Afternoon Tea: Frozen Assets (1931)

This is from the communist Mexican artist Diego Rivera:

nol art rivera frozen assets 1931
Click here to zoom

Created during the Great Depression, this one is almost too predictable. It’s beauty alone, though, makes it worthy of an afternoon with tea.

Here is more from NOL on the Great Depression.

Some challenges Brazil has to overcome to achieve development

Now it is true. As I predicted some time ago, Jair Bolsonaro became Brazil’s president. Bolsonaro is not the brightest guy in the room, but I believe he has some qualities a leader requires. Above all, Bolsonaro shows conviction, a quality central to leadership, as Albert Mohler observes. Bolsonaro has the conviction that socialism/communism is the wrong way, and that Brazil has to try an alternative. The alternative, he has grown to understand, is the free market.

In his first remarks as president, Bolsonaro said that Brazil is “leaving socialism.” Some Brazilian friends, even people with high education, found this quote preposterous. In their view, Brazil can’t abandon socialism because she never tried it. That’s quite scary! After almost two decades of rule of the Worker’s Party (PT) there are people in Brazil who believe that Brazil never tried socialism.

It must be observed that PT is a big party, with many internal tendencies. Still, historically the party has the objective of turning Brazil into a socialist country. It is quite shocking that some people haven’t realized this!

On the other hand, many Brazilians still charge capitalism for all the country’s problems. The difficulty with this is that, if we take capitalism as free-market, Brazil has never been capitalist. Brazil’s economic history, in a nutshell, is of government control of the economy.

One of the challenges Brazil has, as surprising as it may be, is to teach people what is socialism and what is capitalism. The other is to make people understand that socialism is just bad. It has been tried. It failed, as it should. Capitalism, understood as economic freedom, worked everywhere. And there is no reason to believe that it wouldn’t work in Brazil.

Peer pressure writ large

Part I

We fight for and against not men and things as they are, but for and against the caricatures we make of them.

~ Joseph A. Schumpeter

One hurdle to public discourse that is underrecognized and must be addressed is the simple fact that individuals in the broader population don’t really know what they want. There is often no clear center of self-awareness. Instead, the peer and peer-driven media substitute for personal and communal identity. On the one hand, this situation has existed throughout history without imperiling the human species. On the other hand, this is an era of mass media and peer influence. Therefore, examining role of the peer and its media, specifically social media, is important in a time of societal disruption and discontent.

In the FuturamaSimpsons crossover episode from November 2014, Homer Simpson tries to explain freemium games to the Futurama crew:

Okay, it starts free, right? Then you visit your friend’s game, and he’s got this awesome candy mansion. […] And you’re like, “99 cents?!” You bet I’d like one!” And that’s why I owe Clash of Candies $20,000.

The cartoon aptly summarizes the real-life effect the prevalence of the peer can have. Naturally, there is great comic potential in these situations, and the Simpsons creators capitalized appropriately. Though it is worth adding that the ongoing theme of Homer Simpson possessing a weak character not only made the above quote plausible, it might be a portent to the real problem.

Ruth Davidson of the Scottish Conservative Party wrote an article titled “Ctrl + Alt + Del. Conservatives must reboot capitalism,” in which she argued that the current capitalist arrangement has failed. Concerning the collapse of middle society towns and villages, in the face of growing prosperity in the metro areas she wrote:

How does a teenager living in a pit town with no pit, a steel town with no steel or a factory town where the factory closed its doors a decade ago or more, see capitalism working for them? Is the route for social advancement a degree, student debt, moving to London to spend more than half their take home pay on a room in a shared flat in Zone 6 and half of what’s left commuting to their stagnant-wage job every day; knowing there is precisely zero chance of saving enough to ever own their own front door?

Or is it staying put in a community that feels like it’s being hollowed out from the inside; schoolfriends moving away for work, library and post office closures and a high street marked by the repetitive studding of charity shop, pub, bookies and empty lot – all the while watching Rich Kids of Instagram on Channel 4 and footballers being bought and sold for more than the entire economy of a third world nation on Sky Sports News?

Not a single person familiar with this impossible choice should be surprised by the rise of the populist right and left, of Donald Trump and Jeremy Corbyn, with their simple, stick-it-to-the-broken-system narrative. This is what market failure piled upon social failure piled upon political failure looks like.

If the goal of government is to ensure that everyone has a job and paycheck, Davidson made some very good points. In fairness to her, the cultural attitude today, both in the US and the UK, does indeed tip toward the idea that it is the responsibility of government ministers, such as Davidson, to create magically a world of stable, predictable work and money. What Davidson caught but then also missed is that much of the desire of the people isn’t about money, jobs, or stability, it’s about “social advancement,” to use her own words.

Anyone who thinks that the workers of the old, idealized industrial world were spared non-material social concerns, or arriviste inclinations, is deluded about the course of social history. Nor, are such concerns a purely feminine pursuit, as the Victorians liked to think, supported in their belief by the works of authors such as Jane Austen, Elizabeth Gaskell, and George Eliot (nom de plume of Mary Ann Evans); William Faulkner, Sinclair Lewis, F. Scott Fitzgerald, and, to a lesser extent, Ernest Hemmingway all made careers out of chronicling male social climbing. There is probably something significant about the fact that the second set of authors were all between-the-Wars Americans, but that will have to be set aside for now.

As Polly Mackenzie of the UK think tank Demos wrote, weighing in on the concept of the “working class identity crisis,”

If you’re one of those people who gets a bit misty eyed about the jobs of the past, how fantastic they were, and how they’ll never be replaced, I can hear you scoffing at the notion that putting stuff in boxes [discussion centered on Amazon as the major employer for the low-skilled, under-educated] could ever be meaningful. Those who hark back to the pit villages and steel towns that gave working men a sense of pride and identity will tell me that putting stuff in boxes isn’t ‘man’s work.’

But those people are wrong about where meaning comes from in the workplace. True, some jobs are meaningful because of the direct impact they have in the world – some people save lives, educate children or create works of art. But there’s no such direct meaning in bashing coal off a rock face. Mining is grueling, physical labour, but if that were enough to create meaning then the warehouse jobs could match it, exhausted limb for exhausted limb.

To borrow the title of Gregg Easterbrook’s book, this is The Progress Paradox: everyone is better off but no one is happier. Mackenzie grasped that societal breakdown isn’t about actual jobs; as she also pointed out, none of the “disenfranchised” workers really want to go back to jobs that cost them health and limbs, and the social respect that they claim they’ve lost never truly existed – name one time in history when a coal miner held equal status to a professor or an artist.

Continuing on the confusing, conflicting perceptions of what people want, Henry Olsen of the Ethics and Public Policy Center in Washington, DC, went to Levittown, PA, and interviewed a wide range of locals in an effort to understand the skeleton of populism.

Greg [a local] put it this way: “Trump is telling them ‘it’s OK to be you.’ The rest of culture is telling them ‘it’s not OK to be you.’”

As Greg told me, whether the message is economic – “you have to go to college to succeed” – or cultural “I like to listen to AC/DC; what’s wrong with that?” – Levittowners and people like them have felt the brunt of elite disdain. In voting for Trump, these blue-collar workers were rebelling against the idea that America is no longer for people like them.

“Levittowners just want a good Christmas for their kids and to go to Jersey Shore for a couple of weeks. They want some acknowledgement that is OK,” Anthony [another local] said. Trump gives them that, and they are willing to overlook nearly everything in exchange.

In conclusion, Olsen wrote:

Rather than viewing global blue-collar discontent through an economic lens, we ought to be looking at populist-backing voters more as people like us, holding similarly cherished identities and hopes. And maybe if we did that, we might all be a bit better off.

It is important to note that according to Olsen, the majority of the local population held Bernie Sanders in equal esteem to Donald Trump. In a broad sense, Olsen’s comments and interviewees echo Davidson and Mackenzie: The good life, rather than simply money, is the fuel behind the average person. The dissonance is that “the good life” varies wildly by perception, not to mention goals.

Consider, for example, the statements uttered by Olsen’s source Greg regarding perceived attitudes on education, economics, and culture. Immediately, it is doubtful that anyone in wider society gives a hoot about any individual’s taste in rock music. In fact, it is more probable that Greg would find the noise issuing from average college dorms and frat houses to be quite recognizable. As a claim for difference and despite, popular culture is a non-starter.

On the success and career side, while the attitude Greg identified certainly exists, it is important to remember that it is the concoction of Americans by and for themselves. The “college-or-nothing” idea is a creation of the peer. The vocational and technical schools which benefited people like Greg didn’t spontaneously close in the decades after World War II; they closed because the market dried up (let’s ignore any correlation to the draft for now) as everyone, flush with post-War prosperity, raced into colleges and universities, regardless of quality or level of preparation. Even now, there are plenty of viable alternatives to obtain skills and commensurate financial independence for the less scholastically inclined. For someone to claim the college-success paradigm as a source of socio-cultural disenfranchisement suggests an ultimate conformity to the pressures of the peer through blind acceptance of a narrow definition of success. The number of fields where it is absolutely true that a person must attend college to succeed are quite few, require specific talents, and are highly specialized. It is not an organic thought for a person with average aspirations and expectations to compare himself to someone in one of these professional areas. Such a comparison only occurs through contact with and shaping of perception by a peer or group of peers.

But, one might argue, how is this possible if the Gregs of the world live their entire lives in circles of people with similar backgrounds and information levels? The answer is through images and the media of imagery. Particularly influential are television and social platforms, such as Instagram, largely because of their capacity to shape perception.

Part II

toffsandtoughs_cropped.jpg

This photo is titled “Toffs and Toughs,” taken by photographer Jimmy Sime in London in 1937, and it shows two English public (private for Americans) schoolboys waiting for their parents to come pick them up. The photo has two stories, the actual story, and the one built around it by malcontents. The day after Sime took the photo, the leftist and class-warfare fomenting News Chronicle, which later merged into the modern tabloid Daily Mail, published it underneath the headline “Every Picture Tells A Story,” but then declined to clarify the photo at all, beyond misidentifying the two boys in morning dress as Etonians attending the Eton-Harrow cricket match. Almost simultaneously, American Life magazine picked up the photo and published it with further misidentifications and lack of clarification. The message was clear: the elites ignore or turn their back on the underprivileged and working-class.

The real story of the two “elite princelings” was very different. Both boys, students at Harrow, came from solidly middle-class backgrounds; the only trait that might be interpreted as “elite” about them was that their fathers were Harrovians. The younger boy Peter Wagner (on the far left) came from a family of immigrant tradesmen who had bootstrapped their way up the ladder. By 1937, the Wagners had settled into being a family of scientists and stockbrokers, comfortable, respectable, conventional. Peter served honorably during World War II and then took over his family’s business. The older boy Timmy Dyson (center) came from a professional military family, great of name but lacking means. Born into decidedly ordinary circumstances, he spent his childhood as an army brat. His parents only afforded Harrow because he was an only child. He died suddenly a few months after Sime took the infamous photograph.

Of the three “poor” boys, their realities were also much different from the one implied by the photo. None of them was a street urchin. Since they were playing hooky from school the day of the photo, one can extrapolate that they came from families with sufficient means to keep teenage boys enrolled in school despite living in Depression-era London. The two smaller boys, flanking the tall one, both became successful businessmen, while the taller boy became a civil servant. The three never forgave the media for casting them in the role of impoverished victims, arguing that they all had much richer lives than the photograph showed. Literally richer in the case of the two small boys, who post-War reportedly lived at a level of luxury unknown to “elite” Timmy Dyson.

“Toffs and Toughs” is an interesting study of imagery and the myths and perceptions that it can create and perpetuate. It is not an accident that Ruth Davidson, when discussing the modern young person’s alienation from capitalism, wrote, “all the while watching Rich Kids of Instagram on Channel 4 and footballers being bought and sold for more than the entire economy of a third world nation on Sky Sports News.” These are highly visual media which are also highly ersatz, shaped into the appearance of a cohesive whole through skillful editing.

Sports stars (and musicians, dancers, and artists) are terrible for comparison because becoming one requires herculean efforts and hours of practice. An extension of the 10,000-hour rule is: if someone isn’t willing to put in 10,000 hours to master a skill, he has no right to engage in envious nattering. Rich Kids of Instagram is a British reality TV show that spun off of an eponymous Tumblr thread wherein the purported Instagram photos of the superrich are collected. If one examines the pictures with a critical eye, it becomes apparent that the majority are staged – anyone standing on a pier can take a selfie with a docked yacht; it doesn’t mean that he owns the boat.

In the fourth episode, “From Cradle to Grave,” of Milton Friedman’s Free to Choose, 1980 original, at 32:27, Helen Bohen O’Brian, then Secretary of Welfare for Pennsylvania, astutely observed that people estimated their quality of life based on the people around them. What visual media has done is to bring people like the exhibitionists of Rich Kids of Instagram into people’s lives and present them as if they are in some manner the viewer’s peers. It is as divisive and dishonest as claiming that “Toffs and Toughs” told a “story.” If one considers that Guardian columnist Marina Hyde outed the TV show by revealing that a “rich kid” was not particularly rich, was a former tenant of Hyde’s family, and the place portrayed as the reality starlet’s house was their own property, into which the TV crew had unknowingly broken and entered, the deception is exactly on par with the 1937 one. It is all a pitiful lie, but one which, as Davidson spotted, the vast majority of people see and envy as truth.

In closing, there is one last example to consider. Marc Stuart Dreier, currently in prison for fraud, is an ex-lawyer whose scams were eclipsed only by those of Bernie Madoff. In an interview for the BBC documentary Unraveled, Dreier explained that he wasn’t motivated by greed or desire for the “rich life,” no, he wanted to be someone who socialized with golf and football stars. At the start, he was the embodiment of the American dream – son of an immigrant goes to Yale and Harvard Law – but then he discovered that law was not his métier. He neither enjoyed it, nor was he good at it. Unable to succeed through honest means, he turned to fraud. He wanted to be successful, not for its own sake but for the peer group he hoped to join. The documentary shows repeatedly snippets of Dreier in the guise of lawyer-philanthropist glad-handing footballers and playing with famous golfers, always with cameras there to catch every move. The goal was the visuals, not the reality.

In a battle of the mythic caricatures of Joseph A. Schumpeter, the victim is going to be liberty and responsibility. Today, Schumpeter’s words are truer than ever. Everyone has caricatured everyone else. And at the same time, everyone imagines himself on stage with his peers as the audience. There is no doubt that social media and technology have exacerbated the problem of imagery and the peer – fictional Homer Simpson and his candy mansion and Rich Kids of Instagram – but it is delusional to pretend that it didn’t exist before apps and smart phones. Blaming capitalism for the discontent caused by voyeurism and false expectations is both a logical non sequitur and a very serious peril for liberty. For the sake of preserving freedom, it is important to ask, to demand even, by what metric are the disaffected judging their lives. If it is by the peer, as Bohan O’Brian argued, then it is not a valid metric and should be treated as such.

Legal Immigration Into the United States (Part 14): Immigration and Politics

Left-Wing Immigrants

Immigration is seldom politically neutral. Large-scale immigration as experienced by the wealthy Western countries changes the balance of power between domestic parties.  Immigrants seem to never divide their loyalties evenly between existing parties. And, immigration may indirectly be responsible for the emergence of new, nativistic political parties.

Immigrants to France, nearly always join the French Socialist Party. Immigrants to the UK tend strongly to vote Labor. Immigrants to the US vote overwhelmingly Democratic. The reasons for these tropisms are complex. They may include the possibility that some sort of vaguely defined social democracy is the default preference for a humanity ever so slowly extricating itself from ancestral collectivism. Why else would socialist-sounding noises have still not lost their allure in spite of the many failures, some tragic, associated with the word, in spite also of the manifest success of capitalism in raising millions out of poverty? The dramatic sinking of socialist and oil-rich Venezuela though well documented by the media seems to have made little impression on young Americans, on people reared in the midst the plenty of capitalism. It’s as if a sort of subdued ethnocentrism protected Americans from rational consciousness: They are Latins; of course, we would naturally do better. Immigrants from poorer countries, immigrants from less well informed countries are not likely to resist the lure better than young Americans. (“Not likely,” it’s not completely impossible.)

Market-oriented thought does not come naturally to the many because, with its inherent (and, in Adam Smith, explicit) justification of selfishness, it’s ethically counter-intuitive. It invites us to act exactly contrary to the way our mothers and most of our religions demand. (Take the current Pope, for example….) At any rate, few Americans read Adam Smith, of course. It’s not obvious how much basic economics is taught in high school, or in college. In fact, it’s easy to graduate with honors from a good American university without a single course in economics. Others in the world, with a less vivid personal experience of successful capitalism, read him even less, I suspect. I don’t think I could find a single French adult who has read anything by Smith though some well educated people there have heard of him. (I cast a line on this issue on an active French pro-capitalist Facebook group – Libéraux Go – for a week without a single bite.)

I fear that there is no reservoir of intellectually market-oriented potential immigrants anywhere. Or of immigrants with a potential for market orientation. India will continue sending America leftists who function well individually in a market- oriented society while collectively wishing to bring it down. The most promising regional source of people ready for capitalism is probably the Islamic world. That’s not because many Muslims have a theory of the market but because, sociologically speaking, there is a vigorous merchant tradition in Islam. The fact that the Prophet himself was a merchant, as was his older, educated, mentoring first wife, probably also helps a little. The additional fact that Islam early on provided an explicit ethical framework for entrepreneurship – including lending – probably awards a degree of legitimacy to anything related to capitalism in Muslim countries that is practically lacking in the formerly Christian world, for example. (Please, don’t tell me about Max Weber’s The Protestant Ethic and the Spirit of Capitalism! My friend, the late François Nielsen and I destroyed its myth in 2001 – “The beloved myth: Protestantism and  the rise of industrial capitalism in 19th century Europe.” Social Forces 80-2:509-553.)

Perhaps, I am engaging in wishful thinking but, the multiple failures of socialist experiments in Latin America in a person’s lifetime may supply a trickle of pro-capitalism immigrants. (Currently, there is an exodus of middle-class Venezuelans to Florida.) Finally, disenchantment with the unkept promises of high-tax European welfare capitalism may give the USA another source, although the countries concerned are in sharp demographic decline. The first Macron government in France created a new cabin-level post charged with persuading the young elite to not emigrate! I take this as a good sign for the US.

[Editor’s note: in case you missed it, here is Part 13]

Cities in capitalism are more beautiful

The other day I wrote about some of the reasons why I love capitalism. One of them is that cities in capitalism are more beautiful. I am convinced of this when I think about some cities I am more familiar with, including their geography and history.

Most foreigners I know have difficulty to answering correctly, when asked, “What is Brazil’s national capital?”. Most people answer Rio de Janeiro, but it is actually Brasilia. Many people say that beauty is in the eyes of the beholder, but I am very inclined to say that this is not so. I am still not 100% sure about this, but I believe that there is something objective about beauty. Maybe it is not something so strict, like a point. Maybe it is something broader, like an area. But still, I am inclined to say that there is something objective about it. At least for me, Brasilia is one of the ugliest cities conceivable. I am really glad to say that. Its architecture was designed by Oscar Niemeyer and Lucio Costa. Growing up in Brazil, questioning that Niemeyer was a genius is almost anathema, almost like saying that Maradona was better than Pelé or that Ayrton Senna was not the best Formula One pilot ever. Because of that, I was always happy to say that Niemeyer’s buildings are among the ugliest things on the surface of this planet. It was like shouting that the king is naked.

Brasilia is very beautiful from the sky. Its shape resembles an airplane or a cross. But that is the problem: the city is beautiful from heaven, but not for the people walking in it. It was made for God to see from up there. But, as Niemeyer was a convinced atheist, I am not sure who is watching his creation. My guess is that Niemeyer thought that he was a god. A very mean god, who didn’t care about people having to spend lots of time in cars driving long distances.

Niemeyer was also related, with Lucio Costa, to Barra da Tijuca, a neighborhood in Rio de Janeiro where I spent lots of time growing up. Lucio Costa, as far as I’m concerned, was not a communist. I believe he was closely connected to the Brazilian version of positivism. Because positivism and communism are basically the same, it doesn’t make much of a difference. Barra da Tijuca is very similar to Brasilia: very beautiful if looked at from the sky, but very unpleasant for the pedestrian. Very long distances to walk. Cars are mandatory.

The most pleasant neighborhoods in Rio de Janeiro are the result of spontaneous order. As Hayek noticed, spontaneous order is one of the central features of capitalism. People usually contrasted between planned economies (such as the USSR) and unplanned economies (such as the US in some moment of its history). But Hayek observed that all economies are planned. Some are centrally planned. Others are planned by several individuals who are not following a specific central plan.

I am convinced that cities that follow no plan, or a very simple plan, are more beautiful than cities that follow a very specific central plan. New York, as far as I know, followed a simple plan, a grid. But other than that, there was a lot of freedom in the use of the space for much of its history. It’s a city that I just love. I am more comfortable talking about Rio de Janeiro. It is a city that was at its best before modern architecture, positivism, socialism, Developmentalism, and other isms. It was better when Brazil had a little more classical liberalism.

Some reasons why I love capitalism

Here is a list of things I love about capitalism. Before presenting the list, it is important to say what I mean about capitalism. By capitalism, I mean free market capitalism. I don’t mean oligarchic capitalism (as it is very common in Latin America), state capitalism (communist countries) or Crony capitalism (sadly, more and more prevalent in the US). What I mean by capitalism is a system consistent with personal choice, private property, and voluntary exchange. The system Adam Smith described in Wealth of Nations. With that in mind, here is the list:

capitalism is true to human nature;

capitalism (slowly but surely) produces (immense amounts of) wealth;

capitalism is (more or less) stable;

capitalism helps the ones who need the most;

capitalism allows us to help others in need;

capitalism reduces violence;

capitalism reduces the incidence of wars;

capitalism breeds cosmopolitanism;

capitalism makes a better use of natural resources;

capitalism produces more beautiful cities;

capitalism is consistent with the Bible.

Cultural marxism and the Overton window

According to all accounts, Karl Marx was not an easy person. Basically, he had the habit of making the life of all around him miserable. However, as Joseph Schumpeter (himself far from being a Marxist) loved to point out, he was extremely well read. This allowed him to build a complex economic theory focused on factory workers, without ever (or almost ever, at least) stepping into a factory. Life for a factory worker in 19th century Britain was not easy, and Marx was very able in pointing that out. His economic theory, however, was a complete failure, as Ludwig von Mises aptly pointed out.

Marxism should have died in the mid-20th century when it became clear that all socialist countries are poor and oppressive. However, it survived as cultural Marxism. People like Antonio Gramsci, Michel Foucault, Jacques Derrida, and everybody in the Frankfurt School were not interested in economics. Instead, they wanted to study culture. The oppressed were not the factory workers anymore, but the social minorities. Libertarians and Conservatives should sympathize with that. It is true that women, non-whites, and homosexuals suffered a great deal in the masculine, white, heterosexual West. To point out that they suffer even more outside the West is not particularly helpful. We don’t have to throw the baby out with the bathwater. However, as with much of original Marxism, cultural Marxism is only good at pointing the problems, not at offering solutions. Modern civilization, as Sigmund Freud very well observed, is full of discontents. This is an old argument. Rousseau points out how modern civilization is cruel. Voltaire answers that, as cruel as it might be, it is still better than the alternative.

Our problem today is that cultural Marxism was successful in pushing the Overton window in their favor. That was precisely Gramsci’s objective: to fight “bourgeois” cultural hegemony with Marxist cultural hegemony. To a great degree, he succeeded. We need to fight the cultural war. As much as modern life can be bittersweet, I still haven’t heard a better alternative. Besides, as a Christian, I have to say with Saint Augustine that men have a “God-shaped hole” that no civilization – Modern, pre-modern or postmodern – can fill. But still, I enjoy the things that capitalism, capitalism that originated from the Protestant ethic, has to offer.