This is a re-post of a blog entry I wrote for my LinkedIn profile a few weeks ago.
In the five years between 2001 and 2006 Citigroup ran a US campaign with the lively name Live Richly in order to sell equity loans. I remember seeing similar campaigns in Germany but in regard to this particular US version I had not been aware of it, until I started to follow the work by Mark Blyth on austerity.
He quite frankly noticed that this add is not asking the consumer to be/become rich but to live richly, a slight semantic difference with rather huge implications. At the same time, beginning in 2003, the US government, with the support of now famous financial institutions Fanny Mae and Freddie Mac, adopted the American Dream Downpayment Act that enabled low-income families to purchase their own home – all in the name of the American dream.
That, in some way, reminded me of the beautiful and humorous writings of American economist Thorstein Veblen, son of Norwegian immigrants and famous for developing American institutionalism that provided a theoretical substitute to the European, continental writings of Marx. In his 1899 humorous treatise The Theory of The Leisure Class Veblen develops a social critique of the, what he calls, ‘conspicuous consumption’ of the leisure class, those gentlemen, landlords and business men who, in Marx vocabulary, are the capitalists. For Veblen conspicuous consumption has no other purpose than the demarcation “between an honourable superior class” and the inferior working and servant classes, while it, at the same time, communicates the ceremonial necessities and the “norms of reputability” one needs to adhere to in order to enter the realm of the grand social class. As an early example, Veblen refers to “the use of intoxicating beverages and narcotics” for the purpose of “ceremonial differentiation”, and if they “are costly, they are felt to be noble and honorific”. Certainly a point of view I, myself, hold very dear. At the end, however, conspicuous consumption has no purpose to Veblen other than to show off one’s social status.
Fast forward roughly 110 years later, we, I dare to say, face a similar situation. Today we might rather speak of lifestyles than social classes but the story remains somewhat the same. Living richly is nothing more than the invitation to consume conspicuously in order to join the Haves and to leave the Have Nots behind. A home, car or an iPad today are signs of wealth and status like the walking stick or the watch in the pocket was in the times of Veblen. Back then they were signs of occupation, the owner was in no position to use his hands for labour, today we showcase financial independence. That, of course, causes a problem if the belief prevails that everybody can cross the borders into the leisure class, even if they fail to have the means to sustain such a lifestyle. What we end with is a pseudo-leisure class that itself is divided again into classes; a prime and a sub-prime class, at least.
Veblen, then, might also tell why the Marxists are still waiting for the proletariat’s revolution against their masters. The conspicuous consumption might be so powerful and habitual that the proletariat rather wants to become part of the masters than revolt against it. Veblen certainly reminds us to look for the deeper situated habits of thoughts in order to identify the root-causes of socio-economic problems. In that sense, it feels like that Irvine Welsh’s character Bruce Robertson, misanthropic inspector in the crime novel Filth, who makes a comment showcasing most sarcastically but somewhat appropriately this intentions, when he admits his motivation to join the force was the prospect of becoming part of police brutality and not to fight it.
For human beings the call of nature is an inevitable truth of the life, nobody can escape it, we all need to go to the loo during the day.
Successful people understand that their success as well as their mental and physical health depends very much the precise management of their time they spent on the bog. That’s why pooping routines are a key ritual for so many of them; and why the very first thing most successful people do before taking a shit is to drop their pants.
1. They drop their pants.
Successful people understand that dropping ones pants before taking a dump is a crucial part to prevent unpleasant accidents that will prevent them of having a overall successful day. There is nothing more disturbing than caught odours or visible stains for business partners and colleagues, of which successful people are especially aware of.
2. They exercise their brains.
Successful people know how to utilise the time they sit and shit. Instead of doodling around on the wall, they exercise their brains with Sudoku and 2048 or read the newest issue of The Economist, NYT or Playboy. Successful people know exactly how beneficial these activities are for their success in life and at work, so doing these activities in their spare time will increase their overall success.
3. They plan their next steps.
Successful people plan precisely what they do after they finished. From the number of toilet tissue sheets they use over the best way to wash their hands quickly to the time they inspect their successful creation.
4. They keep their social networks alive.
While networking with your business contacts is best done on a face to face basis, successful people know that they can utilise the time on the loo to have quick calls with their best friends to organise informal social gatherings. Successful people understand the benefits of these social gatherings for their mental and physical health and offer a welcoming relief from a hard day at work.
5. They unplug and disconnect from work.
Truly successful people do anything but work while pooping, they never check their email, and they try not to dwell on work-related issues. Successful people give themselves a buffer period between the time they read their last email and the time they wipe their bum. The idea is to get your head out of work before you sit down.
6. They are proud.
Finally, truly successful people know the benefits of intrinsic motivation. This motivation is achieved through the realisation of one’s own successes. Here, the inspection of their creation is a perfect way to get a sense of achievement, which has a positive effect on one’s psychology.
In the past few month I’ve read some articles about the life and the suffering of a PhD. Many of these articles came mostly in form of top ten lists and meant to be funny. As it is often the case with these lists, you feel understood by some of these points and they offer you an articulation of your problems you weren’t able to come up with yourself. But there is one thing in these lists that is never mentioned, but is at least very strongly connected to me and my PhD.
The question, which I’ve been asked so many times now, why I am doing a PhD in the first place. I know the standard answers here: It is such an interesting topic that nobody ever looked into! I like doing research! Career! I’ll change the world with this! … These are some of the things one can say and which are quite possible truly meant this way. Yes, I do like research and I like being an academic and I want this career path. But the honest, bloody, ugly truth is that I can’t do anything else!
Among my many friends I have all sorts of people who do different jobs they actually like. People who enjoy their participation in creating something physical, a car, a house, some kind of product, a piece of art, design or adverts, are among these friends. People who like to work with people, in schools, in hospitals, in hotels or in court are my friends. People who are true entrepreneurs, always chasing the next opportunity and creatively turning something unimaginable into a source of income. And although I can empathetically understand the satisfaction they get from their work, I would not gain it from these activities because my limited skill set won’t allow me to perform in such a way that I could actually enjoy it.
I, on the other hand, are only good at thinking, or at least I hope I am. It’s not the case that I’m not creative or unable to work with people. These skills I possess, but they are only directed in one direction, namely to support my ability to do research. I find satisfaction in grabbing a problem, sit down and think about it philosophically. I also enjoy thinking about the way we can think about these problems. This ability to critically think is both a blessing and a curse, as it proves helpful in my job but rather painful in my private life. At the end of the day, the things I find most appealing create a sense of indifference in others, which is also the other way around.
Finally, in the best of all possible worlds I will do my PhD. I will graduate and wear a talar and my family and friends will be proud, pictures will be taken. But the end result, this book, the accumulation of years of sitting, staring and thinking will only be known to a hand full of people on this planet.
Last Monday, Prof. Steve Fleetwood from the University of West England was so kind to be the speaker at the final Critical Realist Workshop of this term; sadly the next one will be in October, which means a long waiting time. At the end of his presentation, Prof. Fleetwood faced three interesting questions. In this post, I want to develop a few thoughts on them.
Prof. Fleetwood talked about his current work on defining labour markets [LM], what they are and why the conception of LM in neoclassical economics is useless, because orthodox economists basically don’t know what they’re doing. The reason, he said, lies in the missing understanding of underlying socio-economic phenomena. While institutions are acknowledged as being somewhat influential in orthodox economics, they remain separated from LMs. Hence, LMs are some kind of entities, yet the mainstream fails to really define what they actually are. Prof. Fleetwood referred to chess as an analogy for this separation; chess would then be separated but influenced by chess rules.
Instead, Prof. Fleetwood suggests defining LMs as emergent mechanism of socio-economic phenomena [SEP]. This included a longer differentiation of SEPs, of course, but as I want to limit my text to the questions I won’t delve too deep into it. However, a few words on emergence and mechanisms. As far as I understood, mechanism is meant to be a particular, causal, systematic process-configuration of these SEPs and emergence carries the notion that LMs are irreducible to the underlying SEPs.
What are the questions now from this kind of definition of LMs? The first question was, whether or not LMs are everything. The second question was where the locality is in this, because people go to some physical places to search for work (job centre?). And the final question asked whether or not we can call this emergent process a market, because markets will always have the notion of neoclassical demand and supply functions.
My thoughts on the first question resolve around the issue of boundaries, is it possible to find SEPs that aren’t related to the emergence of LMs? I would argue that this is possible; while contract law is important for the emergence of LMs, traffic law isn’t, at least in my view. Therefore, LMs are not everywhere. However, one could argue that there are secondary influences, indirectly responsible for the emergence of LMs by, for instance, defining the social status of the labour force. In this case, one might argue that LMs are in fact everywhere and everything. This would, of course, also apply for every other entity or mechanism that emerges from SEP, rendering the attempt to define different things somewhat pointless?
What about the second question about locality? Do we need to consider physical space and time in this emerging mechanism called LM? I think the physical space and time are secondary. Sure, job searchers may have to go to a job centre, somewhere located, at a specific time to actually search a job but this doesn’t mean to be important for the LM itself. These specific conditions are very much interchangeable, the UK LM doesn’t change when all job centres burn down and are rebuild two miles down the road. They remain ‘places’ to go for the job search but are not necessarily bound to a physical position. However, space and time still matter, but more in a trivial Kantian sense. Space and time are then a priori constituents for everything. It doesn’t matter where the job centre it but it matters that the job centre is somewhere at one point in time. Likewise, emerging entities, such as LMs, and the underlying SEPs themselves cannot exist without space and time a priori existing. But that is quite trivial I think.
The final question is whether LMs in this definition can still be called market, because markets have this burden of being associated with supply and demand, and exchange, in the orthodox sense. Prof. Fleetwood agreed that it is difficult to speak of a market, although he said it remains a market due to the commodification of labour force which still takes place. I don’t think the notion of supply and demand gets lost with his attempt to define LMs. After all, supply and demand are just a heuristic devise, a very superficial one thought, which does not rely on the usual orthodox methodological individualism. It only shows that there is a supply of labour force, while Prof. Fleetwood tries to show why and how this supply is constituted. That doesn’t change the fact that there are, in some sense, agents looking for a job and organisations offering them. His research, in my view, only adds a description of, basically, everything that has an influence in defining such agents, organisations and rules, practices etc. that constitute the exchange taking place in a LM.
As part of my research on eclecticism and pluralism in economics I am discussing the relevance of eclecticism in economic pedagogy, i.e. how should we teach economics in the future. In regard to this I came across Chris House’s blog post about the usefulness of real business cycle theory (RBC).
RBC has been criticised in the economic literature quite a lot. Gregory Mankiw for example wrote in a paper in the late 80’s that RBC has no persuasive power due to a lack of empirical evidence of its major claims and will therefore disappear at one point.
However, Chris House argues that there is still some value in RBC, despite its flaws, and therefore we should continue to teach to students . First of all, it has a historic value, i.e. the important role it played in the development of macroeconomics in the past. Secondly, it allows students to learn the ‘language’ of mainstream economics. RBC is embedded in a dynamic stochastic general equilibrium framework (DSGE) and by teaching it, students will learn the basics needed in mainstream economics. The third point is the most interesting one, an epistemological argument that claims even if RBC is wrong; it helps us to understand why it is wrong.
I think that is quite an interesting point, because it allows us to think about falsified theories and their epistemological value. Especially as teachers we should not dismiss falsified theories completely. After all, they can serve us as tool to teach students knowledge. At this point, I shall not jump into the discussion on what knowledge actually is. Every failed theory is not only an important part in giving the reason why it failed but also reflects the general controversies and historic, cultural and social environments surrounding and inspiring scholars and their discipline.
Based on this, I hope to develop the concept of, as I call it, pedagogical eclecticism in economics. Under eclecticism, I generally understand a philosophical leitmotif of unprejudiced but critical endorsement of the established contents in research traditions. That may sound a bit complicated but it is quite simple once you read it twice, or three times. In economic pedagogy, this leitmotif translates itself into a teaching style that accepts and teaches the otherwise unaccepted. Not because it provides reliable knowledge about the research object, i.e. the economy in my case, but it gives us an understanding of the subject itself. Such a self-awareness is, in my opinion, necessary for a better comprehension of economics and will help students to gain a critical understanding of the subject they study.
So yesterday my faculty screened the documentary Inside Job for our students, who were partly lured to come with pizza and soft drinks too. The movie 2010 Inside Job was directed by Charles H. Ferguson, and narrated by Matt Damon, and is about the financial crisis of 2007/2008. It tells the story about the financial crisis in five parts, starting with an historical abstract of how we got there and finishing with where we are now. With this story-telling, it connects the neo-liberal deregulation of financial markets beginning the 1870’s and the housing boom in the US in the late 1990’s and early 2000’s with the development of complex financial instruments by major players in the then deregulated financial industry. The instruments the film focuses on, and explains, are the collateralised debt obligations and credit default swap. Additionally, the film mentions the role of the three big rating agencies S&P, Moody’s and Fitch and also looks on the impact of the deregulation of the financial system in Iceland.
I must say that I very much liked the documentary because it is very entertaining and well made. However, there are some aspects I didn’t like. First of all, the conclusion of this movie is somewhat dissatisfying. You leave this movie with the feeling that a handful of bad people in control are responsible for the situation we are now in. By doing so, this movie unintentionally moves close to, and might invite, antisemitic conspiracy theorists. I came across these kind of people quite often in discussion about the financial crisis and its origins and it is quite common to find the opinion that these few bad people are in fact Jews with a Zionist plan of world domination. The movie, at no point, makes such allegations but I know people who used this focus on a few bad people as starting point for their conspiracy theories. Also, some hero’s are presented who did foresee the crisis and tried to warn the world about the problem. This is a classical black and white dichotomy, I think they could have made an emphasis on how many different people talked about problems in the economy and the financial system, from Keynes over Minsky to Keen and many more. In addition, the movie uses a few tricks we know from Michael Moore in order to become, in Christopher Hitchens’ words, an “exercise in facile crowd-pleasing”. An example of this tactic is, when one of the interviewees says that the majority of academic economists do not make millions. The movie tries to proof otherwise by listing a handful of economists who are both academics and working/consulting in financial institutions or the government, including their income, thus showing the audience that this was a lie. Yet, these people are among the elite of academics, most of them in high positions in elite universities and other institutions in the US. The suggestion is, that academic economists make more money and have close connections to interests groups in the financial sector. Although this is true for the five or six people shown, it does not refute the claim that the majority of academic economists are not rich and have no or loose ties with the financial sector. I bet a more detailed analysis would have shown the reality of well-paid but not super rich academic economist working in normal universities in the US and around the world.
The same “crowd-pleasing” creeps in when the conclusion suggests that the problem is caused by a handful of bad, greedy, drug addicted people. I am not arguing against the claim that the financial industry is greedy or that drugs and prostitutes are part of the daily routine, even without the movie The Wolf of Wall Street I knew from sources about such things. However, the focus on the handful of people might tempt people to conclude that the problem can be solved by simply removing these people from power. As a result, the movie misses to outline deeper systemic problems of capitalism itself. There is an awful lot of literature about the systemic risk of capitalism, not only from Marx, which, by mentioning, could have shown how much more complex the financial crisis actually was. For example, the beginning of the deregulation in the 1970’s and 1980’s under Ronald Reagan finds its origin in a interesting development in economic theory. The critique of Keynes and the rise of the Chicago School under Milton Friedman are only part of it. Well, I guess the economists inside of me is getting upset…
Anyway, other aspects about the financial crisis have been briefly mentioned and could have deserved more attention. The actions of the Clinton administration during the time he balanced the budget for example, not only the fact that Alan Greenspan was against regulations. Not only deregulation but also a lot of cheap money from the FED played important role. The Bush housing initiative could have been outlined a bit more, even after the crisis home ownership remained at 65.4% in 2012 while, for instance, European nations like France, Germany or Denmark are between 57.8% and 41% in the same year. The relationship between the housing bubble and the dotcom bubble could be explained in more detail, as for instance Jared Bernstein did.
And finally, I think it would have been interesting to get more information about the political situation in the US, not only complaints about the composition of Obama’s cabinet, basically a handful of economic advisers who were involved in the crisis are not trying to solve it. For instance, the democrats had a majority in both the Senate (ca. 59/41) and the House of Representatives (ca. 255/179) in the first two years of the Obama administration. However, the 2009 stimulus pack was passed with almost no agreement by the Republicans, also some Democrats voted against it. The question must be asked whether a regulation act on the financial industry would have been passed in case Obama’s advisers had suggested it. I am not an expert on US politics, so this would have been interesting to me to see the political dimensions behind the crisis. This would have brought us to what the crisis really is, or as many others see it, not only a crisis of the misbehaviour of a group of people but as a crisis of a capitalist system with a neoliberal political ideology. The film does give a glimpse on this by suggesting that the economic discipline itself is affected but then it returns to the allegations against individuals. It is unfortunate, however the movie gives interesting insights into a crisis and its legacy that affects all of us. A true must watch, despite the points I criticised =)
What we now need, is a similar take on the crisis in the EU.
After reading a couple of blogs about the Winter Fan Dance 2014, I decided to write my own contribution, trying to tell the world, or at least my readers, how I felt during this traditional SAS march in the Brecon Beacons in Wales. (sorry for any spelling mistakes, it was late =))
The Fan Dance is the latest highlight in a process of changing my life. Everything began in 2010 when I decided to change my life by leaving the town I lived in for almost 10 years, where I went to school, studied and met a bunch of awesome friends. Not everything in life was perfect though and therefore I moved to Auckland, New Zealand, in order to do my Masters and make friends with even more incredible people. After two years, I came back to Europe and found the next intellectual challenge at Anglia Ruskin University in Cambridge, I became a PhD student. I continued to the change by starting to run and to join BMF. I promised a good friend to run a tough mudder with her one day and so I needed to get in shape. Secondly, I was 29 when I started my PhD, knowing that when I turn 30 it is the right moment to give the change a stereotypical push into the right direction. In September 2013 then, I did a Spartan Sprint as a test to see how fit I was. It turned out to be a great race and despite being injured I managed to get a good time.
The question then was: What comes next? I don’t remember how but I came across the Avalanche Endurance Event page promoting the Fan Dance Race Series. I was instantly interested and a few days after discovery me and my fellow PhD researcher Mike registered for the clean fatigue Winter Fan Dance 2014, which would be exactly four days after my 30. birthday. What a present!
A couple of month later, after two sport injuries and a lot of training, the day came. I turned 30 on January 14th. Mike and I were both pushing our anticipation to its limits. On January 17th, he picked me up in London, where I attended a PhD workshop but was hardly able to concentrate. Thanks to the traffic around London we arrived late in Wales, too late for the registration on that Friday. Finding our B&B was not a problem and after a quick dinner we went to bed. The next morning we had a great breakfast and drove to the Storey Arms for registration and the race itself. Unfortunately, the strong wind slammed the door of Mike’s car so that it locked itself with the keys and his gear inside. He called a locksmith who was able to open it and retrieve the keys, yet we started 21 minutes behind the other clean fatigue racers. With this delay, we thought we might at least be able to catch up with the slowest, not finishing last!
The start itself was hard, a steep incline right from the beginning, the heart-rate went up fast and my breathing became heavy. I was asking myself how I was going to finish this if the race continues like this. However, after a while we had a first relief as the route leveled off. Down into a valley, through a small stream and back up again. At this point my socks were soaked and remained that way for the rest of the race. On top of Corn Du, we met this old guy who had a race number on his back telling us it was windy, and he was right. Passing the ridge, the wind and rain hit us hard from the right side. It was almost impossible to walk in a straight line but I really started to enjoy this weather. Coming from an North Sea island in north-west Germany, I was used to stormy weather during winter. A 21 km training walk at home, only through the dunes and along the beach, gave me a first impression of such weather on the final 3 km. However, it made this race so much more fun! We then approached the summit of Pen Y Fen and the wind started to blow the water through my windproof and water resistant jacked and gloves, so much about that. There was no chance finishing this race without being soaked in water. After we had a short talk to some DS members on the summit, we headed down Jacob’s Ladder. I’ve read about how hard this part is and I realised how painful this will be on our way back.
Then we made our first and only mistake, thanks to my poor map reading skills (sorry Mike). We took the wrong way and went up Cribyn, the normal route would have taken us around. This meant to climb another two peaks before we came down to Windy Gap and the RV tent. From there we followed the Roman Road to the turning point. On that road we finally met the main bulk of clean fatigue racers. On the final bit towards the turning point we started to run a bit. The ground was even but thanks to the weather and the other racers a single area of mud. We arrived at the RV2 after approximately 3 hrs and I had a few energy bars, a few cups of tea and I put on a second pair of socks so that my boots remained tight around my feet. The water made them loose and my feet slipped around inside, causing pain in my toes every time I went down a slope.
Walking back on the Roman Road was, quite honestly, boring. It was not raining nor was it really windy. The Roman Road was slightly going uphill but it was nothing compared to the slopes of Pen Y Fen or the other peaks. At that time I started to feel my legs a bit and I was hoping that this won’t turn into agony once we were climbing Jacob’s Ladder. Back at Windy Gap we took the right route this time, as I saw people going this way earlier.
And here it was that something remarkable happened. Mike and I were both walking around Cribyn not knowing that we would escape the slopes of this peak we encountered on our detour. When the route got steeper and steeper, our speed slower and slower and the pain in the legs bigger and bigger, we thought we still had to face Jacob’s Ladder. With visibility of around 20 meters I was looking for a peak or something, telling myself not to stop until I reached it. “You won’t stop, you’ll stop on a peak, sit down, rest and then go for Jacob’s Ladder” was my inner monologue followed by the voice of my BMF instructor telling me to “suck it in”, and later after talking to Mike he said he had about the same thoughts. Then it happened, a rock formations emerged from the clouds and I realised that we were already on Jacob’s Ladder fighting our way up. I turned around and screamed at Mike, telling him the good news. A rush of pure relieve and excitement went trough my brain. I think this was the happiest moment in the whole race, when I saw these rock formations. Just a bit of climbing and we were back on the peak of Pen Y Fen and the pain in my legs felt minutes ago was just gone.
Members of the DS approached us and asked if we were OK and how many people were behind us. We actually managed to catch up and leave several clean fatigue runners behind despite our delay and detour. What followed was almost a sprint down Pen Y Fen to Corn Du and further to the stream we crossed in the beginning. The final slope was tough but we did it and soon after it we could see the red phone box waiting for us. On our way down we passed several other racers, thus achieving what we planned; not finishing last! I don’t remember our time but it was bit more than 5 hrs official race time, not considering our 21 minute delay. The last thing to do was to get the Fan Dance patch and the handshake from Ken.
I was soaked in water but happy as hell, with Mike I had a great team mate at my side. I also kept thinking about this old guy we met quite early in the race. If he was OK, if he gave up or made it. I never saw him again. Also, I feel a deep respect towards those who did the load bearing and of course the soldiers from SAS who run the Fan Dance with even more weight on their back and at a faster pace. We met a couple of them up there, I think, and they were just smiling and saying “good morning”. I think a smile always helps. When I registered, I asked whether I will be the first German to participate and at that time the answer was yes, with the exception that another guy from Germany had registered as well. So I’m still hoping I was one of the two first Germans doing the Fan Dance.