Interesting Links: Oct 28, 2017

Here are three interesting articles I came across in the previous few days. They are about three distinct topics, namely deterrence and revenge, vertical vs horizontal censorship and the repulsive logic behind the process of financialization.

Link # 1: The Psychology of Revenge and Deterrence

Why is the instinct for vengeance so strong even when it is clear that widespread death and destruction would be a much more likely outcome than any kind of “victory”? In the event of a nuclear war, why is second-strike retaliation so certain when it may gain nothing of social or material value? We believe these things because humans share a universal thirst for retaliation in the face of threat and in the wake of loss, no matter what classical economists may say to the contrary about how people “should” behave. Indeed, the psychology of revenge and the hatred on which it rests make a seemingly irrational second strike entirely credible. We can apply this analysis to nuclear weapons, but the basic drive is no different than the one that makes most people want to kill anyone who threatens their child, or to hurt a cheating spouse. The instinct for revenge is universal, automatic and immediate. It also serves a function: to deter the threat of future exploitation.

Link # 2: The geometry of censorship and satire

As Dorenko explained it, Kremlin censorship under Putin is “vertical”—top-down censorship that is brutal and frightening when you’re targeted; but also flawed and inefficient as censorship strategies go, because the top-down vertical approach is too narrow, too concentrated under one tyrannical locus at the top. There are too few censors, and too many people and too much material to censor, meaning there’ll always be someone you miss, and there’ll always be journalists or satirists looking for ways to circumvent the narrow-minded censors. This was contrasted to our “horizontal” censorship in the West: rather than coming from a tyrannical top-down force, our censorship is carried out horizontally, between colleagues and peers and “society”; through public pressure and peer pressure; through morality-policing; and from within oneself, one’s fears for one’s career, and fears one can’t necessarily articulate, fears that feel natural rather than imposed upon.

Link # 3: Finance isn’t just an industry. It’s a system of social control.

Our way of thinking about it starts from the idea that the logic of the market doesn’t enforce itself — the logic of the market has to be enforced. And one way of looking at the role of finance is that it enforces the logic of the market and ensures that a whole range of decisions that could potentially be made in many different ways in fact end up being made according to the logic of commodities and of accumulation. Here we’ve been inspired by the economists Gérard Duménil and Dominique Lévy, among others. So, the most obvious case we highlight is the corporation. On one level, we think of the corporation as a typical organizational form of modern capitalism. But in another sense it’s simply a body of people with some sort of hierarchy and defined roles, engaged in some kind of productive process.It’s not inherently engaged in producing commodities for profit. And if we go back to the prehistory of the corporation, the corporation was just a legally chartered body that carried out some kind of function.

It got appropriated as an organizational form for capitalism specifically, but it didn’t start out as that. The other side of the coin is that there’s a long tradition of thinkers, including Galbraith, Keynes, Veblen, and many others, who saw a natural, or at least possible, evolution of the corporation into the basis of some kind of planning or collective organization of production —that it could easily cease to be oriented toward the needs of profit maximization. So if you think that type of evolution is possible, then you ask, why hasn’t it happened? I would argue that the answer is that somebody stopped it from happening — that there are people in society whose job it is to prevent that from happening. There are people and institutions whose job it is to ensure that corporations remain within capitalist logic, that they remain oriented towards production for sale and for profit. On some level, this is the fundamental role of shareholders and their advocates, and of institutions like private equity.

What do you think? Comments?

  1. azn
    October 28, 2017 at 11:07 am

    AD please do a piece on “petroyuan”. If oil exporters start accepting yuan for oil payment that could be the ‘unexpected’ external shock you talk about.

  2. barrkel
    October 29, 2017 at 4:14 am

    On the last article: there are indeed many people who accept the ideology of the market as a value system, as an end in itself rather than a means to an end. They’ll say bizarre things like “company X shouldn’t do Y because it would harm the stock price” – as if the purpose of a company was its value, rather than that the value of a company is in what it does, not all of which can be monetized. They have the cart before the horse; they’ve confused a mechanism with what it’s trying to optimize.

    And these people are densely spread throughout finance, because naturally when you’re dealing with a bunch of symbols with numbers attached, and you’re trying to maximize the numbers you have a relationship with, the things that are measured start to feel like ends, because they’re the only thing that matter to you directly.

    • Thegenius
      October 29, 2017 at 9:36 am

      Because large economic system cannot function without a pricing system

      Right… keep living in your libertarian delusion.

    • Thegenius
      October 29, 2017 at 9:38 am

      For example, if you force farmers to stop using prices, you get famine

      Is that what they told you on Koch-funded websites? So how is it that money was seldom used during most of the history (and prehistory) of agriculture?

    • Thegenius
      October 29, 2017 at 3:09 pm

      Money has existed since the beginning of agriculture because farmers believe their own crop has a certain value, which they can use to exchange for something else, like cow or chicken. Why dont you go convince some farmer to give you his crops fo free.

      Where is the archaeological evidence for use of money by farmers for most of history?

      Maybe you are confusing debt with money..

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