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Fanatics, Charlatans, and Economists

Public Policy

Throughout the world, it seems, crisis is gripping national politics. In election after election, voter turnout has hit historic lows. Politicians are universally reviled. Mainstream parties, desperate to remain relevant, are caught in a vice, forced to choose between pandering to extremism and the risk of being overwhelmed by populist, anti-establishment movements.

Meanwhile, not since the end of World War II has money played such an important role in politics, trumping the power of ideas. In the United States, for example, the sound of billions of dollars flowing into election-campaign coffers is drowning out the voices of individual voters. In parts of the world where the rule of law is weak, criminal networks and corruption displace democratic processes. In short, the pursuit of the collective good looks sadly quaint.

The trouble began at the end of the Cold War, when the collapse of a bankrupt communist ideology was complacently interpreted as the triumph of the market. As communism was discarded, so was the concept of the state as an agent around which our collective interests and ambitions could be organized.

The individual became the ultimate agent of change – an individual conceived as the type of rational actor that populates economists’ models. Such an individual’s identity is not derived from class interests or other sociological characteristics, but from the logic of the market, which dictates maximization of self-interest, whether as a producer, a consumer, or a voter.

Indeed, economics has been placed on a pedestal and enshrined in institutions like central banks and competition authorities, which have been intentionally separated and made independent from politics. As a result, governments have been confined to tinkering at the margins of markets’ allocation of resources.

The 2008 global financial crisis, the resulting recession, and rapidly widening income and wealth inequality have punctured the glib triumphalism of economics. But politics, far from rising to take its place, continues to be discredited, as mainstream leaders – particularly in North America and Europe – call on economic theories to justify their policy choices.

The pursuit of individual attainment is the hallmark of our time, eclipsing the collective dimension of human destiny. And yet the deep human need to be part of a group has yet to disappear. It lingers, but without a credible outlet. National projects ring hollow, and the so-called international community remains an abstraction. This unfulfilled desire for community may be felt particularly acutely by young people – including, for example, young jihadists.

Indeed, nationalist politicians and religious leaders have been the first to spot the vacuum, and they are rapidly filling it. Pope Francis, Vladimir Putin, Abu Bakr al-Baghdadi, and Marine Le Pen have little in common. But they share one insight: There is a deep longing for the creation of communities defined by shared values, not functional needs.

The crisis of national politics has consequences that echo far beyond the borders of individual countries. National chauvinism and religious fundamentalism are here to stay, and with them the terrorism that extremists of all stripes embrace, because both phenomena are ideally suited to the age of the individual: They provide imaginary answers to personal angst, instead of political answers to collective challenges. These movements’ amorphous nature – often channeled through charismatic leaders – allows each individual to project onto them his or her dreams, making them difficult to counter within the framework of traditional politics.

But this strength can also be a weakness. When tasked with managing territories and governing populations, these movements begin to face the same bothersome logistical and organizational constraints as their rivals. As a result, bureaucracy is constantly at their heels, leaving them in perpetual need of upheaval and renewal.

If politics is to retake the field of values from the fanatics, the charlatans, and the economists, it must be rebuilt from the ground up. More than half of the world’s population now lives in cities, and any political renaissance must counterbalance the appeal of vast virtual communities with resilient urban societies. Citizens must become reengaged with the political process, educated in public affairs, and provided with real (not merely virtual) platforms to air their differences and debate alternative views.

Furthermore, institutions that provide bridges between states and the global community, such as the European Union, must be strengthened and refocused. In particular, their technical functions must be clearly distinguished from their political roles.

But, above all, politicians must stop trying to shore up their diminished credibility with the pretense of economic science. Politics begins where contemporary economics ends – with ethics and the attempt to create a justly ordered society.

Project Syndicate



22 Comments on "Fanatics, Charlatans, and Economists"

  1. J-Gav on Tue, 27th Jan 2015 6:46 pm 

    Good intentions and some fair points but too many “musts” in this article.

  2. bobinget on Tue, 27th Jan 2015 6:47 pm 

    The research team concluded that peak production of the world’s most important crops and livestock products came and went between 5 and 30 years ago. For instance, peak corn came in 1985, peak rice in 1988, peak poultry eggs in 1993, and peak milk and peak wheat both in 2004. The world saw peak cassava and peak chicken in 2006 and peak soy in 2009. This trajectory is troubling, because it means production will eventually plateau and, in some cases, even start to decline.

    Read more: http://www.smithsonianmag.com/science-nature/world-hit-peak-chicken-2006-180954037/#sVX105rC87sThRmo.99
    Give the gift of Smithsonian magazine for only $12! http://bit.ly/1cGUiGv
    Follow us: @SmithsonianMag on Twitter

  3. Makati1 on Tue, 27th Jan 2015 7:53 pm 

    J-Gav, you beat me to the comment. Too many “Musts”. Not going to happen. Like the dreamers that want to rebuild civilization in a few years when 90% either will not or cannot.

    It is mentioned in other articles, that next year, by some calculation, the top 1% will own more than half of the world’s wealth/resources. Or the equivalent of Africa, China and India being owned by the Democratic Republic of the Congo.

  4. penury on Tue, 27th Jan 2015 8:17 pm 

    Another crock of B.S,

  5. Makati1 on Tue, 27th Jan 2015 8:31 pm 

    Update:
    “Eighty people hold the same amount of wealth as the world’s 3.6 billion poorest people, according to an analysis just released from Oxfam. The report from the global anti-poverty organization finds that since 2009, the wealth of those 80 richest has doubled in nominal terms — while the wealth of the poorest 50 percent of the world’s population has fallen.”

    http://fivethirtyeight.com/datalab/meet-the-80-people-who-are-as-rich-as-half-the-world/

    Will it be only 8 people next year? We shall see.

  6. Perk Earl on Wed, 28th Jan 2015 12:10 am 

    Look what I just found on Google news!

    http://powersource.post-gazette.com/powersource/latest-alternative-energy/2015/01/27/President-Seeks-Oil-Exploration-Off-East-Coast/stories/201501270221

    WASHINGTON — The Obama administration moved Tuesday to open up a vast stretch of East Coast waters to oil and gas drilling, a decision that could have a profound impact on the economic and environmental future of states from Virginia to Georgia. The move also adds a new dimension to President Barack Obama’s legacy.

    In an announcement that outraged environmentalists and brought grudging cheers from the oil and gas industry, the Interior Department unveiled the latest part of its five-year plan for the government to sell leases for oil and gas development in federal waters from 2017 to 2022.

    The plan would open up one lease sale area off the southeast stretch of the Atlantic Seaboard, an area the oil industry has long hungered to exploit. It would also open new portions of the Gulf of Mexico, which is already open to drilling. And in a move that appeased environmentalists but angered Alaskan Republicans, it will ban drilling in portions of the Arctic Ocean’s Beaufort and Chukchi seas.

  7. Makati1 on Wed, 28th Jan 2015 1:26 am 

    Perk, if the price stays down, there is little chance they will ever be tapped. And then again, they are in hurricane alley. Sounds like another sick joke from our Emperor.

  8. Perk Earl on Wed, 28th Jan 2015 1:49 am 

    It struck me as odd too, Mak. He campaigned positioning himself as the environmental prez early on, but now he’s in the latter half of his 2nd term it seems he’s trying to pad his legacy while risking the east coast to potential oil slicks?

    So let me get this straight; he’s against the pipeline to Canada, against ANWAR, against drilling off the West coast, against drilling off of Florida, but from Georgia north to Virginia (conservative region ok with risking coast to get oil revenue) he’s for offshore drilling? Sure seems like a mixed up view of things.

  9. Davy on Wed, 28th Jan 2015 3:22 am 

    Perk, this is just another example of the pragmatism or outright hypocrisy from Obama. I have seen him desert the underprivileged for the privilege in policy and personal actions. Obama loves the good life but preaches to the underprivileged that he is one of them and for them. Obama is a sellout to Wall Street. Many of his appointments are from the Beltway privilege. Yet, we see Obamacare as an attempt to do something for the poor. Obama and the environment is again a mixed bag. Obama to me seems to be a political opportunist. That said I don’t like his political positions and his personal choices. I prefer a man like Pope Francis that lives what he preaches. That’s just personal opinion.

    Back to oil and the environment. I personally think we must consider each and every potential source of fossil fuels at this inflection point into a society ending depletion event from POD & ETP of oil. If BAU has distorted reality from the view point of corn porn growth it has also distorted reality from the greenies. I myself am a tree hugger and the sooner the rape and pillage of Mother Nature is over the better. That is my spirit and faith but my pragmatism says horrors await us when the crescendo of descent swallows all of our locals up in a collapsing support system. Just as we need to reevaluate our economic policies we must reevaluate the environment in regards to survival. At least acknowledge the tradeoffs of survival and environmental protection.

    It is fine if the environmentalist actions of protection are to be chosen but don’t let that be done in a lie that those actions have no consequence. We are nearing a tipping point where complexity and energy intensity will likely contract. This will likely be ugly and painful. Is protecting the environment a luxury at this point? When this ugly descent begins painful decisions are going to need to be made. Questions like do we trade people’s lives for the environment? Is that not what we are going to do when fossil fuels run short and the food system contracts if we choose not to produce energy? As a tree huger I want to protect the environment. I want to atone for the sins made against Mother Nature but as a father I can’t bear to see my kids suffer. Unfortunately we will soon be facing these decisions on a macro and micro level. What is worse is this is a Catch 22. We destroy the environment to live only to die in a destroyed environment so WTF Maynard. In any case much of this drilling talk is just talk because the economics of oil is nearing a fundamental shift with only the most affordable sources being potential production. East coast production or ANWAR for that matter will likely never happen.

  10. Davy on Wed, 28th Jan 2015 8:01 am 

    Here you go guys those of you who are talking about the new world order conspiracies. This is also for those of you looking towards a post dollar multilateral financial system based around the IMF SDR. This is a great read. I don’t know what all to believe but it is definitely thought provoking and worthy of your time

    http://www.zerohedge.com/news/2015-01-27/failing-stimulus-and-imfs-new-multilateral-world-order

  11. dave thompson on Wed, 28th Jan 2015 8:58 am 

    This is a free online book I am currently reading. Some of the folks here may find interest. http://www.ascentofhumanity.com/

  12. shortonoil on Wed, 28th Jan 2015 9:33 am 

    WASHINGTON — The Obama administration moved Tuesday to open up a vast stretch of East Coast waters to oil and gas drilling, a decision that could have a profound impact on the economic and environmental future of states from Virginia to Georgia.

    There have been extensive discussions over the years about how much oil is actually to be found along the US Atlantic coast. Some arguing there is a lot, others saying not so much. But, one thing is for sure, there is a lot less at $46/barrel than there was at $100. With the shine rubbing off the shale revolution recently, and American energy independence starting to sound a little hollow, Obama is most likely getting pressured to do something. The DemCrats certainly don’t want to become known as the Party that began the end of US domestic petroleum production.

    Of course, as with most things political, all the White House can do is to appear to be taking action. The industry itself has seen $trillions wiped off its balance sheets over the last eight months, and no amount of political posturing is going to change that problem. The industry is now impaired, and an East Coast off shore Miracle will be a lot harder to pull off than was a North Dakota cow pasture Shale Miracle. In essence this will be too little, too late, and will sound too much like the last load of hoopla that was poured on the US public.

    Even though much of the East Coast off shore production would be in shallow water, these wells won’t appear overnight, nor will they be low cost production. Off shore by its very nature is more expensive to produce than on shore. Although we expect a bounce in prices later this year, and next as production declines begin from the low prices, the longer term trend is down:

    http://www.thehillsgroup.org/depletion2_022.htm

    With a development time of six to eight years for most of these fields, they will be priced out of the market before they can come on line. The US may retrieve a few barrels off the East Coast, but it is more likely that this will just be another example of political showmanship.

    Of course, eventually someone in Washington may wake up, and realize that depletion has us by the throat. The silence that will then come out of Washington will be deafening!

    http://www.thehillsgroup.org/

  13. Northwest Resident on Wed, 28th Jan 2015 9:53 am 

    shortonoil — Great points in your post above.

    When I read Obama’s announcement that his administration is opening up East Coast waters to oil and gas drilling, my first thought as usual was “whose attitudes and opinions is he trying to influence, and for what purpose”?

    As you point out, that statement and “policy change” by Obama’s admin can’t possibly be directed toward increasing oil production — as much as that appears to be the intent. If it was possible to increase oil production by drilling off the East Coast then they would already be doing it, environment and public opinion be damned.

    The constant theme I see being propagated by this and many past and present propaganda ploys is simply, do and say whatever it takes to keep the MUPPETS confident and invested in energy production.

    The takeaway for muppets with this Obama announcement is “sure, you got played for a sucker on fracking and yes you lost your ass, but just you wait until we start drilling off the East Coast because that my good friend is the real deal!”

    And the takeaway for all of us who see through the B.S. is, wow, they must really really need to keep all those muppets invested in shale and unconventional oil production, obviously because the moment the muppets all start bailing out of energy investments en-masse is the day that BAU crashes and burns.

    Or, am I reading too much into it?

  14. ghung on Wed, 28th Jan 2015 10:09 am 

    I, for one, doubt that it’s a coincidence that the administration announces plans to protect big parts of ANWR and open up Atlantic off-shore at the same time. He’ll let the Atlantic coast States and other interests tie up things off their coasts while getting his ANWR protections in place as promised. I doubt he’s too worried about pissing off Alaska at this point. The timing is no coincidence either, considering the current “oil glut”.

  15. Plantagenet on Wed, 28th Jan 2015 11:08 am 

    ghung is exactly right that obama is using the oil glut as cover for these moves, and right that oil drilling is very unlikely to ever get underway off the Atlantic coast.

  16. shortonoil on Wed, 28th Jan 2015 11:11 am 

    And the takeaway for all of us who see through the B.S. is, wow, they must really really need to keep all those muppets invested in shale and unconventional oil production, obviously because the moment the muppets all start bailing out of energy investments en-masse is the day that BAU crashes and burns.

    The industry has taken a real pounding lately. If the public loses faith in its ability to deliver product there will certainly be hell to pay. After the fleecing investors took on Shale there appears to be a concerted effort to bring faith back to the petroleum’s industry’s ability to right the wrong that was done. They want to project the idea that the industry can deliver oil if we let them. The talk about shale in the press seems to concentrate on the financial shenanigans that were once again pulled by the bankers. There is almost no mention of the fact the stuff wasn’t worth anything to begin with!

    Discussion of East Coast off shore, and ANWR are back to the same game they have been playing all along. That game has been: “There is plenty of oil, so how can it become a problem? All that needs to be done is to give the industry free rein to produce it”. It is meant to reinforce the concept that all oil is “good” oil, and there is a lot of oil.

    It is just a mater of time before they pull the 25 Gb to be had from the West Sak. Of course, no one will mention that pumping tar at 60 below zero is problematic. All the protagonists in this story are lining up to give lip service to their invisibility.

    Can’t wait for the statement from Obama’s dog?

  17. Northwest Resident on Wed, 28th Jan 2015 11:35 am 

    “Can’t wait for the statement from Obama’s dog?”

    Rucking ruff rimes raread. Rotta rye rum rime. ruff ruff — rucking ruff!

  18. Tom on Wed, 28th Jan 2015 12:13 pm 

    In the late 1970’s or early 1980’s oil industry nominations/priorities for leasing portions of the U.S. outer continental shelf were accepted by the U.S. Department of Interior. If I remember correctly, much of the east coast, with the exception of the Baltimore Canyon, were rated by the industry to be low priority. This was based on having performed seismic surveys on most of the area. The leasing that has occurred since that time has essentially followed the industry’s priorities. Therefore what is now being proposed for leasing, is, in fact, the “dregs” that have been reserved for last. Does the east coast have profit-making petroleum potential? It remains to be seen, but, based on the industry’s own priorities, I am extremely skeptical. the entire outer

  19. GregT on Wed, 28th Jan 2015 12:33 pm 

    Plant said,

    Blah blah blah blah Obama, blah blah blah blah ‘the oil glut’, blah blah blah blah.

  20. Northwest Resident on Wed, 28th Jan 2015 12:55 pm 

    I’m waiting for some fool to assert the phrase “Obama’s Oil Glut” as if it were fact. So far, no known fools have been willing to go that extra step with their customarily false and absurd accusations. But give it time. I know it must be very, very tempting for a special someone that we all know and love.

  21. Plantagenet on Wed, 28th Jan 2015 1:08 pm 

    @Nordent

    You are barking up the wrong tree if you want to discuss “Obama’s Oil Glut”.

    The oil glut is product of global supply-demand imbalance. It has nothing to do with Obama.

    Ruff ruff!

  22. GregT on Wed, 28th Jan 2015 2:40 pm 

    Blah, blah, blah, blah, “Obama’s Oil Glut”.

    Blah, blah, oil glut, blah, blah, blah, blah. Blah, Blah, blah blah, Obama.

    Blah blah!

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