05 December 2008

Post-modernism and the economic crisis

As I mentioned in this posting, my friend Curtis Schweitzer thinks the present economic crisis is evidence that the post-modernist claim, that reality is construct of language, is false. He writes (here):
The current economic crisis...is...the greatest argument against the idea that "reality" is merely a construct of language. After all, there has perhaps never been a greater and more expensive attempt to change reality through language than the unending insistence that subprime loans be given AAA status. Whether we meant to or not, we put postmodernism up to experiment.The results, I think, are fairly obvious.
I share his antipathy towards post-modernism, but I can't join him here. I don't think we have had a test of post-modernism here. If anything, a friutful post-modern critique is quite possible.

It is quite true that saying, "Everyone is special" is a way of saying no one is special. To call someone "special" is to compare them to some set of attributes, the possession of which is what makes them "special". Clearly those who do not possess this set of attributes are not special. The assertion that everyone is special really is a denial of the propostion that there is an objective set of criteria by which the judgement is made. Everyone is special because everyone can be compared to any set of arbitrarily selected attributes (values) and be found to possess that arbitrary set of attributes.

This is the heart of post-modernism, which is an assault on philosophy itself, especially the role which values play in philosophy. In describing reality, philosophy employs values. For example, in the Republic, is a long dialogue on the ideal state, how it should be founded, organized and ruled. The idea is that this ideal society should last forever. But note the arbitrary assignment of value to living in any city at all, ideal or not, to living in no city. That city-life is superior to any alternatives is simply assumed. All of the philosophy which is brought to bear, and which flows out of the dialogue, has this assumption in play. (There are other assumptions, other values assigned and employed, of course; and they are all equally arbitrary.) In the city-life versus non-city-life dyad, why is city-life to be valued over non-city-life? If we say that city-life is better for men, we find that we are, again, employing arbitrary values.

If we understand all values as arbitrarily selected and then employed, then (1) no one is special and (2) because no one is special all values are equal (what Neitzsche called the revaluation of all values, in e.g., The Will to Power).

This talk of value is quite relevant when we turn to discussion of the economy. On a post-modern view, there simply is no reason for not viewing all loans equally. There are quite a few places to go with this, but for the sake of time and space, let's just go straight to money, especially since we are talking about value. Money is what was borrowed; money is what is being lost. But let's think about the nature of this money. When we do, I think we can see how a postmodernist could assert that all this talk about an economy is a construct. That is to say, economic reality is a construct of language.

This money which has been loaned and is being lost is fabricated, almost out of nothing. The government takes perfectly good paper, and perfectly good ink, and turns it into worthless garbage. It then forces us, at gun-point, really, to accept this worthless garbage as legal tender for all debts public and private. Why? Because there is some fixed commodity (like gold, silver, latinum)? No. Because the government says so. The government arbitrarily assigns to pieces of paper a certain value; and this, despite the fact that these pieces of paper are made out of the same amount of paper and ink. We trade these pieces of paper for goods and services. But there is nothing behind them of value. We can trade these worthless pieces of paper for other pieces of paper, or for goods and services. But we cannot redeem them for gold or silver. And even if there were, that also would be an arbitrarily assigned value. Why should you and I accept gold in exchange for goods and services. Why not iron? We could say that, gold, being rarer and harder to come by than iron has a greater value. But it doesn't have a greater value per se. We give it value, by accepting it in exchange for goods and services.

So when we buy, say, a computer for some amount of money, say $700.00 (700 units of nothing) the one from whom we purchase this computer must accept this paper. Why? Because he, the one giving up his computer attaches value to this money? No. His unfederal government tells him he must. Fortunately, some of the bitterness is removed because he knows he can take that $700.00 (700 units of nothing) and trade it for goods and services he wants.

Now, if this government can, by simple fiat, command us to accept worthless paper as legal tender, then it really does stand to reason that, since loans are loans of worthless paper (even though, in "reality" no paper trades hands) the same government which can arbitrarily assign value to pieces of paper can assign value to loans. Think of it: The unfederal government can take pieces of paper all costing the same amount to print (say, $1.00 -- 1 unit of nothing) and assign different values to them. Nothing logically prevents that same government from arbitrarily assigning equal value to different loans. The face value of a loan is measured in terms of money, worthless pieces of paper to which worth has been arbitrarily assigned. So these loans are of arbitrary face value. If a piece of paper can be assigned a value of $20.00 dollars (20 units of nothing), then anything can be assigned any value, a house, a boat, whatever. What, then, is anything "worth"?

The concept of worth is a construct; and it is very much a construct of language. The entire economy rests upon the propositional assignment of value to pieces of paper: "This note is legal tender for all debts public and private." (A proposition whose truth value rests upon nothing more than the government's say-so, backed up with a club.) And every economic transaction rests upon that assertion because every economic transaction involves (at least in theory) the trading back and forth of these pieces of paper we have been commanded (there's your use of language) to trade them back and forth.

We'll just pass over the fact that this same unfederal government can, at its whim have printed up more of these pieces of paper, thus devaluing the pieces of paper already floating around the market, which in turn, because people want the same "value" for these pieces of paper, moves them to raise their prices. However, do let me pause here to point out that this operation of the government, among many, many others should be all the evidence needed to support the claim that ours is not a free market economy. In a free market economy the participants decide what to value, what to accept as tender for debts. The participants decide what to exchange, and for what goods and services. Real money originates in barter, not in the formation of governments and legislation by those governments. But I digress.

So, if the money being loaned has an arbitrary value, then the loans have arbitrary values. Money can be printed up by fiat, thus devaluing those loans; or, the government can, by the same fiat, command that loans of differing values be treated equally. This doesn't demonstrate that, as Curtis puts it, "The current economic crisis...is...the greatest argument against the idea that 'reality' is merely a construct of language." A post-modernist can, I think, justly say that economic reality really is a construct of language, and, by virtue of that, so is the current economic crisis.

Curtis asserts, "[T]here has perhaps never been a greater and more expensive attempt to change reality through language than the unending insistence that subprime loans be given AAA status." In actual point of fact, this reality was virtually created out of whole cloth, and through language, by the same entity which changed reality through language. In "reality" all loans, AAA or not, have the same "value" -- nothing, since that value is in terms of worthless pieces of paper. We haven't, as Curtis puts it, "[P]ut postmodernism up to experiment" and found it failing. The post-modernist can justly claim that language is exactly what he says it is: a means of coercion.

We have not put post-modernism to the test. Much of our economy results from the fiat power of the unfederal government, a non-player in the market, dictating value to market players and altering value with impunity. That coercion lines up nicely with the post-modern critique, I think.

What we have put to the test -- yet again -- is mercantilism, which is practiced by both parties and requires the use of force by government. I think the post-modernist is entitled to point to the way our economy works and say, "Q.E.D."

Note: I still think post-modernists are wrong. But I think the present crisis is not a demonstration of that.


About Me

James Frank SolĂ­s
Former soldier (USA). Graduate-level educated. Married 26 years. Texas ex-patriate. Ruling elder in the Presbyterian Church in America.
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