Agents of destiny
ORIGINALLY oikonomia meant “administration of the house”. And by way of extension, it has become the art of governing the commons. For Aristotle the techne oikonomike differs from politics just as the house (oikia) differs from the city (polis). In the Hellenistic age –and then more explicitly in the Imperial age, lexicons of politics and economics got entangled so as to produce the oxymoron term political economy. That would be a term Aristotle couldn’t make sense of because for him there is a difference, even opposition, between oikos and polis. In the beginning, economics just didn’t make sense to Greek philosophers, and neither did the term political economy. But everything is political, even life and death.
MISGOVERNING THE COMMONS
People continued to think about economics. With the passage of time some thinkers have even coined a distinction between an oikonomia basilike (national economy) and an oikonomia politike (economy of the city or the commune). Agamben said there was the commutation that posed the oikia as “a polis on a small and contracted scale”, and the economy as “a contracted politeia”. That makes good sense because in the political theology of the years 1000-1500 kings and popes were also both self-similar and reflections of each other just as economics and politics reflected onto each other. Conversely, the polis is presented as “a large house” and politics as “a (public) economy”. In fact, originally oikonomia means “administration of the house”. By way of extension, it has become the art of governing the commons.
ARISTOTLE
For Aristotle the techne oikonomike differs from politics just as the house (oikia) differs from the city (polis). Agamben would like us to consider that “this distinction is restated in the Politics, in which the politician and the king –who belong to the sphere of the polis- are qualitatively opposed to the oikonomos and the despotes –who are referred to the sphere of the house and the family”. Because Platon denied the possibility of a conflict between the polis and the house –that is between public and private spheres, Aristotle insisted on the fact that politics isn’t simply the economics of the polis and economics isn’t simply the politics of the house. Therefore, running the whole national economy as if it were a firm wouldn’t make sense therein. It wouldn’t make sense today either. Perhaps the phrase ‘capitalism kills’ is meant to convey that idea. Well, it maybe capitalism but also misgoverning the commons that kills.
IS THERE THEOLOGY IN THE ECONOMY?
Well, maybe. Practically it could mean two things. First, because God has set up in motion this wretched earth so it stays in equilibrium forever until the judgment day, it is by definition an economical order. That is the principle of parsimony. On top of that its design must be (dynamically) optimal. Now this inter-temporality is a bit of a problem because economic time and theological time may not be the same thing.
Anyhow if the way things are being administered as if run by an oikonomos, then there shouldn’t be any deviation from the already set path because it is optimal. Perhaps this explains in some sense why throughout history critiques of the economical were treated on a par with outright political opposition. The second is, of course, the enigma of the interest rate. Nevertheless, I have alluded to that elsewhere. Let’s suffice to utter the strong claim of general equilibrium theory that in market economies the rate of interest and the rate of profit are intertwined, and in equilibrium they tend to converge.
DE-THEOLOGIZING THE TECHNE OIKONOMIKE
When it comes to reforms and remaking, rebidding, recasting and such, what happens? Perhaps we have to secularize or de-theologize the outlook first in the manner Carl Schmitt had suggested back in the 1920s. Consider Alexander Zinoviev’s muchpraised The Yawning Heights, the first law of Ibanskian life –meaning the Soviet Union of the 1970s- appears to be “the well-known rule whereby people who want to make a change never change anything, while changes are only effected by people who had no intention of doing so”. Since the set of political possibilities is empty, all change come a fortiori as by-products, and not as consequences of intentional actions. The second law states that “success achieved under any leadership must be success achieved by that leadership” and, finally, “for every disaster a guilty person outside the leader
ship can be found”. Now, the second and the third laws are kind of natural. Instances of such conduct and codification can be found anywhere and anytime. But the first is not an attribute that is so ubiquitously distributed. The real thread that links them all and binds them is that nobody actually believes in anything. In Ibansk, there is no belief closure. For the Soviet Union, in particular and inter alia, Timur Kuran had labelled this feature “true lies”: Publicly announced preferences and privately held ones are different, even contradictory. Indeed, preference falsification seems to be a pervasive and strategically manipulated phenomenon in many parts of the globe. And it would not simply wash to say, “be yourself ”, since “be yourself ” is a command that is self-defeating. As Emily Dickinson had reminded us in her Complete Poems: “The Heart cannot forget/Unless it contemplates/What it declines”.
PSYCHOLOGICAL CONUNDRUMS
This is an example of willing what cannot be willed. Being oneself –as in “be yourself ”- is an impossible undertaking since, according to Jon Elster –in Political Psychologyit amounts to a confusion of internal and external negations. Being oneself and trying to forget are endogenously driven projects. For instance, trying to forget requires the representation of the absence of what is to be forgotten and, thereby, the presence of it. One may grant that anyone willing to combat in warfare is insane and that he should have the right to be exempted on psychiatric grounds. He only has to ask. But if he asks for exemption, then he does not want to go to war and therefore he is sane. He will not be exempted from duty thereof. In fact, the lore has it that, during some stage of the Vietnam War, U.S. military authorities had declared volunteers unfit for service, probably in the belief that volunteering at that moment was a clear sign of incapacitating mental instability.
TRANSLATING THE POLITICAL MAP
Now, in Turkey, the first law of Ibansk has almost surely failed so far. Most instances of political actions can clearly be delineated back to the motives and opportunities, and the will and power to carry them out. No wonder, social and/or political engineering in these lands is a techne that everybody can easily understand how it works –or at least think so. More often than not it is true. However, not all action plans work well for those who initiate them. The gist of the matter is all action plans work for some, even if they do not work for those who bear the flag. It is in this sense that everything is deliberately designed and rational. This is admittedly a working hypothesis only, but it is a promising one.
ELECTIONS AND ITS AFTERMATH
Elections are coming up, and even if they aren’t around the corner, the political design targeting them has already begun to take shape. After the earthquake there is some confusion as to the exact date. We are in a zone of “happening”: now the happening may take some time but what is bound to happen is already “happening ” in a sense as if in slow motion. Will the original plan work after the earthquake? How much currency reserves would be needed? Or else how much would one need to stay afloat until the elections? Non-residents holdings of equities and bonds have been down by USD 13.4 billion over the last 12 months. So c. USD 13 billion has flown out. Let’s put things in perspective though.
Conjecture: The magnitude of reserves you need for a currency intervention is proportional to (a) the volume of nominal assets (funds) that are used for allegedly speculatively attacking your currency ( b) to the correlation coefficients of real markets ( goods markets or sectors) with each other (c) to the inverse of the exchange rate band you are targeting.
If the attack means a flow of funds that add up to USD 15 billion then the reserve you need is say slightly around that; if the amount doubles up then he magnitude you have to sell to the market also doubles up etc. If dollarization is the risk, then selling out of reserves is again a disaster because you might need an infinite amount of reserves to counter that. Similarly if goods markets are intricately bound up so shocks are highly correlated, then you would need an incredibly large amount of reserves. This goes back to the classic book on commodity markets by David Newberry and Joseph Stiglitz, 1981. If you need USD 80-100 billion, say in a year, to alleviate the pain of the disaster, then how much hard currency do you really need going forward?