Deadly Contradictions by Stephen P. Reyna

Author:Stephen P. Reyna [Reyna, Stephen P.]
Language: eng
Format: epub
Tags: Social Science, Methodology, Political Science, International Relations, General, Anthropology, Cultural & Social
ISBN: 9781785330797
Google: OnhNjwEACAAJ
Publisher: Berghahn Books
Published: 2016-08-01T05:21:47+00:00

A “Zone of Ignorance” and Malinowski

Religious faith … fixes … all valuable mental attitudes, such as … courage and confidence in the struggle with difficulties. (Malinowski [1948] 1954: 89)

Starting in the late 1970s economic elites became involved in hermeneutic politics that relied on neoliberalism to fix the vulnerabilities provoked by the contradictions. The politics failed. Offshoring and financial fixes did not fix cyclical problems, and the specter of global warming caused “panic” while peak oil went “off a cliff.” Here, then, were fixless fixes to hermeneutic puzzles whose solution concerned humanity’s fate. The words of Malinowski will become relevant following consideration of important economic elites’ perceptual understanding of this situation.

A good place to begin is with Ben Bernanke, head of the Federal Reserve during the Great Recession. Bernanke came from a rural, southern background in Dillon, South Carolina. His father owned a drugstore. Young Ben was a “brain” (he taught himself calculus) and went to Harvard and then MIT for his doctorate, about which certain wags chant: “MIT, PhD, M-O-N-E-Y.” Bernanke’s (1979) doctoral dissertation, titled “Long-Term Commitments, Dynamic Optimization, and the Business Cycle”, dealt with business executives and the “business cycle” (conventional economists’ way of conceptualizing cyclical contradictions). Bernanke (1979: 2) analyzed “the problem of making irreversible investment decisions when there is uncertainty about the true parameters of the stochastic economy.” A stochastic process is one where the outcome is unpredictable. A stochastic economy is one where the different production, distribution, and consumption results are uncertain. Bernanke told the world in his dissertation that when things are uncertain, economic elites “wait for new information” (ibid.). Brilliant! Ben was in the M-O-N-E-Y, ascending the ranks of government economic positions, until in 2002 he was appointed to the Federal Reserve’s Board of Governors, becoming its president in 2005.

In a 2004 speech entitled “The Great Moderation,” Bernanke was pretty certain of one thing: that, due to the effectiveness of contemporary macro-economic policy, the volatility of the business cycle had decreased to the point that it should no longer be a major topic in economics (in Krugman 2009: 10). This judgment was rendered after the recessions of the 1970s, 1980s, 1990s, and 2000, and just three years before the Great Recession. Three years later in 2007, during the eruption of grave volatility that was to be the Great Recession, Bernanke reached back to doctoral stochastic memories and asserted that a prime attribute of the current economy was “uncertainty” (2007). Of course, it would have been in times of uncertainty that Sir Mervyn King, then governor of the Bank of England, confided to a Telegraph reporter, “Who knows what’s going to happen tomorrow” (Aldrick and Kirkup 2011).

Other respected economic elites were of like mind. In an analysis of the US economy, Michael Spence, a Nobel Prize winner in economics, and his colleague Sandile Hlatshwayo concluded that employment problems had emerged. In their judgment about what will happen with this “employment situation” being “unknown,” “answers” as to what to do “appear to be missing,” so “experimenting is the only way to solutions” (Spence and Hlatshwayo 2011: 38).

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