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If you read one thing about political economy all year, read this interview with Michael Hudson

Stumbled across this interview with one of my favorite economists, Michael Hudson. He is not from Harvard or MIT or Chicago, so he doesn’t get as much attention as the Paul Krugman’s of the world, but he punches well above his weight when it comes to his abilities to articulate what is happening within the political economy of the world.

The interview is long but you should read the entire thing. It is honestly the best piece I have read on political economy in at least 2 years. The tl;dr version is that Obama long ago sold out the Democratic constituency to Wall Street, the deficit debate is all political theater, the bailouts vested the power of Wall Street in the same way that the railroad land giveaways vested the power of the robber barons, Greece will default and get kicked out of the EU, the financial estate is essentially at war with the public… it’s all stuff you’ve probably heard before, but Hudson does an exceptional job of tying it all together.

I feel like most people are still asking “How did it all happen?”, when what we really need to do is ask “What is happening right now?”. The vast majority of people believe the propaganda pushed out by the media. No one reads or listens with skepticism and objectivity anymore, and I don’t mean to rant, but maybe they never did. Is there just too much noise? How can you explain the entire political economy without debasing your argument by making it sound like a wild conspiracy?

I think this is the point that a lot of mainstream middle Americans don’t get: it isn’t that there is a group of Illuminati who sit in a lair somewhere and have discussions about how well their plan is going, it is that there are outsiders and insiders: the insiders understand what is happening and do their best to work within the system and profit from it, while the outsiders, some of whom know what is happening, are the majority who get screwed.

The only thing we can really do about it is stop caring about money; stop caring about year-over-year GDP growth; most of all, stop believing what you are told. You are not “informed” because you watch both MSNBC and Fox News, you are not one of the people who “get it” because you vote Democrat, read the Huffington Post, and have a Noam Chomsky book or two sitting on your bookcase that you probably never read. I’m stoked that you are at least a social progressive, and I am glad that you read more books than the Bible, but do yourself a favor and divorce your conceptions from the pop cultural memeosphere. We all have an emotional and cognitive investment in the world as we see it, but we are often unaware of exactly how and when these investments were made… and we sure as hell don’t check on them with half the alacrity we reserve for our financial investments.

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Timothy “Speed” Levitch

I heard of Speed Levitch several years ago while I was still completing my undergrad. A T.A. I had in a Chicano Studies class had recognized me as a earnest scholar and recommended that I check out the film The Cruise. I never did watch it until today, but I did check out some videos and read some articles about the guy on the internet, and I watched Waking Life without even noticing that Levitch was in it (probably because I didn’t really like Waking Life). I filed him away in my memory banks under bohemian street philosophers who seemed interesting, if not a little bit weird or half-baked, promptly forgetting about him as I explored the more arcane areas of financial engineering and pondered the ramifications of the economic crisis. Today I ran across the following quote, on The New Inquiry, which reignited my interest:

People riot the same way they orgasm. This is why the riots of men end as fast as they begin and have never really changed anything. Woman’s riot will be an ever-expanding, multiple, only-accumulating rebellion that will shatter this paradigm forever.

Here is an excerpt from The Cruise:

If you have Netflix, it is available for instant streaming as of right now.

Categories: Cool People, Philosophy

Transcendent Man: Ray Kurzweil

I watched the documentary Transcendent Man tonight and it is a very interesting and educational film. I highly recommend it to anyone who has never heard of Ray Kurzweil or is unfamiliar with Moore’s Law. If you’ve already read Kurzweil’s book or seen him talk before, you will know what you are getting yourself into with this movie and might actually find it kind of boring (like I did) (but its still good).

Kurzweil is an inventor and engineer who holds a lot of patents on optical scanning technology (specifically OCR) and several musical instruments. He is pretty famous: in the film it seems like everyone from Colin Powell to Bill Gates is giving him props. Over the course of the last several decades, he has made a name for himself by making bold predictions about technology, most of which have kind of half-way or sorta all-the-way come true (sometimes not always exactly when Kurzweil predicts they will), although there is a lot of debate in the scientific community about the accuracy of his predictions. His Big Idea is the “Singularity”: a point in time where technological change will happen at such a fast rate that we will have to become cybernetic organism just to understand and comprehend it. Because of Moore’s Law, computer will be as small as blood cells by the year 2040 and we will be able to bioengineer ourselves into cyborgs that will live forever and be able to download information into our brains ala The Matrix. Most of the skeptics don’t so much disagree with the premise of his predictions as they do with when they will come true, and this is where things get interesting.

Kurzweil has been accused, and these accusations are somewhat supported by the seemingly candid view we get of him in Transcendent Man, of having a lot of fear-of-death driven hubris. The film brushes past the facts of Ray’s father’s illness and somewhat early death, Ray’s Type II diabetes, and his less than subtle obsession with immortality, to focus on the marvel of his predictions. In the film, he seems obsessed with the idea of his own genetic fragility, and also his ability to perhaps single handed invent a way to cheat death. Kurzweil definitely has a large emotional/spiritual/existential investment in his predictions coming to light.

Another criticism of Kurzweil’s extrapolations is that Moore’s Law has a limit (something freely admitted to by Gordon Moore himself). Computers can only become so small before they will have to actually be smaller than atoms (these subatomic computers are theoretically possible, and designing these types of computers is the objective of quantum computing). Also at a certain point, the speed of light and the gravitational constant come into play, although I am not versed enough in physics to explain the ramifications of these limits. Suffice it to say, the unlimited exponential growth that Kurzweil bases his theory from is dubious, although his predictions of cell sized computers may come to fruition before these limits are met.

Artificial intelligence also plays into Kurzweil’s view of the future world. He predicts that AI’s smarter than every single human brain on the planet combined will come into existence within the next 50 years. I personally find this hard to believe because we haven’t been able to build a machine that can pass the Turing Test yet. It is interesting to note the diverging opinions amongst some of the “experts” in this field. The kind of AI’s that some of Kurzweil’s peers describe in the film sound more like Skynet than the benevolent personalities imagined by Kurzweil himself. In any case, I am far from an expert on AI and the film doesn’t really try to explain the specifics of it, which is too bad because it is a fascinating and ill-understood subject.

Regardless of the accuracy of his predictions or the possible hubris behind his optimism, Ray Kurzweil is undeniably a genius and an inspiration. I personally hope that the predictions he makes come to be a reality within his lifetime so that he can see The Singularity happen and so I can live forever as a cyborg.

Here is a simple and easy to understand story about innovation in America

Prof. Tyler Cowen is my favorite blogger and favorite contemporary economist.

http://marginalrevolution.com/

I get many of my best ideas from him. More recently, he wrote and published an e-book called The Great Stagnation. It is an easy and informative read, cannot recommend it highly enough. Rather than try to summarize what Tyler’s ideas are, I will let the man himself do the talking.

Milton Friedman: 2005 Interview with Charlie Rose

Watch it HERE

Milton Friedman is arguably the most important thinkers of the 20th century. In spite of this, or perhaps because of, he is hated and misunderstood by a great many people. I think a lot of the hatred is misplaced. Any of the (questionable) connections he has to some of the more ill-conceived policies of the Pinochet regime or the IMF/World Bank are greatly overshadowed by the paradigm shifting contributions he made to monetary policy and political economy. The world is undeniably a better place because of him, and if you don’t believe me, ask your parents or grandparents what the 1970’s were like.

A lot of the vitriol directed at Friedman is his “support” of Augustus Pinochet. I don’t know the extent of his actual advising duties while he was in Chile. What I do know, is that after Pinochet left, and as the country continued to follow the free market policies advocated by Friedman, Chile’s economy went from janky to swanky in just about ten years.

A lot more negative attention was given to Friedman after Naomi Klein’s Shock Doctrine became a best seller. In Klein’s book, she paints a picture of Friedman that makes him sound like a mad scientist, bent on using his sinister and cruel economic experiments to achieve his aims of… winning a Nobel Prize? Or maybe helping Ronald Reagan justify tax cuts for the rich… I am not sure. In any case, you are doing yourself a disservice if everything you know about Friedman is from The Shock Doctrine and/or Zeitgeist and/or the Principles of Macroeconomics course you took at the community college (take it from someone who has once identified as such).

Monetarism, the movement that Friedman is associated with and considered to have founded, understands money as just another good for which there is a demand and supply. Before this, no one really thought of money this way. A lot of economic problems could be understood as being caused by a disequilibrium between the supply of money and demand for it. It might seem strange to think of there being a “demand” for money, but imagine a situation where there is an economic recession. Investors are unsure of the future cash flows that will be generated by their assets. Accordingly, many investor’s decide that they would rather hold onto cash instead of the assets they have, because they know that the cash (or treasuries) have less risk than whatever else they could put their money into. The effect of everyone wanting to get liquid creates a demand for cash, a demand that outstrips the supply, and ultimately causes asset prices to plummet as investors sell at fire-sale prices (if they do finally decide to sell at all, or if they can).

In the past (Keynesian era), the government could step in and start writing checks, using its own cash to jump start the economy (hopefully) and also increasing the amount of money being supplied (except Keynes didn’t really think about this; he thought that the demand for money naturally reached an equilibrium with supply within the asset and forex markets).  Keynes didn’t believe you should just fire up the printing press: it debases the currency (duh!) and ultimately doesn’t have a “real” effect on the economy. He basically said: “It doesn’t make a difference if you have $1 or $10, if the $10 has been debased and each one of those dollars is only worth a dime.”

Friedman came around and said: “Keynes, you are mostly right, but the money supply doesn’t instantly reach equilibrium with demand. There are all kinds of signalling effects and inefficiencies that can create situations where demand doesn’t equal supply, and such a disequilibrium can be maintained for quite some time, especially so with help from the economic illiterates that are usually in charge.” The whole “economic illiterate” thing is why Friedman is so often associated with “free market ideology”: like hundreds of prominent economists before him, Friedman noticed (correctly) that most of the government’s economic policy (interference) actually hindered the absolute growth of the economy.

In my mind, Friedman is mostly responsible for most of the economic prosperity that the entire world has enjoyed since 1980. Neoliberalism has been a winning strategy, not just for America, but for everybody (except North Korea, which plays by its own rules, to tragic effect). It is true that the gains from global trade haven’t been distributed “evenly” between the rich and poor nations of the world, but they have been gains none the less.

The success or failure of the economic policies advocated by the World Bank or IMF have little reflection on Friedman himself.

Cool People: Slavoj Zizek

Slavoj Zizek is one of these guys that I really want to understand, but can’t. I am not sure if it is because I am not as smart as he is, or if he is full of shit.

He’s kind of an academic rockstar. He dates lingerie models and wears the free socks you get from flying on Lufthansa. He’s also a funny, cynical, old fuck, as is made evident by this interview (When asked, “What makes you depressed?”, Zizek answers: “Seeing stupid people happy.”) He is in high demand as a lecturer. When he speaks English, he has the worst kind of saliva-soaked Central-Eastern European accent, which he employs at a machine gun’s pace to effortlessly jump between his three favorite topics: Communism, Lacan, and Hegel… which wouldn’t be all that hard to follow, except he frequently stops at stations as varied as Kung-Fu Panda, the ecology of “shit”, and his own self-loathing between the terminals of his intellectual heroes.

Despite all of this, I came across this piece that Zizek wrote for Guernica, where I think he is trying to reinvent Communism, and I actually followed along with his prose for about 1000 words before it became obfuscated by Zizek’s… Zizekiness. Also, from the site where I found the article, came this reader comment:

“I’ve read before that Zizek is a pure Hegelian that is just trolling humanity with his silly defenses of communism. Something like the philosophical equivalent of Howard Stern… It’s very rare for me to find a socialist I don’t hate, but in this case I make an exception… because like I said I think he’s just screwing around.”

Interesting hypothesis. As I stated, I am really not sure whether I should take Zizek seriously or not. To me, it seems much of his writings have little appeal outside the circles of pseudo-intellectuals and nihilistic bourgeois continentals who claim Zizek as their own. Other times, I find myself wanting to believe that he is onto something important, but I am just unable to wrap my mind around it completely. In either case,  I am always hesitant to bring him up in serious conversation, because his ideas are polarizing at worst and confoundedly byzantine at best.

From what I have read and seen about the man, I believe him to be earnest in the presentation of his ideas, but skeptical and sarcastic about his audience’s ability to understand them (this is an attitude that I can relate to completely). He is approaching political economy from a psycho-philosophical perspective that doesn’t really mesh with my own model of emergent institutionalism, and it is probably the case that I just “don’t get it” because I haven’t been trained to (despite my love of philosophy, my studies in it have been entirely self-directed and incomprehensive), but in any case I find what Zizek has to say supremely fascinating. He is also an interesting personality. His normally cantankerous prose is punctuated by moments of lucidity: “I don’t see any continuity with old-style communism in my approach. So why do I then call it communism? As to its contents, though, the problem is always the same. It’s the enclosure of the commons. Marx was talking about land and property when he wrote about this, but today intellectual property is our commons, information is our commons. Something that Marx could not have predicted is taking place today: we are witnessing a strange regression to the same kind of enclosure of the commons, andpeople having to pay rent to people like Bill Gates for intellectual property.”


More on Zizek:

2010 Profile from the UK Guardian

2004 Interview w/ Believer Mag

Categories: Cool People, Pinko Commies