[A]lmost no one is asking about the concept of “unelectability” itself. How did we get to the point where the candidate of a major party was judged not by his political vision, programme or sensibilities, but by an estimation of how different classes of imagined voters were likely to respond to him?
How is it that this has become our basic standard for judging politicians? And by “we” I am referring not just to political junkies, professional or otherwise, but to the electorate as a whole....
Back in 1936, John Maynard Keynes suggested that financial markets were organised a little like a beauty contest – except, he emphasised, a beauty contest with one important twist. Imagine newspaper readers were shown a hundred portraits, then asked to judge not which face was the prettiest, but which face everyone else would think was the prettiest.
In that case, everyone would not only be trying to imagine everyone else's preference, they'd really be trying to guess what everyone else guessed everyone else's preference would be. And so on, ad infinitum. This, Keynes argued, is basically how the financial sector works. Second-guessing of this sort can lead to crazy bubbles when people bid up, say, tulip bulbs in 17th century Amsterdam, or housing in London today, just because they think others want them.
In between Keynes and the latest general election, the financial sector itself has come to dominate the world economy – and British and American economies in particular.
This rise has been accompanied by a profound cultural shift. Starting in the Eighties, when news feeds began to provide stock quotes moving along the bottom of the screen, everyone in rich countries has, in a thousand subtle ways, been encouraged to look at the world through the eyes of an investor.
The same period saw the rise of punditocracy. Even in Keynes's day, newspapermen were notorious for their cynicism (think of the movie The Front Page). But in recent decades, that particular strain of cynicism – the assumption that politics is really just a game of personalities, showmanship and manipulation, and in no sense a battle over values or ideals – has migrated from the Fleet Street pubs to newspaper comment pages, and from there to news stories, and from there to anywhere anyone argued about politics.
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For the rich and powerful, popular cynicism is extraordinarily convenient. It's no longer necessary to convince people that the political or economic system is fair. All you have to do is convince them everyone else thinks it is.
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All this recalls the South Sea Bubble of 1711, where “every fool aspired to be a knave”, buying up worthless financial instruments for extravagant prices hoping to pass them off to the next sucker at a profit before the inevitable collapse.
When bubbles burst, the results tend to be dramatic. Corbyn's sudden rise can be seen as another's sudden fall. What we have just witnessed can, I think, be legitimately referred to as the popping of the Blair-Clinton bubble. That is, the ending of the assumption that a tepid, compromised, market-friendly, bureaucratic centrism that nobody actually liked was the only form left-of-centre politics could take, because everyone was convinced that everyone else thought so.
The moment a credible player appeared on the scene who rejected the underlying assumption, everyone realised no one really much liked it to begin with – which is, is of course, why the entire political-journalistic class united for two years to try to convince us that the player in question was not credible.
The only remaining question is: has the bubble fully collapsed? How far will it go? Will this spell the end of the financialisation of politics? If so, what does it tell us about the ultimate fate of the financial bubbles on which it is founded?--David Graeber "The 2017 general election marked the popping of the Blair-Clinton bubble," The New Statesman.
l very much like (with qualifications noted below) Graeber's two-fold idea that (i) much recent political commentary focuses on an estimation of how different classes of imagined voters are likely to respond to a candidate, that is, it tries to imagine everyone else's preferences; and (ii) that this is akin to how financial markets operate, especially in bubble territory. This may well have displaced discussion of "political vision, programme or sensibilities" and of the extent, if any, whether the "political or economic system is fair." Underlying Graeber's two-fold idea is (iii) a kind of ideological trickle-down (recall this post on Hume and Berkeley) image in which a way of conceiving the world moves from "Fleet Street pubs to newspaper comment pages, and from there to news stories, and from there to anywhere anyone argued about politics." This trickle down is reinforced, perhaps even driven by, a larger cultural shift in which finance and financial reporting has become extremely important (by historical standards). Inspired by Graeber, I call (i-iii) bubble-politics.
Moreover, Graeber also explains who benefits from this status quo (the two-fold idea and its trickle down): "the rich and powerful." For their privilege goes unquestioned now because the very issues of fairness go un-discussed. The previous sentence is, I think, what Graeber intends to say, although not what he says. He suggests that what happens is a kind of mass ideological manipulation in which "All you have to do is convince [the people that] everyone else thinks the political or economic world is [fair]." I am not denying that it is possible that such mass ideological manipulation takes place [plenty of rhetoric about meritocracy to go around], but (a) it does not fit the logic of his particular argument; (b) it also goes against media culture which promotes unfulfilled desire not satisfaction with the status quo.
Before I got to my modest criticisms of Graeber a non-trivial aside. Modern financial markets are a peculiar kind of markets in a way that Keynes could not appreciate. (I would argue that Keynes's model is basically inspired by Adam Smith's treatment of bubbles in financial products, but that's for another time.) The prices of many financial instruments (especially derivatives) follow not so much the law of supply and demand, but rather rational pricing formulas* (most famously associated with names like Black, Merton, Scholes) and which rely at their core, on the idea that there is no-arbitrage. (The formulas presuppose, in practice that some traders instantaneously take advantage of arbitrage opportunities in the market-place.)** So, in financial markets people can imagine everyone else's preferences -- all other things being equal, and of course that's not always the case -- because everybody is using pretty much the same formulas (this gets discussed in the sociology of finance literature as an element of 'performativity').
No such pricing formula exists in politics. But everyone else's preferences are measured by way of opinion polls. It is no surprise, then, that the Bayesian aggregation models of opinion polls have provided a means at systematically imagining everyone else's preferences. (Recall my analysis of the weaknesses of these models here.) And so these have reinforced the mechanisms that Graeber is sketching.
So far so good. It is worth noting, however, that there are structural, institutional reasons why the United States and the United Kingdom, are especially susceptible to bubble politics. For in a first-past-the-post-system [FPTPS] it really matters what everyone else's preferences in one's district are, and so it matters how everyone else's preferences are imagined to be. Strategic and tactical voting in light of such imaginings is, in fact, quite rational whereas in a reasonably functioning proportional representation system one can rationally vote one's preferences without, on the whole, much concern to tactics. (Even small parties can have leverage in a coalition.) While I do not claim that bubble politics is intrinsic to a FPTPS, it is a non-accidental feature of it. That is to say, even even when one political bubble is burst one can expect another to develop in a FPTPS. In fairness to Graeber his focus is resolutely on the UK/USA because he speaks of the "Blair-Clinton bubble" and ignores other places where what he describes as tepid centrism seems to thrive (e.g., Macron, Trudeau Jr. etc.).
There is a further reason for this last point that one can expect another political bubble to develop in a FPTPS. As Jason Brennan never tires of saying, many markets generate direct and focused feedback mechanisms (through the price system; profits/losses, etc.) at fairly rapid time scales. (The collapse of Long-Term Capital twenty yeas ago is a nice case in point.) By contrast elections do not occur very often and the feedback mechanism are rather diffuse, slow, and coarse-grained. Meanwhile, participation in opinion polls has almost no feedback at all--this is a nice instance of cheap talk. Because of the lack of regular feedback the bubbles can, once developed, thrive for a long time (the term of a parliament, a US President, etc.).
I said I had some modest criticism of Graeber. That's because I am struck by the fact that his post can be read as trying -- forgive the language -- to call the top of the market ["Corbyn's sudden rise can be seen as another's sudden fall... the popping of the Blair-Clinton bubble"] in a bubble polity rather than discussing a "political vision, programme or sensibilities."+ That is, Graeber contributes to the genre of punditry that is most apt for a bubble politics: prophecy. Now he does so quite elegantly by simultaneously and artfully deconstructing -- like a magician who shows his tricks while performing them -- the practice he is, if I am right, contributing to. ***
*It is an ironic fact that some of the most famous bits of modern finance theory are associated with Chicago economics even though they are really instruments of rational planning.
**They also rely on the idea that lack of knowledge about the future, uncertainty, can be modeled as randomness. But that I have often discussed before.
+It may be true that "Blair-Clinton bubble" has been burst, but it does not follow yet that a Corbyn like candidate is capable of winning a majority in parliament, especially because his opponent ran, by all accounts, a terrible campaign.
***And yes, my dear reader, by ignoring underlying issues I may well also be thought to contribute to bubble politics in this post. That's true, but in the body of the post I am not inclined to discuss the future electoral fortunes of any politican.
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