Atlas Shrugged: The Mocking

Tuesday, September 13, 2011

This Is Not A Blog Post

This is not a post, it is just some thoughts on a very interesting and entertaining article.

Via Brad DeLong: David Graeber: On The Invention Of Money

Last week, Robert F. Murphy published a piece on the webpage of the Von Mises Institute responding to some points I made in a recent interview on Naked Capitalism, where I mentioned that the standard economic accounts of the emergence of money from barter appears to be wildly wrong. Since this contradicted a position taken by one of the gods of the Austrian pantheon, the 19th century economist Carl Menger, Murphy apparently felt honor-bound to respond.

In a way, Murphy’s essay barely merits response. In the interview I’m simply referring to arguments made in my book, ‘Debt: The First 5000 Years’. In his response, Murphy didn’t even consult the book; in fact he later admitted he was responding at least in part not even to the interview but to an inaccurate summary of my position someone had made in another blog!

We are not, in other words, dealing with a work of scholarship. However, in the blogsphere, the quality or even intention of an argument often doesn’t matter. I have to assume Murphy was aware that all he had to do was to write something—anything really—and claim it rebutted me, and the piece would be instantly snatched up by a right-wing echo chamber, mirrored on half a dozen websites and that followers of those websites would then dutifully begin appearing across the web declaring to everyone willing to listen that my work had been rebutted. The fact that I instantly appeared on the Von Mises web page to offer a detailed response, and that Murphy has since effectively conceded, writing an elaborate climb-down saying that he had no intention to cast doubt on my argument as a whole at all, only to note that I had not definitively disproved Menger’s, has done nothing to change this. Indeed, on both US and UK Amazon, I have seen fans of Austrian economics appear to inform potential buyers that I am an economic ignoramus whose work has been entirely discredited.
We've seen this a million times. We cannot fight every lie and the elite's stream of lies is infinite. Politicians and Megan McArdles are cheap, comparatively speaking.

At this point, it’s easier to understand why economists feel so defensive about challenges to the Myth of Barter, and why they keep telling the same old story even though most of them know it isn’t true. If what they are really describing is not how we ‘naturally’ behave but rather how we are taught to behave by the market—well who, nowadays, is doing most of the actual teaching? Primarily, economists. The question of barter cuts to the heart of not only what an economy is—most economists still insist that an economy is essentially a vast barter system, with money a mere tool (a position all the more peculiar now that the majority of economic transactions in the world have come to consist of playing around with money in one form or another) [10]—but also, the very status of economics: is it a science that describes of how humans actually behave, or prescriptive, a way of informing them how they should? (Remember, sciences generate hypothesis about the world that can be tested against the evidence and changed or abandoned if they don’t prove to predict what’s empirically there.)

Or is economics instead a technique of operating within a world that economists themselves have largely created? Or is it, as it appears for so many of the Austrians, a kind of faith, a revealed Truth embodied in the words of great prophets (such as Von Mises) who must, by definition be correct, and whose theories must be defended whatever empirical reality throws at them—even to the extent of generating imaginary unknown periods of history where something like what was originally described ‘must have’ taken place?

Authoritarians and anti-authoritarians have different goals. Authoritarians want to obey authority while anti-authoritarians must rely on facts. They cannot rationalize reality away because they know that they, not others, are responsible for their own decisions and they must accept the consequences of their actions. To create plausible excuses for this weak abdication of responsibility, authoritarians must make up lies. Creating a new reality, living a lie, makes you crazy, so here we are as a country--crazy, delusional and broke.

The persistence of the barter myth is curious. It originally goes back to Adam Smith. Other elements of Smith’s argument have long since been abandoned by mainstream economists—the labor theory of value being only the most famous example. Why in this one case are there so many desperately trying to concoct imaginary times and places where something like this must have happened, despite the overwhelming evidence that it did not?

It seems to me because it goes back precisely to this notion of rationality that Adam Smith too embraced: that human beings are rational, calculating exchangers seeking material advantage, and that therefore it is possible to construct a scientific field that studies such behavior. The problem is that the real world seems to contradict this assumption at every turn. Thus we find that in actual villages, rather than thinking only about getting the best deal in swapping one material good for another with their neighbors, people are much more interested in who they love, who they hate, who they want to bail out of difficulties, who they want to embarrass and humiliate, etc.—not to mention the need to head off feuds.
Even when strangers met and barter did ensue, people often had a lot more on their minds than getting the largest possible number of arrowheads in exchange for the smallest number of shells. Let me end, then, by giving a couple examples from the book, of actual, documented cases of ‘primitive barter’—one of the occasional, one of the more established fixed-equivalent type.
It's always personal. Holding up a facade at all times is exhausting and authoritarians want nothing more than to be able to let down the false front and let the real man or woman out: the unloved child who traded obedience for acceptance and who channels all his ensuing anger and resentment outward at safer targets. Authoritarians must obey authority, conservatives must conserve. Anything that does not conform to authoritarian dogma is disregarded or shouted down.


fish said...

This is not a comment.

ifthethunderdontgetya™³²®© said...

That is not a fish.

Susan of Texas said...

Okay, I'm having a little trouble letting go.

Lurking Canadian said...

Ceci, n'est pas une pipe.

Kathy said...

For a brief time when I was around 14-15 years old, I was drawn to the notion of "Enlightened Self Interest", a softer type of libertarian thinking, where the believer understands that the welfare of the individual and the group are closely linked.

By the time I was 16 I realized the error in the notion was the the word/notion "Enlightened".

Anonymous said...

Oh Susan, Never Change!


Anonymous said...

staycation redefined

Dragon-King Wangchuck said...

Even if it isn't a post, this is till a thanks. That Graeber link is fascinating and very educational. Read teh whole thing.

I believed teh Barter Myth until I read teh linked Invention of Money post (I blame Sid Meier). I had no reason to doubt it - or so I thought. But the reason to doubt is that the Barter Myth doesn't make any sense and directly contradicts our own experiences.

Take children for example. There's no barter or even credit based market reason to feed your children - it's done because that's what's done. There is no accounting for it, no amortization, no whatevers. For real human beings (i.e. not idealized "rational" economic actors), even in a post-money society, obligations are not only of a financial nature.

So it shouldn't be surprising that the earliest appearances of money is in temples and religious institutions. A paternalistic relationship where the number of children gets larger and larger and the tasks of inventory and procurement and disbursement and graft for high officials gets too difficult to manage without some way of keeping track.

There are countless examples of relationships people have with other people that have nothing to do with economic activity. And for people who aren't greedy selfish asshole glibertarians, these are the ones that actually shape our lives, experiences and character. That the idea of money would arise from those types of relationships and not "shopping" makes perfect sense.

It's one of those revelations that is so completely obvious once it's explained, you kick yourself for not realizing it in the first place. And the only way one could doubt it (especially in light of the evidence) is if one willfully disbelieves plain facts in order to maintain a complete lack of empathy even for the people they are closest to.

fish said...

Take children for example. There's no barter or even credit based market reason to feed your children - it's done because that's what's done. There is no accounting for it, no amortization, no whatevers. For real human beings (i.e. not idealized "rational" economic actors), even in a post-money society, obligations are not only of a financial nature.

Yeah? Then explain the Ayn Rand School for Tots.

Pete said...

Ceci n'est pas une pipe.

Dragon-King Wangchuck said...

Yeah? Then explain the Ayn Rand School for Tots.

You'll note that while teh horrible ogre runs her gulag to reap monetary rewards, teh children do no such thing. Their collectivist behaviour in liberating teh sought after resources is truly a case of each providing according to ability and receiving according to need. Just like in teh movie.

Anonymous said...

I'd read that article before coming here, but I just loved it to bits. The man can write!