the CIA’s comprehensive domestic covert surveillance project (called Operation CHAOS) to control US citizens. He targeted both Olaf Palme and Pierre Trudeau, amongst so many others. The LRB’s May issue 40(9) reviews a history of Angleton’s work. His is a story of how you get carte blanche, all possible credibility and credit in capitalism.

Angleton was educated in the Ivies, in literature–poetry–and New Criticism. That institutional base was an anticommunist hotbed. But that’s not all. I can’t recommend the “doth protest too much” Thomas Power LRB article, but it does show how the adoption of a literary analysis technique like New Criticism could buoy a career, in spookery. Like today’s Neo-materialism, New Criticism eschewed sociological craft and context as a triangulator for interpretation. The effect was to, for the moment, permit the critic greater authority…until he’d spent institutional credibility. If the same technique were imported by a spook king to the interpretation of the world, it would bestow, for a time, the same mystical institutional authority. At an institutional and social cost.

This is the way with the importation of all anti-scientific textual analysis to analysis of the world. Good career move while you can produce the performance to get away with it, and apres moi, le deluge.

Angleton was preparing the US-Israeli secret police relation. Shin Bet chief Amos Manor described Angleton, one of the US and global capitalism’s leading spooks, as “fanatic about everything”, with a “tendency towards mystification.”

Fanatic mystification: What passes for credible, what is given all credit in this system.