Dec 5, 2013
The Insider’s Economic Dictionary: Part A
Posted on Aug 9, 2013
By Michael Hudson
This piece first appeared at Michael Hudson’s website.
The Antidote to Euphemism
The fallacies that lurk in words are the quicksands of theory; and as the conduct of nations is built on theory, the correction of word-fallacies is the never-ending labor of Science. … the party in this country, one of whose great aims was, at one time, the perpetuation of slavery, owed much of its popular vote to the name Democracy. – S. Dana Horton, Silver and Gold (1895)
Now, it is clear that the decline of a language must ultimately have political and economic causes . . . It becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish thoughts. The point is that the process is reversible. . . . If one gets rid of these habits one can think more clearly, and to think clearly is a necessary first step toward political regeneration. – George Orwell, “Politics and the English Language” (1946)
You can fool some of the people all of the time. Those are the ones you should concentrate on. – George W. Bush, talking about The People
Classical economists defined rent as unearned income, a property claim that did not reflect a corresponding expenditure of labor, which was the sole source of value. But as our postindustrial society has evolved into a “service economy,” the national income and product accounts count interest and rent as a product – an output of services. Landlords thus are depicted as providing a useful service, not merely charging access fees for sites created by nature and given value by the community’s overall prosperity. The classical value judgment that deemed some business activities unproductive – or even “sterile,” as France’s Physiocrats put it – has been rejected by today’s value-free economics.
As advertisers well know, naming a product shapes how it is perceived. And as Voltaire noted in Candide, optimism “is the mania of insisting that all is well when one is in a terrible state.” Nowhere is this more a political act than in the realm of selling economic policy. What Orwell wrote about the ideological coloration of language in his day applies especially to the vocabulary with which economics students are indoctrinated and formal reports written. Instead of reflecting reality, their jargon often dulls the mind’s critical faculties by diverting attention away from the actual dynamics at work. Depicting debt as wealth, today’s doublethink calls higher access prices for homebuyers “wealth creation.” The economy’s lapse into a rent-and-usury system is welcomed as progress into a post-industrial service society.
Just as history is written by the victors, so politicians, journalists and academic ideologues coin the economic vocabulary with an eye to molding popular opinion on behalf of their constituencies. Thirteenth-century Churchmen replaced the unpleasant word “usury” by “interest,” a term bearing less negative connotations. More recently, predatory policies have been called “reforms” and regressive tax policies called progressive even when their objective is to reverse centuries of true reform.
Denis Diderot (1713-1784), a member of the French Enlightenment, organized the writing of the Encyclopédie as a revolutionary project. It contained a map of human knowledge and included an entry defining the Enlightenment’s political program: “The good of the people must be the great purpose of government. By the laws of nature and of reason, the governors are invested with power to that end. And the greatest good of the people is liberty. It is to the state what health is to the individual.”
But what is “liberty”? America’s Liberty Bell is inscribed with a verse from Leviticus 25: “Proclaim liberty throughout all the land, and to the inhabitants thereof.” The biblical Hebrew term was d’r’r (deror), cognate to Babylonian andurarum used by rulers to annul the population’s personal and agrarian debts, liberate bond-servants and restore self-support lands to citizens who had forfeited them to foreclosing creditors or sold them under distress conditions. These royal Babylonian proclamations evolved into the Jubilee Year that Judaism placed at the center of its religion in an epoch when rulers had come to protect rather than check the power of creditors and absentee landlords.
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