Harvard University Press Blog

Neoliberal Penality and the Chicago Police State

“The market is the best mechanism ever invented for efficiently allocating resources to maximize production . . . I also think that there is a connection between the freedom of the marketplace and freedom more generally.” As political scientist Bernard Harcourt notes, these are surprisingly not the words of Friedrich Hayek or Milton Friedman, but of then-candidate Barack Obama, in the summer of 2008. As Harcourt demonstrates in The Illusion of Free Markets: Punishment and the Myth of Natural Order, a clear relationship exists between the pervasive expectation that the federal government should (or at least could) stay out of market matters, on the one hand, and the public and political acceptance of the expansion and naturalization of government’s role in policing and incarceration, on the other.

Harcourt refers to this self-perpetuating schema—in which a belief in the government’s obligation to respect the illusory freedom of markets can thrive alongside an urge to continually restrict the freedom of people—as “neoliberal penality,” and details how it facilitates the expansion of the penal sphere. Most directly, he notes, the logic provides politicians with rhetorical tools with which to enact prison-packing tough-on-crime policies. Harcourt cites Katherine Beckett’s work in demonstrating Ronald Reagan’s advocacy of the paradoxical rubric by which public assistance can be deemed an illegitimate state function while policing and social control are its obligation. Here’s Reagan speaking at a fundraiser:

This is precisely what we’re trying to do to the bloated Federal Government today: remove it from interfering in areas where it doesn’t belong, but at the same time strengthen its ability to perform its constitutional and legitimate functions. . . . In the area of public order and law enforcement, for example, we’re reversing a dangerous trend of the last decade. While crime was steadily increasing, the Federal commitment in terms of personnel was steadily shrinking.

Harcourt characterizes this as the “core idea in neoliberal penality,” this notion that the government should respect the self-contained orderliness of the economic sphere, yet has a legitimate role to play outside that sphere, especially in law enforcement.

Cut to Chicago site of this week’s NATO summit, where world leaders discussed global issues of “security in an age of austerity.” Pictured at right are those very world leaders, posing together for a commemorative photograph. Below, in striking contrast, we see images of the security forces present in Chicago during the meeting.

The photos, taken by Harcourt’s daughter Isadora Ruyter-Harcourt, depict what Harcourt dubbed “the Chicago Police State 2012.”

When Wal-Mart Went to Mexico

The front page of the April 21st New York Times carried a long investigative report detailing allegations of widespread bribery at Wal-Mart’s Mexican subsidiary. According to documents obtained by the Times, Wal-Mart de Mexico orchestrated a multi-year campaign of bribery to win market dominance, paying off officials in “virtually every corner of the country” in its rush to build stores. After being alerted of the pattern of wrongdoing in 2005, reports the Times, Wal-Mart’s leaders ordered that the internal investigation be shut down. The Times characterizes the entire affair as a prolonged struggle at Wal-Mart’s highest levels, pitting “the company’s much publicized commitment to the highest moral and ethical standards against its relentless pursuit of growth.”

With the company now in full damage control mode and watching its stock price fall, it’s worth reflecting on the origins of Wal-Mart’s expansion into Mexico, currently home to one in five Wal-Mart stores. In the text below, excerpted from her 2009 book To Serve God and Wal-Mart: The Making of Christian Free Enterprise, Bethany Moreton details the crucial role that the company’s expansion into Mexico played in the U.S. debate over the North American Free Trade Agreement (NAFTA). “For a brief but decisive moment in U.S. politics,” she writes, “the key to imagining free trade was Wal-Mart in Mexico.” What follows is an early ’90s story of globalization, market deregulation, and what’s now alleged to be systematic law-breaking, with cameos from the likes of the Clintons, Ross Perot, Al Gore, and Newt Gingrich.

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In 1965, Mexico had begun experimenting with export-oriented maquiladoras [manufacturing operations] along its northern border, where some areas enjoyed duty-free status to entice manufacturers. Such efforts, however, did not attract much attention initially, nor were they meant to: Mexican policy from the 1940s to the 1980s remained committed to developing native industry for domestic consumption behind protective tariff walls, just as the United States and Britain had done in the nineteenth century.

Between 1940 and 1980, this strategy produced annual growth rates of over 6 percent and a steady rise in real wages. But the “Mexican Miracle” came at a price, one increasingly met through high-interest loans from American banks. In 1982, the Mexican finance minister was forced to go to Washington, hat in hand: the country could not honor its foreign payment schedule. In return for emergency loans, Mexico submitted to free-market restructuring, cutting social services, privatizing hundreds of state-owned enterprises, and joining the Uruguay Round of the General Agreement on Tariffs and Trade. The buying power of the Mexican minimum wage dropped by almost 70 percent between 1982 and 1991. Industrial wages fell by almost half; per capita basic food consumption dropped 30 percent.

In early 1991, following announcements of negotiations for NAFTA, American investment in Mexico jumped to two and a half times its previous rate. In this context, then, Wal-Mart’s decision to enter Mexico’s retail market represented part of a larger shift underway to realign the post–Cold War global geography from NATO and the Warsaw Pact into competing free-trade areas. President George H. W. Bush negotiated the agreement with the help of the business-heavy Advisory Committee for Trade Policy and Negotiations. A business coalition of more than 500 corporations—“a virtual lobbying Who’s Who”—helped the administration secure Congressional approval for fast-tracking the treaty, or requiring an up-or-down vote without the possibility of amendments. The constitutional division of labor that had often stymied free traders—commercial regulation to Congress, but foreign policy to the executive branch—could thus be short-circuited: It was to be the trade agreement hammered out by President Bush, or no trade agreement at all.

But the old Cold Warrior was not the visionary who could see it through to ratification. That job fell to Arkansan Bill Clinton, whose wife resigned from Wal-Mart’s board to help her husband’s presidential campaign in 1992. Despite his party’s resolution against NAFTA in 1991 and his own ambivalence toward it during the campaign, the new president threw his support to the treaty in 1993. The key for business under the new administration was now to see the trade agreement through a scheduled vote in the House in mid-November. If they lost, and a new round of negotiations opened up, it might be years before they could muster the political will to pass another version, what with the recession and climbing unemployment.

The Business Roundtable swung into action. It organized 2,300 corporations into USA-NAFTA and assigned state captaincies to Roundtable members. The captains—all but four of whom had participated in the treaty negotiations through seats on the Bush-era advisory boards— mobilized unprecedented business unity in campaigning for public opinion through every conceivable media outlet, from op-eds to talking heads. “You may also want to consider involving employees in a company-wide letter-writing campaign,” suggested the Illinois NAFTA Coalition in a July 1993 memo to its members. Procter & Gamble, a major Wal-Mart vendor, promoted the treaty’s potential to double the company’s export market in a quarterly report to its 170,000 stockholders. Wal-Mart made early appearances as a symbol for this export potential. “Here’s a country with 86 million people, trying to grow and needing access to the kind of products we have here,” said a USA-NAFTA council member. “I’ve been told by the leadership of Wal-Mart that they can’t get enough American-made product into their stores they are now building in Mexico.”

Budgets, Ethics, and Social Darwinism

In a speech widely considered to be his first blow in the general election campaign against likely Republican nominee Mitt Romney, President Obama last week denounced the budget proposal put forth by Republican Congressman Paul Ryan. Whereas Romney has described Ryan’s budget as “marvelous,” Obama made his own opinion of the budget clear:

Disguised as [a] deficit reduction plan, it’s really an attempt to impose a radical vision on our country. It’s nothing but thinly-veiled Social Darwinism. It’s antithetical to our entire history as a land of opportunity and upward mobility for everyone who's willing to work for it— a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of the middle class. And by gutting the very things we need to grow an economy that's built to last—education and training; research and development—it’s a prescription for decline.

Those comments have been a hot topic on the news shows, with Ryan himself weighing in to describe Obama’s remarks as a “verbal tantrum” more petulant than presidential. “He’s trying to use this kind of rhetoric to distort away from his failed record,” Ryan told NBC.

Yet, writing at the NYT blog The Stone, philosopher Philip Kitcher notes that while the common conception of “Social Darwinism” actually has little to do with the ideas of Charles Darwin, the term as generally understood does, in fact, apply to this Republican budget proposal. He outlines the concept’s meaning:

The heart of social Darwinism is a pair of theses: first, people have intrinsic abilities and talents (and, correspondingly, intrinsic weaknesses), which will be expressed in their actions and achievements, independently of the social, economic and cultural environments in which they develop; second, intensifying competition enables the most talented to develop their potential to the full, and thereby to provide resources for a society that make life better for all. It is not entirely implausible to think that doctrines like these stand behind a vast swath of Republican proposals, including the recent budget, with its emphasis on providing greater economic benefits to the rich, transferring the burden to the middle-classes and poor, and especially in its proposals for reducing public services. Fuzzier versions of the theses have pervaded Republican rhetoric for the past decade (and even longer).

There are very good reasons to think both theses are false. Especially in the case of the Republican dynasties of our day, the Bushes and the Romneys, success has been facilitated by all kinds of social structures, by educational opportunities and legal restrictions, that were in place prior to and independently of their personal efforts or achievements. For those born into environments in which silver spoons rarely appear—Barack Obama, for instance—the contributions of the social environment are even more apparent. Without enormous support, access to inspiring teachers and skillful doctors, the backing of self-sacrificing relatives and a broader community, and without a fair bit of luck, the vast majority of people, not only in the United States but throughout the world, would never achieve the things of which they are, in principle, capable. In short, Horatio Alger needs lots of help, and a large thrust of contemporary Republican policy is dedicated to making sure he doesn’t get it.

Second, even if rigorous competition enables the talented — or, better, the lucky — to realize their goals, it is completely unwarranted to suppose that their accomplishments will translate into any increased benefit for the overwhelming majority of those who are less fortunate. The strenuous struggle social Darwinism envisages might select for something, but the most likely traits are a tendency to take whatever steps are necessary to achieve a foreseeable end, a sharp focus on narrowly individual goals and a corresponding disregard for others. We might reasonably expect that a world run on social Darwinist lines would generate a cadre of plutocrats, each resolutely concerned to establish a dynasty and to secure his favored branch of industry against future competition. In practical terms it would almost certainly yield a world in which the gap between rich and poor was even larger than it is now.

On a Desert Island, with Soup

Heard the one about the physicist, the chemist, and the economist on a desert island? If you work here you have; it’s been our favorite joke this year.

Goes like this:

A physicist, a chemist, and an economist are stranded on a desert island. One can only imagine what sort of play date went awry to land them there. Anyway, they’re hungry. Like, desert island hungry. And then a can of soup washes ashore. Progresso Reduced Sodium Chicken Noodle, let’s say. Which is perfect, because the physicist can’t have much salt, and the chemist doesn’t eat red meat.

But, famished as they are, our three professionals have no way to open the can. So they put their brains to the problem. The physicist says “We could drop it from the top of that tree over there until it breaks open.” And the chemist says “We could build a fire and sit the can in the flames until it bursts open.”

Those two squabble a bit, until the economist says “No, no, no. Come on, guys, you’d lose most of the soup. Let’s just assume a can opener.”

GET IT?

You can’t just assume a can opener and have it appear, obviously. But economists regularly rely on analogous assumptions of conditions that don’t actually exist in the real world. This is one of the fundamental ways in which economics differs from the hard sciences, even though economists often seek to present their views with the certainty of, say, a physicist or chemist.

In The Assumptions Economists Make, Jonathan Schlefer digs into this manner of assumption-based economic modeling that leads opposing economists to come to drastically different conclusions. It’s kind of like an outsider’s guide to economic thought, meant to help us understand just how ideologically determined an economist’s work can sometimes be, and also how shockingly wrong, as we all learned the hard way when the bottom fell out of the economy in 2008.

To Schlefer, it’s his own position outside the field that helps him to explain its workings:

Be warned: as a card-carrying political scientist, I may entertain a certain smoldering envy toward the imperialistic powers of the social sciences—namely, university economics departments. But my outsider’s perspective has its uses, since I am duly startled by features of the economics landscape that economists barely notice, so inured have they become to them. Moreover, I’m curious about economics. You need curiosity to write about anything you might criticize, because otherwise you never spend the energy and thought to figure out what it says in the first place. And sometimes when you figure out what it says, criticisms you thought you had evaporate, strengthen, or otherwise change.

Indexing the Age of Fracture

Daniel T. Rodgers, Henry Charles Lea Professor of History at Princeton University, has been named a winner of the 2012 Bancroft Prize for Age of Fracture, his exposition of the late-20th century dissolution of the ideas that had previously served to shape Americans’ understanding of the world. The Bancroft is one of the most distinguished academic awards in the field of history, and, says the book’s editor, Joyce Seltzer, for Rodgers it was well-deserved:

The very first time I read Dan’s manuscript, I knew it was very special. He managed to brilliantly characterize the last three decades of intellectual discourse in the U.S. so as to enable me to see it in a new and revealing light. By mapping out major ideas about the market, race, gender, political obligations, and social welfare, and demonstrating the shift from collective to fragmented perspectives and outlooks, Dan makes the radical changes taking place in our way of thinking provocatively clear. I began to see the transformation he explored everywhere—in the arts, sciences, and in our social and political relations and expectations. Age of Fracture is a wake-up call to all of us that we must pull together again for the greater welfare and future of our community and nation.

Accurately and coherently characterizing an era is a challenging endeavor, especially when one’s period of inquiry is so recent. In his Prologue, Rodgers quotes Stuart Hall on the naming of ages: “What is important are the significant breaks—where old lines of thought are disrupted, older constellations displaced, and elements, old and new, are regrouped around a different set of premises and themes.” Though the task is to focus on major ideological threads, rather than to catalogue an age’s every idea, one of the striking things about Age of Fracture is just how much ground Rodgers is able to cover in a book that comes in well under 400 pages.

Age of Fracture is certainly no pastiche, though, and it’s also not the sort of free associative cultural criticism that we’d associate with, say, Greil Marcus. Nevertheless, Rodgers makes his way from Jimmy Carter to Judith Butler, the Civil War to the Culture Wars, Game Theory to the Gay Rights Movement, Nietzsche to Noonan, Earl Warren to Alice Walker, Harriet Beecher Stowe to Howard Stern. He covers so much ground, in fact, that we thought we’d just be blunt about it and offer up the Index. Give it a skim or a scour below.

But Which Keynes?

During the economic meltdown of 2008, when politicians and pundits were casting about for explanations, it was far from certain that the ideas of John Maynard Keynes would come roaring back into public discourse. Just a few years earlier, Keynes was hardly mentioned in discussions of economic policy. But then down goes Lehman and here comes Keynes, back in the headlines. Then comes government spending, then government debt, then fear of default and aggressive partisan politics, and then it’s back to bye bye for Keynes. ‘Twas but a quick return engagement, a cameo based in caricature, say Roger E. Backhouse and Bradley W. Bateman, authors of Capitalist Revolutionary: John Maynard Keynes. This most recent appearance was only one of many such returns, they argue, each of which seems to have been based on a different version of the multi-faceted economist. From Capitalist Revolutionary:

The Keynes who was recently and so suddenly resurrected is far from being the only Keynes to have appeared in public debate in the last half-century. He is not the same person who was famous in the middle of the twentieth century, during what was widely called “the age of Keynes.” Neither is he the Keynes who was rejected so decisively by economists and politicians in the 1970s. Keynes and Keynesianism have been reinterpreted time and time again, both by those who seek to claim his authority for positions they want to adopt and by those who denounce him, using him as a foil against which they can present their own ideas. This repeated reinterpretation should not be a surprise. We now see the world differently from the way people saw it in the 1940s, in the immediate aftermath of the Second World War; in the 1960s, when Kennedy and Johnson were trying to manage the economy; or even in the 1970s, when the current movements against “big government” and the welfare state were first getting under way.

One reason for seeing Keynes differently is that the world has changed. The trends that get swept into the category of “globalization” have transformed the world economy, just as the end of the Cold War and the end of Communism transformed the political climate. Present-day skepticism about whether politicians and businessmen can be trusted to do anything other than line their own pockets contrasts dramatically with the widespread confidence in government and planning found in the thirty years following the Second World War. These changes have had a profound effect on which Keynes people have been able to see. There is, however, another reason for seeing Keynes differently. Keynes and Keynesianism were multidimensional. Unusually, Keynes straddled the worlds of academia, journalism, government, and business, with the result that he cannot (or should not) be pigeonholed only as the designer of economic policies or just as an important economic theorist who sought the fundamental laws governing the operation of capitalist economies. He was both of these, and to leave out one or the other of them distorts our view of the whole. He was, moreover, also a philosopher who offered a moral critique of capitalism.

Hardt and Negri on "The Problem of Transition"

Now in its seventh week, the Occupy Wall Street movement continues to expand and evolve. Notable events this week include the successful effort by Occupy Oakland protesters to shut down the city’s port, the fifth busiest in the nation, and tomorrow’s coordinated “Bank Transfer Day,” when those opposing our banking system plan to move their money from large corporate banks to local institutions. Throughout the movement’s duration, much attention has been focused on its governance structure and on its “demands.” For the protesters themselves, these things are deeply intertwined: the decision-making process is just as critical as the decisions. The dynamic puts us in mind of the work of Michael Hardt and Antonio Negri, co-authors of Empire, Multitude, and Commonwealth. In the following excerpt from Commonwealth, the authors discuss how the governance structure of a movement can itself help to prepare its participants for what comes next. Or, in terms of Occupy, how the work of deciding on “demands” can itself create the conditions for their achievement.

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Too much of revolutionary thought does not even pose the problem of transition, paying attention only to the overture and neglecting all the acts of the drama that must follow. Defeating the ruling powers, destroying the ancien régime, smashing the state machine—even overthrowing capital, patriarchy, and white supremacy—is not enough. That might be sufficient, perhaps, if one were to believe that the formation of the multitude was already achieved, that we were all already somehow not only purified of the hierarchies and corruptions of contemporary society but also capable of managing the multiplicity of the common and cooperating with one another freely and equally—in short, that democratic society was already complete. If that were the case, then, yes, maybe the insurrectional event destroying the structures of power would be sufficient and the perfect human society already existing beneath the yoke of oppression would spontaneously flourish. But human nature as it is now is far from perfect. We are all entangled and complicit in the identities, hierarchies, and corruptions of the current forms of power. Revolution requires not merely emancipation, as we said earlier, but liberation; not just an event of destruction but also a long and sustained process of transformation, creating a new humanity. This is the problem of transition: how to extend the event of insurrection in a process of liberation and transformation.

Condorcet proclaims, and Hannah Arendt echoes him almost two hundred years later, that “the word ‘revolutionary’ applies only to revolutions that have freedom as their object.” We would extend this to say that revolutions must have democracy as their object and thus that the direction and content of revolutionary transition must be defined by the increase of the capacities for democracy of the multitude. People are not spontaneously, by nature, capable of cooperating with one another freely and together governing the common. W. E. B. Du Bois, for example, studying the promises, betrayals, and failures of Reconstruction after the U.S. Civil War, is keenly aware that emancipation alone is not sufficient. In addition to all the traps and subterfuges of the U.S. government and dispossessed Southern slaveholders, in addition to the color and class hierarchies created by Northern carpetbagger capitalists, Du Bois also focuses on the problem that even after the abolition of slavery the vast majority of the population, white and black alike, remains poor and ignorant, lacking the capacities for democracy. Emancipation is only the beginning.

In the annals of modern revolutionary thought Lenin provides the locus classicus for understanding the revolutionary transition. Lenin recognizes, as we noted earlier, that human nature as it is now is not capable of democracy. In their habits, routines, mentalities, and in the million capillary practices of everyday life, people are wedded to hierarchy, identity, segregation, and in general corrupt forms of the common. They are not yet able to rule themselves democratically without masters, leaders, and representatives. Lenin thus proposes a dialectical transition composed of two negations. First, a period of dictatorship must negate democracy in order to lead society and transform the population. Once a new humanity has been created, capable of ruling itself, then dictatorship will be negated and a new democracy achieved. Lenin has the great merit of posing the problem clearly, but his dialectical solution is today widely and rightly discredited, not only because “transitional” dictatorships so stubbornly hold on to power, resisting the dialectical inversion in democracy, but more important because the social structures of dictatorship do not foster the training in democracy necessary to make the multitude. On the contrary! Dictatorship teaches subservience. Democracy can be learned only by doing.

The problem of transition must be given a positive, nondialectical solution, leading toward democracy through democratic means. Our analysis in the previous section has already developed some elements for such a democratic transition. The insurrectional event, we explained, must be consolidated in an institutional process of transformation that develops the multitude’s capacities for democratic decision making. Making the multitude is thus a project of democratic organizing aimed at democracy. Rather than counting on the boomerang effect of the dialectic to thrust the process at the final moment to the opposite end of the spectrum, this notion of transition delineates an asymptotic approach such that even if the movement never reaches a conclusion, the distance between transition and goal, between means and end becomes so infinitesimal that it ceases to matter. This process should not be confused with old reformist illusions that insist on gradual change and constantly defer revolution into the indefinite future. No; rupture with contemporary society and its ruling powers must be radical: as much as insurrection is swept up in the process of transition, transition must constantly renew the force of insurrection. Often in evaluating the state of the present society, in other words, the point is not to haggle over whether the glass is half empty or half full but to break the glass!

Thomas Sargent Shares 2011 Nobel Prize in Economics

Our congratulations to Thomas J. Sargent, who shares this year’s Nobel Prize in Economics with Christopher A. Sims for their empirical research on cause and effect in the macroeconomy. In 1987 we published Sargent’s Dynamic Macroeconomic Theory, along with its companion volume, Exercises in Dynamic Macroeconomic Theory, which was written with Rodolfo E. Manuelli. Our Lindsay Waters, who acquired those books for HUP, had previously published both Sargent and Sims while at the University of Minnesota Press.

The Nobel press release describes Sargent’s work:

Thomas Sargent has shown how structural macroeconometrics can be used to analyze permanent changes in economic policy. This method can be applied to study macroeconomic relationships when households and firms adjust their expectations concurrently with economic developments. Sargent has examined, for instance, the post-World War II era, when many countries initially tended to implement a high-inflation policy, but eventually introduced systematic changes in economic policy and reverted to a lower inflation rate.

And, further explanation via the Nobel website:

What happens in the macroeconomy when monetary policy systematically follows a Taylor rule, i.e., when the interest rate responds to changes in inflation and the business cycle in a pre-determined pattern? Or what happens if a central bank is instead given a mandate to maintain inflation close to two percent? Sargent’s analysis deals with the effects of such systematic policy rules and the consequences of changes in the rules for policy. Expectations are an integral part of this analytical approach.

Is it possible to determine whether changes in the economy depend on shifts in economic policy? Could such changes instead depend on fluctuations in the overall economy that prompt decision-makers to adopt a different policy? Sargent has examined these issues using a three-step method.

His first step involves developing a structural macroeconomic model, i.e., an accurate mathematical description of the economy. A number of parameters, which determine the relationships among different variables, are introduced into the model. For instance, if we know that consumers’ aggregate demand for goods and services is affected by the expected real interest rate, this relationship should be incorporated in the model. The parameters governing such basic relations should not be affected by the changes in economic policy. This includes preference parameters, which describe how individuals choose between saving and consumption depending on interest rates and income.

“Riots in The Cause of Consumer Goods"

It’s difficult to discuss what’s been happening in London this past week without tipping one’s ideological hand from jump. The language calls for choices that reflect opinions. “Rioting” is the term being used most frequently by politicians and news outlets. Many on the left reject that label, though. “Uprising” is a term they see as more appropriate. Others, like the journalist Darcus Howe, call it an “insurrection.” Many who use the term “rioting” are inclined to dismiss the people on the streets as opportunistic looters, acting out with no cause; those saying “insurrection” and “uprising” tell a different story, of a politically and economically neglected group set off by the police shooting of a young black man.

The shooting itself may have been an unpredictable spark, but Paul Gilroy, via twitter, noted that “It is completely absurd to say that nobody expected this.” Gilroy, a professor at the London School of Economics who we’ve published several times, has been tweeting about the situation all week. People online have been turning to him for insight, but he’s remained resolute in his stance that the cause of these events is plain.

“We all know perfectly well why this is happening. The price of operating inside the official bubble is too high these days.”

“You already know enough. So do I. It's not knowledge we lack what is missing is the courage to understand what we know & to draw conclusions.”

Gilroy also retweeted the following from @DayMoonRoseDawn:

“They said we had to BUY! BUY! We couldn't afford it, so they gave us credit and said BUY! BUY! Then they stop the credit. It's now byebye!”

This socioeconomic analysis was echoed in a Granta post by Gabriel Gbadamosi:

These looters are doing what they’re supposed to; grabbing the goods they see in the shops and can’t buy in a recession. They loot the bling – the sports shoes, gold watches, mobile phones and plasma TVs; and you can recognize the very poor when you see a woman looting potatoes from a corner shop. These acquisitive looters are certainly copying the gold standard of a social contract eroded by and evaporating with the money. These are riots in the cause of consumer goods.

That’s also the explanation offered by the sociologist Zygmunt Bauman, whose Does Ethics Have a Chance in a World of Consumers?, we published in 2008. Bauman wrote a post for Social Europe Journal on “Consumerism Coming Home to Roost.” “These are not hunger or bread riots,” he explained. “These are riots of defective and disqualified consumers.” More:

From cradle to coffin we are trained and drilled to treat shops as pharmacies filled with drugs to cure or at least mitigate all illnesses and afflictions of our lives and lives in common. Shops and shopping acquire thereby a fully and truly eschatological dimension. Supermarkets, as George Ritzer famously put it, are our temples; and so, I may add, the shopping lists are our breviaries, while strolls along the shopping malls become our pilgrimages. Buying on impulse and getting rid of possessions no longer sufficiently attractive in order to put more attractive ones in their place are our most enthusing emotions. The fullness of consumer enjoyment means fullness of life. I shop, therefore I am. To shop or not to shop, this is the question.

For defective consumers, those contemporary have-nots, non-shopping is the jarring and festering stigma of a life un-fulfilled – and of own nonentity and good-for-nothingness. Not just the absence of pleasure: absence of human dignity. Of life meaning. Ultimately, of humanity and any other ground for self-respect and respect of the others around.

This way of thinking presents modern society as a world organized around consumption, certain to break down when economic collapse excludes so many from the consuming. Of course, consumption has only replaced other earlier points of consensus, and the events in London serve as a reminder of that shift. We heard from Richard Howells, our European Sales Director, based in our London office, that the past week has left him thinking of Daniel Rodgers’ recent book, Age of Fracture. The book looks specifically at the US, but much of its analysis of the increasing fluidity and even breakdown of all of our mid-century principles of collective purpose can also help us to understand the UK. Rodgers argues that our categories of social reality have been fractured, and, as Richard relates, London is seeing the effects of that fracture on its streets.

How WWI-Era Federal Debt Transformed U.S. Culture & Economy

In 1900 the average American had nearly nothing to do with financial markets and institutions, but by the time of the stock market crash of 1929 stock ownership had spread to a quarter of American households. In When Wall Street Met Main Street: The Quest for an Investors' Democracy, Julia C. Ott traces this expansion of investment through the opening decades of the twentieth century. While American policymakers wrangle over raising the debt ceiling in 2011, Ott explains below how the mass effort to underwrite the federal debt incurred during World War I played a central part in the U.S. transition to an investors’ democracy.

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This summer’s controversy over whether Congress should raise the debt ceiling reveals Americans’ deep discomfort with a government that can’t balance its books. Voices on the right call for cutting, freezing, or privatizing programs in order to rein in spending. Those on the left hope to grow revenue by repealing the Bush tax-cuts or by invigorating the economy with further stimulus measures. No one defends a large outstanding federal debt as a positive good for the nation.

This has not always been the case. During the First World War, many welcomed the vastly enlarged federal debt, envisioning that universal investment in war bonds would yield a better postwar society. Americans began to think differently about financial securities investment during World War I, which fostered widespread stock ownership in the 1920s. The Great War, therefore, marks a major turning point in When Wall Street Met Main Street, which considers how Americans’ relationships with financial securities markets changed dramatically—and permanently—in the first three decades of the twentieth century.

When the United States entered World War I, the federal debt more than tripled in size, relative to GDP. This unprecedented increase in borrowing by the U. S. government was not understood simply as a wartime necessity. Rather, policymakers and citizens alike celebrated the Liberty Loan, Victory Loan, and War Savings programs—which parceled out the war debt as small-denomination bonds—as means of cultivating support for an unpopular war, unifying a heterogeneous population, enhancing their citizenship, and ensuring a more secure and prosperous future for all. The architects of these War Loan programs believed that universal investment would transform all inhabitants into citizen-investors possessing a “stake” in the nation, regardless of their formal political status. At a historical moment marked by passionate debate over the meaning of citizenship and nationhood, the War Loan drives invited Americans to imagine the nation as a financial market, one in which investment both made and manifested citizenship.

The Treasury Department determined the goals, terms, quotas, and key themes for the War Loan drives. But, on the ground, Americans mobilized themselves through the broad array of private associations that organized public life. Groups representing those whose fealty the state sought to secure—especially women’s, labor, African-American and ethnic associations—proved particularly important in the financial mobilization of the home-front. As these groups rallied their members to raise money for the war, they advanced a wide range of answers regarding which political, social, and economic rights the citizen-investor could claim.