I will be talking on the “great inequality debate” at 7pm at Cafe Mainstein in Berlin this coming Saturday. The discussion is in English and entrance is free.
The debate on the super-rich at the recent Battle of Ideas festival in London is now available to watch on video. Clink on the link here.
This is the text of my review of The Market as God for the Financial Times. It was published on Friday 21 October.
Just across the piazza from Milan’s magnificent Gothic cathedral, the Duomo di Milano, stands one of the first shopping malls in the world. The Galleria Vittorio Emanuele II, a temple of modern consumerism, was clearly built as a commercial replica of its venerable Catholic neighbour.
This uneasy contrast symbolises what Harvey Cox, an emeritus professor of divinity at Harvard, wants to explore in The Market as God. His goal is essentially to compare and contrast classical faith with what he refers to as “ersatz” religion. In his view, the market perspective bears all the characteristics of a traditional religion except it is constructed by human beings. He seeks to uncover the market theology, which he sees as comparable in scope, if not profundity, to traditional religion.
His interest in the subject was piqued when, on a friend’s advice, he started reading the business pages to help him understand the real world. To his surprise he found that the Financial Times’s lexicon (among others) “turned out to bear a striking resemblance to Genesis, the Epistle to the Romans and Saint Augustine’s City of God”.
Of course, he was not claiming that the financial press literally focuses on divine matters. Rather that the preoccupations of finance strangely parallel those of theology. Each of them has its own grand narrative about the inner meaning of human history. Theologians have their myths of origin, legends of the fall and doctrines of sin and redemption. Finance has similar concerns but in disguise: chronicles about the creation of wealth, the seductive temptation of over-regulation and salvation through the advent of free markets. Even entrepreneurs can, in his view, be seen as a secular version of saints.
Cox is at pains to emphasise that he is not opposed to the market itself. His objection is what he sees as its aspiration to divinity that has emerged over the past couple of centuries. It has become, in his view, a hubristic outlook that inspires wastefulness, cupidity and avarice.
Such criticisms are in line with two papal encyclicals (letters) that are approvingly cited by Cox at the start of the book. In 2013, inEvangelii Gaudium (the Joy of the Gospel) the newly elected Pope Francis criticised a “deified market” and “ideologies which defend the absolute autonomy of the marketplace”. Two years later, Laudato Si, the Pope addressed the growing planetary crisis brought about by climate change. Indeed, Cox dedicates his book to Pope Francis “with gratitude and hope”.
In principle, Cox’s project of examining the values and symbols of the market is a good one. It could help yield a better understanding of how the capitalist economy works.
Unfortunately, he makes a fundamental error that plagues countless critiques of the market system. He assumes that a confident pro-free market perspective is the dominant outlook. But even on a descriptive level, leaving aside any debate about the desirability of such a worldview, this is simply not true. Free market economics is not prevalent at the level of the workings of the market system or in relation to public discourse.
Despite the occasional flourishes of free market rhetoric the overwhelming reality even in the US is of huge state intervention. Government spending in the US is expected to amount to about 36 per cent of GDP this year, or $6.6tn, according to the International Monetary Fund. It is hard to square this reality with claims to the economy’s free market status.
On the level of ideas, pervasive doubts about the free market most often take the form of concerns about its alleged damaging effects. For example, the widespread idea that climate change represents a huge market failure, one that potentially threatens the future of humanity, is hardly a ringing endorsement of capitalism. Similarly, the often expressed concerns about the damaging effects of extreme inequality suggest a lack of confidence in the market system.
What Cox presents as a humane critique of the mainstream free market outlook is in fact an expression of the contemporary orthodoxy.
The Financial Times has published my review of The Market as God by Harvey Cox. I will upload the text in the next few days but meanwhile here is the link. You may need to register (free) to read it.
A reminder that I will be debating inequality and the super-rich at the Battle of Ideas this Saturday. Come along to the session and indeed the whole weekend.
I am delighted to be speaking at the Battle of Ideas weekend at the Barbican Centre in London on 22 and 23 October 2016. On the Saturday I will be speaking on a panel on the super-rich and on the Sunday on the debate about social inequality. I will post more details at a later date. Alternatively you can check out the Battle of Ideas website. The whole festival is well worth attending.
Those who know German would do well to read Zeitgeisterjagd (Hunting the Zeitgeist) by Matthias Heitmann. The German author explores the dire consequences of the spirit of the times we live in. Risk aversion has infused public and private life to such an extent that we think of ourselves as unable to act upon the world. This ultimately renders us incapable of overcoming the challenges that face us. The result? We have become unfree.
The book was reviewed by Maren Thom in English on spiked in October 2015.
Readers in the UK can buy the book on Amazon here.
The following is a blog post I wrote on behavioural economics for the Institute of Economic Affairs website.
Delighted to be talking on two panels at the Think Confererence in London this coming weekend. Do come along if you can.
This is the original (unedited) version of my latest book review for the Financial Times.
Although Yuval Levin is a self-avowed conservative he takes aim at both sides of the US political divide in this perceptive work. The former White House staffer under President George W Bush sees both progressives and conservatives as wallowing in an unhealthy nostalgia. The Fractured Republic argues eloquently that striving for a better future means desisting from romanticising the past.
Republicans, in Levin’s view, tend to hark back to 1981. In the first full year of the Ronald Reagan presidency the conservative president set about implementing free market reforms in earnest.
The nostalgia of the Democrats, in contrast, harks back to the Great Society of 1965. That was the high point of the campaign against poverty and racial injustice implemented by the administration of Lyndon B Johnson.
Neither side, Levin argues, has the answer to the most contemporary problems in the US. The left is too wedded to statism and the right too often favours a hyper-individualism. Neither, in his view, is up to the tackling the central challenge of America’s fractured society. Both social order and economic security have been weakened. A dysfunctional political system is ill-equipped to tackle these problems.
Many leading American thinkers share Levin’s preoccupation with acute social divisions although each has their own particular take on it. Robert Putnam, a Harvard academic, has bemoaned the decline of social capital in US society. Bill Bishop, a prominent journalist, has used demographic data to show Americans increasingly choose to live with like-minded neighbours. Charles Murray, a conservative thinker, has bemoaned how a powerful upper class has separated itself from the rest of society.
For Democrats, and those who more generally define themselves as progressive, economic inequality is generally central to this concern. They criticise an ostentatious super-rich for separating itself from the rest of society.
Levin accepts that high inequality is a reality but is surely right to argue that it is an effect rather than a cause. The wealthy, for instance, have benefitted from the booming of the financial sector and financial assets over the years. But to see this trend as the main reason for America’s fracturing is misleading.
Conservatives also identify a growing social divide but they tend to see it more in moral terms. Levin is influenced by Charles Murray’s argument on the growing gap between those with a university education and those without. It is perhaps not surprising that college graduates suffer lower unemployment. But they also tend to have significantly higher marriage rates, lower divorce rates and more religious commitment. For the right, cultural disintegration and polarisation, rather than economic inequality, are the key concerns.
Although Levin is critical of both conservatives and progressives he argues that the right is better able to come up with a solutions. His solution is a reinvigoration of what he calls mediating institutions in society: a strengthening of community life. As a self-professed conservative it is not surprising that he sees the family as playing a central role in achieving this task. But he also argues for increased importance to be attached to liberal education (as opposed to vocational learning) and greater civic engagement. Above all he emphasises the importance of religious institutions as he sees these as a direct challenge to the age of fracture.
This emphasis on mediating institutions is in line with his support for what he calls a modernised politics of subsidiarity. That is the idea that key decisions should be made as close to the community level as reasonably possible.
Despite the many insights in Levin’s work there are good reasons to call some of his key insights into questions. For example, there is a lot of emphasis on institutions but much less on the ideas needed to develop a common outlook.
It is also arguable that the widespread concern about inequality is driven by factors other than economic ones. At least in part it seems to reflect an insecurity within the elite itself. It no longer has confidence in its own ability to cohere society.
Nevertheless the Fractured Republic should be require reading for all those trying to understand the contemporary US.
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Ferraris For All, my book defending economic progress, has just been published in an extended edition in paperback and on Kindle with a new chapter on the inequality debate.Amazon.com, Amazon.co.uk, Amazon.ca, Amazon.de,
Please see the Buy the book page for more details.