Commentary on Political Economy

Friday 30 November 2012

Krugman on Class Wars

We don't always agree with Krugman's theoretical approach to economics, but we know that politically his heart is in the right place - and that counts for a lot! So here is his latest Column for the benefit of our friends.

Class Wars of 2012

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On Election Day, The Boston Globe reported, Logan International Airport in Boston was running short of parking spaces. Not for cars — for private jets. Big donors were flooding into the city to attend Mitt Romney’s victory party.
Fred R. Conrad/The New York Times
Paul Krugman
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Readers’ Comments

Readers shared their thoughts on this article.
They were, it turned out, misinformed about political reality. But the disappointed plutocrats weren’t wrong about who was on their side. This was very much an election pitting the interests of the very rich against those of the middle class and the poor.
And the Obama campaign won largely by disregarding the warnings of squeamish “centrists” and embracing that reality, stressing the class-war aspect of the confrontation. This ensured not only that President Obama won by huge margins among lower-income voters, but that those voters turned out in large numbers, sealing his victory.
The important thing to understand now is that while the election is over, the class war isn’t. The same people who bet big on Mr. Romney, and lost, are now trying to win by stealth — in the name of fiscal responsibility — the ground they failed to gain in an open election.
Before I get there, a word about the actual vote. Obviously, narrow economic self-interest doesn’t explain everything about how individuals, or even broad demographic groups, cast their ballots. Asian-Americans are a relatively affluent group, yet they went for President Obama by 3 to 1. Whites in Mississippi, on the other hand, aren’t especially well off, yet Mr. Obama received only 10 percent of their votes.
These anomalies, however, weren’t enough to change the overall pattern. Meanwhile, Democrats seem to have neutralized the traditional G.O.P. advantage on social issues, so that the election really was a referendum on economic policy. And what voters said, clearly, was no to tax cuts for the rich, no to benefit cuts for the middle class and the poor. So what’s a top-down class warrior to do?
The answer, as I have already suggested, is to rely on stealth — to smuggle in plutocrat-friendly policies under the pretense that they’re just sensible responses to the budget deficit.
Consider, as a prime example, the push to raise the retirement age, the age of eligibility for Medicare, or both. This is only reasonable, we’re told — after all, life expectancy has risen, so shouldn’t we all retire later? In reality, however, it would be a hugely regressive policy change, imposing severe burdens on lower- and middle-income Americans while barely affecting the wealthy. Why? First of all, the increase in life expectancy is concentrated among the affluent; why should janitors have to retire later because lawyers are living longer? Second, both Social Security and Medicare are much more important, relative to income, to less-affluent Americans, so delaying their availability would be a far more severe hit to ordinary families than to the top 1 percent.
Or take a subtler example, the insistence that any revenue increases should come from limiting deductions rather than from higher tax rates. The key thing to realize here is that the math just doesn’t work; there is, in fact, no way limits on deductions can raise as much revenue from the wealthy as you can get simply by letting the relevant parts of the Bush-era tax cuts expire. So any proposal to avoid a rate increase is, whatever its proponents may say, a proposal that we let the 1 percent off the hook and shift the burden, one way or another, to the middle class or the poor.
The point is that the class war is still on, this time with an added dose of deception. And this, in turn, means that you need to look very closely at any proposals coming from the usual suspects, even — or rather especially — if the proposal is being represented as a bipartisan, common-sense solution. In particular, whenever some deficit-scold group talks about “shared sacrifice,” you need to ask, sacrifice relative to what?
As regular readers may know, I’m not a fan of the Bowles-Simpson report on deficit reduction that laid out a poorly designed plan that for some reason has achieved near-sacred status among the Beltway elite. Still, at least you can say this for Bowles-Simpson: When it talked about shared sacrifice, it started from a “baseline” that already assumed the end of the high-end Bush tax cuts. At this point, however, just about all the deficit scolds seem to want us to count the expiration of those cuts — which were sold on false pretenses, and were never affordable — as some kind of big giveback by the rich. It isn’t.
So keep your eyes open as the fiscal game of chicken continues. It’s an uncomfortable but real truth that we are not all in this together; America’s top-down class warriors lost big in the election, but now they’re trying to use the pretense of concern about the deficit to snatch victory from the jaws of defeat. Let’s not let them pull it off.

Tuesday 27 November 2012

Nietzsche on Art as The Problem of Philosophy

For Nietzsche, the Political is the continuation of civil war by other [symbolic, metaphoric, false, conventional] means. This “dissimulation” is simply a ruse to enforce a certain “polite” life-style that serves to protect the persona of the individual in a society that needs to keep at bay the state of nature. This “convention” is simply a means of self-preservation and self-protection – a “device” (cf. Heidegger’s Zustand and Gestell, or even Foucault’s dispositif) that seeks to elevate mere “conventions” and symbols, such as language and science, to the status of “truth”. Truth therefore is not just a perspective but it is also a convention that humans elevate to “the measure of all things” in an attempt to make the world “familiar”, “manageable” and “safe” – to male it certain. This truth-as-certainty is an instance of that Christian-bourgeois quest for Sekuritat that makes liberal democratic regimes constitutionally resistant to political change (cf. Arendt’s penetrating insights on this topic in On Revolution, discussed in Part 4 of our Weberbuch).

The question of why human beings come to place their faith in “science and progress” is one that Nietzsche will explore meticulously later with the concept of the “self-dissolution” of Christian-bourgeois society as the culmination of the ontogeny of thought. For the moment, in 1873, he can merely describe the difficulty in frustrated “constructivist” terms, thinking that “iteration”, sheer “long use and now-unconscious custom”, mere “persistence”, can serve as an explanation of the mathesis. For the moment his analysis is confined to a mere “phenomenology and perspectivism”. Nietzsche makes his exasperation at his own inability to isolate the relevant causes evident in a string of oft-quoted passages:

Still we do not yet know whence the instinct of truth
[Trieb der Wahrheit] comes… (p180)

Wir wissen immer noch nicht, woher der Trieb zur Wahrheit stammt:

…only by all this does he [man] live with some repose, safety and
consequence [Ruhe, Sicherheit und Konsequenz:…]. (p.184)

If he were able to get out of the prison
walls of this faith, even for an instant only, his "self-consciousness"
would be destroyed at once. Already
it costs him some trouble to admit to himself that the
insect and the bird perceive a world different from his

Surely every human being who is at home with
such contemplations has felt a deep distrust against
any idealism of that kind, as often as he has distinctly
convinced himself of the eternal rigidity, omnipresence, and infallibility
of nature's laws [Naturgesetzen]: he has arrived at the conclusion that as far as we can penetrate the heights of the telescopic and the depths of the microscopic world, everything is quite secure[!], complete, infinite, determined, and continuous.
Science will have to dig in these shafts eternally
and successfully and all things found are sure to
have to harmonise and not to contradict one another. (p186)

And as the man of action binds his life to reason and its
concepts, in order to avoid being swept away and losing
himself, so the seeker after truth builds his hut close
to the towering edifice of science in order to collaborate with it and
to find protection. And he needs protection. (Beginning of Part 2)

Clearly at this early stage, Nietzsche’s thought is still confined to the “velleitary and arbitrary”, metaphorical and anthropomorphic assessment of signification and ultimately of physical mathematics, of mathesis. He fails to identify, except for his insistence on “persistence” and “crystallization and sclerosis”, the problem of why science and logic as specific practices have come about, of why they have “triumphed”. And above all he fails to explain how they could have done so, - again, outside of sheer habit, repetition and therefore con-vention (“persistency” [Verharren] and “crystallisation and sclerosis” [Hart- und Starr-werden])! Nietzsche is mixing up the arbitrariness of signifiers (semeiotics) with the problem of scientific causation – which is in practice only regularity and predictability. He still fails to see that it is not the “predictability” that is a “convention”, but rather the “direction of scientific and technological practice” that responds to “antagonistic values” being presented as “objectivity” or “necessity” or “causality” when in reality it occurs in “conventional experimental circumstances” which supply the problematic, all-important “nexus”. All that can be established then - not “proven” or “explained” but merely “described” - are the “regularities” that can be given numerical expression in space and time and be exploited instrumentally by humans. Consequently, these “regularities” are mere “conventions”, anthropomorphic metaphors or metonymies.

The very relation of a nerve-stimulus to the produced
percept is in itself no necessary one; but if the same
percept has been reproduced millions of times and has
been the inheritance of many successive generations of
man, and in the end appears each time to all mankind
as the result of the same cause, then it attains finally
for man the same importance as if it were the unique,
necessary percept and as if that relation between
the original nerve-stimulus and the percept produced
were a close relation of causality: just as
a dream eternally repeated, would be perceived and
judged as though real. But the congelation and
coagulation of a metaphor does not at all guarantee
the necessity and exclusive justification of that metaphor. (p185)

Selbst das Verhältnis eines Nervenreizes zu dem hervorgebrachten Bilde ist an sich kein notwendiges: wenn aber dasselbe Bild millionenmal hervorgebracht und durch viele Menschengeschlechter hindurch vererbt ist, ja zuletzt bei der gesamten Menschheit jedesmal infolge desselben Anlasses erscheint, so bekommt es endlich für den Menschen dieselbe Bedeutung, als ob es das einzig notwendige Bild sei und als ob jenes Verhältnis des ursprünglichen Nervenreizes zu dem hergebrachten Bilde ein strenges Kausalitätsverhältnis sei: wie ein Traum, ewig wiederholt, durchaus als Wirklichkeit empfunden und beurteilt werden würde. Aber das Hart- und Starr-Werden einer Metapher verbürgt durchaus nichts für die Notwendigkeit und ausschließliche Berechtigung dieser Metapher.

Nietzsche is already searching for the genealogy of morals and understands early that the Apollonian/Dionysian opposition between intellect and intuition, reason and ec-stasis, is a way for “Christian-bourgeois society” to impose an artificial style of behaviour and life on its members by enforcing the “superiority” of the intellect over the instincts. Nietzsche comes to see “consciousness” or intellect as a “mask”, as a ruse, as the beginning of that “ontogeny of thought” that will shape the “transition” from the neutral state of the state of nature to the conventional “values” of liberal Christian-bourgeois society – “the cemetery of intuitions”, the “disgregation of the instincts” - and its “apparent”, “idealistic” or utilitarian reconciliation of the system of needs. Ultimately, it is this semiotic “structure of ideas” that permits the social synthesis, the reproduction of human society, but one that pretends to homologate scientifically the organization of production with the liberal constitutional order – the Political with the Economic sanctioned with the seal of “scientific truth” in the homonymous “science of Political Economy”.

The effectuality of this homologation of disparate and heterogeneous realities, the “possibility” of the reproduction of liberal Christian-bourgeois civil society is what seems to confirm and validate the scientific calculation, regularity and predictability of the symbolic exchange, of the “Truth” and the “values” of Christian-bourgeois society – what Nietzsche calls “the eternal rigidity, omnipresence, and infallibility of nature's laws [Naturgesetzen]”, where “everything is quite secure, complete, infinite, determined, and continuous” – that is, the inter-subjectivity of its symbolic interaction - all of which boils down to the “Value” of Political Economy, the quidditas or “whatness”, the quantifiable and calculable hard reality that makes possible the social synthesis. (As we shall soon see, this dual aspect of “what makes society possible” and of “what is possible for society” is what constitutes the central quest of the great social theoreticians from Hegel to Marx and Weber. Nietzsche evades this question altogether, first, because he sees human beings in purely ontogenetic instead of phylogenetic terms, and second because the “negative thinking” of which he is the highest expression obliterates the entire meaning of human “potential” or “fulfillment” which it consigns to the empyrean of “teleology”.

The problem with Nietzsche's "true phenomenology and perspectivism" is precisely that the “regularities and predictions” of scientific mathesis are often so strong that they go beyond the mere notion of “convention” and "habituation"; that they may be “arbitrary” in their designation but “necessary”, not in a physical sense but in a socio-political one in that they lie outside the will of some humans, in their “regularity and predictability”. Nietzsche is simply not dealing with the fact that it is not our “designation” of each separate “leaf” with the symbol “leaf” that is the problem: the problem is that this designation is effectual in the prediction of what a “leaf” will do in different "experimental" situations created by human beings that belong to an antagonistic society. And this is what constitutes a “political practice”! So Nietzsche simply does not confront yet this “political practice” as inter-subjectively valid science! Although he clearly perceives the problem of what constitutes this validity, of this effectuality, whereby “truth” and “science” may be “un-masked” and de-mystified, he simply is unable yet to go beyond a rudimentary “conventional” explanation of scientific practice as more than “persistence” or "habituation" and “self-deception” that have sunk to the level of “necessity” and “instinct”. The question we need to answer next is whether despite these early failures we can find already in Uber Wahrheit the seeds for a more thorough-going critique of social and scientific reality in Nietzsche that can lead us to lay new foundations for the critique of the Christian-bourgeois society of capital.

We may thoroughly appreciate now from our foregoing discussion the validity and correctness of Cacciari’s judgement on the “inexistence of an aesthetics in Nietzsche” separable from and subordinate to philosophical reasoning.

1. Es conocida la afirmación de Nietzsche en El origen de la tragedia por la cual el arte aparece como la verdadera actividad metafísica del hombre. Aun en el Ensayo de una autocrítica de 1886 él recalca que aquella juvenile metafísica de artista contenía ya lo esencial de su pensamiento sucesivo. Es lícito, por lo tanto, considerar en términos sustancialmente unitarios la concepción nietzscheana del arte. Nietzsche no está interesado en la elaboración de una estética como un dominio filosófico especial; el arte es para él problema filosófico-metafísico: en la actividad artística está en juego una apertura al ser, una iluminación metafísica sobre el sentido del ente.
Producción artística e interpretación del producto artístico son ambos problemas filosóficos. No existe autonomía del arte respecto a lo filosófico, así como no existe autonomía de lo filosófico respecto al arte. Arte y filosofía sepresentan perennemente unidas en aquella deconstrucción de la tradición metafísica europea que constituye el objetivo de la total crítica nietzscheana. (‘El Arte in N.’)

We could not agree more with Cacciari’s position. As we have shown, art is prior to philosophy for Nietzsche just as intuition and perception are prior to reflection in terms of his “onto-geny of thought” in which, once more, memory or re-collection or re-flection plays a crucial role in the “construction of concepts” out of “crystallised metaphors”. Once again, however, the metaphysical status of art in Nietzsche’s conception of it as “the construction of metaphors by an artistically creative subject” and as “the genius of falsity” is open to objection on the grounds that (a) meta-phors re-fer (bring back) invariably to a substratum “beyond which they bring” (meta pherein, to bring over), and (b) it is impossible to separate (here is another chorismos) – as Nietzsche himself maintains! - meta-phors from the act of perception itself and indeed from “concepts” – and therefore it cannot be accurate to describe human perception and intuition as “the construction of metaphors” and “appearances”!

Cacciari sharply points out Nietzsche’s ambiguity on the first count: - that if “art is the genius of falsehood”, then it follows that Nietzsche still posits a “Truth”, a “Fundamentum”, in relation to which art is “falsehood”!

8 Nietzsche afirma que el arte constituye el "genio de la mentira". Se trata de un ejemplo evidente de "platonismo invertido", en que Nietzsche se obstina en separar de una manera demasiado abstracta "razón clásica" y modernidad.  (Cacciari, ‘El Hacer del Canto’)

Quite right! If indeed “art is the genius of falsity”, this can occur if and only if there is some “thing” that art can properly “falsify”, some “re-ality” in relation to which art can actually lie. But this is precisely the starting point of Plato’s vehement condemnation of art and its dissoi logoi (“double talk”) and doxa (opinion, chatter) as against philosophy’s logico-discursive dialectic reasoning (dianoia) leading to episteme (knowledge, science)! In complete contrast, what Nietzsche meant by this expression was precisely that art is the genius of falsity in opposition to or transgression against “the cemetery of intuitions” constituted by that oppressive “structure of concepts” represented by “logic and science” – by the two activities that pretend to represent “the truth” when in fact they are “distancing” human beings from the greatest “truth” of all – and that is that all human perception and reasoning is “based on the construction of artistic or aesthetic metaphors”! Nietzsche’s expression is ironic to some extent; and yet its literal “inverted Platonism” points once more to his early confusion with regard to a “reality” that art “genially falsifies” by creating “contra-dictory appearances”.

And Cacciari is right also on the second count because “the construction of metaphors” – that is, art – is inseparable from the construction of concepts – philosophy.

Pero esta afinidad es revelable por diferencia. La consideración del hecho artístico es llevada a cabo filosóficamente, no porque el arte sea representación o se limite a imaginar las ideas filosóficas. El arte es problema filosófico en tanto su estructura es problema para la filosofía; su presencia, la presencia de su palabra choca con la dimensión conceptual del trabajo filosófico. Arte y filosofía se unen polarmente, por oposición. De una vez Nietzsche supera, por esta vía, toda estética decadentista de la autonomía pura del hecho artístico, así como todo contenido ideológico. Arte y filosofía están indisolublemente conectados en tanto problema el uno con la otra. Aún más: el arte es siempre presencia amenazante-inquietante para la pura filosofía.

Because philosophy itself cannot be com-prehended by its own logos and must remain therefore an artistic activity, and because artistic activity is prior to philosophical re-flection or contemplation in that it is in-comprehensible to the philosophical logos, it follows that artistic activity reaffirms the primacy of in-vention over re-flection – which poses an insuperable metaphysical problem for philosophy – again, not in the sense that art is a problem for philosophy to consider, one among many, but rather in the sense that art is the problem of philosophy, a problem that is ante-cedent to, that pre-cedes philosophical reflection! As Cacciari genially puts it, “art is a philosophical problem in that its structure [its nature as activity] is problematic for philosophy”. This cannot be said even of theology, as Werner Jaeger has shown with his concept of “natural theology” (in The Theology of the Early Greek Philosophers), in that the divine is not prior to metaphysics as an activity but forms only one of its problems or aspects.

This is precisely why art poses “a menacing and disquieting presence for pure philosophy” – because of its precedence over philosophy as an activity, as initium. Art shows the “activist” reality of philosophy – its practical initium, the fact that even conceptually its “doing”, its being a “beginning”, is prior to and cannot be com-prehended (grasped and explained totally) by pure thought or reflection given that thought is itself an activity, namely, “thinking about thinking”, where the second “thinking” stands for the meta-phorical activity of art upon which philosophy is both a “re-flection” and ultimately an artistic activity in itself! Of course, artistic activity is in-conceivable without thought itself – as Nietzsche reminded us earlier, without the pro-duction of meta-phors inseparable from the act of intuition and perception as appearance. Yet, if it is not pre-conceptual, art is certainly pre-reflective and (as Cacciari would say) pre-discursive activity in that both its “doing” and its “feeling” or “sense” is prior to philosophic reflection and its logos. It is the “union” of these opposed moments in art – the “doing” and the “feeling” - that poses a greater problem for philosophy than it does for art – because the task of philosophy is precisely to com-prehend all activity, including the artistic, and this it cannot do if philosophy remains an artistic activity itself, an initium that is incomprehensible by and inexplicable to philosophy. (This “materiality” or immanence of thought is what escapes Arendt because of her formalistic-abstract, trans-scendental approach to it in ‘Life of the Mind’. See our ‘Immanence Revisited’ and ‘Philosophy of the Flesh’.)

It is precisely for these reasons that we simply cannot go along with Cacciari and persist with the terminology he adopts from Nietzsche with regard to “art as the genius of falsity” and to the “contradictoriness” of the world. However “tragic” may be the attempt at mimesis, whether artistic or philosophico-scientific, it does not evince the contradictoriness of life and the world! Croce’s objection in the Logica against the Nietzschean thesis was precisely that if there is no “truth”, then it is impossible to prove the “truth” of this thesis! This is an objection of which Cacciari does not seem to be mindful because, like Croce, he remains captive to the primacy of “truth” and thus equivocates about “the truth of non-truth”!

El arte de lo profundo es del todo solidario con lo Verdadero de la metafísica. Para ambos la apariencia es mentira, y el signo no otra cosa que vestimenta-escritura del pensamiento. Este arte miente demasiado; en realidad, miente dos veces: la primera haciendo propia la mentira del Fundamentum metafísico; la segunda reduciendo las propias configuraciones sígnicas a seductores velos del logos. El poeta transformado opone a este exceso de mentira la perfecta medida de
su arte: existen múltiples modos de abrirse al mundo - el signo es una apertura al mundo; él afirma la verdad de la apariencia, el carácter abismal (ab-gründlich: sin fundamento, continuamente desfondante) de la apariencia, la verdad de aquello que para la metafísica es no-verdad, por lo tanto, mentira, y por otra parte, el carácter de velo, de ocultamiento de esta verdad de la apariencia que reviste la Verdad metafísica. Como Derrida ha explicado: la Verdad falsificada , deviene apariencia, o, mejor dicho, asume el rol que la apariencia tenía a sus ojos, y la apariencia deviene única verdad, no porque sustituya al antiguo Fundamento, sino porque indica la verdad de la ausencia de Fundamento, verdad de la no-Verdad.
El arte en cuanto juego de configuraciones sígnicas es entonces, el pensamiento de la verdad de la apariencia, de la verdad de la no-verdad… pero la Forma [artistica] no tiene nada de
formalístico: ella es universal facultad falsificante, pone la verdad como no-verdad. La Forma artística abre al mundo, es apertura al ser, en cuanto divina tirada de dados, abismo del Azar y de sus combinaciones, teoría trágica del eterno crear-destruir. (El Arte en N.)

Note this critical expression by Cacciari:

El arte en cuanto juego de configuraciones sígnicas es entonces el pensamiento de la verdad de la apariencia, de la verdad de la no-verdad…

Note that this “play of configurations” can be understood only in relation to the reality of social formations, only in terms of “the social synthesis”, without which our entire speculative efforts relapse into sheer mysticism, which is what he slips into in the last paragraph from the quotation above:

…pero la Forma [artistica] no tiene nada deformalístico: ella es universal facultad falsificante, pone la verdad como no-verdad. La Forma artística abre al mundo, es apertura al ser, en cuanto divina tirada de dados, abismo del Azar y de sus combinaciones, teoría trágica del eterno crear-destruir.

True, as Cacciari himself shows in ‘El Hacer del Canto’, the mimetic gap does remit the telos of philosophy and its logos back to the mystical world of “divine inspiration”, of “delirium” – a thesis advanced long ago by Werner Jaeger in The Theology of the EarlyGreek Philosophers (see our ‘Postcard from Istanbul’). The painful realization of this common artistic-metaphorical matrix is what pro-voked the wrath of Plato’s “condemnation” of art and mythology because these expose the “tragic” inability of philosophy and science to bridge this mimetic gap. But the mimetic gap ec-sists only for philosophy and its transcendental logos; it does not ec-sist in reality for art whose only reality is that of so-called “appearances” and “meta-phors”!

Un instante hace irrupción, donde una voz que constituye siempre el a priori de toda idea del artesano, se abate sobre el hombre, transformándolo en su propio instrumento. A través de él, que no es, por lo tanto, el sujeto de la creación (y cuyo "hacer" no tiene su origen en el no-ser), esa voz se manifiesta visiblemente, se expresa audiblemente, resuena, se transforma en ese canto. Ese canto es mímesis, en el sentido en que está de acuerdo, en armonía, solo con esa voz, y por lo tanto realmente con nada, ya que esa voz, en tanto tal, no se da nunca verdaderamente. Ese canto, en suma, no es la mímesis sino de su propio presupuesto, que trasciende toda medida, toda utilidad y toda techne normal. Ese "hacer" que constituye el canto es, pues, verdaderamente un delirio en relación con el habitus de la poesía, de las technai que teje el arte de la realeza: y, sin embargo, cuanto más delimitamos su especificidad, más su carácter arcaico, su ser arche, cuya muerte o superación ningún logos podrá decretar, puesto que todos se expresan a través de su principio y en su presencia, aparece como evidente. (El Hacer del Canto)

In a later piece, Cacciari this time seems to agree with Nietzsche’s thesis that art is “the genius of falsity” because life and the world are perceptible and knowable only as appear-ances, and there-fore as “contra-dictory”.

El problema filosófico del arte se centraliza en la relación arte-mentira. En el prefacio a la segunda edición de La Gaya Ciencia, Nietzsche dice:

Nos ha fastidiado este mal gusto [...] querer la verdad a toda costa [...] esta fascinación de adolescentes por el amor a la verdad. La artes son excogitadas como una especie de culto de lo no-verdadero.

Estas indicaciones se articulan plenamente sólo en los Fragmentos Póstumos sucesivos al Zaratustra. En el contexto de La Gaya Ciencia puede aún parecer que se trata simplemente de descubrir al juglar escondido en nuestra pasión por el conocimiento - y aquello que en el arte se limite a enfatizar la dimensión romántica del ejercicio interminable de la ironía, solamente deconstructiva, sobre el mundo-verdadero. En los Fragmentos Póstumos, sobre todo en aquellos que pertenecen al período 87-88, es evidente, en cambio, que Nietzsche no está interesado en una estética especial -en el caso en cuestión, la irónico-romántica -, sino en la definición de las estructuras fundamentales del hecho artístico. En el arte él aprehende una facultad general, un poder-Kraft que tiene validez universal. En el arte está en juego una dimensión general del ser, una total facultad falsificante. El arte es la facultad-Kraft que niega la verdad - o, mejor dicho el arte es expresión de esta facultad universal, y por lo tanto activa en cualquier otro dominio. Pero en el arte el genio de la mentira resurge en su pureza - el poder de la mentira se muestra en toda su luz y belleza. Aquella voluntad de poder que nos permite reducir la cruel realidad, contradictoria y sin sentido del mundo a nuestra necesidad de vivir - aquella voluntad de poder que es la gran creadora de la posibilidad de vivir - pone sus nervios al desnudo en el arte.Tenemos el arte para no perecer frente a la verdad.

This is an unnecessary forzatura of Nietzsche’s thought caused in part by his own careless and misguided manner of articulating the problem in the early works. As we can see from our quotation below, for Nietzsche it is as senseless to say that “the essence of things”, and therefore contra-diction, exists as it is to state the contrary!

For our antithesis of individual and categories is anthropomorphic too
[i.e. is of purely human origin] and does not come from the essence of things,
although on the other hand we do not dare to say that it does not correspond
to it; for that would be a dogmatic assertion and as such just as
undemonstrable as its contrary. (UWL, p.180)

Nietzsche merely contends that the principle of non-contradiction is inapplicable as a “metre” of both artistic and of scientific “doing” precisely to the degree that they are “doings”, initia, and not statements, what Cacciari calls “logico-discursive reason” and “vestimenta-escritura del pensamiento”! Life and the world are not contradictory because they ec-sist only as “appearance”,” - but this term now no longer stands in opposition to a “re-ality(!)”, to a “true world” – “the true world has disappeared with the apparent one”, ironises Nietzsche in the Twilight. Rather it indicates the primacy of perception and its “participation” (methexis) in the perceived, as well as the impossibility of truth-as-certainty and of truth-as-totality. The principle of non-contradiction is applicable only to the concept of truth-as-certainty and totality, of “reality as the essence of things”, and not to that of “appearance” which challenges the “objective existence” of such “re-ality” and that therefore makes the notion of “truth-as-certainty and totality” together with that of contra-diction superfluous. (We have shown in our Weberbuch and will discuss again soon how Weber misconceived this essential point in his critique of “objectivity” in science.)

If we understand “appearances” correctly (as Nietzsche indicates but fails to do consistently), then they can never be contra-dictory because as such they do not re-fer to any “under-lying [sub-stantive] reality” or “essence of things” or “things-in-themselves” against which they can be judged to be false. This is what allows Nietzsche to speak of “truth and falsehood in an extra-moral sense” (ausser-moralisch), that is to say, “outside” the morality to which this false opposition of real events gives rise! The polarity here is between the mani-fold and multi-versality of experience [appearances] which is re-presented and embodied by the human instinct to the creation of metaphors, art and myth, against the truth-as-certainty and uni-versality of “rational science” for which “reality” is definable in terms of ultimately self-referential “natural laws” subject to the principle of non-contradiction which they themselves must infringe. (Incidentally, the Popperian test of “falsifiability” of scientific truth runs against this insurmountable objection: - that it invalidates the very notion of “scientificity” because only “false statements” are “falsifiable”! In other words, Popper’s test of “scientificity” mis-conceives the entire notion of “scientificity” and is quite simply an ideological attempt to rescue bourgeois science from the Nietzschean critique of it as “the will to truth” and “truth-as-certainty” that underlie and sustain it: - it is no test at all given that even, and especially, blatant lies are “falsifiable” by definition and that, as we shall argue below in agreement with Nietzsche, the notion of “scientific truth” cannot stand on contingency – what Arendt called “verities” - but rather on the physical-mathematical necessity of “the laws of nature”!)

[In our next piece we will attempt to draw closer to a novel approach to the social synthesis through the critique of Cacciari and Vattimo.]

Sunday 25 November 2012


Here for the benefit of our Chinese friends is the full New York Times story on Wen Jia Bao's crimes and those of his family.

SHENZHEN, China — The head of a financially troubled insurer was pushing Chinese officials to relax rules that required breaking up the company in the aftermath of the Asian financial crisis.
Aly Song/Reuters
Ma Mingzhe, the chairman and chief executive of Ping An, struck the gong at the Shanghai Stock Exchange as the company listed its stock there in 2007.

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The survival of Ping An Insurance was at stake, officials were told in the fall of 1999. Direct appeals were made to the vice premier at the time, Wen Jiabao, as well as the then-head of China’s central bank — two powerful officials with oversight of the industry.
“I humbly request that the vice premier lead and coordinate the matter from a higher level,” Ma Mingzhe, chairman of Ping An, implored in a letter to Mr. Wen that was reviewed by The New York Times.
Ping An was not broken up.
The successful outcome of the lobbying effort would prove monumental.
Ping An went on to become one of China’s largest financial services companies, a $50 billion powerhouse now worth more than A.I.G., MetLife or Prudential. And behind the scenes, shares in Ping An that would be worth billions of dollars once the company rebounded were acquired by relatives of Mr. Wen.
The Times reported last month that the relatives of Mr. Wen, who became prime minister in 2003, had grown extraordinarily wealthy during his leadership, acquiring stakes in tourist resorts, banks, jewelers, telecommunications companies and other business ventures.
The greatest source of wealth, by far, The Times investigation has found, came from the shares in Ping An bought about eight months after the insurer was granted a waiver to the requirement that big financial companies be broken up.
Long before most investors could buy Ping An stock, Taihong, a company that would soon be controlled by Mr. Wen’s relatives, acquired a large stake in Ping An from state-owned entities that held shares in the insurer, regulatory and corporate records show. And by all appearances, Taihong got a sweet deal. The shares were bought in December 2002 for one-quarter of the price that another big investor — the British bank HSBC Holdings — paid for its shares just two months earlier, according to interviews and public filings.
By June 2004, the shares held by the Wen relatives had already quadrupled in value, even before the company was listed on the Hong Kong Stock Exchange. And by 2007, the initial $65 million investment made by Taihong would be worth $3.7 billion.
Corporate records show that the relatives’ stake of that investment most likely peaked at $2.2 billion in late 2007, the last year in which Taihong’s shareholder records were publicly available. Because the company is no longer listed in Ping An’s public filings, it is unclear if the relatives continue to hold shares.
It is also not known whether Mr. Wen or the central bank chief at the time, Dai Xianglong, personally intervened on behalf of Ping An’s request for a waiver, or if Mr. Wen was even aware of the stakes held by his relatives.
But internal Ping An documents, government filings and interviews with bankers and former senior executives at Ping An indicate that both the vice premier’s office and the central bank were among the regulators involved in the Ping An waiver meetings and who had the authority to sign off on the waiver.
Only two large state-run financial institutions were granted similar waivers, filings show, while three of China’s big state-run insurance companies were forced to break up. Many of the country’s big banks complied with the breakup requirement — enforced after the financial crisis because of concerns about the stability of the financial system — by selling their assets in other institutions.
Ping An issued a statement to The Times saying the company strictly complies with rules and regulations, but does not know the backgrounds of all entities behind shareholders. The company also said “it is the legitimate right of shareholders to buy and sell shares between themselves.”
In Beijing, China’s foreign ministry did not return calls seeking comment for this article. Earlier, a Foreign Ministry spokesman sharply criticized the investigation by The Times into the finances of Mr. Wen’s relatives, saying it “smears China and has ulterior motives.”
After The Times reported last month on the family’s wealth, lawyers representing the family said the article contained unspecified errors and that the family reserved the right to take legal action.
Sukree Sukplang/Reuters
Prime Minister Wen Jiabao’s relatives invested quietly in Ping An through a series of investment vehicles. It is not clear whether the relatives still own stock in the company.

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In addition, the Chinese government blocked access to the English-language and Chinese-language Web sites of The Times in China — and continues to do so — saying the action was “in accordance with laws and rules.”
Neither Mr. Wen, who is expected to retire in March, nor Mr. Dai, who is now the head of the National Social Security Fund, could be reached for comment.
Western and Chinese bankers and lawyers involved in Ping An’s 2004 Hong Kong stock listing and a subsequent 2007 listing in Shanghai said they did not know that relatives of Mr. Wen had acquired large stakes in the company.
Executives at Morgan Stanley and Goldman Sachs, which once held sizable stakes in Ping An and served as lead underwriters for the Hong Kong public offering, also said they were never told of the holdings. At Ping An’s urging, the two investment banks had also appealed in 2000 to Mr. Wen and other regulators for the waiver from the breakup rule. The private equity divisions of the two investment banks sold their combined stakes to HSBC in 2005 for about $1 billion — a 14-fold increase on their initial investment.
Thousands of pages of publicly available corporate documents reviewed by The Times suggest that the Ping An stakes held by the prime minister’s relatives were concealed behind layers of obscure partnerships rather than being held directly in their names.
In an interview last month, Duan Weihong, a wealthy Wen family friend, said that the shares in Ping An actually belonged to her and that it was an accident that Mr. Wen’s relatives appeared in shareholding records. The process involved borrowing their government identity cards and obtaining their signatures.
China and Hong Kong have detailed regulations on the disclosure of corporate information deemed material to a publicly listed company’s operation, like the identities of large shareholders and details about whether companies controlling large stakes are related parties. But legal experts say enforcement is often lax, particularly inside China. There is also, they say, a culture of nominee shareholders — when one person holds shares on behalf of someone else — that is difficult for even the most seasoned lawyers and accountants to penetrate.
The Times found no indication such regulations or any law was broken, nor any evidence that Mr. Wen held shares in Ping An under his own name.
After reviewing questions from The Times, the Securities and Futures Commission of Hong Kong and the Hong Kong Stock Exchange declined to comment. The China Securities Regulatory Commission in Beijing did not respond to inquiries.
HSBC, today Ping An’s largest shareholder with about 15.5 percent of its stock, declined to comment. The company announced last week that it is considering selling its stake in Ping An as part of a broad effort to raise capital.
Ping An today is a hugely successful conglomerate with revenue of $40 billion last year and about 500,000 insurance agents across China. It is China’s only fully integrated financial institution, with the second largest insurer, a trust company and brokerage house.
In late 2010, Ping An added more firepower, announcing a $4 billion deal that has since given it control of the Shenzhen Development Bank, one of China’s midsize commercial banks. Ping An is now building a new headquarters here in Shenzhen, a spectacular 115-story office tower that was designed by the New York architectural firm Kohn Pedersen Fox.
Ping An’s Close Call
Ma Mingzhe, the Ping An chairman and chief executive, was a high school graduate who got his start as an aide to Yuan Geng, a pioneering figure in some of China’s earliest economic reforms and an early leader of Ping An.
Impressed with Mr. Ma’s intellect, Mr. Yuan put him in charge of human resources at a state-managed industrial park, and eventually at a new insurance firm, Ping An, which took root in Shenzhen, a coastal boomtown.
Mr. Ma’s timing was opportune. China was just beginning to restructure its state-led economy. The government began dismantling the iron rice bowl system, which had guaranteed pensions, social insurance and living quarters to Communist Party cadres.
Although Ping An was founded as a state entity, it was one of the first Chinese insurance companies to experiment with Western management systems, including the use of actuaries and back-office operations, as well as foreign shareholders.
Mr. Ma helped manage the tiny company when it was founded in 1988. Several years later, he was looking for big-name shareholders from the United States.
In 1994, the private equity divisions of Morgan Stanley and Goldman Sachs each paid about $35 million to acquire 7.5 percent interests in Ping An. At the time, they were the largest foreign investments ever made in a Chinese financial institution.

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Much of the company’s early success was attributed to Mr. Ma, a hard-charging executive who was admired for his management and political skills — and for taking risks.
“He had all the qualities of a great entrepreneur,” says Yan Feng, who helped run Ping An’s Shanghai office in the 1990s. “He was a quick learner, knew how to adapt to new situations and was really determined. He’d do whatever it takes to get what he wants.”
But the company’s growth drive ran into trouble in the late 1990s, when China’s economy weakened after the 1997 Asian financial crisis.
The bloated state sector began to collapse, and by 1998, some of the nation’s biggest banks were nearly insolvent.
Ping An’s hard-won fortunes were also evaporating. Like most big Chinese insurers, Ping An had won new clients with investment products that guaranteed big returns over long periods based on the high interest rates banks offered for deposits during a time of inflation. When interest rates plummeted in the mid-1990s, losses piled up.
In 1999, senior executives at Ping An began to acknowledge that the company could soon be insolvent. As a joint-stockholding company, Ping An had big institutional investors, mostly state companies. But many of them refused to come to the company’s aid by purchasing additional shares, which would have provided needed capital.
“They weren’t sure Ping An would survive,” said one former Ping An executive who spoke on the condition of anonymity.
There was also mounting pressure from the government. Worried about systemic risks to the financial system, regulators in Beijing stepped up their enforcement of laws that required financial institutions to limit the scope of their business activities.
Banks were told to sell their stakes in brokerage houses or trust companies; and insurance companies had to choose to operate in life or property insurance, but not both.
After China’s new insurance regulatory agency was established in 1998, it began pressing Ping An to shed its trust and securities business, and to split its life and property insurance divisions into separate companies.
At a news conference in November 1999, Ma Yongwei, then the chairman of the China Insurance Regulatory Commission, said the agency had already drawn up plans to split up Ping An and other insurers.
“The separation plans have been submitted to the State Council for approval,” Ma Yongwei told the media, adding that they would “deepen reform of the insurance system.”
Pushing Back the Regulators
With his company about to be broken up, Ma Mingzhe, also known as Peter Ma, fired off letters to leaders in Beijing, dictated memos reminding himself to “buy golf clubs” for high-ranking officials, and kept detailed charts outlining the lobbying responsibilities of each top executive at Ping An, according to a copy of those records verified by former Ping An executives.
Mr. Ma focused much of his personal energy on China’s highest government administrative body, the State Council, a 38-member group whose senior leaders were Prime Minister Zhu Rongji and Wen Jiabao, then vice premier. The company also sought the support of Dai Xianglong, the nation’s central bank chief, who also had oversight over the insurance industry.
Mr. Wen was in a unique position. He was head of China’s powerful Central Financial Work Commission, which had been established in 1998 to oversee the country’s banking, securities and insurance regulators, as well as China’s biggest financial institutions.
When Mr. Ma met regulators, he told them his company was facing insolvency and asked them to help shore up the company’s balance sheet by approving a Hong Kong stock offering, according to transcripts of Ping An meetings and interviews with participants.

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“Now, Ping An’s life insurance is in a loss, and property insurance and the trust company have thin margins,” Mr. Ma wrote in the Sept. 29, 1999, letter to Mr. Wen. The contents were confirmed by two former top Ping An executives.
Rather than an out-and-out breakup, Mr. Ma offered a middle road. After seeking advice of other investors, Mr. Ma proposed the formation of a holding company that would effectively separate life insurance from property but keep them under one corporate umbrella, along with the securities and trust division.
The company, he said, would re-establish itself as the Ping An Group, according to Ping An documents reviewed by The Times. He then began looking for allies to promote his proposal.
In January 2000, with Mr. Ma’s backing, executives from Morgan Stanley and Goldman Sachs wrote a joint letter to Mr. Wen arguing that a breakup would “violate China’s policy to encourage and protect foreign investment,” according to a copy of the letter reviewed by The Times. The letter’s authenticity was verified by former executives at the two investment banks.
The American investment banks warned that “as a listed company in the U.S., we could be required to disclose our losses relating to the investment in Ping An, which would not be helpful for the image of China’s policy of reform and opening to the outside.”
The letter came after months of aggressive lobbying on the part of Ping An executives and the two American banks to persuade other high-ranking officials in Beijing, including the central bank and the insurance regulator, to hold Ping An together, according to corporate documents reviewed by The Times.
As early as 1999, executives at Ping An also began making contact with the relatives of Mr. Wen.
Hu Kun, a former Ping An employee who served as Mr. Ma’s staff assistant from 1997 to 2000, recalled a 1999 meeting between Mr. Ma and Zhang Beili, the wife of Mr. Wen.
Mr. Hu said he was not told what transpired at the meeting, but he recalled his boss’s reaction. “Because of that meeting, Chairman Ma got very excited,” said Mr. Hu, who is now living in the United States and who has quarreled with Ping An over 52,000 shares he claimed he was owed.
Corporate records reviewed by The Times indicate that Mr. Ma held an afternoon meeting and then dinner with the prime minister’s wife and Li Chunyan, who ran Ping An’s office in Beijing, on June 17, 1999.
It is not known what they discussed, but the relationship seemed to flourish. Around the same time, a diamond company partly controlled by the relatives of Ms. Zhang began occupying office space at the Ping An office tower in Beijing, according to records the diamond company filed with regulators. Later, a start-up co-founded by Wen Yunsong, the son of Ms. Zhang and the prime minister, won a lucrative technology contract from Ping An, according to interviews with former Ping An executives.
Mr. Ma, who is 56 and still runs Ping An, declined to comment for this article. Interviews with four senior executives who worked with Mr. Ma and Mr. Hu at the corporate headquarters in Shenzhen during the same period corroborate Mr. Hu’s recollections and the content of the documents reviewed by The Times concerning Ping An’s lobbying efforts and meetings with the relatives of Mr. Wen.
In addition, Li Chunyan, who ran the Beijing office, confirmed in a telephone interview that during that period he had brought Ms. Zhang to meet the Ping An chairman, Mr. Ma.
The documents and interviews shed no light on whether those meetings played a role in the decision by government regulators to abandon plans to split up Ping An. But in April 2002, the nation’s top regulators delivered their verdict. With approval of the State Council and insurance regulators, Ping An began the process of transforming itself into a financial conglomerate.
The company was not only allowed to retain property and life insurance licenses, but also licenses that permitted it to operate a brokerage and a trust company. It was also allowed to obtain a bank license.

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Together, analysts say, the licenses were worth a fortune in China’s tightly regulated marketplace.
“They were one of the few who got to enjoy these gold-digging benefits,” said Bob Leung, a longtime insurance analyst at UBS in Hong Kong.
By late 2002, Ping An had not simply survived the downturn, its prospects had begun to look bright. The company’s restructuring bolstered revenue and profits. In October of that year, one of the world’s biggest banks, HSBC, agreed to pay $600 million to acquire a 10 percent stake in the company from Ping An. Just over a year later, regulators approved the company’s application to list and sell shares on the Hong Kong Stock Exchange.
While Ping An was preparing for its listing in Hong Kong, a group of investors with close ties to senior officials in Beijing, including Wen Jiabao, were quietly accumulating large blocks of Ping An stock.
Buying Into Ping An
On Dec. 26, 2002, Ping An filings show, a company run by Duan Weihong, a Wen family friend from the prime minister’s hometown, acquired Ping An stock through a company called Taihong. Soon after, the relatives of Mr. Wen and colleagues of his wife took control of that investment vehicle, the records show.
According to documents Ping An filed ahead of its Hong Kong listing, Taihong acquired 77.7 million shares of Ping An from the China Ocean Shipping Company, a global shipping giant known as Cosco, and 2.2 million more shares from Cosco’s Dalian subsidiary. A two-for-one stock split doubled the number of shares Taihong owned. So in June 2004, just before Ping An’s Hong Kong offering, Taihong held 159.8 million shares, or about 3.2 percent of Ping An’s stock, according to public filings.
In an interview, Ms. Duan said she had paid about 40 cents a share at current exchange rates, or a total of $65 million, to acquire the shares.
The price seems to have been a huge and unusual discount, analysts say, since HSBC had two months earlier acquired its 10 percent stake for about $1.60 a share, according to public filings.
Cosco did not return calls seeking comment.
For Taihong, it was a blockbuster purchase. By 2007, when the price of Ping An’s stock peaked, the 159 million shares were valued at $3.7 billion — though by 2007 Taihong had already significantly reduced its stake, according to public filings.
While Taihong was the shareholder of record, the beneficiaries of the Ping An deal were cloaked behind more than a dozen investment vehicles controlled by the relatives of Mr. Wen, including two brothers-in-law, a sister-in-law, as well as several longtime colleagues and business partners of his wife, Zhang Beili, according to corporate and regulatory documents. All of them were listed, along with Ms. Duan, as the owners of Taihong.
And by 2007, the prime minister’s mother, who is now 91, was listed on public documents as holding $120 million worth of Ping An stock through a pair of investment companies linked to Taihong.
Ms. Duan, who says she got to know the prime minister’s family in 2000, said that she bought the Ping An shares for her own personal account. The Wen relatives only appear in the Taihong shareholding records, she said, because her company borrowed the government-issued identity cards of other people — mistakenly, she said, from relatives of the prime minister — to help mask her own Ping An stake from the public.
“In the end,” Ms. Duan said, “I received 100 percent of the returns.”
The Fallout
In 2001, China issued new regulations that put restrictions on trading in listed shares by Communist Party members and their families.
For instance, the rules barred party officials in charge of a state-owned company from using their parents, children — or even their children’s spouse’s relatives — to trade stocks of a listed state-owned company.

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The Times found no indication that Mr. Wen shared inside information with family members.
But there are many unanswered questions about the relatives’ holdings, analysts consulted by The Times said, like who might have known about the relatives’ purchases and whether anyone had a legal obligation to disclose that information.
Executives at Morgan Stanley and Goldman Sachs say they were unaware of the share purchases and were not involved in the transactions.
The companies also said that a typical I.P.O. process is unlikely to uncover the ultimate identity of shareholders who are hiding behind layers of investment vehicles using unrecognizable names.
According to regulations in Hong Kong and China, publicly listed companies and their professional partners who help sell shares to the public are legally obligated to disclose the identities of only those shareholders controlling a stake larger than 5 percent. The Times found that at its peak, Taihong, the investment vehicle tied to the Wen family, never held more than a 3.2 percent stake.
Another question that remains unanswered is how Taihong was able to buy shares of Ping An at a price that appears to have been highly discounted. By late 2002, Ping An had already become a hot I.P.O. prospect following a big investment by HSBC.
The answers to some of the questions, legal experts say, may turn on who was involved in brokering the deal that led to the relatives’ acquiring shares in Ping An in the period before the company’s public offering in 2004, and whether the deal-makers were seeking to gain favors from the regulators.
“The key questions are: why were these people chosen, and on what terms did they get the shares?” said Jerome A. Cohen, a professor at New York University Law School and an expert on China’s legal system. “Obviously, everyone would like to get in before a hot I.P.O.”