Normative Political Economy: Subjective freedom, the market, and the state

173 Pages·2001·23.809 MB·English

by  David P. Levine

Normative Political Economy
Normative Political Economy explores the criteria we use for judging economic
institutions and economic policy. It argues that prevailing criteria lack suffi-
cient depth in their understanding of subjective experience. By uncovering
the meaning of this experience through reference to psychoanalytic theory,
the book changes the way we understand the processes and structures of
‘political economy’.
The currency of David Levine’s argument are fundamental concepts of
universal importance. Topics covered include:
basic needs, equality and justice
freedom, self-integration, and creative living
the role of the state
capitalism and the good society
This book represents essential reading for any student of economics, polit-
ical science or moral philosophy.
David P. Levine is Professor of Economics in the Graduate School of
International Studies at the University of Denver. He is the author of nine
books and numerous articles in the fields of economic theory, political
economy, and applied psychoanalysis. His recent publications include Wealth
and Freedom (1995), Self-Seeking and the Pursuit ofJ ustice (1997) and Subjectivity
,
in Political Economy (1998)
.
Routledge Frontiers of Political Economy
1 Equilibrium Versus Understanding 16 Women and European Employment
Towards the rehumanization of economics Jill Rubery, Mark Smith, Colette Fagan,
within social theory Damian Grimshaw
Mark Addleson 17 Explorations in Economic
2 Evolution, Order and Complexity Methodology
Edited by Elias L. Khalil and From Lakatos to empirical philosophy of
Kenneth E. Boulding science
3 Interactions in Political Economy Roger Backhouse
Malvern after ten years 18 Subjectivity in Political Economy
Edited by Steven Pressman Essays on wanting and choosing
4 The End of Economics David P. Levine
Michael Perelman 19 The Political Economy of Middle East
5 Probability in Economics Peace
Omar F. Hamouda and Robin Rowley The impact of competing trade agendas
6 Capital Controversy, Post Keynesian Edited by J. W. Wright, Jnr
Economics and the History of Economics 20 The Active Consumer
Essays in honour of Geoff Harcourt, volume Novelty and surprise in consumecrhoice
Edited by Philip Arestis, Gabriel Palma and Edited by Marina Bianchi
Malcolm Sawyer
21 Subjectivism and Economic Analysis
7 Markets, Unemployment and Economic Essays in memory of Ludwig Lachmann
Policy Edited by Roger Koppl and Gary Mongiovi
Essays in honour of Geoff Harcourt, volume
22 Themes in Post-Keynesian Economics
Edited by Philip Arestis, Gabriel Palma and Essays in honour of Geoff Harcourt, volumethree
Malcolm Sawyer
Edited by Peter Kriesler and Claudio Sardoni
8 Social Economy
The logic of capitalist development 23 The Dynamics of Technological
Clark Everling Knowledge
Cristiano Antonelli
9 New Keynesian Economics/Post
Keynesian Alternatives 24 The Political Economy of Diet, Health
Edited by Roy J. Rotheim and Food Policy
10 The Representative Agent in Ben J. Fine
Macroeconomics 25 The End of Finance
James E. Hartley Capital market inflation, financial derivatives
11 Borderlands of Economics and pension fund capitalism
Essays in honour of Daniel R. Fusfeld Jan Toporowski
Edited by Nahid Aslanbeigui and Young Back 26 Political Economy and the New
Choi Capitalism
12 Value, Distribution and Capital Edited by Jan Toporowski
Essays in honour of Pierangelo Garegnani 27 Growth Theory
Edited by Gary Mongiovi and Fabio Petri A philosophical perspective
13 The Economics of Science Patricia Northover
Methodology and epistemology as if 28 The Political Economy of the Small Firm
economics reallv mattered
Edited by Charlie Dannreuther
James R. Wible
29 Hahn and Economic Methodology
14 Competitiveness, Localised Learning and
Edited by Thomas Boylan and Paschal F.
Regional Development
O’Gorman
Specialisation and prosperity in small open
economies 30 Gender, Growth and Trade
Peter Maskell, Heikki Eskelinen, Ingjaldur The miracle economies of postwar years
Hannibalsson, Anders Malmberg and Eirik David Kucera
Vatne 31 Normative Political Economy
15 Labour Market Theory Subjective freedom, the market, and thestate
A constructive reassessment
Ben J. Fine David P. Levine
Normative Political
Economy<br/>
Subjective freedom, the market,
and the
state
David P. Levine
First published 2001
by Routledge<br/>
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Simultaneously published in the USA and Canada
bRyo utledge<br/>
605 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2001 David P. Levine
Typeset in Garamond by
Florence Production Ltd, Stoodleigh, Devon
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or retrieval
system, without permission in writing from the publishers.
Notice:<br/>
Product or corporate names may be trademarks or registered
trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data<br/>
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Levine, David P., 1948-
Normative political economy: subjective freedom, the market,
and the state/David P. Levine.
p. cm.
Includes bibliographical references and index.
1. Economics—Psychological aspects. 2. Liberalism.
3. Individualism. 4. Economics—Moral and ethical aspects.
I. Title.
HB74.P8 L477 2000
330—dc21 00-034482
ISBN 13: 978-0-415-23529-7 (hbk)
Contents
Prefacevii
1 Introduction1
PART I
Foundations11
2 Ends13
3 The quality of subjective experience36
4 Needs and rights51
5 State and societ7y3
PART II
Applications 87
6 Capitalism and the good societ8y9
7 Income from work and social insurance107
8 Justice and economic democracy119
9 The economy: national, international, globa1l39
Notes151
References156
Inde1x59

Preface
In this book, I explore foundational concerns of normative political economy.
I do so out of the conviction that something important is missing in current
discussion of the ethical standing of economic institutions. This something
missing is a substantial account for the quality of subjective experience as
the central element in shaping the goals of economic activity and economic
institutions. I take subjectivity to be the central element in any meaningful
discussion of normative issues relevant in the contemporary setting. In that
setting, to provide a meaningful basis for normative judgment requires us
to understand the nature of subjectivity, and the prospects for subjectively
meaningful experience.
One can think of subjective experience as a kind of capacity, somewhat
along the lines that Martha Nussbaum and Amartya Sen follow in their
discussions of human capabilities. The specific capacity associated with what
I refer to as subjective experience is the capacity to define meaningful goals,
to take initiative in seeking to realize them, to lead a creative life, and to
find satisfaction in doing so. Institutions can be organized to facilitate or
impede the individual’s effort to develop and express this capacity, to consti-
tute him- or herself as, in the words of Heinz Kohut, a ‘centre of initiative’
in the world.
The emphasis on subjective experience leads us inevitably to mental or
psychic life. Yet, for those concerned with the economy, few things seem
less relevant than its psychic dimension. Because of this, the concepts needed
to understand subjective experience have played no part in discussion of
normative issues in political economy. Matters are not helped much by the
prevalence of utilitarian and related choice-theoretic ideas, which explicitly
deny the significance of any aspects of subjectivity that we cannot subsume
into the formal depiction of choice. This makes it all the more important
that we begin the exploration of subjective meaning in an arena where it
has largely been ignored.
The title of this book refers to norms, and it may be useful to explain
briefly my motivation for using this term, especially given the likelihood
that reference to norms will be taken to imply that the ethical standing of
institutions is made contingent or relative in some essential way. I use the
Preface
term ‘norm’ to make clear that this book considers not economic institu-
tions as they are, but as they might be if shaped according to ethically
compelling ideals. I do not consider these ideals arbitrary, purely subjective,
or customary. Nor do I consider them derivative of group decision-making,
however democratic that might be. On the contrary, the ideals I consider
here arise only when matters of history, tradition, or embeddedness in a
group no longer command conviction. These ideals and the norms that
embody them arise prior to matters of group decision-making, since they
are needed to judge the normative standing of the group itself and of its
decision-making processes. I take it that references to the modern world,
or to modernity, suggest a situation where group-constituting norms
(whether customary or not) no longer command conviction simply because
they are group-constituting; so something different is required if institu-
tions are to embody ethically meaningful ideals.
This something different is the specific norm that makes ethical living
possible outside the group. To live outside the group is to live as an indi-
vidual. This book, then, is about a world where the only compelling norms
are those that incorporate respect for the individual as the locus of subjec-
tive experience. This individual may seek membership in groups, and derive
substantial satisfaction and meaning in life from them. But, in joining a
group, the individual does not make him- or herself its creature. The norm
that expresses the ethical significance of life prior to, and even outside of,
the group is variously referred to as freedom, self-determination, autonomy,
and creative living.
In the current intellectual climate, a difficulty can arise for those who
appeal to the norm of freedom, and of the creative living connected to it,
for judging economic institutions. This difficulty has to do with the univer-
sality of freedom as a foundation for normative judgment. I argue that
freedom is a universal standard, though not in the sense sometimes attrib-
uted to that term. I consider freedom and the possibility of creative living
it affords neither inevitable nor universal to human experience. I do, however,
consider freedom the realization of a human potential. The realization of
this potential depends on one vital condition, which I refer to as the inte-
gration of subjective experience. The dependence of freedom on integration
makes the norm of freedom also a norm of integration, an integration that
many today consider illusory. I will not respond to those who question the
possibility of self-integration except to note that what makes the norm of
integration seem illusory is the extent to which we have failed to achieve
it. This failure should not, however, be presumed to imply the inherent
incapacity of human beings to integrate their lives around that core expe-
rience I will refer to as being your self.
I take it that integration of subjective experience is the essential element
in the idea of reason. Reason is the process that integrates subjective expe-
rience, and it is the expression in thought of the integration of that
experience. This is not, of course, the reason of formal deductive logic, of
Preface
consistent choice, or of conscious deliberation more generally, however vital
those may be. Rather, this is the reason of mental processes set loose from
presuppositions about what we must know and what we must do, so that
knowing and doing can be made the expression of a subject who knows
and who acts. Reason understood in this way is a cognitive, emotional, and
intellectual capacity inseparable from what I refer to here as the capacity
for subjective experience. This book is written, then, for those who would
judge institutions by their relationship to freedom and reason and, more
concretely, to the creative living freedom and reason make possible.
The freedom I consider here is not normally realized through the policy
of free trade, although historically it is in some ways linked to that policy.
If free trade means that economic opportunity is not limited by arbitrary
considerations, especially those of rank and status, but open to all, then
free trade is indeed linked to the norm of freedom. But, if free trade means
that the economy cannot be regulated in ways made necessary to protect
and secure the capacity for subjective experience, then it is the enemy of
freedom.
In economics, involvement with the idea of individual freedom has most
often meant a commitment to a particular ideology. This ideology has
various forms, but in all of them, the individual is taken as an irreducible
starting point for normative judgment. What this means is that being an
individual is taken to require no special development and no special condi-
tions aside from those that provide protection from others and from the
state. Individuals are what they are, want what they want, and gain satis-
faction where they find it. My earlier volume on Subjectivity in Political
Economy (Routledge 1998) was in large part devoted to undermining this
idea, and offering at least the rudiments of an alternative. This alternative
takes individuation seriously, understanding it as an achievement that
depends in vital ways on the availability of what Donald Winnicott refers
to as a facilitating environment. In the present volume, I continue to explore
the possibility that we can conceive economic arrangements suitable to self-
determination without denying the substantial demands individuals place
on, and the substantial dependence individuals have on, a larger order
including other individuals, the groups they form, the market, and the
state.
I would like to thank Pam Wolfe and Daniel Whelan for their assistance
in the preparation of the manuscript of this book. Material included in
Chapter 8 was first published in The Review of Political Economy, Vol. 10,
No. 3 (July 1998). The section on greed in Chapter 5 originally appeared
in Psychoanalytic Studies (Spring 2000).