Appendix # 1: Imagination in a Market Society

In a market society, things are first dreamt then they are produced sold and bought. That things are first dreamt is not obscure nor is it particular to the market organization. As thinking organisms, humans by their nature imagine the design of the objects and institutions they produce before they go about producing them. This first kind of imagination is simply the step of planning that we go through in the process of producing making the things around us. The act of planning out a physical form before going on to produce it is what many see as the characteristic that distinguishes human production from that of animals.[1] But while imagination might be one thing in the individual act of production, as soon as individual men step forth into society, their collective plans take on another form. In an economic setting, men first imagine and second produce a good or a service. But in the market economy, a more elusive act of imagination occurs when a good is made into a commodity - when it is bought and sold. To become a commodity, a good is prepared by the seller as an object that has value. To be bought as a commodity, the good and its promises are accepted by the masses as a valuable entity.

Sometimes the act of thinking about a commodity is as mundane as the promise that a farmer makes about the quality of his grain, or the value a supermarket customer sees in a familiar label on rice. In this type of a transaction, the promises made by a producer and accepted by a consumer concern the use value or utility of the good: the value obtained when the material is put to use or consumed. In the parlance of political economy, these mundane commodities might be defined as those for which use value sets an equilibrium value at which the good is exchanged.[2] Even the transaction of such mundane commodities already requires a complex process of collective thought so baffling that modern thinkers continue to describe it in terms of Adam Smith’s ‘invisible hand.’ Markets for commodities like grains and rice are mundane in that they are relatively well understood by microeconomic models of the costs of supply and the utility of demand. But despite the modern quantification of microeconomics, there remains beneath the theories a mystical quality even in the most simple of markets. Only a true cultural conundrum[3] could sustain an explanation as imaginative as Smith’s ‘invisible hand’ among the scientific aspirants of economics.[4]

Yet no real transaction ever takes place in a microeconomic marketplace. From the perspective of the modern economist, this realization stems from the view of quantitative microeconomics as a set of models that only approximate the real nature of economic phenomena. From the viewpoint of a political economist without the scientific aspirations of the modern economist, this same realization stems precisely from the impossible nature of the mythical ‘invisible hand.’ But for the purposes of this study, it is valuable to differentiate between those ‘mundane’ commodities, which are best considered microeconomic, from other more complicated commodities, which only a delusional scientist or a foolhardy philosopher would think of as mundane. This second type of commodity may be defined as one whose transaction is so dependent on the state of the economy as a whole that its values are nearly independent of the costs of production and the utility of consumption. Whereas cognitive planning is constitutive in the production of all physical things, and all commodities possess a certain mystical quality, it is in the transaction of these complex commodities that the economy comes to rely on the assurances of a distinct collective imagination.[5]

In the modern economy, the practice of investment is so routine that the purchase of stocks and bonds often takes on the language of consumption. In one sense, the notion of consumption is relevant even to commodities that will never be consumed: exchange value allows us to think about commodities as possessing an equivalent utility even if they have no material use. Investments have a finite monetary value set by risk and potential gain that can be transferred in the consumption of any other commodity in the market. Modern economists have developed a suite of theoretical mechanisms that quantify confidence and uncertainty in the same way that one might quantify the use value of a sack of rice. These tools are useful to professional economist because they allow him to speak about complex commodities with the same language as Gregory Mankiw when he describes the economics of guns and butter in Principles of Economics.

Since the actual value of an investment can arise only when it is exchanged for mundane goods with actual utility, we might call economists expectations about the value a statistical value: it is the result mathematical calculations that quantify each uncertainty to produce an estimation of the utility the investment can purchase. Although the calculation of a statistical value requires its own sort of imaginative process, mathematical logic gives endows the process of estimation with a certain confidence. But while the investment can stand on its own with a certain statistical value, when it is thought of in relation to all other investments its value melts into the collective imagination. Taken as a whole, confidence in the market value stands not upon real utility or mathematical rigor but drifts like a dream in society.

[1] This notion of the imagination implicit in the productive process comes from Marx’s Capital Volume 1, Chapter 7 Section 1: “A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labor-process, we get a result that already existed in the imagination of the laborer at its commencement.” Available online at http://www.marxists.org/archive/ marx/works/1867-c1/ch07.htm

[2] Use value and exchange value have a long history in the various traditions of Political Economy. In this context, use value is in line with the 19^th century definitions of Marx or Ricardo and also 20^th century conceptions of utility.

[3] For an indulgence in the mystification of what I call mundane commodities, one need look no further than Marx’s essay on Commodity Fetishism in Capital Volume 1. However, as we will see later on in this section, Commodity Fetishism is really quite a different notion from that which I am developing in this piece.

[4] For the manifesto of the modern aspirant scientist, read Milton Friedman’s “The Methodology of Positive Economics,” in Essays in Positive Economics ed. Milton Friedman, 1953.

[5] While the distinction between mundane and complex commodities is made in order to develop a theory of imagined confidence, it is maintained as an arbitrary division. Any good can take on this second more abstract form because any market can be the subject of speculation. There is no such thing as the mundane commodity. However, the values of many commodities are dominated by the microeconomic forces of supply and demand and are only rarely subject to more abstract forces of speculation.

State, Sweat and Pleasure in a Neural Reward Circuit

The Prairie Vole, featured in a story published recently in the AP is studied more than any rodent out side of mice and rats because it takes part in that most sacred human behavior. The species a engages in monogamous social pairings that resembles the pairing of human sexual partners. In that species and in ours, love forges molecules of social complexity through a tacit neural contract.

But unlike the English Philosophers John Locke and Thomas Hobbs, this modern biology implies the ultimate in materialism and shows directly that chemicals can construct the foundation of love. What is more, the same brain system, here implicated in voles, also has a phenotype in humans. An artifact of a primal love, the center is profound and powerful but also poisonous and perverted; it serves both beauty and a whore. The mesolimbic reward circuit is a group of neurons that release dopamine, that neurotransmitter which encodes pleasure and Parkinson's, hopes and habits, and here, love and psychotropic chemical addiction

This work was presented in a course on genetic neurobiology at Brown University, taught by professor Giliad Barnea. A former Israeli solder, the man seems like a giant especially when he is compared to the mice he studies.

They had it coming for scheduling this topic on valentines day. In a prepared lecture, I told the class that pair bonding is the root of capitalist ideology, the stump of religion, and like opium to the masses.

Nonetheless, there is a real study of vole neurobiology that centers on a series of experiments performed in the lab of Young and Wang (2004). These scientists marked the peptides Oxytocin (not to be confused with the synthetic opiate derivative) and Arginine Vasopressin (AVP) as pheromones that dictate a repertoire of behavioral commands. In the lab and in nature, these chemicals switch voles from polygamous rodents into wild romantics who remember love for a life time.

This animal love is material needs and chemical desires. But defined by its boundaries, all love is pains and promises, specially formulated to control us. In the very way that they delight us, at the very moment that they dig us the the deepest yet the highest euphoria, and most of all in those seconds when they decide that nothing else matters, then, men women and men and women become tacit in a domination.

In political theory, the social contract is an experimental construction, a thought test where men put themselves on the shoulders of some ideal type yet impossible ancestor. From thought experiment, they extrapolate an ever present force of chaos implicit in the relations of men. In the contract, men exchange their rights for protection, nature for order, freedom for slavery.

In the contract State catches man. It is by the contract that a corrupt city may is tolerated because he is a friend to each, even while a parasite of all. It is by the contract that a dead end job gives enough to live in poverty, but squashes all hopes and dreams. It is by the contract that a system of prolitarianism lays rooted in the small oppressions.

In modern political thought, social contract theory influences both the far right and the far left. It is at the heart of neoliberalism and guides that invisible genius, the market. It is the parent of freedom but also the project of ideology.

Yet as in man, also in nature.

In an analysis of behavior and brain complexity, Dunbar and Shultz (2007) argue that another social contract occurs when animals live in pairs. Within a group of related species, animals that engage in pair bonding tend towards a larger brain than those of relatives which exhibit other mating strategies. Dunbar and Shulltz contend that an evolutionary force makes bonded individuals smarter because, contracted by love, they are better able to cooperate in a social system. Is not the brain in love that most ripe for prostitution to society?

But make it explicit here, this is not a genetic analysis of humanity. Neural plasticity is the transformation of man by his environment. The physiology of a brain is controlled by its history, its beliefs, its comrades and its master.

To be sure, the capacity for human complexity, that intricate wiring which we connect as worst fears and greatest dreams, this is the product of miracle evolution. But just as propaganda can be written on the same paper as poetry, and words themselves are nothing but the place holders for their real meanings, the human brain is the raw material which by living, we transform into art and argument, romance and horror, thought and forgotten, commodity and slave.

Genes do not encode an ideology, but paper is not the laws that are written on it. Our brains are the media of society. This is the view that pair bond evolved as a means of organizing social complexity. By creating a molecule out of atoms, pair bonding forms the crucial bridge between individual gain and group well being.

Economics terms these relations "public goods" and considers them to be the one great failure of the market. But the pair bond, a genetic phenotype, serves in animals the role of the state in modern society.

In the circuitry of the mesolimbic reward system, that highest emotion is manifest in a soup of cells and ions. Best represented in the diagram, these neuclei are arranged so that together with pleasure felt during copulation (1), pheromonic signals detected by the olfactory system get stored in the nulceaus accumbans, the prefrontal cortex, the lateral septum, and the amygdala. Here, written in the strength of synaptic embraces, the physical root of love is manifest.

But in humans, this same dopaminergic pathway from the ventral tegmental area to the nucleaus accumbans is also the site of addiction. These same cells store our most intimate relations and our most oppressive objectification. With that same potency that lover binds to lover, parent binds to child, brother binds to brother, drug addiction makes man object, chemicals master.

Tough Time for...Neoclassical Economics?

The New York Times reports "Tough Times for Big Economies" ; across a variety of economic systems, it seems that large, unregulated market economies are unstable in ways that traditional economists seem to argue that they never should be.

On a practical level, economic advisers who would normally shun nearly all forms of government intervention, are facing the fact that they are going to have to make serious, structural investments across many sectors of the economy. The American government is planning to spend in the region of 700 Billion Dollars to buy out failed credit and investment firms. The Chinese government has just announced a plan to invest over 500 Billion dollars in their economy. Further, it seems that many other big governments are going to have to increase spending and regulation in their economic systems.

On a theoretical level, facts are not supporting models of micro and macro economic behavior. American Economists, most of whom believe in some variant of the Chicago School, are now reconciling an investment that supersedes every argument they have made about deregulation in the last 60 years. How can one argue that health care, welfare, or rent control are inherently flawed and at the same time support a bailout that trumps gross private spending those sectors?

Modern teaching in economics argues that in order to avoid the dreaded "dead weight loss", deregulation should be applied indiscriminately to all aspects of modern economic life. Their take on International Relations for example, relies on the assumption that free trade, the market mechanism of ir, can bring nothing but good. Read the standard text of all introductory economics classes, Mankiw's "Principles of Economics", and you will find a 150 page argument that free trade is an absolute necessity in economic life. Not only does Mankiw suggest that free trade is unavoidable, which may be true in a globalizing society, he also predefines it as good. This is an example of a larger rule that governs the way many economists operate: if an economic model is mathematically satisfying, it must also be normative enlightening.

Its going to be interesting if the prevalent economists in our financial, government and academic institutions continue to have such esteem for the free market on a micro economic level even as they spend in unprecedented levels on the economy writ large.