Re: <nettime> The insult of the 1 percent: "Art-history majors"

[Nicholas Knouf <nak44@cornell.edu>]

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Thanks for posting this Brian, and for your comments.  I've been
finding it more and more instructive to be reading the economic and
financial texts of "the other side" and I actually look forward to
reading this book.

What interests me here---and of course this can only be based on the
article itself, and not Conrad's book---is the way Conrad bows down at
the altar of efficiency.  I had assumed that the so-called "invisible
hand" or the efficient markets hypothesis were simplifications that
were taught to undergrad economics or business majors, quickly to be
rectified into more complex models by most market participants.  At
least this is what I understand from reading some of the financial
press and ethnographies of traders, etc.  Yet Conrad is lauded in the
article by Andrei Shleifer, one of the most well-known proponents and
developers of "behavioral finance", or the attempt to do market
experiments to understand how people actually behave outside of game
theoretic models.  Shleifer in fact wrote a book entitled "Inefficient
Markets", a text that could not be further from the world Conrad
describes.

Conrad's position is part of a larger trend, I think, of the radical
simplification of complex systems.  Conrad's comments on his dating
process sound exactly like a game theoretic model: what is my expected
utility as I play a game of a few rounds where I add up the benefits
of my potential partners and subtract the costs of the date?  We know,
from the work of Philip Mirowski in _Machine Dreams: Economics Becomes
a Cyborg Science_, the close connection between developments in
neoclassical economics mid-twentieth century---especially game
theory---and the practices and worldview of first-order cybernetics.
Behavioral finance and economics (starting most prominently with
Kahneman and Tversky) has shown how people's probabilistic ideas do
not match the underlying models suggested by game theory.  What's
disturbing to me is not only the comments that Brian notes below, but
this trend towards greater abstraction that is evinced in Conrad's
arguments, a regression to models with only the most tenuous hold on
"reality", and coming so soon after the hype (and actual takeup!) of
complexity sciences in so many fields.  There's a tension, I've
noticed, between the comments by, for example, traders---who
understand the complexity of the market because their jobs depend on
it---and the models and understandings of participants who are a few
steps removed.  I would have expected someone like Conrad, with
experience in the brutal activities of Bain Capital, to understand
this better.  But perhaps it's precisely because he _does not
understand_---he's too far removed from his days as a corporate
raider---that he's able to make the comments he does regarding the
"art-history majors".  (And perhaps not tangentially, his disgust at
seemingly non-efficient activity signals yet another regression, to a
time before the rise of the "creative economies".)  I'm not surprised
at his derision at the rest of us; what worries me is that he seems to
actually believe his models, an extreme danger to anyone no matter
their political persuasion.  The challenge is how to counter this
simplification---to bring out the complex dynamics, the far from
equilibrium behavior---as part of a set of moves in the production of
a society that values the things Conrad wants to destroy.

Best,

nick


On 05/03/2012 02:43 AM, Brian Holmes wrote:
> Edward Conard works for Mitt Romney's firm, Bain Capital. He is
> part of the .01% and he is true to his class. A New York Times
> reporter interviewed him on the occasion of his soon-to-be-released
> book (which you should probably steal if you want to read it)
> called "Unintended Consequences." As usual, it declares that the
> superrich do us all a world of good, even though all they want is
> more for them. In Connard's case, he already has enough to crush us
> like flies. Check out his world view, as reported by Adam
> Davidson:
> 
> "At a nearby table we saw three young people with plaid shirts and 
> floppy hair. For all we know, they may have been plotting the next 
> generation's Twitter, but Conard felt sure they were merely
> lounging on the sidelines. 'What are they doing, sitting here,
> having a coffee at 2:30?' he asked. 'I'm sure those guys are
> college-educated.' Conard, who occasionally flashed a mean streak
> during our talks, started calling the group 'art-history majors,'
> his derisive term for pretty much anyone who was lucky enough to be
> born with the talent and opportunity to join the risk-taking,
> innovation-hunting mechanism but who chose instead a less
> competitive life. In Conard?s mind, this includes, surprisingly,
> people like lawyers, who opt for stable professions that don?t
> maximize their wealth-creating potential. He said the only way to
> persuade these 'art-history majors' to join the fiercely
> competitive economic mechanism is to tempt them with extraordinary
> payoffs."
> 
> http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner
>
> 
- -makes-a-case-for-inequality.html
> 
> This Connard wants to get rid of art-history majors the way you
> get rid of cockroaches, by calling the exterminator. But it's not a
> pretty picture when you are the vermin. Like all the ideologues of
> the 1%, Connard thinks that culture is worth nothing but hatred. In
> short, gentle reader, he wants to erase us from the face of the
> earth. All of you who generously and perhaps a bit
> self-interestedly wanted to believe that the great financial barons
> were unparalleled patrons of the Museum and the Opera and the
> Academy, please take careful note. Now they don't want to buy us or
> stick us up with pushpins on the wall. Instead they just want to
> flame us and laugh when we burn. The cuts to culture, to education,
> are not some side effect of a necessary austerity. They are the
> centerpieces of a concerted ideological plan to eliminate anyone
> who elaborates any other kind of value.
> 
> Life, for these Connards, is competition. Full stop. There is no
> room for anyone who does not compete at 2:30 in the afternoon.
> According to Connard, we who have other values should be banished
> if not killed. That's the message, and even more, the program.
> 
> Imagine a world from which art has been surgically removed. Replace
> it with entertainment and compete 'till you're blue.
> 
> Is it maybe time to give up being neutral?
> 
> here's hoping, Brian
> 
> 
> 
> 
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