From Marx to Freud: The Meaning of Post-Proletarian Populist Outrage

The populist outrage over the AIG bonuses seems to illustrate the confusion about what capitalism is now.

At one point, capitalism was a contest between the worker and the capitalist. And the capitalist was a rich and powerful INDIVIDUAL. Carnegie or Rockefeller, for example, had power to dictate wages and prices. Investment depended on capitalist elites; work depended on the alienated proletariat.

But people angry about the AIG bonuses are not angry at the rich and powerful individuals. They are angry at knowledge workers and professionals who they suspect have abused their positions.

In today's world, it is the pension funds that direct investments. Powerful individuals have very little power compared with what they had decades ago.

The populist outrage against AIG is, oddly, the outrage of workers against workers. The AIG bonuses were given to knowledge workers – management and analysts – who manage the investments of (and insure) knowledge workers.

This whole mess is no longer a matter of class warfare between Marx's capitalists and workers. Class warfare that might be described by Marx has been replaced by the split personality of schizophrenia that might better be predicted by Freud. What was once fought in the social arena has become a battle over identity. Are these investments made on behalf of capitalists or labor?

The real lesson of Keynesian economics is to subordinate the goals of capital markets to the goals of the broader economy. Returns to capital - for instance - are made lower in order to stimulate employment and consumption. Obama and his advisers are of this school.

But it could be that once pension funds realize that they are themselves the tools of workers, they would do this themselves. It is one thing to run a pension fund in order to maximize returns to capital. It is another to run a pension fund to maximize returns to the workers that depend on the investment of capital to keep jobs and to become more productive. Once pension funds operate from this insight, they may well begin to manage their investments differently.

The problem may not be economic. It may simply be a matter of identity. It seems time that pension funds realized who they were and whose interests they really ought to take seriously.

Hegelian Ecololgy

Bureaucracy defends the status quo long past the time when the quo has lost its status.
- Laurence J. Peter

Hegel's philosophy was probably the biggest influence on Marx's thinking. The man's notion of dialectic as the animating force of history is one that I find persuasive.

A community may be in equilibrium. The early Greeks, say, might contentedly accept societal norms like justice and the common good. Consider that status quo the thesis. And then along comes Socrates who effectively reveals to them that they can't even define ideas like justice or the common good, awakening individual conscience. Consider this the antithesis. Then, over the course of centuries of dialectic between these two, the west eventually arrives at a synthesis, a community in which individual conscience or Adam Smith's self-interest becomes the new measure of the common good. This upwards spiral of opposing forces eventually results in a resolution, a new equilibrium, that is bigger than the two opposing points, or forces. It is through this dynamic that history unfolds, according to Hegel.

I suppose that Hegel's notion is not limited to philosophical or historical progress. His description of social evolution could be modified to describe natural evolution.

A species has to adapt to its environment. And yet, every species makes up a part of some other species environment. Every species is both adapting to the environment and defining that environment. Once a species has adapted to the environment, it has changed that environment. And, of course, this is on-going as millions of species are all engaged in the same dance. Imagine the environment as the thesis and the adapting species as the antithesis; tomorrow's species and environment is the synthesis, a new, temporary equilibrium.

I find the term Hegelian ecology oddly alluring and think that it describes this dynamic of evolution - whether social or natural. It seems to almost guarantee dynamic tension, a dance of progress. It is a reminder that the thing in itself is perhaps never quite so within itself.