Tuesday, 7 October 2014

The strange comfort of symptoms - Intermittent Explosive Disorder and other pseudo-explanations

A curious combination of excitement and annoyance accompanies hitting upon the succinct description of a phenomenon you were only able to skirt around incoherently. Last year, I wrote an article on capitalism and mental health which laboured to make the point that the pathologisation of mental disorders, such as depression or attention deficit, which conveniently enables pharma companies to sell more drugs, does not mean that the social effects themselves are fictions or are not becoming more acute.

Then comes along Belgian psychoanalyst Paul Verhaeghe, who says in this latest book What About Me? that, as far as mental distress is concerned, symptoms are being reclassified as diseases. I can see now what I was trying to say. Cheers. Kind of.

Here is Verhaeghe speaking:

One example is attention deficit and hyperactivity disorder. Because a child is hyperactive and has difficulty concentrating, they obviously have ADHD. A person who periodically explodes in uncontrollable rage suffers from Intermittent Explosive Disorder (IED). It’s rather like saying that someone who endures painful headaches every other day, has headache disease.

Verhaeghe says we are trapped inside circular arguments and pseudo-explanations. Breaking out involves accepting, in common with the British Psychological Society and the World Health Organization, that mental disorders are primarily caused by social factors.

Contemporary blindness

Every society generates mental illness as well as mental health, says Verhaeghe. The Victorian age, with its strict moral codes and repressive sexual morality, produced hysteria in some women and obsessive-compulsive disorder in some men. Our current society generates “disorders” such as depression and anxiety among adults and ADHD and autism in children. While we are quite able to look back with clarity on the deficiencies of past epochs, says Verhaeghe, “we are blind to what goes on in our own day and age.”

This is compounded by the neo-liberal insistence on the effects of mental distress, never the reasons behind it. “Sociological research has shown a clear link between the current socio-economic system and severe psychological and social problems,” writes Verhaeghe. “The dominant neo-liberal mindset ignores this fact and, instead of tackling the causes, focuses entirely on the consequences: namely, the deviant, disturbed, and dangerous others – psychiatric patients, junkies, young people, the unemployed and ethnic minorities.”

The reason why western politics seems so immovably stuck on this and other issues, is that even enlightened critics who want to change society’s attitude towards mental illness cannot extricate themselves from this “dominant neo-liberal mindset”.

For “better mental health”

Consider the UK charity, Mind, which has as its tagline “for better mental health”. The charity aims to ensure everyone experiencing a mental health problem gets help and support and is a member of Time for Change, a coalition of charities that campaigns against mental health discrimination and stigma.

There is nothing wrong with any of this and Mind does important work trying to make sure people with mental health problems are not unfairly affected by the Work Capability Assessment and other benefit horrors. But if you really want to achieve “better mental health” you have to extend your gaze immeasurably. You have to examine how the current organisation of work generates mental distress rather than mental health, how lack of control over your work is a cause of both mental and physical illness, how inequality generates distress, and how the erratic quality of early childhood relationships incubates mental problems that emerge later in life.

You would have to delve -  as the twentieth century German psychoanalyst Erich Fromm did – into what brings about a ‘sane society’ and what causes its opposite. This would inevitably take you into controversial and difficult issues, such as how success in contemporary society is dependent upon the fostering of certain characteristics, such as (in Verhaehge’s words) “flexibility, speed, efficiency, result-orientedness and articulateness in the sense of being able to sell yourself.” And how the lack of these skills leads to failure and self-blame.

But Mind and other mental health charities wouldn’t dare approach any of these issues. Apart from the fact that they are sternly warned off by politicians (a short-lived UK “minister for civil society” told charities to “stick to their knitting”), to do so would take you away from symptoms, which can always be ameliorated or looked upon in a different way, into the dangerously “political” waters of root causes. But because they are controversial and political is precisely the reason we need to go there.

As Verhaeghe readily admits, “finding evidence for the connection between a particular type of society and mental disorders is no simple matter”. He suggests that the spectacular rise of ADHD is connected to constant exposure to “information nuggets” such as text messages, tweets and keywords. There is no time to practice the art of concentration. This sounds plausible. But accepting this hypothesis then begs the question of why our work and free time is filled with so many distractions, why we are, in the words of David Harvey, “totally absorbed either in the pseudo busy-work of much of contemporary production or in the pursuit of alien consumerism.”

“Always connect”, said the early twentieth century novelist EM Forster. But, exceptions like the Equality Trust and the New Economics Foundation aside, most of the organisations that surround us are myopic when what is required is 20:20 vision. This narrow focus on symptoms is not limited to mental illness. When our political culture can bear to accept the reality of global warming, it becomes fixated on technological fixes that will give a spurt to economic growth. The root cause of the financial crisis becomes lost in attempts to eradicate symptoms such as unemployment or government debt.

Possibly, a compulsive need to always be occupied partly explains the compulsive attention on symptoms, because the symptoms will never go away unless you address the underlying disease. Maybe we want to permanently exhaust ourselves in trying to solve never-ending symptoms. I think Erich Fromm called it the fear of freedom.

Monday, 4 August 2014

Forget the 1 per cent, it's the 0.1 per cent you need to keep your eye on

I’ve always been rather mistrustful of the Occupy movement’s neat division between a 1 per cent prospering like there’s no tomorrow versus a 99 per cent struggling to make ends meet. There is, it seems obvious to me, a large segment of society in western economies that is materially quite well off and possessing a distinct wish for business as usual to prevail, rather than hoping for radical change.

I still think that caveat is valid, but, on closer reflection, maybe Occupy rather underestimated the problem. The real winners of capitalism are not actually the 1 per cent, but those even higher up the income ladder.

Consider, for example, this frankly mind-blowing graph from the UK’s Equality Trust, showing how income is distributed in Britain:

This graph requires, perhaps, some rubbing of the eyes, but some pictures, as they say, are worth a thousand words. It shows two explosions of income growth in the 0.1 per cent income bracket. Firstly, from an average of around £460,000 in 1993 to £840,000 in 2000. And then, most breathtakingly, from about £750,000 in 2000 to over £1.3 million in 2009. In the middle, there is a dip around the time of the dotcom stock market crash, and, after 2009, the real doozy economic crash kicks in and incomes fall to where they were in 2005 or 2006. The 1 per cent, meanwhile, saw a spurt of income from around £215,000 in 2003 to £315,000 in 2009. Nothing to be sniffed at but nowhere near as spectacular as the wealth surges achieved by their 0.1 per cent cousins. The 1 per cent are not millionaires, unlike most of the British Cabinet, who are.

Nice work if you can get it, you might say. But these ‘earnings’ don’t, in the main, come from work. One of the insights you gain from ploughing through Thomas Piketty’s Capital in the 21st Century is that income from capital only predominates over income from labour when you get to the 0.1 per cent, or even higher (the graph above, by the way, is put together using data from Piketty’s World Top Incomes Database).

“The share of income from labour always decreases rapidly as one moves progressively higher in the top decile [the top 10 per cent], and the share of income from capital always rises sharply,” writes Piketty, “ … income from capital assumes a decisive importance only in the top thousandth [the 0.1 per cent] or top ten thousandth [the top 0.01 per cent].”

What is income from capital? It is income that flows automatically from the ownership of assets. It takes the form, Piketty tells us, of “rents, dividends, interest, profits, capital gains, royalties and other income that comes from merely owning capital in the form of land, real estate, financial instruments, industrial equipment.” What has rather masked the giant land grab of wealth that has been going on the last 15 years, is that inequality of income from labour has also grown massively. Piketty documents the rise of the ‘super-manager’, a phenomenon particularly pronounced in the US, but one that has also happened, to a large extent, in Britain and France:  corporate executives who earn millions and whose huge incomes seem to bear no relation to either merit or productivity. But concentration on this patent rubbishing of the meritocratic principles on which the economy is alleged to rest, hides the even greater funnelling of wealth into the hands of people who don’t even have to get out of bed to receive it.

It is remarkable how successive UK governments have obediently furthered the interests of the 0.1 per cent, people whose interests, you might imagine, are not in desperate need of any furthering. The 0.1 per cent income explosion, shown in the graph above, gives pre-tax income. Meanwhile, the tax they pay on that income has been drastically cut. The top rate lies at 45 per cent but was 83 per cent in the 1970s. Corporation tax, a tax on the profits of the corporations the 0.1 per cent largely own, has been reduced from 33 per cent in 1997 to 21 per cent, and will be shrunk further to 20 per cent in 2015. Capital gains tax, a tax of the profit you make from selling masses of shares for example, was slashed from 40 to 18 per cent in 2007. And when the financial crisis arrived, the British government responded with a £375 billion state subsidy programme, known as Quantitative Easing, which raised the value of assets such as equities and bonds, by a quarter.

Ignorance and confusion

With regard to inequality, Piketty has exposed “our collective ignorance and confusion,” says Stephanie Flanders (ex-BBC economics editor and now chief market strategist for JP Morgan Fleming), in a review of Capital in the 21st Century. The confusion stems, in part, from the fact that the official measure of inequality in the UK, the Gini Coefficient, reflects only mutedly, as the graph below shows, the phenomenal income spurts of the 0.1 per cent.

Graph reproduced courtesy of the Equality Trust

Indeed, inequality fell somewhat in the immediate aftermath of the financial crisis, as both the capital-dominated income of the 0.1 per cent took a hit (cushioned to an enormous degree by government) and those further down the income ladder weathered income declines. According the UK Office for National Statistics, the top 20% (entry requirement £36,466 a year) of households have seen their income drop by 5.2 per cent since 2007. Inequality has been falling, paradoxically, while median incomes have endured their longest period of contraction since the 19th century. Inequality has just recently started rising again, by the way, as the torrent of misery inflicted by the government on those at the bottom of the income pyramid, begins to show up in statistics.

What will happen in future to the incomes of the 0.1 per cent? If economic growth is slow but uninterrupted, their income will resume its spectacular rise. If, however, further shocks are in store, as seems likely, it may well be that their wealth will be hit again. And government may not have the resources to step in to save them.

The patrimonial middle class

I referred to an important caveat at the start of the post and, if you read Piketty, you get an idea of why Occupy’s 1 per cent/99 per cent division is both an underestimate and, at the same time, a simplification of the situation. When you look at the rise of the 0.1 per cent, especially in the context of real wage decline, it’s tempting to assume huge swathes of society have been locked out of prosperity. But that is not the case. Go back a hundred years, says Piketty, and you can see vastly greater concentrations of income and wealth. Then in Europe, the top 10 per cent owned virtually everything and the bottom 90 per cent were frozen out. This was a time of the phenomenal growth of Marxist and syndicalist workers’ movements, which was no accident.

Since that time, says Piketty, we have seen the emergence of what he calls the “patrimonial [property-owning] middle class”. Though wealth is still extremely concentrated, this middle class, estimated by Piketty at 40 per cent of the population, has appropriated an important share of wealth. “Tens of millions of individuals – 40 per cent of the population represents a large group, intermediate between rich and poor – individually own property worth hundreds of thousands of euros and collectively lay claim to one-quarter to one-third of national wealth: this is a change of some moment,” he writes.

Piketty describes the emergence of this middle class as “fragile” and it seems we are witnessing the end of the affair, as, for example, the proportion of those renting their homes increases and those with mortgages declines. But it will take a long time to unravel and, at present, different parts of society seem to inhabit separate universes. And the universe of the 0.1 per cent is the most hidden of all.

Piketty’s telescope on that universe indicates the supreme importance of income from capital. As awareness of the scope of inequality has grown, interest in alternatives such as the Mondragon collective of worker-controlled cooperatives in Spain, has risen. Mondragon has an income ratio of 6 to 1, in contrast to the income ratios of 300 to 1 present in many corporations, it is pointed out, approvingly. But the important characteristic of Mondragon is not just its much lower income gap, but the fact that income from capital, the income gleaned from profits, goes to all members of the co-operative, and is not syphoned off by a tiny elite. So much flows from the ownership of capital.

Thursday, 17 July 2014

The Ghost of Karl Polanyi

Nearly three years ago I wrote a two-part review of a book that, although close to 70 years old, seemed practically psychically insightful about our current economic and social predicament.  The Great Transformation by émigré socialist economist Karl Polanyi was about how the free market economy, scrupulously assembled and globalised in the 19th century, crashed and burnt in the 1930s, to be replaced by Fascism and Stalinism.

At the heart of this market economy, and pivotal to its collapse, was the creation of what Polanyi calls ‘fictitious commodities’. Nature, labour and money were not commodities; they didn’t conform to the definition of a commodity in that they weren’t produced for sale. But they were still caught in the dragnet. Everything had to be a commodity, no form of income could be permitted that didn’t derive from selling on the market. “To allow the market mechanism to be the sole director of the fate of human beings and their natural environment, even of the amount and use of purchasing power,” wrote Polanyi, “would result in the demolition of society”.

Past, pre-capitalist societies saw great dangers in this commodification and they deliberately held it in check. Nobody was threatened with starvation – as they are now - unless they made enough money through paid labour. Past societies (European feudalism is an example), even though marked by oppression and domination, operated on different, non-economic, principles, such as reciprocity, loyalty and obligation.

Polanyi saw a solution to this modern commodification of everything in the regulated and mixed economies that were to emerge after the Second World War (The Great Transformation was published in 1944). He believed that working conditions and the basic wage should be “determined outside the market”. He thought land should be owned by co-operatives, towns, schools, parks and wildlife preserves, and the government should direct investment. After a century of blind improvement society was restoring its habitation, Polanyi said.

I was reminded of Polanyi’s relevance because someone else was. Marxian geographer, David Harvey, in his latest book, Seventeen Contradictions and the End of Capitalism, says that “capital has expanded its range and depth with the passing of time” and no-one saw more clearly the nature of this phenomenon than Karl Polanyi.

Chief among the self-evident truths that govern our societies, writes Harvey, is the idea that “everything under the sun must be in principle and wherever technically possible subject to commodification, monetisaton and privatisation.” Neoliberal policies have ripped up many of the protections put in place by the politics moulded after the Second World War. Using Marx’s terminology, Harvey says that “exchange value is everywhere the master and use value the slave.” You can see the contrast between use value and exchange value most clearly in housing. There is an obvious use value in housing – people need somewhere to live and shelter, warmth, utilities etc. But housing is also, and now primarily, a way to make money; it possesses exchange value. It is a financial asset that has a crucial role in the economy. This leads to perverse policies so that house building is limited in order that increased supply doesn’t drag down house prices. So exchange value trumps use value.

The question that thrusts itself forward if you read Polanyi today is whether society, as it was in the 1930s, is in dire need of de-commodification? After three decades of neoliberal improvement, does society need to concentrate on habitation?

You could classify this necessary de-commodification, following Polanyi, into three main areas, plus one more

1 Labour

Labour’s commodification is becoming more pronounced in the kind of economy that is being built post-crash. Casual (zero-hours, short-term or self-employed), low-paid and low productivity jobs are in the ascendancy. People are reduced to mere labour costs which must always be held down. Labour’s status as a ‘fictitious commodity’ is compounded by its lack of power as a commodity. It suffers from perpetual over-supply so, small elites aside, it lacks negotiating power. The compulsion to work at whatever conditions offered by the market is augmented by the systematic dissolution of the welfare state in Britain. Wages fall as a result.

One way to give a modicum of power back to labour is a basic income. With everybody’s income assured at some level, the capacity of those offering employment to, in the words of a member of the Swiss organisation, ‘Generation Basic Income’, “blackmail people with their existence” will be severely curtailed. In his day, Polanyi thought trade unions had the power to determine the basic wage outside of the market. They no longer have that power, but a basic income can achieve a similar de-commodification of labour.

2 Housing and Public Services

As noted on the Preorg blog, Article 25 of the UN’s Declaration of Human Rights says that everyone has a right to housing. But in Britain ever rising mortgage costs mean the average house now trades at just shy of 10 times salary. Spiralling rents mean they can easily eat up 50% of income, while people are frequently evicted from their rented accommodation because the owner wants to sell to cash in on rising prices, or raise the rent.

“Land, a commodity that arose through no work of our own,” says the Preorg blog in an echo of Polanyi, “and buildings, a collection of simple technologies that could be available to all, are not what prevents us solving the housing crisis in Britain and they are not the cause of homelessness around the world.”

There are uncomplicated ways that housing can shed its exchange value and be returned to a use value function, such as community land trusts, council housing and housing co-operatives. But such market-denying interventions are nowhere near the level they need to be.

A similar de-commodification is needed in public services. The unadorned principle should be that the provision of utilities that everyone needs should not be means to make billions for hedge funds. Capital-ism – the use of money to make money – has no rightful place here. Welsh Water, a social enterprise without shareholders that does not engage in crass profiteering and does not raise prices unjustifiably, is an example of the way ahead. Use value needs to trump exchange value.

3 Land/Nature

Polanyi says in The Great Transformation that to isolate land and form a market out of it “was one of the weirdest undertakings of our ancestors.” Famous nineteenth century liberal Jeremy Bentham wrote that “the condition most favourable to the prosperity of agriculture exists when there are no entails, no unalienable endowments, no common lands, no rights or redemptions, no tithes.”

There are many more restrictions on how owners can use land than existed in nineteenth century, but land is still a massively privately-owned resource. 36,000 individuals – 0.6% of the population – own half of rural land in Britain. The movement towards community land ownership in Scotland is a way land ownership could be democratised. A return, possibly, to the common lands of centuries past. But, and this is important to remember, it would still be a market, albeit a decentralised one, with different people running things.

Polanyi’s own answer to nature becoming a market was that land should be owned by institutions – schools, co-operatives, the church or towns. Land and nature should be ‘embedded’ in institutions, followers of Polanyi say. But, as recent history shows, the church, local authorities or public agencies are not custodians of the land. These institutions seem utterly entwined in the ‘one big market’ of which Polanyi spoke. They are not averse to selling the land they own for development, for instance. In China, land grabs against peasant ownership in the last few years have been conducted by heavily indebted local authorities who then sell the land to developers.

Land that is not ‘marketised’ would form, I would suggest, a landscape that was not exploited solely as a resource, was not used for fracking, was not developed for houses (yes, I know there is a contradiction between this and the need to build homes), not subject to harmful pesticides, not used for agricultural mega-farms. This does suppose a change in ownership but that is not sufficient.

4 Money
Here we are on, I admit, shaky ground in trying to apply to Polanyi’s insights to today’s financialised world.  His central objection was to commodity money – money that is a mere representative of a commodity like gold or silver – and cannot be increased or decreased. In the nineteenth and early twentieth century reliance on commodity money was why so many governments were part of the international gold standard. Countries ‘pegged’ their currencies to gold and wages and prices fell or rose as they experienced a trade surplus or deficit. Polanyi quite correctly saw that these swings caused mass uncertainty and unemployment and paved the way for the collapse of the market economy in the ‘30s. Many people have said the euro is a 21st century gold standard because it denies states the option of devaluing their currency (they don’t have one), and austerity is the inevitable result – increased ‘competitiveness’ through lower wages. Given that, you could argue that, to be an authentic ‘Polanyian’ today, you should be in favour of European states having their own currencies again. “Abolishing the euro in its current form,” says German sociologist Wolfgang Streeck, “would thus be equivalent to the abolition of the gold standard in the 1920s, which, according to Polanyi, made it possible again ‘to tolerate willingly that other nations shape their domestic institutions according to their inclinations.’”

Commodity money is in contrast to fiat money – money issued by governments that cannot be redeemed in gold. With all due respect to Polanyi, I don’t see how the trillions of dollars of fiat money created through quantitative easing is any less fictitious than commodity money.

Polanyi argued that as commodity money practically disappeared after the collapse of the gold standard, it was replaced by ‘purchasing power’ money. The only purpose of purchasing power money is to buy goods to which price tags are attached. Shopping, in other words. It is tempting to argue that we have to contend with a new kind of commodity money – money used to buy and sell financial instruments based on debt, so that the end owner of the debt (who receives the interest payments), literally has no relation to, or knowledge of, the people or institutions that took out the loan in the first place. These were the instruments at the heart of the financial crisis, while ‘purchasing power money’ has taken a back seat. It could be argued this is ‘fictitious capital’ at its most dangerous.

Another side of Karl Polanyi

Karl Polanyi has come back into vogue in the aftermath of the economic crisis, but he usually receives a tepid interpretation. American sociologist Fred Block, for example, says that The Great Transformation shows that national economies depend on active government and the global economy on strong regulations. Blah, blah, blah. A more radical reading of Polanyi implores us to actively de-commodify – to remove from control by markets – certain key elements of human life. The question that remains is whether this is possible, while retaining capitalism. Writing in the 1940s, Polanyi was clear that labour, nature and money were “essential elements in industry” but he nonetheless wanted to safeguard them from the effects of markets. Today, they seem to be more essential than ever to economic growth. Continental Europe is endeavouring to restore growth by ending collective bargaining, thus enmeshing the ‘basic wage’ even more tightly in the market. The UK’s recovery is based on a house price bubble and exploitation of low wage labour. Further privatisation and outsourcing are also elements of the mix. Commodify, monetise, privatise.

A revolt against this process would obviously not try to facilitate this kind of growth; it would have the opposite effect. “The revolt of the mass of the people in the name of inadequate access to use values becomes imperative,” writes Harvey. But if you – to use Marx-speak – privilege use values at the expense of exchange values, do you not also inhibit capitalist growth? As I have written before, we have a ‘divided self’ when it comes to the economy. Many people can see the disastrous, anti-social impacts of capitalism, and want to ameliorate them, but they are also ‘capital dependent’ in the sense that they need jobs to live and pensions to live off when they retire (funds which are often invested on the stock market). They thus have an interest in capitalism being successful.

Against this, it should be said that introducing a basic income and detaching housing from the market, would result in higher incomes for people whose incomes are now being squeezed in various ways. This should have a beneficial impact on growth.

The radical interpretation of Polanyi inspires attempts to de-commodify core elements of human existence. The even more radical interpretation is that this Polanyian endeavour is now – whether it likes it or not – post-capitalist.