Monday, November 23, 2020

Marriage and society in the ante-bellum Japan

 Junichiro Tanizaki wrote the trilogy “The Makioka Sisters” during the World War II. I read it twice. Once, probably more than ten years ago; and  now during the pandemic. It is one of world classics. It is a story of an affluent commercial Osaka-Kobe family that is getting slightly less affluent. The entire plot revolves around the marriages of two youngest (out of four) sisters. It is not a book where much happens. In reality, almost nothing of note happens. Even whether the sisters ultimately get married or not is of little importance. It is not Jane Austen.

It is masterfully written. By the middle of the book, the characters are so well drawn that the reader feels to have known them throughout his life. The leisurely style of writing, full of inner discussions of what motivates even the minutest of the action of the heroines, is never boring. You learn about psychology as you learn about the social milieu of Japan in the late 1930s. Given that this is the world that will never come back and that Tanizaki knew that at the time of writing, the book has an elegiac, and somewhat nostalgic, feel.  We are witnessing the last stirrings of the world that was forever gone.

But, as an economist would, let me review three areas—not literature—as revealed in the book that I found most interesting: gender relations, social distance between classes, and “Westernization” of Japan.

I will begin with the last one. It is often said that Tanizaki was conflicted about the “Westernization” of Japan. (That theme appears in his hauntingly beautiful “Some prefer nettles”.) I think that an excessive focus on the so-called “Westernization” makes us not realize that what we observe in the book (and probably in real life) was a process of modernization. Osaka of the late 1930s is a recognizably modern city: subway, inter-city trains with sleeping cars, taxis, Japanese, Chinese, German, French restaurants, theaters, commercial district, rich bourgeoisie living in individual homes outside the city center. I see all of this as “modernization”. We would regard it as such in Rome and Barcelona; why not in Osaka? Yes, there is kabuki and no theaters (to which the family often goes), but so there is opera and zarzuela in Naples and Madrid. We do not contrast opera to American movies in South Europe to call it “Westernization”. Why should we contrast traditional Japanese theater to American films in Osaka?   

Thus, modernization and development, even if they are far from the topic of the book, are everywhere. They are everywhere in the background because the family members (most of the book deals with the lives of the four sisters, in particular Sachiko, the second eldest) spend most of their time in theaters, travel and various eateries.

How about the treatment of women? The book is indeed about women, their lives, and it is mostly through their eyes that we see Osaka and Japan. Marriages are arranged, whereas in Europe in the 1930s they were not, or much less openly so. In affluent Japanese families, the match-making was formalized even if less elaborate than many people might expect. The families would meet, while previously agreeing whether it is an official match-making meal (miai) or not, and they would chat, drink, and depending on the mood and preferences get along or not. Money and social status play a big role; but so would women’s preferences (and men’s obviously). In the book, one of the sisters refuses several promising parties. So women are not forced into marriages. But it is a delicate balancing act: you cannot permanently reject suitors that are arranged by your solicitous family without looking ungrateful or inconsiderate; you cannot forever postpone your marriage without jeopardizing the marriage prospects of your younger sister (the sisters are supposed to marry in order, by age). Thus, you might eventually say “yes” even when you feel more like “maybe”.

Does love get into the picture? Not at all. Actually, I think that the word “love” is hardly at all used in a book whose sole topic is two marriages. It is rather the similarity of values, tempers, and social class between the prospective spouses that counts, the sturdier bases for a successful marriage, not the conventionally defined love. The French historian Paul Veyne, when explaining Roman attitude to marriage compared it to modern Japan’s:  “For Romans, like for today’s Japanese, love belonged to the domain of minor satisfactions and objects of gentle teasing; it was kept out of the domain of serious matters, to which belonged matrimonial and family affairs” (my translation).

Finally, the social distance. Since the family is well-off it employs several maids. They are essentially part of the households, privy to many of family secrets and the distance is surely much less than in the 19th century English novels where servants are hardly heard or seen (by the 1930s, perhaps that the social distances in England had become much less, but I do not know the English literature of that time to be able to tell). It seems that the social distance too was modern, broadly at the same level as in continental Europe, probably less than among the equally affluent families in the more aristocratic settings of pre-World War Russia and Germany. But the Makiokas were, we need to remember, a commercially-enriched family, not aristocracy.

I spent some time, after placing Elizabeth Bennet and Anna Karenina in their respective income distributions in my The Haves and the Have-nots, scouring  other works of fiction in different countries to find numeric evidence of incomes and prices. Tanizaki provides very few of those; in the book of 600 pages, there are about a dozen references to wages or costs. So it is not a great source for those who would like to exactly locate the family within the income distribution of Japan before the war.

And the war? It appears from time to time, as it would appear to a family that really does not care about social and political events: as a distant thunder. We learn of the “Chinese incident”, the need to dress more modestly during the national emergency, of a job posting offered in Manchukuo, of Herr Hitler’s desire to prevent the outbreak of war in Europe (through a letter of a German family), and then of the beginning of a distant European war. That’s where the book stops.

The rest, as they say, is history.

 

 

Friday, November 20, 2020

Willing meaningful deaths and unwilling meaningless deaths

 In a recent Blomberg column Tylor Cowen discusses how the relative positions of China and the US are affected by the pandemic. While the column makes some interesting points about the vaccines, and also rehashes the well-known arguments, many of which have nothing to do with the pandemic (China’s lack of allies and the problems of the Belt and Road Initiative), there is one especially perverse take of Cowen’s which needs to be challenged.

He argues that quarter a million of American deaths (so far) shows America’s toughness, readiness “to tolerate causalities”, and to disprove Chinese military planners’ view of Americans as “soft” and effete.

Cowen is misled by simply looking at the number of deaths and imagining that every death, whatever its cause, is the same. To argue that the willingness to suffer deprivation and ultimately to die is a sign of courage, character, and determination you need two elements: agency and meaning. Agency is individuals’ conscious readiness to face terrible odds; meaning is individuals’ decision to do so because they believe in what they are doing. Neither is present in covid deaths. These are not deaths imbued with agency, not do they have any higher meaning, neither for the individuals nor for the community.

I will try to explain this by giving three examples. In doing so, I define “meaning” not as seen and approved by an external observer, but as experienced by the person who is sacrificing himself or herself.  Take the Nazi prosecution of the War. Very few people would disagree that it was morally evil. Nevertheless the willingness of German soldiers on the Eastern Front to take enormous casualties and the willingness of the German civilian population to suffer bombing without much demur, shows the strength of their beliefs. So it does carry a meaning, Or take the Communists who were massacred by Chiang Kai-sheck’s forces in 1927. They also showed, through their example of fighting “hope against hope” a much more powerful and vicious enemy, the strength of their beliefs. Or finally consider early Christians facing Roman persecutions. There is little doubt that their stubbornness and readiness to die for a new religion led ultimately to the triumph of Christianity. So in all three cases, with vastly different moral implications, individual agency was present among those who sacrificed themselves. In their own eyes, suffering and death had a meaning. The ideals for which they were ready to die were indeed very different: extreme nationalism and racism, an ideology (Communism) or a religion. (One could of course use innumerable other examples, including those of Americans who died in the Civil War, two World Wars, the Korean war, the Vietnam war and so forth.)

But dying of an epidemic does not carry any of these two messages. No one courts a covid death in order to highlight the value of American democracy, or any other ideology or ideal. No individual thinks that by dying from covid she is furthering any cause in which she believes. Covid deaths are –however we may be loath to admit it—in a larger sense meaningless. Or more exactly, their only meaning is indeed the meaning that most people assign to them: they show terrible disorganization of societies where they occur. That disorganization can be economic (societies are poor), political (their system is dysfunctional), medical (absence of equipment) or any other. But they surely do not have any grand ideological significance.

Cowen’s wrong reasoning would lead us, by his perverse logic, to think that high suicide rates are to be hailed as a sign of a society being “tough” rather than being sick. The same is true of high death rates from alcohol or opiates. When Russia’s death rates skyrocketed during the 1990s, due to suicides and alcohol, this was not an indication of Russia’s strength but of Russia’s weakness.

The deaths of despair or the deaths due to societal mismanagement do not send a message about society’s grit, endurance, determination, or faithfulness to an ideal but rather the reverse—about the society’s failure. 

 

PS. The only people in this pandemic who can be called heroes are doctors, nurses and other medical personnel. Indeed they display agency (conscious will to help despite dangers) and their actions have a meaning (saving lives).  

 

 

Sunday, November 8, 2020

The history of global inequality studies

 I recently read a very nice paper by Christian Christiansen on the origins of global inequality studies. The paper is yet to be published, so I will not quote anything from it but I would suggest to the interested readers to go to his and Steven Jensen’s (editors) excellent book “Histories of Global Inequality” and especially the introductory essay that goes over the same themes.

Christiansen studies how the very idea of worldwide inequality has changed over the past seventy years. He charts the path from the post-colonialist rhetoric where worldwide inequality was inequality between colonies and metropoles to the Third Worldism and structuralism to the New International Economic Order and finally to global neoliberalism. The term “global inequality” appears for the first time in print in a 1974 article on the global food crisis by Mick McLean and Mike Hopkins ("Problems of World Food and Agriculture: Projections, Models and Possible Approaches," Futures). It  is only in the 1990s that “global inequality” became associated with the idea of income inequality between citizens of the world.

Let me note finally that Christiansen’s work may be very usefully read in conjunction with two excellent recent books that cover similar, even if wider, ideological ground: Samuel Moyn’s “Not Enough” and Quinn Slobodian’s “Globalists”.  I reviewed them here and here.

Christiansen asked a question that I thought about for a while but never wrote about: how do certain ideas—in this case the idea of global inequality--arise? How do they get formulated? What explains that they become popular after not only being ignored but not even existing (as ideas) for a long time? Since I was involved in this process, I thought I would try to explain how --at least to me—this seems to have happened.

It is useful of think of the interaction between four forces: ideology, politics, data, and sociology of knowledge.

The 1980s and 1990s in the World Bank and the academia were inhospitable to the idea and study of inequality. Probably as never before. It is worth remembering for example that the World Bank was in the 1970s a pioneer in the work on inequality. I remember how excited I was (I was then working in an economics institute in Belgrade) when I first saw the 1974 compilation of income inequality statistics around the world by Shail Jain. Nothing similar existed before. Montek Alhuwalia and Graham Pyatt, then at the World Bank, wrote several very influential papers.

But with the triumph of the dreary neoclassical economics inequality was exorcised from the mainstream. It did remain in development economics though. But there too with the neoliberalism which the World Bank espoused in the 1980s it was soon eliminated. The toxic influence of Anne Krueger saw to it. Thus the ideology basically told you, “it is not a topic worth studying and we shall waste no resources on it”.

Moreover, and somewhat ironically, the eclipse of inequality studies happened in conjunction with increasing importance of poverty studies. The  latter were, as I called them, “the moral laundering” undertaken by  the rich. Those in power liked them because such studies showed them not to be oblivious or ignorant of the plight of the “less fortunate”. It also buttressed their ideological hegemony. (In “The haves and the have-nots” I tell the story of how the head of a prestigious  Washington think tank told me to change my interest in my CV from “inequality” to “poverty”—because the rich board members were allergic to the term “inequality”.)

Then there were the politics. Many World Bank member countries disliked the World Bank studying their inequality and refused to authorize such studies or to share the data. That applied to countries like Turkey (where for years, if not decades, the World Bank failed to do a study of inequality) and the Middle East (Algeria, Tunisia, Syria). In Eastern Europe, Romania could not stomach the idea of such a study and released no data. In Yugoslavia too there was strong resistance, coming from the rich republics, because a country-wide study was bound to show huge and increasing gaps between the richer and poorer parts of the country. Finally, many African countries lacked institutional capacity to mount household surveys without which there were no data to study inequality. Thus if there are no data (Africa), or large parts of the world do not want to release the data (China should be added to my above list), or countries were not members of the World Bank (the Soviet Union and Cuba), there was hardly any sense in studying “global inequality” that would leave out one-third, or more, of the world population.   

By the late 1980s, things began to change with glasnost in the USSR and the first serious releases of the Soviet data, and improvements in the data gathering capacity in Africa. China as well,  from the mid-1980s, provided at least fragmentary income distribution data. All of that allowed  the World Bank to move, since the 1990 World Development Report, into global poverty assessment and monitoring. The ideological backing for this was provided by the UN focus on global poverty alleviation. But as all of this implies, the data were no longer the main issue: the ideology was.

The first time I had the idea to study global inequality was around 1994, motivated (in part) by the realization that the same data that were used for the study of global poverty could be “repurposed” to study global inequality.  My first paper on global inequality was published in 1999. (The final version is here.)  (When prompted by Christiansen’s work I reread it yesterday. I was pleasantly surprised how it foreshadowed almost all the issues we still discuss today, both methodologically and substantively.)

But when ideology “militates” against studying something, very few people will bother to do it. Simply put, incentives were aligned against inequality studies. There would be no funding. Such research would be sidetracked and ignored. This is what happened within the World Bank.

On the other hand, it needs to be acknowledged that the World Bank research was never organized in a hierarchical dictatorial manner that some people imagine. You could study more or less any relevant topic so long as you could show reasonable publication success. One may not receive any of the powerful World Bank financial support or media coverage (that would be reserved for politically more acceptable topics),  but there was no active discouragement or prohibition; or at least I have never encountered it.

Getting involved in the work on the not currently popular topics is like betting on a horse that is unlikely to win a race. Most of the time, one loses and understandably most of the people avoid doing it. But at times one may be lucky and win.

If asked what is important, a trite answer would be to say to follow one’s passion or interests. But I think that while in general this is a good advice it is of limited practical value. I would add that when choosing what to study one should keep one’s expectations and ambitions of external success (within one’s lifetime) low. One thus can never be disappointed.

Saturday, November 7, 2020

What we owe to Donald J Trump

Now as Trump is being made ready to enter history, many publications are reviewing his presidency, as indeed they have been doing during the past four years. Many of such assessments are trivial, turgid, and tedious. He is being reviled for his callousness, racism, xenophobia, arrogance, inefficiency, ineffectiveness, ignorance. Many who will defend him will probably do so for the same reasons: but in their view xenophobia, racism and arrogance may be considered virtues not deep moral flaws.

My assessment is entirely different. First, where I think Trump was right, and second, what Trump allowed us to learn.

Trump was right in the essential principles of foreign policy: America First and mild isolationism. To see that one ought to realize that there are only two possible foreign policies  for the United States of America: American exceptionalism and America first. American exceptionalism is, as the name says, based on an ideology of American preeminence, held to be earned and deserved on account of the unique virtu of  the new republic. The preeminence for the USA clearly implies a structured hierarchical system of countries where the USA is on the top and other countries play subsidiary and inferior roles.  The ultimate unspoken objective of that policy is mastery of the world. The US is not the first country to have entertained such dreams: from Egypt, Rome, Christian Empire of Byzantium, Muslim Empire, Charlemagne, the Huns, Tamerlane, Napoleon, Hitler, the Communist Empire of the USSR, the list is long. While achieving such an empire is most unlikely, the road to that objective is paved with wars. This is why the ideology of “indispensable nation” almost by definition calls for, in Gore Vidal’s terms, “endless wars for endless peace”. It is not by some accident that America has been at practically uninterrupted war for eighty years.

America first at least formally puts all countries on the same level. It argues that America will follow its own interests but it does not expect less from others. As Trump, not a scholar of international relations, nevertheless stated in his United Nations speech, he would expect the same policy as regards their own countries from Algeria to Zimbabwe. In the America First policy, US will always, because of its size and importance, punch more than others but it will have no desire or illusion that it has to rule others or tell them how they should order  their internal affairs. It will behave transactionally which is indeed a policy that makes war much less likely. Interests can be negotiated, ideologies cannot.

Trump basically followed this policy until his obsession with China broke through after covid-19 which he seemed to have considered as some kind of China-made express ploy to evict him from the presidency. Nevertheless he began no new wars, and made, at times important, moves to end wars started almost 20 years ago for which nobody in Washington could any longer proffer any rationale. They were pure imperial wars like the ones in “The Tartar Steppe” where nobody at the seat of the empire even knows where their soldiers are fighting and even less why.

Trump made two signal contributions to our knowledge of politics and business. To the politics he brought all the skills he had practiced for almost half-a-century in business and, as I wrote, his was the ultimate triumph of neoliberalism. He considered citizens as his employees whom he could at will push around and fire. He saw presidency as Bezos sees his own position at Amazon: he can do anything, unconstrained by any rules and laws.

Trump tore off the curtain which divides citizens, the spectators of  the political game, from the rulers and displayed the wheeling-dealing, exchange of favors, the use of public power for private gain in an open, in-your-face manner, available for all who attended the show to see. While in the past administrations such illegal and semi-legal actions, as receiving money from foreign potentates, moving from one to another lucrative position, cheating on taxes were done with discretion and some decorum, with the curtain lowered so that spectators could not see and participate in the malfeasance, this was now done in the open. It was thus thanks to Trump that we could see the immense corruption lying at the heart of the political process.

But he did more. When he came with these corrupt manners to the presidency they were the manners honed in by fifty years of business dealings that too involved all sorts of semi-legal or illegal shenanigans. But this did not stop him in his business ascent. Rather they made the ascent possible, letting him enjoy a brilliant career in New York business world, become rich, and be a valued guest at many parties, including being an esteemed contributor to political campaigns like the one run by Hillary Clinton for US senate.  The very fact that his climb to business power was not seen in any way as exceptionable or unacceptable shows that everybody else around him used the same means to come to the top.

Thus from knowing more about Trump we know more  about the means used to succeed in the rich business milieu of New York,  and even of the world, as Trump and his companions, made deals in Scotland, Russia, the Middle East, China and elsewhere. His close confidantes and family members who betrayed him in  order to garner multi-million dollar contracts exhibited a behavior that Trump himself would have done (and approved of) but that showed clearly  what kind of ethical standards are prevalent in that environment.  Trump thus gave us another very valuable lesson: it showed the rot, corruption and impunity that lay at the heart of many powerful businesses.

His persona revealed the depth of corruption at the center of politics and the center of business. These are unpardonnable sins. Sins enjoyed in secret are acceptable or overlooked; sins flaunted are not. Those who replace him will do their best, not to change that because it has become a systemic feature, but to cover it up. But once you see the truth it will be difficult to go back pretending nothing has happened. 

 

Monday, November 2, 2020

The mistake of using the Kantian criterion in ordinary economic life

 In the last section of his justly celebrated “On economic inequality” Amartya Sen discusses the role of incentives in work motivation in socialist societies. He goes over Marx’s distinction between the role that material incentives would play in socialism (“a society…still stamped with the birthmarks of the old society from whose womb it emerges”) and where such incentives would remain important, and communism where material incentives would not matter and where everybody would contribute according to their abilities and would be rewarded according to their needs.

Sen then discusses the Chinese attempt to move toward the communistic reward structure during the Great Leap Forward. Sen notices that it proved to be a fiasco even if “it is difficult to dissociate the difficulties generated by the use of non-material incentives from those caused by other features of the Leap Forward” (p. 96).  The fiasco was due, among other things, to the idea that individuals would not follow their self-interest, namely that they will be indifferent to the relationship between their effort and reward. Since reward was independent of effort people minimized their own effort which, when done by everybody, led to the reduction of output and eventually to famines and disaster.

Sen however considers a situation where the behavior of individuals would be different as would the outcome. He assumes a Prisoner’s Dilemma two-person game. As is well known, the dominant strategy for each person is to defect, i.e., in the example when rewards are dissociated from effort to work as little as possible. When everybody follows self-interest only, the collective outcome is low output.  This is what, according to Sen, happened during the Great Leap Forward.

But assume now, Sen writes, that the value system of individuals charges, that they do what is best for community, assuming or being assured that the others would do likewise. When all do so, the outcome of the Prisoner’s Dilemma is socially optimal (high output), and is individually preferred even if people’s preferences might have remained individualistic. Thus people had to act as if they held an altruistic value system even if their true preferences were individualistic. The Chinese perhaps were right: if self-abnegation, altruism and reciprocity, and not self-interest, could be inculcated or if people could be made to behave as if they had these values. Big ifs.

The requirement is indeed that people do not behave in a self-interested way, but in what John Roemer recently introduced follow Kantian categorical imperative: that they behave in the way that they would like everybody else to behave.* While this nicely solves the Prisoner’s Dilemma, the requirement is so remote from the way people behave in ordinary life that it does violence to any usual and real norms of behavior.

This does not mean that under exceptional circumstances people may not behave without much regard for the balance between rewards and effort: if a ship is sinking, everybody will probably work at much as they can without looking around to check whether others are pulling in their weight too. There are many other exceptional situations where the same principle might hold. Even in elections, like the ones in today’s United States, such a behavior can be seen in people’s willingness to stand in long lines in order to cast the vote—the value of which  is close to nil. (And is even less so in states that are overwhelmingly Republican or Democratic.)

People might behave altruistically in their interactions with family and close friends. There again, the balance of gain and loss, is often overlooked. But in what Alfred Marshall called “the ordinary business of life” our usual and correct assumption is that of self-interested behavior. Moreover, that assumption has never been as justified as it is nowadays when significant areas of our ordinary life (the ones where altruism might have obtained in the past) are “invaded” by commercialization. What commercialization or commodification do is to place shadow prices on many activities that in the past were subtracted from the market. Once such shadow prices exist, it is only a matter of time before more people, including those who never thought of selling and buying certain activities, begin to participate. The mass participation introduces normalcy and converts hitherto non-market goods and activities into objects of market transactions, not different in any way from the usual areas where market reigns, from purchase of food and cars, to the supply of labor or investment of capital.

The expansion of commodification into our leisure time where insensibly our pleasure in playing computer games or browsing the Internet, becomes a potentially lucrative activity (hosting adds on one’s Website or becoming an influencer), or into our family life (pre-nuptial agreements), or the rest of our lives as in willingness to forego the right to free speech for money (non-disclosure agreements), implies that the sphere of self-interest has expanded and the sphere of altruism has receded.

The  realization that this is so has important implications for at least two types of discussions that are conducted today. One is the extension of what Sen wrote fifty years ago and John Roemer recently: the idea that socialism can be introduced through a change in people’s system of values. This, from all that we have seen in the past, and that we see now is entirely unrealistic.

The same ideas are also present in discussions regarding the climate change. Here too some authors invoke miraculous changes in our behavior whereby we would no longer care for own income and wealth but would be willing to sacrifice them for the global reduction of CO2 emissions. The argument is exactly the same as what Sen used in his Prisoner’s Dilemma: if everyone were to start behaving in the way he or she would like others to behave, climate change may indeed be controlled.

The problem is here, like elsewhere, that this type of behavior is incompatible with the system of values propagated by capitalism (and necessary for its survival) which we have accepted and affirm in our ordinary lives: from the moment when we argue about our wage to the time when we draft pre-nuptial agreements. Thus, here too such assumptions of altruism may be useful in modeling various games, but are entirely useless in dealing with the real world and deciding on actual policies, which, if they are to lead to change, must be based on incentives and punishments.

The assumptions about one’s behavior in ordinary life (and far away from lab conditions where they are often investigated) are crucial if we want to make things better. By assuming altruism and selfless reciprocity in economic life, we are led astray and the results cannot be different from what similar attempts have produced in the past. In fact, they have given free rein to the worst human instincts, as those very far for being so na├»ve have draped themselves in the sheepskin of altruism to better exploit those who either believed in such fictions  or were forced to believe them.

It is only by building “on the granite of self-interest” ** that we can make a change.

 

* The same idea is present in Plato who in “Gorgias” and “The Republic” argues that the just man never competes against others but does what he believes to be the best thing to do. Competition is a vice.

** George Stigler regarding “The Wealth of Nations”.   

 

Addendum.

The text needs two clarifications.

1) When we assume self-interested behavior we are at the same time assuming that our interests clash with interests of everybody else. But that does not mean that we do not cooperate with people. We cooperate whenever our interest can be enhanced by cooperation compared to not cooperating. This is why we work in factories with others and not alone at home: output is much greater when we collaborate and hence our self-interest is better served.

2) In the Kantian model, we also assume that people are self-interested. But they adjust their behavior as to do what they think everybody should be doing.  So behavior is, in some sense, delinked from the underlying individualistic motivation. In addition, the beliefs about how everybody should behave may differ. One person may believe that the socially proper behavior is A; another person may believe it is B. Thus an additional requirement is to be imposed: that through education or socialization these beliefs should be made the same or similar.

Take the following example. My self-interest may be not to pick up after my dog. But in a Kantian fashion, I might clean up after my dog because I think that everybody should  do the same. But another person might believe that not picking up the poop is actually good for the nature, plants etc. Thus although we both follow the Kantian precept we end up by doing two very different things. Hence some cultural “equalization” is necessary. Religion or ethics are supposed to do so—although one may be doubtful how well they could do it.