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David Ricardo: Machiavelli of the Margin

13 Nov

In my course this semester at the Graduate Center, “The Political Theory of Capitalism,” we’ve been exploring how some of the classics of modern political economy translate, traduce, transmit, efface, revise, and/or sublimate traditional categories of and concepts in Western political theory: consent, obedience, rule, law, and so forth.

Through economic thinkers like Smith, Ricardo, Keynes, Schumpeter, Jevons, and the like, we try and read political economy as the distinctively modern idiom of political theory. In the same way that religion provided a distinctive language and vocabulary for political thought after Rome and before the Renaissance, might not economics provide modern political theory with its own distinctive idiom and form? In other words, our interest in the political moment of economic discourse is not when the state intervenes or intrudes; it’s when economic discourse seems to be most innocent of politics. That’s when we find the most resonant and pregnant political possibilities.

I’ll give you an example.

For the last several weeks we’ve been reading and talking about Ricardo’s On the Principles of Political Economy and Taxation, which I have to admit, damn near killed me. Turns out it’s really hard to teach a text you don’t understand.

But one of the more interesting—and, at least to me, semi-intelligible—arguments in Ricardo is his account of rent. (I don’t think the problem is Ricardo; it’s me.) For it’s there, in his chapter on rent, that he introduces the idea of the margin. I could be wrong, but I don’t see anything like a notion of the margin in other parts of the book. It’s all in his chapter on rent. (Ricardo experts or intellectual historians: is that right? Are there other places in Ricardo’s texts where he talks about the margin? Were there other theorists prior to Ricardo who talked about it?)

Now that in and of itself is interesting: Is there something to be gleaned from or learned about the idea of the margin from the fact that it arose, for Ricardo, in the context of a discourse on rent?

Anyway, here are three places in his chapter on rent where he talks about the idea of the margin:

The reason then, why raw produce rises in comparative value, is because more labour is employed in the production of the last portion obtained, and not because a rent is paid to the landlord.

Raw material enters into the composition of most commodities, but the value of that raw material, as well as corn, is regulated by the productiveness of the portion of capital last employed on the land, and paying no rent; and therefore rent is not a component part of the price of commodities.

It follows from the same principles, that any circumstances in the society which should make it unnecessary to employ the same amount of capital on the land, and which should therefore make the portion last employed more productive, would lower rent.

Ricardo’s basic idea of rent is that it arises from the differential in the quality of two tracts of land. So we start with land that is lush and fertile and easily farmed. At some point the population will require more food and more land will have to be put into play. So we move to the next piece of land, which is slightly less fertile and lush. At that point, the first piece of land generates a rent: the farmer and/or capitalist who use it will be willing to pay slightly extra in order not to have to use the slightly less fertile lend. And then we move to the third piece of land. And so on.

Ricardo’s basic intuition is that rent arises from difference:

If all land had the same properties, if it were unlimited in quantity, and uniform in quality, no charge could be made for its use, unless where it possessed peculiar advantages of situation. It is only, then, because land is not unlimited in quantity and uniform in quality, and because in the progress of population, land of an inferior quality, or less advantageously situated, is called into cultivation, that rent is ever paid for the use of it. When in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land.

At some point, we reach a final piece of land, beyond which it simply does not pay to work it at all. That final piece of land generates no rent; all it can afford is a wage to the laborer and a profit to labor’s employer. The tract of land just before that one generates a very little bit of rent. The one before that a little bit more. And so on back to the best land.

That last piece of really crappy land—with its concomitant last exertion of labor or last expenditure of capital—sets the value for the class of commodities that are produced on all the lands. For it is there, on that worst land, that the most labor will have to be expended in order to generate the commodity (the amount of labor required to produce the commodity determines the value of the commodity).

The exchangeable value of all commodities, whether they be manufactured, or the produce of the mines, or the produce of land, is always regulated, not by the less quantity of labour that will suffice for their production under circumstances highly favorable, and exclusively enjoyed by those who have peculiar facilities of production; but by the greater quantity of labour necessarily bestowed on their production by those who have no such facilities; by those who continue to produce them under the most unfavorable circumstances; meaning—by the most unfavorable circumstances, the most unfavorable under which the quantity of produce required, renders it necessary to carry on the production.

And while that last bit of land generates no rent—for all the value of the commodities sold is devoted to the wages of labor and the profit of the capitalist—every infinitesimal differential above that last bit of land will generate a rent. And though that last bit of land doesn’t generate a rent, the value of the rents on the better lands will be set by the value of the commodities produced on that last bit of land. The value of the commodities on that last bit will be high—”with every worse quality [of land] employed, the value of the commodities in the manufacture of which they were used, would rise, because equal quantities of labour would be less productive”—so the more productive labor working the better land will produce more commodities, so that better land will fetch a high rent.

Anyway, that’s the little bit of economics I could figure out (and I probably didn’t even get that right.)

But here’s the interesting part for me, as a political theorist.

In political theory, the great political moment, the highest mode of political action, is the founding of a new polity. Read Machiavelli, Montesquieu, Rousseau, Tocqueville, Nietzsche, Arendt: the founding moment is when all the basic laws, institutions, customs and mores of the polity are set out. It’s a moment of great drama and great art (that’s why Aeschylus mined it to such tremendous effect in the last play of the trilogy The Oresteia).

For political theorists of this vein, the further away you move from the founding moment—the further in time and place—the more loss, decay, corruption you will see. There is simply a fact of entropy that sets in, once the fervor and fever of that founding moment is lost. Machiavelli’s great obsession with Rome has much to do with the distance in time and space that the republic/empire travels from its founding as a small city.

The art of politics, then, is to steal back from time (and space) what it takes from the polity as it was founded, to deprive age of its ravages, to find a way to repeat the intensity, the engagement, the connection and commitment, of that founding moment. Whether through education, laws, festivals, rites, wars, what have you.

It struck me in reading Ricardo just how much the marginal theory of rent turns that idea of a founding moment on its head. Where the western theoretical tradition begins with a moment in time and place, and sees a threat in any movement away from that time and place, Ricardo’s theory of the margin begins at the opposite end of that process, with the last tract of land, which is furthest removed from the original tract in both time and space. And where the founding tradition of political theory sees the founding as the source of value from which all politics and morals emanate and decay—the founding is the pacesetter of values—the marginal theory of rent sees the outer limits of decay and decadence as the source of value: of the labor on that outer tract of land that is required for the production of the commodity, of the value of the commodity itself, and of the rent that commodity will generate on the inner tracts of land.

Ricardo himself seems to have had some intuition of how strange this all is. Not from a political theory perspective (though his comments are quite generative on that score) but from a more general cultural and sociological perspective:

Nothing is more common than to hear of the advantages which the land possesses over every other source of useful produce, on account of the surplus which it yields in the form of rent. Yet when land is most abundant, when most productive, and most fertile, it yields no rent; and it is only when its powers decay, and less is yielded in return for labour, that a share of the original produce of the more fertile portions is set apart for rent. It is singular that this quality in the land, which should have been noticed as an imperfection, compared with the natural agents by which manufacturers are assisted, should have been pointed out as constituting its peculiar pre-eminence.

Rent arises from decay, from the distance traveled from that founding tract of land.

And here’s where the fact that the marginal theory arises in the context of an account of rent, of money paid to a semi-aristocratic landlord, might matter. For in classical political theory of the kind we’ve been examining here, the supreme political actor is often assumed to be some sort of propertied worthy, a member of the landed gentry (that was part of the Country tradition of Bolingbroke’s circle in 18th century England) or such. His landed independence frees from him the imperatives of fear and favor, makes him a creature of civic virtue. It is a precondition of his agency.

But in Ricardo’s hands, the landlord is completely without agency. He’s more than a parasite; he’s utterly passive. Not only do his rents derive from the activities of others, but they go up in response to the imperatives of population growth that compel the harvesting of new and less fertile lands. He doesn’t act at all; he merely presides over and profits from the expansions and exertions of others.

And where the landed gentry of the political tradition are expected to attend to the maintenance and the upkeep of the polity, the preservation of its founding fervor, the landlords of Ricardo have a vested interest in the decay and demise of the lands and labors surrounding them. For that decay and demise provide the raw ingredients of difference that serve as the source of their rents.

Without multiplying instances, I hope enough has been said to show, that whatever diminishes the inequality in the produce obtained from successive portions of capital employed on the same or on new land, tends to lower rent; and that whatever increases that inequality, necessarily produces an opposite effect, and tends to raise it.

…it is obvious that the landlord is doubly benefited by difficulty of production. First, he obtains a greater share, and secondly the commodity in which he is paid is of greater value.

If what I’m saying about Ricardo’s theory of rent (and the significance of the margin for that theory) is true, the question becomes: to what extent can we read the entire tradition of marginal economics, which comes later and moves significantly beyond the category of rent, in a similar light, as standing the basic categories and concepts of political foundings on their head?

Update (November 13, 11:45 pm)

Several folks have asked me to post a copy of the syllabus. Which I thought I had a while back, but turns out the link is dead. So here it is now.

Smith/Brecht

29 Sep

Adam Smith, The Theory of the Moral Sentiments:

The poor man, on the contrary, is ashamed of his poverty. He feels that it either places him out of the sight of mankind, or, that if they take any notice of him, they have, however, scarce any fellow-feeling with the misery and distress which he suffers. He is mortified upon both accounts. For though to be overlooked, and to be disapproved of, are things entirely different, yet as obscurity covers us from the daylight of honour and approbation, to feel that we are taken no notice of, necessarily damps the most agreeable hope, and disappoints the most ardent desire, of human nature. The poor man goes out and comes in unheeded, and when in the midst of a crowd is in the same obscurity as if shut up in his own hovel….The man of rank and distinction, on the contrary, is observed by all the world. Every body is eager to look at him, and to conceive, at least by sympathy, that joy and exultation with which his circumstances naturally inspire him. His actions are the objects of the public care. Scarce a word, scarce a gesture, can fall from him that is altogether neglected. In a great assembly he is the person upon whom all direct their eyes; it is upon him that their passions seem all to wait with expectation, in order to receive that movement and direction which he shall impress upon them; and if his behaviour is not altogether absurd, he has, every moment, an opportunity of interesting mankind, and of rendering himself the object of the observation and fellow-feeling of every body about him.

Bertolt Brecht, “Mackie Messer” (“Mack the Knife“), Three Penny Opera:

And some are in the darkness
And the others in the light
But you only see those in the light
Those in the darkness you don’t see

But you only see those in the light
Those in the darkness you don’t see

[Und die einen sind im Dunkeln
Und die anderen sind im Licht
Doch man sieht nur die im Lichte
Die im Dunklen sieht man nicht

Doch man sieht nur die im Lichte
Die im Dunklen sieht man nicht]

 

Copyrights and Property Wrongs

26 Sep

Jeffrey Toobin has an interesting piece in this week’s New Yorker on the effort of individuals to get information about themselves or their loved ones deleted from the internet.

Toobin’s set piece is a chilling story of the family of Nikki Catsouras, who was decapitated in a car accident in California. The images of the accident were so terrible that the coroner wouldn’t allow Catsouras’s parents to see the body.

Two employees of the California Highway Patrol, however, circulated photographs of the body to friends. Like oil from a spill, the photos spread across the internet. Aided by Google’s powerful search engine—ghoulish voyeurs could type in terms like “decapitated girl,” and up would pop the links—the ooze could not be contained.

Celebrities who take naked selfies, ex-cons hoping to make a clean start, victims of unfounded accusations, the parents of a woman killed in a gruesome accident: all of us have an interest in not having certain information or images about us or people we care about shared on the internet. Because it provides such a powerful sluice for the spread of that information and those images, Google has become the natural target of those who wish to protect their privacy from the prying or prurient eyes of the public.

In Europe, Toobin reports, the defenders of the right to privacy—really, the right to be forgotten, as he says—have had some success. In the spring, the European Court of Justice upheld the decision of a Spanish agency blocking Google from sharing two short articles about the debts of a lawyer in the newspaper La Vanguardia. While the newspaper could not be ordered to take down the articles, the Court held that Google could be “prohibited from linking to them in any searches relating to” the indebted lawyer’s name. As Toobin writes:

The Court went on to say, in a broadly worded directive, that all individuals in the countries within its jurisdiction had the right to prohibit Google from linking to items that were “inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed and in the light of the time that has elapsed.”

While the decision has quite a bit of support in Europe, it has been widely criticized in the United States as a violation of the First Amendment, threatening both freedom of speech and freedom of the press. Where the right to privacy is held to be “a fundamental human right” in Europe, claims Stanford scholar Jennifer Granick, Americans are more sensitive to issues of freedom of expression; they prefer to deal with the privacy issues, if they do deal with them at all, in a piecemeal fashion. Europe’s position, as Toobin explains, comes out of the continent’s long experience with state surveillance, with governments making use of personal data in ways that presumably the American state has not.

And yet…

As Toobin goes onto explain, Americans can legally protect themselves from unwanted scrutiny or embarrassment on the internet through a different legal instrument: copyright law.

Because Google is extremely sensitive to the legal claims of those who own specific words or images, it steadfastly refuses to link to copyrighted materials and images (or allow people to post copyrighted videos on YouTube, which it owns.) So if a celebrity were to take a selfy, or if the Catsouras family owned the photographs of their daughter—they tried, unsuccessfully, to get the California Highway Patrol to give them the copyright—Google could be forced, or persuaded, to stop linking to any sites that posted them. That threat of copyright violation can be very effective.

In August, racy private photographs of Jennifer Lawrence, Kate Upton, and other celebrities were leaked to several Web sites….Several of the leaked photographs were selfies, so the women themselves owned the copyrights; friends had taken the other pictures. Lawyers for one of the women established copyrights for all the photographs they could, and then went to sites that had posted the pictures, and to Google, and insisted that the material be removed. Google complied, as did many of the sites, and now the photographs are difficult to find on the Internet, though they have not disappeared. “For the most part, the world goes through search engines,” one lawyer involved in the effort to limit the distribution of the photographs told me. “Now it’s like a tree falling in the forest. There may be links out there, but if you can’t find them through a search engine they might as well not exist.”

I don’t have much of an opinion about the fundamental issue in the article: the battle between the right to privacy and freedom of speech. Toobin presents the various arguments on all sides of the question, and it’s pretty clear that the European approach, favoring the right to privacy, raises many difficult legal and institutional issues.

What I’m more struck by is how little traction the right to privacy has in the United States, as compared to the claims of copyright.

I don’t know much about copyright law, either in the US or in Europe, but I can’t help wondering if one of the reasons its claims are so potent here, trumping those of privacy, is that copyright is  a property right.

The right to privacy, of course, is historically intertwined with property rights: in the Griswold decision, for example, which struck down Connecticut’s ban on contraception, Justice Douglas cited the Third Amendment, which forbids the quartering of soldiers in private homes, as the basis for a broad constitutional right to privacy. Even so, the right to privacy is not nearly as dependent on the claims of property as is copyright, which is a variant of intellectual property (patents and so forth).

Where copyright is designed to protect a person’s ownership over a text or image on the theory that that ownership benefits the public—if an author can reap the full monetary benefits from the production or sale of a text or image, she will be encouraged to produce those texts and images—the right to privacy is designed to protect a person’s claims against the public. Copyright protects a person’s property by conscripting it on behalf of the public (at least in theory); privacy shields a person from the public.

It’s interesting that an allegedly individualistic US is less sensitive to these issues of privacy than an allegedly collectivistic Europe, but the rights of privacy in the cases Toobin cites don’t involve any property rights. Save the damage to one’s reputation, which might gain some traction from the law if a person were powerful, but gets virtually none when a person is not.

The whole discussion reminds me of another Justice Douglas opinion: his concurrence in Heart of Atlanta Motel v. United States. In that case, the Supreme Court upheld Title II of the Civil Rights Act. That provision made it illegal for restaurants, inns, and public accommodations to discriminate on the basis of race. The Court claimed that Title II was a legitimate exercise of Congress’s power under the Commerce Clause. The majority held that Congress had the power to regulate interstate commerce, that the travel of African Americans to and from the South involved interstate commerce, and that ending segregation in these public accommodations would facilitate such travel.

In his concurring opinion, Douglas conceded that Congress had the right to use its interstate commerce powers in these ways, but he was discomfited by the Court’s resting Title II on that basis. He would have preferred to rest it on Congress’s power under the 14th Amendment.

Though I join the Court’s opinions, I am somewhat reluctant here, as I was in Edwards v. California, 314 U.S. 160, 177, to rest solely on the Commerce Clause. My reluctance is not due to any conviction that Congress lacks power to regulate commerce in the interests of human rights. It is, rather, my belief that the right of people to be free of state action that discriminates against them because of race, like the “right of persons to move freely from State to State” (Edwards v. California, supra, at 177), “occupies a more protected position in our constitutional system than does the movement of cattle, fruit, steel and coal across state lines.” Ibid. Moreover, when we come to the problem of abatement in Hamm v. City of Rock Hill, post, p. 306, decided this day, the result reached by the Court is, for me, much more obvious as a protective measure under the Fourteenth Amendment than under the Commerce Clause. For the former deals with the constitutional status of the individual, not with the impact on commerce of local activities or vice versa.

But American being America, commerce ruled. And rules. Like property.

What was it those two dudes said? “In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality.”

A UI Trustee Breaks Ranks! We Have an Opening!

5 Sep

In another bombshell, UI trustee James D. Montgomery tells Ali Abunimah, well, I’ll just quote from Ali’s piece:

A trustee of the University of Illinois has added to public criticism over the decision to fire Palestinian American professor and Israel critic Steven Salaita.

“I think it would have been far better had it been dealt with differently and had it been done with more consultation with faculty,” James D. Montgomery told The Electronic Intifada today.

He also acknowledged the “adverse” impact that a growing boycott was having on the university’s ability to function.

Montgomery, a prominent Chicago attorney, echoed the regrets expressed by Chancellor Phyllis Wise over her own role in the affair.

Montgomery was careful, however, to say that he was undecided about the merits of the case, but he sounded far less certain and more circumspect than a public statement he signed last month along with other trustees forcefully backing Wise’s decision.

Montgomery laid out some of the issues that the board would be faced with at its upcoming 11 September meeting.

“Obviously there’s a lot of uproar on both sides of the issue from the perspective of students and alums who are offended by the manner in which Salaita spoke,” Montgomery said.

“And there are folks who are claiming that is a violation of the right to academic freedom. It’s a difficult decision in terms of what is right and what is wrong,” he continued.

“I know we’re going into executive session and obviously there are people who are seeking to pressure the university to reverse its decision. It’s coming from very significant places. It’s had an adverse impact because people are declining to participate in university activities and there have been a number of events canceled.”

“How it will turn out is anybody’s guess and I would not hazard one at this point,” Montgomery now says, adding he personally has not made up his mind about the issues the board would have to decide.

Here’s the take home:

First, and most important, this is not a done deal. Montgomery very clearly says that he has no idea how or what the Trustees will decide, and how he will vote. So keep up the pressure (more below).

Second, a member of the BoT has now admitted that the faculty should have been involved in this decision.

Third, that a trustee would be willing to go on the record like this, again, it shows a university that is not in control of itself.

Fourth, as Bonnie Honig pointed out to me, the UI Board of Trustees is very small. There are twelve members, and two of them (students) can’t vote. That means at least one out of ten of the trustees is undecided. Believe it or not, that’s huge.

Fifth, when we went through a similar battle over BDS at Brooklyn College, this is how it happened. One cracked, and then they all fell down. No predictions, no guarantees. But this could be the beginning of the end.

Sixth, and again most important, email the Board of Trustees. We have an opening, so let’s take it. Be polite, be firm, reach out to them as people. All of you have gotten us to this point. Now take us all the way there.

Again here are the emails:

Christopher G. Kennedy, Chair, University of Illinois Board of Trustees: chris@northbankandwells.com

Robert A. Easter, President: reaster@uillinois.edu

Hannah Cave, Trustee: hcave2@illinois.edu

Ricardo Estrada, Trustee: estradar@metrofamily.org

Patrick J. Fitzgerald, Trustee: patrick.fitzgerald@skadden.com

Lucas N. Frye, Trustee: lnfrye2@illinois.edu

Karen Hasara, Trustee: hasgot28@aol.com

Patricia Brown Holmes, Trustee: pholmes@schiffhardin.com

Timothy N. Koritz, Trustee: timothy.koritz@gmail.com or tkoritz@gmail.com

Danielle M. Leibowitz, Trustee: dleibo2@uic.edu

Edward L. McMillan, Trustee: mcmillaned@sbcglobal.net or mcmillaned@msn.com

James D. Montgomery, Trustee: james@jdmlaw.com

Pamela B. Strobel, Trustee: pbstrobel@comcast.net

Thomas R. Bearrows, University Counsel: bearrows@uillinois.edu

Susan M. Kies, Secretary of the Board of Trustees and the University: kies@uillinois.edu

Lester H. McKeever, Jr., Treasurer, Board of Trustees: lmckeever@wpmck.com

Capitalism and Slavery

1 Aug

I’ve mentioned Greg Grandin’s book Empire of Necessity on this blog before. It’s basically the true story—and more!—behind Melville’s Benito Cereno, which if you haven’t read, you should read right away. And then read Greg’s book. In any event, Alex Gourevitch has a wonderful interview with Greg up today at Jacobin. It’s got all sorts of gems in it, but I thought readers here would be especially interested in this:

Scholars have long examined the ways in which slavery underwrites capitalism. I thought this story, though, allowed attention to slavery’s role in shaping not so much the social or financial dimensions of capitalism but its psychic and imaginative ones.

Capitalism is, among other things, a massive process of ego formation, the creation of modern selves, the illusion of individual autonomy, the cultivation of distinction and preference, the idea that individuals had their own moral conscience, based on individual reason and virtue. The wealth created by slavery generalized these ideals, allowing more and more people, mostly men, to imagine themselves as autonomous and integral beings, with inherent rights and self-interests not subject to the jurisdiction of others. Slavery was central to this process not just for the wealth the system created but because slaves were physical and emotional examples of what free men were not.

But there is more. That process of individuation creates a schism between inner and outer, in which self-interest, self-cultivation, and personal moral authority drive a wedge between seeming and being. Hence you have the emergence of metaphysicians like Melville, Emerson, and of course Marx, along with others, trying to figure out the relationship between depth and surface.

What I try to do in the book is demonstrate the centrality of slavery to this process, the way “free trade in blacks” takes slavery’s foundational deception, its original deceit as captured in the con the West Africans were able to play on Amasa Delano, and acts as a force multiplier. Capitalism disperses that deception into every aspect of modern life.

There’s many ways this happens. Deceit, through contraband, is absolutely key to the expansion of slavery in South America. When historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery. And when they are talking about slavery, they are talking about corruption and crime. Not in a moral sense, in that the slave system was a crime against humanity. That it was. But it was also a crime in a technical sense: probably as many enslaved Africans came into South America as contraband, to avoid taxes and other lingering restrictions, as legally.

Sometimes slaves were the contraband. At other times, they were cover for the real contraband, luxury items being smuggled in from France or Great Britain, which helped cultivate the personal taste of South America’s expanding gentry class. And since one of the things capitalism is at its essence is an ongoing process to define the arbitrary line that separates “self-interest” from “corruption,” slavery was essential in creating the normative categories associated with modern society.

Why Aren’t the Poor More Responsible?

16 Jun

MIT economist Esther Duflo:

We tend to be patronizing about the poor in a very specific sense, which is that we tend to think, “Why don’t they take more responsibility for their lives?” And what we are forgetting is that the richer you are the less responsibility you need to take for your own life because everything is taken care for you. And the poorer you are the more you have to be responsible for everything about your life….Stop berating people for not being responsible and start to think of ways instead of providing the poor with the luxury that we all have, which is that a lot of decisions are taken for us. If we do nothing, we are on the right track. For most of the poor, if they do nothing, they are on the wrong track.

I’m not sure that “we” is as big as Duflo thinks, but her point is a good one. Reminds me of this post I did three summers ago.

The Calculus of Their Consent: Gary Becker, Pinochet, and the Chicago Boys

5 May

The economist Gary Becker has died. Kieran Healy has a great write-up on Foucault’s engagement with Becker; Kathy Geier has a very smart treatment of, among other things, feminist critiques of Becker’s theory of the family. And some more personal reminiscences of taking a class with Becker.

Kathy mentions this article that Becker wrote in 1997 about the Chicago Boys who worked with the Pinochet regime. Becker’s conclusion about that episode?

In retrospect, their willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile.

No real surprise there. Many free-marketeers, including Hayek, either defended the Pinochet regime or defended those who worked with it.

But the Becker piece reminded me of that infamous Mont Pelerin Society (MPS) conference in Viña del Mar in 1981, about which I wrote at length two summers ago. The MPS is an organization of economists, philosophers, and assorted action intellectuals and businessmen dedicated to spreading the free market gospel across the globe. In the late 1970s, at the height of Pinochet’s repression, Hayek and a few grandees from Chile began discussions  about holding the MPS’s annual conference in the seaside city where the coup against Allende had been planned. The purpose in meeting there would prove avowedly propagandist. As the organization’s own newsletter later acknowledged, the conference provided participants with an opportunity

for becoming better acquainted with the land which has had such consistently bad and misrepresenting press coverage (and, perhaps for that reason, it was appropriate to have Reed Irvine, head of Accuracy in Media as one of the first speakers in the first session).

Becker was originally targeted or slated to speak on a conference panel titled “Education, Government or Individual Responsibility?” His name appears on an early agenda with a “T” next to it. For “tentative.” But Becker either never confirmed or pulled out. No matter: Milton and Rose Friedman, along with James Buchanan and Gordon Tullock, were there to show the flag—and the calculus of their consent.

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