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    • Healthcare and the Nature of the Firm

      By Gordon Hull

      Yesterday, a group of very rich and influential corporations – Amazon, Berkshire Hathaway and JPMorgan Chase – announced that they would be teaming up to form an independent healthcare company for their employees.  From the NYT:

      “The alliance was a sign of just how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiraling cost of medical treatment. It also caused further turmoil in an industry reeling from attempts by new players to attack a notoriously inefficient, intractable web of doctors, hospitals, insurers and pharmaceutical companies.  It was unclear how extensively the three partners would overhaul their employees’ existing health coverage — whether they would simply help workers find a local doctor, steer employees to online medical advice or use their muscle to negotiate lower prices for drugs and procedures. While the alliance will apply only to their employees, these corporations are so closely watched that whatever successes they have could become models for other businesses.”

      The CEOs were very clear that they weren’t sure what they were going to do, but that they intended to improve the healthcare cost problem for their employees and corporations.  This announcement falls only a couple of weeks after a consortium of hospitals announced that they’d be forming an independent drug company to supply them with cheap generic drugs.  That announcement was spurred in part by the recent behaviors of investors who scoop up old drugs for rare diseases, and then raise the price enormously, knowing that the drug is uncommon enough that there won’t be market competition.  But the behavior of those who exponentially raise the prices of EpiPens and Daraprim is really only an exemplar of the more general pricing strategy of Pharma, as the Times reported with regard to the doubling of the price of rheumatoid arthritis drug Humira since 2012. 

      What the Amazon/JPMorgan/Berkshire Hathaway consortium and the hospital consortium have in common, then, is that they are committing to find new ways to make health care cheaper.  And they are doing so by attempting to internalize costs that they would otherwise have to pay for on the market.  Two thoughts:

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    • Intellectual Property, Creative Commons and Neoliberal Biopower

      By Gordon Hull

      In “Intellectual Property’s Leviathan,” Amy Kapczynski argues that both advocates of strong IP protection, and critics from the creative-commons (CC) side tend to view the state in the same way: “both those who defend robust private IP law and their most prominent critics … typically describe the state in its first instance as inertial, heavy, bureaucratic, ill-informed, and perilously corruptible and corrupt” (131-2).  On the pro-IP side, neoliberal economic doctrine (she cites Hayek) view the state’s role as establishing markets and getting out of the way.  The state otherwise lacks the information to decide winners and losers efficiently, and in any case, it would tend to be corrupted by political or other sectarian interests (ignore for the moment the corruptibility of markets).  On the creative commons side, which Kapczynski identifies with Yochai Benkler and Lawrence Lessig, there is a tendency to adopt exactly the same view of the state: “the commons, they suggest, is a concept that seeks not only to liberate us from predatory and dysfunctional markets, but also from predatory and dysfunctional states” (137).  As she points out, IP does present a number of obvious instances of regulatory capture, so the fear is not an irrational one.  The irony behind this distancing, however, is that both views also require the state to be a functioning entity capable of creating and executing reasonably coherent policy.  For the pro-IP camp, the state has to be able to administer a property regime (and a complex regulatory bureaucracy); for the commons camp, the state has to be able to do things like fund basic research through agencies like the NIH.

      Kapczynski’s point is an important one, and I have only a couple of things to add.  First, she notes that the commons theorists tend to treat infrastructural projects and commons-based private ordering systems in the same camp.  As she notes, this is a strange move:

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    • Revising Foucault on Neoliberalism: the Role of Monopolies (part 2)

      By Gordon Hull

      As I suggested last time, the current neoliberal expansion of IP hinges on the acceptance of monopolies, and the relation between deadweight loss (as advanced by Arrow) and incentives theory (as advanced by Demsetz) is accordingly essential to understanding it.  Here I want to expand on that point, and then say something about contemporary theory.

      The debate is one that Demsetz’s side is winning.  When term limits came before the Supreme Court in Eldred v. Reno, a set of seventeen economists – including such neoclassical luminaries as Arrow, James Buchanan, Ronald Coase, and Milton Friedman – submitted an amicus curiae brief to the Supreme Court opposing the 1998 Copyright Term Extension Act (CTEA).  These economists made arguments precisely in terms of incentives and deadweight loss: a further increase in term length is highly unlikely to make a meaningful difference to incentives to create works, while likely to burden the public with reduced access, and other creators with greater licensing fees.  They conclude:

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    • Revising Foucault on Neoliberalism: the Role of Monopolies (part 1)

      By Gordon Hull

      In rereading Philip Mirowski’s critique of Foucault on neoliberalism (as it’s presented in Never Let a Serious Crisis Go to Waste, his book on the 2008 financial crisis), I noticed a limit in Foucault’s analysis that I hadn’t really thought about before.  Although Foucault correctly sees that a key (if not they key) feature in the transition from classical liberalism to neoliberalism is the realization that markets are something that the state can create and curate, he does not see that neoliberalism also puts a lot of weight on the neoclassical tolerance for monopolies.  This is a significant reversal from classical liberalism.  I work on intellectual property, which is a legal regime that attempts to create markets in intellectual goods by way of granting monopolies to their creators, which means it’s hard to ignore the tolerance of monopoly.  But the point is worth expanding on more generally.

      As Foucault points out (as will be apparent, all of my references will be to Birth of Biopolitics; I’m not aware the topic comes up elsewhere in his work), classical liberalism – the “liberal art of government” (BB 65) – requires anti-monopoly legislation for the “freedom of the internal market to exist” (BB 64).  Competition, if left unchecked, will tend to lead to monopolies.  By the New Deal, and the political opposition is engendered, liberalism faced a “crisis … due to the inflation of the compensatory mechanisms of freedom” (BB 69) such that anti-monopoly legislation could be perceived as part of a “’legislative strait-jacket” (BB 68).  The ordo-liberals thus pick up on the “problem of competition and monopoly” but “do not depart in any way from the historical development of liberal thought” (BB 119).  For early neoliberalism, the “problem will be to demonstrate that monopoly is not in fact part of the economic and historical logic of competition” (BB 134).  Instead, they look at what non-economic policies are supposed to have led to monopolies, and argue that competition and markets do not, without these external distortions, lead to monopolies.  They also reframe the problem with monopolies, which is that they will distort the operation of the price mechanism (BB 136, citing von Mises).  The essential claim is thus that a monopolist will have to charge market prices, or competition will unseat him.  So intervention is not necessary (BB 137).

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    • PIKSI: Summer institutes for undergrads from groups traditionally underrepresented in philosophy

      PIKSI_Poster_2018 Colour

    • Net Neutrality, Bears Ears and Primitive Accumulation

      By Gordon Hull

      Ajit Pai is the Marie Antoinette of the Trump Administration.  How else can you explain his decision to do a little skit last week, in which he pretends that his chairmanship of the FCC is a part of a plot by his former employer, Verizon, to ensure full regulatory capture of the FCC?  This of course while he was inside a cozy dinner, ignoring people outside protesting his impending vote to end Net Neutrality, and while he claims the support of millions of provably fake comments?  If that moment put the sheer hubris of the Trump administration on display, then surely its naked appeals to the worst kind of partisanship was Pai’s attempt to deflect criticism of his decision by companies like Twitter.  There, his argument was that Twitter, not he, is an enemy of the open internet because it’s (supposedly) too liberal.  As for the millions of provably fake comments, Pai can’t be bothered to investigate, and won’t let anybody else do so either.

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    • Gaslighting in the FCCorporate Attack on Net Neutrality

      By Gordon Hull

      As part of its war on all things done during the Obama administration, the Trump administration is planning to do away with Net Neutrality rules.  Those rules, announced in early 2015, established that Internet Service Providers must treat all traffic across their networks equally.  Absent such rules, they could favor their own content over that of their competitors, favor content providers who are willing and able to pay extra for faster service, disfavor content that they don’t like (in the only bit of possible karmic justice here, many of them could make it much harder for radical white terrorists to organize online), and so forth.  The “FCCorporate” in my title is deliberate, and it’s of course designed to indicate regulatory capture.  But it also indicates something particularly insidious: regulatory capture by way of gaslighting.  First, a review of net neutrality.

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    • The Neoliberal Biopolitical Two-Step: Of Patents and Banking Arbitration

      By Gordon Hull

      It has seemed to me for a long time that one helpful theoretical lens through which to look at neoliberalism is to understand it as a phase (or perhaps a dispositive) of biopower. This is because neoliberalism does not generally rely on juridical rules (or tried to colonize the judiciary), it pushes for the marketization of everything, and involves an elaborate state apparatus to support that marketization. It also functions as an engine of subjectification, actively attempting to turn everyone into instantiations of homo economicus, whether directly by state action, or by way of empowering private actors. Even school students are quietly taught the ropes. The incessant demands for privatization have put enormous pressure on the public sector, both in the starvation of funding cuts and the efforts to privatize it. That, in turn, has led to such monstrosities as private prisons.

      That said, today’s neoliberal biopolitics obviously needs to be distinguished from the biopolitics that came before, which was, as Foucault discussed, centered at the population level, concerned with birth rates, longevity, and so on (hence the distinction is readily apparent in health policy). One of the hallmarks of the emergence of biopolitics is the rise of the administrative state; as the state comes increasingly to try to optimize the population, an elaborate administrative apparatus – a large state bureaucracy – emerges to fill these functions. This does not mean that there are no more laws. Indeed, Foucault emphasizes that the biopolitical era involves multiple sites of power, both inside and outside the state:

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    • C-M-C, M-C-M’ and Marx’s understanding of Power

      By Gordon Hull

      Over at Larval Subjects, Levi Bryant has a nice post on how Marx’s distinction between C-M-C and M-C-M’ helps to explain an otherwise puzzling ideological construction. Marx’s distinction, arrived at in chapter 4 of Capital, is about how commodities circulate. In the C-M-C formula, we consider someone who starts with a commodity, sells it, and uses the proceeds to buy another one. For example, I start with a shirt, sell it, and use the money to buy some bread. In this formula, a couple of things become apparent: use value is both the beginning and end of the process insofar as the individual offers up something she doesn’t have a use for (or has less of a use for), and essentially trades it for something she has a greater use for. In contemporary economic-speak, the market is efficiently helping individuals satisfy their preferences, by moving goods to whoever values them the most. This is the perspective of the worker, who sells his labor for money.

      The M-C-M’ relation is one that the capitalist uses. Here, the capitalist has money, sells it to get a commodity, and then sells the commodity for more money than he paid for it. As a result, he has more money at the end of the day than before. Marx emphasizes the M-C-M’ relation because it helps to get him to labor as the source of value: whatever commodity occupies the middle place in the M-C-M’ relation has to be one the use of which increases its value. The answer, of course, is labor.

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    • Foucault and Marx: on Subjectification and Exhaustion

      By Gordon Hull

      I have been circling around the relation between Marx and Foucault for a while, and thinking in  particular about the ways that they can be viewed as productively engaged, particularly at the intersection of primitive accumulation and subjectification (e.g., here, here and here)  This of course flies in the face of Foucault’s acerbic dismissals of Marxism, as when in the early parts of Society must be Defended, he dismisses it as “totalitarian,” or in the Trombadori interviews more generally.  But there is a renaissance of interest in the topic, and there are a number of Foucault texts only now being studied in the English-speaking world that can be brought to bear on it.  Most prominent perhaps is the recently translated “Mesh of Power” lecture, where Foucault specifically credits chapters 13-15 of Capital for moving toward a non-juridical understanding of power.  As Foucault says, what Marx shows there is that “one power does not exist, but many powers” and that power is productive, not repressive:

      “These specific regional powers [delineated by Marx – GH] have absolutely no ancient [primordial] function of prohibiting, preventing, saying ‘you must not.’ The original, essential and permanent function of these local and regional powers is, in reality, being producers of the efficiency and skill of the producers of a product.  Marx, for example, has superb analyses of the problem of discipline in the army and workshops.”

      What I want to do here is extend some of the credit to the “Fragment on Machines” section of the Grundrisse. 

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