View Full Version : Interesting overview on Economic Theory of Thorstein Veblen and Obama: financial economics vs. industrial economics

06-14-10, 09:30 AM

Two weeks ago, I explored the problem of why President Obama's administration has so little concern for the problems of working Americans, in The Obama administration as “managed democracy" (http://real-economics.blogspot.com/2010/05/obama-administration-as-managed.html). I used Thorstein Veblen's insights into the Leisure Class to extend Sheldon Wolin's analysis of "managed democracy" (a new form of authoritarianism developed in the past two or three decades, which most of us would also call corporatism). The fundamental point I was trying to make is that there is nothing in the education or life experiences of someone like Barack Obama or Larry Summers that would provide them an understanding of industrial economics or real (not politically expedient) empathy for the working class. (Let me qualify that, because I had hoped, and still cling to a hope, that Obama's experience as a community organizer might have given him a reservoir, not yet drawn upon, of support for industrial economics, or at least enmity for, or the very least suspicion of, financial economics.)
Forthwith, my post in full:

In his important 2008 book, Democracy Inc.: Managed Democracy and the Specter of Inverted Totalitarianism (http://www.amazon.com/Democracy-Incorporated-Managed-Inverted-Totalitarianism/dp/0691135665), Princeton professor emeritus of politics Sheldon S. Wolin has identified and dissected the emergence of a new type of authoritarian political system in the United States.

The new constitution conceives politics and governance as a strategy based upon the powers that technology and science (including psychology and the social sciences) have made possible. Exploitation of those powers enables their owners to redefine the citizenry as respondents rather than actors, as objects of manipulation rather than as autonomous.
This new political type has arisen as the revolving door between government and the private sector as spun faster and faster, infusing the government with the morals and social customs of the American managerial class, while suffocating the older, more noble idea of civic virtue. In short, American politics has been “managerialized.” To fully understand this, Wolin first recounts the history of the concept of civic virtue and the emergence of the polis:

Over the centuries politicians and political theorists-starting with
Plato's Republic have emphasized disinterestedness, not personal advantage, as the fundamental virtue required of those entrusted with state power. In recognition of the temptations of power and self-interest a variety of constraints -- legal, religious, customary, and moral -- were invoked or appealed to in the hope of limiting rulers or at least inhibiting them from doing harmful or evil acts. At the same time rulers were exhorted to protect and promote the common good of society and the well-being of all of their subjects. With the emergence of democratic ideas during the seventeenth and eighteenth centuries, it fell to the citizen to assume responsibility for taking care of political and social arrangements, not only operating institutions but "cultivating" them, caring for them, improving them, and, ultimately, defending them. Democracy presumed the presence of a "popular culture," not in the contemporary sense of packaged pleasures for a perpetually adolescent consumer, but culture in its original meaning: from the Latin cultus = tilling, cultivating, tending. The ideal of a democratic political culture was about cooperating in the care of common arrangements, of practices in which, potentially, all could share in deciding the uses of power while bearing responsibility for their consequences. The assumption was that if decision-making institutions of a community were left untended, all or most might suffer.

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