Teaching the textbook controversy (13 March 2010)

Steve Benen links to a NYT article about curriculum changes at Texas high school social studies classes. Here's the lede:

After three days of turbulent meetings, the Texas Board of Education on Friday approved a social studies curriculum that will put a conservative stamp on history and economics textbooks, stressing the superiority of American capitalism, questioning the Founding Fathers’ commitment to a purely secular government and presenting Republican political philosophies in a more positive light.

I am somewhat apathetic. It's not as though the curriculum anywhere is objective and unbiased; the more neutral it claims to be, the more perniciously hidden the ideology is in practice. So with the situation in Texas, the bias (admittedly ridiculous) has been made more overt and easier to teach against if you a subversive teacher and are so inclined. This would have the laudable effect of illustrating for students how the can't automatically trust official-looking books and must learn to read everything critically. And in those districts where the books are taught straight, well, what were those students going to learn in institutions anyway? High school is not about disseminating truth; it's about indoctrination in the abiding mores of a community, as well as training people to be meek workers in the hierarchical systems they will encounter throughout life.

You can't blame the Christians for wanting to Christianize the school systems they control. Once you accept that school are for ideological indoctrination, then it becomes a matter of who has the power to use the institutions to suit their aims. "Truth" is simply a tactical ruse to gain power for your ideology. The Texas Christians are right in thinking that a counter-ideology has been taught in schools, and are simply implementing the logic of power by wanting to substitute theirs for it. (It's like what Lenin said, you look for the person who will benefit and um, um...) But they are merely relativizing what they probably hold as absolutely true by introducing it into the welter of democratic politics. One lesson people can take away from the school-board conflict is that Christian ideology is open to a vote, and that Christianity must build consensus in the same Machiavellian ways as politicians.

These efforts to control textbooks as though that will ensure control over the kids who pretend to read them and teachers who pretend to teach them seem sort of desperate, as though the books were to blame for the waning popularity and unreality of some of their views. To paraphrase Thomas Merton (and also a rebel princess from some movie), the more they tighten their ideological grip, the more students will slip through their fingers. I mean, they are dealing with people who say things like this:

“The topic of sociology tends to blame society for everything,” Ms. Cargill said.

Yes. And historians -- man, they have historical explanations for everything. And mathematicians, all they ever talk about is math. Where is the Scripture?

I suppose I am skeptical that people take textbooks as some sort of gospel, but that may be because I have always had autodidactic tendencies and figured that what was in textbooks was pabulum for indifferent students and fodder for rebellion for anyone else who was engaged.

The ideological takeover is a classic enhance-the-contradictions moment; it's so blatant an effort that it makes the underlying problems self-evident. The heavy-handed efforts to safeguard hegemony exposes how frail it has become. This sort of inanity should prompt sane people to withdrawal from the system altogether if they can, or at least put in place local forms of resistance to the tyranny. It calls the phony objectivity of schools to everyone's attention, including those who ordinarily wouldn't give a shit.

Anyway, some of these proposals don't strike me as all that outrageous.

In economics, the revisions add Milton Friedman and Friedrich von Hayek, two champions of free-market economic theory, among the usual list of economists to be studied, like Adam Smith, Karl Marx and John Maynard Keynes. They also replaced the word “capitalism” throughout their texts with the “free-enterprise system.”

The double-talk about capitalism is pretty dumb, but kids should be taught about the sort of neoliberalism that has actually shaped policy for the past few decades. They should understand Hayek's idea about the market as a system for conveying information. They should understand Friedman's conflation of liberty with economic freedom of choice. At that point you can constructively critique these ideas, or reject them as part of institutional learning. If teachers were suddenly mandated to teach Frankfurt school theory in high schools, then those ideas would truly be dead.

As Meritocracy Fades, Social Networks Rise (18 Feb 2010)

A key to getting people to indiscriminately share online is to convince them that the "merit" of what they're sharing is irrelevant -- that they don't need a reason to share, that sharing is intrinsically rewarding. Many of the arguments in favor of using Twitter, for example, can be reduced to this, usually with the winking implication that sharing is also good self-marketing in partial disguise. If we worry about having something important to say, we will miss out on the chance to say something potentially valuable to someone else. Hence every moment we stay silent, we are destroying value! Sealed lips sink ships!

The ideology of meritocracy, I think, is incompatible with this ideology of sharing, which belongs to a vision of a "networked society." We are shifting away from the idea that we accomplish success through special personal merit (the much-hated elitist model), toward the idea that we achieve success through maximum publicity (the much lauded and enjoyed Jersey Shore model). Populism, the contempt for expertise, the championing of reality TV, the futility of "going Galt" -- they are all connected. But to explain why, it helps to debunk the meritocracy myth first. In this Forbes opinion piece, Reason Foundation analyst Shikha Dalmia uses Hayek to make a libertarian case against the idea of markets rewarding merit. This is unusual, as libertarian/Randian types tend to see market rewards as proof of virtuously selfish conduct, which makes most sane people think they are out of their minds. Dalmia's case hinges on the difference between merit -- a moral idea -- and value, an economic concept. Markets reveal value, not merit. And value, if you follow Hayek's argument in "The Use of Knowledge", is mainly generated by happening to have vital, local information at a fortuitous time -- not because you are a genius inventing brilliant information for market consumption. Dalmia:

The beauty of the market, Hayek brilliantly pointed out, is that it allows people to use knowledge of their particular circumstances to generate something valuable for others. And circumstances, he emphasized, are a matter of chance -- not of gift. Furthermore, since no two people's circumstances are ever identical, every producer potentially has something--some information, some skill or some resource--that no one else does, giving him a unique market edge. "[T]he shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others," noted Hayek.
In a functioning market, Hayek insisted, financial compensation depends not on someone's innate gifts or moral character. Nor even on the originality or technological brilliance of their products. Nor, for that matter, on the effort that goes into producing them. The sole and only issue is a product's value to others. Compare an innovation as incredibly mundane as a new plastic lid for paint cans with a whiz-bang, new computer chip. The painter could become just as rich as the computer whiz so long as the savings from spills that the lid offers are as great as the productivity gains from the chip. It matters not a whit that the lid maker is a drunk, wife-beating, out-of-work painter who stumbled upon this idea through pure serendipity when he tripped over a can of paint. Or that the computer whiz is a morally stellar Ph.D. who spent years perfecting his chip.

Most people instinctively don't like this sort of definition of value, as Dalmia points out. It smacks of postmodernism, of contingency and relativism, of a whimsical world without justice. It makes a mockery of the idea of use value as a basis for economic value. There is only exchange value, which can seem to imply that in a market society, everything is negotiable, even what heretofore seemed like absolute truths.

Meritocracy is a ex post facto rationalization that helps mask this somewhat terrifying reality about capitalism -- it provides us a first line of psychological defense when we are in danger of recognizing that "all that is solid melts into air," as Marx memorably put it in his description of capitalism's relativizing force in the Communist Manifesto:

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

Of this, Dalmia insists, we need not be afraid. Shine sweet freedom, shine your light on me: "Markets don't just expand and democratize the concept of merit; they render it moot," Dalmia argues. "No longer does it matter what great qualities reside in you. What matters is if you can make them work for others. The concept of merit is replaced by that of value. Merit is intrinsic, concentrated and atomistic; value is relational, decentralized and social." In other words, market yourself well and you don't need any intrinsically worthy qualities, be they the aristocratic chimeras of breeding, the moral virtues sanctified in religion, or the cold, hard cash worshiped by capitalists. Instead you just need to share what information you have without necessarily understanding its value or believing that it has intrinsic merit, but overrating its importance all the while. Then society will return the "real" value of it to you, apparently.

And in that we have a pretty good explanation of the rise of social networks -- which have the magical property of making markets for information appear as nonmarket forums for sociality. Part of the rise of the "networked information economy," as Yochai Benkler calls it, involves using the word network as a screen for the word market so that the players in that market will rip themselves off and contribute labor and content for nothing.

What would happen, though, if networks actually supplanted markets -- if people stopped leveraging the unique contextual information they possess to game markets and instead shared it compulsively, without a view to undermining competitors but out of a quest for social recognition? Do we have to have markets providing an incentive to exploit information to make that information useful and efficacious, to translate it into "value"? Or could masses of volunteered information be sorted according to some other principle ("merit"?) in order to derive facts about the conditions of the economy at various times and places?

Price discrimination watch (10 Feb 2010)

In the world of economic abstraction, prices are believed to find their "true" level, a real-time approximation of a good's actual value (if there is such a thing), by balancing supply and demand. This process of price discovery is a central pillar of free-market ideology; drawing on Hayek, free marketeers read into prices the decentralized distribution of information vital to the development of the economy. Prices let the people on the ground, knowingly or not, translate local conditions into incentives that can be communicated far and wide.

But lots of things jam up the signal, as when prices are "sticky" and can't quickly adjust to shifts in the sovereign consumer's whims. Then, the discussion shifts to price elasticity of demand -- what sort of range of prices are possible for a good. Demand is "inelastic" if it's not much affected by price.

That brings us closer to what retailers' practical experience with prices seems to be: Their primary concern is to figure out how to charge as much as they can from a given customer for a given good. That is, they need to divide their customers into segments that see different menus of prices -- as when Americans in Prague get one menu from restaurateurs, Czechs another. Customers don't like this. It immediately seems unfair once we realize such discrimination is happening. Everybody wants to have the illusion that they are getting the best deal, or if not that, at least the same deal everyone else is getting.

Online retail -- as this CNN piece and this WashPost article by Joseph Turow, both from 2005, detail -- seems like it would be the perfect place to perfect techniques of price discrimination. We create a concrete demographic profile through our trackable online behavior (the sites we visit, the sort of goods we click through to have a closer look at, who we know on Facebook, that sort of thing), which can be used to make assumptions about the prices we can afford to pay. And in the absence of printed price tags or other customers at the scene of exchange (the point of sale), the discriminatory price can be generated on the spot. Think of it as automated haggling that has taken place without your having to go through all the awkward trouble and conflict. You are adequately sized up and the appropriate line in the sand (for retailers, at any rate) is drawn.

Amazon famously and clumsily tried this back in 2000, but users quickly discovered it and protested. Paul Krugman wondered if it might be illegal under the Robinson-Patman Act. Still, there was little reason to expect the issue to disappear. It's too potent a weapon in the retail arsenal, and it seems such a ideal application for all the data now being gathered in our new Web 2.0-powered knowledge economy.

But apparently there is some intramural strife among businesses: This recent NYT article looks at the battle between online retailers and manufacturers over who gets to set prices. The conflict, the article reports, stems from a 2007 Supreme Court ruling that gave manufacturers more power to dictate how prices can be advertised -- in sheer defiance of Hayek. Manufacturers want to stop online retailers from using their goods as loss leaders, tarnishing the brand with cheapness and presumably undermining their ability to price discriminate elsewhere.

[Manufacturers] say the competitiveness of the Internet has unlocked a race to the bottom -- with everyone from large corporations to garage-based sellers ravenously discounting products, and even selling them at a loss, in an effort to capture market share and attention from search engines and comparison shopping sites. They also worry that their largest retail partners may be unwilling to match the online price cuts and could stop carrying their products altogether.
“If there isn’t that back-and-forth between manufacturer and retailer, it’s just a natural tendency to drive the price down to nothing,” said Wes Shepherd, chief of Channel Velocity, which sells software that allows companies to scour the Web looking for violations of pricing agreements.

I've been thinking about that less quote all day, and I still can't make any sense of it. The online retailers don't exist to give products away to thwart manufacturers. What I am missing here?

Hayekian literary studies (3 January 2007)

I keep suspecting MLA types will eventually seize upon Hayek for fresh philosophical underpinnings sufficient to generate new readings of the lit classics. This would perhaps satisfy increasingly whiny right-wing critics of academia's liberal bias (Michael Berube's dismissal of that myth notwithstanding) and provide a new direction for theory to go now that the profession is "beyond" or "after" theory. Sure enough, Emory University English professor Mark Bauerlein recently published this article in the Chronicle of Higher Education about the alleged liberal conspiracy against Hayek in favor of Foucault (who, strangely enough, in his latter days actually went around encouraging people to read Hayek, whose ideas about spontaneous order resemble Foucault's account of power dispersed in institutions.)

While Hayek's defense of free markets (for which he won the Nobel prize in economics in 1974) influenced global politics far more than Foucault's analyses of social institutions like psychiatry and prisons, the two thinkers enjoy contrary standing in the liberal-arts curriculum. Hayek's work in economics has a fair presence in that field, and his social writings reach libertarians in the business school, but in the humanities and most of the social sciences he doesn't even exist. When I was in graduate school in the 1980s, a week didn't pass without Foucault igniting discussion, but I can't remember hearing Hayek's name. In those heady days of politically framed cultural criticism, academic intellectuals formed a vanguard of cosmopolitan insight and ideological unmasking (so they said), but their range of reference fell short.

Bauerlein concludes that "it would be healthy for everyone if the academic curriculum broadened its scope, if the lineage of conservatism were consolidated into a respectable course of study — that is, if Hayek won one-tenth the attention that Foucault receives." He imagines such a course in conservative thought would build up from Burke and Tocqueville to such contemporary luminaries as Harvey Mansfield (author of much-derided book about manliness), cultural-literacy dogmatist E.D. Hirsch, and Dinesh D'Sousa, whose most recent book blames the "cultural left" for 9/11. Wow, the promise of such a course is almost enough to make me wish I was a graduate student again. (Not really.) When I was in school, my sense was that English department conservatives wanted to teach literary appreciation courses in the established classics and couldn't fathom why students wouldn't want a warm bath in the luxuriance of the great works. These people were against ideas generally (and wouldn't have ever even considered the possibility of praxis) and preferred subjective pronouncements about aesthetic quality backed up by tradition. The entire profession of literature studies for them seemed to be about deciding which works were "great." This led me to think aesthetics themselves were a conservative conspiracy (a view which Eagleton's Ideology of the Aesthetic did much to foster).

But a familiarity with philosophical underpinnings of modern capitalism -- via classical economists Adam Smith and Ricardo and more recent apologists like Milton Friedman -- to balance the Marxist critiques that often are introduced in literary theory and cultural studies classes would probably be a good thing. It's no good citing Marxist theory without understanding which parts of it are generally held by all credible economists to be bunk. And I think that commercialism and the logic of business has a lot more to do with literary developments than the various romantic mystifications of genius and aesthetic innovation.

Anyway, I had been wondering what the trojan horse might be for smuggling Hayek into cultural studies programs. This essay is a start: Reason's blog points readers to this article by Paul Cantor, which applies Hayek's notion of spontaneous order to television-show development and exemplifies what Hayekian literary studies might look like. (Obviously I'll have my eye out for the forthcoming Literature and Economics: Studies in Spontaneous Order, which Cantor co-edited with Steven Cox as well.) Cantor asserts that falling back on spontaneous order is a good way of skirting the all-too-common (I do it all the time) logical inanity of attributing agency to art works that don't lend themselves to the kind of close reading that ascribes authorial intention to every minute choice -- things like TV shows and Shakespeare's plays, since these were likely shaped in performance and written down later. Spontaneous order can be seen as variation on the Romantic (and New Critical) ideal of organic form, which evolves dialectically in regard to content so that they suit each other perfectly. And better yet, this view demotes the lone genius working in opposition to society and replaces him with a celebration of collaboration, of art-making as not a mystical process reserved for special people (rich, elite, overeducated) but as a quotidian process of ordinary people pooling and specializing their talents. "The idea of spontaneous order always seems counterintuitive to us; as human beings we evidently are conditioned to attribute order to an individual orderer. That is why the ideas of both Smith and Darwin (not to mention Hayek) encountered so much initial resistance and are rejected to this day by many people. But if one recognizes the various kinds of feedback mechanisms at work in popular culture, one begins to see that it is possible for it to lack a centrally ordering agent and yet be self-regulating and self-perfecting." It's the last part that likely causes the most trouble -- not only are we reluctant to grant agency to the workings of an unmanaged system, but we are unwilling to accept that as the best of all possible results on account of there being no self-interest director (or state apparatchik) orchestrating it all. And feedback loops and spontaneous orderings often yield nonoptimal results -- American Idol, for instance. But yet it may be nonoptimal only to my elitist aesthetic. Cantor cites this cautionary advice from literary critic Franco Moretti: "If it is perverse to believe that the market always rewards the better solution, it is just as perverse to believe that it always rewards the worse one!" Actually there is nothing perverse about such a belief: Disdaining what's popular (and what popular taste has shaped via the market) is a sure way of protecting the power that derives from your intellectual capital -- you believe that judging what is best requires that special training that you, fortunately enough, have managed to acquire. Aesthetics are a disguised way of exercising arbitrary power, and markets thus seem democratic because they democratize the aesthetic, or make it something collectively decided. But the market is no panacea; it's distorted by the different advantages (more money, political capital) participants bring to it. You must have the capital (the connections, the money, etc) to get your TV show made before spontaneous order can begin to perfect it, and that capital already embeds decisions that have nothing to do with what might have been spontaneously demanded. In other words, we still fight over control of where to fix the starting points and parameters within which market processes, creative and liberating as they may be, will work.

"Economic calculus" and the end of curiosity (4 December 2006)

As someone who occasionally complains about free-market ideology and economists' traditional assumptions about rationality -- that it operates universally and consists of individuals' maximizing utility by unerringly choosing among a variety of alternatives to yield the most satisfactory outcome -- I found Hayek's short essay "The Use of Knowledge in Society" interesting. It seems to implicitly acknowledge that the view is ideological (rather than an empirical observation of human nature) while insisting on its profound usefulness upon being widely adopted.

The essay is a concise explanation of how markets can be seen as a system for distributing knowledge via the medium of prices, which are simple and straightforward enough for any participant in an economy to understand. By responding predictably to price changes, individuals can pass along critical information -- "the knowledge of the particular circumstances of time and place" -- without ever having to comprehend it or explain its overall significance.

To know of and put to use a machine not fully employed, or somebody's skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques. And the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.

Hayek pretends to find it strange that this exploiting this kind of knowledge, which is typically the basis of entrepreneurial opportunity, is scorned.

But the possession of such knowledge is not necessarily earned by careful study or diligent habits or admission into prestigious educational institutions but by sheer good fortune; it seems unmerited, its distribution seems random and hence unfair. (Chris Dillow at Stumbling and Mumbling refers to this deploringly as the "managerialist bias" -- the assumption that only those specially trained and certified should be entrusted to make economic decisions that affect us all.) But Hayek insists that knowledge is valid only when it is distributed arbitrarily rather than centralized in the hands of planners (or bureaucrats or educators or whomever), who more likely than not, in his opinion, are corrupted by their power (this is the gist of The Road to Serfdom).

So if knowledge is distributed among people who don't ultimately have enough of it to do any real structural damage with the information -- a happy consequence of democratic societies -- what remains necessary is a mechanism that transcends human agency to aggregate that knowledge and make it socially useful. Enter the market, which allows the semi-informed person to make decisions based on price. As far as Hayek is concerned, when one is making decisions, "It is always a question of the relative importance of the particular things with which he is concerned, and the causes which alter their relative importance are of no interest to him beyond the effect on those concrete things of his own environment."

That almost seems tautological to say decisions are a matter of choosing between the relative importance of things, but actually this is where the economist's assumptions about rationality are imported into the scheme. (Hayek calls it "economic calculus.") Prices think through the importance of information for us so that we don't have to, and it has the added benefit of being unerring at least in the sense that it is impersonal. In other words, prices don't tell us the inherent value of an object but an unbiased accounting of an object's overall significance to society -- and this information, divorced of the reasons behind the number, is all we really need as individuals. "The problem is precisely how to extend the span of out utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do." We receive our marching orders from prices, which in this view reflect society's best interests or at least its collective inclinations, rather than Big Brother. Consequently, all we need to learn from society during our schooling is a proper respect for prices, for always trying to get the most for less (a lesson that, incidentally, is endlessly reinforced in advertisements). This plays out in the inculcation of "rational" behavior, always being concerned with maximizing utility, which is essential to making the entire system able to coherently communicate anything. If people behave in a wasteful way (destroying the accursed share, as in Bataille's theories, perhaps?) what the price system communicates may have less and less to do with what is socially useful and necessary.

This suggests why the market, conceived in these terms, can seem so objectionable -- it obviates the need for human understanding and reduces decision-making to a mechanistic response to a single figure. It suggests that all other considerations are not just misguided but are in fact harmful obfuscations. Extrapolate from this and you yield a worldview that has no regard or use for curiosity -- and a very cursory look at America's chain stores and passive entertainments would seem to support the idea that we already live in that world.

UPDATE: See this Blood and Treasure post for an analysis of Hayek's fondness for "liberal dictatorship". Writes Jamie K.: "I’ve argued before that many of China’s anti subversion laws – like those against 'causing turmoil' or 'disturbing social order' - have a Hayekian feel to them. They’re essentially designed as measures to stop people exercising the conceit of reason."