event mechanics

I was forwarded the below email. I am posting it here with comment below for anyone who was also sent the email and who finds it as abhorrent as I do. I make a simple argument below to indicate its fallacies:

An economics teacher at a local school made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Gillard/Brown socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The teacher then said, “OK, we will have an experiment in this class on the Gillard/Brown plan”. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.
As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
To their great surprise, ALL FAILED and the teacher told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. It could not be any simpler than that. (Please pass this on)
Remember, there IS a test coming up. The next election.
These are possibly the 5 best sentences you’ll ever read and all applicable to this experiment:
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

The high school economics teacher who carried out this little experiment should go on some kind of sabbatical to give the teacher time to head back to university and learn some basic political economy. What is wrong with the logic of the email? It equates marks received during education with money. Such an obvious error leads me to believe an actual teacher would never actually carry out such an experiment.
Money is a quantitative measure. The difference between $74 and $75 is only a difference of $1. The difference between a mark of 74 and a mark of 75 is also a difference of one mark, but it is also the difference (at my university, at least) between a distinction grade and a high distinction. Marks are a quantitative measure of a qualitative difference.
Why is this an important distinction to make? You do not take part in education to get marks. You take part in education to get an education. When employed, you work to exchange whatever work you carry out for money; money then allows you to go do things. You do not exchange anything while being educated; the point of education is to be transformed at a basic level from someone without skills or knowledge to someone who has achieved a certain level of competence. Competence is qualitative. There are good and bad students just as there are good and bad teachers.
The worst possible conclusion to draw from the email’s example is that students take part in education so as to ‘accumulate’ marks and not for the explicit purpose of becoming competent. This is actually a common phenomena. Students will try to minimise the amount of effort and work required to learn and expect to achieve the same marks. They follow the exceptionally poor advice and embody the ideology contained in the email. They try to ‘game’ the marking criteria and assessment details so as to ‘accumulate’ marks rather than acquiring competencies. If you have children or friends who are studying at whatever level encourage them to study so as to learn.
People who embody the faulty logic of the email may find it hard to adapt or even imagine some other way of ‘working’ that is not premised on a market model (you work to accumulate some ‘number’ of something, be it marks, money or whatever). Clearly, they have not thought too hard about the various other non-market based economies that operate in most developed countries. Here are a few:
1. Children. How do you measure the ‘success’ of your offspring? In terms of how many you have? Maybe that is good in non-industrial or non-developed agrarian or nomadic societies. In developed countries we invest a huge amount of resources into our children. What sort of return do we get? We hope children will have a high quality of life. One’s quality of life can be represented in quantitative ways, but like educational assessments, the number represents a quality.
2. Education. I don’t mean for students, I mean for the teachers. People don’t become teachers because of some quantitative measure of success. They believe that they can make a difference in the lives of their students, help their students (and others) live better lives. If the local high school teacher did believe what was contained in the above email, then why are they working as a teacher? Surely they would work where they would maximise the economic return for their work?
This leads me to my overall point. Most of our activity as human beings is not carried out to get a quantitative reward. The love of parents or the care and consideration of teachers is more important to the future of Australia. That is why I find the email so offensive. It was written by someone with an axe to grind, but has clearly never thought about the purpose of education.
I won’t even bother engaging with the explicit political point of the email regarding the redistribution of ‘marks’ as if they were a form of money. The abject stupidity of the analogy makes me sad.

Nikki Usher‘s 2010 article in New Media & Society “Goodbye to the news: how out-of-work journalists assess enduring news values and the new media landscape” examines the goodbye letters, emails, speeches, columns and blog postings — “final musings” — of journalists who have been laid off, taken a ‘voluntary buyout’ or who have left the industry. Usher’s piece is somewhat polemical in tone at times, not that this is necessarily a problem, it just needs to be taken into account when digesting her arguments:

[A]ll these goodbyes reveal a silver lining – those that are being let go may be let go for business reasons, but they may also be the people failing to see the opportunities for new media and those who are unable to help newspapers be entrepreneurial in their attempts to come through the crisis they face. (924)

Usher analysed 31 ‘final musings’ as presented on the Poynter.org blog by Jim Romenesko. The terrific irony of this for anyone following the current state of journalism in the US is that Romenesko resigned from the Poynter Institute late last year after being accused of improper attribution by allegedly not using “quote marks” appropriately. The Romenesko blog was rebranded Romenesko+ and is now simply Media Wire. It is a brilliant example to use in my first lecture for my Online News unit this semester, in concert with Usher’s piece as a set reading, as we introduce and explore with students the role of ‘online news’ in the tensions of the current journalism industry.

Usher’s piece is a useful way to frame traditional understandings of journalism in the context of structural change. The analysis is useful for locating the prevailing culture of legacy print journalism in terms of the relation between individual experiences and the structural shifts that in part form their context. From a Foucaultian perspective Usher is isolating a ‘discourse event’ in the point of inflection between two discursive regimes and correlative compositions of power relations (dispositifs). Usher draws on Fredric Jameson’s conceptualisation of ‘nostalgia’ and Barbie Zelizer’s notion that rather than ‘profession’, US journalists should be understood as belonging to an ‘interpretive community’.

Usher’s use of Jameson’s ‘nostalgia’ begins with her arguing that journalists now work in a ‘post-modern news era’ (914). (What would be absolutely fascinating for me would be to revisit the so-called ‘Media Wars’ of the late-1990s in light of such a description. On the face of it, Keith Windschuttle and his ‘traditionalist’ supporters have lost.) She is mostly describing the shift Fordist modes of news production, which includes changes to reliable occupational routines of ‘newsroom’ work practices and changes to the status and function of the audience. The inherent double movement of Jameson’s nostalgia is that it is backwards oriented and forward directed. Nostalgia produces collective memories of the past while at the same produces a potential of a better future. The nostalgia of journalists, Usher suggests, also masks reality in that bias, corporate control and so on are not constitutive elements:

They are nostalgic for a time when journalism meant stability and economic security, and deeply believe that traditional print journalism contributed to democratic discourse and public service – masking the reality, perhaps, that their work may have helped sustain and perpetuate power structures. The old way of doing newspapers is threatened, and journalists are uncertain about the future. But significantly, they also fail to be forward-looking even as they are backward-looking: their nostalgia is self-limiting because it fails to produce a vision of the future that catapults traditional journalists into the new media world and new media economics. (923)

The current transformations to the legacy news industry serve as an example of what Zelizer calls the ‘interpretive community’. Usher writes:

Discourse about the changes in the news industry creates a discursive community of journalists. This, then, shapes shared meanings about the trials and tribulations journalists face and takes on the collective memory of ‘professional journalism’ in a pre-web, pre-blog, pre-newspaper slump era. (915)

Usher’s analysis is structured around four main areas of journalists’s discourse functioning as an ‘interpretive community’: 1) ‘Journalism as an ideal’ (916-9), 2) ‘New Media Economics’ (919-21), 3) confusion around what is being challenged or changed, mostly in terms of technology (921-2), and 4) a failure to be ‘forward thinking’ (923-5).

The basic tenets of journalism as an ideal are that journalism works in the public interest, it remains impartial, serves the voiceless and provides a crucial link in democracy (916). The ideal of journalism is to serve as ‘public service journalism’. Mark Deuze defines public service journalism as:

Journalists share a sense of ‘doing it for the public’, of working as some kind of representative watchdog of the status quo in the name of people, who ‘vote with their wallets’ for their services (by buying a newspaper, watching or listening to a newscast, visiting and returning to a news site). (447)

Deuze (2005: 448) notes that journalists can learn to have more responsive attitude to their ‘publics’ and therefore use this “age-old ideological value” as a wau to maintain the power relations of the status quo while learbing how to adapt to changing conditions. As Usher describes it, in the context of ‘prestige papers’ (such as the LA Times or New York Times), “these individuals want to reassert their claims to defining the public interest and determining what public service journalism is, rather than creating a more open conversation with a newly engaged audience of news producers and consumers” (917).

In the context of smaller, local newspapers this public service ideal is described in terms of a newspaper being a (more paternalistic than patronizing) ‘caretaker’ helping a public “interpret difficult ideas” and also sustaining local community by reproducing existing routines of newspaper communication and correlative power relations. Usher’s point is that this does not take into account those on- and off-line practices that reproduce ‘community’ that do not have the newspaper at the centre (918). Newspaper in general are seen to be arbiters of democracy in the idealized practice of highlighting the power relations that underpin existing governmental and market-based power relations. There was a general lament, Usher notes, that transformations to journalism are understood in terms of catering to the ‘market’ rather than ‘democracy’. ‘New media economics’ (and ‘new media technologies’) therefore become a threat to the democratic role of public service journalism. Political writer Michele Jacklin’s final column captures a sense of this when she writes, “As a substitute for hard news and insightful analysis, readers are served up a steady diet of splashy graphics, celebrity gossip and stories with the heft of cotton candy.”

In the Australian context, this tension between hard news and insightful analysis versus forms of content designed to increase website visitors and ‘hits’ is represented from the other side of the conflict by NineMSN.com’s online news editor Hal Crawford in his commentary about the Australian Federal Government’s Independent Media Inquiry posted to mUmbrella.com.

Real time data tell you exactly how popular a story is, and to maximise your audience size you need to weed out stories that no one wants to read. This kind of brutal treatment can be hard for an old school journalist to take.
Initially you may get upset that no one is reading the ‘important’ stories, but that arrogance fades quickly. Truly important stories rate. If some piece of news is going to change lives or become socially necessary or is just plain interesting, it gets traffic.

The NineMSN submission to the inquiry similarly seeks to problematise ‘quality journalism’:

The traditional view is that a key role for the news media is to be an independent monitor of government power and therefore quality journalism requires truth, accuracy and independence. We think it’s also important to acknowledge that that news media serves diverse roles. [...]
For ninemsn the most important indicator of quality content is that it is trusted. Trust is the key concern for our news team because trust equates to brand reputation which drives of audience. [...]
The traditional media are no longer small elite who serve as the gatekeepers of the news. Value in the digital news media is increasingly generated by interactions with users including the use of social media to provide commentary, share stories and drive traffic. News produced for digital platforms has to be a quality product if we want people to engage with our stories, to contribute their own insights and to participate in their dissemination.

The discourse surrounding ‘new media economics’ in Usher’s analysis is less important to my Online News unit this semester, but will be central to the second semester unit organised around ‘innovation’ and ‘entrepreneurial journalism’. The second semester unit is designed to prepare students for a more market-oriented, audience-driven form of journalism at the level of producing individual stories through to the level of creating standalone ‘online media enterprises’. Usher’s analysis notes that individual journalists generally take structural shifts personally, and see their respective departures as a failure of ‘owners’ or ‘Wall St’ to recognise talent. This is important in an educational context because ‘talent’ is still recognised, of course; it is more a question of the character of the ‘talent’ and of the mechanisms of ‘recognition’.

Jacklin’s comments are also interesting in the context of the socio-technical practices and technologies that Usher suggests will assist journalism. She lists a number of “recommendations as the possible salvation for traditional journalism’s problems: increased social networking, conections with the audience, more multimedia platforms, crowd-sourcing, better forums, flash-graphics, newspaper-hosted community blogs and hyperlocal reporting, to name a few” (922).

Lastly, Usher notes that the article odes not mean to say that other journalists are not reconsidering with the public and “are deeply engaged in trying to understand what such things as user-generated content, blogging, comment boards, data-mining, crowd sourcing and the like might mean for their newsrooms” (924-5). She ends with a provocative question: “to what extent are non-traditional journalists concerned with the discourse about traditional news values and the idea of what it means to be a journalist?” My response, shared with other educators, is to work on developing units that hope to empower students when they hit the job market.

“From salesman to client, from client to salesman, from consumer to consumer and from producer to producer, whether competing or not, there is a continuous and invisible transmission of feelings — an exchange of persuasions and excitement, through conversations, through newspaper for example — which precedes commercial exchanges, often making them possible, and which always help to set their conditions.” (Gabriel Tarde in Bruno Latour and Vincent Antonin Lepinay “The Science of Passionate Interests”, 39)

My ‘festive season’ reading has largely consisted of Bruno Latour and Vincent Antonin Lepinay’s “The Science of Passionate Interests: An Introduction to Gabriel Tarde’s Economic Anthropology”. It makes for fascinating reading. The extent of my Tarde reading consists of his Laws of Imitation and the special 2007 issue of the journal Economics and Society on his work. (Oh, plus Tarde’s post-apocalyptic science-fiction novella!)

In The Science of Passionate Interests, Latour and Lepinay have produced a diagrammatic reading of Tarde’s masterwork Psychologie Economique (1902). They set up Tarde’s core problematic in terms of developing an adequate critical theory (or ‘science’) of economies that does not fall into the same mistakes as ‘economics’. Here are my notes to part one (1-32). The science part of it is a development of the notion that everything can be measured according to measures appropriate for their terms.

Latour and Lepinay begin with Tarde’s theory of value, and demonstrate its relation to subjectivity. For Tarde subjectivity refers to the “contagious nature of desires and beliefs, jumping from one individual to the next without ever [...] going through a social context or structure” (9). Value extends to all desires and beliefs; it is made up of all the continual assessments we make. Bourdieu’s theories of cultural capital is also another way of critically engaging with non-economic economies of social and cultural value. The difference between the two is that Bourdieu’s focus is squarely the deployment of cultural competence and social esteem within structurated fields. Tarde and Bourdieu have different takes on the aquisition of value, for Bourdieu it is learnt as a product of imbrication in a field, for Tarde (immanent social) value is produced through the special interference effect of congruent practices of ‘imitation’, what he calls ‘invention’. Tarde’s value is a mmeasure of talent, Bourdieu’s is a measure of competence.

Tarde argues that economists did not make use of all the possible ways value can be quantified and they instead relied on, firstly, reducing all human behaviour to an ‘objective’ realm and, secondly, extending this reduction to all domains of human activity. Latour and Lepinay argue that economists format social relations. They do this by confusing two orders of measuring. The actual measured measurement that “captures the real state” (15) and the measuring measurement that formats the social world. Latour and Lepinay quote Tarde’s example of how the value of ‘belief’ is (re)produced by monks:

Priests and the religious have studied the factors involved in the production (meaning here reproduction) of beliefs, of ‘truths’, with no less care than the economists have studied the reproduction of wealth. They could give us lessons on the practices best suited to sowing the faith (retreats, forced meditation, preaching) and on the reading, the conversations and types of conduct that weaken it. (Tarde in L&L 15)

For Tarde it is a question of the laborious work of seeking out the specific values of any activity. Latour and Lepinay introduce the term valuemeter to refer to all devices whose specific function is to make visible and readable all the value judgements of what Tarde calls economics (16). The result is a metrology produced by chains of valuemeters. They provide the sociology of science as an example, where a metrology of learned literature “made visible and readable by the very extension of the quasi-currency we call credibility where, better than anywhere else, the very production of the finely differentiated degrees of belief plays out” (19).
The flaw in the approach of economists is to imagine they had to pursue a line of inquiry characterized by a “progress of detachment, objectivity and distance” (20). Latour and Lepinay provide money as an example of a ‘measuring measure’. What money measures, as a process of simplified registering for the purposes of capture (money as an ‘apparatus of capture’?), has kind of link to what is indicated by the numbers (21).

It would be a mistake to imagine, Latour and Lepinay warn, that as the number of metrological chains of valuemeters increases, there is a danger of shifting from passions to reasons, from the inter-subjective of Tarde’s social economy to the anemic economics of neoliberal markets, etc. Nor is it about finally recovering economic reason, but about how the economic rational is always thoroughly irrational. The solution to ward off the epistemological problem of false distance, built on a scaffold of irrationalities, is to properly appreciate value “from up close, in small numbers, and from the inside” (28). Latour and Lepinay are clear on this:

If there is, for Tarde, a mistake to be avoided, it is to take social facts “as things,” whereas, in other sciences, if we take things “as things,” it is for lack of a better alternative! How could sociologists abd, more surprisingly, economists, have had the crazy idea of wanting to imitate physicists and biologists through an entirely artificial effort at distancing, while the very thinkers they tried to imiate would give their right hands to find themselves at last close to particles, cells, frogs, bodies with whom they try top come into intimate association with the help of their instruments? (29)

The central problem has been to mistake the discipline of economics for the economy (31-32).

There has been a bit of a discussion on Twitter and around the internet regarding whether or not the Occupy Wall Street protests have received ‘sufficient’ news coverage. Here is a good piece by Joe Pompeo where he crunches some numbers. Erika Fry at the Columbia Journalism Review has published a piece of meta-journalism also questioning the sufficiency of the press coverage. She should be lauded for attempting to bring an analytical frame to the discussion. She draws on the work of celebrated sociologist Charles Tilly in an attempt to ascertain whether the Occupy Wall Street protest should be considered a social movement or not. Fry writes:

They [sic] press coverage indicates that most journalists have found Occupy Wall Street a movement not significant to give much coverage. If Tilly were around today, given his criteria, he’d likely agree.

Unfortunately, Tilly is certainly not the most useful academic source to draw on in this circumstance. For Tilly, social movements should be thought of as attempts by a politically engaged population to effect change to a nation’s political apparatus. Is that what is happening here? I don’t want to get into too much political or media theory, but ‘Wall Street’ is an event in part constituted by everything signified by ‘Wall Street’. Does Fry understand this? The Occupy Wall Street protests are not protesting a building or even an actual street. The protests on the actual street called Wall Street serve as a resource for counter images, the locus for the production of counter-narratives and so on. They are not protesting against a physical location; the physical location is simply a locus of action. Just as ‘Wall Street’ itself is distributed across the social body in repeated and yet different ways. Fry writes:

For a perhaps concurring perspective from the world of social science, consider the canonical work of American sociologist and political scientist Charles Tilly (he died in 2008) who developed widely-accepted criteria of what constitutes a ‘social movement.’ Yes, the media is not academia—there is of course a place for things that are timely, newsworthy, and important—the police’s questionable use of pepper spray on protesters for example—but in deciding the extent to cover a nascent protest movement, to which national media attention is oxygen, it is worth considering his criteria.

Its been pointed out that Fry’s logic is circular (nascent social movement needs national media coverage — its ‘oxygen’ — but won’t get it because it is not a social movement). But that is relatively unimportant compared to correcting the misunderstanding regarding Tilly’s work. Firstly, if Tilly was ‘canonical’ at one point, his work has shifted in status to ‘seminal’. The difference is that a ‘canon’ is a political artifact within knowledge economies, its importance is sustained by agents who are invested in its importance (imagine scholarly ‘Tilly experts’ who want Tilly to remain important). A work becomes ‘seminal’ when it has real influence in a field because it inspires other scholars to produce critical work that engages with its arguments or points in a thorough manner.

Tilly’s seminal work has inspired other scholars such as Jeroen Van Laer & Peter Van Aelst who have published a paper that is particularly relevant: “Internet and Social Movement Action Repertoires: Opportunities and Limitations” (2010). Laer and Aelst draw on Tilly’s framework without necessarily agreeing with his arguments and present their own more nuanced perspectives. This is the real scholarly influence of ‘seminal’ work. How many times Tilly’s work is set as required reading, for example, would indicate its canonical status. This indicates that it is important but not why.

Laer and Aelst offer a nuanced perspective of social movements that are entirely or partially organised around internet-based opportunities for political action. Fry seems to miss the obvious point (and, well, it is obvious, surely??) that the Occupy Wall Street protests have developed in such a way so the offline protest provides ‘oxygen’ for the online protest. Fry is not stupid, she seems to admit this point, but without sufficiently engaging with its importance:

The group has many grievances, but what they want to do about them or achieve by occupying Wall Street is much less clear—both in those “unfair” media reports and the content churned out by OWS’s own media machine.

So the Occupy Wallstreet Protest organisational group has its own ‘media machine’, ok… this is not newsworthy? Maybe not yet?

It’s just not the kind of coverage the protest group—which produces a lot of media in its own right—was hoping for.

Fry admits that the protest group is producing a large amount of its own media content through its ‘media machine’. Does Fry ask if this is different from other social movement protests? Or what the protest group hopes to achieve by producing a large amount of its own media content? No, she does not.

They have also built a sophisticated social media infrastructure and communicate on Twitter. Yet, just by looking at the pictures or a livestream of events, aside from the presence of technology (lots of Macs), it’s so far hard to distinguish OWS from any other liberal protest.

They’ve also ‘built a sophisticated social media infrastructure’! So aside from the presence of ‘technology’ — you know, technology that can be used to produce your own media coverage of an event, and indeed produce a planned ‘media event’ of the protest, for which the offline protest serves as a resource — Fry finds it hard to distinguish the Occupy Wall Street protests from any other ‘liberal’ protest. Ok, this isn’t news. It isn’t even meta-news produced by a meta-journalist (a ‘journalist’ covering other journalists) from the CJR. I am not sure why Fry believes that her own inability to distinguish between liberal protests is news or even media commentary. That is why journalists should go speak to experts, instead of relying on Wikipedia definitions of useful scholarly research such as Tilly’s definition of primarily 20th century social movements. Hence, we arrive at Fry’s money shot — the line in any work of online news-based media content (I won’t call it journalism) which is designed to function as ‘link bait’. Trollumnists (columnists who function as internet trolls) will organise their columns around such examples of ‘link bait’. Fry’s link bait trollumnist money shot is that the Occupy Wall Street protests are ‘all hype’:

Tilly explains this can come from participant demeanor and an air of seriousness. OWS seems to project by it’s worthiness by its own media machine, shrewdly developed in advance of the protests to steer the narrative and call attention to itself — the rather sophisticated websites, Twitter feeds, livestream technology, and thought that has gone into documentation and projecting an image online is impressive. OWS’s PR machine has not been matched by on-the-ground reality. OWS is all hype.

Occupy Wallstreet is all hype. Clearly. Fry says so based on evidence derived from Tilly’s Wikipedia page and her own inability to distinguish between protest movements as defined by her robust analytical journalistic mind. Why not ask a related question based on Tilly’s own understanding of internet-based social movements, one that is far more interesting and, dare I say it, newsworthy? Let’s frame it in a way that would be relevant for a meta-journalist such as Fry working at CJR:

Charles Tilly argued that internet-based social movements do not have strong enough social ties to constitute a viable social movement, does this observation apply to the Occupy Wall Street protests? If not, then how should journalists approach internet-based social movements? Are there any ethical or professional issues attempting to cover a social group that is producing their own media narratives that compete with the media narratives in the so-called ‘mainstream media’?

You see how that would produce actual news? It transcends the political divide not because it asks for representative opinions from various ‘sides’ of the protest (“he said, she said” journalism), but because it asks a question that anyone interested in the protests from any side of politics will actually want to know.

I hope there are not too many typos in the above, I’ve had to hammer it out before a three and ahalf hour drive to Sydney!!

On one of my recent trips up to Sydney from Canberra I listened to the debate hosted at the London School of Economics and produced as a program for the BBC with the theme of Keynes vs. Hayek. I listened to the ‘complete’ version availble on iTunesU, posted by the LSE. Keynes is traditionally understood to belong to ‘the left’ and Hayek to ‘the right’. I listened with an accute curiousity that developed into a sense of disbelief. The most sensible voice in the debate was Lord Robert Skidelsky who suggested that a targeted investment program would get most western economies out of the slump they find themselves in. On the other hand, from a systems theory perspective the Hayekian approach seems the most sensible — let the market-based systems sought themselves out, booms and busts equalise over the long term. But, for Hayekians, how does this happen? Representing the Hayekian side is Professor Georg Selgin. In the written version of his prepared speech (Skidelsky’s presentation is also there), Selgin says:

Liquidate, in short, the whole sub-prime bubble-blowing apparatus that was nurtured by easy monetary policy.

That would have meant letting insolvent banks that lent or invested unwisely go bust.

But instead our governments chose to keep bad banks going and that is why quantitative easing has proven a failure.

Quantitative easing failed because almost all the new money the government created has gone to shore up the balance sheets of irresponsible bankers.

‘Irresponsible bankers’? Ok. This sounds great! In fact, both sides of the debate seemed to agree that at a certain point economics becomes a discussion of morals. For the Keynesians it is a question of recognising the humanity of those suffering because of irresponsible decisions mostly by others (i.e. Selgin’s “irresponsible bankers”). On the other hand, the Hayekians argue that governments should not support ‘markets’ (or the legacy organisation of commercial entities that function “irresponsibly”) through spending because that will just encourage further irresponsibility, so the only appropriate response is to weather the downturn and work on making sure it doesn’t happen again when a ‘bust’ rips through a society.

What I do not understand from the Hayekian position, based on what Selgin was saying, is that the unfettered “market” is both the source of freedom and the ‘fairest’ way to distribute responsibilities while at the same time also the mechanism by which agents that constitute the market (i.e. “irresponsible bankers”) are morally censured/reprimanded (or something) so they will not participate in or contribute to unsustainable ‘booms’ again. I was actually shocked by this suggestion. Firstly, that most “irresponsible bankers” couldn’t care less what damage they do to ‘markets’ through their unfettered pursuit of profit, and, secondly, that the ‘market’ is the same mechanism that enables this unfettered pursuit of profit (discussed by Hayekians in terms of ‘liberty’ or ‘freedom’) will also somehow distribute punitive measures to those deservingly responsible. Is there not an inherent contradiction here, where the ‘market’ is asked to do two things at once? I know there are some allegedly intellectual Hayekians so I’d welcome any response that attempted to resolve this contradiction.

Let me frame it another way. Below is a clip of one of the “irresponsible banker”-types that Selgin is discussing. Real capitalists (who are the real problem) do not care where their profit comes from; they game the markets to exploit any opportunity possible. This is a pathological position based on an active disavowal of humanity and the suffering that accompanies the collapse of a market (or for that matter the unethical production of surplus value). (Found via here and here.)

The ‘market’ as discussed by the trader above is not the Hayekian market of Selgin — one that is both the source of ‘freedom’ and moral disciplinarity — it is the market constituted by thousands of capitalists who attempt to embody the most pathological dimensions of capital itself. There is no discussion of the creation of real value and no discussion of how to correct the immorality of previous consitutent participants of an obviously failed composition of the ‘market’. How would a Hayekian respond to the above trader? How would a Hayekian concerned with booms as well as busts respond to the current mining boom in Australia? What mechanisms would be put into place to restrict the irresponsible boom that is currently being created through the commodities market?

Do Hayekians have a concept of a sustainable opportunity? This is my interest in all this. I am thinking about the current state of the journalism industry that can no longer rely on legacy business models from the print-era or broadcast-era media industry. Is there a Hayekian concept of opportunity that is not framed in terms of the entrepreneurial recognition of a capitalist profit that only has to be actualised through a commercial enterprise, but is rather turned towards a sustainable commercial model? I have been researching this and I have not come across anything like the concept of a “sustainable opportunity” in any of the economics/business literature.

This is why Skidelsky’s response seems to be the most appropriate to me. A targeted investment plan does not mean investing money into capitalist enterprises solely designed to realise profit and hence game an inherently pathological market (i.e. the stupidity of the bank bailout), it means investing in projects that will produce real value.