The Market, the State and the Monkey in the Middle

Profit versus regulation

In Economics for the Common Good, Noble laureate Jean Tirole describes the efficient and effective running of the economy.  The market operates in order to make a profit; the state regulates the market in order to insure that the population is well served and, in particular, to avoid monopolies and price fixing in the market.  Pro-business conservatives will complain about and protest over-regulation, the interference of the state in the market, administrative red tape and taxation which stifle and hamstring businesses from innovating, expanding and making a profit. Pro-state socialists and liberals will complain about and protest under-regulation, the failure of the state to control companies who, in their greed for profit, damage the environment, break or corrupt the law, and undermine the health and welfare of the population.  

"Game theory" and "cognitive bias"

Tirole's claim to fame is the application of game theory to economics.  Game theory attempts to determine optimal strategies by anticipating the actions and reactions of players in the game or agents in the  economy.  Traditional economics worked on the assumption that agents acted in rational self interest.  History and experience show that logic is not always determinant.  Tirole describes illogical, counter-to- the-evidence-and-self-interest beliefs as "cognitive bias."

Ideology

In a similar but more conspiratorial vein, postmodernists explain individuals' acting in opposition to their own best interests in terms of ideology.  In Ideology: An Introduction, Terry Eagleton describes ideology as follows:

A dominant power may legitimate itself by promoting beliefs and values congenial to it; naturalizing and universalizing such beliefs so as to render them self-evident and apparently inevitable; denigrating ideas which might challenge it; excluding rival forms of thought, perhaps by some unspoken but systematic logic; and obscuring social reality in ways convenient to itself. Such `mystification', as it is commonly known, frequently takes the form of masking or suppressing social conflicts, from which arises the conception of ideology as an imaginary resolution of real contradictions. (5-6)

Ideology can thus explain the historical phenomenon of women's opposing the right to vote being given to women.  In the historical context, some women felt that involvement in politics was "unfeminine" and even "unnatural." Similarly, ideology is invoked to explain how an impoverished American citizen in need of affordable health care will vote for a billionaire who opposes social welfare programs.  The disadvantaged voter adheres to the market ideology that "all will be well" if the state is run like a business.  Conversely, Tirole cites the statistic that 60% of Americans (including many of the poor) believe the poor are poor "because they are lazy or lack determination." A typical third example, even if the empirical evidence is conclusive that more lenient treatment of prisoners will result in reduced recidivism and a lower crime rate, the ideological notion that the purpose of prison is punishment will commonly prevail.

Is education the answer?

Tirole's perhaps wishful solution (and the purpose of Economics for the Common Good) is that we all need a better understanding of economics.  In particular, citizens need to understand that economics is focused on results based on historical, empirical and statistical evidence while considering as many variables as possible.   I desperately want to agree with Tirole that education is the answer, but I am all too aware of the Cassandra effect.  (Cassandra was condemned by the gods to know the future and always tell the truth but, whatever she said, no-one would believe her.)  Being right, having knowledge, ethics and honesty on your side are weak forces of social change compared to celebrity, wealth, propaganda, manipulation of mass media, ideology and cognitive bias.  The devolution of skepticism into cynicism is no help either.

Change requires consensus

You and I are the "monkeys in the middle" as the ball gets passed back and forth between the state and the market. (I'm assuming you've played the game of my analogy sometime in your life.)  As voters we can influence the state; as consumers the market.  However, our influence is entirely dependent on our ability to act collectively; as individuals it is virtually nonexistent.  Have you noticed that in an era when we have enormous amounts of information and data at our individual fingertips, the possibility of consensus has grown evermore remote?  Society at every level--global, national, local--has grown more polarized.   The media, which once had a decisive effect on both the state and the market, has become nigh on irrelevant as journalists have become news-readers, panelists, gossips, messengers of pre-packaged press releases and cheerleaders for the cognitive biases of their particular readership.

The Rules of "monkey in the middle"

Even "monkey in the middle" has rules.  The basic rule is that there must always be a distance between the players so that the "monkey" has a chance to catch the ball as it is thrown back and forth overhead.  This is the rule we all need to be concerned about.   For example, Tirole points out that there is a distinct "lack of enthusiasm shown by most economists toward industrial policy."  "Industrial policies"; that is, governments attempting to pick and choose winners and losers in the market through subsidies and tax breaks, frequently fail because "politicians and voters lack information about the technologies, sectors and businesses that will produce tomorrow's economic wealth."

The Separation of state and market

While the state has the obligation to provide conditions for thriving markets, its presumed objective is the wealth and welfare of the citizenry.  We are all too familiar with the scandals of companies and lobby groups which seem to have taken control of the government.  The risks of Western democracies devolving into oligarchies and plutocracies seem evermore imminent as we have all come to accept that elections are won by campaigns and campaigns are won with ever larger sums of money.  We are called upon to vote for candidates we have likely never met based on slogans and sound bites tailored to appeal to what some guru or algorithm has determined to be our cognitive biases.  The solution isn't revolution; it's more self-awareness, diligence, consciousness and conscientiousness.

Overcoming cognitive bias

Overcoming my own cognitive bias is a challenge.  I recognize that I am left-leaning and quick (perhaps too quick) to see signs of capitalist greed corrupting both the market and the state.  I would like to know more about the experiences of businesses dealing with the state.  In my online review of various sites dealing with "why small businesses fail," none of them mention problems with the state. However, whenever I read blogs or op-eds with a pro-business perspective, the ideological anti-state rhetoric seems consistently inflated.

The Rhetoric on "passive income"

 "Time Hasn't Taken The Sting Out Of Feds' Attack On Small Business" is a good example of the rhetoric.  At issue is the Canadian tax rate on "passive income."  "Passive income" is money that you earn without having to work for that specific amount; in other words, money earned by money invested in stocks, bonds, mutual funds, and so on.  In order to encourage small businesses the Federal tax rate on businesses with fewer than 100 employees is 10%.  The debate is about how profit should be taxed when it comes not from your business but from investments made outside your business.  Should your "passive income" be taxed at the same rate as everyone else's investment income (including pension income), or should this money be taxed at the lower small-business tax rate of 10%?  Up until 2017 when the Liberal Government changed the rules, the answer was that if you followed the right tax procedures (often described as "loopholes"), your passive income was taxed as if it was small-business income.

Context and comparisons

Let's put the issue in perspective.  If you are a full time, permanent employee at a MacDonald's, you probably earn around $26,000 a year (salaries at a MacDonald's franchise can go up to $75,000 for an Operations Manager).  The tax rate on your $26,000 salary will be around 15%.

If you own the MacDonald's, you are probably making $150,000 a year in profit.  That $150,000 is taxed at the small-business rate of 10%.  No-one is debating this difference in tax rate.  No-one is questioning the idea that the MacDonald's owner takes on risks and responsibilities that allow him to earn that profit while paying a lot of bills and employing people, and he therefore gets the additional reward of a lower tax rate than his employees'.

In fact, to get to the issue of "passive income" tax rates, you have to imagine someone significantly wealthier than your average MacDonald's owner.  In order for the new rules to apply, you have to imagine someone with more than a million dollars in investments.  So let's imagine that our MacDonald's man has 10 franchises.  He is therefore pulling in 1.5 million dollars annually and, as long as he has fewer than 100 employees, can continue to pay the 10% tax rate.  After a few years our MacDonald's man has 2 million saved up.  He invests the 2 million, and makes an annual 5% return on his investments; that is, 100 thousand dollars.  Finally, we have made it to the question of "passive income":  What tax rate should the MacDonald's man pay on this 100 thousand of passive income?"

How should passive income be taxed?

Should our hypothetical business man pay the small business tax rate of 10% on his 100-thousand of passive income?  The Conservative answer is yes.  This was the status quo until 2017.

Should our imagined MacDonald's owner pay the normal (what everyone pays) tax rate on this 100 thousand of investment profit?  Interestingly, no-one is suggesting this possibility.

The Liberal solution, which became law in 2017-18, is that the MacDonald's man will pay the 10% tax rate on the first $50,000 and the normal rate on amounts over $50,000.  This is the new regulation that is being described as the "Feds' Attack on Small Business."

Economics, finance and education

Okay, I haven't quite succeeded in overcoming my socialist cognitive bias.  I first encountered the issue of tax rates on passive income when some of my former students (none of them multi-millionaires) shared a a video on my Facebook feed of Conservative MP, Michelle Rempel, railing against this Liberal attack on farmers and small businesses.  My students, in their comments, shared Minister Rempel's outrage at this attack on farmers and small businesses.  How many farmers do you know with more than a million dollars invested in the stock market?  Tirole has got it right; we all need to learn a lot more about economics and finance.

The Postmodern Hoax

Beyond the Hoax

Reading Alan Sokal’s Beyond the Hoax brought back the question that haunted my university teaching career:  How much of postmodernism was intellectual fraud?

"Transgressing Boundaries" and Social Text

Sokal is the physicist who submitted a deliberately bogus article entitled “Transgressing the Boundaries:  Towards a Transformative Hermeneutics of Quantum Gravity” to the cultural studies journal Social Text.

Post-structuralism as Mummery

After it was accepted and published (Spring/Summer 1996), Sokal announced that the article was nonsense, a parody of postmodernist half-baked arguments and verbiage. Sokal and the Belgian physicist/philosopher, Jean Bricmont, subsequently published Impostures Intellectuelles (1997) in which they systematically unmasked the mummery of leading lights of post-structuralist theory such as Jacques Lacan and Julia Kristeva.

Jacques Lacan as Charlatan

The most compelling essay I have read on Lacan is Dylan Evans’ “From Lacan to Darwin.”  Evans spent at least a decade studying Lacan, first in the context of psychoanalysis as a dedicated Lacanian disciple in Buenos Aires, then in Comparative Literature at UNY Buffalo, and finally in London as a psychologist and adherent of “evolutionary psychology.”    Evans confesses:

“As I became more familiar with Lacan's teachings, the internal contradictions and lack of external confirmation became ever more apparent. And as I tried to make sense of Lacan's bizarre rhetoric, it became clearer to me that the obfuscatory language did not hide a deeper meaning, but was in fact a direct manifestation of the confusion inherent in Lacan's own thought.”

Lacanian Psychoanalysis

Paradoxically, Evans offers the closest thing to a justification for Lacanian psychoanalysis  (and the whole of Lacan’s work for that matter) I’ve ever read.  The process is one in which the analyst is a fraud, and when the patient finally discovers that his psychoanalyst is a huckster then he is cured.  (Consider the possibility that the whole of postmodernism/post-structuralism was a hoax, and we are now cured because we can say so.)  Evans concludes by questioning the legitimacy of the process, but his preamble shows a degree of coherence that is rare in discussions of Lacan: 

“Lacan did not believe that psychoanalysts should think of themselves as experts, able to reveal the hidden meaning of the patient's speech, but he did believe that the patient should think of the analyst that way. The analyst, in other words, did not really possess a secret knowledge, but was merely 'supposed' by the patient to possess this knowledge. In the course of the treatment, the patient would come to 'de-suppose' the analyst of this knowledge – that is, to lose his faith in the analyst. That, in fact, was the whole point of psychoanalytic treatment.”

Fashionable Nonsense

How is it possible that this “fashionable nonsense” (to quote the American title of the Bricmont & Sokal book) became so widespread and firmly, even dogmatically accepted in the arts and humanities programs of Anglo-American universities?  The answer is fairly obvious and often repeated with allusion to the fable of “the Emperor’s new clothes.” What I can add, perhaps, is some of the detail of how university professors and students aspiring to become university professors were compelled to show an understanding of; that is, to pretend to understand, the nonsense underpinning post-structuralist theory. 

How Scholarship Becomes Dogma

The same requirement that we put on students writing theses applies to professors submitting their work for peer review:  “show that you have done the reading.”  “The reading” in the postmodern period is, of course, the post-structuralist theorists:  Lacan, Kristeva, Derrida, Foucault, etc, and to make matters worse, everyone who makes use of this Tel Quel cabal, which turns out to be just about everyone who is getting published.  For professors, the cliché is still fully functional: it’s publish or perish.  If you want to get published, which is what you do to get tenure and promotion, not to mention funding so you can go to conferences at juicy locations like Hawaii and Paris, then you better know your post-structuralist theorists, or at least be ready to pretend you do.  

The Trickle-Down Effect on Pedagogy

The idea that a couple of hundred specialists might gather at a conference to spout this turgid, empty language at one another, playing verbal puzzle games, didn’t really disturb me all that much.  Though it did seem a terrible waste of time and brainpower.  What did disturb me was to see students chastised for failing to “theorize” and “problematize” as if these terms signaled an accomplishment.  It disturbed me to see students struggling to understand theories which didn’t hold water and being forced, like their professors, to pretend they made sense and were being grasped;  or, worse still, simply being turned off the study of literature and culture because it had been transformed into the study of obtuse theories.

Negotiating Postmodern Dogma

Then, of course, there was my dilemma of how to negotiate the hypocrisy:  teaching theories I really didn’t find credible.  In my research and publications, I think I did alright:  showing that I had read the post-structuralists while signaling that I wasn’t really buying the theories they were selling (citing Sokal and Bricmont for example).  Teaching undergraduates, I could cherry-pick concepts and vocabulary, acknowledging their soi-disant origins, but spinning them, à la Rumpelstiltskin, into something that made sense; that is, that made sense to me, and could be transformed into something that made sense and was even useful for students.  I could explain deconstruction, as Ellis does in Against Deconstruction, in terms of the many challenges to essentialism (the idea that words get their meanings from one-to-one correspondence with the “essences” of objects in the world).  While acknowledging that the un-readable Kristeva did the earliest work on the important and useful concept of intertextuality, I could quickly turn to Graham Allen’s accessible description of the idea (in Intertextuality) that “meaning [. . . .] exists between a text and the other texts to which it refers and relates” rather than within an independent text.  The ubiquitous concept of “the subject” as an unstable site of consciousness, so typically associated with Lacanian psychoanalysis, is what the philosophy of mind is all about and could be explained in that context. 

The Imposition of Postmodern Dogma on Students

Dealing with graduate students and graduate theses was more problematic.  It was disheartening to see students being led down a garden path, into dead ends, on wild goose chases--all the clichés applied.  I tried to be frank, but I also recognized that if students wanted to get on in the academic world, they could not afford to be dismissive of post-structuralism. Even if you knew the emperor wore no clothes, there was no advantage and significant risk in saying so.

Postmodernism Versus Enlightenment

Perhaps the most important part of Beyond the Hoax is its preface.  There Sokal concludes, from the surprising attention which the hoax received (though I always felt it didn’t receive enough), that “a not insignificant cohort of adults recall having endured, as undergraduates, an English, cultural studies or women’s studies course overly filled with Lacanian or deconstructionist verbiage, and who may have doubted their own intellectual competence as a result.”  On a broader, political level, Sokal quotes Noam Chomsky’s complaint that postmodernist intellectuals, while claiming a leftist agenda, have actually deprived working people of the tools of emancipation by claiming “that the ‘project of the Enlightenment is dead,’ that we must abandon the ‘illusions’ of science and rationality -- a message that will gladden the hearts of the powerful, delighted to monopolize these instruments for their own use.”  To substantiate Chomsky’s point, consider the fact that we have been told ad infinitum by postmodernists that “common sense” and “binary thinking” (the only kind of thinking that the human brain is capable of) are evidence of right-wing, conservative ideology.

Postmodernist Abuse of Language

What I have most appreciated of Sokal’s work (though odd since he is a physicist) is his critique of postmodernist abuses of language.  What Sokal observes most often relates to how postmodern academics use terms from science which also exist in common language but without ever clarifying the sense in which the words are being used.  Instruction number one which I would typically give to graduate students approaching a thesis was “define your terms,” but it was a tough sell considering the postmodern scholars they were reading rarely, if ever, did so.  The postmodernists’ solution to the ambiguity, obfuscation and incoherence in their own writing was to celebrate ambiguity, polysemy and indeterminacy as if they were positive features in expository writing.

Science and Scepticism

The Sokal hoax provided a healthy revelation of what we were allowing to happen inside academia, but I’m less sure that the revelation has made its way into university classrooms.  As much as I admire what Sokal has accomplished, as he clarified his objectives in perpetrating the hoax and clarified the terms of the debate between postmodernist constructionist and empirical scientists, I found myself sliding back to where I had come from among the phenomenologists and skeptics.  The question, which is as old as philosophy itself, boils down to: “Is there an objective reality, uncontaminated by our perceptions and intentions, that we can have access to?”  Science must answer yes because the study of that reality is its defining objective.  Cultural-studies academics like me, unimpressed as I am with post-structuralism, are destined by discipline, like the ancient Greek philosophers of the 4th and 3rd centuries BCE, to remain skeptical.

Time to Blow the Whistle

What does "education" mean?

Teachers, past, present and future, and students, it's time to blow the whistle.  Complaints and confessions are needed.  Name any problem--crime, depression (economic and psychological), sexism, racism, drug abuse, the breakup of marriages and families, etc, etc--and someone has already proposed that "education" is the solution.  Does anybody ever stop to consider what these specialists (politicians, administrators, sociolgists, ecologists, psychologists, pedagogues and functionaries) mean by "education"?

New myths for old

The world renowned literary theorist and educator, Northrop Frye, described education as the process of getting rid of old myths, in order to replace them with new ones.  Frye was a great believer in "myth," so his declaration isn't quite as cynical as it sounds.  So let me play the cynic, although as you might guess, like most cynics, I'm really just a slightly bruised idealist.

Education versus cognitive bias, ideology and prejudice

Everywhere I look at what passes for "education," I see one group of people trying to impose their thoughts and beliefs on another group.  (Liberal-minded educators will object to the verb "impose," but whatever verb you choose--"transmit," "share," "pass"--the end result is the same.)  "Education" too often means simply replacing one set of ideas with another set that the educator likes better. Unfortunately, whenever you ask someone why one set of ideas is better than another, you very quickly find yourself running in a circle, trapped in a tautology, exhausted by a conversaton that never quite takes place. 'My ideas are better because they correspond to my values.  My values are better because they correspond to my ideas.'

Critical thinking skills and postmodernism

Lots of university programs in the Humanities and Social Sciences pretend to have solved the problem by flashing "we teach critical thinking skills" on their web sites.  The sad truth is that much of what gets taught as "critical thinking" is anything but.  Far too often, what passes for "critical thinking" in universities is slavish, dogmatic adherence to the loosely reasoned ideologies of armchair socialist and armchair feminists.  (I speak as a socialist and feminist with a longstanding commitment to his armchair.)  But think about it, really, if there was any commitment to "critical thinking" in universities, would we still be forcing students to read the bogus diatribes of junk theorists like Lacan, Kristeva, Derrida, Bhabha and their ubiquitous spawns as if they all made perfect sense?

Students cannot be called upon to effectively exercise critical thinking skills until they have amassed a bank of uncritical thinking skills and knowledge.  This is a problem that universities do not want to address, and which we need to talk about.

Dogma is the enemy of learning

Since this is my first posting, I guess I should explain what I think this blog is about.  It is dedicated to speaking openly and frankly about education without having an agenda or a dogma to defend.  Education is too important to be left in the hands of specialists.  Education is the passing on of knowledge, skills and attributes from one person to another.  It is carried on everyday by millions of people, many of whom have never thought of themselves as teachers or as students.  Its practices are as diverse, unique and personal as are the relationships of all those people involved in the process.  Our collective knowledge of the field is boundless.  Everyone has something important to contribute, if we have the courage to write the truth, and the respect and sagacity to read with an open mind.