The Porter Zone

Philosophical musings and more

Monthly Archives: April 2011

Rita Hayworth, the male gaze and the unconscious mind

Introduction

A few days ago, I wrote more a squib than an essay, a piece that attempted to clarify my assertion (in Less is More and The Male Gaze Gone Wrong) that in the world of cinema, the male gaze has shifted in the last-half century, that shift having involved a passage from male gazers entering into a relationship with the gazed at of transformational devotion to one of simple sexual attraction.  Using Rita Hayworth as an example, I argued that in fact the simple selling of sex appeal is not, after all new.  Scarcely a novel assertion, I know.  The novelty came in the principle I adopted to explain why it is that though the movies have always sold sex, it appears to be so much more prevalent now.

So far so good.  Where the previous piece fell down somewhat was in that it skated around the whole question of the way in which sex is sold, and how that has changed over the half-century, for there there really is a significant shift, towards a greater commoditisation, and away from (hypothetically) mutually rewarding eroticism to the clinical isolation of masturbatory fantasy.  We can explain away the ‘there’s a lot more of it about’ phenomenon, but we cannot explain away this.  Instead we need to explain it, and that is what I intend to do.

Therefore, in this essay I will start by recapitulating, more formally, the argument of the former piece as to why the appearance that there is more selling of sex now is just that, an appearance.  Then I will proceed to analyse the underlying shift in approches to sex that the removal of the bias caused by time’s censorship makes clear.  In the process I shall correct some errors that crept into the earlier piece, particularly the assumption that because with Rita Hayworth the emphasis was very much on the ‘sex’ part of sex goddess, that meant her passionate eroticism was on a par with the lifeless sexualism of a modern starlet.

Sex is always with us

My original hypothesis

The hypothesis put forward in the pieces linked to above, is that screen goddesses were arousing, yes, but what one felt one seeing them wasn’t simply erotic arousal.  Rather there was some kind of pull, an attraction, a shock, similar to that created by experiencing great art, that created a space between them and the viewer that could then be filled, by the viewer, with new material derived from the devotion thus formed.  Like any good work of art, they offered the viewer the possibility of a transformative experience which the viewer can then make use of to develop, to change, to transcend themselves.

On the other hand, looking at the cinema today, one finds innumerable more or less identical young women who pose in various stages of undress, and who are treated in movies purely as sexual objects.  They do not send the message ‘ don’t I make you want to develop yourself?’, they send the message ‘don’t you wish you could have sex with me?’  And so they are offering not a transformational and ongoing mental journey, but a simple act of physical satisfaction.  But maybe not even that, for they are objects of lust rather than promises of the satisfaction of lust.

This is not a false analysis.  These two categories exist, and it is clear that the goddesses of today are thin on the ground.  My error lay in thinking that there was no equivalent in the past to the sexual offer of today’s starlets.  It turns out that there was, though different in kind.  Enter Miss Hayworth.

Miss Hayworth puts the ‘sex’ in sex goddess

Rita Hayworth Rita Hayworth
1 2
Rita Hayworth Rita Hayworth
3 4

So, here we have four images of Miss Hayworth.  I deliberately chose ‘glamour’ pictures as opposed to cheesecake shots, as I was trying to get her as close as possible to the style of the goddesses.  Shot number two is more or less unique in entering true goddess territory, the others being much more representative.

And what do these pictures say? I think it’s fair to say that pictures one, three and four are all focussed on one, or rather two, things. And it’s not her face.  And the message is pretty clear.  Miss Hayworth is not offering an experience akin to that of first reading Devils, which may end with the viewer a quite different person.  She is offering herself, as a (quite remarkable) subject of sexual desire.  So clearly, sex was being sold in the past, just as now.

Before I move on, it is worth noting some further points about these images.  For one thing, though pictures one and three may be focussed on Miss Hayworth’s breasts, there is a considerable subtlety about it.  Clearly she and her couturier knew that eroticism is all about what is revealed, and that in order to reveal one must first conceal.  The modern variety (I shall illustrate below) have nothing of the subtlety of, say a dress with a gauze over-dress and a fabric under-dress with the fabric colour precisely matched to skin-tone.  But, passing over that level of detail, this is a sexuality that works by suggestion rather than by plonking assertion, so it is eroticism rather than sexualism.

Note also Miss Hayworth’s expression.  This is not merely a matter of saying ‘look at me, I’m sexy, I bet you want me’.  There is definite longing, desire.  Though she is not offering the transcendance offered by the true goddesses, she is still selling more than mere gratification.  Instead she is selling desirability and desire: a mutual experience not a solitary one.

I will return to those points.  For now note that we have found that half a century ago there were pure goddesses and sex goddesses; there were actresses whose sole selling point was their body (Jane Russell springs to mind) and there were actresses so transcendant that their body was entirely incidental (Katharine Hepburn, for example).  The oddity is surely that while now I can point at any number of sex kittens, it’s not entirely clear what has happened to the goddesses (of either description).

Time’s censor

In an essay called The Censorship of Time I attempted to explain the phenomenon that art from the past seems to consist solely of masterpieces, while modern art seems to be predominantly of a very low quality.  The argument, simply told, is that art from any period is winnowed, so the great and lasting endures, while the ephemeral ends up being consigned to history’s archives (until dug up by some over-zealous cultural antiquary).  And so, for all periods of time but one we see only the tip of the iceberg when it comes to artistic production, the winnowed out wheat.  The one exception is the present, when we cannot help but see the tares, simply because the winnowing process has not yet happened.  And thus, modern art is predominantly dreadful, but then so was what constituted modern art in 1911, 1811 and so on.  Art on the whole is predominantly dreadful, but the dreadful works of former years now languish in deserved obscurity, and we can guarantee that in 2111 people will look back on our time and see it as just as artistically golden as we see any past era as being.

So, we can adapt this thesis to explain a number of things.  For example, there is a definite shift in the nature of mainstream movies over the past half-century, but before simply saying that cinema now is worse that (as opposed to different from) that of old, we need to remember that it is highly unlikely that any of the current slew of superhero pictures will stand the test of time as has The Day the Earth Stood Still, and that therefore a reliable analysis of changes in the moves needs to deal with thematic and technical trends (such as my analysis of creeping over-reliance on realism in The Tyranny of Realism)  rather than at attempt at measuring changes in quality.  Thus I still stand by my analysis in Whither the Movies? because it is thematic and not based on quality.

Censoring Miss Hayworth

So, let us apply the notion of the temporal censor to the cinema and sex.  Well, it seems fairly reasonable to say that selling pure sex, be it erotic or sexualist, is an ephemeral thing.  Yes, Miss Hayworth was extremely beautiful and highly concupiscent, but being a sex goddess is not a life-long activity: there will always be newer, younger women to appeal to the sexual urges of the male gaze.  In other words, sexual allure is a relatively commonplace commodity, so there’s no real need for the targets of desire in one generation to be remembered by the next.  Being a goddess is different.  Obviously it is a much rarer commodity, and as such it is worth preserving, for things that can offer the transcendant experience, whether they be pinups, pictures or symphonies, are clearly of great worth.  And thus goddesses will survive the winnowing process whereas only the most exceptional of sex goddesses will.

The consequence of this is that the censorship effect means that we would expect the sirens and sex goddesses of yesteryear to be largely forgotten, while the goddesses are remembered.  As a neat example, consider the three leads of How to Marry a Millionaire. Miss Bacall is a goddess pure and simple and is still considered one of Hollywood’s greats.  Miss Monroe is that rare thing, a sex goddess so supernal that she has survived (though that may be in part because she was a fine actress who deliberately adopted the persona of a sex goddess who didn’t know that she was one).  Miss Grable, who was a sex goddess at the time, has suffered more than a little diminution in her image, and seems well on the way to obscurity.

Ginger Rogers Ginger Rogers
5 6

What this means is that the censorship effect predicts that we will appear to see sex by the bucketful in modern cinema, and, apparently, little in the past.  And that is precisely what we do see.  Everywhere we look we see modern starlets showing of almost literally their all, but we tend not to remember Ginger Rogers giving us a good look straight down her cleavage while wearing her most inviting smile, or sitting on top of a piano wearing a see-through dress.

The wider picture

From eroticism to sexualism

I have written about this before, but it is worth discussing again.  As I noted above, these older examples of selling sex, where what matters is basically the woman’s body and her sex appeal rather than anything else, are of considerable subtlety.  I noted the way that Miss Hayworth’s dress, though exposing (and forming, there appears to be some subte corsetry at work, as one can see by comparing her waist in images 3 and 4) her bosom in a most admirable way, is even more admirable in that it appears to be exposing much more than it really is.  Again, there is just a touch of room for the imagination to enter.  Likewise, Miss Rogers’ dresses in the two pictures advertise her charms most effectively, but they merely advertise them; they do not demonstrate them.

Now part of this is, obviously, a consequence of censorship of another kind, and the need to encode rather than state explicitly, but it is more than that.  It is this allowance of the imagination into the picture that raises these images above the level of fodder for masturbatory fantasies and turns them into a source of erotic reverie.  And before I am accused of playing semantic games, my point is that in all of these older cases the male gazer sees a highly sexually attractive woman, but his sexual fantasy has to engage imagination.  He is not just looking at a body, it is a body that he has to relate to, that he has to get to know, that has an owner, who is saying, by her manner, that she wants him.  And who, by virtue of that, is a person and not an object.

As a somewhat more modern example, consider this short scene from Don Levy’s great film Herostratus, where the (very) young Dame Helen Mirren flings herself into the part of a woman who is quite literally selling herself, or rather using herself to sell rubber gloves.  The scene is overpoweringly erotic, but though Dame Helen’s undoubted physical charms play a part in that, more of it comes from her acting.  From her very first ‘Do you want me?’ we see a woman filled with desire, looking only for someone who can satisfy it.  The image she creates is that of a very sexy woman who wants to give herself to the male gazer, but as a whole, not as just a body.  And of course, it is testament to both the film’s and Dame Helen’s greatness that whereas Miss Hayworth was a sex goddess, here Dame Helen is a professional actress playing the part of a professional actress playing the part of a sex goddess.  In fact, it is arguable that Dame Helen is that rarest of things, a true goddess who is also a sex goddess.

katherine heigl Katherine Heigl
7 8

Now let us look at the modern alternative.  We have here two posed shots of the leading actress Katherine Heigl, who would appear, judging from her extreme popularity, a good candidate for modern-day sex goddess status.

There are two things to note.  First of all, there is no longer any pretence at subtlety (it is hard to imagine how much less subtle than image 8 one could be), and these images do indeed demonstrate as opposed to merely advertise the wares.  So eroticism is gone, and we are firmly into the territory of the male gaze objectifying that at which it gazes.

Second look at Miss Heigl’s expression.  Or, rather, lack of it.  There is no allure, nothing.  She is making no effort to engage, even at a remove, with the viewer of the image.  She knows perfectly well that she is an object pure and simple, and so she is acting as one.  All in all looking at these images is a rather depressing experience, and one feels rather sorry for Miss Heigl (the alternative, of course being that she is not being exploited, but is a willing conspirator in her objectification, in which case one should be sorry about her).

Forms of the male gaze

To summarise what has happened, it seems worth trying to fit what we have seen into a more general model.  As so often, ideas from medieval philosophy turn out to be quite useful; I am referring to the theories of different styles of love, from the spiritual, via courtly down to physical love and then base lust at the bottom.  So I shall, translating this into more modern language, define three forms of male gazing: the creative form (corresponding to courtly or spiritual love), the erotic form (physical love) and finally the sexual form (lust).

Some psychology

Before I go any further, let me expose a simple psychological model.  In Jungian psychology, the mind has two main parts: the conscious and the unconscious.  We all know more or less what the conscious is, but the unconscious is a bit of a mystery.  What we think of as intellectual pursuits are largely conscious, but they are generally driven by deep roots in the unconscious, which provides the energy and source that drives them.  In particular, creativity involves considerable conscious work, but is driven from the unconscious.

The unconscious also has some structure.  In fact there are two distinct divisions.  One is into the human unconscious and the reptilian unconscious.  We all have, within our brains, a fully functioning reptilian brain, parts of which are constantly suppressed so we do not, in fact, act like crocodiles.  And with that brain, we all have the basic animal urges of lust, fear, aggression and hunger, which are pure, simple and primal, with nothing of the human about them.  The human unconscious deals with more complex, nuanced emotions and so, in our particular area of enquiry, it is the locus of eroticism and sexual desire (as opposed to sexual lust).

The other division is into the visible unconscious and the shadow.  Basically the shadow constitutes those parts of our minds that we have pushed away from ourselves and are dissociated from, either by desire or by force.  So those aspects of the personality that we do not wish to express or even to admit to having will end up in the shadow.  So, positive creative behaviour and thinking are driven from the visible unconscious, from the well-integrated parts of our personality.  Uncharacteristic behaviour comes from the shadow.

Kinds of gazing

Lauren Bacall
9

So, I see a clear distinction between male gazing which is primarily sexually driven and that which is driven by something else, such as the urge for self-transformation.  I spoke before of a shock, as of that of experiencing great art, or religious revelation, or some great insight, as it were the ‘wow’ factor.   Now, Lauren Bacall is quite capable of inducing that simply by staring rather severely at the camera while giving no hint at all as to what shape her body might be (image 9), and that is what makes her a goddess proper.  Here thoughts of sex are irrelevant, or else so transformed as to scarcely be describable as sexual.

So this is the abstract, non-sexual form of the gaze.  It speaks to those parts of the mind that make us truly human, the intellect and non-sexual passions, such as passion for justice, or truth, or beauty (including creativity).

Now, moving on to the sex goddesses of the past, this form of male gazing is driven by eroticism or sexual desire, which is the humanised form of the basic animal sexual urge.  This humanisation is seen in the way that there is still room for the human attribute of imagination, and that the gaze speaks of desire for a person rather than for satiation.

Finally, today we see the animal lust of the reptilian unconscious, without any embroidery.  The images 7 and 8 of Miss Heigl, and innumerable even more blatant images of other starlets, make it quite clear that we have moved beyond desire and on to the simple urge to satisfy sexual need.

So what happened?

So, what I believe has happened in the transition from Miss Hayworth’s erotic allure to Miss Heigl’s impersonal sexualism is as follows.  The reptilian unconscious has, for much of human history, been very firmly embedded within the shadow.  That is why, though abominations happened, and animalistic behaviour happened, it occurs as a sudden eruption from the shadow, and is contrary to the trend of society (and even, quite often, the individuals in question) as a whole.  And so, with the reptilian unconscious hidden away, the outlet for sexual feeling has been erotic desire.

It would appear that, at some time in the last half-century, the reptilian unconscious has started to emerge from the collective shadow, and so now naked lust, naked greed and so on are becoming more acceptable as people begin to integrate those urges directly into their personality, rather than going via the intermediation of some other more complex emotion.  And so the sexual male gaze has shifted simply because, distressing though it may be, pure lust is a more efficient way of getting what you want than the perfumed garden of eroticism.

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Rita Hayworth shows up the temporal censor

Introduction

Some of you may recall that in essays too numerous to contemplate (like, say, these: Less is More and The Male Gaze Gone Wrong) I cast a number of aspersions at the male gaze, suggesting that something had gone seriously wrong with it in the last half-century or so.  It is, after all, a long journey from being dazzled by Lauren Bacall to being filled with lust by Megan Fox, and it’s downhill most of the way.

However, I did, I now discover, make a slight mistake in this argument.  That is to say, I cheerfully assumed that this shift from eroticism to out and out soft porn in the way we males interact with female movie stars was an entirely modern phenomenon.  And I still maintain that, by and large, my thesis is correct.  But I had failed to take full account of Rita Hayworth, and on this rock the simple Manichean duality of the thesis founders.

Why Rita Hayworth?

You see, I had assumed that the screen goddesses of old were objects of erotic allure, creating that open space into which the viewer’s imagination could fall and emerge enriched.  Rather than (as do the majority of the starlets of today) saying ‘don’t you want to have sex with me’, which is a question answered with a quick surge of lust and then done and dusted, a neat, hygienic, disposable experience, they offered, or so I thought, a complex world of longing and unspecified promise, something that can lead to a transformational experience.

And then I came across Miss Hayworth.  Feast your eyes on these:

Rita Hayworth Rita Hayworth
1. Take a look at these! 2. Let’s be classy
Rita Hayworth Rita Hayworth
3. Or not 4. Wow, I’m sexy

Now, let me make two points clear right at the outset. First, these were the most glamorous shots of Miss Hayworth that I could find. Many were much more, shall I say, explicit in their intent. Second shot number two is more or less unique in being a proper attempt at creating allure. Interestingly, it’s copied all over the internet, but there aren’t any others (there is a small variation, but that’s it). So this is the pick of what’s out there.

And what do these pictures say? I think it’s fair to say that pictures one, three and four are all focussed on one, or rather two, things. And it’s not her face. And the clear message is not ‘I am full of mysterious allure, which you must quest to understand’. No, it’s more along the lines of ‘I am sexy as hell; want a piece?’ In other words, the only real difference between Miss Hayworth and the starlets of today is that in her day selling sex was not quite so unsubtle as it has now become. It was all still about tits and ass, but the purveyors of tits and ass had not yet forgotten that subtle revelation is more arousing than crude exposure.

That’s a point to come back to, but the real point is this: sure the goddesses of yesteryear were light-years from the starlets of today, but they were equally light-years away from those starlets’ equivalent in their own era. In other words, in the second tier, just as there are actresses today whose career is predicated solely on their body, so there were fifty years ago. So there are two questions. First, why does it seem as if things were different back then? And second, where are the goddesses of today?

Censorship in action

Some of you may recall that a while back I wrote an essay called The Censorship of Time.  It was an attempt to explain the well-known phenomenon that art from the past seems to consist solely of masterpieces, while much of what we see produced today frankly sucks.  Cultural conservatives gleefully claim this as evidence of a decline in civilisation.  I don’t.

Instead, I observed that if you look at art from any period, it has undergone a form of winnowing process, whereby the vast majority of bad or just mediocre art (which can, quite often, be that which was most popular at the time) is gradually set aside, and what remains are the gems.  So nearly all of the art ever produced is forgotten save by desperate graduate students in search of a thesis topic, or those who live in the past (parenthetically, I find it amusing that the latest fad in classical music is for ‘contemporaries of Mozart’, as if merely to have lived at the same time as dear Wolfgang is enough to confer some unusual merit).  And this is absolutely true and effective for all periods in history save one: the present.  Because we live in the present, the winnowing process hasn’t happened, and so the wheat is swamped by the chaff, especially as the chaff is more likely than not to be what sells.  And the consequence of this is that, yes, modern art appears to be worse than the art of the past, but that is only because we are seeing all of it, and not just selected highlights.

If you think about it, this is pretty obvious.  Think of popular music in the 1960’s and it’s The Who and The Rolling Stones and so on.  It’s not Engelbert Humperdinck, and yet he was more popular than they.  We remember the pinnacles of noir like The Big Sleep, but we don’t remember the vast numbers of absolutely dreadful noir movies that it spawned.  While now, films that will last, like Synecdoche New York are swamped by instantly forgettable dreck like Transformers, while a fine actress like Maggie Gyllenhaal is criminally under-utilised, while Katherine Heigl seems to be in every romantic comedy made.

Not even close
Not even close

So, what was my mistake?  Well, it’s quite clear that, though popular taste has unquestionably degenerated in the last few decades, the main reason why the movies seem so awful is simply that, well, most of them are.  It didn’t occur to me that the same might be true when it came to sexual gratification.  Part of the problem is that, as noted above, there has been a general shift towards greater explicitness.  The picture of Miss Heigl makes the point for me: by the standards of modern starlet pinups this actually quite sophisticated, and yet, when compared with Miss Hayworth, it really is quite lacking in subtlety.  And so it is entirely possible to miss the equation.  Miss Hayworth was selling her body, as is Miss Heigl.  And just as Miss Heigl is everywhere, while Miss Gyllenhaal is hardly anywhere, Miss Hayworth reigned supreme while the more beautiful, more intelligent, more sophisticated, more alluring, infinitely more talented Miss Bacall made only a handful of movies.

So the conclusion from all this is as follows: popular taste sucks.  Both artistically and in terms of its preference for the surgically applied arousal of pornography to the complexities of erotica.  But it always has sucked.  We’re just unlucky that it’s busy sucking at us right now, and it’s hard to avoid.

And so?

Well, we have the obvious question of where this takes us?  Are all of my previous arguments that movies and the male sex are going to hell in a hand-cart mistaken?  No.  Movies that used to be mainstream now would not get made, because the prime audience has shifted from being adults to teenaged males.  And, for the same reason, the manner of sexual arousal has shifted so as to be more simple and direct.  Gone are even the subtleties of Miss Hayworth’s dress, with its careful gradation from flesh-coloured fabric to flesh, the edge being artfully hidden.  The feedback loop I have noted before means that audiences demand more, quicker, and so that’s what they get, which habituates them to need even more, and so on.  So heaven only knows where things will go next.

And as for who are the goddesses of today: well, you tell me.

Your input is requested . . .

I have a number of ideas for what could come next by way of essays on this blog, some listed on the ‘Future topics‘ page.  But it would be nice to get some idea of what you, the readers would like to see.

So, here is a simple poll.  Just click on your choice and after, ooh, however long, I shall collate the results and then decide whether or not to ignore them.  You can’t ask more than that, can you?

Many thanks for taking part in this exercise in intellectual democracy.

Post-neo-apres-Keynesian economics

Introduction

In these times of massive recession and general tightening of credit, popular discourse is rediscovering the joy of Keynesian macroeconomics, in particular Keynes’ views on how to stimulate an economy that is underperforming.  What this generally boils down to is a call for protectionism (consider, for example, the US administration’s woefully misguided ‘buy American’ policy), restriction on free movement of labour, and for the counter-intuitive nostrum of increased spending, as a means to stimulate business performance.

In this essay, I’m going to take a look at these measures and investigate them from the point of view of a more modern view of macroeconomics, and a first-principles analysis which fully understands its presuppositions, unlike the proponents of this neo-Keynesian thinking, who do not seem to be fully aware of theirs.  I will conclude that of the three measures described above, the first two are totally misguided, while the third may have limited applicability if used correctly.

I will start with a discussion of general macroeconomic principles, with an aim to exposing my assumptions.  After that I will discuss the neo-Keynesian measures in turn giving reasons why they should be set aside or modified.  Finally, I will make a tentative proposal as to what a viable economic stimulus package could look like.

My assumptions

Assumptions

The health of the economy is measured in terms of its ability to create wealth

Basically, Adam Smith got it right first time: macroeconomics really is about the wealth of nations.  Wealth (which isn’t the same as money) is a direct measure of how much economic production there is going on.  Creating wealth / growing the economy means that there are more jobs available for people to take up, because there is a greater need for people to assist in the creation of wealth.  Therefore, if wealth grows, unemployment falls, while if wealth shrinks or stagnates, unemployment rises or stagnates.  Moreover, as wealth grows people become better off.   Wealth arises from the exchange of money for services, and this money flows round to those who help provide the services.  And, in a neat feedback loop, people being better off and willing to spend means that more services are required, and so wealth grows.

The free market is the best judge of a business’ success

It is a key truth that free markets, provided they remain free, are extraordinarily good at ensuring that businesses flourish precisely when they have something to sell that people want, and (via free competition) that the correct price is achieved for all services: correct here meaning the maximum price that consumers are prepared to pay for the service.  Now, note that there are several provisos here.  The reason why some ostensibly ‘privatised’ businesses have manifestly failed to find the correct price (e.g. privatised railways in the UK) is that there is not free competition to provide services: each route belongs to one company, so in fact there are a number of mini-monopolies.  Likewise, it is necessary that government regulate the market to ensure that it does remain free and fair, precisely so as to avoid monopolistic behaviour.

Discussion

These macroeconomic assumptions are quite orthodox, but are not especially favoured in popular discourse.  First, there is a common belief that failing or uncompetitive businesses should be supported because if they went under then jobs would be lost.  But what would be the macroeconomic result of that?  If uncompetitive businesses are artificially preserved, then in fact they will be made artificially competitive, and so will be able to prevent new, innovative businesses from acquiring market share.  Therefore, in fact what will happen is that the economy will start to stagnate, and eventually shrink, because consumers will go elsewhere.  And so, the stabilisation plan of preventing short-term unemployment will eventually lead to recession.  And if there is already a recession, it will make the recession that much deeper.  Unfortunately, the macroeconomy is a rather Darwinian creature, and surviving in it is a matter of adapt or die.  Rather than artificially prolong the death-throes of a moribund business, we should be ensuring that the economic climate (in terms of regulation, taxation and legislation) favours the establishment of new, wealth-generating businesses.

Second, wealth is often confused with riches.  The wealth of a nation is not measured in terms of the size of the money-bags of a few plutocrats.  Plutocrats, like the poor, are always with us.  Wealth is about the ability of individuals in the economy to create marketable services for which people are prepared to pay and so is in the hands of all of us.  Individual wealth (if one can apply a macroeconomic indicator to an individual) is a matter of how much one puts directly into the economy in the sense of how much one enables production of services.  And moreover, wealth directly benefits all in the economy, because they share in the value of the services they help create.  Therefore, contrary to the rhetoric of anti-capitalists, wealth is a very good thing.

Third, and returning to the market, in an extension to my first point, there is a popular tendency to get over-attached to whole economic sectors.  So, cultural conservatives complain because the UK’s economy is now largely post-industrial, and similarly in the US, which is undergoing the transition from industrial to post-industrial.  But, to look at it in larger terms, why does a country need to have any industrial sector?  Provided it is possible to buy the necessary services from elsewhere, and provided the country can function with a growing economy without an industrial sector, why should it matter?  Well, the obvious objection is that losing the industrial sector causes unemployment.  But note that I just assumed that the economy could maintain a growing post-industrial economy.  This means wealth is still being created at (more than) the old rate, and that there is increased demand for jobs.  Unless one takes a rather essentialist view of what people are and are not fit to work on (which I find offensively prejudicial) then there is no reason why unemployment should rise provided workers are prepared to be flexible.  Therefore, we conclude that any country will retain a residual industrial sector, consisting of those services that cannot be sourced from abroad, but that there is nothing to fear from the transition from industrial to post-industrial, just as there was no need to fear the transition from agrarian to industrial, and there will be no need to fear the next paradigm shift.

Neo-Keynesian assumptions

The goal is to create jobs, not wealth

This is, in fact, the fundamental fallacy of what one might call folk-economics.  It largely seems to result from the confusion discussed above between wealth creation and plutocracy. But there is a crucial point here.  As I said above, wealth creates jobs.  Jobs do not necessarily create wealth.  To see this in its crudest form, imagine a scheme in which we had the ministry for digging holes and the ministry for filling holes in, whose work teams followed one another round the country.  This would undoubtedly create jobs, but it would do nothing whatever to grow the economy.  In fact, the situation is worse than that.  By pulling people into economically unproductive labour, this scheme would reduce the workforce available to do economically productive work.  Moreover, by paying people to do (essentially) nothing, one slows down the motion of money between suppliers and consumers of services, by introducing a whole new class of non-producers who only consume, and so effectively the money supply is reduced.  Therefore a deflationary contraction of the economy is likely.

This example is deliberately contrived, but a very important point follows from it.  If people are doing work that is not economically productive, then they have at best a net neutral impact; in fact they are likely to have a small effect.  This is not to say, as some might have at the height of the monetarist craze, that therefore nobody should be paid to do unproductive work.  There are clear benefits in terms of culture, knowledge and future potential to having some unproductive work.  However, in a time of recession, when one is considering means to stimulate the economy, creating new unproductive jobs is a fatal error.  Which means that in a time of recession, the emphasis should be firmly on looking at ways to promote the creation of wealth, knowing, as we do, that to create wealth you need people, which means jobs, and more wealth means more people, which means more jobs.

Neo-Keynesian cures for a recession

During a recession, market freedom should be limited

The argument here is more or less that local businesses will not be able to compete with those abroad, and that therefore a deliberate imbalance should be introduced into the economy (in the form of tariffs, for example) so as to make them competitive, and hence more likely to survive, guaranteeing that jobs will be sustained.  I could repeat the argument from above, but there’s an interesting alternate viewpoint.  Suppose I do sustain uncompetitive businesses using tariffs or whatever; how do I ever emerge from recession?  Because now there is no incentive either for the uncompetitive businesses to improve, become competitive and start generating wealth, or for new businesses to arise to replace them.  In fact, there is an extremely strong risk that in propping up uncompetitive businesses I will stifle innovation at home, and in fact prevent the economy from growing.

Let me run through that more slowly.  I would only impose a tariff if my local businesses could not compete internationally.  Now, the thing to remember here is that they have internal competitors as well, in the form of other businesses in the same market segment, or of start-ups.  Now, if I bias the market in favour of existing non-competitive businesses, it will be very hard for start-ups to gain market share and start generating wealth.  Moreover, there is no incentive for the existing businesses to make themselves competitive, and hence start generating wealth.  But if I am ever to emerge from recession I either need new, strong businesses to replace the old, weak ones, or else I need the existing weak businesses to become strong, and I have just created a strong disincentive for either of those outcomes to occur.  Imposing the tariff can only work if the economy depends on ‘national champions’: businesses which are the sole player in their respective market segments.  It is not, therefore, surprising that an enthusiasm for Keynesian thinking often goes together with a touching faith in the merits of nationalisation.

During a recession, free of movement of labour should be limited

Note, by the way, that all of these arguments apply equally well to protectionism involving the restriction of free movement of labour.  Protecting the ‘native’ work-force simply institutionalises those features that made it non-competitive in the first place.  As a result, there is no incentive to (say) acquire new skills or shift to developing market segments, because everything is comfortable just the way things are.  And so the measures become self-reinforcing and, with time, the economy becomes moribund.

Large-scale public sector investment will stimulate the economy

This is another idea that only really works if the state and the economy are one.  But to start from the beginning, investment to stimulate the economy is not a bad idea, but one has to be certain that the investment has the right result.  For example, investment in the hole digging and filling businesses described above would result in zero net benefit to the economy, and so would be money down the drain.  What is needed is investment that incentivises existing businesses to generate more wealth, and new businesses to start up and add their wealth-generating capacity to the economy.  Therefore a system of, say, tax incentives for new businesses, or grants for innovation would work (note, by the way, that this is not a tariff, as this is not incentivising businesses to stay the same, but actively incentivising them to change and grow), as would large-scale procurement programmes.

But the idea is strongly embedded in the public consciousness that investment in the public sector is de facto good for the economy.  Of course, it creates jobs (so we’re back with the jobs not wealth fallacy), but what does it do to create wealth?  Well, assuming that we actually have an open economy, and not one tilted in favour of state-owned enterprises (in which case we are in trouble anyway, as described above), then the public sector is (with the exception of spending departments, of which more below) not a producer of wealth.  This is not to say that it is unimportant.  Health-care, education, regulation, etc are all vital functions of the state, and have long-term macroeconomic implications (an unhealthy and ill-educated work-force is not a productive workforce) and so there is a strong argument for sustained investment in these services regardless of the state of the economy.  But if we are in a recession, there is nothing that extra investment in these services can do to get us out of it.

Now, what can be done?  We can do a number of things, for example start procurement programmes, or sponsor research and development, with an aim to growing new capability in the economy.  Though it is not especially fashionable to say so, investment in defence spending is probably a good move in times of recession, especially if it can be used to spur new developments (this is not to say that non-productive research should be cut, but it is not a good target for investment specifically aimed at getting the economy out of recession).  Likewise, sponsoring applicable research, indeed providing funding for transition from research to production, is sensible.  More indirectly, funding  to promote retraining and skill acquisition, giving people an incentive to move from moribund market segments to more productive ones, will be effective.  So we can say that public sector investment can be effective, provided that investment is used to enable business development and hence creation of wealth.

So what can be done?

We have seen that the Keynesian views on how to stimulate an ailing macroeconomy range from the outright dangerous (interfering with the freedom of markets) to the simply wrong-headed (public sector investment is the answer), and yet they remain startlingly popular.  Why is this?  I think there are several reasons, all rooted in folk economics.

Equation of wealth with plutocracy

As I noted in the discussion of the Keynesian fallacy that what matters is creating jobs, not wealth, this idea is popular because when one starts talking about wealth with non-economists, the almost automatic response is for people to start thinking about the obscenely rich and start frothing at the mouth about the inequities between rich and poor.  But, as I said (again), wealth is not money.  Wealth is, in a sense, the potential to create money, and it belongs to everyone who plays an active role in the economy.  Which means that we all have a stake in making sure that there is as much wealth in the economy as possible, because it is something from which we all benefit, not just plutocrats.

But, if we follow on from the equation of wealth equals very rich people, then it becomes almost logical to conclude that wealth is a bad thing, and that rather than striving for wealth, we should strive for some intangible concept such as quality of life.  Indeed, we hear people complain of politicians who talk in terms of economics that they know the price of everything and the value of nothing.  But what is value?  Who defines value?  How can we be sure that my idea of what constitutes value is commensurate with yours?  There are as many definitions of value as there are people.  This is the problem: if something cannot be measured, then it is well nigh impossible to tell whether you are delivering it, and therefore how to deliver it.  Wealth, on the other hand, is susceptible to an agreed on definition and it has the inestimable advantage that it enables all of us to acquire the value we want.

Failure to grasp pain for gain

The problem, I believe lies in basic facts about understanding of risk.  It is well known that risk is not a concept that is easy to understand, or that many people do understand.  Two particular aspects of this are as follows.  First, people are very poor at quantifying risk.  Second, people are risk averse.  So if doing nothing carries no obvious immediate risk, whereas taking action does carry immediate risk, then people will almost certainly prefer to do nothing, even if in the medium to long term doing nothing carries very high risk.  In other words, people do not readily grasp the pain for gain principle: in fact one can almost guarantee that they will do almost anything to avoid the short-term, beneficial pain, even if they know about the long-term consequences of their choice.

When applied to macroeconomics this notion is very powerful.  We see immediately why there are outcries whenever moribund industries die, and calls for government to bail them out.  People see the short-term loss of jobs, and ignore the long-term economic benefits of letting the business die and disbenefits of sustaining it, because keeping it going avoids short-term pain, and the macroeconomic arguments in favour of allowing the market to have its way are somewhat abstruse, dealing with abstractions like markets, wealth, and so on and so forth, and if there is one thing folk wisdom is worse at than understanding risk, it is understanding abstractions.  Indeed, in the somewhat anti-intellectual atmosphere of many Western cultures, the mere fact that economists can present well-rounded theoretical justifications for their claims will actually tend to count against them (and, unfortunately, this is not limited to economics).

Hankering for paternalism

It is only if people are (pace Thomas Jefferson) left free to pursue wealth that they will be able to obtain happiness.  If the state decides what constitutes ‘the good life’ then one is essentially removing the element of freedom of choice from the vast majority of people, and therefore edging towards totalitarianism.  And yet in spite of this, an awful lot of people seem to have a hankering for a situation in which the state is expected to take macroeconomic decisions on their behalf, even though they would not trust it with making personal decisions for them.  But the expectation is that those macroeconomic decisions should be based not on economic indicators but on the ideas, following from failure to grasp pain for gain and general dislike of abstract thinking, that failing industries should be supported, jobs should never be lost in any market segment, and what matters is value, not wealth.

This is, needless to say, a contradictory position.  When Keynes was active, the idea that the state should somehow determine what industries should exist was intellectually respectable, and, after all, it did have a history going right back to feudalism.  What is amazing is that even now, when the folly of attempting to control the market (which is, after all, a chaotic system, and so insusceptible to control – though susceptible to gentle pertubation) should be clear to all, not only do some governments still maintain that it is right and proper to do so, but a large number of people who really should know better seriously argue that capitalism, and with it the idea of the free market, is dying.  And so we have the simultaneous, and rather bizarre, belief that the state and those of its servants who make sure that it continues to tick over, and that currency still means something and so on and so forth are the enemy, while the public sector and publicly owned businesses are the salt of the earth.  So we have healthy individualism mixed with a yearning for the state to be our parent, absolving us of any responsibility to behave like adults.

It is time to leave the nursery.