Hannah Arendt Center for Politics and Humanities
27Apr/151

Amor Mundi 4/26/15

Arendtamormundi

Hannah Arendt considered calling her magnum opus Amor Mundi: Love of the World. Instead, she settled upon The Human Condition. What is most difficult, Arendt writes, is to love the world as it is, with all the evil and suffering in it. And yet she came to do just that. Loving the world means neither uncritical acceptance nor contemptuous rejection. Above all it means the unwavering facing up to and comprehension of that which is.

Every Sunday, The Hannah Arendt Center Amor Mundi Weekly Newsletter will offer our favorite essays and blog posts from around the web. These essays will help you comprehend the world. And learn to love it.

amor_mundi_sign-upWill It Never End?

violenceJohn Gray, writing in The Guardian, takes on Steven Pinker's argument that progress and the Enlightenment are bringing about the decline and extinction of violence. "It may be true that the modern state's monopoly of force has led, in some contexts, to declining rates of violent death. But it is also true that the power of the modern state has been used for purposes of mass killing, and one should not pass too quickly over victims of state terror. With increasing historical knowledge it has become clear that the 'Holocaust-by-bullets'--the mass shootings of Jews, mostly in the Soviet Union, during the second world war--was perpetrated on an even larger scale than previously realised. Soviet agricultural collectivisation incurred millions of foreseeable deaths, mainly as a result of starvation, with deportation to uninhabitable regions, life-threatening conditions in the Gulag and military-style operations against recalcitrant villages also playing an important role. Peacetime deaths due to internal repression under the Mao regime have been estimated to be around 70 million. Along with fatalities caused by state terror were unnumbered millions whose lives were irreparably broken and shortened. How these casualties fit into the scheme of declining violence is unclear. Pinker goes so far as to suggest that the 20th-century Hemoclysm might have been a gigantic statistical fluke, and cautions that any history of the last century that represents it as having been especially violent may be 'apt to exaggerate the narrative coherence of this history' (the italics are Pinker's). However, there is an equal or greater risk in abandoning a coherent and truthful narrative of the violence of the last century for the sake of a spurious quantitative precision."

How About Improving High Schools?

college reformDavid Leonhardt takes on the conventional wisdom that college is not for everyone. (Although I thought the conventional wisdom is that college is for everyone.) In his Upshot column in the NY Times, Leonhardt argues that new studies show that college benefits even the most marginal students. "The fate of students like Mr. Escanilla is crucial to today's debate over who should go to college: How much money should taxpayers spend subsidizing higher education? How willing should students be to take on college debt? How hard should Washington and state governments push colleges to lift their graduation rates? All of these questions depend on whether a large number of at-risk students are really capable of completing a four-year degree. As it happens, two separate--and ambitious--recent academic studies have looked at precisely this issue. The economists and education researchers tracked thousands of people over the last two decades in Florida, Georgia and elsewhere who had fallen on either side of hard admissions cutoffs. Less selective colleges often set such benchmarks: Students who score 840 on the SAT, for example, or maintain a C+ average in high school are admitted. Those who don't clear the bar are generally rejected, and many don't attend any four-year college. Such stark cutoffs provide researchers with a kind of natural experiment. Students who score an 830 on the SAT are nearly identical to those who score an 840. Yet if one group goes to college and the other doesn't, researchers can make meaningful estimates of the true effects of college. And the two studies have come to remarkably similar conclusions: Enrolling in a four-year college brings large benefits to marginal students. Roughly half of the students in Georgia who had cleared the bar went on to earn a bachelor's degree within six years, compared with only 17 percent of those who missed the cutoff, according to one of the studies, by Joshua S. Goodman of Harvard and Michael Hurwitz and Jonathan Smith of the College Board. The benefits were concentrated among lower-income students, both studies found, and among men, one of them found." What is unasked in Leonhardt's argument is, "What about high school?" It is not controversial that sending someone to college will help people. But does it make sense for us to continue offering free high school educations that are horrific and then charge people for better college educations? Wouldn't the money and effort spent on community colleges and financial aid for lower tier colleges be better spent reforming high school education in a meaningful way? It seems most people simply have given up on high school, which is why college becomes an expensive and next-best alternative.

Your Smart Things, They're Spying On You

smart homeJustin McGuirk says the smart house is here and that it's here less to make your life convenient and more to gather data about what you do at home: "For the first time since the mid-twentieth century--with its labor-saving household appliances and rising quality of life--the domestic is once again the site of radical change. And though domestic space appears to fall within the realm of architecture, architects themselves have been almost mute on the implications of such change. Architecture, it seems, has given up its dreams of imagining how we might live, and so into that void technology is rushing. That tired old trope of 'the house of the future' has been replaced by what is now called the 'smart home.' The smart home is the network's great white hope for ubiquitous connectivity. It sounds benign enough, and may conjure Jacques Tati-style mise-en-scènes populated by absurd devices--the smart home is prime territory for farce--but it is also an ideology. It is the house-shaped manifestation of the internet of things, according to which all our devices and appliances will join the network, communicating with us and each other. To say that the internet of things is an ideology is to suggest that the use-value of the concept has yet to be sold to the consumer. It is easily mocked by skeptical hacks who question the need for talking fridges and washing machines that you can program with your smartphone ('You still need to put the clothes in yourself, right?'). Bruce Sterling argues that the internet of things has nothing to do with the consumer and everything to do with the business interests of the service providers. Given that data is the new currency, the internet of things is an epic power grab by the lords of the network--Sterling focuses on the 'big five' of Google, Amazon, Facebook, Apple, and Microsoft--to gain control of as much human data as physically possible. As the primary interface of the internet of things, the smart home is effectively the tendrils of the network rising out of the ground and into every one of our household appliances to allow mass data collection and digital surveillance." And while it used to be that you could strategically opt out of this data gathering, McGuirk suggests that the smart home will just render you redundant. Home, then, is no longer any retreat from the public space.

amor_mundi_sign-upMindfulness and Social Control

mindfulnessVirginia Heffernan is wary of the way "mindfulness," an idea brought into Western thought from various Eastern religions, has been taken up by businesses and 21st century self-help gurus: "Mindfulness as 'keeping in tune' has a nice ring to it. But it's 'focused on the task at hand' that appeals to managers, like Jackson, who are conscious of performance goals. Might workplace mindfulness--in the cubicle or on the court--be just another way to keep employees undistracted and to get them to work harder for nothing but airy rewards? In this context of performance enhancement, 'mindfulness' seems perilously close to doggerel from the same playbook that brought us corny affirmations, inner children and vision boards. Maybe the word 'mindfulness' is like the Prius emblem, a badge of enlightened and self-satisfied consumerism, and of success and achievement. If so, not deploying mindfulness--taking pills or naps for anxiety, say, or going out to church or cocktails--makes you look sort of backward or classless. Like driving a Hummer."

Feeling and Thinking

Françoise MoulyFrançoise Mouly, in an interview, talks about the relationship between thought and emotion in art: "Often, we separate intellectual discourse from emotional reaction. But I take such genuine pleasure in things that are intellectually well architected. It's definitely an integrated experience for me. Much more than any kind of cheap, emotional pulls that you get in popular culture, when I read a sentence and it's beautifully written, it can bring me to tears. I know what I respond to is a voice. A voice is not just a stylistic thing, but it means someone who really has something to say. I think a lot of what I get from books--whether they be books of comics or books of literature--is a window into somebody's mind and their way of thinking. I love it when it's so specific. It's a new way to look at the world. It's as if I could get in and see it through their eyes. It also reaches a level of universality because, somehow, I can recognize some of my feelings in seeing somebody who is actually expressing their own inner reality. Even though Flaubert has not been in Madame Bovary's skin, you do get a sense of what it's like to be that person. It's a kind of empathic response when you're reading it."

The Fiction and the Fact

joseph mitchellIn a piece on the New Yorker writer Joseph Mitchell, Janet Malcom, starting with facts from a new biography of Mitchell, tries to work out whether it matters that his tendency to exaggerate or flat-out invent in his profiles for the magazine, more prevalent than previously believed, matters. Ultimately, she says, it doesn't. But only because he was good at it: "Every writer of nonfiction who has struggled with the ditch and the bushes knows what Mitchell is talking about, but few of us have gone as far as Mitchell in bending actuality to our artistic will. This is not because we are more virtuous than Mitchell. It is because we are less gifted than Mitchell. The idea that reporters are constantly resisting the temptation to invent is a laughable one. Reporters don't invent because they don't know how to. This is why they are journalists rather than novelists or short-story writers. They depend on the kindness of the strangers they actually meet for the characters in their stories. There are no fictional characters lurking in their imaginations. They couldn't create a character like Mr. Flood or Cockeye Johnny if you held a gun to their heads. Mitchell's travels across the line that separates fiction and nonfiction are his singular feat. His impatience with the annoying, boring bits of actuality, his slashings through the underbrush of unreadable facticity, give his pieces their electric force, are why they're so much more exciting to read than the work of other nonfiction writers of ambition. In the title piece of The Bottom of the Harbor, a short work of great subtlety about the ability of fish and shellfish to survive in polluted water, Mitchell mentions a small area of the New York waterfront where, in contrast to the general foulness, 'clean, sparkling, steel-blue water' can be found. This image of purity in the midst of contamination could serve as an emblem of Mitchell's journalistic exceptionalism. He has filtered out the impurities other journalists helplessly accept as the defining condition of their genre. Mitchell's genre is some kind of hybrid, as yet to be named."

What We Talk About When We Talk About Dresses

dressMegan Garber wonders what might have caused the backlash against some designer dresses that went on sale at Target this week, coming up with an answer that suggests, as always, that when we're talking about clothes, we're not just talking about clothes: "A common phrase you'll hear associated with Pulitzer is 'uniform'--as in, as Givhan put it, 'part of a preppy uniform that announces itself from fifty paces,' or, as the Boston Globe put it, 'a uniform of the well-heeled WASP.' Which is ironic, of course: Uniforms are about the constriction of freedoms, and preppiness and WASPiness are, in general, about the freedom that comes with privilege. And clothing, furthermore-'fashion,' in haughtier moments--is most optimistically about the freedoms of self-expression and self-reinvention. It recognizes very little distinction between faking it and making it. If you have the money and the inclination, you can stock your closet--and swath your body--with Alice + Olivia and Thakoon and Marc Jacobs and Marchesa, or with very convincing knockoffs. You can balance them out, as the fashion magazines have taught you to do, with items from H&M and Zara and Forever 21. We live in an economy of sartorial abundance; one outcome of that is that 'style' is something we have come to associate with freedom. But Pulitzer's clothes are, again, 'uniforms'--which are, on the whole, designed to free their wearers from the burdens of free thinking. And this is perhaps the main source of the ire about Pulitzer's clothes: The garments suggest a kind of willful conscription, celebrating what happens when wealth and status are accompanied by an insistent rejection of creativity. It was, and to some extent still is, popular to deride women for being 'basic,' which is to say for loving pumpkin-spice lattes, Ugg boots, Gucci handbags, and other predictable outcomes of commercialized femininity. 'Basic' is a terrible epithet in many ways, but it is also, as far as 'Lillys' are concerned, an instructive one: Pulitzer's clothes are, in this sense, the worst kind of basic. They promise class and community and the relief of conformity. They are marketed to people of privilege. Worst of all, though, they suggest that the best thing one can do with one's privilege is to use it to go on vacation."

amor_mundi_sign-upFeatured Events

h. g. adlerTranslating the Holocaust: H. G. Adler as Writer and Scholar

This event, which features a keynote address, several panels, and a performance, will offer a unique opportunity to consider the intersection of both the scholarly and artistic work of H. G. Adler, a major thinker and writer who is just becoming known in English.

Sponsored by the Hannah Arendt Center, The Bard Translation Initiative, Jewish Studies, German Studies, and Human Rights Project.

Free and open to the public!

Monday, May 4, 2015

Bard Hall, Bard College, 4:00 pm - 6:00 pm


human conditionHAC Virtual Reading Group - Session #8

HAC members at all levels are eligible to participate in a monthly reading group led online via a telecommunication website by Roger Berkowitz, Director of the Hannah Arendt Center.

For questions and to enroll in our virtual reading group, please email David Bisson, our Media Coordinator, at dbisson@bard.edu.

Friday, May 15, 2015

Bluejeans.com, 11:00 am - 12:00 pm

 

 


privacy con 2015 (temp)SAVE THE DATE - 2015 FALL CONFERENCE

Thursday and Friday, October 15 and 16, 2015

The Hannah Arendt Center's eighth annual fall conference, "Privacy: Why Does It Matter?," will be held this year on Thursday and Friday, October 15-16, 2015! We'll see you there!


From the Arendt Center Blog

This week on the Blog, Jennie Han discusses how Arendt's and Kant's conceptions of critical thinking help open us up to the rest of the world in the Quote of the Week. Albert Einstein provides this week's Thoughts on Thinking. In a special feature, Zelda May Bas, a student fellow with the Hannah Arendt Center, recounts our second "Courage to Be" dinner, during which Professor Uday Mehta spoke on Gandhi. Finally, we visit the Hannah Arendt Collection and peruse a number of books dedicated to understanding the character and political aspirations of Adolf Hitler in this week's Library feature.

The Hannah Arendt Center
The Hannah Arendt Center at Bard is a unique institution, offering a marriage of non-partisan politics and the humanities. It serves as an intellectual incubator for engaged thinking and public discussion of the nation's most pressing political and ethical challenges.
23Sep/130

The False Culture of Utility

Arendtquote

“Culture is being threatened when all worldly objects and things, produced by the present or the past, are treated as mere functions for the life process of society, as though they are there only to fulfill some need, and for this functionalization it is almost irrelevant whether the needs in question are of a high or a low order.”

--Hannah Arendt, “The Crisis in Culture”

Hannah Arendt defines the cultural as that which gives testimony to the past and in preserving the past helps constitute  our common world.  A cultural object embodies the human goal of achieving “immortality,” which as Arendt explains in The Human Condition is not the same as eternal life or the biological propagation of the species. Immortality concerns the life of a people and is ultimately political.  It refers to the particular type of transcendence afforded by political action. In “The Crisis of Culture,” Arendt shows how culture has a political role insofar as it creates durable and lasting objects that contribute to the immortality of a people.

culture

The danger Arendt confronts in “The Crisis in Culture” is that mass culture makes art disposable and thus threatens the political ability of cultural life to produce lasting and immortal objects.  The source of her worry is not an invasion of culture by the low and the base, but a sort of cannibalization of culture by itself.  The problem is that mass culture swallows culture and subsumes it under the rubric of need.  The immortal is degraded to a biological necessity, to be endlessly consumed and reproduced. Durable cultural objects that constitute a meaningful political world are thereby consumed, eroding the common world that is the place of politics.

Arendt’s point is first that mass culture—like all culture under the sway of society— is too often confused with status, self-fulfillment, or entertainment. In the name of status or entertainment, cultural achievements are stripped down and repackaged as something to be consumed in the life process.  She would argue that this happens every time Hamlet is made into a movie or the Iliad is condensed into a children’s edition. By making culture accessible for those who would use it to improve themselves, the mass-culture industry makes it less and less likely that we will ever confront the great works of our past in their most challenging form.  Eventually, the watering down of once immortal works can make it difficult or impossible to perceive the importance of culture and cultural education for humanity and our common world.

However, Arendt does not offer simply a banal critique of reality television as fast-food.  We might recognize a more insidious form of the risks she describes in the new intellectualism that marks the politics, or anti-politics of the tech milieu. What has been termed Silicon Valley’s anti-intellectualism should instead be understood as a forced colonization of the space potentially inhabited by the public intellectual.

The prophets of the tech world see themselves as fulfilling a social and political duty through enterprise.  They unselfconsciously describe their creations as sources of liberation, democracy, and revolution.  And yet they eschew politics. Their abnegation of overt political activity is comprehensible in that, for them, ‘politics’ is always already contained in the project of saving the world through technological progress.

We see such exemplars of technological cultural salvation all around us.  Scholars and cultural figures are invited to lecture at the “campuses” of Apple and Google, and their ideas get digested into the business model or spit back out in the form of TED talks.  Even Burning Man, originally a ‘counter-cultural’ annual desert festival with utopian pretensions, has been sucked into the vortex, such that Stanford Professor Fred Turner could give a powerpoint lecture titled, “Burning Man at Google: A cultural infrastructure for new media production.”  The abstract for his article in New Media & Society is even more suggestive: “…this article explores the ways in which Burning Man’s bohemian ethos supports new forms of production emerging in Silicon Valley and especially at Google. It shows how elements of the Burning Man world – including the building of a sociotechnical commons, participation in project-based artistic labor and the fusion of social and professional interaction – help to shape and legitimate the collaborative manufacturing processes driving the growth of Google and other firms.”  Turner’s conclusion virtually replicates Arendt’s differentiation between nineteenth century philistinism and the omniphagic nature of mass culture:

In the 19th century, at the height of the industrial era, the celebration of art provided an occasion for the display of wealth. In the 21st century, under conditions of commons-based peer production, it has become an occasion for its [i.e. wealth] creation.

The instrumentalization of culture within polite society has given way to the digestion and reconstitution of culture in the form of gadgets meant to increase convenience.  Would-be cultural objects become rungs on the hamster wheel of life’s progress. Progress as the ultimate goal of technological cultural innovation is a vague concept because it is taken for granted due to the self-contained and self-enclosed nature of the industry.  Where it is defined, it is demonstrated through examples, such as the implementation of the smart parking meter or the use of cloud networking in order to better administer services to San Francisco’s homeless population.

In a recent New Yorker article on the tech revolutionaries, George Packer writes, “A favorite word in tech circles is ‘frictionless.’ It captures the pleasures of an app so beautifully designed that using it is intuitive, and it evokes a fantasy in which all inefficiencies, annoyances, and grievances have been smoothed out of existence—that is, an apolitical world.” Progress here is the increasingly efficient administration of life.

When tech does leave its insular environment and direct its energies outward, its engagements reflect both its solipsism and focus on utility, which for Arendt go together.  The Gates Foundation’s substantial investments in higher education impose the quantitatively verifiable standard of degree completion as the sole or main objective, which seems odd in itself, given Gates’ notoriety as a Harvard drop-out.  The efforts of the Foundation aim less at placing Shakespeare in the hands of every fast-food worker, and more towards redirecting all of cultural education toward the development of a cheap version of utilitarian aptitude.  Such tech intellectualism will ask, “What is the point of slaving over the so-called classics?” The claim is that the liberal arts vision of university education is inseparable from elitist designs, based on an exclusive definition of what ‘culture’ should be.

“What is the use?” is the wrong question, though, and it is tinged by the solipsistic mentality of a tech elite that dare not speak its name.  The tech intellectual presents the culture of Silicon Valley as inherently egalitarian, despite the fact that capital gains in the sector bare a large burden of the blame for this country’s soaring rate of inequality.  This false sense of equality fosters a naïve view of political and social issues.  It also fuels tech’s hubristic desire to remake the world in its own image:  Life is about frictionless success and efficient progress, and these can be realized via the technological fix.  “It worked for us, what’s the matter with you?”

tech

For Arendt, culture is not meant to be useful for employment or even the lofty purpose of self-cultivation; our relationship to culture nurtures our ability to make judgments.  Kant’s discussion of taste and “common sense” informs her notion of the faculty of judgment in art and politics.  In matters of taste, judging rests on the human ability to enlarge one’s mind and think with reference to an “anticipated communication with others” and “potential agreement.”  Common sense, as she uses it, “discloses to us the nature of the world insofar as it is a common world.”  Culture and politics are linked in that both can only exist in a world that is shared.  She writes:

Culture and politics, then, belong together because it is not knowledge or truth which is at stake, but rather judgment and decision, the judicious exchange of opinion about the sphere of public life and the common world, and the decision what manner of action is to be taken, as well as to how it is to look henceforth, what kind of things are to appear in it.

That culture and politics are about enacting judgments, rather than truth or technique for the advancement of biological life, is a point that is clearly missed by the tech intellectuals.  The establishment of utility as the sole goal of higher education represents only one section of a general lens through which the world appears only as a series of practical problems to be figured out.  In this paradoxical utopia of mass accessibility, insulation, and narrow-mindedness, applied knowledge threatens to occupy and pervert culture at the expense of political action and care for our common world.

-Jennifer Hudson

The Hannah Arendt Center
The Hannah Arendt Center at Bard is a unique institution, offering a marriage of non-partisan politics and the humanities. It serves as an intellectual incubator for engaged thinking and public discussion of the nation's most pressing political and ethical challenges.
8Apr/130

Amor Mundi 4/7/13

Arendtamormundi

Hannah Arendt considered calling her magnum opus Amor Mundi: Love of the World. Instead, she settled upon The Human Condition. What is most difficult, Arendt writes, is to love the world as it is, with all the evil and suffering in it. And yet she came to do just that. Loving the world means neither uncritical acceptance nor contemptuous rejection. Above all it means the unwavering facing up to and comprehension of that which is.

Every Sunday, The Hannah Arendt Center Amor Mundi Weekly Newsletter will offer our favorite essays and blog posts from around the web. These essays will help you comprehend the world. And learn to love it.

"My Republican Friends Ask if I've Gone Crazy."

frumminiA favorite exemplar of American intellectual is the reformed proselytizer, which in part explains the celebrity of David Frum. A lifelong Republican and official in the George W. Bush administration, Frum was part of the neo-conservative movement. For the last few years, however, Frum has positioned himself as a centrist, the thinking man's Republican. In 2011 he published a manifesto of sorts, breaking with the extremes of his party: "I've been a Republican all my adult life. I have worked on the editorial page of The Wall Street Journal, at Forbes magazine, at the Manhattan and American Enterprise Institutes, as a speechwriter in the George W. Bush administration. I believe in free markets, low taxes, reasonable regulation, and limited government. I voted for John McCain in 2008, and I have strongly criticized the major policy decisions of the Obama administration. But as I contemplate my party and my movement in 2011, I see things I simply cannot support." The full essay is well worth reading today. So is Frum's blog, one of the best. Take a look, and then come hear Roger Berkowitz and Walter Russell Mead talk with Frum in NYC on Tuesday, April 9th, as part of the Hannah Arendt Center's series, "Blogging and the New Public Intellectual." More information here.

What is Poetry For?

poetIn honor of National Poetry Month, The Big Think asked Robert Pinsky, the 39th Poet Laureate of the United States, about The Favorite Poem Project, which he founded in 1997. In the course of the interview, Pinsky speaks about teaching poetry: The best thing I know of about teaching art is in William Butler Yeats' great poem, "Sailing to Byzantium." He says-in the first draft he said, "There is no singing school, but studying monuments of its own magnificence." He doesn't say there's no singing school but going to an MFA program or to Julliard or to Conservatory. He says the way, indeed the only way, you learn singing or any other art is to study, not just sample or be exposed to, but to study. Not just things that are pretty good or not bad or that are in fashion this year, but monuments of the arts magnificence. And that's how you learn something.

Saxifrage

saxIn William Carlos Williams' poem, the Saxifrage is the flower of insight and invention, the flower that "splits the rocks." For Tim Cook (not that Tim Cook for you Apple fans), the Saxifrage School is the two-year old effort to re-imagine college education. The school has no buildings and few permanent staff. "Saxifrage is woven into the bustle of three East Pittsburgh neighborhoods. A graphic-design course is taught in a coffee shop. A course on organic agriculture uses the boiler room in an abandoned city pool house for its seed-starting workshop. Other offerings are computer programming and carpentry & design. The courses are taught by working professionals and craftsmen, and the plan is to hire adjuncts and Ph.D students from traditional colleges to teach humanities classes as they are added." The advantage is low cost and high flexibility. And it is part of a growing trend of alternatives to traditional college education.

The Burden of Fees

hatsMarian Wang points to one of the reasons that college is so much more expensive than it appears to be: fees. Fees amount to a "second tuition" that often means that students end up paying far more than the sticker price for an education. Driven by decreased state support, colleges and universities are using these extra charges as a way to close the funding gap. Wang uses Massachusetts as a particularly egregious example: "At state schools in Massachusetts, where the state board of higher education has held tuition flat for more than a decade, "mandatory fees" wind up far outstripping the price of tuition. At the University of Massachusetts Amherst, the flagship of the UMass system, mandatory fees are more than six times the cost of in-state tuition."

Religion for Atheists

atheiLate last month, The New Statesman asked several thinkers about what purpose religion might serve for an atheist. Among the most popular answers is Karen Armstrong's: "Throughout history, however, many people have been content with a personalized deity, yet not because they "believed" in it but because they learned to behave - ritually and ethically - in a way that made it a reality. Religion is a form of practical knowledge, like driving or dancing. You cannot learn to drive by reading the car manual or the Highway Code; you have to get into the vehicle and learn to manipulate the brakes."

Featured Upcoming NYC Event

frumminiBlogging and the New Public Intellectual

An Ongoing Series of discussions moderated by Roger Berkowitz and Walter Russell Mead.

April 9, 2013 at Bard Graduate Center

 

David Frum, blogger for The Daily Beast & The Huffington Post.

David Frum is back. And he's jockeying to be the front and center of the post-Romney American conservative movement".  - Eddy Moretti

Learn more here.

From the Hannah Arendt Center Blog

This week on the blog, Jennie Han considers how Arendt's idea of critical thinking was influenced by Kant's idea of a "world citizen." Jeff Champlin discusses Seyla Benhabib's essay, "Hannah Arendt and the Redemptive Power of Narrative." And Roger Berkowitz thinks about the line between human and animal consciousness.

The Hannah Arendt Center
The Hannah Arendt Center at Bard is a unique institution, offering a marriage of non-partisan politics and the humanities. It serves as an intellectual incubator for engaged thinking and public discussion of the nation's most pressing political and ethical challenges.
8Aug/120

The Fecundity of the Unexpected

Readers of the Hannah Arendt Center blog are well acquainted with the pension train wreck that is heading our way.  It is not only public union pensions but also those corporate pensions that still guarantee defined benefits that are radically underfunded. And what hides the immensity of the problem is continued unrealistic assumptions about long-term future returns.

As was reported recently, Maryland—to take just one example—continues to assume a 7.75% annual return on its public pensions, which is even higher than the 6.6% 100 year historical average on stock returns.

While there is blame to go around—including feckless politicians and Wall Street hucksterism—the root of the problem may be a general unwillingness on all sides to realize that the last 100 years may have been an aberration. This is the argument that legendary investor Bill Gross makes in a report he sent to PIMCO clients this week.

Gross takes aim at the oft-repeated "truth" that over time stocks will return a real return of 6.6%. He argues that the returns over the last century were predicated on a Ponzi scheme, giving extra returns to shareholders at the expense of laborers (declining real wages) and government (declining real taxes). As those trends reach their limits, it is inevitable, Gross writes, that real returns must decline as well:

The legitimate question that market analysts, government forecasters and pension consultants should answer is how that 6.6% real return can possibly be duplicated in the future given today’s initial conditions which historically have never been more favorable for corporate profits. If labor and indeed government must demand some recompense for the four decade’s long downward tilting teeter-totter of wealth creation, and if GDP growth itself is slowing significantly due to deleveraging in a New Normal economy, then how can stocks appreciate at 6.6% real? They cannot, absent a productivity miracle that resembles Apple’s wizardry.

And it is not only stocks that will suffer. With treasuries yielding 2.55% (less than inflation), it is increasingly unlikely that long term bonds will provide meaningful returns.  The sad result:

Together then, a presumed 2% return for bonds and an historically low percentage nominal return for stocks – call it 4%, when combined in a diversified portfolio produce a nominal return of 3% and an expected inflation adjusted return near zero. The Siegel constant of 6.6% real appreciation, therefore, is an historical freak, a mutation likely never to be seen again as far as we mortals are concerned.

The consequence of these reduced expectations for public and private pension funds (and also for retirees with 401k plans that assume healthy investment returns) are dire. Simply put, throughout society, we are living beyond our means. We are in denial and continuing to make unrealistic investment assumptions. Gross draws the inevitable lesson for pension plans:

Private pension funds, government budgets and household savings balances have in many cases been predicated and justified on the basis of 7–8% minimum asset appreciation annually. One of the country’s largest state pension funds for instance recently assumed that its diversified portfolio would appreciate at a real rate of 4.75%. Assuming a goodly portion of that is in bonds yielding at 1–2% real, then stocks must do some very heavy lifting at 7–8% after adjusting for inflation. That is unlikely. If/when that does not happen, then the economy’s wheels start spinning like a two-wheel-drive sedan on a sandy beach. Instead of thrusting forward, spending patterns flatline or reverse; instead of thriving, a growing number of households and corporations experience a haircut of wealth and/or default; instead of returning to old norms, economies begin to resemble the lost decades of Japan.

We should applaud Gross for saying what many of us suspect: that the efforts of technocrats who populate pension plans to predict future returns is unpredictable at best and more likely subject to rosy biases. And yet even Gross then goes on to assume the tone of an all-knowing sage, something that seems de rigueur for public commentators today. We will solve the problem, Gross assures us, by turning to inflation.

Maybe Gross is right. But whatever the future holds, we must first confront the fact that as things now stand, we face a collective reduction in our wealth. How we respond to the reality of that threat will define the United States in coming generations. Either we can continue to insist that we are a wealthy nation and go on spending and living as if nothing had changed, or we can adjust our expectations downward.

Or we can somehow seek to unleash new forces of wealth creation that would generate the kind of economic growth and social and economic change that will lead to unexpected transformations in who we are.

We should neither take Bill Gross' prognostications as prophecy nor deny the reality he describes. Gross offers merely a hypothesis about the future, something far different from a fact. We do not have an adequate understanding of human nature and human economy to predict the GDP for this year, let alone for 2030. Human spontaneity, chance, and freedom mean that predictions of the future are simply calculations based upon the assumption that such and such will happen if men act rationally and nothing unexpected happens. In such cases it is helpful to recall Pierre-Joseph Proudhon's remark (loved by Hannah Arendt) that "the fecundity of the unexpected far exceeds the statesman's prudence."

Read more from Bill Gross here. You can also read more on Pensions as Ponzi schemes here and here.

-RB

*This post originally appeared yesterday on Via Media.

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