## Wednesday, March 21, 2012

More teaching: We're starting on the open economy now. Exchange rates, trade, international finance, the balance of payments. So one of the first things you have to explain, is the definition of real and nominal exchange rates:

e_R = e_N P*/P

where P and P* are the home and foreign price levels respectively, and the exchange rate e is defined as the price of foreign exchange (so an appreciation means that e falls and a depreciation means that it rises).

This is a useful definition to know -- though of course it's not as straightforward as it seems, since as we've discussed before there are various possibles Ps, and once we are dealing with more than two countries we have to decide how to weight them, with different statistical agencies using different weightings. But set all that aside. What I want to talk about now, is what a nice little example this equation offers of a structuralist perspective on the economy.

As given above, the equation is an accounting identity. It's always exactly true, simply because that's how we've defined the real exchange rate. As an accounting identity, it doesn't in itself say anything about causation. But that doesn't mean it's vaacuous. After all, we picked this particular definition because we think it is associated with some causal story. [1] The question is, what story? And that's where things get interesting.

Since we have one equation, we should have one endogenous (or dependent) variable. But which one, depends on the context.

If we are telling a story about exchange rate determination, we might think that the endogenous variable is e_N. If price levels are determined by the evolution of aggregate supply and demand (or the growth of the money stock, if you prefer) in each country, and if arbitrage in the goods market enforces something like Purchasing Power Parity (PPP), then the nominal exchange rate will have to adjust to keep the real price of a comparable basket of goods from diverging across countries.

On the other hand, we might not think PPP holds, at least in the short run, and we might think that the nominal exchange rate cannot adjust freely. (A fixed exchange rate is the obvious reason, but it's also possible that the forex markets could push the nominal exchange rate to some arbitrary level.) In that case, it's the real exchange rate that is endogenous, so we can see changes in the price of comparable goods in one country relative to another. This is implicitly the causal structure that people have in mind when they argue that China is pursuing a mercantilist strategy by pegging its nominal exchange rate, that devaluation would improve current account balances in the European periphery, or that the US could benefit from a lower (nominal) dollar. Here the causal story runs from e_N to e_R.

Alternatively, maybe the price level is endogenous. This is less intuitive, but there's at least one important story where it's the case. Anti-inflation programs in a number of countries, especially in Latin America, have made use of a fixed exchange rate as a "nominal anchor." The idea here is that in a small open economy, especially where high inflation has led to widespread use of a foreign currency as the unit of account, the real exchange rate is effectively fixed. So if the nominal exchange rate can also be effectively fixed, then, like it or not, the domestic price level P will have to be fixed as well. Here's Jeffrey Sachs on the Bolivian stabilization:
The sudden end of a 60,000 percent inflation seems almost miraculous... Thomas Sargent (1986) argued that such a dramatic change in price inflation results from a sudden and drastic change in the public's expectations of future government policies... I suggest, in distinction to Sargent, that the Bolivian experience highlights a different and far simpler explanation of the very rapid end of hyperinflations. By August 1985,... prices were set either explicitly or implicitly in dollars, with transactions continuing to take place in peso notes, at prices determined by the dollar prices converted at the spot exchange rate. Therefore, by stabilizing the exchange rate, domestic inflation could be made to revert immediately to the US dollar inflation rate.
So here the causal story runs from e_N to P.

In the three cases so far, we implicitly assume that P* is fixed, or at least exogenous. This makes sense; since a single country is much smaller than the world as a whole, we don't expect anything it does to affect the world price level much. So the last logical possibility, P* as the endogenous variable, might seem to lack a corresponding real world story. But an individual countries is not always so much smaller than the world as a whole, at least not if the individual country is the United States. It's legitimate to ask whether a change in our price level or exchange rate might not show up as as inflation or deflation elsewhere. This is particularly likely if we are focusing on a bilateral relationship. For instance, it might well be that a devaluation of the dollar relative to the renminbi would simply (or mostly) produce corresponding deflation [2] in China, leaving the real exchange rate unchanged.

Here, of course, we have only one equation. But if we interpret it causally, that is already a model, and the question of "what adjusts?" can be rephrased as the choice between alternative model closures. With multiple-equation models, that choice gets trickier -- and it can be tricky enough with one equation.

In my opinion, sensitivity to alternative model closures is at the heart of structuralist economics, and is the great methodological innovation of Keynes. The specific application that defines the General Theory is the model closure that endogenizes aggregate income -- the interest rate, which was supposed to equilibrate savings and investment, is pinned down by the supply and demand of liquidity, so total income is what adjusts -- but there's a more general methodological principle. "Thinking like an economist," that awful phrase, should mean being able to choose among different stories -- different model closures -- based on the historical context and your own interests. It should mean being able look at a complex social reality and judge which logical relationships represent the aspects of it you're currently interested in, and which accounting identities are most relevant to the story you want to tell. Or as Keynes put it, economics should be thought of as
a branch of logic, a way of thinking ... in terms of models, joined to the art of choosing models which are relevant to the contemporary world. ... [The goal is] not to provide a machine, or method of blind manipulation, which will furnish an infallible answer, but to provide ourselves with an organised and orderly method of thinking out particular problems.
Much of mainstream macroeconomics assumes there is a "true" model of the world. Connected to this, there's an insistence -- shared even by a lot of heterodox macro -- on regarding some variables as being strictly exogenous and others as strictly endogenous, so that in every story causality runs the same way. In the canonical story, tastes, technology and endowments (one can't help hearing: by the Creator) are perfectly fixed, and everything else is perfectly adjustable. [3]

Better to follow Keynes, and think about models as more or less useful for clarifying the logic of particular stories.

EDIT: Of course not everyone who recognizes the methodological distinction I'm making here agrees that the eclecticism of structuralism is an advantage. Here is my teacher Peter Skott (with Ben Zipperer):
The `heterodox' tradition in macroeconomics contains a wide range of models. Kaleckian models treat the utilization rate as an accommodating variable, both in the short and the long run. Goodwin's celebrated formalization of Marx, by contrast, take the utilization rate as fixed and looks at the interaction between employment and distribution. Distribution is also central to Kaldorian and Robinsonian theories which, like Goodwin, endogenize the profit share and take the utilization rate as structurally determined in the long run but, like the Kaleckians, view short-run variations in utilization as an intrinsic part of the cycle. The differences in these and other areas are important, and this diversity of views on core issues is no cause for celebration.

EDIT 2: Trygve Haavelmo, quoted by Leijonhufvud:
There is no reason why the form of a realistic model (the form of its equations) should be the same under all values of its variables. We must face the fact that the form of the model may have to be regarded as a function of the values of the variables involved. This will usually be the case if the values of some of the variables affect the basic conditions of choice under which the behavior equations in the model are derived.
That's what I'm talking about. There is no "true" model of the economy. The behavioral relationships change depending where we are in economic space.

Also, Bruce Wilder has a long and characteristically thoughtful comment below. I don't agree with everything he says -- it seems a little too hopeless about the possibility of useful formal analysis even in principle -- but it's very worth reading.

[1] "Accounting identities don't tell causal stories" is a bit like "correlation doesn't imply causation."Both statements are true in principle, but the cases we're interested in are precisely the cases where we have some reason to believe that it's not true. And for both statements, the converse does not hold. A causal story that violates accounting identities, or for which there is no corresponding correlation, has a problem.

[2] Or lower real wages, the same thing in this context.

[3] Or you sometimes get a hierarchy of "fast" and "slow" variables, where the fast ones are supposed to fully adjust before the slow ones change at all.

### Louis Liked It

Last weekend was the Left Forum. I've been going to these things for years and years, since they were the Socialist Scholars Conference, and it must be said they have gotten much better in recent years. Many more younger people, many fewer undersocialized fossil Trotskyists. (Some of my best friends are...) This year, felt especially good As Doug Henwood said on Facebook, "The sessions were good, especially the discussions - but the major difference was that Occupy made it feel like it actually mattered."

I was on two panels with some UMass comrades, one on the New Deal and whether we want a new one, and one on whether finance specifically is the enemy. Louis Proyect caught most of the former on tape and, gratifyingly, says it was the best one he went to. Tho he says I work at William Patterson University, which I've never even heard of, and says I was calling for a new New Deal, which I don't think I really was. But judge for yourself: here's the video.

## Wednesday, March 14, 2012

### (How) Was the Problem of Depression-Prevention Solved?

Krugman says that Friedman-style monetarism is really just a special case of postwar Keynesian analysis. I agree. (New Keynesianism in turn is just another name for monetarism.) To get monetarist conclusions out of an ISLM-type model, all you need is an income-elasticity of money demand that is both (a) stable and (b) large relative to the interest-elasticity of money demand.

Of course, for this to work the "money" that's demanded has to be the same as the "money" that the central bank supplies, which requires a particular, and now largely vanished, kind of financial structure, as we've been discussing below. But that's not what I want to talk about here. Rather, it's this other bit:
This time the Fed did all that Friedman denounced it for not doing in the 1930s. The fact that this wasn’t enough amounts to a refutation of Friedman’s claim that adequate Fed action could have prevented the Depression.
Do we think this is right? It doesn't seem right to me. If unemployment in the 1930s had peaked at below 10%, instead of 25%; if industrial production had fallen by one eighth, instead of by over half; if fixed investment had fallen by 20%, instead of by 80% (yes, business investment halted almost entirely in the early 30s); if we'd had one or two quarters of deflation, instead of four years; -- then I think we would say that the Depression had indeed been prevented. Krugman is implicitly assuming here today's economy couldn't collapse the way it did in the 1930s, but how do we know that's true?

We always ask, why was the Great Recession so deep? But you could just as well turn the question around and ask why, despite initial appearances, did it turn out to be not nearly as deep as the Depression?

I can think of four families of answers. One is the one that Krugman is implicitly rejecting -- that policy was better this time. I think most people who tell this story -- including some on the left -- would emphasize the rescue of the banking system. Disgusting as it is to see the same smug assholes who caused the crisis handed truckloads of money, if nature had taken its course and the big banks had been allowed to fail, we might really have had a Depression. That's one story. You might also mention fiscal policy, which, while inadequate, has clearly helped, but it's hard to see that explaining more than a few points of the difference.

The second answer would be that the sheer size of government makes a Depression-scale collapse of demand impossible, regardless of policy. In 1929, with government final demand only a couple percent of GDP, autonomous spending basically was investment spending, especially if we think at the global level so exports wash out. Today, by contrast, G is significantly larger than I (about 20 vs 15 percent of GDP), so even if private investment had collapsed at the same scale as in 1929-1933, the percentage fall in autonomous demand would have been much less. (And of course that fact alone helped keep private investment from collapsing.) Interestingly, despite Hyman Minsky's association with stories about finance, this, and not anything to do with the financial system, was why his answer to the question Can "It" Happen Again was, No. Policy is secondary; big government itself is the ballast that stabilizes the economy.

Third would be that the shock in 1929 was greater than the shock in 2007. Of course that would require that you specify the shock, and assumes that you think the causes of the crises were basically exogenous. We could compare a story of the 1920s about radically changed trade patterns as a result of WWI, or about the transition agriculture to industry, to a story for the more recent crisis about the housing bubble, or global imbalances, or the transition from industry to services. If you believe a story like that, there's no reason you couldn't argue that their exogenous shock was bigger than our exogenous shock, and that's the real difference.

Last, you could argue that private demand is inherently more stable today than it was before WWII. Price stickiness, say, usually cast as a villain in macroeconomic stories, could have prevented outright deflation; and greater debt-financing of consumption, again usually seen as part of the problem, could have helped stabilize consumption demand in the face of falling incomes. Or financial markets are less subject to short-term fluctuations in sentiment. (Haha. I crack myself up.)

Personally, I would lean toward door number two. But the important thing is just to reframe the question -- not why was the recession so bad, but why wasn't it worse? If someone ever did an IGM-style survey of economists, but of the good guys, it would be a good thing to ask.

## Saturday, March 10, 2012

### Graeber Cycles and the Wicksellian Judgment Day

So it's halfway through the semester, and I'm looking over the midterms. Good news: Learning has taken place.

One of the things you hope students learn in a course like this is that money consists of three things: demand deposits (checking accounts and the like), currency and bank reserves. The first is a liability of private banks, the latter two are liabilities of the central bank. That money is always someone's liability -- a debt -- is often a hard thing for students to get their heads around, so one can end up teaching it a bit catechistically. Balance sheets, with their absolute (except for the exceptions) and seemingly arbitrary rules, can feel a bit like religious formula. On this test, the question about the definition of money was one of the few that didn't require students to think.

But when you do think about it, it's a very strange thing. What we teach as just a fact about the world, is really the product of -- or rather, a moment in -- a very specific historical evolution. We are lumping together two very different kinds of "money." Currency looks like classical money, like gold; but demand deposits do not. The most obvious difference, at least in the context of macroeconomics, is that one is exogenous (or set by policy) and the other endogenous. We paper this over by talking about reserve requirements, which allow the central bank to set "the" money supply to determine "the" interest rate. But everyone knows that reserve requirements are a dead letter and have been for decades, probably. While monetarists like Nick Rowe insist that there's something special about currency -- they have to, given the logic of their theories -- in the real world the link between the "money" issued by central banks and the "money" that matters for the economy has attenuated to imperceptible gossamer, if it hasn't been severed entirely. The best explanation for how conventional monetary policy works today is pure convention: With the supply of money entirely in the hands of private banks, policy is effective only because market participants expect it to be effective.

In other words, central banks today are like the Chinese emperor Wang Wei-Shao in the mid-1960s film Genghis Khan:
One of the film's early scenes shows the exquisitely attired emperor, calligraphy brush in hand, elegantly composing a poem. With an ethereal self-assurace born of unquestioning confidence in the divinely ordained course of worldly affairs, he explains that the poem's purpose is to express his displeasure at the Mongol barbarians who have lately been creating a disturbance on the empire's western frontier, and, by so doing, cause them to desist.
Today expressions of intentions by leaders of the world's major central banks typically have immediate repercussions in financial markets... Central bankers' public utterances ... regularly move prices and yields in the financial markets, and these financial variables in turn affect non-financial economic activity... Indeed, a widely shared opinion today is that central bank need not actually do anything. ...
In truth the ability of central banks to affect the evolution of prices and output ... [is] something of a mystery. ... Each [explanation of their influence] ... turns out to depend on one or another of a series of by now familiar fictions: households and firms need currency to purchase goods and services; banks can issue only reserve-bearing liabilities; no non-bank financial institutions create credit; and so on.
... at a practical level, there is today [1999] little doubt that a country's monetary policy not only can but does largely determine the evolution of its price level..., and almost as little doubt that monetary policy exerts significant influence over ... employment and output... Circumstances change over time, however, and when they do the fictions that once described matters adequately may no longer do so. ... There may well have been a time when the might of the Chinese empire was such that the mere suggestion of willingness to use it was sufficient to make potential invaders withdraw.
What looked potential a dozen years ago is now actual, if it wasn't already then. It's impossible to tell any sensible macroeconomic story that hinges on the quantity of outside money. The shift in our language from  money, which can be measured -- that one could formulate a "quantity theory" of  -- to discussions of liquidity, still a noun but now not a tangible thing but a property that adheres in different assets to different degrees, is a key diagnostic. And liquidity is a result of the operations of the financial system, not a feature of the natural world or a dial that can be set by the central bank. In 1820 or 1960 or arguably even in 1990 you could tell a kind of monetarist story that had some purchase on reality. Not today. But, and this is my point! it's not a simple before and after story. Because, not in 1890 either.

David Graeber, in his magisterial Debt: The First 5,000 Years [1], describes a very long alternation between world economies based on commodity money and world economies based on credit money. (Graeber's idiolect is money and debt; let's use here the standard terms.) The former is anonymous, universal and disembedded, corresponds to centralized states and extensive warfare, and develops alongside those other great institutions for separating people from their social contexts, slavery and bureaucracy. [2] Credit, by contrast, is personal, particular, and unavoidably connected with specific relationships and obligations; it corresponds to decentralized, heterogeneous forms of authority. The alternations between commodity-money systems,with their transcendental, monotheistic religious-philosophical superstructures; and credit systems, with their eclectic, immanent, pantheistic superstructures, is, in my opinion, the heart of Debt. (The contrast between medieval Christianity, with its endless mediations by saints and relics and the letters of Christ's name, and modern Christianity, with just you and the unknowable Divine, is paradigmatic.) Alternations not cycles, since there is no theory of the transition; probably just as well.

For Graeber, the whole half-millenium from the 16th through the 20th centuries is a period of the dominion of money, a dominion only now -- maybe -- coming to an end. But closer to ground level, there are shorter cycles. This comes through clearly in Axel Leijonhufvud's brilliant short essay on Wicksell's monetary theory, which is really the reason this post exists. (h/t David Glasner, I think Ashwin at Macroeconomic Resilience.) Among a whole series of sharp observations, Leijonhufvud makes the point that the past two centuries have seen several swings between commodity (or quasi-commodity) money and credit money. In the early modern period, the age of Adam Smith, there really was a (commodity) money economy, you could talk about a quantity of money. But even by the time of Ricardo, who first properly formalized the corresponding theory, this was ceasing to be true (as Wicksell also recognized), and by the later 19th century it wasn't true at all. The high gold standard era (1870-1914, roughly) really used gold only for settling international balances between central banks; for private transactions, it was an age not of gold but of bank-issued paper money. [3]

If I somehow found myself teaching this course in the 18th century, I'd explain that money means gold, or gold and silver. But by the mid 19th century, if you asked people about the money in their pocket, they would have pulled out paper bills, not so unlike bills of today -- except they very likely would have been bills issued by private banks.

The new world of bank-created money worried classical economists like Wicksell, who, like later monetarists, were strongly committed to the idea that the overall price level depends on the amount of money in circulation. The problem is that in a world of pure credit money, it's impossible to base a theory of the price level on the relationship between the quantity of money and the level of output, since the former is determined by the latter. Today we've resolved this problem by just giving up on a theory of the price level, and focusing on inflation instead. But this didn't look like an acceptable solution before World War II. For economists then -- for any reasonable person -- a trajectory of the price level toward infinity was an obvious absurdity that would inevitably come to a halt, disastrously if followed too far. Whereas today, that trajectory is the precise definition of price stability, that is, stable inflation. [4] Wicksell was part of an economics profession that saw explaining the price level as a, maybe the, key task; but he had no doubt that the trend was toward an ever-diminishing role for gold, at least domestically, leaving the money supply in the hands of the banks and the price level frighteningly unmoored.

Wicksell was right. Or at least, he was right when he wrote, a bit before 1900. But a funny thing happened on the way to the world of pure credit money. Thanks to new government controls on the banking system, the trend stopped and even reversed. Leijonhufvud:
Wicksell's "Day of Judgment" when the real demand for the reserve medium would shrink to epsilon was greatly postponed by regime changes already introduced before or shortly after his death [in 1926]. In particular, governments moved to monopolize the note issue and to impose reserve requirements on banks. The control over the banking system's total liabilities that the monetary authorities gained in this way greatly reduced the potential for the kind of instability that preoccupied Wicksell. It also gave the Quantity Theory a new lease of life, particularly in the United States.
But although Judgment Day was postponed it was not cancelled. ... The monetary anchors on which 20th century central bank operating doctrines have relied are giving way. Technical developments are driving the process on two fronts. First, "smart cards" are circumventing the governmental note monopoly; the private sector is reentering the business of supplying currency. Second, banks are under increasing competitive pressure from nonbank financial institutions providing innovative payment or liquidity services; reserve requirements have become a discriminatory tax on banks that handicap them in this competition. The pressure to eliminate reserve requirements is consequently mounting. "Reserve requirements already are becoming a dead issue."
The second bolded sentence makes a nice point. Milton Friedman and his followers are regarded as opponents of regulation, supporters of laissez-faire, etc. But to the extent that the theory behind monetarism ever had any validity (or still has any validity in its present guises) it is precisely because of strict government control over credit creation. It's an irony that textbooks gloss over when they treat binding reserve requirements and the money multiplier as if they were facts of nature.

(That's more traditional textbooks. Newer textbooks replace the obsolete story that the central bank controls interest rates by setting the money supply with a new story that the central bank sets the interest rate by ... look, it just does, ok? Formally this is represented by replacing the old upward sloping LM curve with a horizontal MP (for monetary policy) line at the interest rate chosen by the central bank. The old story was artificial and, with respect to recent decades, basically wrong, but it did have the virtue of recognizing that the interest rate is determined in financial markets, and that monetary policy has to operate by changing the supply of liquidity. In the up-to-date modern version, policy might just as well operate by calligraphy.)

So, in the two centuries since Heinrich van Storch lectured the young Grand Dukes of Russia on the economic importance of "precious metals and fine jewels," capitalism has gone through two full Graeber cycles, from commodity money to credit money, back to (pseudo-)commodity money and now to credit money again. It's a process that proceeds unevenly; both the reality and the theory of money are uncomfortable hybrids of the two. But reality has advanced further toward the pure credit pole than theory has.

This time, will it make it all the way? Is Leijonhufvud right to suggest that Wicksell's Day of Judgment was deferred but not canceled, and now is at hand?

These issues were touched on in the debate around interchange fees that rocked the econosphere a while back. (Why do checks settle at par -- what I pay is exactly what you get -- but debit and credit card transactions do not? Should we care?) But that discussion, while useful, could hardly resolve the deeper question: Why have we allowed means of payment to move from being a public good to a private oligopoly? In the not too distant past, if I wanted to give you some money and you wanted to give me a good or service, we didn't have to pay any third party for permission to make the trade. Now, most of the time, we do. And the payments are not small; monetarists used to (still do?) go on about the "shoe leather costs" of holding more cash as a serious reason to worry about inflation, but no sane person could imagine those costs could come close to five percent of retail spending. And that's not counting the inefficiencies. This is a private sales tax that we allow to be levied on almost every transaction,  just as distortionary and just as regressive as other sales taxes but without the benefit of, you know, funding public services. The more one thinks about it, the stranger it seems. Why, of all the expansions of public goods and collective provision won over the past 100 or 200 years, is this the one big one that has been rolled back? Why has this act of enclosure apparently not even been noticed, let alone debated? Why has the modern equivalent of minting coinage -- the prerogative of sovereigns for as long as there've been any -- been allowed to pass into the hands of Visa and MasterCard, with neoliberal regimes not just allowing but actively encouraging it?

The view of the mainstream -- which in this case stretches well to the left of Krugman and DeLong, and on the right to everyone this side of Ron Paul -- is that, whatever the causes of the crisis and however the authorities should or do respond, eventually we will return to the status quo ante. Conventional monetary policy may not be effective now, but there's no reason to doubt that it will one day get back to so being. I'm not so sure. I think people underestimate the extent to which modern central banking depended on a public monopoly on means of payment, a monopoly that arose -- was established -- historically, and has now been allowed to lapse. Christina Romer's Berkeley speech on the glorious counterrevolution in macroeconomic policy may not have been anti-perfectly timed just because it was given months before the beginning of the worst recession in 70 years, but because it marked the end of the period in which the body of theory and policy that she was extolling applied.

[1] Information wants to be free. If there's a free downloadable version of a book out there, that's what I'm going to link to. But assuming some bank has demand deposits payable to you on the liability side of its balance sheet (i.e. you've got the money), this is a book you ought to buy.

[2] In pre-modern societies a slave is simply someone all of whose kinship ties have been extinguished, and is therefore attached only to the household of his/her master. They were not necessarily low in status or living standards, and they weren't distinguished by being personally subordinated to somebody, since everyone was. And slavery certainly cannot be defined as a person being property, since, as Graeber shows, private property as we know it is simply a generalization of the law of slavery.

[3] A point also emphasized by Robert Triffin in his essential paper Myths and Realities of the So-Called Gold Standard.

[4] Which is a cautionary tale for anyone who thinks the fact that an economic process that involves some ratio diverging to infinity is by defintion unsustainable. Physiocrats thought a trajectory of the farming share of the population toward zeo was an absolute absurdity and that in practice it could certaily not fall below half. They were wrong; and more generally, capitalism is not an equilibrium process. There may be seven unsustainable processes out there, or even more, but you cannot show it simply by noting that the trend of some ratio will take it outside its historic range.

UPDATE: Nick Rowe has a kind of response which, while I don't agree with it, lays out the case against regarding money as a liability very clearly. I have a long comment there, of which the tl;dr is that we should be thinking -- both logically and chronologically -- of central bank money evolving from private debt contracts, not from gold currency. I don't know if Nick read the Leijonhufvud piece I quote here, but the point that it makes is that writing 100-odd years ago, Wicksell started from exactly the position Nick takes now, and then observed how it breaks down with modern (even 1900-era modern) financial systems.

## Thursday, March 8, 2012

### Under Which Lyre

Playing around with Google ngrams for some reason made me think of this:
The  elder  Mill,  whose  philosophy  I  will  not  praise  otherwise,  was  on  this  point  right  when  he  said:  If  one  proceeds  from  pure  experience,  one  arrives  at  polytheism.  ... It  is  commonplace  to  observe  that  something  may  be  true  although  it  is  not  beautiful  and  not  holy  and  not  good.  Indeed  it  may  be  true  in  precisely  those  aspects.  But  all  these  are  only  the  most  elementary  cases  of  the  struggle  that  the  gods  of  the  various  orders  and  values  are  engaged  in.  I  do  not  know  how  one  might  wish  to  decide  'scientifically'  the  value  of  French  and  German  culture;  for  here,  too,  different  gods  struggle  with  one  another...

We  live  as  did  the  ancients  when  their  world  was  not  yet  disenchanted  of  its  gods  and  demons,  only  we  live  in  a  different  sense.  As  Hellenic  man  at  times  sacrificed  to  Aphrodite  and  at  other  times  to  Apollo,  and,  above  all,  as  everybody  sacrificed  to  the  gods  of  his  city,  so  do  we  still  nowadays,  only  the  bearing  of  man  has  been  disenchanted  and  denuded  of  its  mystical  but  inwardly  genuine  plasticity.  Fate,  and  certainly  not  'science,'  holds  sway  over  these  gods  and  their  struggles.  One  can  only  understand  what  the  godhead  is  for  the  one  order  or  for  the  other,  or  better,  what  godhead  is  in  the  one  or  in  the  other  order. ...

The  grandiose  rationalism  of  an  ethical  and  methodical  conduct  of  life  that  flows  from  every  religious  prophecy  dethroned  this  polytheism  in  favor  of  the  'one  thing  that  is  needful.'  ... [But] today  the  routines  of  everyday  life  challenge  religion.  Many  old  gods  ascend  from  their  graves;  they  are  disenchanted  and  hence  take  the  form  of  impersonal  forces.  They  strive  to  gain  power  over  our  lives  and  again  they  resume  their  eternal  struggle  with  one   another.

### Shared Sacrifice on 116th Street

According to the local student paper, my current employer is having a disagreement with some of its workers (pictured above). I was not at this rally, unfortunately. At least Suresh was, so the Slackwire community was represented.

So what's it about? Well, to borrow a line from Omar, the workers think they should keep the pensions and health benefits they get for doing their jobs, and the university thinks otherwise. Hardly the first time, right? But while employers everywhere can cut benefits, few can manage this kind of rancid liberalism:
Columbia’s proposed cuts are supposedly in the name of worker equality—the University cites similar “sacrifices” made by the non-unionized administrative and professional departments. ... Apparently, the union must also “fairly” take these unilateral cuts imposed upon the unprotected members of the Columbia labor community.
Who but a university administrator could explain with a straight face that they are only slashing the benefits of their clerical staff because of a high-minded concern for fairness and equity? Truly, it would take a President Robbins:
About anything, anything at all, Dwight Robbins believed what Reason and Virtue and Tolerance and a Comprehensive Organic Synthesis of Values would have him believe. And about anything, anything at all, he believed what it was expedient for the president of Benton College to believe. You looked at the two beliefs, and lo! the two were one.
The affected employees are members of UAW 2110. I used to run into 2110 President Maida Rosenstein now and then when I worked at the Working Families Party. And from everything I've seen of her and that union... well, if Columbia insists in inflicting a Comprehensive Organic Synthesis of Values on these workers, I think it may have a fight on its hands.