Economic Crisis: The Double Fallacy

[coberst]

Economic Crisis: The Double Fallacy

 

1) The ideologist “reduces the social relations to personal qualities, and then uses the latter to justify the former.”

2) The ideologist “mistakes the appearance for reality. He so analyses the social relations that the rich and poor appear vastly unequal in their ‘endowments’, and on this flimsy basis he asserts that they are unequal.”

 

A responder to my thread “Ideology: Humanity’s Weakest Link” wrote the following:

“Capitalism is natural law. It should be the dominant ideology. Just like evolution is a dominant ideology, also because it's natural law. The free-market is to possessions as free-thought is to discussion. Would that we lived in a world where our minds were as free as our markets!”

 

Ideology seems to be a domain of knowledge little discussed in today’s world. Anytime I place the word “ideology” in the title of an OP the viewership seems to drop off rather dramatically.

 

What are the forms of thinking that are characteristic of ideologists? What are the most critical techniques and fallacies involved in the construction of an ideological, i.e. apologetic, body of thought?

 

I have turned to Bhikhu Parekh, a political theorist and Centennial Professor at the Centre for the Study of Global Governance at the London School of Economics for assistance in trying to answer these questions. Parekh has studied the work of Carl Marx and authored the book “Mark’s Theory of Ideology” from which the quotes in this post are taken.

 

To understand ideology one need understand the sense of infallibility of apologetics. The apologist provides a systematic argumentative discourse in defense of doctrine; the apologist provides a systematic attempt to justify the certainty with which s/he holds the views of the particular set of ideas in question.

 

First, the ideologist removes from historical context the ideas and forms of thought of her ideology and seeks to universalize them. S/he generalizes a set of concepts thereby conferring universality on the underlying social relations and experiences. Such universalization is evident in the comment of the responder’s view that “capitalism is natural law”. Such views are seen when we hear that capitalism and democracy are the most rational means for organizing society and thus represent “the end of history”, i.e. the end of further critical thought in such matters.

 

Secondly, the ideologist seeks to equate these ideological concepts as “just doing what comes naturally”. Such ideological views, practices, and social order are natural, or normal, or reasonable, or necessary and sufficient to human type creatures. All of which is intended to discourage any form of discussion or critical thinking.

 

Examples of such practices might be the effort to say that a woman’s place is in the home, scarcity is a natural human predicament, we shall always have the poor in our midst, overpopulation is an act of nature, aggression is a part of the natural order, inequalities among a population is the will of God, societies are naturally hierarchal, intellectual skills are more valuable than manual. As Marx frequently puts it “the ideologists ‘eternalizes’, or ‘deifies’ a given social practice or order, and eliminates history.”

 

Thirdly, the ideologist “constantly conflates the distinction between form and content.” In a production oriented society there are production relations and productive forces, the former representing the form of production while the latter represents the content. The ideologist’s primary concern is to legitimize the social form by presenting it in an appealing light whereas s/he attributes its evils to technology along with its evils.

 

“The social relations of capitalism create alienation, unemployment and acute division of labor dehumanizes the worker, cripples his personality, etc. The ideologist explains all these in terms of the machines, and deflates the attack on the capitalist social structure to its technology. While producing the social evils, technology also eliminates poverty and disease, conquers nature, creates material abundance, and so on. The ideologist ascribes these benefits to the capitalist social relations.”

 

Fourth and finally, the ideologist constantly reduces a relation to a quality. Also the ideologist prefers “quality-signifying to a relation-signifying vocabulary”. For example: the rich are rich because they are thrifty and disciplined, the poor are extravagant, undisciplined, and lazy.

 

Capitalism has met its enemy and it is ideological laissez-faire capitalism. Can capitalism throw off this heavy hand of laissez-faire ideology?

 

Quotes from “Marx’s Theory of Ideology” by Bhikhu Parekh.

[Essay]

Thanks Coberst!

 

As always, I appreciate....

 

This nice summary provides a perspective that really puts a handle on a worldview that I've been trying to understand lately.

 

...and IMO provides some answers to that interesting question about the difference between liberals and conservatives. :doh:

 

Thanks again,

~ :)

 

p.s. Can you add a little something about the semantics of this "...ideological, i.e. apologetic" example/association.

[coberst]

Thanks Coberst!

 

As always, I appreciate....

 

This nice summary provides a perspective that really puts a handle on a worldview that I've been trying to understand lately.

 

 

p.s. Can you add a little something about the semantics of this "...ideological, i.e. apologetic" example/association.

 

The Concept of Apologia:

“Strange as it may seem, Marx’s concept of apologia bears a remarkable resemblance to, and can be best understood in the context of the traditional discussion of the nature and task of philosophy.”

 

Philosophy is, as a philosophy professor said to me when I asked him what philosophy was about, a radically critical self-consciousness form of inquiry. Philosophy is the only domain of knowledge that has the attitude and discipline required to critically question its assumptions. All domains of knowledge start with assumptions and if these assumptions are challenged then the whole domain of theoretically defined knowledge loses its theoretical rational and legitimacy.

 

Pull away the foundational assumptions of any domain of knowledge and the edifice crumbles without it.

 

A system of knowledge is inherently limited and distorted by its assumptions. Because of these assumptions it abstracts certain aspects of reality and conceptualizes the subject matter in a highly selective manner in accordance with the assumptions. The physicist restricts her focus to matters that can be quantified in terms of weight, time, distance, and perhaps wavelength.

 

“Each form of inquiry operates within the framework of and the limits set by its basic assumptions, and offer an inherently inadequate account f the world.” Since non-philosophical inquiry is not aware off or able to question its assumptions “they have a constant tendency to claim universal validity and transgress into areas not their own.”

 

The author argues that “the assumptions underlying and constituting a point of view may be not only methodological, ontological, and epistemological, but also social…To be a member of a society is to occupy a prestructured social space and to find one self already related to others in a certain manner.”

 

An ideology is systematically biased by its assumptions and it constantly must protect its assumptions from erosion if it is to maintain the status of its ideology. For Marx the ideologist becomes a constant apologist for his ideology. An uncritical or vulgar social theorist, even though personally very critical of the established order cannot overcome the social osmosis resulting from the society and is unable to realize his critical intentions.

[questor]

Coberst, you have posted some interesting ideas, one of them the statement that ''Capitalism is natural law''. Is this your view? If it is, why would you think so?

[REASON]

Coberst, you have posted some interesting ideas, one of them the statement that ''Capitalism is natural law''. Is this your view? If it is, why would you think so?

 

You seem to misunderstand. In Coberst's OP, he is referring to someone else's comment that "Capitalism is natural law" is an example of an ideology, not that he thinks it's a reality.

[Essay]

You seem to misunderstand. In Coberst's OP, he is referring to someone else's comment that "Capitalism is natural law" is an example of an ideology, not that he thinks it's a reality.

Thanks for clarifying; for reading closely, and hearing the voice.

 

...and let me apologize for missing Coberst's reply above. I've been off more than on lately. But thanks mucho, ...belatedly. :)

 

~~~

[Moontanman]

I wasn't aure where to put this, I hope it's relevent.

 

From the internet by permission from Stratfor - Geopolitical intelligence, economic, political, and military strategic forecasting | Stratfor

 

 

 

 

Red Alert: The G-7 -- Geopolitics, Politics and the Financial Crisis

 

The finance ministers of the G-7 countries are meeting in Washington. The first announcements on the meetings will come this weekend. It is not too extreme to say that the outcome of these meetings could redefine how the financial markets work, certainly for months and perhaps for a generation. The Americans are arguing that the regime of intervention and bailouts be allowed to continue. Others, like the British, are arguing for what in effect would be the nationalization of financial markets on a global scale. It is not clear what will be decided, but it is clear that this meeting matters.

 

The meetings will extend through the weekend to include members of the G-20 countries, which together account for about 90 percent of the global economy. This meeting was called because previous steps have not freed up lending between financial institutions, and the financial problem has increasingly become an economic one, affecting production and consumption in the global economy. The political leadership of these countries is under extreme pressure from the public to do something to solve — or at least alleviate — the problem.

 

Underlying this political pressure is a sense that the financial class, people who run global financial institutions, have failed to behave responsibly and effectively, and have therefore lost their legitimacy. The expectation, reasonable or not, is that the political system will now supplant these managers and impose at least a temporary solution. The finance ministers therefore have a political mandate, almost global in scope, to act decisively. The question is what they will do?

 

That question then divides further into two parts. The first is whether they will try to craft a single, global, integrated solution. The second is the degree to which they will take control of the financial system — and inter-financial institution lending in particular. (A primary reason for the credit crunch is that banks are currently afraid to lend — even to each other.) Thus far, attempts at solutions on the whole have been national rather than international. In addition, they have been built around incentivizing certain action and increasing the available money in the system.

 

So far, this hasn’t worked. The first problem is that financial institutions have not increased interbank lending significantly because they are concerned about the unknowns in the borrower’s balance sheet, and about the borrowers’ ability to repay the loans. With even large institutions failing, the fear is that other institutions will fail, but since the identity of the ones that will fail is unknown, lending on any terms — with or without government money — is imprudent. There is more lending to non-financial corporations than to financial ones because fewer unknowns are involved. Therefore, in the United States, infusions and promises of infusion of funds have not solved the basic problem: the uncertain solvency of the borrower.

 

The second problem is the international character of the crisis. An example from the Icelandic meltdown is relevant. The government of Iceland promised to repay Icelandic depositors in the island country’s failed banks. They did not extend the guarantee to non-Icelandic depositors. Partly they simply didn’t have the cash, but partly the view has been that taking care of one’s own takes priority. Countries do not want to bail out foreigners, and different governments do not want to assume the liabilities of other nations. The nature of political solutions is always that politicians respond to their own constituencies, not to people who can’t vote for them.

 

This weekend some basic decisions have to be made. The first is whether to give the bailouts time to work, to increase the packages or to accept that they have failed and move to the next step. The next step is for governments and central banks to take over decision making from financial institutions, and cause them to lend. This can be done in one of two ways. The first is to guarantee the loans made between financial institutions so that solvency is not an issue and risk is eliminated. The second is to directly take over the lending process, with the state dictating how much is lent to whom. In a real sense, the distinction between the two is not as significant as it appears. The market is abolished and wealth is distributed through mechanisms created by the state, with risk eliminated from the system, or more precisely, transferred from the lender to the taxing authority of the state.

 

The more complex issue is how to manage this on an international scale. For example, American banks lend to European banks. If the United States comes up with a plan which guarantees loans to U.S. banks but not European banks, and Europeans lend to Europe and not the United States, the integration of the global economy will very quickly shatter, leading to significant limitations on international trade, currency convertibility and so on. You will nationalize economies that can’t stand being purely national.

 

At the same time, there is no global mechanism for managing radical solutions. In taking over lending or guarantees, the administrative structure is everything. Managing the interbank-lending of the global economy is something for which there is no institution. And even with coordination, finance ministries and central banks would find it difficult to bear the burden — not to mention managing the system’s Herculean size and labyrinthine complexity. But if the G-7 in effect nationalize global financial systems and do it without international understandings and coordination, the consequences will be immediate and serious.

 

The G-7 is looking hard for a solution that will not require this level of intrusion, both because they don’t want to abolish markets even temporarily, and more important, because they have no idea how to manage this on a global scale. They very much want to have the problem solved with liquidity injections and bailouts. Their inclination is to give the current regime some more time. The problem is that the global equity markets are destroying value at extremely high rates and declines are approaching historic levels.

 

In other words, a crisis in the financial system is becoming an economic problem — and that means public pressure will surge, not decline. Therefore, it is plausible that they might choose to ask for what FDR did in 1933, a bank holiday, which in this case would be the suspension of trading on equity markets globally for several days while administrative solutions are reached. We have no information whatsoever that they are thinking of this, but in starting to grapple with a problem of this magnitude — and searching for solutions on this scale — it is totally understandable that they might like to buy some time.

 

It is not clear what they will decide. Fundamental issues to watch for are whether they move from manipulating markets through government intrusions that leave the markets fundamentally free, or do they abandon free markets at least temporarily.

 

Another such issue is whether they can find a way to do this globally or whether it will be done nationally. If they do go international and suspending markets, the question is how they will unwind this situation. It will be easier to start this than to end it and state-controlled markets are usually not very attractive in the long run. But then again, neither is where we are now.

 

This report may be forwarded or republished on your Web site with attribution to Stratfor - Geopolitical intelligence, economic, political, and military strategic forecasting | Stratfor

[coberst]

Coberst, you have posted some interesting ideas, one of them the statement that ''Capitalism is natural law''. Is this your view? If it is, why would you think so?

 

This is an example of what the apologist says to convince others that capitalism is natural like the flowers in the field.

[questor]

Coberst, my question to you was, do you agree with this view? If you do, why? If you do not why? Is there another system you consider more natural?

[coberst]

Coberst, my question to you was, do you agree with this view? If you do, why? If you do not why? Is there another system you consider more natural?

 

 

If the question is ‘do I agree with capitalism’ then I must say that capitalism provides a means for creating many things that a group of people require. It also creates many inequalities and dangerous hubris, greed, and accentuates competition and aggression. Capitalism is successful if the GDP is constantly growing. The logic of an every expanding system of production and consumption means that shortly we will consume the planet.

 

If the question relates to ideology then I must say that ideology is dangerous and with a high tech society that places great power in the hands of humans it becomes suicidal. We are like children sitting in a pool of gasoline laughing and playing with matches. Making CT (Critical Thinking) a standard part of our educational system is the only way that I can see how we might survive another 200 years.