potlatch

how to restore pricelessness

The inestimable Simon Hoggart, parliamentary sketchwriter for The Guardian, has a neat test which he applies to political rhetoric, to check whether or not it means anything: if it's impossible to imagine anyone demanding the opposite of what is being argued for, then you know it's hot air. Hence, much of what Tony Blair claimed to stand for - 'more money in your pocket, less crime on the streets, better public services' - wasn't actually a set of policies or political values at all, seeing as nobody could sensibly disagree with any of it.

I feel that the same may be true of David Cameron's 'Big Society'. It's not that the idea is too bad to be helpful, but that it's too good to be helpful. Everybody already wants to live in neighbourhoods that are thriving, where people look after each other, where the state is not relied upon. There's nothing remotely controversial about this aspiration. It's why house prices in Stoke Newington are more than double what they are a few miles east in Leyton. Of course the state would rather let us look after one another, as would we. This doesn't go any way to explaining why it is that we don't.

I was minded of this when I saw this advert for the P&G Capital Cleanup on the tube earlier:

Down the right-hand side are the logos of various household cleaning product brands and Procter and Gamble itself. In case you can't read the text, it says the following:

You know when your mum's coming round to your flat and you give the place a quick tidy? Well that's exactly what we're doing. Except our "flat" is London and our "mum" is the rest of the world coming round. So we're cleaning London in time for the London 2012 Olympic Games. But that's a big job so we're asking people like you to lend us a hand. We have litter to pick [sic], graffiti to scrub, and flowers to plant. To help London look its best go to P&GCapitalcleanup.com. Come on. Make your mum proud.

This isn't going to turn into another curmudgeonly anti-Olympics rant (read this if that's what you're after). Nor do I have any objection whatsoever to people donating their time for free to cleaning up London, which strikes me as an excellent idea, rather like having "more money in your pocket, less crime on the streets, better public services". The problem with this advert is the huge vacuum of justification at its heart. When Procter & Gamble invites ordinary members of the public to clean up a viciously unequal financialised city, where services of this nature are typically outsourced to private contractors, to prepare the ground for a vast splurge of securitised and brand-controlled two-week corporate entertainment, we might be entitled to respond to our 'mum' with a somewhat adolescent response: why the hell should I?

This response is far from inevitable, universal or praise-worthy, but it has a logic to it in this context that shouldn't be ignored. If, for example, the advert had appeared without the very prominent backing of a large corporate sponsor, or was not linked directly to an extremely complex and expensive act of megaproject management, then it might appear merely as a 'nudge' towards greater public spiritedness. I'm always rather charmed by the ads that London buses have, in which a cartoon teenager says "I won't play my music loud" next to a cartoon old woman saying "and I won't put my bag on the seat", in an effort to encourage slightly greater conviviality on public transport. But the fact that those ads are innocent of any strategic economic interests (beyond the 'consumer satisfaction' of bus users), and are simply branded with the reassuring Edwardian logo of London Transport, surely contributes to their efficacy. By contrast, the P&G Capital Cleanup is demanding uncalculated acts of generosity in pursuit of private profit. This is clean-up work that would otherwise be paid for.

The central problem of voluntary or community action in a neoliberal society is this: it is far easier to move from the realm of gift exchange to the realm of calculated exchange than it is to do the opposite. Where calculation and a calculating mindset is pushed further into the realm of informal social relationships, via audit, managerialism and social media, it becomes extremely difficult to suddenly appeal to the power of 'society' to reverse this or alleviate its malign effects. Simply arguing that it would be nice for people to act decently and public-spiritedly is not enough of a response, to a 30-year policy and management project built specifically on the claim that people can not be trusted to act decently or public-spiritedly unless kept under audit and surveillance.

This isn't to say that economisation and calculation are inevitable, irreversible or irresistable. Relationships and exchange surely can be returned to the realm of uncalculated gift-giving. But this won't come about by simply demanding that we all stop counting the costs or calculating the price, especially not in a society where cost-counting and pricing are still such dominant forces in public life. Right now, being nice does not appear to pay, either in a monetary or a non-monetary sense. To change this requires some form of strategy, which must firstly be built on a more sophisticated understanding of the problem.

The economistic fallacy, which only dates back to the late 19th century and not the whole way back to Adam Smith, is that 'social' uncalculated exchange is a derivative or even deficient variety of 'economic' calculated exchange. This assumption is present in the term 'externality', as employed by welfare economists since Pigou (1912), which treats the public as an accidental side-effect of the market, rather than vice versa. Economic anthropologists, dating back to Marcel Mauss, have challenged this very successfully, by demonstrating that gift exchange is primary, and market exchange is secondary. Georges Bataille's work on 'general' and 'restricted' economy also explores it brilliantly, starting with the recognition that all value originates in the immeasurable force of the sun. The same critique of calculated exchange has been made more recently by David Graeber in relation to credit relations.

Neo-classical economics therefore turns the world upside down, by assuming that calculation is 'normal' and that altruism is unusual. Game theory develops this problem and tests it experimentally. But eventually, as I argued in relation to the riots last summer, this inverted worldview becomes realised as a normal way to think and to interpret relationships. Once prices have been put on certain goods, they cannot simply be removed simply because it would be nice to remove them. But that seems to be the extent of the Big Society's logic.

The only alternative is to develop new practices, norms and techniques of valuation, to replace those of price. Time-banking and alternative currencies are clear examples of this. New types of credit, which are not entirely fungible (in strong contrast to credit securitisation) can be developed, in which norms of reputation, trust and shame are actively involved in how they bind people. This needn't simply be a form of conservatism, if new instruments can be invented. There is both a modernising and a conserving spirit to how something like the Big Society might actually be pursued. 

Finally, this would also require the deliberate dismantling of corrupt forms of market exchange and calculation. If prices are to be removed from certain areas of public and social life, then there must be a clear political strategy to undermine those institutions which benefit from such pricing. This includes much of the current banking system. It also includes FTSE100 companies urging us to donate our time for the benefit of their media circus and shareholders.

'I want my day in court'

Chicago Law and Economics, as pioneered by Richard Posner and others, represents one of the most extensive and successful efforts to replace moral and political reasoning with economic calculation. I've written a couple of papers about what this tells us about the character and authority of the neoliberal state. One not insignificant element of Law and Economics is that it overlooks legal, moral and common sense views of 'right' and 'wrong', by focusing on a priori incentives and measured outcomes. In place of judicial neutrality, the supposed methodological neutrality of neo-classical economics ensures that fines and damages payments are fair.

This is all very well, but it's important to recognise what precisely is lost when the notion of justice is replaced with a calculus of cost/benefit and cause/effect. This news item about the $7.8bn BP settlement with Gulf of Mexico oil spill victims included one striking quote, from a recipient of damages:

Dean Blanchard, a leading shrimp producer from Grand Isle, Louisiana, before the spill, was adamant: payment would not be enough.

"I want my day in court," he said. "If they can get off with just paying the money – well, they've got plenty of money, they are not really going to learn a lesson.

"I'd like to make sure this never happens again. Somebody has got to hold BP's feet to the fire. They have just gotten away with throwing money at problems, but that doesnt get rid of the problems."

A perceived virtue of neo-classical economics, as a tool for public decision-making, is its simplicity. It credits all people, equally, with a capacity to pursue goals in a largely rational and self-interested fashion. But here we see an equally simple psychological portrait: 'I want my day in court', 'I'd like to make sure this never happens again' and 'somebody has got to hold BP's feet to the fire'. There is nothing legalistic, liberal or especially metaphysical about any of these claims. It's difficult to treat this as 'irrational', without at the same time holding to an eccentrically narrow definition of 'rationality'. But, in resolutely obvious terms, here we see a damning critique of the entire basis of neoliberal legitimacy, correctly understood.

Uneconomics latest

The Uneconomics debate is now up and running (RSS feed), with excellent contributions from Judith Marquand, Oliver Huitson and Glen O'Hara. There'll be a typically biting piece from Phillip Mirowski next. Watch this space. And email me if you have ideas for contributions or contributors.

Uneconomics: new debate

I've launched a new debate or essay series at openDemocracy, under the title of 'Uneconomics'. Its purpose is twofold. Firstly, to criticise the monochrome economic world, as depicted by orthodox economists, which they increasingly assist in governing and shaping. And secondly, to bring alternative forms of economic analysis and depictions to light, which are too often marginalised within the academy, and virtually ignored by policy-makers and within the public sphere. I'm keen to hear from anyone who might want to contribute an article, especially if they have empirical research that challenges orthodox assumptions, might alter public understanding or the definition of policy problems, and therefore demands a broader readership than academic journals can achieve (email me). David Graeber, and especially his recent book on debt, is a model of what we should be aiming for. There will be contributions from Judith Marquand and Philip Mirowski in the next week or two, and I should have some other interesting contributions in the pipeline.

You can read my opening gambit here, which is a polemical attempt to define what's at stake:

It is time to acknowledge an uncomfortable truth about the public status of economics as an expert discipline: it has grown to be far more powerful as a tool of political rhetoric, blame avoidance and elite strategy than for the empirical representation of economic life. This is damaging to politics, for it enables value judgements and political agendas to be endlessly presented in ‘factual’ terms. But it is equally damaging to economics, which is losing the authority to describe reality in a credible, disinterested, Enlightenment fashion. 

The status of economists in public life has taken many twists and turns, since Adam Smith’s Wealth of Nations was published in 1776. The classical political economists, such as David Ricardo and John Stuart Mill, were engaged public intellectuals, whose analysis covered institutions, politics and morals. It was only after the ‘marginal revolution’ of the 1870s that economics reappeared in its neo-classical manifestation, the form with which we associate the term ‘economics’ today. In drastically delimiting the scope of economics to the study of rational decision-making by individuals, the marginalists withdrew from describing capitalism or society, creating space for rival social sciences to emerge for this purpose.

This has already attracted some scornful responses in the comments. This issue is clearly not new, but I thought it would be an opportune moment to revive some of these questions, alongside so much debate about the morality of capitalism.

Thatcherism as tragedy then farce

In their excellent After the Great Complacence (which I'm pleased to see is on Paul Mason's Christmas books list), the CRESC authors point out that the Thatcher era has been subjected to remarkably little economic evaluation. Given the types of claims that were made about Britain's weak economy in the 1970s, they argue that the critical test of Thatcherism ought to have been private sector job creation. Yet they also show that 70% of private sector job creation between 1979-1997 came from transferring jobs out of the public sector, and into the private sector (i.e. privatisation, PFI and out-sourcing). If, of course, one believes that the real goal of Thatcherism was to weaken the power of organised labour, this transition no doubt achieved its goal.

North Sea Oil and financial services helped to prop up the public accounts from the mid-1980s onwards. Low wage service sector employment expanded as more women entered the labour market, making up much of the remaining 30% of private sector jobs not transferred from the public sector. According to the Resolution Foundation, female employment accounted for 27% of household income growth between 1968-2008, compared to 8% for male employment. All of which led Britain to feel quite smug by the late 1990s, as mainland Europe struggled with both service sector job creation and growth. There was even a new academic gloss which could be applied to all of this, in the form of Endogeneous Growth Theory (I wonder if anyone has evaluated how much the 'knowledge economy' delivered). New Labour added further jobs and growth via a growing public sector (again, see this CRESC paper on how little the New Labour era ever delivered in the private sector).

So one way or another, by hook or by crook, the neoliberal era delivered on some of its microeconomic and macroeconomic promises - at least until 2007 when it all started to go very pear-shaped. But in doing so, it really needs to be viewed as a series of accidents, good fortune and clever (if repeatedly short-termist) political strategy. The one thing that was never likely to work was the ideal which had always excited neoliberals when in exile: the heroic entrepreneur, creating wealth and jobs through sheer self-discipline and desire to succeed. This vision serves a useful role in coordinating neoliberals, when they feel marginalised and afraid (as Hayek et al did during the 1930s, and the proto-Thatcherites did during the 1970s) but as a basis on which to create national economic policy, it's nonsense. It's a wonderful campaigning tool, and a marvellously envigorating ideal. It may even serve to get the odd MBA student out of bed in the morning. But as a basis for economic policy-making, it's nothing more than an ideological rallying cry.

So just how the hell did George Osborne succeed in duping anyone into trusting in this ideal all over again? Maybe it doesn't matter. Maybe he was perfectly well aware that the public sector doesn't 'crowd out' gutsy entrepreneurs. If he'd ever stepped outside of Westminster or Oxfordshire for any length of time, he would surely have noticed that the 'march of the makers' was not about to begin any time soon (as if they'd all been biding their time, waiting for those pesky old Surestart centres to get out of the way, before founding the next Google). Even Osborne can't really have believed it.

And I wonder if anyone believed it. The Institute of Economic Affairs and Policy Exchange may have pretended to believe it. Maybe Policy Exchange were just expressing solidarity with the doddery old IEA, in the manner of humoring a mad old relative ("I know, it's very sad, but he means well") out of respect for their longevity. "Yes, grand-dad - Von Mises would get us out of this mess. Now would you like another cushion?" What they refuse to see, perhaps because they adopt the Hayekian ethos that "to be neutral means to have no answers to certain questions", is that the British have already been offered copious amounts of economic liberty, allied with unprecedented torrents of credit... and we used it to go shopping and live off an asset bubble. If ever someone was going to found the 'next Google', I'd have thought 2005 might have been a pretty good time, with banks and society awash with money and governments still paranoid about 'competitiveness', but it didn't happen. "That's right grand-dad, the socialists stopped it happening with their clever red tape. Now lets get you a nice mug of cocoa."

How is the argument supposed to work? That people become more determined to succeed on their own, the harsher environmental conditions become? I suppose one could point to a 19th century emigre economic culture, such as New York's, in which individuals strain extra hard, when they have everything to gain and nothing to lose. But the same argument has been made by the Archbishop of Canterbury to explain why young people go looting. There is a bizarre psychological premise at work in this vision, that when the chips are down, economic security is in decline and credit has dried up, human beings go and... set up businesses. Meanwhile, the flipside assumption is that when times are good, they stay at home and sponge off the state.

As an insight into human psychology, this is up there with the character from Human Remains who, when complaining about his next door neighbour's laziness, confides with the camera: "He claims to be depressed - but he's obviously not too depressed to lie in bed all day". It pre-dates forty years of research into economic psychology (which, elsewhere, the Conservatives have embraced) and the cultural character of post-1968 capitalism.

A worldview that originates in 1930s Austria, was mobilised strategically - and not uncynically - by US businesses and conservatives from the 1970s onwards, and was quickly falsified by the experiences of the early 1980s, has somehow had one final hurrah, to be falsified a second time. Maybe this shouldn't interest or bother us, seeing as it performed its brief task, of giving George Osborne something to say for the past 18 months. Maybe it's just 'ideology' or 'propaganda', as a comment on a previous blog post put it, and not to be taken remotely seriously.

But I can't help finding this farcical and a little melancholic. Was it a joke? Was Osborne being ironic, when he told us that the private sector would swiftly flood the space left by a receding public sector? What did he think this private sector would do or make, that it hasn't been doing up until now? Silicon Roundabout serves as a new semi-ironic answer to this question. The Right are repeating mantras that we've heard before, like punchlines to jokes that we've heard before and never laughed at in the first place. Post-speculative melancholia pervades the corridors of the Treasury too.

If we are to take Austrian economics seriously, the first thing to acknowledge is that Hayek et al would have had little truck with macroeconomic forecasting or the OBR's complex modelling, which disguise the fundamental uncertainty of our situation. Secondly, they would surely have warned against expecting any resolution any time soon. The crude vision of a sudden private sector rush, catalysed by a sudden shrinkage of the public sector (disproved viciously in the early 1990s in former socialist economies) is a naive modernist fantasy. In its place, the Austrians would have preached patience, with much pain along the way. Yet still the question would remain: can we be sure that 'enterprise' and 'entrepreneurship' are likely to be the emergent responses to this crisis?

A far more sophisticated guide would be their compatriot, Joseph Schumpeter, who stressed the evolutionary character of capitalism, whereby accidents and innovations alter its very building blocks, as well as how they put together. Like Marx, Schumpeter believed that eventually capitalism would evolve itself out of existence, or at least to something unrecognisable as capitalism. The Schumpeterian lesson is that we don't yet know what will get us out of this crisis. Nor do we even know if capitalism will get us out of this crisis. The answer certainly doesn't lie in 'business' or in 'government', presently understood, but in as-yet unthought-of institutional arrangements, which may change our very definition of what the 'private sector' or 'public sector' necessarily looks like. As Will Hutton argues, the most important legacies of major crises (such as that of the 1870s and '80s) are the creation of entirely new risk-sharing norms and institutions.

Nascent James Dysons aren't going to suddenly appear from their garages, wielding new technologies to export. And economic pain won't make anyone more likely to disappear into a garage to invent one. What it will do, we have to hope, is force people to co-operate and adapt, possibly to the fact that the neoliberal dream of an enterprising, capitalist private sector has now been lost for good.

macro-economic falsification

Here are three intriguing insights from economic conservatives:

Positive economics is in principle independent of any particular ethical position or normative judgments. As Keynes says, it deals with "what is," not with "what ought to be." Its task is to provide a system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances. Its performance is to be judged by the precision, scope, and conformity with experience of the predictions it yields.

Milton Friedman, The Methodology of Positive Economics [pdf] (1953)

 

We should cut early, as deep as is feasible given time-tabling constraints. We need growth, and early cuts are likely to promote growth, even in the short term. There are three reasons why. First, at lower levels of public spending the economy is likely to grow faster. If the economy grows faster, then wages will grow faster. So households today will feel safe to borrow and consume more and to save less, knowing that their (pre-tax) incomes will be higher later, allowing them to pay off their debts. Investors will also expect better returns if growth is faster...

Andrew Lilico, Chief Economist, Policy Exchange, The Observer, June 2010

 

[The Office for Budget Responsibility] expect GDP in Britain to grow this year by 0.9% – and by 0.7% next year...The OBR have significantly reduced their assumptions about the spare capacity in the economy – and the trend rate of growth. And this increases their estimate of the proportion of the deficit that is structural – in other words, the part of the deficit that doesn’t disappear even when the economy recovers. So our debt challenge is even greater than we thought because the boom was even bigger, the bust even deeper, and the effects will last even longer.

George Osborne, Chancellor of the Exchequer, Autumn Statement, November 2011

I trust that any followers of Milton Friedman will have the good grace to accept when an economic hypothesis has been disproven.

Update: The New Statesman points towards a speech David Miliband made from the back benches yesterday, dismantling Osborne's claims about the sources of growth.

Further update: Andrew Lilico has explained why his theory hasn't yielded the expected results. It rather confirms IanC's intuition in his first comment below.

the onward rise of technocracy

It is now firmly established (contrary to the naive Keynesian celebrations of 2008-09) that the crises of neoliberalism are working in favour of their architects, and not against them. The banks are more powerful, three years after their historic suicide attacks, not less. What is now also becoming clear is that the same is true for neoliberalism's preferred mode of sovereign ruler: the technocrat. Both Greece and Italy are to become nations governed not just via economics (as Foucauldian theorists of liberal governmentality have long witnessed) but by economists. Potentially this is a wholly new epoch emerging, in the interplay between the modern state and liberal economics.

This makes Woolfgang Streeck's recent article in The New Left Review all the more prescient. As he argues there:

There are various ways to conceptualize the underlying causes of the friction between capitalism and democracy. For present purposes, I will characterize democratic capitalism as a political economy ruled by two conflicting principles, or regimes, of resource allocation: one operating according to marginal productivity, or what is revealed as merit by a ‘free play of market forces’, and the other based on social need or entitlement, as certified by the collective choices of democratic politics. Under democratic capitalism, governments are theoretically required to honour both principles simultaneously, although substantively the two almost never align...

In the liberal utopia of standard economic theory, the tension in democratic capitalism between its two principles of allocation is overcome by turning the theory into what Marx would have called a material force. In this view, economics as ‘scientific knowledge’ teaches citizens and politicians that true justice is market justice, under which everybody is rewarded according to their contribution, rather than their needs redefined as rights. To the extent that economic theory became accepted as a social theory, it would ‘come true’ in the sense of being performative—thus revealing its essentially rhetorical nature as an instrument of social construction by persuasion. In the real world, however, it did not prove so easy to talk people out of their ‘irrational’ beliefs in social and political rights, as distinct from the law of the market and the right of property. To date, non-market notions of social justice have resisted efforts at economic rationalization, forceful as the latter may have become in the leaden age of advancing neoliberalism.

It is also worth noting that the march of the technocrats in 2011 is (at least on the face of it) just as startling as the onward march of the investment banks in 2010. Wasn't the financial crisis also a vast humiliation for economic expertise? Didn't the risk modelling techniques, the stress tests and the forecasts turn out to be about as 'objective' as a gut feeling about the Grand National? And can't we now accept that any social scientist who projects an arrogant refusal to discuss their methods, their presuppositions and their own perspective, is ultimately more politically dangerous than the apparently 'post-modern' ones who are frank enough to discuss the interplay of power and knowledge?

Under the new circumstances, the description of economics as a 'social science' becomes less tenable. Economics has undergone various mutations in its time (though of course this would be the last thing that would be discussed in an economics class), from a branch of political theory in the mid-18th century, to something approaching economic sociology in the mid-19th century, to a professional academic discipline by the early 20th century, before descending into mathematical formalism by the late 20th century. The new technocrats, on the other hand, do not - and importantly can not - abide by Milton Friedman's Popperian vision of economics, as the generator of falsifiable predictions. In the face of an uncertain future, the technocrats do not use economics to produce models of risk, but to shape and control it via sovereign powers. These are two separate pragmatic responses to uncertainty as identified by Frank Knight - but Knight never foresaw that economics would be used in pursuit of the latter.

Economics and sovereignty are merging. If Prime Ministers Mario Monti or Lucas Papademos ever turn out to be 'wrong' in their economic analysis, this might, from now on, be beside the point.

Knowing the Unknowable paper

The paper I posted a few months back, 'Knowing the Unknowable', has now been published by Social Epistemology. Email me if you'd like the final pdf version.

the political economy of unhappiness

Continuing from the debate on happiness for OpenDemocracy, I have an article in the current New Left Review, entitled 'The Political Economy of Unhappiness'. This stems from a curiosity I've had for some time, of how it is that economists and statisticians have come to grapple with issues that were once the preserve of Frankfurt School Marxists, namely suffering and the paradoxes of 'progress'. I argue:

As the recent statistical interest in social and economic ‘progress’ suggests, the neo-classical discourse surrounding happiness and unhappiness invariably strays into ethical, then teleological, and then critical terrain. On the one hand this leads to an instrumentalization of critical, ethical and Enlightenment concerns (as the measurement of historical progress would suggest); but on the other, the contradictions and injuries of neo-liberal capitalism start to show up within the very positivist bodies of knowledge that are intended to regulate and sustain it. If the ‘need to lend a voice to suffering is a condition of all truth’, perhaps liberal economics is on the verge of uncovering truths that it never previously imagined.

I might add that this piece is rumoured to be the first ever New Left Review article to cite The Daily Mail.

the rise of the 'criminal-consumer'

Like the rest of the media, potlatch is on summer hiatus right now, occasionally stirring to wonder whether public life is really such a trivial thing that it makes sense for all of its key protagonists and main analysts to holiday simultaneously. Say what you like about the bond markets, but you can at least rely on them to still be steam-rollering national sovereignty, even in mid-August.

The police are also all in Tuscany at the moment, which is why there are so many televisions going cheap in Tottenham this week. Some of the media's remaining members have picked up a social media angle to all of this: were the riots all a brilliantly coordinated ruse, based on innovations such as #meetoutsidedixonsat3am ? How long before the whole problem becomes framed in the rationalist, maximising terms of game-theory, and we discover that the modern state doesn't actually work? I've wondered about this before, on hearing that Hackney has 900 policemen to cope with 350,000 residents.

New Labour gave us the 'citizen-consumer' as a new model of the individual public service user. This is a participating member of 'the community', who nevertheless holds preferences which they act upon rationally and self-interestedly. They operate on the border between public and private interest. Could we witness the rise of the 'criminal-consumer', who employs lawlessness as a strategy for their own consumer goals? This was ultimately what Gary Becker proposed over 50 years ago, when he applied neo-classical price theory to understand crime and other non-market activities. Michel Foucault described Becker's version of neo-liberalism as follows:

Law enforcement is the set of instruments of action which, on the market for crime, opposes a negative demand to the supply of crime.

This is very close to what Jeremy Bentham had proposed in the late 18th century. Richard Posner has subsequently developed this approach, based on the notion that law's sole function is to alter incentives. Some activities such as illegal downloading, where obedience to the law is simply not efficient enough, make such a perspective faintly plausible.

Should one adopt this rationalist account of crime and deviance, then throw in social media, things start to appear very scary indeed. The 'criminal-consumer' acquires the capacity for widespread, mass co-operation (as allegedly was facilitated by twitter during the Arab Spring), in a way that is compatible with individual preferences for more consumer goods.

This is a kind of post-Thatcherite, neo-classical variant of what Marxists have hoped for, namely that bringing the proletariat together in the factory and the city will eventually lead to the emergence of a reflexive class consciousness, in which individuals discover that co-operation is more rational than competition. Revolution would follow. Neo-classical economics famously lacks any theory of production, and so when homo economicus assembles en masse in the city, with the new capacity of social media, the only form of co-operation that can emerge is riotous consumption, otherwise known as looting. If socialism promised to democratise the means of production, social media might be democratising the means of consumption, with both omelettes requiring a few eggs to be broken along the way.

Under these circumstances, the role of the state becomes like that of the anti-trust authority. Crime, in the age of twitter, comes to appear as a form of cartel, that needs busting. Above all else, the state must prevent co-operation, and maintain homo economicus in the state of mutually suspicious individualism. In a bizarre new form of neo-classical performativity, the prisoners dilemma travels from the realm of scholarly game theory, to being a strategy for policing the city.

Naturally all of the above is a nonsense. Co-operation happens for reasons other than strategy and shared preference, and strategy and share preference are seldom enough to generate co-operation. The law remains tinged with a metaphysical authority, that is not reducible to its effects on incentives. In any case, behavioural 'nudges', brains and 'choice architectures' have knocked the Benthamites and neo-classical dogmatists out of the policy limelight. But perhaps that's just as well. If the lessons of Becker, Bentham et al were learnt too closely, attaining law and order on the streets of the digitally-enabled city might soon come to appear tougher than a Nash equilibrium.