Literature and the Economics of Liberty

Notes

Preface

1. The Poetics of Spontaneous Order: Austrian Economics and Literary Criticism

As a field, it accepts that studying culture is rarely value-free, and so, embracing clearly articulated, left-wing values, it seeks to extend and critique the relatively narrow range of norms, methods, and practices embedded in the traditional, past-fixated, canon-forming humanities. (p. 27)

Evidently for During, by definition, a centrist or a right-wing Cultural Studies could not exist.

It would seem that to say there is an interaction between the relations of production and the “superstructure” is to utter a truism which all would accept and which has nothing particularly Marxist about it.... That books and plays cannot be understood without knowledge of the historical circumstances and social conflicts of the time was known, long before Marx, to many French and other historians.... We must ask then, what exactly is historical materialism? If it means that every detail of the superstructure can be explained as in some way dictated by the demands of the “base,” it is an absurdity with nothing to recommend it to credence; while if, as Engels’s remarks suggest, it does not involve absolute determinism in this sense, it is no more than a fact of common knowledge. (Main Currents, vol. 1, p. 364)

Slip of the tongue or of the pen? Ignorance on Shakespeare’s part? Error of the scribe or of the typesetter who has put in one letter too many? The extra i... produce[s] a gap in the meaning and call[s] attention to the material base of signs.... The little i in “Ariachnes” has the effect of a bit of sand in a salad or of a random sound in a symphony, the flautist dropping his flute, the snap of a breaking violin string.... The conflation in “Ariachnes” of two myths which are and are not congruent is precisely in agreement with what happens in Troilus’ speech, namely, an anguished confrontation with the subversive possibility of dialogue, reason divided hopelessly against itself.... The principle of identity is the basic assumption of monological metaphysics.... The “whole shebang” of Occidental metaphysics is, the reader can see, brought into question in Troilus’ experience and in his speech. (pp. 45–47)

All this from what amounts to a typo!

Natural selection in each well-stocked country, must act chiefly through the competition of the inhabitants one with another, and consequently will produce perfection, or strength in the battle for life, only according to the standard of that country. Hence the inhabitants of one country, generally the smaller one, will often yield, as we see they do yield, to the inhabitants of another and generally larger country. For in the larger country there will have existed more individuals, and more diversified forms, and the competition will have been severer, and thus the standard of perfection will have been rendered higher. Natural selection will not necessarily produce absolute perfection; nor, as far we can judge by our limited faculties, can absolute perfection be everywhere found.

For the same point about “absolute perfection,” see also p. 381.

We do not assert that the capitalist mode of economic calculation guarantees the absolutely best solution of the allocation of factors of production. Such absolutely perfect solutions of any problem are out of reach of mortal men.

Notice that, as Darwin does in the biological realm, Mises rejects the possibility of “absolute perfection” in the economic realm.

Planned economies have an in-built tendency to reject the admission of error (although they all have to in the end), while market economies, by contrast, are built around the principle of uncertainty—one man’s error is another man’s entrepreneurial gain. (If anything, market economies face the problem of over-generation of failure.) Planned systems lack any mechanisms for the automatic registration of failure, such as bankruptcy or takeover, or, more indirectly, stock market quotations, transferable international currencies and so forth.

For further critique of Soviet economic planning, see James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven, Conn.: Yale University Press, 1998), pp. 193–222.

Many features of real-world markets which appear, from a perfectly competitive-ideal perspective to be direct evidence of inefficiency, turn out to be wholesome features of a vigorously and dynamically competitive world. So-called “imperfections” of competition emerge as crucial elements in the market process of discovery and correction of earlier entrepreneurial errors.

a genuine second edition was guaranteed for most serialized works, when they came out in volume form after the last magazine installment or monthly part had appeared. Successful authors who regularly published their works initially as serials knew they would have a chance to revise their entire texts, and could plan accordingly. Thackeray, Dickens, Eliot, Arnold, Trollope, and Hardy, for example, all at various times submitted work for serial publication already knowing that they would make changes for subsequent publication in book form.... Many Victorian authors seem to have taken a perfectabilitarian view of their texts, looking forward from the time of first publication to a series of editions and impressions, each affording an occasion to reduce errors, correct misstatements, add clarifications, or revise in response to criticism.

part I of The Idiot contains much stronger signs of a future conflict between Myshkin and Ganya—constant misunderstandings, insults, vague threats, and a blow—all of which seem to lay the groundwork for them to be significant enemies. When Ganya ominously (and eponymously) calls Myshkin an idiot, the full weight of the title seems to promise a dramatic clash. But in fact Ganya turns into a minor, though frequently present, character, and nothing significant or “fatal” takes place between him and Myshkin.... In the notebooks written after the publication of part I, [Dostoevsky] reminds himself to do something more with Ganya but never does.

the creative process typically traces not a single line to a goal but a series of false leads, missed opportunities, new possibilities, improvisations, visions, and revisions. It is constituted by an intention that evolves over time. To be sure, authors typically remove the traces of this process and present their work as if it were the product of a clear plan, known from the outset. By convention, works are usually offered as the expression of an intention that is essentially instantaneous even if it took time to execute and takes time to appreciate. After the work is complete, the authors remove the “scaffolding,” as Bakhtin liked to say.

For her contemporary readers, this last novel along with Cranford (1853) represented her greatest achievements. No less a figure than Henry James wrote of it: “... in ‘Wives and Daughters’ the late Mrs. Gaskell has added to the number of those works of fiction—of which we can not perhaps count more than a score as having been produced in our time—which will outlast the duration of their novelty and continue for years to come to be read and relished for a higher order of merits.... So delicately, so elaborately, so artistically, so truthfully, and heartily is the story wrought out.” Another contemporary reviewer praised the novel above the work of Jane Austen and George Eliot.

The edition also rightly removed the second occurrence of two paragraphs which appear erroneously in the first edition.... The repetition is evidently to be accounted for by the insertion of much additional material to the serial edition for the volume edition, immediately after their first occurrence. Gaskell then evidently overlooked this earlier use and repeated them at the end of the added material. In the second edition the second of these passages is deleted.... There were many other careful corrections.

Depicting Mr. Weller helping his son Samuel... the picture clearly shows a placard on the mantel... reading distinctly “Guinness Dublin Stout.” The placard was originally the wooden crate side of the box containing Guinness; by being replicated in the illustration for Pickwick, it became an ad peeping out over Weller’s head. (p. 30)

Dickens exploited these opportunities for keeping his readers in suspense: for example, at the close of Clock 30, Nell shrieks and faints at the sight of a figure ahead of them on the road leading out of the second industrial city. The reader had to restrain his impatience for a week—or a whole month, if he was relying only on the monthly parts— when the opening chapter of the next number would immediately identify the figure as.... Again, at the end of Clock 39, Dick Swiveller is suddenly “seized with an alarming illness, and in twenty-four hours was stricken with a raging fever.” Another week or month intervenes before his fate is known. (p. 15)

(Clock stands for Master Humphrey’s Clock, the weekly magazine in which The Old Curiosity Shop first appeared.)

This is not to say that the market always knows best.... But cultural critics should admit their ignorance of precisely why “art happens,” and should not assume that they can point the way to an alternative society whose art would be superior to that of the existing order. (Literature, Money and the Market, p. 122).

The awkward results of this last-minute expansion of the little tale can be detected in the early part of the novel.... The malicious profligate Fred Trent is soon dropped as Dickens prefers to develop the far more spectacular malice of Quilp, and Dick Swiveller’s engaging profligacy. The Sophie Wackles episode proves to be a hilarious irrelevancy. Kit, who is introduced as a harmless semi-idiot, occasioning some light relief in Chapter 1, by some twenty chapters later has become an earnest responsible young man. (p. 14)

Trollope did not wish to succumb to “this hurried publication of incompleted work.” He held that “the rushing mode of publication to which the system of serial stories had given rise, and by which small parts as they were written were sent hot to the press, was injurious to the work done.” To Trollope’s eyes, the serial system, when it came to affect not only the publication but also the initial composition of a work, resulted in a loss of artistic control. His customary protection against pressure that might have led to hasty publication was to complete a novel and revise it thoroughly before sending any of it to a publisher. If serial issue was planned, he then metered out the manuscript to the printers while he went to work on his next book.

Erickson, Literary Form, pp. 162–63, quotes from Harriet Martineau’s Autobiography to show how one Victorian author objected particularly to the cliffhanger convention of serial publication:

I could not conscientiously adopt any method so unprincipled in an artistic sense as piecemeal publication. Whatever other merits it may have, a work of fiction cannot possibly be good in an artistic sense which can be cut up into portions of an arbitrary length. The success of the portions requires that each should have some sort of effective close; and to provide a certain number of these at regular intervals, is like breaking up the broad lights and shadows of a great picture, and spoiling it as a composition. I might never do any thing to advance or sustain literary art; but I would never do nothing to corrupt it, by adopting a false principle of composition.

Thanks partly to miscalculation on [Dickens’s] part, Gaskell found herself pressurized to make the work shorter than she intended. What from her viewpoint constituted the worst compression was that made in the last few chapters of the novel. Consequently for the first (two) volume edition... the narrative was considerably expanded. (p. xxvii)

For a detailed analysis of the conflict between Gaskell and Dickens over the text of North and South, see Hughes and Lund, “Textual-sexual Pleasure,” pp. 151–59. Gaskell was so upset by her experience with North and South that she did not allow any of her subsequent novels to be serialized until Wives and Daughters. In view of the problems Dickens created for Gaskell, it is ironic that early in his own career he himself found that serial publication inhibited him: “I was obliged to cramp most dreadfully what I thought a pretty idea in the last chapter. I hadn’t room to turn” (quoted in Easson, Curiosity Shop, p. 15).

Whether the commodity-text is to take the particular form of a series of books, a magazine serial, or a part-issue novel, series production, by allowing the bourgeois audience’s ideological engagements to be sensed and expanded, allows as well the extraction of ever greater surplus value from the very production (or “creative”) process itself.

To be sure, other authors are often surprised by their characters, whose inner logic may invalidate an earlier plan. It is not unusual for an author to discover that a character “refuses to do” what the author has destined for him; that is, the author recognizes that the outcome he or she has in mind would be perceived as false and forced. But in such cases most authors revise so that their surprise is not visible to readers. They may rewrite earlier sections so that the desired outcome does not appear forced or they may recast the novel so that what turned out to be the better outcome is prepared for all along. In either case the surprise that altered the original plan is masked. (Narrative and Freedom, p. 98)

What strikes Morson about Dostoevsky is the degree to which he accepted the freedom of his characters and hence the open-endedness of his narratives:

The notebooks to The Idiot reveal conclusively that even after Dostoevsky had published the first part, he had little idea of how to continue. To mention just a few important questions of plot, he did not know whether Nastasya Filippovna would marry Rogozhin or Myshkin; whether she would kill herself, be killed, or die naturally, or whether Rogozhin would be damned or saved. (Narrative and Freedom, p. 136)

It is impossible to imagine any real-world situation in which a decision-maker does not recognise that he must make his choices within an open-ended context. The decision-maker is not presented, as it were, with given resources. On the contrary, it is in the course of the decision itself that the human decision-maker determines what objectives are most important, and what resources are in fact available to him.... The inescapable and radical uncertainty faced by each human agent ensures the open-endedness of human choice. (How Markets Work, p. 26; italics in the original)

Morson and Kirzner are clearly describing the same world, one in literary terms, one in economic.

if one looks at the table of “the most popular novelists by editions printed 1750–1769,” it’s quite clear that the interplay of readers and publishers in the marketplace had completely shaped the canon of the eighteenth-century novel many generations before any academic ever dreamed of teaching a course on the novel: on that list of editions, Sterne is first, Fielding second, Smollett fourth, Defoe fifth, Richardson sixth, Voltaire eleventh, Goldsmith fifteenth, Cervantes seventeenth, and Rousseau nineteenth. They are all there.

The 1930s growth model was built around the sheer expansion in the volume of factors of production set to work. Capital investments were jacked up to the highest bearable level (with a concomitant drop in the share of resources going to consumption).... The result is an extremely lopsided economy, in which a disproportionate amount of resources never actually leave the industrial sector.

Rutland points out that Michael Polanyi characterized this phenomenon “cleverly” as “conspicuous production” (p. 110). For further critique of overproduction of capital goods in the Soviet economy, see pp. 115, 135–36, 138.

A Hollywood blockbuster such as Independence Day can make over $200 million in North American box office, whereas another movie with similar costs can open at as many theatres and flop, taking in only one or two million.... The fallibility of even the Hollywood majors in predicting success is illustrated by the many industry hits turned down by various studios, including Star Wars, Back to the Future, Driving Miss Daisy, and Dances with Wolves.

For a detailed account of the rapid turnover of motion picture executives even in the golden age of the studio system studied by the Frankfurt School, see Thomas Schatz, The Genius of the System: Hollywood Filmmaking in the Studio Era (New York: Henry Holt, 1996). For a treatment of the same phenomenon in the contemporary television industry, see Bill Carter, Desperate Networks (New York: Doubleday, 2006). For amusing accounts of some of the movie industry’s most spectacular failures to predict—let alone create—demand, see James Robert Parish, Fiasco: A History of Hollywood’s Iconic Flops (Hoboken, N.J.: John Wiley, 2006).

In the last two decades, critics working to reverse both the long-standing rejection of mass culture and the more insidious rejections of audience agency... have sought, in various ways, to assert the relative autonomy of the consumer.... Creators’ innovations, artistic power, and complexity work to increase the texts’ value for audiences and arise not in spite of the pressure to catch and keep a mass audience but in many cases as a result of that pressure.... Serial fans contribute to the shaping of their narratives, and creators attest to the creative inspiration this interaction can provide; on the other hand, creators also have the power to resist fan pressure and often do resist to keep texts from becoming too predictable and thus lessen their ability to intrigue and involve their audiences. (pp. 10–12)

Or as De Certeau succinctly puts it: “it is always good to remind ourselves that we musn’t take people for fools” (p. 176).

creating a new audience, although ideologically it might be explained as “satisfying a demand.” Publishers were now in a position in the economic structure to undertake in a controlled way the creation of the kinds of mass audiences which the different careers of Charles Dickens and Charles Knight, seventy-five years earlier, had shown to be accessible to a new literary mode of production, by exploiting systematically the power of a commodity-text to interpellate an infinity of unknown subjects. (Modes of Production, pp. 87–88)

Because of Feltes’s Marxist failure to see the link between consumption and production, he misinterprets the role of publishers. For a critique of the general idea that entrepreneurs create demand, see Kirzner, How Markets Work, pp. 54–58.

when a new genre first arises, and no “central” convention has yet crystallized, its space-of-forms is usually open to the most varied experiments. And, then, there is the pressure of the market. The twenty-five authors of the Strand Magazine are all competing for the same, limited market niche, and their meanderings through morphospace have probably a lot to do with a keen desire to outdo each other’s inventions: after all, when mystery writers come up with an “aeronaut” who kills a hiker with the anchor of his balloon, or a somnambulist painter who draws the face of the man he has murdered, or a chair that catapults its occupants into a neighboring park, they are clearly looking for the Great Idea that will seal their success. And yet, just as clearly, aeronauts and catapults are totally random attempts at innovation, in the sense in which evolutionary theory uses the term: they show no foreknowledge—no idea, really—of what may be good for literary survival. In making writers branch out in every direction, then, the market pushes them into all sorts of crazy blind alleys; and divergence becomes indeed, as Darwin had seen, inseparable from extinction.

Circulation can create value only in so far as it requires fresh employment—of alien labor—in addition to that directly consumed in the production process. This is then the same as if more necessary labour were used in the direct production process. Only the actual circulation costs increase the value of the product. (italics in the original)

Typically, Marx views the transporting of goods as a physical (material) problem. He does not see that the real problem is entrepreneurial and hence mental—figuring out how to get the right goods to the right place at the right time. As he does throughout his economic thought, Marx neglects the distinctive role of the entrepreneur. Given his objective theory of value, Marx cannot conceive how a good can increase in value simply by changing hands. Hence he rejects the idea that middlemen contribute value to an economy: “This kind of circulation offers the dealers all manner of speculative opportunities; but while it enriches some, it ruins the others, and the nation’s wealth gains nothing thereby” (Grundrisse, p. 636). Marx also discusses the issue of what he calls “circulation” in Das Kapital, and deals specifically with the “expenses of transportation” in vol. II, pt. I, chap. VI, sec. III, where he makes the same point: “The productive capital invested in this industry adds value to the transported products, partly by transferring value from the means of transportation, partly by adding value through the labor-power used in transportation.” See Karl Marx, Capital: A Critique of Political Economy, Ernest Untermann, trans. (Chicago: Charles H. Kerr, 1933), vol. 2, p. 170.

The village libraries, the penny-a-day circulating libraries, the mutual improvement societies, the mechanics’ institute libraries—all had, for one reason or another, failed to meet the needs of intellectually ambitious workmen who could not afford the outright purchase of new books. (p. 259)

Altick goes on to show that capitalism solved the problem of making books widely available in Victorian Britain through all the usual benefits of competition (lowering of costs, innovation of products, stimulating demand, and so on). Like most literary critics, Altick is no friend of capitalism and he would never formulate his thesis this way, but in fact his book is a great tribute to the positive power of capitalism as a cultural force.

They were tough businessmen who produced anything that would sell. They took risks, broke traditions, and maximized profits by quantity instead of quality production. Rather than try to corner some segment of the market by a legal monopoly, they wanted to be left alone by the state and would even bribe it to do so. They were entrepreneurs who made a business of Enlightenment.

(When Darnton speaks of “quantity instead of quality” here, he is referring to the physical appearance of the books, not their quality as literature.)

The evidence is that Rembrandt took to the new marketplace economy not only because he wanted freedom from patrons, but also because he wanted freedom for himself.... Two different but reciprocal values—that established in the marketplace and that of the individual suited to that market—are juxtaposed. Taken together, they constitute that ideology of the free market and the free individual that modern society has inherited in great part from the example of Rembrandt’s Holland. (pp. 113–14)

Alpers aptly characterizes Rembrandt as “an entrepreneur of the self” (p. 118).

2. Cervantes and Economic Theory

Y en dulces varias rimas se llevaron
mis esperanzas los ligeros vientos,
que en ellos y en la arena se sembraron.

This consciousness of his literary genius is echoed in Cervantes’s great play Pedro de Urdemalas, in the praise bestowed on Pedro de Urdemalas’s Protean creativity by other characters and by Pedro himself in verses redolent of those in the Viaje del Parnaso:

Bien logrado iré del mundo
cuando Dios me lleve de él,
pues podré decir que en él
un Proteo fui segundo. (Jornada III)

government bureaucrats do not pay taxes; they consume the tax proceeds. If a private citizen earning $10,000 income pays $2000 in taxes, the bureaucrat earning $10,000 does not really pay $2000 in taxes also; that he supposedly does is only a bookkeeping fiction. He is actually acquiring an income of $8000 and paying no taxes at all. (ibid., p. 791)

Just as a lamp, before going out, shoots up in a brilliant flame, so the State, before disappearing, assumes the form of the dictatorship of the proletariat, i.e., the most ruthless form of State, which embraces the life of the citizens authoritatively in every direction.

Mental illness is a metaphor (metaphorical disease). The word “disease” denotes a demonstrable biological process that affects the bodies of living organisms (plants, animals, and humans). The term “mental illness” refers to the undesirable thoughts, feelings, and behaviors of persons. Classifying thoughts, feelings, and behaviors as diseases is a logical and semantic error, like classifying the whale as a fish. As the whale is not a fish, mental illness is not a disease. Individuals with brain diseases (bad brains) or kidney diseases (bad kidneys) are literally sick. Individuals with mental diseases (bad behaviors), like societies with economic diseases (bad fiscal policies), are metaphorically sick. The classification of (mis)behavior as illness provides an ideological justification for state-sponsored social control as medical treatment.

See http://www.szasz.com/manifesto.html Among other Szaszian libertarian views are the following:

Abolition of involuntary mental hospitalization. Involuntary mental hospitalization is imprisonment under the guise of treatment; it is a covert form of social control that subverts the rule of law. No one ought to be deprived of liberty except for a criminal offense, after a trial by jury guided by legal rules of evidence. No one ought to be detained against his will in a building called “hospital,” or in any other medical institution, or on the basis of expert opinion. Medicine ought to be clearly distinguished and separated from penology, treatment from punishment, the hospital from the prison. No person ought to be detained involuntarily for a purpose other than punishment or in an institution other than one formally defined as a part of the state’s criminal justice system.

Abolition of the insanity defense. Insanity is a legal concept involving the courtroom determination that a person is not capable of forming conscious intent and, therefore, cannot be held responsible for an otherwise criminal act. The opinions of experts about the “mental state” of defendants ought to be inadmissible in court, exactly as the opinions of experts about the “religious state” of defendants are inadmissible. No one ought to be excused of lawbreaking or any other offense on the basis of so-called expert opinion rendered by psychiatric or mental health experts. Excusing a person of responsibility for an otherwise criminal act on the basis of inability to form conscious intent is an act of legal mercy masquerading as an act of medical science. Being merciful or merciless toward lawbreakers is a moral and legal matter, unrelated to the actual or alleged expertise of medical and mental health professionals.

El esfuerzo regido con cordura/allana al suelo las más altas sierras/.... Si el esfuerzo y cordura no se halla/ que todo lo previene y lo barrunta,/poco aprovechan muchos escuadrones,/ y menos infinitas municiones./ Si a militar concierto se reduce/cualquier pequeño ejército que sea,/ veréis que como al sol clare reluce/ y alcanza las victorias que desea;/pero si a flojedad él se conduce,/ aunque abreviado el mundo en él se vea,/ en un momento quedará deshecho,/ por más reglada mano y fuerte pecho. (act I, ll. 13–14, 101–12)

Notice the words cordura (judgment, prudence), concierto (concert), and reglada (ruled), my emphasis. Later in the play Cervantes again has Scipio insist on the need for reason in war.