Philip Mirowski

It's indisputable that Mirowski knows how to pick his subjects; his earlier work Machine Dreams is a really interesting history of the influence of Cold War institutions and fields of study like cybernetics on the development of much of modern economics, far-reaching in its subject material and insightful on almost every page. For this work, the subtitle promises an analysis of how neoliberal economics (more on what that is in a bit) managed to outlast the financial crisis and ensuing recession in the advanced nations - in theory both an enlightening and useful work, whether the reader wanted to figure out a new path forward for economics in light of the aftermath, or simply gain a better understanding of the high-level debates going on within the profession. However, this work is immensely frustrating to read. To borrow Mirowski's title for one of his previous books, his arguments here are almost entirely more heat than light, sustained polemics of contempt for the entire profession without attempting much more than a cursory nod in the direction of any positive path forward. I like a good rant as much as the next guy, but given that the world could definitely use a clear, well-documented, useful guide to how so many economists were able to give such bad advice to world governments after the financial crisis, this book's flaws make it more than usually disappointing given how smart Mirowski is.

Much like Karl Marx, he's bit difficult to comprehend quickly or to summarize easily, and often stronger on the sentence level than the paragraph level. That's not because he's necessarily unclear - in fact, he easily connects many ideas with good insight, clever metaphors, and a powerful sense of irony - it's that he's got so many subtleties, sub-points, and qualifiers connecting in all directions that extracting the central pith of his arguments to try to summarize them leaves them curiously drained. Additionally, the torrents of venom he unleashes are paired with a habit of introducing neologisms like "Neoliberal Thought Collective" that will raise red flags for tendentiousness, partisanship, or simple bias, making it difficult to tell if his rendition of his subject is really all he says it is. The term "neoliberal" itself is a perfect example - though I've heard the word countless times, I was never very clear on its exact definition. I've been under the impression that "neoliberalism" was a hazy euphemism for something like "try to accomplish the goals of activist New Deal/Great Society liberalism via more market-oriented means". However, discussion on economics blogs often tends to conclude that the term, when used derogatorily, simply has no meaning other than "This person opposes the goals of New Deal/Great Society liberalism". Clear definitions of terms are vital to have a productive discussion of anything, but Mirowski is not much help. At great risk of wildly oversimplifying to the point of changing his meaning, I'm going to attempt to paraphrase his extended definition of neoliberalism, his Thirteen Commandments in the "Short Course in Neoliberal Economic Doctrine" section:
1. The vision of society inherent in neoliberalism isn't "natural" in the sense that libertarians claim that markets are "natural", it's got to be consciously built by people.
2. The definition of "market" is unclear, although what markets do - i.e. aggregate price information Hayek-style - is mostly unchallenged by neoliberals.
3. Even though market society isn't natural (see point 1), neoliberals like to pretend it is, in the manner of Margaret Thatcher proclaiming "there is no alternative", though they handwave away things like externalities or market failures.
4. Neoliberals don't actually hate the state, they just want to change it to make citizens more like customers or consumers by, e.g., outsourcing its functions to private actors, as in ratings agencies like Standard & Poor's that perform a quasi-public task.
5. Neoliberals have issues with democracy and like to treat political problems as essentially synonymous with business opportunities and citizens as synonymous with customers.
6. To that end, neoliberalism separates labor from the question of value and treats people completely as economic agents, which separates neoliberalism from Locke-style classical liberalism in that it changes debates over the nature of property and justice.
7. "Freedom" is a tricky subject for neoliberals, but it can either be seen as Isaiah Berlin-style "negative freedom", split into economic, social, and political freedom (with economic freedom being the most important), or can be summed up by Hayek as something that helps "to provide both the opportunity and the inducement to insure the maximum use of knowledge that an individual can accrue.
8. Capital's movement across borders should be as free as possible, although labor's shouldn't.
9. Neoliberals think that inequality is not only natural but a positive good insofar as it helps the market work; attempts to "correct" the market are doomed to fail and can only result in misery.
10. The market is always right, and even things like monopolies or oligopolies that classical liberals like Adam Smith were skeptical of are actually good.
11. The solution to market failures is more markets; emissions permits can solve pollution externalities, problems with public education due to wealth disparities can be fixed with vouchers, and bankers are the best people to solve financial crises.
12. Neoliberals really like the prison-industrial complex, as in Richard Posner's quote that "The function of criminal sanction in a capitalist market economy, then, is to prevent individuals from bypassing the efficient market".
13. Neoliberals made allies with right-wingers by conflating market logic with morality, as in Hayek's quote "All that we can say is that the values we hold are the product of freedom, that in particular the Christian values had to assert themselves through men who successfully resisted coercion by government, and that it is to the desire to be able to follow one's own moral convictions that we owe the modern safe­guards of individual freedom. Per­haps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished."

That's a complex doctrine, which one might rightly suppose that few people subscribe to completely. I guess "agrees with Milton Friedman" might be as good a bullet point précis as any. Is this an accurate description of a real ideology or a strawman? To some extent it seems fair. In Machine Dreams, Mirowski emphasized that much of the modern economics literature in subfields like game theory, efficient markets, rational actor theory, etc., which were often used by right-wingers to justify "freedom", were actually developed by Cold War researchers pursuing some of the most anti-"freedom" goals imaginable, such as global thermonuclear war. Likewise here, he spends a lot of time talking about the Mount Pelerin Society, which was Hayek's extremely influential gathering of like-minded economist-philosophers, dedicated to pursuing the Popperian "Open Society" while being closed-off to outsiders. This is of course a classic paradox of change: many revolutionaries have struggled with the notion that their non-violent utopia seemed to require violence to be constructed, Popper himself noted that a democracy might decide to vote to abolish democratic institutions, and it's a staple in undergrad classes to present the conundrum of how exactly a society committed to free speech and tolerance should handle individuals who are not. Mirowski presents several examples of committed neoliberals puzzling at the idea that markets, which were supposed to be natural and spontaneous, might require un-natural and un-spontaneous action from themselves in order to prosper. An ideology which celebrated the individual and disdained the expert had to be developed and promoted by an ideologically rigid collective of experts.

Neoliberalism in practical terms comes down to extending the logic of market activity to as many parts of life as possible. This could be seen as a benefit to a more capitalist sort of person, as that increases the amount of opportunities there are for people to turn a profit or choose from a wider menu of options, or it could seem a hazard to the opposite sort of person, as systems of control, dominance, and exploitation are erected by those with more power or money. Mirowski leans heavily towards the latter opinion, using the theories of Foucault to discuss ways that he feels that neoliberalism has transformed society. Not knowing much about Foucault, I can't comment much on Mirowski's discussion of him. However, I can say that he chooses some questionable examples of neoliberalism's effects on contemporary American society; let's take his description of gambling's comeback in recent decades.

I know several people from widely varying walks of life who love to play poker or gamble in general, and while I suppose it's possible that they are merely pawns of the subtle infiltration of neoliberalism into everyday life ("heroically abjectly submitting to risk", even), absent from this analysis is the possibility that gambling is a nearly universal human activity that has existed for thousands of years, and its recent resurgence is due less to the rise of neoliberal ideology than to a recognition of the limits of prohibitionist attitudes and the needs of cash-strapped governments for new sources of revenue. Certainly none of my gambler friends them has ever thought of themselves as a hero, beyond the status that any successful poker player might have, and while it's possible that some people out there do, the example as a whole seems fairly tangential (a while later in the book Mirowski quotes Krugman referencing Keynes' famous line about "When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.", but he doesn't bother to more than nod towards a possible connection between the rise of hold 'em and any trends on Wall Street). I have the same skeptical attitude towards Mirowski's description of Facebook as a neoliberal tool.

He has a mixture of the true (Facebook does indeed makes money off its users and people do sometimes use it to monitor their employees/lovers/children), false (Facebook doesn't "force participants to regularly change and augment their profiles" at all), and nearly meaningless old-person-isms (what do "destabilizes your identity" and "distills the persona down to a jumble of unexplained tastes and alliances" mean?). I'm perfectly willing to listen to criticisms of Facebook's business model, but it's important to separate the technology behind internet-based personal interaction from the human behaviors that happen to use that technology. Tom Standage's The Victorian Internet had a lot to say about how similar the reaction to the internet is to that of the telegraph in the 19th century, so I think it's unlikely that Facebook is emblematic of a new trend in the ways he's alleging, although of course many people dislike Facebook for perfectly sensible reasons. And finally, his take on video games is comical at best: "Computer gaming used to be about triumphs of virtuosity; now, as in Grand Theft Auto, it is all about debasement of the losers." I agree in general with him that in some ways America seems like a worse society because of cheap, greedy, venal Reaganism, as shown in excellent works like Mark Ames' Going Postal, which documents the recent climb to near-ubiquity of school and workplace shootings; all the same, that's an absurdly oversimplified analysis of that game in particular and of video games in general.

He's on much firmer ground a bit later when he criticizes the self-serving attitudes of professional neoliberal economists. Anyone who saw Inside Job knows the infuriating Glenn Hubbard types in the economics profession, who actively pushed for more deregulation of derivatives and not only insisted that financial markets were capable of self-regulation but also, as in Hubbard's case, actively provided assistance to floundering corporations like Countrywide that were trying to appear more solvent than they actually were. Mirowski spends a lot of time tracing all the various ways in which the economics profession is riddled with conflicts of interest, including those at the Federal Reserve, the Bush and Obama administrations, the private sector banks, and so on. He spends a while anatomizing "agnotology", his word for the way that those types of economist shills sought to muddy the waters of debate during the crisis by either equivocating or pushing discredited theories behind what the problems or solutions were. This corruption of the economics profession itself made me think of P.J. O'Rourke's line about legislators, though in this case if buying and selling were encouraged by Econ profs, the first things to be bought and sold were Econ profs. Anyone who reads Yves Smith will enjoy this section. After discussing that, he sets out his aim in chapter 5: "It will suggest that the paltry ineffectual intellectual amendments to neoclassical macroeconomics prompted by the crisis exist, in part, serve the agnotological purposes of the NTC."

The three intellectual amendments mentioned are "(1) behavioral economics; (2) repudiation of the efficient-markets hypothesis; and (3) fixing the DSGE macro model." Without delving too deeply into every nuance of his critiques of the critiques of those three items, this section is an example of another irritating thing Mirowski sometimes does: act like seemingly every economist in the world, even the ones who strongly disagree with each other, are either part of this "Neoliberal Thought Collective" or are enabling them in some way. For their efforts to oppose neoliberalism, liberal economists like Joseph Stiglitz, Paul Krugman, or Robert Solow get at best grudging backhanded compliments, and at worst are accused of carrying water for the neoliberalism they've spent so much time and energy to publicly reject. Time and again, Mirowski will implore economists like that trio to reach out to more heterodox influences, which outside of some mentions of Keynes are rarely enumerated, while summing up their efforts thusly: "Behavioral economics, divestment of the EMH, and tinkering with the DSGE have all been abysmal failures. Yet something agnotological was achieved: the blogosphere was set all a-twitter on irrelevant pointless topics, while journalists were set off on wild goose chases." So... what should have been done? Who should have been listened to? What kinds of models should be used? I don't think it's necessarily the job of a historian like Mirowski to do economists' jobs for them, but it's frustrating to read perceptive criticisms of the way that the "villains" of the story duped the public in the cases of TARP, Fannie Mae/Freddie Mac, and Financial Crisis Inquiry Commission side by side with glib dismissals of seemingly everyone who was trying to do anything to stop them.

It's with glib dismissals that he begins the final chapter of the book, openly mocking groups like Occupy Wall Street for their actions. It's fine to offer valid criticisms of OWS - that they didn't achieve the impact their near-twin the Tea Party did can be chalked up to poor tactics, a lack of the kind of Koch money that the Tea Party had, a failure to take over the Democratic Party the way that the Tea Party did the Republicans, insufficient alliances with established organizations like unions, and so on. Many people I know sympathized with the movement but were turned off by its seeming aimlessness and lack of a plan, which can in large part be chalked up to its deliberately weak leadership structure. Mirowski's analysis has some good stuff:

"But more to the point, the Tea Party was consciously organized to give its recruits things to do and upbeat political identities to inhabit, all revolving around the commercialization of protest. All OWS offered were endless feints toward an oxymoron of an anarchist powwow, complete with tents. It was a murketing ploy, only bereft of anything to sell. OWS did not sufficiently appreciate the topography and extent of its opponent's political organization coupled with its cultural scripts, and for that reason made no coherent attempts to craft and supply an alternative. Or, to phrase it more cruelly, Occupy believed in the bedtime stories of the power of spontaneous order welling up from below, but was in the dark about the realpolitik of the modern privatization of protest."

The "murketing" he refers to is a form of commoditized marketing of social justice issues that's heavy on irony, image, and coolness (think Adbusters), and it's fair to note that OWS attracted its share of dilettante protestors that made a sharp contrast to the implacably dedicated true believers in the Tea Party. But hold that thought about their failure to "supply an alternative", because after an interesting discussion of how neoliberal-championed projects like geoengineering have come to dominate the discussion of potential responses to climate change, he ends with... whatever the opposite of a flourish is:

"The purpose of this book has been to attempt to answer this question: Why did the neoliberals come through the crisis stronger than ever? Precisely for that reason, we have passed lightly over some other highly contentious collateral issues, such as:
What were the key causes of the crisis?
Have economists of any stripe managed to produce a coherent and plausible narrative of the crisis, at least so far? What role have heterodox economists played in the dispute?
What are the major political weaknesses of the contemporary neoliberal movement?
What is the current topography of the Neoliberal Thought ­Collective?
What lessons should the left learn from the neoliberals, and which should they abjure?
What would a vital counternarrative to the epistemological commitments of the neoliberals look like?
Is there a coherent alternative framework within which to understand the interaction of the financialization of the economy with larger ebbs and flows of political economy in the global transformations of capitalism?"

Great questions! Maybe someone should write a book that tries to answer them! I'd read it, and probably so would lots of other people! This book, however, seems to be targeted at someone else - the kind of reader who's less interested in answering questions than raising them, who's less interested in proposing solutions than in mocking those of others, who wouldn't keep an enemy closer than a friend because no one's a friend, who doesn't think the good is the enemy of the perfect because everything's bad. In short, Mirowski has written this book for himself. It's a shame - I agree with him completely that politics has become much less responsive to people who aren't on top, and that even periods of relatively good government like the one right after 2008 still left much to be desired. The economics profession is in real need of reform. But even though much of the history in here is interesting, and even useful, such as the parts about the influence of the Mount Pelerin Society, there are just too many passages in here that read like HUAC testimony from the 50s with the word "Communists" crossed out and "neoliberals" inserted instead. It's been a while since a book raised my hopes so much and then failed to meet them so spectacularly.… (más)

The hidden history of postwar economics, with special attention paid to game theory, linear programming, thermodynamics, and information theory/cryptography. He explores a ton of fascinating linkages between these subjects with a scathing, almost Nietzschean denunciation of how the flaws and assumptions of past economists have turned modern economics into what it is today. However, it's also a celebration of the ideas behind economics, and the ending part where he shows an example of an auction market actually simulating another market is awesome. The amount of research he must have dug through is staggering.… (más)