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As long as herd utility is the only utility governing moral value judgments, as long as the preservation of the community is the only thing in view and questions concerning immorality are limited to those things that seem to threaten the survival of the community; as long as this is the case, there cannot yet be a morality of neighbor love. Suppose that even here, consideration, pity, propriety, gentleness, and reciprocity of aid are already practiced in a small but steady way; suppose that even in this state of society, all the drives that would later come to be called by the honorable name of virtues (and, in the end, basically coincide with the concept of morality) suppose that they are already active: at this point they still do not belong to the realm of moral valuations at all they are still extra-moral. During the best days of Rome, for instance, an act done out of pity was not called either good or evil, moral or immoral; and if it were praised on its own, the praise would be perfectly compatible with a type of reluctant disdain as soon as it was held up against any action that served to promote the common good, the res publica. Ultimately, the love of the neighbor is always somewhat conventional, willfully feigned and beside the point compared to fear of the neighbor. After the structure of society seems on the whole to be established and secured against external dangers, it is this fear of the neighbor that again creates new perspectives of moral valuation. Until now, in the spirit of common utility, certain strong and dangerous drives such as enterprise, daring, vindictiveness, cunning, rapacity, and a domineering spirit must have been not only honored (under different names than these of course), but nurtured and cultivated (since, given the threats to the group, they were constantly needed against the common enemies). Now, however, since there are no more escape valves for these drives, they are seen as twice as dangerous and, one by one, they are denounced as immoral and abandoned to slander. Now the opposite drives and inclinations come into moral favor; step by step, the herd instinct draws its conclusion. How much or how little danger there is to the community or to equality in an opinion, in a condition or affect, in a will, in a talent, this is now the moral perspective: and fear is once again the mother of morality. When the highest and strongest drives erupt in passion, driving the individual up and out and far above the average, over the depths of the herd conscience, the self-esteem of the community is destroyed its faith in itself, its backbone, as it were, is broken: as a result, these are the very drives that will be denounced and slandered the most. A high, independent spiritedness, a will to stand alone, even an excellent faculty of reason, will be perceived as a threat. Everything that raises the individual over the herd and frightens the neighbor will henceforth be called evil; the proper, modest, unobtrusive, equalizing attitude and the mediocrity of desires acquire moral names and honors. Finally, in very peaceable circumstances there are fewer and fewer opportunities and less and less need to nurture an instinct for severity or hardness; and now every severity starts disturbing the conscience, even where justice is concerned. A high and hard nobility and self-reliance is almost offensive, and provokes suspicion; the lamb, and the sheep even more, gains respect. There is a point in the history of a society when it becomes pathologically enervated and tenderized and it takes sides, quite honestly and earnestly, with those who do it harm, with criminals. Punishment: that seems somehow unjust to this society, it certainly finds the thoughts of punishment and needing to punish both painful and frightening. Isnt it enough to render him unthreatening? Why punish him as well? Punishment is itself fearful! with these questions, the herd morality, the morality of timidity, draws its final consequences. If the threat, the reason for the fear, could be totally abolished, this morality

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would be abolished aswell: itwould not be necessary any more, itwould not consider itself necessary any more! Anyone who probes the conscience of todays European will have to extract the very same imperative from a thousand moral folds and hiding places, the imperative of herd timidity: we want the day to come when there is nothing more to fear! The day to come the will and way to that day is now called progress everywhere in Europe.

SLAVOJ IEK. WHY CYNICS ARE WRONG.

Slavoj iek. "Why Cynics Are Wrong." in: Lacan.com. 2009. (English).
Days before the election, Noam Chomsky told progressives that they should vote for Obama, but without illusions. I fully share Chomskys doubts about the real consequences of Obamas victory: From a pragmatic-realistic perspective, it is quite possible that Obama will just do some minor face-lifting improvements, turning out to be Bush with a human face. He will pursue the same basic politics in a more attractive mode and thus effectively even strengthen U.S. hegemony, which has been severely damaged by the catastrophe of the Bush years. There is nonetheless something deeply wrong with this reaction a key dimension is missing in it. It is because of this dimension that Obamas victory is not just another shift in the eternal parliamentary struggles for majority with all their pragmatic calculations and manipulations. It is a sign of something more. This is why a good, American friend of mine, a hardened Leftist with no illusions, cried for hours when the news came of Obamas victory. Whatever our doubts, fears and compromises, in that moment of enthusiasm, each of us was free and participating in the universal freedom of humanity. What kind of sign am I talking about? In his last published book The Contest of Faculties (1798), the great German Idealist philosopher Immanuel Kant addressed a simple but difficult question: Is there true progress in history? (He meant ethical progress in freedom, not just material development.) He conceded that actual history is confused and allows for no clear proof: Think how the 20th century brought unprecedented democracy and welfare, but also the Holocaust and gulag. Nonetheless, Kant concluded that, although progress cannot be proven, we can discern signs that indicate progress is possible. Kant interpreted the French Revolution as a sign that pointed toward the possibility of freedom: The hitherto unthinkable happened, a whole people fearlessly asserted their freedom and equality. For Kant, even more important than the often bloody reality of what went on in the streets of Paris was the enthusiasm that those events engendered in sympathetic observers all around Europe: >The recent Revolution of a people which is rich in spirit, may well either fail or succeed, accumulate misery and atrocity, it nevertheless arouses in the heart of all spectators (who are not themselves caught up in it) a taking of sides according to desires which borders on enthusiasm and which, since its very expression was not without danger, can only have been caused by a moral disposition within the human race. One should note here that the French Revolution generated enthusiasm not only in Europe, but also in faraway places like Haiti, where it triggered another world-historical event: The first revolt of Black slaves, who fought for full participation in the emancipatory project of the French Revolution. Arguably the most sublime moment of the French Revolution occurred when the delegation from Haiti, led by Toussaint lOuverture, visited Paris and was enthusiastically received at the Popular Assembly as equals among equals. Obamas victory belongs to this line; it is a sign of history in the triple Kantian sense ofsignum rememorativum, demonstrativum, prognosticum. That is, it is a sign in which the memory of the long past of slavery and the struggle for its abolition reverberates; an event which now demonstrates a change; a hope for future achievements. No wonder that Hegel, the last great German Idealist, shared Kants enthusiasm in his description of the impact of the French Revolution: This was accordingly a glorious mental dawn. All thinking beings shared in the jubilation of this epoch. Emotions of a lofty character stirred mens minds at that time; a spiritual enthusiasm thrilled through the world, as if the reconciliation between the divine and the secular was now first accomplished. Did Obamas victory not give birth to the same universal enthusiasm all around the world, with people dancing on the streets from Chicago to Berlin to Rio de Janeiro? All the skepticism displayed behind closed doors even by many worried progressives (what if, in the privacy of the voting booth, publicly disavowed racism reemerges?) was proven wrong. There is one thing about Henry Kissinger, the ultimate cynical Realpolitiker, that strikes the eye of all observers: How utterly wrong most of his predictions were. To take only one example, when news reached the West about the 1991 anti-Gorbachev military coup, he immediately accepted the new regime (which ignominiously collapsed three days later) as a fact. In short, when socialist regimes were already a living dead, Kissinger was counting on a long-term pact with them. The position of the cynic is that he alone holds some piece of terrible, unvarnished wisdom. The paradigmatic cynic tells you privately, in a confidential low-key voice: But dont you get it that it is all really about (money/power/sex), that all high principles and values are just empty phrases which count for nothing? What the cynics dont see is their own naivety, the naivety of their cynical wisdom that ignores the power of illusions.

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The reason Obamas victory generated such enthusiasm is not only the fact that, against all odds, it really happened, but that the possibility of such a thing to happen was demonstrated. The same goes for all great historical ruptures. Recall the fall of the Berlin Wall: Although we all knew about the rotten inefficiency of the Communist regimes, we somehow did not really believe that they will disintegrate. Like Kissinger, we were all too much victims of cynical pragmatism. This attitude is best encapsulated by the French expression je sais bien, mais quand meme (I know very well that it can happen, but nonetheless I cannot really accept that it can happen). This is why, although Obamas victory was clearly predictable at least for the last two weeks before the election, his actual victory was still experienced as a shock. In some sense, the unthinkable did happen, something that we really didnt believe could happen. (Note that there is also a tragic version of the unthinkable really taking place: holocaust, gulag how can one really accept that something like that could happen?) The true battle begins now, after the victory: The battle for what this victory will effectively mean, especially within the context of two other much more ominous signs of history: 9/11 and the financial meltdown. Nothing was decided by Obamas victory, but his victory widens our freedom and thereby the scope of our decisions. But regardless of whether we succeed or fail, Obamas victory will remain a sign of hope in our otherwise dark times, a sign that the last word does not belong to realist cynics, be they from the Left or the Right.

Needed: a new economic paradigm

By Joseph Stiglitz

The blame game continues over who is responsible for the worst recession since the Great Depression the financiers who did such a bad job of managing risk or the regulators who failed to stop them. But the economics profession bears more than a little culpability. It provided the models that gave comfort to regulators that markets could be self-regulated; that they were efficient and selfcorrecting. The efficient markets hypothesis the notion that market prices fully revealed all the relevant information ruled the day. Today, not only is our economy in a shambles but so too is the economic paradigm that predominated in the years before the crisis or at least it should be. It is hard for non-economists to understand how peculiar the predominant macroeconomic models were. Many assumed demand had to equal supply and that meant there could be no unemployment. (Right now a lot of people are just enjoying an extra dose of leisure; why they are unhappy is a matter for psychiatry, not economics.) Many used representative agent models all individuals were assumed to be identical, and this meant there could be no meaningful financial markets (who would be lending money to whom?). Information asymmetries, the cornerstone of modern economics, also had no place: they could arise only if individuals suffered from acute schizophrenia, an assumption incompatible with another of the favoured assumptions, full rationality. Bad models lead to bad policy: central banks, for instance, focused on the small economic inefficiencies arising from inflation, to the exclusion of the far, far greater inefficiencies arising from dysfunctional financial markets and asset price bubbles. After all, their models said that financial markets were always efficient. Remarkably, standard macroeconomic models did not even incorporate adequate analyses of banks. No wonder former Federal Reserve chairman Alan Greenspan, in his famous mea culpa, could express his surprise that banks did not do a better job at risk management. The real surprise was his surprise: even a cursory look at the perverse incentives confronting banks and their managers would have predicted short-sighted behaviour with excessive risk-taking.

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The standard models should be graded on their predictive ability and especially their ability to predict in circumstances that matter. Increasing the accuracy of forecast in normal times (knowing whether the economy will grow at 2.4 per cent or 2.5 per cent) is far less important than knowing the risk of a major recession. In this the models failed miserably, and the predictions of policymakers based on them have, by now, totally undermined their credibility. Policymakers did not see the crisis coming, said its effects were contained after the bubble burst, and thought the consequences would be far more short-lived and less severe than they have been. Fortunately, while much of the mainstream focused on these flawed models, numerous researchers were engaged in developing alternative approaches. Economic theory had already shown that many of the central conclusions of the standard model were not robust that is, small changes in assumptions led to large changes in conclusions. Even small information asymmetries, or imperfections in risk markets, meant that markets were not efficient. Celebrated results, such as Adam Smiths invisible hand, did not hold; the invisible hand was invisible because it was not there. Few today would argue that bank managers, in their pursuit of their self-interest, had promoted the well-being of the global economy. Monetary policy affects the economy through the availability of credit and the terms on which it is made available, especially to small- and medium-sized enterprises. Understanding this requires us to analyse banks and their interaction with the shadow banking sector. The spread between the Treasury bill rate and lending rates can change markedly. With a few exceptions, most central banks paid little attention to systemic risk and the risks posed by credit interlinkages. Years before the crisis, a few researchers focused on these issues, including the possibility of the bankruptcy cascades that were to play out in such an important way in the crisis. This is an example of the importance of modelling carefully complex interactions among economic agents (households, companies, banks) interactions that cannot be studied in models in which everyone is assumed to be the same. Even the sacrosanct assumption of rationality has been attacked: there are systemic deviations from rationality and consequences for macroeconomic behaviour that need to be explored. Changing paradigms is not easy. Too many have invested too much in the wrong models. Like the Ptolemaic attempts to preserve earth-centric views of the universe, there will be heroic efforts to add complexities and refinements to the standard paradigm. The resulting models will be an improvement and policies based on them may do better, but they too are likely to fail. Nothing less than a paradigm shift will do. Nazis econ up everytime they went to war Think about too much about what you know, then you dont know what you know Stieglitz rationality not good way to predict financial crisis, i.e. banks giving out loans. Have US bail them out People are products of historical culture, you dont buy hats cuz its rational cuz it makes sense, but because its arbitrary Other countries filling in = bankrupt, project fear, paranoia of nothing that their metaphysics cant understand. They posit in fukiyamian terms, problematize telos, cuz they are commensary with their disrespect to the rev, allowed for dictatorships The non state actors filled in and reclaimed agency

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Things like the alt is radical, can change relationship, theres no vaccum, there are subjects, its just that the US does not metaphysicall acknowledge alterity Kagan ev is dumb cuz the US is not some neutral arbitrarer, we have eco interest in them They try to rationalize about other people, they are just theoretical not empirics, no owen access We say that they litereally discipline data in which they only see certain data as good