[Tracking some recent reading]

One of the greatest gifts I received from my education in policy studies is the understanding that every issue has more than one side and that it is possible, and sometimes necessary, to hold different perspectives to be simultaneously valid. With that in mind, I picked up Martijn Konings’ The Emotional Logic of Capitalism: What Progressives Have Missed last week as a counterpoint to some of the other reading I’ve been doing on the decline of capitalism (e.g. Ryan Avent’s excellent Wealth of Humans) or its actual demise (e.g. Paul Mason’s Postcapitalism: A Guide to Our Future). I got just a few pages in when it became clear that Konings’ argument is a refutation of Karl Polanyi’s 1944 classic The Great Transformation: The Political and Economic Origins of Our Time, which has been sitting unread on my bookshelf for over a year and which is about the limitations of a global market economy.

This is all heady stuff for someone who is not a trained economist (although the “Political Economy” course I took from my dear friend Tom Catlaw was my favorite and provided a small foundation on which to build some understanding for my current project). By sheer coincidence, I stumbled upon the clearest explanation of enlightened self-interest and the limitations of the market the evening after I began reading the Polanyi book, not from a book on political economy but instead from David Foster Wallace’s tome Infinite Jest, which I happen to be reading in fits and starts at the same time. Some might argue it too is a book on political economy. Pretty much smack in the middle of the (incredibly long) book is a dialogue between the two spies, Quebecois separatist Marathe and US agent Steeply, on a hill above Tucson.

Essentially, they are talking about the differing values that separate their peoples. Steeply essentially says (and I’m broadly paraphrasing), “You’re entitled to pursue all the happiness you want to pursue as long as you don’t mess with my happiness or my pursuit thereof.” This is what a lot of Americans believe, especially centrists and right-wing libertarians. But what if, Maranthe asks, again paraphrasing broadly, the cost of maximizing your happiness is the displeasure or pain of someone else?” Maranthe goes on to describe the limits of the market economy in an environment of scarcity through a thought exercise about pea soup, of which there is only one single serving available to the two of them. “We both want the soup. So me, my pleasure from eating the [soup] has the price of your pain at not eating soup when you badly crave it” (p. 574). Steeply provides a market solution, with a redistributive option: “We bid on the soup. We negotiate. Maybe we divide the soup.” But Marathe argues that redistribution is not viable because anything less than a complete serving will not satisfy and may cause even more pain, “half the bowl would only torment this craving I have.” With sharing eliminated from the thought exercise, Steeply returns to the market and reliance on the price mechanism: “Then we bid on the soup. Whoever’s got the most desire for the soup and is willing to fork over the highest price buys out the other’s half, then the other [goes to the store to buy more soup]. Whoever’s willing to put his money where his hunger is gets the soup.” Marathe insists that this response is irrelevant. At which point, Steeply understands that Marathe is asking about values – not value. “You want to raise the question of what prevents 310 million individual American happiness-pursuers from all going around bonking each other over the head and taking each other’s soup. A state of nature. My own pleasure and to hell with the rest.” Steeply then answers the question himself: “Because a certain basic amount for the wishes of other people is required, is in my interest, in order to preserve a community where my own wishes and interests are respected…And but then I can anticipate somebody on your side of the chasm retorting with something like ‘but what if your rival for the pleasurable soup is some individual outside your community…separated from me by a chasm of history and language and value and deep respect for individual freedom – then in this wholly random instance there be no community-minded constraints on my natural impulse to bonk your head and commandeer the desired soup.” And this is why Polanyi finds himself writing about the limits of a self-regulated market in 1944, as the world’s nations fight one another over more than just soup.

Sometimes it takes art to explain economics — a refreshing realization as I dig deeper into the economics of art.

(image of pea soup by Sara Goldsmith, CC 2.0)