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Who Dare Say They Have Found A Free Market?

November 8, 2019

Thanks to Ned Boulberhane, a 2019 Harrison Middleton University Fellow in Ideas, for today’s post.


At the 2018 Left Forum at John Jay College in New York City, the economist Michael Hudson made a bold claim. He proposed that when Adam Smith wrote of free markets in the his literary classic, The Wealth of Nations, he was not referring to a market free from government oversight, but rather his view of a free market was one that meant free from monopolies. I was left with the natural response of...."wait, really?" And I knew that I had to investigate more. Thus, we begin our examination of free markets and the vision of Adam Smith.

To begin, while Adam Smith is almost certainly more well-known for his work, The Wealth of Nations, he was also the author of a previous book, The Theory of Moral Sentiment. Through exploration of even the most simple biographies, it is evident that Smith wanted to be known not only for his insight into economics, but also as a moral philosopher. The Wealth of Nations is a particular work where Adam Smith attempted to find common ground between the uses of capitalism and the moral betterment of humanity. Thus, in short achieving a system where trade could occur freely but not conducted in an immoral way.

Michael Hudson is the celebrated author of J is for Junk Economics, and a self-proclaimed debt historian. In addition, to the claim he made regarding Adam Smith and the free markets, he expanded his statement by saying that since the time of the palace economies, the concept of a strong public sector is what moves a civilization forward. If the private sector becomes too large and too powerful, it can move the public sector to its advantage. This allows for oligarchy to propagate. While that statement comes at the issue from a strong perspective, Adam Smith addressed a similar issue in the first book of The Wealth of Nations, for it appears Smith's most pressing issue regarding markets was free trade. It would be impossible to have a system of free trade if a monopoly holds all the power to trade. The monopoly would dominate the market, and concepts such as price competition, innovation, and entrepreneurship would be impossible.

Noam Chomsky is also very critical of how Adam Smith is interpreted in the 21st Century. The term "free market" is used frequently in contemporary political discussions, but Chomsky also highlights a particular issue with one of Smith's more famous phrases: The Invisible Hand. It is true that Smith used the term invisible hand, but it does not refer to an outside power that can manipulate markets. Smith's statement on the invisible hand, which occurs about midway through the dense volume, is a prediction that home bias will occur in economic decision making. What it refers to is that when capital markets are conducting trade and activities, there will be a rather expected preference given to the traders and actors within one's home community. Perhaps a modern day example of this is "Buy Local" or "Support Local Farmers." Smith made the proposition that it would be as if they were protected by an invisible hand.

Chomsky highlights one other particular issue regarding Adam Smith and the free market. This revolves around Smith's interpretation of the division of labor. To illustrate, Smith was heavily opposed to the concept of unregulated and unrestricted access to business and corporate ability. If the private sector were ever to cross the line and institute practices that were harmful to human life, Smith believed that it was the responsibility of the government to step in and prevent such actions from becoming more heinous, tying into Hudson's statement that the private sector can move the public sector it its advantage. In short, Smith saw the need for government oversight and regulation, so that humans would not be exploited.

There is famous but casual expression, "economics is an art not a science." Some might challenge this by saying that it is a social science, and the writings of Adam Smith are somewhat in the middle. As previously mentioned, Adam Smith sought to apply the concept of moral philosophy to free trade. However, one of the most important things that Smith expresses in the early books of The Wealth of Nations appears to be that the human social element in economic thought must never be forgotten. In lighter terms, trade is a good thing. Unrestricted trade that causes a detriment to human life is not.

The term "free market" is used in the news on a frequent basis. After hearing Michael Hudson's presentation on markets, I knew that I wanted to explore this subject. It might sound strange, but I almost feel disappointed that I did not find too many areas of disagreement. However, to give some form of push back and after reading through Smith's (sometimes painfully) dense economic classic, it seems that the heart and soul of his focus was not on government regulation. Perhaps current political thinkers would jump at the chance to throw their hats behind Smith hearing that he was for regulation and against unrestricted capitalism, but it seems they will have to wait. From the writings of Adam Smith we can see that he was in favor of protecting human life and honoring the concept of community. His regard for the invisible hand is evidence of that and perhaps a sort of ideal that one could strive toward: trade and cooperation bringing people together, respect for one's own community, and a path to economic prosperity with a sense of fairness.

To respond to the statement that was asked at the beginning, it seems that it is partially correct. While it appears true that Adam Smith was opposed to monopolies blocking the possibilities of free trade, he was more concerned with economics benefiting as many people as possible, and that served as the heart of his issue. While in our present day and age a world where capitalism is conducted on a fair and moral basis with respect to humanity and the Earth might be difficult for many to imagine, but perhaps it is also fair to say that someone such as Adam Smith would not be deterred by challengers. In life one often has to strive toward the ideal. It may seem difficult or nearly impossible, but through the strides one learns along the journey.

Works Cited:

Chomsky, Noam. (n.d.). “Noam Chomsky on Adam Smith.” New York.
Hudson, Michael. (2017). J is for Junk Economics: a Guide to Reality in an Age of Deception. Place of publication not identified: Islet.
Hudson, Michael. (n.d.). Left Forum 2018. Left Forum 2018. New York.
Smith, Adam. (1981). The Wealth of Nations. London: Dent.

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October Quarterly Discussion Review

November 1, 2019

Thanks to Alissa Simon, HMU Tutor, for today’s post.

During October, I was fortunate to discuss W.E.B. Du Bois’s book The Souls of Black Folk. In our discussion we spent quite a bit of time exploring the metaphor of the veil, which Du Bois says exists between African Americans and “the other world.” His first experience with this veil was in the schoolhouse of his youth. When the children pretended to exchange visiting cards, one white girl refused to exchange with Du Bois. He writes: “The exchange was merry, till one girl, a tall newcomer, refused my card, - refused it peremptorily, with a glance. Then it dawned upon me with a certain suddenness that I was different from the others; or like, mayhap, in heart and life and longing, but shut out from their world by a vast veil.” In trying to understand the veil itself, we explored the potential reasons for making it the metaphor. Why a veil? It seems that a sort of transparent or opaque line always exists between the two different groups, sometimes invisibly even. While acting as a physical barrier, it is also barely there, both noticeable and not. Du Bois says that those inside the veil are most disillusioned because it impairs a true apprehension of potential, but he quickly remarks that it also acts upon those who are outside of it. In fact, it seems innocent, but the veil damages everyone it touches. Once again, the translucent, flexible quality of a veil can present a mask, which seems to affect not only the one wearing it, but rather, it obscures and distorts all viewpoints. The veil is an apt metaphor for these reasons: its ambiguity and formlessness, an intentional or distorted barrier, and the very fluid nature of it.

On the very first page of the book, Du Bois explains that between the two worlds exists an unasked question. Some people attempt to ask, or dance around the subject, but to the question of “How does it feel to be a problem,” or how does it feel to be the problem race, he does not answer. I could not understand why he did not respond to this question, which seems so important to his message. But our discussion helped me better understand his reasons for not answering. In his eyes, and in truth, the answer to that question requires a whole history of explanation. Rather than deliver a lecture at a cocktail party, he attempts to answer in the complex, weaving narrative of his book. He writes:

“The history of the American Negro is the history of this strife, - this longing to attain self-conscious manhood, to merge his double self into a better and truer self. In this merging he wishes neither of the older selves to be lost. He would not Africanize America, for America has too much to teach the world and Africa. He would not bleach his Negro soul in a flood of white Americanism, for he knows that Negro blood has a message for the world. He simply wishes to make it possible for a man to be both a Negro and an American, without being cursed and spit upon by his fellows, without having the doors of Opportunity closed roughly in his face.”

Despite the notion that, at that time, being “Negro” and “American” must have seemed almost antithetical, Du Bois astounds me with his hope. He says that America is an experiment, in which he hopes to play an equal part. Much of this book addresses the educational system because it is there that we find communal, foundational beliefs. Education can open up dialogue about what it means to be American and what it means to be African-American. While it is important to Du Bois to bolster the African-American pride and potential, he repeats that the conversation must include everyone. If the American experiment is to be successful, it must sincerely address slavery, it must sincerely address racism. And the African-American responsibility is to teach others how a formerly enslaved peoples can share in equality and freedom.

We briefly discussed, and I continue to wonder at the intended audience for this book. Did he mean to address elites, intellectuals, African-Americans specifically, educators? For whom is his message most important? I keep returning to the answer that everyone must be the intended audience. Du Bois’s grace and eloquence in dealing with such a difficult subject is impressive.

Published in 1903, Du Bois uses Atlanta to explain his fears for the rest of America. He sees Atlanta as a city rising in greed and excess, and yet still unable to address equality. He feels that money complicates Atlanta in an unhealthy way. Du Bois says of the Civil War that right triumphed but with something of the wrong, by which I believe he means to say that ownership of peoples transferred into greed and excess of other types of property. Du Bois says, “Not only is this true in the world which Atlanta typifies, but it is threatening to be true of a world beneath and beyond that world, - the Black World beyond the Veil. Today it makes little difference to Atlanta, to the South, what the Negro thinks or dreams or wills. In the soul-life of the land he is to-day, and naturally will long remain, unthought of, half forgotten; and yet when he does come to think and will and do for himself, - and let no man dream that day will never come, - then the part he plays will not be one of sudden learning, but words and thoughts he has been taught to lisp in his race-childhood.”

The education of African Americans had been so minimal and unable to address economics and equality, so the nation grew by experience only, which created inaccuracies and perpetuated inequality. This appears to be the period of “race-childhood,” with which we are just now coming to terms.

I am grateful to those who dedicated an hour and half to discuss the vital words of W.E.B. Du Bois with me. Our next Quarterly Discussion will be in January on Natural Science. Check out our Facebook page and website for more information on upcoming events.

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Maoist Influence on Contemporary Chinese Thought

October 25, 2019

Thanks to Ned Boulberhane, a 2019 Harrison Middleton University Fellow in Ideas, for today’s post.

China: The far lands of the Orient, and perhaps the world's oldest living civilization. However, the days of Huang He River Valley have evolved into something quite different than the previous centuries. 1949 saw the rise of communism in China, and the foundations and thinking of an individual named Mao Zedong would begin to affect the course of Chinese education, thinking, ideology, and culture. I first came to China in 2013. The first vivid memory I have of the country, other than the airport, is the array of hanging lights from the all the trees along Guangzhou's Tian He Road (天河路), yet after six years in the world's most populous nation, it becomes quite clear that the presence and direction of Chairman Mao (毛主席 Mao Zhuxi, Zhuxi meaning Chairman) is very present in not only education but in the thinking of Chinese daily life - a Maoist presence of thought.

As a teacher in China, I often discuss the differences between Chinese and American education. One of my students explained to me that Mao Zedong (毛泽东), the first president of the People's Republic of China, was opposed to the humanities. He valued the hard sciences, engineering, and even disciplines such as physics. Mao's biographer, Philip Short, wrote a detailed argument about how he claimed that this type of educational philosophy came to be.

Mao Zedong was born to a rather poor family, but his father was a strict disciplinarian, and even described as tyrannical (Short, 2000), yet Mao possessed a rebellious spirit by nature and developed a domineering attitude from an early age.

While the journey of Mao's life is complex there are a certain set of criticisms that have evolved into the contemporary academic discussions on Chinese thought:


1. Treating human beings as statistics.

2. Viewing group identity as paramount.

3. The previously mentioned disregard for the humanities.

It is a harsh statement to accuse Mao Zedong of treating human beings as statistics, but it is a brutal reality that is employed by the powerful across many different nations and time periods from the writings of the Italian Giovanni Giammaria Ortes, who went on to influence Thomas Malthus and Jeremy Bentham (Tarpley, 1996) to the Principles of Scientific Management used by Frederick Winslow Taylor to advise the Ford Motor Company, all of these examples share the concept of treating humans as numbers that can be rearranged. This is heavily relevant to a particular time in Chinese history known as the Great Leap Forward (大跃进), a plan to convert China from an agrarian economy to a massive industrial power (Short, 2000). The practice of private farming was prohibited and many farmers were forced to work in the steel industry, so that China could go on to compete with the economic forces of the British Empire. The nationalization of farming led to an inadequacy to produce food for the nation, thus the foundation of the Great Famine.

In Guangdong Province ( 广东省), there is a saying "The Cantonese eat everything," meaning that any form of animal or edible plant can be consumed.This is a reference to the Great Famine when food was scarce, and it served as a necessity. When living in Guangdong Province, it is not uncommon to hear stories such as "My father also refused to eat sweet potatoes. As a kid, that was all he ate for three years."

When it comes to political commentators in the Western World, there is almost a blame game that the liberal vs. conservative dynamic chooses to play. The left wingers proclaim that Mao Zhuxi was an authoritarian right wing controller, and the opposition claims that Mao was a left wing identity-centered communist (Peterson, 2018). It is a fair criticism to say that Chairman Mao promoted national identity over all else, a sort of always striving to the greater good of China, even if it meant the means were destructive. In Mandarin, the name given to the nation we know as China is Zhong Guo (中国 meaning Central Country). Perhaps a more honest perspective on the political leanings of Chairman Mao and the Maoist influence on contemporary thought is that the current People's Republic of China views it as a central nation, one that incorporates the left and right political dynamics together. The two major divisions of western politics have blended together in China.

On the topic of education, the interactions of people from different nations around the world is impossible to avoid in China. The internet is censored with something commonly referred to as the "Great Firewall" of China. Websites and applications such as Facebook, Twitter, Instagram, Youtube, and thousands of others are blocked. These sites are associated with free expression and would give users the ability to share creative material and information that is critical of the government; however, as someone once told me "when the internet was created, it was not designed to be censored." The interactions of ideas are difficult to contain or limit.

Education takes many different forms. There are the traditional methods that involve classroom learning and the methodologies of an instructor, but on the other hand, there exists a benefit in intercultural communication. In 1975, Mao Zedong met with Henry Kissinger and Richard Nixon in what was called, "The Opening of China to the West," but in reality by that time Mao Zedong was in the last full year of his life, and his cognitive faculties were not functioning properly (Short, 2000). Perhaps, the Maoist educational form has left a major impact on the citizens of China in the current day and age. The consequences of the Great Leap Forward, Great Famine, and Forced Industrialization are present in China's ability to perform as a manufacturing power of the world. At the same time, the death toll resulting from the methods to achieve that economic status is impossible to record in a proper manner with estimates as low as 14 million and as high as 70 million (Short, 2000).

The ages of technological advancement and global interconnection are bringing strong challenges to the Maoist-centered ways of 1949-76. One of the components of government that China was never able to escape was corruption, and even on lighter terms, opposition to those in power. Mao died in 1976, and one his successors, President Deng Xiaoping, opened the nation to a rudimentary usage of free markets and trade (Cella, 2018). This should not have come as a surprise since the plan for the foundations of Maoist China were focused on the expansion of the industrial sector.

In the most general of terms, China still stands as a nation that is a far off land to the Western observer. The East of the East and the West of the West converge on a variety of issues surrounding trade, international business, and tourism. Yet in the near future, more and more individuals are coming toward to China, and the CGTN anchor Liu Xin declared in 2017 that the 19th Century saw the dominance of the British Empire, the 20th Century saw the rise of the United States, and the 21st Century shall be for everyone. Will that take place? Only time will tell. As for now, one can say that there has been a deviation from the economic practices put into place from Mao Zedong. This has almost certainly served as a benefit, but the academic, intellectual, and communicative effects of Maoist Chinese thought are very present in the interactions of Chinese daily life, running deep into the educational systems as well as interpersonal relations.

References:
Cella, C. (2018) CCCT with Chris Cella. Chris Cella Channel.

Liu X. (2017). The Point with Liu Xin. China Global Television Network.

Peterson, J. (2018). Debating the Gender Pay Gap. BBC 4.

Short, P. (2000). Mao: The Man Who Made China. Tarius Publishing. Amazon Digital Services. LLC.

Tarply, W. (1970-96). Against Oligarchy: Essays and Speeches 1970-1996. ICLC.

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BOOK REVIEW: Sapiens

October 18, 2019

Thanks to Jennifer Taylor, a 2019 Harrison Middleton University Fellow in Ideas recipient, for today's post.

Harari, Yuval N. Sapiens: A Brief History of Humankind. [Toronto]: Signal, 2014.

I have often heard that if we choose not to learn from the mistakes of history, we will inevitably end up repeating them. Though it is undeniably very practical advice to be aware of the perils and pitfalls to which we as human beings are susceptible, in spite of my best intentions to be a well-informed member of the species, history has never been a subject that has thrilled me. I took the requisite courses in high school, of course - but names and dates blurred together and important concepts failed to stick with me. More than a decade later, I obtained Sapiens at the recommendation of a family member.

It took less than two pages to realize that this history book is unique. Beginning approximately 2 million years ago with the plethora of human species that failed to survive past 12,000 BCE and spanning into predictions for the future, Harari’s Sapiens focuses on broad concepts and questions that have influenced the behaviours and movements of Homo sapiens as a species, rather than the individuals who may have made culturally significant impacts on a smaller scale. Harari presents the vast and complex history of our species chronologically, organized largely by the Revolutions that set human beings apart from their non-world-dominating counterparts, extinct and otherwise: Cognitive, Agricultural and Scientific.

The Cognitive Revolution represents the transition of sapiens from one of many human species struggling for survival into the dominant species on the planet - but the explanation for that transition is not as simple as large brains and opposable thumbs. Human species possessed those traits for millions of years and remained in the middle of the food chain. Gaining control of fire and developing language are also not unique to Homo sapiens. So how did they, in a relatively short span of time, become the only surviving species of humans? And how did they then develop from bands of 50 citizens cooperating together into cities of millions?

The Agricultural Revolution, which Harari refers to as “history’s biggest fraud”, describes the progression of modern humans from a population of hunter-gatherers into communities of farmers. How and why did this change take place? And was the domestication of grain the benefit to the species we believe it to be? How do we define evolutionary success and whether or not we, as humans, have been successful?

Beginning about 500 or so years ago, the goals of education transitioned from preservation and validation of existing rules to discovery and acquisition of new ones in a process called the Scientific Revolution. By accepting that modern culture was ignorant, it opened the door to scientific discoveries and real progress. This change led to the discovery of medications, the invention of new weapons, and the stimulation of economic resources that led to men on the moon and the invention of the atomic bomb. But do technological advancements necessarily mean that quality of life - rather than lifespan - has improved? Is Capitalism the key to progress, or a cult that holds the hardest-working members of its population back? What will continued technological advancements mean for the future of Homo sapiens, who are, biologically, little different than we were 200,000 years ago?

Enormous questions such as these have no simple answers, but Harari tackles them with a level of knowledge and insight that allows him to lay out the myriad facets of each topic with eloquence and clarity. Sapiens is written in language accessible to laypeople with a degree of humour, but uses it to set forth complex concepts and theories about the history of human beings. And as promised, that history is repeating itself. According to Harari, Homo sapiens are no stranger to causing mass extinction on a global scale. Nor is the current post-truth climate the first time our species has been willing to justify behaviour based on common myths. Even being ensnared in the “luxury trap”, an endless cycle of working harder in pursuit of luxuries we aren’t able to enjoy, is part of the history of humankind. Though understanding our history may not allow us to accurately predict the future, it does allow us to “widen our horizons, to understand that our present situation is neither natural or inevitable, and that we consequently have many more possibilities before us than we imagine.”

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