Lambert here: I got into permaculture during the last Crash, as a hedge against not being able to buy food, and from there to plants (see, e.g., Michael Pollan’s The Botany of Desire and IN Defense of Food). So it’s not surprising to see titles like Meals Matter appearing in the zeitgeist again.
By Michael Symons, a restaurateur who turned to scholarship. His latest book, Meals Matter: A Radical Economics through Gastronomy, is now published by Columbia University Press. Originally published at Open Democracy.
Political leaders and economic commentators pronounced the coronavirus crisis a balancing act between “lives” (on one hand) and “the economy” (on the other). To save lives, “the economy” would have to contract, until it, too, needed saving – when we might have to sacrifice lives.
But what is this singular “economy”?
Economists model “the economy” through the price mechanism, and evaluate it through such measures as Gross Domestic Product (GDP). Even many economists have grown restive, warning, for example, that the GDP is misleading, and recommend such non-financial indicators as “well-being”.
The deception goes much deeper. Broadly, “the economy” puts money in command. Under the guise of the old “laissez-faire”, then “free enterprise”, and more recently neoliberal “greed is good”, money funded its own self-aggrandizement. The resulting ideology handed enormous power to finance and business chiefs – and governments, often on money’s behalf.
As I set out in my new book, Meals Matter: A Radical Economics through Gastronomy, for two centuries, modern economists misappropriated Enlightenment ideas on behalf of money. Their distorted “economy” might have boosted productivity, but worsened inequality, demoralized democracy, and tipped the natural world towards disaster. Please, no more “business as usual”.
What is an economy? As those political leaders hobnobbing less with CEOs might readily accept, every economy centres on the distribution of nourishment. An actual economy puts food on the table. It’s life-giving, which is why care, health and food workers never stopped being “essential”.
Back when Adam Smith’s Wealth of Nations launched modern economics in 1776, many writers well understood the gastronomic basis of economies. Even Smith argued that, through the “co-operation and assistance of great multitudes”, including the butcher, brewer, and baker, “we expect our dinner”.
More than that, Enlightenment philosophers recognized five, interconnected economies. Each type of economy supplies sustenance in a distinct way, with money surprisingly inessential. While side-lined by economists, these five are everyday realities for eaters. The lockdown renewed attention to all five, and dramatized the need to rebalance them.
First comes the domestic economy. Society’s “building-block” was the original oikonomia. Such ancient Greek writers as Xenophon instructed on the management of the family home (or oikos). Economics advised on housework, indoors and out. The family’s method of sharing food and its labour among themselves was defined by sociologist Max Weber a century ago as communist. Given the history of paternalism, Weber referred to what he called the “ideal-type”, but, most certainly, no money required.
The virus brought the domestic economy roaring back. Home offices, home schooling, and home cooking all expanded, complete with the widespread rediscovery of sourdough baking. Many predict that, having been rediscovered, this economy might not entirely snap back to “the economy”. For 51% of respondents of one U.S. survey (late-May 2020), the “new normal” would include continuing to cook more often at home. Together with more people preferring to work from there, cooking might now not go the way of home sewing – from commonplace to minority hobby.
In Adam Smith’s day, Enlightenment intellectuals were preoccupied with the political economy (from polis, the ancient Greek for “city”). This is a town, nation or similar conceived as a great household. Some central authority accepts responsibility for the distribution of nourishment, acquired through a community-wide division of labor. This method is food redistribution (although the term has come to mean transferring resources from the rich to the poor, or vice versa).
Since their earliest examples, temples and courts coordinated wide gathering and serving of food, centred on often ostentatious-seeming sacrifices and banquets. With increasing sophistication, redistribution seemed less directly nutritional. In a decisive development, authorities adopted money taxation and disbursement as an intermediary. As philosopher Thomas Hobbes pointed out in 1651, money became a more transportable and less perishable food substitute, which circulated like blood around the “body politic”, for conversion back to nourishment, when required.
Dramatized by the storming of the Bastille on 14 July, 1789, the French Revolution was meant to democratize the monarch’s role as “baker-king”, including Versailles banquets. On the Revolution’s first anniversary, General Lafayette supervised “endless tables” under Parisian trees for 22,000 provincial representatives, followed by 5,000 of the poor. However, attempts at literal feasting in the streets demonstrated the sophistication already attained by supply chains.
The modern banquet is an intricate affair, almost lost to view. Yet the coronavirus has brought this political economy to the fore, with governments directing social distancing, shifting resources to health, boosting emergency food and survival incomes, and also spending to save “the economy”.
When Hobbes imagined the political economy as a giant Leviathan with a crowed head over an agricultural nation, he saw a “body politic”, drawing an analogy with the human physiology. The terms “physiology” and “economy” were virtually interchangeable at the time. French économistes would gain the nick-name “physiocrats”, for example. Furthermore, Enlightenment intellectuals spoke of the person as an animal economy. Each of us can be viewed as an economy, centred on nutrient flows.
Liberal thinking emerged with Hobbes, John Locke, Jean-Jacques Rousseau, and Thomas Jefferson arguing every individual’s equal need, enforced by nature, for self-preservation, primarily through nutrition, and best served through a commonwealth of mutual support. They established a near-sacred right to life, liberty and the pursuit of happiness. The liberal response to the pandemic has underlined this social contracted care for the individual. By contrast, more authoritarian leaders have downplayed individual health for the sake of “the economy”. With the decline in the neoliberal promotion of liberty, rightwing leaders are increasingly inclined to identify “the economy” with “the nation”.
Typically of Enlightenment economists, François Quesnay was a medical professional – he was Madame de Pompadour’s physician. By 1747, when writing on the animal economy, he found parallels in the social distribution of primary production, notably the buying and selling of grain. Quesnay decided that, like the body, the market economy was preferably left to work “naturally”. Rather than the “baker-king” controlling prices, Quesnay saw benefits in market exchange. French économistes had a huge influence on Adam Smith, when he socialized with them while living in Paris during early free-market experimentation.
With the nineteenth-century rise of corporate capitalism, Smith’s early supporters promoted the market’s “invisible hand” as superior to any other economic coordinator, notably as much more efficient than democracy. They advocated liberty for money, while ignoring equality, life and happiness. Dropping “political” from their name, they imperiously proclaimed themselves “economists”.
Later in the nineteenth century, “marginalist” economists used the mathematical calculus to describe the behaviour of market prices, so mesmerizingly that they thought they studied nothing short of “the economy”. John Maynard Keynes became synonymous with some pushback within the ranks. However, again with the Ronald Reagan/Margaret Thatcher era, neoliberal leaders obeyed economists’ fundamentals to restore supreme freedom to money.
Significantly, the virus exposed the hollowness of demands for “small government”. With budget deficits of lesser concern, given obvious government support for “the economy”, many citizens hope that democratic power might more forcefully save a fifth economy, the most essential of all.
The coronavirus starkly reminded that all economies depend on the intricate web of nutrient flows of the natural economy. Charles Darwin still used that term, “natural economy”, in his Origin of the Species in 1859 (German zoologist Ernst Haeckel introduced “ecology” ten years later). Undeniably, money’s ceaseless push for so-called “growth” has trampled on actual growth.
In summary, the present tumultuous rebalancing has demonstrated the market economy to be poorly-equipped to cope with viral attacks on the animal economy, leading to renewed reliance on the domestic economy, while governments at local, national and global levels have reasserted the political economy. Finally, as players at all levels must surely soon accept, the overall, natural economy must return urgently to prominence, or we’re all shut down.
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There is one way to reduce greenhouse gas output by a third and to meet the current targets. It is also a method that is well within the competence of ruling classes around the world. Simply follow through on the current crisis and reduce the material economy by a third.
The elites can then throw the burden of poverty on the bottom 80%. This would fit with their methodology of the last few decades and can be justified by the principle of destroying the village in order to save it.
Capitalists can’t do that and remain capitalists.
They can develop a massive immaterial economy by capturing unenumerated human rights under a property regime and legally enforcing a permission requirement from the rightsholder. If that sounds like modern intellectual property or the bats–t loony world of neoliberalism to you, you’re right.
I think many of them will be OK with their transition to feudal lords.
Feudal lords owed duties to their serfs. Serfs had customary rights and land tenure. Feudal lords also had to personally go to war when the king called, and bring infantry with them through personal loyalty.
These modern parasites would not be good feudal lords.
Plagues helped the serfs that were survivors because their labor became much more valuable. The master of the manor relied on them to do the farming and maintenance, as well as providing manpower for tolls on roads going through their land or collecting fees for markets held in their town.
The very bad things, like the English starving the Irish, generally happen when the aristocracy became disconnected from the people doing the labor and their isn’t a social contract. That is what has been happening in the US over the past few decades.
Let’s all adopt a plant based diet.
Reduction in greenhouse gas emissions
Major increase in general health
– fewer cancers
– no heart disease
– minimal diabetes …
No COVID since we won’t need the industrial ag that breeds avian/swine flus
Downsides…
No bacon
A bunch of ranchers need to do something else
“Everything is getting better and better look at the stock market” the 1920’s believer in free markets
That belief will be gone by the end of the decade.
“Stocks have reached what looks like a permanently high plateau.” Irving Fisher 1929.
This 1920’s neoclassical economist that believed in free markets knew this was a stable equilibrium.
He became a laughing stock.
Better shelve this for a few decades until everyone has forgotten.
Now everyone has forgotten we can use it for globalisation.
In the 1930s, a lot of effort went into working out what had gone wrong, but because we switched to Keynesian capitalism for a few decades much of it got lost.
The free market thinkers at the University of Chicago were just as keen as anyone else to find out what had gone wrong with their free market theories in the 1920s.
The Chicago Plan was named after its strongest proponent, Henry Simons, from the University of Chicago.
He wanted free markets in every other area, but Government created money.
To get meaningful price signals from the markets they had to take away the bank’s ability to create money.
Henry Simons was a founder member of the Chicago School of Economics and he had worked out what was wrong with his beliefs in free markets in the 1930s.
Banks can inflate asset prices with the money they create from bank loans.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.
“Simons envisioned banks that would have a choice of two types of holdings: long-term bonds and cash. Simultaneously, they would hold increased reserves, up to 100%. Simons saw this as beneficial in that its ultimate consequences would be the prevention of “bank-financed inflation of securities and real estate” through the leveraged creation of secondary forms of money.”
https://www.newworldencyclopedia.org/entry/Henry_Calvert_Simons
Real estate lending was actually the biggest problem lending category leading to 1929.
Richard Vague had noticed real estate lending balloon from 5 trillion to 10 trillion from 2001 – 2007 and went back to look at the data before 1929.
Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.
“Stocks have reached what looks like a permanently high plateau.” Irving Fisher 1929.
This 1920’s neoclassical economist that believed in free markets knew this was a stable equilibrium. He became a laughing stock, but worked out where he had gone wrong.
Banks can inflate asset prices with the money they create from bank loans, and he knew his belief in free markets was dependent on the Chicago Plan, as he had worked out the cause of his earlier mistake.
Margin lending had inflated the US stock market to ridiculous levels.
The IMF re-visited the Chicago plan after 2008.
https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf
This is how an asset price collapse feeds back into the financial system.
Why did it cause the US financial system to collapse in 1929?
Bankers get to create money out of nothing, through bank loans, and get to charge interest on it.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
What could possibly go wrong?
Bankers do need to ensure the vast majority of that money gets paid back, and this is where they get into serious trouble.
Banking requires prudent lending.
If someone can’t repay a loan, they need to repossess that asset and sell it to recoup that money. If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse.
As the real estate and stock market collapsed the banks became insolvent as their assets didn’t cover their liabilities.
They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get most of the money they lend out back again to balance their books.
The banks become insolvent and collapsed, along with the US economy.
When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse.
“It’s nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world” All the Presidents Bankers, Nomi Prins.
When this little lot lost almost all its value overnight, the Western banking system became insolvent.
Western taxpayers had to recapitalise the banks and make up for all the losses the bankers had made on bad loans they had made to inflate asset prices.
We don’t want another financial crisis so central banks have to keep pumping up asset prices.
When asset prices collapse it feeds back into the financial system.
Today’s policymakers think banks are financial intermediaries.
This is what banks would look like after the Chicago Plan, but that was never put into place.
Banks can still inflate asset prices with money they create out of nothing.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Policymakers have been slow to realise how this causes the problems the University of Chicago found in the 1930s.
I did some weekend reading of the NY Times coverage of the week of the 1929 crash.
From Nov. 1, 1929:
https://archive.nytimes.com/www.nytimes.com/library/financial/110129crash-brokers.html/
“…Many of the houses accustomed to sending out letters each night did not do so yesterday. They felt that in view of the two days’ suspension of trading any advice contained in such letters might be inapplicable by Monday. Other houses which get out only weekly letters issued theirs last night.
See Outlook Encouraging
Some of the opinions expressed in letters that were mailed to customers yesterday follow:
Orton, Kent & Co.–We consider the situation from the standpoint of the market and from that of business to be more encouraging than for some time past. It is true that the terrific losses sustained by security holders throughout the country will make serious inroads into the demand for luxuries. To a certain extent this will no doubt permeate all phases of commerce and industry and should result in slightly lower, corporate profits in the fourth quarter of this year than last year. While reduced demands for luxuries and semi-luxuries resulting from stock market losses will somewhat aggravate the industrial retrenchment, the deflation has resulted in other conditions which are distinctly favorable.
Jackson Bros., Boesel & Co.–The demonstration in the stock market yesterday was a vote of confidence in the business and credit situations of the nation. The size of the buying power still unsatisfied leads us to the conclusion now that the market could easily rally another 10 to 20 points in the averages before real resistance is encountered.
P. F. Cusik & Co.–That a large part of the recent collapse in security pirces was due to an aggravated condition of “undigested securities” there is little doubt. With a temporary, even if enforced check on the flood of new issues, stabilization of prices for existing securities will be further aided.
Wads Bros. & Co.–We expect, however, within the next week to see an orderly and healthy market which will reflect the prosperity of individual companies.
E. F. Hutton & Co.–It is hard to imagine any reason for selling high-grade securities at these levels and there seems to be every fundamental and technical justification for buying….”
Other bits of from the NY Times archive 1929:
Oct. 30
https://archive.nytimes.com/www.nytimes.com/library/financial/103029crash-fed.html/
…”Bank Rate Cut Expected
As developments of the day pointed to increasing ease in credit, banking opinion in Wall Street yesterday reached the conclusion that a reduction in the rediscount rate of the Federal Reserve Bank of New York was sure to be ordered at tomorrow’s meeting of the directors. Although call money advanced from the renewal rate of 5 per cent to 6 per cent, in response to the calling of $150,000,000 in loans, rates on bankers’ acceptances were again slashed one-eighth of 1 per cent and other branches of credit displayed ease.
The calling of loans which developed during the day was largely the result of withdrawal of funds by out-of-town and non-banking lenders.
Rates on bankers’ acceptances are now down one-half of 1 per cent from the levels which obtained since last August and leaves the bill buying rate of the Federal Reserve far out of line with the actual market.
The new rates are 4 3/4 per cent bid, 4 5/8 per cent asked for 30, 60 and 90 day bills; 4 7/8 per cent bid, 4 3/4 per cent asked for four months’ bills, and 5 per cent bid, 4 7/8 per cent asked for five and six months’ bills.
Tomorrow’s statement of brokers’ loans is expected to show a record-breaking decrease. Some put the figure at $750,000,000….”
https://archive.nytimes.com/www.nytimes.com/library/financial/103029crash-lede.html/
“Stocks Collapse in 16,410,030-Share Day, but Rally at Close Cheers Brokers; Bankers Optimistic, to Continue Aid”
Three Factors in Market
Three factors stood out most prominently last night after the market’s close. They were:
Wall Street has been able to weather the storm with but a single Curb failure, small in size, and no member of the New York Stock Exchange has announced himself unable to meet commitments.
The smashing decline has brought stocks down to a level where, in the opinion of leading bankers and industrialists, they are a buy on their merits and prospects, and brokers have so advised their customers.
The very violence of the liquidation, which has cleaned up many hundreds of sore spots which honeycombed the market, and the expected ability of the market to right itself, since millions of shares of stock have passed to strong hands from weak ones….”
I am re-reading “The Great Crash 1929” John Kenneth Galbraith.
Now I know more, I can see things that I didn’t when I read it first time.
I have nearly finished, and have just read the part where Irving Fisher is in the making excuses phase after 1929.
Later on he knuckles down to work out where he went wrong.
I don’t think this is covered in the book, but I haven’t quite finished it yet.
They issued more credit to buy stocks to prop up the market.
The banks failed.
And they will swear up and down it was the “gubment” policies that caused the crash. “Gubment” didn’t do anything but let them rob as they please. So yeah, that was a failure.
No scam is ever the bankers’ fault. They are going to run the same narrative this time around.
Look into the movement for food sovereignty. World’s biggest social movement by far, but largely centered in the global countryside and therefore lamentably not on the radar here, though it is absolutely everywhere else. Like various things. Deeper, harder than Pollan by far.
We can talk about equality–including Black equality–until the cows come home. But until Black farmers have land. . . Then we begin to build locally. Miguel Altieri, one of the founding fathers, is also the father of agroecology. Invisible because it’s radical. As the left has said for a century and a half, it’s all about land reform. That scares the liberals off.
Love Michael Symons, know him from watching The Food Network. Seeing as how detailed, historical and geographical his offerings were, not too surprised in him having branched out into an economic breakdown as well. Was happy to see he brought up the physiocrats. What he omitted about them was that they came up with the impot unique, “ to make the landowners of France pay for the expenses of the sovereign thus avoiding the onerous taxation of the peasants, workers, and cultivators of land. It was to be a levy on the value of land exclusive of improvements such as crops, houses, barns, fertilization- as well as the wealth* produced by labor and capital utilizing land, the source of all wealth.”
Adam Smith had this to say about it – “This system, however, with all its imperfections, is, perhaps, the nearest approximation to the truth that has yet been published upon the subject of political economy, and is upon that account well worth the consideration of every man who wishes to examine with attention the principles of that very important science.”
Quotes from – http://www.acsu.buffalo.edu/~zarembka/Physiocrats.htm
Also a piece on A.R. Jacques Turgot, associated with the physiocrats, but “scouted their cult-like tendencies”-
Turgot’s Legacy_ Our Commerce Clause | by Mason Gaffney
A complement to MMT…
Meanwhile, FYI, here’s my review of Stephanie Kelton’s The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy
Breatharianism is the simplest answer….
Making money doing nothing.
What are the options?
Well, there are quite a few options available; we’ve got rent, dividends and interest and there is the globalisation favourite, capital gains on property.
With a BTL portfolio, I can get the capital gains on a number of properties and extract the hard earned income of generation rent at the same time.
That sounds good.
What is there not to like?
This is the best thing about capitalism.
You can make money without doing any work.
Economists do identify where real wealth creation in the economy occurs, but this is a most inconvenient truth as it reveals many at the top don’t actually create any wealth.
The Classical Economists had a quick look around and noticed the aristocracy were maintained in luxury and leisure by the hard work of everyone else.
The Classical economist, Adam Smith:
“The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money.”
Ricardo was an expert on the small state, unregulated capitalism he observed in the world around him. He was part of the new capitalist class and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.
“The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist.
They soon identified the constructive “earned” income and the parasitic “unearned” income.
They got rid of that with neoclassical economics.
GDP was invented after they used neoclassical economics last time.
In the 1920s, the economy had been booming, the stock market had been soaring and nearly everyone had been making lots of money.
In the 1930s, they were wondering what the hell had just happened as everything had appeared to be going so well in the 1920s and then it all just fell apart.
They needed a better measure to see what was really going on in the economy and came up with GDP.
In the 1930s, they pondered over where all that wealth had gone to in 1929 and realised inflating asset prices doesn’t create real wealth, they came up with the GDP measure to track real wealth creation in the economy.
The transfer of existing assets, like stocks and real estate, doesn’t create real wealth and therefore does not add to GDP. The real wealth creation in the economy is measured by GDP.
So all that transferring financial assets about doesn’t create wealth?
No it doesn’t, and now you are ready to start thinking about what is really going on there.
Someone’s got to do it, and it isn’t going to be today’s economists.
Introduce “economic liberalism” and everyone will go for the easy money.
Creating real wealth involves real work, producing new goods and services in the economy.
Why bother working hard and building up a company yourself?
Asset strip companies other people have built up, that’s easy money.
We created a parasitic rentier capitalism and then the coronavirus hit.
There was nearly as much wealth extraction as wealth creation in the economy, and a shrunken economy just won’t cope this.
Adam Smith really sticks the boot in:
“All for ourselves, and nothing for other people seems, in every age of the world, to have been the vile maxim of the masters of mankind.”
Calm down, mate.
They haven’t changed you know.
2014 – “85 richest people as wealthy as poorest half of the world”
2016 – “Richest 62 people as wealthy as half of world’s population”
2017 – World’s eight richest people have same wealth as poorest 50%
They’re still at it.
The landlord employer game is always to make your money worth less and their money worth more. They raise the rent with the law and reduce your wages with globalism. At the end of each cycle, they replenish their credits and wipe out everyone on the “ladder to success.” It’s a ponzi you can’t win, because it has been passed down for thousands of years across generations, and you are the last one in if you choose to play. Set your distance, to eliminate misdirection.
The point of electronic money is surveillance of every transaction. They increase the volume of electronic money and decrease the relative volume of physical cash in general circulation. Their problem is that they are blind to quantum change because they are replacing the real world with an artificial one, and nature is a boundary that they can no longer see.
Ultimately, labor is filtered out, they hang themselves with their own noose, and labor remaining proliferates. The fact that they have digressed to employing political appointees with irrelevant degrees and crazy salaries to decree martial law does not portend well for what remains of the constitutional narrative.
Those with the best paychecks have degrees, but most with degrees do not get a good paycheck. If the objective were distribution of wealth, those producing real wealth would be at the top, not the moneychangers and their enablers. Electronic money passes through many consuming hands long before what is left reaches the sustainable producers (if at all).
The law is about preserving the order of natural resource exploitation, feeding whatever useful mob presents itself until it is no longer useful. And there is always a useful emotional mob, with easily triggered autonomic systems to be preyed upon. Automation just makes the process more efficient.
It’s all a child trafficking system. Some children catch on and most do not. That’s some economic Darwinism.
Ok. Right. So now tell me why this article is important in light of bidens win at the primaries. People don’t want change. People want Biden.
As my brother is fond of saying, “the basic unit in economics is the calorie” …
Mikel … Excellent links to NY Times. Here is another one with Edison and Ford who had Chicago Plan thinking. Given their lives were connected to the Civil War, and the Greenback Party, it is not surprising they were knowledgeable on this subject
https://timesmachine.nytimes.com/timesmachine/1921/12/04/107034685.pdf
And the next day https://timesmachine.nytimes.com/timesmachine/1921/12/06/98768710.pdf