Democratic Choice in an Economistic World

Democratic Choice in an Economistic World (Part 1 — this will be posted in three parts)

A street musician I know named Omer once had an album with a curious title: “Democracy is a Good Idea”. For someone who spends most of his time in public cursing others and singing out of tune, Omer makes a bold statement. Most of us, I’d like to think, share his optimism. But what are we up against, when we lean on democracy for making social choices? In today’s democracy, we are confronted by an underlying value system that makes certain decisions for us, in a certain way. Those decisions, unfortunately, do not abide by the needs or desires of the populations that make up the “demos” (“citizens”) in democracy. I’ll use two cases/scales (gentrification in the micro, and environmentalism in the macro) to show how, without necessitating conspiracy, direct corruption, or even ill-will, governments and government officials place the values of economics ahead of all else. This tendency to prioritize economic growth and economic value above all else can be called “economism”.

As a warning: I am aware of the criticizable leftist writer tradition, where analyzing the modern order and coming up with damning indictments isn’t necessarily followed with satisfying or equivalent offerings of solutions. I don’t presume to know the exact solution to the problematic tendencies I describe here, but I will recommend strategies for challenging economism from within the current order, even if they seem inadequate. I hold hope—without naiveté—that experimental challenges can provide valuable lessons towards more comprehensive and effective solutions to the problem of economism. Eventually, maybe we’ll prove that democracy was a good idea after all.

Economism comes in many forms; at base it makes money the primary measure by which we assess the value of things, and ensures that only those things that can be priced are considered valuable. Economism as such idealizes money as the ultimate value around which to arrange individual or collective rules, thoughts, and actions. It is found in tendencies of modern political thought, like the idea that “jobs” are an unmitigated good, or that environmental regulations are “bad for the economy”. It can just as well be unconscious, as in the way we individually tend to prioritize making and spending money over other activities regardless of our own interests. One impetus for economism is the condition that money has become a stand-in for the things that we actually need for survival, happiness, and meaning in our lives. Increasing the number of jobs may be good in general for peoples’ ability to eat healthfully, as the connection between mouths and sustenance is mediated by the presence or absence of money, and access to money is mediated by the presence or absence of jobs. If, however, money could be taken out of the equation, we would see that the important aspect is the food, not the money that buys it or the job that provides the money to buy it. Economism embodies the norms of a monetized society, while at the same time it reinforces the monetized values of that society. And this reinforcement takes place most obviously through policy.

Government policy is where a society’s values are supposedly codified; in reality, policy often contradicts the expressed desires of democratic populations in favor of economistic priorities. An example of legislative, legalistic economism can be found in the Californian constitution [italics added]:

1954.25.  The Legislature finds that the price charged for commercial real property is a matter of statewide concern. Price controls on commercial rents discourage expansion of commercial development and entrepreneurial enterprise. These controls also discourage competition in the open market by giving artificial price benefits to one enterprise to the disadvantage of another. Because the impact of these controls goes beyond the local boundaries within which the controls are imposed, the adverse economic consequences become statewide. In order to prevent this statewide economic drain from occurring, the Legislature hereby enacts a uniform system with respect to commercial rents, which shall apply to every local jurisdiction in the state. This legislative action is needed to prevent the imposition of artificial barriers on commercial rents, as well as to define those areas not included within the definition of commercial real property.

This section was written in response to Berkeley, CA passing commercial rent control to protect the character of some of its business corridors. Reading this paragraph, it’s hard to avoid the sense that its drafters considered something called “the open market” to exist aside from society. But the reality is that it doesn’t: the “free” or “open” market is a fiction that has never and could never exist anywhere, as economies always operate in relation to environmental conditions and human cultures and values, factors that are impossible to negate completely and be left with something called only “the economy”—how we organize ourselves to make a living. Throughout time, how we make our livings has always been conditioned by our ways of self-organizing (government and institutions) and the stories we tell about ourselves and the world (values). “The economy” is a thought device deployed to understand how we sustain ourselves, which has greatly varied from culture to culture, and over time. Though the things we need to survive as living beings are more fundamental than the particular social formations that provide us these things, economics as a profession looks at the former (food, shelter, health care, etc) always through the lens of the latter (in our modern case: money). What economists—and the politicians who follow them—tend to ignore is that money is only one aspect of “the economy”.^[1]

It may be popular wisdom that “money doesn’t buy happiness” but that wisdom has yet to translate into mechanisms to prioritize non-money values in the social choices we make, either the individual choices that collectively become social choices (like purchasing trends), or in the overtly social choices we make (through government). The constitutional language referenced above legally prevents communities from using commercial rent control, one potential tool in the struggle against small business displacement caused by gentrification, showing clearly how economism can pervade government and influence social outcomes.

Gentrification’s causes

Those who are opposed to the displacements of people, businesses and culture that stem from gentrification are often unclear on how social choices that promote gentrification are made. One popular narrative about gentrification argues that money-poor artists are the pioneers in the gentrification ecological succession: they move into a run-down neighborhood and make it hip, leading to its “revitalization”. But if we look broader and deeper, we find problems in this narrative. Depending on the context, an artist might be a ‘gentrifier’ one day and gentrified in the next. Is it fair to place the blame for gentrification on those whose primary motivation for living in cheap areas is a desire to spend more time in creative pursuits than on working to pay exorbitant rents? In terms of actual displacement (the clear negative effect of gentrification), artists tend not to contribute directly; it is the later followers of artists who more often raise rents and evict tenants.

Following this logic, some activists blame individuals higher on the wealth scale for their housing purchases in an up-and-coming neighborhood or for their support of boutiques and fancy restaurants that are the canary of the gentrification coal mine. But both aspects of this narrative (roughly, ‘the hipster’ and ‘the yuppie’ as causes of gentrification) miss the crucial difference between consumptive money power and investment money power. This is a crucial difference for understanding where economism stems from and how it might be challenged, because while money certainly has value in its ability to get a purchaser goods and services, its more powerful value lays in its ability to make investors more money through the process of investment.

These investment decisions are driven in part by our current monetary system, which requires each individual agent who acquires debt (and most investment in real estate is based in debt-accumulating loans) to accumulate enough money to pay back that debt with interest. Because an obscure semi-private entities (central banks) are allowed to create money essentially out of thin air (called ‘fiat money’) and then loan this with a condition of interest, there is never enough money in the system to pay off loans: more money must constantly be created (through profits) in order to keep payments flowing to the makers of money. A short video that describes this process well is available here.

‘Hipsters’ may increase neighborhood appeal; ‘yuppies’ may buy into that appeal; and real estate developers may take advantage of that yuppie interest. Yet it is the sources of investment capital (banks, investment firms and stock markets) that mandate borrowers to make a profit, and enables the physical developments that drive gentrification. Gentrification is driven primarily by real estate investment and disinvestment decisions, and while it is important to acknowledge how individuals and groups contribute to or reduce the impacts of gentrification, it is equally important to acknowledge that (in the words of Neil Smith, scholar of gentrification) “even yuppies have very limited choices in the housing market, albeit far more choices than the poor.”

The important point is that assigning causal guilt based on a buying market position is theoretically weak and strategically a dead end. Yes, individuals contribute to gentrification with their purchasing, employment, and sales decisions. But the major culprit is impossible to pin down because it is mobile, shifting, and flows through the individuals commanding its power. Pin down the individual, the power flows elsewhere. This is the power of capital; the capital that drives capitalism. In an economistic society individuals act “rationally” within the capitalist system, so profitmaking (debt repayment) guides choices, and choices that amplify capital are rewarded.

“So, while the question of consumption and the availability of consumers is by no means irrelevant, it is secondary to the far greater power of capital.”