The Economist and AIG

Well this week’s Economist is (perhaps unsurprisingly) defending the $85 billion bail out of American International Group. Prima facie the article makes a convincing case. AIG had $450 billion in the credit-default swaps market alone. Its collapse would undoubtedly hit ordinary policy holders. Yet upon closer scrutiny the rational falls apart. The somewhat facile invocation of utilitarian imperatives is pursued with a rather ideological opportunism. It would certainly be a mistake to overly-politicize an understand of what’s currently going on in the global economic system but it would be equally mistaken to not take this as an opportunity to critically scrutinize the deep normative assumptions underlying a ‘technical’ view of economic issues. George Bush has made a similarly utilitarian defense of the bailout, in a way that interestingly gets to the heart of the matter that the article in the Economist so articulately passes over.

Mr Bush said the measures required the US “to put a significant amount of taxpayer dollars on the line”.

“But I’m convinced that this bold approach will cost American families far less than the alternative,” he said.

Is this at all true? As Noreena Hertz observes in America, the spoils of a long period of prolonged economic expansion and low unemployment have not been widely distributed: 97% of the increase in income has gone to the top 20 per cent of families over the past twenty years. While the rich earn more – average earnings of the top fifth of male earners rose by 4 per cent between 1979 and 1996 – the bottom fifth saw a 44% drop in earnings”. From the voluntaristic standpoint of a liberal democratic capitalist it’s difficult to see the sort of structural relationship at work here: how the drive to free markets systematically undercuts the bases of socio-economic equality in pursuit of ‘flexible labour markets’ and ‘freedom from red tape’. This occlusion is compounded by an atomistic moral theory that underwrites the legitimacy of all outcomes resulting from legal and non-coerced actions by private and pre-individuated actors. This ‘objective’ and ‘technical’ perspective, with the tacit philosophical universalism that accompanies it, obscures the partiality of  the actually existing social and economic interests that pursue their aims through its (allegedly) impartial conceptual framework. The reality of genuine social/economic conflict is theorised away. Yet the extent to which the actual concepts of neoliberal politics become sites of contestation (as the policy framework of a good investment climate simulatenously fuels and resists the precarity which is its inevitable outcome) points to the irreducibility of these conflicts, even when they’re treated in a theoretical language that systematically passes over them.

Advocates of bail outs, the rescue of financial institutions run to the ground through the pursuit of private profit, are invoking utilitarian imperatives (and it would be foolish not to take note of the social consequences the failure of these institutions would have) on a single case where other such considerations would be dismissed by reference to a deontological market fundamentalism e.g. harmful social consequences are fine as long as everyone’s rights have been respected in the process. The Economist article tells us that “in principle [it] is admirable-capitalism requires people to pay for their mistakes” yet (of course) in practice these institutions are just too big and too important to be allowed to fail. There’s such a striking ideological retreat from the fierce deontological voluntarism that usually characterises this sort of position. I just think it’s a deeply dishonest retreat.

Academic Freedom at the University of London

In yet another striking example of how little involvment I had in university life as an undergraduate, I’ve been reading accounts on Ted Honderich’s website of a related set of scandals that took place during my second year at UCL (though I was entirely unaware of it). Suffice to say it now all seems rather interesting and I wish I’d actually had the chance to engage with it.

At the Edinburgh Festival in 2004 Ted Honderich gave a lecture that included moral support for the Palestinians in their struggle against neo-Zionism — neo-Zionism being the enlarging of the state of Israel beyond its original borders, with what that has entailed and will entail for the Palestinians. This was objected to by the chairman and some other members of the undergraduate Jewish Society in University College London, and also by the Union of Jewish Students. A campaign was begun of which the aim of was to have the college take down the website at which you are looking.

It’s also a very clear example of rhetorical anti-racism genuinely threatening academic freedom. I’d call it rhetorical anti-racism because I simply won’t accept the Jew/Israeli conflation. Even so, it poses questions that I have no immediate answers to. I can imagine many of the arguments I’ve routinely made re: no platform being made by the students at UCL and yet I vehemently disagree with what they’re doing. Not least of all the sheer fucking hubris of the student pontificating upon the acceptable future for Honderich, an Emeritus Professor at UCL.

Danny Stone, Campigns Organiser for the Union of Jewish Students called Honderich’s comments “an abuse of UCL resources, and desecration of the name of UCL”. Stone added that “an apology may not be enough”, instead suggesting that the professor receive further education “about the issues and the students he’ll be dealing with.”

he UCL Jewish Society has also joined UJS in calling for clearer guidelines to be published on the use of UCL personal webpages. Samuel Lebens, President of the Jsoc, stated: “UCL’s website should not be allowed to air views that are so removed from fact and so likely to disrupt the good relations between different religious groups on campus. As chairman of the Jewish Society, I will be challenging the administration to create clear guidelines as to what can and cannot be said from the platform of UCL”

I’ve argued in the past for a communitarian understanding of students unions. They are institutions run for, as well as theoretically by, their membership. As such, the decision making forums of the institution may reach conclusions about what constitutes acceptable use of the platforms it offers, providing it does so in an open and democratic way.  To suggest otherwise implies a certain understanding of how what Chantal Mouffe calls the Democratic Paradox should be resolved. Democracy and liberty stand in tension with each other, as you can never foreclose the possibility that democratic processes may lead to illiberal outcomes. It’s impossible to resolve the conflict, as opposed to negotiating it in political life, without privileging one term over the other. Yet to privilege democracy over liberty risks tyranny and to do the reverse is just, well, shit, in a way that’s difficult to summarise in an off-topic point on a blog post. To deny that a students union may legitimately reach conclusions that stand at odds with liberal principles is a perfect example of trying to resolve the paradox by, tacitly or otherwise, holding one value (in this case liberty) to be necessarily prior to the other. Let’s reject this as a crap and superficial* attempt to resolve a profound paradox at the heart of political life.

Yet once we’ve rejected the priority over liberty over democracy, it becomes much more difficult to make a knock-down in principle argument to support Honderich. Obviously there’s lots of empirical questions left here (e.g. were the campaigining students indicative of wider concerns amongst the student body? were the computing regulations about not bringing UCL into disrepute or causing offense arrived at through a democratic process?) but these can be left aside for now, as can the differences between universities and students union. I can concieve of a situation where the (unjustified) attacks on what Honderich carried the sort of democratic legitimacy I’ve been talking about. If such a situation held, does Honderich still have the right to work and write in a way that stands at odds with the democratically reached ideas of a common good and acceptable behaviour within the institution? On a purely theoretical level, I’d say no. Yet in this particular case that revulses me. What becomes of academic freedom?

*In case anyone objects, I’m really not calling Rawls and his ilk “crap and superficial”. The difficulties faced by an insistence on the priority of the right over the good are all together more complicated.