Thursday, May 9, 2024

Universities as factories


I have seen, and read about, of many instances when the police would clear universities of students who were demonstrating. The police would come in on the orders of the authorities unhappy with student-created oases of freedom. It would come, armed, beat up students, and end the protest. University administration would side with the students, invoke “the autonomy of the university” (that is, the right to be exempt from policing), resign, or be removed. This is the usual pattern.

            The novelty, for me, in the current wave of freedom of speech demonstrations in the United States was that it was the university administrators who called for the police to attack students. In at least one case, in New York, the police were puzzled why they were brought in, and thought it was counter-productive. One could understand that this attitude by the administrator might happen in authoritarian countries where the administrators may be appointed by the powers-to-be to keep order on campuses. Then, obviously, as obedient civil servants, they would support the police in its “cleansing” activity although they would rarely have the authority to call it in.  

But in the US, university administrators are not appointed by Biden, nor by Congress. Why would they then attack their own students? Are they some evil individuals who love to beat up younger people?

The answer is, No. They are not. They are just in a wrong job. They are not seeing their role as what traditionally was the role of universities, that is to try to impart to the younger generation values of freedom, morality, compassion, self-abnegation, empathy or whatever else is considered desirable. Their role today is to be the CEOs of factories that are called universities. These factories have a raw material which is called students and which they turn, at regular annual intervals, into graduates. Consequently, any disturbance in that production process is like a disturbance to a supply chain. It has to be eliminated as soon as passible in order for the production to resume. Graduating students have to be “outputted”, the new students brought in, moneys from them have to be pocketed, donors have to be found, more funds to be secured. Students, if they interfere with the process, need to be disciplined; if necessary by force. Police has to be brought in, order to be restored.

The administrators are not interested in values, but in the bottom-line. Their job is equivalent to that of a CEO of Walmart, CVS, or Burger King. They will use the talk about values, or “intellectually-challenging environment”, or “vibrant discussion” (or whatever!),  as described in a recent article in The Atlantic, as the usual promotional, performative speech that top managers of companies nowadays produce at the drop of a hat. Not that anyone believes in such speeches. But it is de rigueur to make them. It is a hypocrisy that is widely accepted. The issue is that such a level of hypocrisy is still not entirely common at universities because they were, for historical reasons, not seen exactly like sausage factories. They were supposed to produce better people. But this was forgotten in the run for revenue and donors’ money. Thus the sausage factory cannot stop, and the police needs to be called in.


Sunday, April 28, 2024

The world according to Garegnani


    I have not thought of this until I had lunch with Anwar Shaikh today. I have personally known Anwar for at least ten years. But only today it struck me that I was meeting a hero of my early intellectual life, although the difference in age between Anwar and me is not that great. But he was my hero while I was a nobody.

    In the early 1980s, thanks to my mentor Branko Horvat, we had a very good group of neo-Ricardian economists in Belgrade who used to meet about once a month, present papers and discuss them. It was a pan-Yugoslav group with meetings alternating between Belgrade, Zagreb and Ljubljana. It was carefully organized, with presentations, assigned discussants, and commentators. Everything was very friendly, collegial and non-competitive. We would discuss and disagree and then go to a nice restaurant.  The literature we studied was entirely Marxist and Staffian. We read many neo-Ricardian/neo-Marxist writers but among all of them, for some reason (perhaps because of clarity of his writing), I liked Anwar Shaikh the most. This is what I recalled today.

    The smartest member of our small group of neo-Ricardians eventually killed himself. I remember getting together with him for dinners tete-a-tete that would last for hours. Then we would move to his very comfortable and large apartment in downtown Belgrade where he would tell me at length how Garegnani’s equation (6) in his 1972 paper was wrong; how mathematically it did not make sense. He would get a piece of paper, and write down the correct derivation. He was not a fake. He knew mathematics extremely well, but could not write quickly and easily. It would take him months and even years to write a couple of pages; discussing a single draft of his paper, we must have spent five or six dinners, drank ten bottles of wine, and  met at one or two months intervals, where each time I would learn that he had advanced by one paragraph in his earth-shattering Sraffian paper. I think that eventually, perhaps ten years later, a couple of his papers were published. But they give just a pale reflection of the brilliance of the man.

    Neo-Ricardians in Serbia existed in the world that had no relationship with  anything around them. They discussed capitalist relations of production, while we had socialist. They focused on the π/w relationship while profit was an unmentionable category. They spoke of wage bargaining while the state decided on salaries. So theirs was the world of equations, differential calculus, and logical rules that could as well have been the world of astronomy as the world of a social science.

    One May 1 (that is, accidentally, on the holiday day), I had a lunch with several friends, and after the lunch ended, I went out in search of a taxi to go back home. It was raining. I ran into one of my socialist, and this case neo-Keynesian, professors. She was also in search of a taxi. In those days, in Belgrade, there were two taxi companies: a private one, and a state one. We found a private taxi company car. But she refused to get into it. She wanted to be driven by a state-owned company and a worker who was neither a petty-bourgeois nor a hired laborer. The problem was that we could not find one such. Finally, one state-owned taxi appeared but the driver was unwilling to stop and take us (most likely he was driving home to rest). My professor however hit the roof of his car with her umbrella and the taxi stopped.

    So the two of us shared the ride, and I insisted that I should pay. She not only refused but pronounced the sentence that I have said a few times since: “I will never let my student pay for me”.  

    During the ride she told me that she was just completing the book that formally proved the superiority of the socialist mode of production and the forthcoming end of capitalism. I thought it was strange that we had to beat the socialist taxi driver with an umbrella to drive us home but said nothing.

    Like neoclassical economists in the West who lived in a made-up world of their own, we lived in ours. With correct equations and beating taxi drivers to pick us up.  

Saturday, April 27, 2024

Abundance, capitalism and climate change


In classical Marxism, communism is defined as a society of material abundance. It is a society where goods flow in abundance (“after the productive forces have…increased…all the springs of co-operative wealth flow more abundantly”, Marx, Critique of the Gotha Program). It is also a society that, having overcome the division of labor, allows for full self-realization and flowering of individual abilities:

He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so [under capitalism] if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner… without ever becoming hunter, fisherman, herdsman or critic.” (The German Ideology)

When we define abundance in communist society it is important to keep in mind that it is material abundance, viz., abundance of physical goods and some services. This cannot be a abundance in everything. We can each have as many cars as we wish but the number of desirable parking places near the good restaurant, where we get a free dinner,  or near a good theater will always be limited.

One could even argue that the abundance of material goods cannot be absolute. For example, if cars are abundant and one can have as many as he or she wishes, they can indulge in anti-social behavior by destroying a car each day.  Thus eventually, society must step in and impose a limit on the number of cars. It can be countered, however, that this is not a likely behavior because a socially destructive behavior is generally indulged in order to show power and wealth. One could expect this kind of behavior to be minimized in communist societies because wanton destruction of goods that are accessible to all does not convey status. A useful comparator may be the wastefulness with the things that are relatively cheap today like water or electricity are used. Neither of them is, for most households in rich countries, very expensive. There is thus no particular status one gets by being ostentatiously wasteful with them. The same might apply for most goods under communism: since they are accessible to all, intentional wastefulness is not signaling power.  

This summary of the standard Marxist view faces one significant problem. The definition of abundance implies full satisfaction of all needs. However, Marx very clearly defines needs as a social category, something that evolves with the development of society. What it means is what we perceive as a need today is a function of what currently exists in the world and consequently what is the current level of development. In Roman times nobody felt the need for a smart phone, nor a frustration if they did not have it. Likewise, we do not experience  the need to spend a weekend on Mars simply because such a good is unavailable.

If needs are a historical category, then new needs arise with technological progress. If new needs are constantly born, the abundance that was presumed in the opening paragraphs cannot be achieved because sufficient material means to satisfy these new needs will always be deficient. When the first laptop was invented, no matter how efficient the production, society could not create billions of laptops almost instantly. Some people’s needs for a new laptop had to go unsatisfied. The access to new goods must always be unequal, and this inequality will produce frustration and imply absence of abundance.  

To summarize: Our needs increase in step with technological progress but the technological progress cannot at all points in time satisfy the needs of everybody. Abundance defined as full satisfaction of all material needs cannot be achieved in technologically advancing  societies.

When can all needs be covered by societal production? Only in a society which does not experience technological progress and where no new needs can arise. In such a society it is possible to imagine an almost unlimited production of things which already exist. That society can be related to today's society by realizing that in the rich part of the world most of our current material needs, defined in terms of goods that already exist, can be fully satisfied. Given the productive capacity of rich countries, everyone could have a decent home, refrigerator,  laptop, dishwasher, car etc.

To reach a society of abundance requires that we accept absence of technological change or economic stationarity. The question then becomes  whether capitalist society can ever be stationary. Schumpeter thought that imagining capitalism as a stationary society is a contradiction in terms. Capitalism can exist only if profits, on average, are positive. No capitalist or entrepreneur would invest if they cannot expect a net return, no more than a worker would work for a zero wage. If profits are positive they will be used for investment; investments will generate growth, and that very growth will create new products, which in turn will create new needs and make the society of abundance impossible.

This then means that the stationary society that is compatible with full satisfaction of all human needs cannot be capitalist. Capitalism, by definition, means limitless change and limitless progress. With the society of limitless change and limitless progress we cannot have abundance.

Degrowth advocates therefore might have a valid point when they argue for an end to capitalism if they believe that climate change can be stopped only if society is stationary. Stationary society, end of capitalism, and abundance are logically consistent.  


P.S. The last point is an implication based (I hope correctly) on Kohei Saito’s arguments. I had a privilege to participate in a panel with Kohei and my interpretation is based on that discussion. I have not yet read his just published (in English) book “Slowdown: The Degrowth Manifesto”.