Book Review: "The Dawn of Everything" by David Graeber & David Wengrow

I finally got around to reading ‘The Dawn of Everything: A New History of Humanity’ by the late, great David Graeber and David Wengrow. Graeber was a first-rate anthropologist and leftist thought-leader, and his tragic death during the pandemic was a huge blow to the international left. While Graeber’s ideas were often insightful and revolutionary, his written work was often dry and difficult. While frequently targeting mass-market ‘grand theorists of history’ such as Jared Diamond, Steven Pinker and Yuval Noah Harari for debunking, he remained firmly grounded in the academic realm. ‘The Dawn of Everything’, a collection of essays and lectures compiled with his collaborator David Wengrow in the ten years prior to his death, is very much of this mould: too interested in debating the ‘big questions’ to be rigorously academic, but too dedicated to the material minutiae and petty historiological disputes to sell a new ‘theory of everything’. In that way, it’s just as frustrating and enlightening as Graeber’s other work, and thus, a fitting final testament.

Let’s begin with the title. Perhaps a more accurate one would have been ‘The Dawn of Inequality: A New Pre-history of Humanity’. Graeber & Wengrow’s primary research question - with the exception of dull, Weberian digression on the birth of the state - is to identify, or at least challenge received accounts of, the origins of inequality. In this, they follow the great tradition of debating liberalism’s theodicy problem - if men are born free, as ideology presumes, why are we now so unequal? Unfortunately, they use as a framing device the ‘debate’ between a fundamentally Hobbesian and Rousseauian narrative of the origins of society - in the former, man is by his nature self-interested and to avoid a life that is nasty, brutish and short, binds himself to the rule of a sovereign. Whereas in the latter, man in his natural state lives in a state of primitive freedom and leisure, which he is seduced into giving up by the material comforts of ‘civilization’.

Graeber & Wengrow point out that this dichotomy, taught to hundreds of thousands of fresh-faced undergrads each year, is dull and limiting. But by framing the book in those same terms they do a huge disservice to the diversity of the ideological debate around liberty and inequality. On the one hand, Hobbes and Rousseau wrote more than a hundred years apart; they were addressing fundamentally different political, economic and ideological contexts and their juxtaposition in this way is an artifact of modern text selection. Moreover, both Hobbes and Rousseau are fundamentally pessimistic writers writing in the social contract tradition, albeit ones with different takes on authority: with Hobbes the authoritarian and Rousseu a sort-of proto-libertarian. Graeber & Wengrow ignore both the more optimistic left-liberal and materialist traditions and the reactionary critique of social-contract theory which sees inequality as a good and natural thing, actually.

A new pre-history of humanity

The other bit of false advertising on the book cover concerns its temporal scope: this is very much a book about ‘pre-history’ - the latest Eurasian civilizations we meet are the Minoan and Mycenaean Greeks, where conventional Western narrative history often begins. Perhaps that’s an intentional choice - after all, human history is much, much longer than recorded in writing. The insights and perspectives that these ancient societies can generate based on scant archaeological evidence are fascinating and represent the best parts of the book. We range all across north and south America, the ancient Middle East and into Eurasia and the Pacific, and while I have absolutely no doubt that Graeber & Wengrow are presenting the absolute cutting-edge in what is known about these societies, facts about them remain frustratingly just out of reach and many of Graeber & Wengrow’s implications are therefore necessary speculative.

At the outset, Graeber & Wengrow offer a convincing narrative about the origins of the inequality question in the European encounter with indigenous America. In this reading, Montesquieu, Voltaire and Rousseau did not invent the inequality discourse out of whole cloth, but instead were reflecting upon the perspective that native peoples had of European civilization - perspectives that were, as a result of French colonial empire, now available to bourgeois writers in the metropole. This isn’t quite right - French liberals had plenty of sixteenth-century sources about social contract theory, liberty and equality in both French and English to draw upon. But the Colombian exchange did pose the question of what rights human beings might have simply a consequence of being human - rather than as royal subjects or Christians. And thus, we are told, Rousseau and his contemporaries invented the concept of the state of nature by taking the ‘primitive’ but ‘egalitarian’ lifestyles of the ‘American’ foraging societies they were familiar with as representative. As we learn much later in the book, however, even those north American social bands which most approximated this ideal had adopted this way of life following previous periods of more centralised state-building - their relative egalitarian social structures were a choice, not merely a consequence of ‘underdevelopment’.

Graeber & Wengrow devote considerable space to advocating for a more fluid view of human social arrangements. Social structures are not fixed by material conditions, made irrevocable once a certain technological threshold. Rather, they note, many early societies adopted different modes of organisation at different times of year, coming together for hunts or festivals, and then dispersing, with very different social rules and hierarchies applying in each mode. A ‘king’ may have both the ceremonial and literal power of life and death at certain times of year, or in certain locations, but then be treated little better than an ordinary band-member on the hunt. Farming was not invented all at once, requiring investment in fixed townships, but societies used it from time-to-time as convenient, and abandoned farming just as easily as they invented it. Some hunter-gathering societies are rigidly egalitarian, others fiercely hierarchical. Egalitarian bands may enforce rigid material redistribution, with social rules to punish accumulation, while others encourage creativity and individuality within a materially poor culture.

Graeber & Wengrow also introduce the idea of cultural ‘schismogenesis’, the notion that neighbouring cultures may consciously adopt polarised social practices to create an exclusive sense of identity. In fact, they note that for most of human history, identity groups got smaller rather than larger, with tribes and villages adopting ever-more exclusive notions of group membership and curtailing the previous ‘freedom to roam’ enjoyed by ancient human populations. Examples include the ancient peoples of the California coast, who in the south enforced a rigid culture based on individual industriousness, and in the north fought and took slaves, who did the majority of the manual labour to support an indulgent ruling class. Graeber & Wengrow examine but ultimately dismiss the traditional materialist account of these different social modes, based on different ‘modes of production’ and the availability of surpluses in each ecological zone. Instead, they argue, these differences were a result of self-conscious self-differentiation against the ‘other’.

In short, there was nothing inevitable or pre-determined about the transition from hunter-gather societies, into agriculturally based city societies and the emergence of priestly and ruling classes based on the exploitation of these surpluses. Graeber & Wengrow marshall truly impressive evidence about the first cities, pre-dating those in Mesopotamia and Egypt by thousands of years, to show that massive groups of people - numbering in the tens or hundreds of thousands - could organise themselves quasi-democratically and without leaving any evidence of social hierarchies over timescales of many hundreds of years. While everyone knows Tenochtitlan, capital of the ‘blood-thirsy’ Aztecs, few know the name of Teotihuacan, a city of 125,000 people organised on egalitarian lines merely 40kms away that flourished over a thousand years prior with pyramid-building just as, if not moreso, impressive. Graeber & Wengrow present documentary evidence to show that Europeans exploring the Americans fundamentally misunderstood that many of the cities they encountered were governed as republics, with rhetorical and political traditions vastly more sophisticated than were practiced in Europe at the time. Their evidence is very clear that warrior aristocracies usually tended to arise in frontier zones - forests, mountains and hills - and only move into cities later as conquerors. And just as importantly, the archaeological records show hints of the first revolutions against tyranny, thousands of years before Rome and the Gracchi.

Against the evolutionists

All well and good. But apart from their [understandable but irritating] abuse of European philosophy as a framing device, Graeber & Wengrow also take aim at another subject close to my heart by being highly critical of what they call social ‘evolutionism’. For Graeber & Wengrow, social evolutionary theory is synonymous with a certain late-nineteenth century, ‘progressive’ view of human societies as inexorably and inevitably moving through a series of fixed stages towards the capitalist mode of development. They note that almost the entire field of sociology - from the Marxist to Hayekian - rejects this kind of simplification entirely, yet Graeber & Wengrow continue to argue against it, arguing that it reflects what sociologists ‘really think’. While that may be right in some sense - people to love their simplifying categories after all, even bespectled academics - employing such crude caricatures a great disservice to cultural evolutionary theory.

Because, in fact, the kind of diversity and experimentation that Graeber & Wengrow identify is precisely the variation that a modern evolutionary perspective would expect to see in human history. What is missing entirely from Graeber’s account is the function of selectors in history - what makes these societies fail. We are told repeatedly that once-glorious cities are abandoned, and people move away. But why? We never know, and Graeber & Wengrow make scant mention of the role of war, disease and environmental change in history. It’s frustrating that in discussing the origin of the state, the role of war and war-making is barely mentioned. Perhaps the emergence of the state in the seemingly mono-typical form we know it today is precisely the consequence of these selective pressures being applied on an initially more diverse population. A true history of humanity would need to account for the emergence of the capitalist nation-state as a consequence of the large-scale European warfare and brutal colonial extraction of the seventeenth and eighteenth centuries.

For Graeber & Wengrow, social arrangements always come back to a matter of ‘choice’ - not just individual choice per se, but the social choice of groups over time. Frustratingly, we are given no information, or even a theory, about how such choices might be made an implemented; given Graeber’s anarchist background, there’s a sort of perpetual wink-and-a-nod towards idea of community autonomy and self-governance. While the notion of social outcomes as social choices is certainly useful from a critical activitist perspective - it allows us to argue that another world is possible - it is not materially grounded. For Graeber & Wengrow, equality is an idea that we must choose. They do not, and cannot, engage from this perspective  in this with well-established liberal problems such as a nature of regime legitimacy, conflicts between the choices of the past and the desire of the current generation, and our fundamental lack of choice about the kind of society we are born into with limited ability to change.

A recommendation, with caution

Did I enjoy ‘The Dawn of Everything’? Yes. Did I learn things about human deep history from it, that I have not read elsewhere? Once again, yes. But am I persuaded that Graeber & Wengrow have genuinely offered a new ‘history [or even, gasp, a theory] of humanity’ that fundamentally challenges the staid and false dichotomy of Hobbes vs Rousseau? No. Unfortunately not. Like ‘Debt: the first 5,000 years’ or ‘Bullshit Jobs’, ‘The Dawn of Everything’ is full of interesting ideas that do not come together a cohesive whole, and which may one day be picked apart by serious academic critique. But for an undergraduate encountering these ideas for the first time, it offers a useful and engaging corrective to hundreds of years of propaganda that the inequality we see around us is somehow either natural or inevitable.  

Pandemic economics does not validate MMT

One of the more-or-less less irritating things about this pandemic is the unrelenting smugness of the MMT (‘Modern Monetary Theory’) crowd. Central banks have shown absolutely no hesitation in turning the taps on to support markets in a financial crisis that – lucky for capitalism – was exogenously driven. And governments worldwide are experimenting, as they usually do during recessions, with jobs programs and direct cash payments to try and prime the economic pump for when lockdowns are lifted. These shifts in macroeconomic policy are massive, unprecedented, and will carry ramifications for years to come. What they have not (yet) done, however, is validate the ambition of MMT proponents to make use of such operations for routine financing of government - the pursuit of which I believe to be toxic to the left’s broader redistributive goals.

I wrote in a previous blog that: “The best evidence MMT proponents have is that [ten years of post-GFC] supply-side quantitative easing (QE) has been neither inflationary nor stimulatory; their ideal outcome is that demand-side 'peoples' QE is also not inflationary but does a better job at stimulating growth.”

I’m not an economist, nor have I worked in public finance. But even a bit of cursory and preliminary reading suggests that pandemic economics provides little, if any, theoretical, political or economic support for the utopian claims of MMT advocates. In my first book, “Politics for the New Dark Age: Staying Positive Amidst Disorder” I supported the approach of counter-cyclical fiscal expansion in an economic downturn, and for credit expansion in a credit crunch. Unlike the GFC, this time more governments are following Kevin Rudd’s advice on recession prevention: go hard, and go early. Central banks have gone very hard indeed, as we shall see. But two questions would need to be answered for MMT to be shown ‘correct’: why has QE not been inflationary until now, and will it become so at the scale currently being undertaken?

What are central banks actually doing

The core claim to fame of MMT economists is that they provide a descriptive account of central bank operations that is more sophisticated and realistic than mainstream economists. This is, I think, true and has been repeatedly acknowledged by bank governors themselves. Central banks are notoriously – perhaps even deliberately – opaque institutions with economic power vastly disproportionate to their level of accountability. Broadly speaking, a central bank underwrites the financial system of an economy through its influence over the money supply and interest rates. They have many tools for performing this function, which can be broadly categorised as conventional (routine functions that are essential to the economy), unconventional (functions that central banks can do to a limited extent and cognisant of risks), and taboo (functions that central banks don’t want, and shouldn’t want, to do). The core policy claim of MMT theorists, as I understand them, is that unconventional and taboo central bank operations are in fact, safe and effective and/or no more or less safe and effective than conventional operations.

A central bank usually regulates the economy by setting its own interest rates, including the rate it lends to other banks at and the interest it pays to depositors. Under ordinary economic conditions, this is sufficient to influence the amount of liquidity in the economy, but following the GFC interest rates have been near-zero in developed economies for nearly a decade and have dipped into negative territory for some purposes in Japan and the EU. Negative interests rates – where the central bank pays you to loan money and you pay it to deposit funds – are an unconventional monetary policy. However, negative interest rates are deleterious in the long-term, as they establish deflationary expectations and erode the value of savings.

The other main tool of conventional central bank operations are so-called ‘open market operations’, the dominant form of which are short-term ‘loans’ against the value of securities (usually, but not always, government bonds). Put very simply, a bond-holder agrees to sell it to the central bank in exchange for newly-created ‘cash’, on the understanding that after a short period of time (sometimes overnight, usually after a week, and rarely after a month or more) they will repurchase the bond. Through the use of such ‘repo’ markets, the central bank can control the availability of government bonds, and thus the interest on them. In unconventional times, central banks can dramatically extend market liquidity by expanding the scale and scope of such loans (‘expanding their balance sheet’), and who they are available to, as well as offering longer-term repayments (as the Reserve Bank of Australia has done). The central bank may also be willing to lend against a more diverse range of assets, including mortgage-backed securities (as the US did during the GFC), other forms of private debt, real property and even equity in firms.

A debt is, and always has been, a minor financial miracle. If I lend you a dollar, I have in effect doubled its value – because now you have the original dollar (minus interest), and I now own a dollar of debt (plus interest) that I can exchange for value with others. When the central bank ‘lends’ against an asset, it swaps that asset for cash (which it ‘creates’ by depositing the funds in the corresponding institutions accounts at the bank), increasing the overall money supply. This provides liquidity to firms at a time when they may need it. But when the balance sheet contracts, those loans are repaid, the debt is cancelled, and the money supply shrinks once again. MMT is suffused with what is often termed neo-chartalism, the fringe theory that taxation is the origin of the value of money. Chartalism argues that taxation creates demand for a government’s own currency, which it meets through fiscal spending - it’s a clever but misleading hypothesis. As both the financial and anthropological literature have repeatedly shown, debt is a more important source of the value of money (the ‘standard of deferred payment’). Unless we think in terms of whole-of-economy balances, as MMTers do, government spending is not debt (i.e. I don’t owe the government anything if I receive healthcare benefits) and taxation is not a repayment for services rendered. But MMT is suffused with this kind of libertarian thinking.

Next, central banks can regulate the money supply through the direct purchase of assets – this is what is usually meant by ‘pure’ quantitative easing (QE). Although some direct bond purchases may be part of conventional open market operations, quantitative easing differs in that central banks acquire a significant percentage of a nations net capital with no obligation for the assets to be returned. Unlike other measures which temporarily expand liquidity, asset purchases have proved hard to reverse. After 11+ years of off-and-on QE, central banks in the US and Europe owned assets worth close to 30 per cent of GDP (and in Japan, 50 per cent) prior to the current pandemic. In other words, QE has become a permanent feature of monetary policy under late-capitalism, a massive subsidy to the capital sector financed directly by monetary creation. It is this result, more than any other, than MMT proponents lean on in public debate to argue that monetary financing is not inflationary.

Breaking taboos

Finally, we come directly to ‘helicopter money’ or direct monetary financing, the most taboo form of central bank operation. When the central bank makes loans, those loans are secured against assets. When it buys assets, they will sit on its balance sheet until sold back. But central banks could also simply credit the bank accounts of its depositors with funds (without taking on any sort of collateral) - including, most notably, the accounts of the national government. It could, in theory, do the same in the bank accounts of every citizen, and this is usually what UBI proponents advocate. Expanding the money supply in this way is probably inflationary; its unconstitutional in Germany (of course) and most developed country banks swear up and down that it remains anathema. However, the scale of central bank intervention unleashed in response to the coronavirus pandemic suggests that some countries (though probably not Australia) have moved from the realm of merely unconventional QE to break the taboo of de facto debt monetization - in other words, the direct financing of government spending by ‘printing’ money.

The allegation (including from Germany’s Constitutional Court) is that by purchasing government bonds in the secondary market, central banks are monetizing government debt, albeit in a roundabout way, using only a thin veneer of capital markets to launder what it’s doing. Rather than owing private lenders, governments are using centrals banks to ‘re-nationalise’ bonds and print money instead. Even prior to the pandemic, the European Central Bank (ECB) had purchased more than two trillion euros of government debt between 2015-2019. In other words, though there’s still strong private sector demand for public bonds, if this demand is underwritten by a central bank guarantee that such bonds can always be offloaded for a profit, then there are perhaps no limits on the government’s ability to raise funds from private lenders. Oh, and private sector middle men make a tidy profit along the way. One has to trust that central banks have institutional safeguards against that outcome – Germany’s Constitutional Court essentially ruled this month that the ECB was operating without sufficient oversight to ensure that trust existed.

The pandemic has taken this practice from ‘cheeky and maybe a little suspicious’ to mainstream central bank policy overnight. Macroeconomics has moved from life support to death’s door. The US federal reserve monetized almost the entire initial US bailout in March, and although it has slowed its pace dramatically, the US may monetize trillions more in additional government stimulus over the remainder of 2020. The ECB and Bank of Japan haven’t slowed down much at all, and some developing economies are following suit. This activity is truly unprecedented in both scale and ambition and it remains an open question whether it’s been a necessary tool to prevent a worse financial crash, whether it will trigger a wave of inflation, or both. One suspects that we might have been better off forcing the markets to chip in more for their own rescue, if only as a way to mobilise excess savings from the top end of town.

The debt’s the thing

So now we return to the question raised in my previous blog. Why didn’t QE (supply-side money creation) generally lift inflation over the last ten years – which quite frankly governments and central banks had been counting on? Part of the answer lies in the failure of supply-side economics in general – what capitalism is suffering from – as a result of decades of austerity, rising inequality and now the novel coronavirus is a catastrophic collapse in demand. Any attempt to inflate the economy by providing the wealthy and large corporations with extra liquidity only inflates a capital bubble, and lowers the marginal cost of funds, encouraging hoarding, consolidation and wasteful consumption that doesn’t enter the real economy and benefits only the 1%. Labour productivity and GDP has diverged; the velocity of money has decreased; companies have been historically profitable since the GFC despite real wages stagnating; and stock prices, even after the pandemic panic, have been positively buoyant.

But the theoretical reason why inflation has remain stubbornly low may be more straightforward - and may suggest why the current round of debt monetization may be different When a central bank buys an asset, or loans funds to the private sector using a bond or other collateral, it exchanges newly-created money for a legal title or obligation. In essence, a real resource in the economy has been swapped for a virtual currency, and when the loan is paid back the currency disappears and the asset re-enters the economy in its place. As far as I know, and unlike a commercial bank, central banks do not re-invest or loan against the value of their balance sheet. In other words, when the central bank removes a real resource from the economy, it’s sequestered in much the same way that a sovereign wealth funds attempts to sequester excess profits from the economy. In my book, I describe wealth as un- or under-utilised capital (in much the same way that un- or under-employed people represent unutilised labour). In undertaking QE, a central bank essentially exchanges such assets for more fungible resources [i.e. currency].

This suggests a theory. QE has not reliably produced to inflation so far because it merely adjusted the mix of capital assets in the economy, and did not change the total ratio of available money to real production and consumption. This suggests that under normal conditions QE is not necessarily inflationary (i.e. related to the size of the money supply), but may have adverse distributional effects (i.e. related to the composition of the money supply). Increasing the liquidity of capital markets may help lubricate the economy in a credit crunch; but at other times, it provides opportunities for existing capital owners to expand and diversify their portfolios. And more liquid capital means more capital flight, and asset purchases and inflation in developing markets (again, much like sovereign wealth funds). This might help explain why academic studies can find no consistent inflationary effects from ten years of central bank QE in the developed world.

Monetary financing, including the current pandemic response and other policies advocated by MMT acolytes, is arguably an entirely different beast. Directly crediting bank accounts (including the bank accounts of the government) with newly-created currency without removing a corresponding volume of capital from the economy does change the ratio of money in circulation to real production and consumption. Money becomes less valuable, even as the wealthy hang on to the legal right to control and profit from their existing holdings. As has been widely noted, a monetised UBI would merely increase rents and other prices. Even if monetary financing were employed fairly and in ways that offset its severe distributional consequences, we still could not ignore the inflationary risk.

MMT is not a progressive policy

It will be months, and perhaps years, until we know the macroeconomic fallout from the current crisis. Just because central banks may be engaging in large scale debt financing, doesn’t meant that they should, or that there won’t be consequences from doing so. It’s possible - perhaps even likely - that at least some countries will end up with 1930s or 1970s-style stagflation. But even if by some miracle massive central banks interventions save capitalism, the long-term distributional consequences of monetary financing benefit the current owners of capital at the expense of workers, students, retirees and we on the left should want no part in them.

There’s no evidence, following ten years of on-and-off QE in the heart of the capitalist world that increasing market liquidity improves market conditions for consumers. When real economic growth is anemic, major financial institutions do not use additional liquidity to extend lending to small businesses or consumers. In fact, evidence suggests that central bank policies to make loans conditional on the funds being recycled into the real economy simply leads to those loan programs going unused - if investing in the real economy were profitable, banks would already be doing so. It’s hard to know where the money is all going but the fact that US billionaires have - personally! - increased their wealth by nearly half a trillion dollars since the pandemic began hints that most is being gambled on stock prices, used to buy-up distressed assets (including overseas), or otherwise entrench the economic power of the largest firms. Trickle down economics, unsurprisingly, is bullshit in such a heavily financialised economy.

Another major risk of QE on this scale is that government bonds eventually have to be repaid. Even if it looks like an accounting trick, those bonds on the central bank’s balance sheet will one day come due. The credit expansion has to be unwound, which means either the government voluntarily deleting vast quantities of its own revenues, or owing vast sums to private actors who buy the (possibly heavily discounted) bonds back. The inevitable political consequence, either way, is another age of austerity in which social programs are cut, regressive taxes rise, and wage labour remains in acute distress. MMT advocates will argue that they reject the fiction that issuing bonds are necessary to finance government spending, but if that fiction is all that stands between us and stagflation, the ultimate effect for the worker is the same: living standards will inevitably decline.

Could QE have been done in a fairer way? In the US, progressives have talked about using the central bank to buy up vast sums of student and medical debt, monetising distressed labour instead of distressed capital. That would certainly have been a strongly stimulatory, once-off transition policy, had the left any real political power to speak of. But as a socialist, who thinks that individuals should not have to go into debt to enjoy access to their fundamental economic and social rights, we should be using this crisis to organise people to fight for permanent, universal public programmes, not telling them that their financial problems are a macroeconomic illusion.

From bad to worse

MMT acolytes are wrong to say they’ve been vindicated by the response to the pandemic. The evidence just isn’t there yet - and if I were a betting man the widespread consensus that this level of monetized government debt will lead to inflation, austerity or both seems more plausible than a miraculous escape from hundreds of years of economic history. MMT’ers always emphases that money matters less than money’s power to control access to real resources in the economy. I agree. But by this very metric, if the sorts of financial policies MMT supporters envisage got off the ground, the unequal distribution of real resources in the economy would remain unchallenged, and there’s a high chance that access to those resources would become even more unjust as prices inflate and currencies devalue.

The problem with liberal feminism is its liberalism, and that's OK

Growing up as a 90's kid, the 'liberal feminism' of the Spice Girls era was a dirty word. Cultural conservatives, who dominated the airwaves then as they do now, lambasted the perceived decadence of Gen X and millennial women. But the opinion of the radical feminists who taught me political and social science at university wasn't much better - they lamented then, as they do now, the superficiality of many modern day feminists who take the victories of the past for granted. Paradoxically, the version of woman-centric politics embraced by the vast majority of both women and men was treated by most commentators as politically irrelevant, and beneath serious notice.

Liberal feminism gets a bum rap. It's lack of a political edge is precisely why it’s so ubiquitous in culture. I suspect, though I can't prove, that the anti-feminist politics of the 2000s stems in part from the relative invisibility of liberal feminism, in a way that both prefigured and reflected the broader populist backlash against the neoliberal assumptions of the era. But as with modern liberalism as a whole, liberal feminism is a richer intellectual tradition than it's often given credit for and offers a coherent - if perhaps insufficient - response to the problems facing women as individuals under capitalism.

It’s not all bad

Liberal feminism shares all the same features, faults, history and values of liberalism as a whole. It would be incorrect to simply stereotype ‘libfems’ as a superficial modern gloss on an older, more radical tradition - an inferior copy, branded and corporatised. Liberal feminists including Mary Wollstonecraft and John Stuart Mill (yes, that JS Mill) long preceded the twentieth century, but fought for the fundamental rights of women using arguments and tactics that were considered extreme for the time. For all its contemporary blandness, liberalism was once a radical tradition – indeed, THE radical tradition. We may have reservations about the extremism of Lenin and friends - but the bolsheviks learnt how to be revolutionaries from liberals, sometimes literally.

Liberal feminism, like many ideologies that grew up in and around the current Western cultural and ideological context, is fundamentally oriented around answering the central paradox of that ontology: if all people are in some sense supposed to be equal, how is it that some are more equal than others? At its best, egalitarian feminism argues that sex and gender are arbitrary social categories and that social rules, norms and structures should be set up in such a way that these categories play no role in outcomes for individuals. Wherever there is evidence that individuals and groups do not experience broadly equitable outcomes, laws and social programs should be put in place to rectify the disparity. So far, so Rawlsian.

But liberalism is a broad church. Many mainstream feminists, particularly of the white, upper/middle-class variety, are centrally focused on equality of opportunity and concern themselves with more equitable representation at the highest levels of government, corporate and cultural power. Rather than quotas and viewpoint diversity being a necessary remedy for structural inequality, they become an end in themselves. But this blindspot is shared by all liberals, for whom an open and broadly representative ruling class is more important than questioning the existence of ruling class in the first place. Like all liberals, libfems can be shockingly dismissive of or tokenise the concerns of poor women of colour and ignore entirely the issues facing women in developing economies.

At its more conservative leaning end, we even find 'classical liberal' or self-described 'equity' feminists – such as Camille Paglia and Christina Hoff Summers – who focus on freedom solely in the negative sense: so long as legal, state discrimination is impossible (a battle won, they claim, by the suffragettes), then everyone is responsible for their own fate in life. Whether naivete or willful blindess, the effect is the same. And, similarly, a shallow, libertarian emphasis on personal choice can produce a feminism that is consumerist and marketed as a lifestyle ‘girlpower’ brand while reinforcing existing gender relations.

Radicals and Liberals

Radical feminists, including myself, who operate within universalist traditions claim that the social position of women cannot be understood solely as a deviation from the liberal universal ideal - an error, soon to be fixed. Rather, patriarchy – a social hierarchy of subordination based on sex and gender – is universal to the human experience and exists outside of capitalism – it significantly pre-dates bourgeois economics and has been seamlessly incorporated into it. This gendered social structure has to be critiqued in order to understand the social roles of men and women: it’s a feature, not a bug. Of course, radicals disagree – often vehemently – as to whether the patriarchy is orthogonal and unrelated to other economic and political structures, whether it strictly co-evolves with them (as socialist feminists and social reproduction theorists hold), or whether those structured interact in complex and multifaceted ways (i.e. intersectionality, the broadest conceptual approach). But all agree that liberalism can't – or won't – deal with this more fundamental inequality. on its own.

Excluded from this typology are the anti-liberal feminists - the sex essentialists and difference feminists - who believe that there are intrinsic differences between men and women, and that the goal of feminist politics is not to eliminate or alleviate those differences, but to organise politically on the basis of sex in order to obtain power for women as a group. This is a shallower and more pessimistic form of identity politics, which shares significant similarities with both reactionary understandings of gender, and other supremacist formations who seek defence against, dominance over or separation from other groups. There's a reason beyond just their common enemies why TERFS/gender critical feminists, conservatives and lesbian separatists often work together – it's because they share common beliefs about the essential nature of sex and the incommensurability of gender categories. But individual men do not oppress individual women: rather, men and women (but mostly women) are both defined by and oppressed by a social structured (‘patriarchy’) that is created and enforced by both men and women (but mostly men).

Feminist politics and ideology is complex, and often seems like a labrinthine minefield to those, such as myself, on the outside looking in. It may be that this attempt to understand its various currents through the lens of other philosophical traditions is reductionist and incomplete. But for me, at least, it’s been helpful to understand how feminism relates to the broader struggle.

The "hereditarian left", if they exist, are just luck egalitarians and that's still not OK

My initial reaction to Ezra Klein and Vox repeatedly slapping down Sam Harris for openly flirting with race realism was to grab the popcorn and stay far, far away. So too with the New York Times and other publications continuing to platform writers 'just asking questions' about the social policy implications of the science of behaviourial genetics. But I decided to draw a line when the well-respected evolution blog "The Panda's Thumb" published a piece on 29 March arguing that debating the discourse of genes and IQ was 'science denialism' akin to climate change denial or fear of vaccines. This is not merely academic. Global warming denialism and refusing to vaccinate children put lives at risk: what precisely is at stake when it comes to the genetic basis of intelligence? 

My primary target for today is not Charles Murray or the identarian alt-right. Instead, it's nominal liberals like Steve Pinker; atheist Sam Harris; self-avowed socialist Freddie DeBoer; rationalists like Scott Alexander; the writer of the "Stumbling and Mumbling" blog; and right-libertarian pseudo-intellectual rags such Quillette. These writers are largely white men, 'classical liberals' who attempt to rationalise social inequality that's at odds with their own sense of meritous privilege. I'm going to call such people the 'hereditarian left' (a term I'm aware was first coined by Murray and then endorsed by Pinker) who combine some personal good faith with a quixotic determination to naturalise social differences in terms of genetics and intelligence. 

Note that the hereditarian left, with its focus on genes and intelligence, is not the same thing as the "Darwinian Left" (Peter Singer). Darwinian selection has wide applications to the study of culture and organisations, as my colleagues in the Cultural Evolution Society will tell you. Nor am I taking aim at all sociobiologists, evolutionary psychologists and behaviourial economists, fields that often produce valuable insight into what it is to be human without attempting to naturalise social differences between us (although not all are so innocent).

Vox's expert witness Paige Harden has proposed the following elements of a polite hereditarian consensus. Quote:

1. The idea that some people are inferior to other people is abhorrent.
2. The mainstream scientific consensus is that genetic differences between people (within ancestrally homogeneous populations) do predict individual differences in traits and outcomes that are highly valued in our post-industrial, capitalist society.
3. Acknowledging the evidence for #2 is perfectly compatible with belief #1.

But Harden's exhortation against drawing moral conclusions (#1) on the basis of scientific findings (#2) is somewhat undermined by her own research team's explicit focus on philosophical matters and social policy. The distinction of scientific 'is' from philosophical 'ought' is important in theory but permeable in practice: as part of the current controversy, Panda's Thumb noted fascinating research that progressives are more likely to think negatively moralised social differences have a genetic origin and less likely to think positive ones do, whereas conservatives are more likely to think advantageous social traits have genetic basis. Harden makes the same point: the way people make judgements about behaviour affects how they talk and write about other genetically determined traits such as obesity or psychological disorders. The naturalist and agent biases are present in all of us: as a social species, we can't help but form judgments about social consequences based on scientific observations.

"The Argument"

I'm going to argue that even Harden's hereditarian formulation has no place in the egalitarian left. But first, we need to cover what the argument is, and is not, about. The premises of the genes and intelligence argument are routinely stated like this:

1. There are differences between individual people in their status, wealth, and power.
2. The achievement of high status, wealth, and power is a consequence of the possession of intrinsic [intellectual] ability.
3. Intellectual ability can be assessed by a set of tests loosely called “IQ tests,” which measure [general] intelligence on a one-dimensional scale.
4. IQ test performance (and therefore intrinsic intelligence) is largely inherited genetically.

Note that my source on this is a lecture by biologist Richard Lewontin in *1983* - predating Murray and "The Bell Curve" by a decade. Yet this formulation is commonly repeated by hereditarians, notably by Harris when interviewing Murray. Every one of these points is contestable to some degree or another: the biological reality of 'g' (general intelligence) is undetermined, we don't know how genes influence intelligence apart from the fact that there may be hundreds that make tiny contributions; intelligence testing only measures a particular subset of socially-valued tasks; and high IQ is no guarantee of success (just ask Malcolm Gladwell). But this is where Vox's merry band of wonks leads us astray: by focusing the debate on the scientific validity of the premises they miss the broader implications being drawn by readers. Moreover, the mainstream scientific view of these premises has evolved with the evidence and it’s not out of the realm of possibility that every one might be proven correct. 

The main problem is that these premises cannot be put together to construct any sort of meaningful, much less socially and politically just, conclusion. Heritability, in particular, just doesn't do what most people thinks it does: heritability only tells us what percentage of the variation in the expression of a trait comes from its genotype. It conveys no useful information about the variance between populations and says nothing about how a trait responds to environmental intervention. Even highly heritable traits (e.g. height, disease susceptibility) can be easily modified by varying environmental conditions (e.g. diet, medical treatment). Moreover, heritability of a trait tells us nothing about the direction of the genetic influence: it's naive Progressivism (with a capital "P") to assume that environments only exert a negative influence on trait development and that genes encode the ideal (Platonic) form of a person. 

And what sort of conclusions are drawn from these premises? Well largely primarily, racist, sexist and classist ones! As a socialist and a Rawlsian liberal, I prefer not to think in terms of race or ethnicity. I have written about the dispossession of native peoples (here, here, here, and here), but the construct of 'race' differs from society to society and as an Australian I'm not qualified to offer a view on the structural disadvantages faced by, for example, French Canadians, the descendants of slaves in the Americas, or Christians in Syria. All I can do, in solidarity, is to listen to and privilege the perspective of those that have such experience. It goes without saying, however, that Vox & crew are on the money in tearing apart genes as a causal factor in differential group outcomes: Klein in particular puts the issue in its historical and social context very well. 

The Default Hypothesis or the "Fundamental Principle" that racist hereditarians add to points 1-4 above is that whatever factors influence intelligence differences among individuals will also influence average differences among groups. But this hypothesis is invalid and false. The division of traits that are distributed on a spectrum into categories is almost alway arbitrary and socially contingent (i.e. ethnic groups are social constructs); trait differences within any human category are almost certainly many orders of magnitude greater than differences between them; and to ignore the role of social hierarchies (and the effects of history, culture and power) in generating and perpetuating group difference is gross scientific negligence of the highest order. No one who argues a connection between race and difference does so in good faith: by choosing to actively perpetuate racial hierarchies they earn their appellation as racists.

What is equality, anyway?

I don't think the "hereditarian left" (in the sense outlined at the top of this piece) are racist. They are however, deeply misguided liberals. In positing that genes and intelligence play a causal role in constructing social hierarchies, but ruling out making judgments about individual moral responsibility for social outcomes, the 'hereditarian left' are constructing an argument within the framework of 'luck egalitalitarianism'. This is well trodden philosophical ground. Rawlsian liberals have often struggled to justify economic redistribution in the face of the choice-centred, libertarian critique. Luck egalitarians accept a 'meritocratic' framing of inequality but are more nuanced about their conclusions, and argue that arbitrarily distributed, undeserved or 'natural' disadvantage should to be compensated at the expense of those who benefit from undeserved or 'natural' advantages. Luck egalitarianism puts the 'hereditarian left', if they exist, in good in good liberal company, but it's still not a defensible philosophical position for anyone who sees themselves as a democrat or a socialist.

"[Since] the capacities needed for responsible choice—foresight, perseverance, calculative ability, strength of will, self-confidence—are partly a function of genetic endowments  . . .  the imprudent are entitled to special paternalistic protection by society against their poor choices.  Equality of fortune says that such victims of bad luck are entitled to compensation for their defective internal assets and internal states. The chief appeal of equality of fortune to those of an egalitarian bent lies in this appearance of humanitarianism. Equality of fortune says that no one should have to suffer from undeserved misfortune and that priority in distribution should be given to those who are blamelessly worst off." 

I was curious to note at least one reactionary commentator citing Elizabeth Anderson's "What's the Point of Equality?" to peg Harden [accurately] as a luck egalitarian (Anderson's definition is the one used above). As a fan of Anderson, I don't recognise the version of her views presented in that blog. Anderson is strongly critical of luck egalitarianism and its paternalistic and disrespectful approach to the worst off in society. Anderson argues that to require the disadvantaged to display evidence of blamelessness and personal genetic inferiority in order to receive assistance reduces them to grovelling at the feet of their 'betters' and involves the state making judgements about the moral and genetic qualities of its citizen that are deeply disturbing, to say the least:

"Suppose their compensation checks arrived in the mail along with a letter signed by the State Equality Board explaining the reasons for their compensation: 

To the stupid and untalented: Unfortunately, other people don’t value what little you have to offer in the system of production. Your talents are too meager to command much market value. Because of the misfortune that you were born so poorly endowed with talents, we productive ones will make it up to you: we’ll let you share in the bounty of what we have produced with our vastly superior and highly valued abilities." [Hey look, it's a UBI!]

Anderson's objections, however, are not merely consequentialist (i.e. expressed in terms of reducing the happiness of the worse-off). Rather, Anderson identifies the defect with luck egalitarianism as its failure to uphold equal respect for the dignity of all citizens. Meritocratic liberalism bases its distributionary principles on the pity elites feel for the less fortunate and their fear of the envy of the latter of the success of the former - a pattern of noblesse oblige that has a familiar stench to any progressive. People lay claim to the redistribution of resources in virtue of their inferiority, not in virtue of their equal rights and dignity. She argues: 

"Egalitarianism ought to reflect a generous, humane, cosmopolitan vision of a society that recognizes individuals as equals in all their diversity. It should promote institutional arrangements that enable the diversity of people’s talents, aspirations, roles, and cultures to benefit everyone and to be recognized as mutually beneficial. Instead, the hybrid of capitalism and socialism envisioned by luck egalitarians reflects the mean-spirited, contemptuous, parochial vision of a society that represents human diversity hierarchically, moralistically contrasting the responsible and irresponsible, the innately superior and the innately inferior, the independent and the dependent.""

Anderson's view (one I share) is that the preferable position is 'democratic egalitarianism' in which everyone stands in a relationship of equality with everyone else. She writes that this means everyone is entitled to participate in decision-making, to be recognized an someone to be listened to respectfully, and that no one need bow and scrape before others or represent themselves as inferior as a condition of having their voice heard. Anderson's vision of equality is compatible with democratic socialism but not luck egalitarianism: it aims to equalise all those social goods necessary for one to be recognised as fully equal (this is where human rights are derived). Democratic equality is what Anderson calls a relational theory of justice: it is fundamentally concerned with the relationships within which goods are distributed, not only with the distribution of goods themselves. Justice, in this view, is a property of a society and its structures, not the moral desserts of individuals. 

"Equality of fortune would offer compensation to those with low talents, precisely because their innate inferiority makes their labor so relatively worthless to others, as judged by the market. Democratic equality calls into question the very idea that inferior native endowments have much to do with observed income inequalities in capitalist economies. The biggest fortunes are made not by those [with the most merit] but by those who own the means of production."

Anderson concludes that the distribution of natural endowments is not a matter of justice, what society does in response is. We cannot make genetic differences the basis for continuing to exclude the worst-off from recognition as full participants in the economic and political life of society. Drawing an analogy with physical impairment, Anderson points out that what the disabled find objectionable is not their different abilities, but that everyone else has rigged the system in ways that leave them with no place in it. People, not nature, are responsible for transforming the diversity of human beings into oppressive hierarchies. 

Conclusion

I am sympathetic to the attempts of these liberal men and women to understand the causes of inequality, and to work to ameliorate the discomfort I'm sure it makes them feel. The policy prescriptions of luck egalitarians may be misguided and counter productive, but at least their heart is in the right place. What I cannot abide, however, is statements such as that by Freddie DeBoer that genetic variance in intelligence creates the 'strongest possible argument' for socialism. Democratic equality cannot be constructed on the basis of luck egalitarianism - whether of genes, race, sex or any other grounds used categorise and divide us. Drawing social conclusions from the science of intelligence, in any form, is just not OK. 

More MMT: inflation, inequality and punching left?

Despite the optimistic subheading of my book, "Staying Positive Amidst Disorder", I'm a cynic by nature and so sometimes need to critically examine both the tone of my work and how its content is being interpreted by others. The last thing I want is for my writing to be seen as "punching left", inadvertently promoting crypto-conservative viewpoints like a Dave Rubin, Jon Haidt, Steve Pinker or their ilk. If you don't know I'm a deep progressive, my pieces on MMT (Modern Monetary Theory), UBI (Universal Basic Income) and identity politics could certainly be superficially interpreted that way. While I think the left's openness to novelty is a great strength, I don't believe ideas get a pass merely because they're new, exciting or challenge preconceived notions. Our passion for the new can just as easily lead us into error as to utopia - as it certainly has in the past. 

So in that vein, I want to continue talking about MMT by looking at the criticisms I received for my previous piece on Reddit and Twitter. I try to be fair in what I write about any subject; my goal is not to "punch left", but to see if exposing young policy programmes to critique by outside perspectives can highlight what, if anything, they offer that's new. This is made challenging by MMT proponents constant and tactical shifts between description and prescription, between the desire to challenge existing narratives and to craft a radical vision of their own.

In short, I received two sorts of criticism for my contribution. First, that I misunderstood and misrepresented the case of Venezuela. Secondly, that I (alongside most economists) overegg fears of inflation in economies that are demand-constrained. The following tweet from Adelaide-based economist Stephen Hail is representative of the comments I received:

You don't seem to know Venezuela's economic history, which has nothing to do with MMT, or the MMT literature. I don't recognise your 'MMT welfare state' as having anything to do with that literature. Where is your discussion of the role of the macro role of the job guarantee???

— Steven Hail (@StevenHailAus) March 24, 2018

Responding to my critics

The Venezuela barb in my first post was in all honesty a low blow. Of course Venezuela is not literally a case study of MMT - I was making an analogy. MMT theorists have an account of hyperinflation as a product of political and ecnomic crisis, which is both fair and explanatory in the Venezuela case. They point out that hyperinflation (of greater than 50 per cent) has never occurred in a democratic country with a sovereign currency. But critics of MMT like myself aren't only worried about the most extreme case. By arguing that adverse consequences are only a concern in factually rare circumstances, MMT economists fuel my suspicion that they're unconcerned with persistent high inflation that doesn't reach crisis proportions. After all, there have been at least two episodes where annual inflation rates in the West era have exceeded 10 per cent, both with harmful effects for both the real economy and domestic inequality. 

The Venezuelan economic crisis has unfolded in multiple distinct phases, and by focusing on only its final Act (characterised by the familiar combination of fixed exchanged rates, debt default, currency depreciation, corruption and hyperinflation), we gloss over the earlier phase of the unravelling which produced these conditions. Even before 2014, Venezuela had one of the highest inflation rates in the world (40-50 per cent);  'Dutch disease' caused by oil-fuelled spending was corroding the country's production base; and capital flight and hoarding constituted a full-scale "strike" by capital (which could not be employed productively domestically). This underlying dysfunction led to the later debt and balance of payments crisis, and it's this systemic dysfunction caused by loose monetary policy - not the hyperinflation at the tail end of the story - which I argue by analogy should be of concern to MMT proponents. 

My flippant use of Venezuela is ultimately just a distraction. The core issue is inflation. When even the US Federal Reserve doesn't fully understand how to control it, MMT proponents make an extraordinary claim when they state it shouldn't worry policy-makers at all. Either inflation is indeed an undesirable side effect of monetary financing, in which case new spending is constrained to a few per cent of GDP (which we do already), or inflation is desirable side effect. I suspect that at the end of the day MMT proponents are comfortable with government finance via debt monetization - in other words, an inflation tax. MMT proponents want to do away with finance via bond auctions. But government bonds, as a method of financing, at their core constitute a lease of a real asset held by the private sector by the government; like taxes, they ensure that spending redistributes inefficiently held wealth to more productive sectors of the economy - something monetary finance doesn't do and actively undermines by eroding the willingness of capital to lend to the state. 

Doing away with this real-world resource constraint, by permitting direct central bank purchase of bonds (i.e. printing money at the Treasury's behest), does not change the availability or distribution of real capital and labour assets of an economy. But increasing the money supply does serve as a kind of tax, reducing the value of savings and fixed-asset incomes, while increasing the spending power of debt-laden consumers and the competitiveness of exporters. There are well known pluses and minuses to an inflation tax - it's not a new idea - and if this is what the MMT solution to inequality looks like in practice then advocates need to be upfront about what they're proposing rather than selling a policy as if it had no downsides. 

This is why MMT proponents need to throw in the 'jobs guarantee' idea: it's the escape valve that exempts their policy recommendations from any negative consequences. If government spending is unlimited, there's no reason MMT couldn't be used to fund corporate subsidies and massive tax cuts (in fact, this is arguably a valid description of post-GFC monetary policy). Modern economies are in fact demand-constrained as a result of inequality, and demand-side spending should absolutely spur higher growth and equity. The best evidence MMT proponents have is that supply-side QE has been neither inflationary nor stimulatory; their ideal outcome is that demand-side 'peoples' QE is also not inflationary but does a better job at stimulating growth. But monetary financing is not future-proof or self-correcting: if applied in the wrong circumstances, monetary stimulus would replicate the stagflation of the 1970s or the liquidity trap of the 2010s. It's also a lever that only ever works in one direction: switching between demand- and supply-side monetary stimulus might undermine the adaptive, anti-fragile features of modern economies and erode trust in the value of goods and services. 

MMT is not synonymous with "far left" 

Just because an idea new and radical doesn't make it progressive. With MMT & UBI, this is abundantly clear. MMT proponents as a rule don't possess a  systemetic critique of the structure of capitalism - views of Marx in the MMT community seem to range from attempts at reconciliation, to bemusement or outright hostility. They want to tinker with the levers of finance without challenging the underlying strutures and private incentives that generate inequality in the first place. This is part and parcel of their effort to signal respectibility to mainstream economists, which manifests in a number of facets of their policy advice.  

Here's a controversial opinion: a jobs guarantee, while certainly an improvement on the laissez-faire status quo, is a conservative policy. Let's be clear: if finance is truly unlimited, why not spend heavily on public infrastructure, universal free education and healthcare, public housing, or a guaranteed minimum income? What about those who are unable (the elderly, carers, students and disabled) or unwilling to work - particular those unwilling to dig holes for the government for minimum wage, or to move or commute to where these job programs will take place? I am all in favour of expanding public sector employment, but jobs guarantee is intrinsically liberal in two key respects: firstly, it is a poverty-alleviation program rather than an inequality-alleviation program; and second, it is 'ambition-sensisitive' in the sense that it only rewards those of good character 'willing to work'. A guaranteed income would have the same result on poverty, at lower administrative cost and leave people free to find productive meaningful work that suits their skills and preferences on their own. Except it offends the sensibilities of ambition-sensitive liberals, and is therefore policy non grata. 

The failure of MMT proponents to deal meaningfully with inequality across the income spectrum is a consistent feature of centre, even centre-left, thinkers who see poverty and unemployment as the only fault with capitalist distribution. As a denial of (several) fundamental human rights, poverty is indeed *the* pressing concern of progressive economics. But inequality is additionally uniquely harmful to individual and social well-being at all income scales and I would argue that a poverty program anchored by a requirement to work would do little to improve the relative automony and self-confidence of the low- and middle-income scale, and may in fact reinforce harmful stereotypes and behaviours (cf: Elizabeth Anderson). MMT theorists seem uninterested in the overall progressivity of taxation, or in taxing capital more aggressively. At their most contrarian, MMT proponents also often take a highly critical view of taxes consistent with far right libertarian economics. 

This failure of MMT advocates to address the distirbution of costs and benefits in society is hidden by the (very cool) data-informed sectoral analysis they produce. MMT breaks economic activity into its private and public components, to demonstrate that increased government spending grows the private sector:

So government spending can grow the economy. But how is that growth going to be distributed? MMT has no answers that I've seen other than saying "Look! A jobs guarantee! Everyone like jobs! We're progressives too!". Inflating away debt may very well affect the distribution of wealth in a society, but income and property differentials would only reproduce it in short order. In terms of reducing inequality, funding a jobs guarantee through monetary policy is functionally no different than asking business to employ more people out of the sheer goodness of their heart: it's short-sighted, counterproductive and unsustainable. 

I'm sure many MMT economists are well intentioned and I'm happy to make use of their work in fighting back against the deficit hawks on the right. But transformation of the economic status quo needs to be smart, adaptive and selective about the sorts of policies we pursue, and by acting as if political and economic constraints don't matter, MMT does the wider left a strategic disservice.