The tax state and entrepreneurial profit

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December 12, 2017 by AK

Corey Robin, the author of The Reactionary Mind, wrote on Crooked Timber:

Schumpeter famously said that taxes are the “thunder of world history.”

In The Guardian, he put it this way:

Taxes are the “thunder of world history,” wrote Joseph Schumpeter. “The spirit of a people … is written in its fiscal history.”

Schumpeter’s 1918 essay, Die Krise des Steuerstaats (The Crisis of the Tax State), is available at archive.org free of charge, but in the original German. One can also find an English translation at scribd.com. The sentence concerning the “thunder of history” can be found on page 7 of the original article:

Wer ihre Botschaft zu hören versteht, der hört da deutlicher als irgendwo den Donner der Weltgeschichte.

“Ihre” refers to “die Finanzgeschichte,” commonly translated as “fiscal history.” If I understand him correctly, Schumpeter is saying this: If you have the ears for the message of fiscal history, you should be able to hear the thunder of world history the most clearly.

This 1918 article is an investigation into the emergence of the fiscal state and the limits of the taxman’s reach. However, it also includes a reference to what would become one Schumpeter’s central ideas.

Entrepreneurial profit proper… arises in the capitalist economy wherever a new method of production, a new commercial combination, or a new form or organization is successfully introduced. It is the premium which capitalism attaches to innovation. As it arises continuously so it disappears continuously through the effect of competition… Even if taxation merely reduced this profit substantially, industrial development would progress considerably more slowly…

However, Schumpeter does not yet recognize it as a special case of the monopolistic profit:

The monopoly profit of a cartel, for instance, that is the difference between the net return and the sum which is necessary to pay for the means of production employed (including interest) may be almost completely taxed away without any unfavorable repercussions. So can pure ground rent…

The Economist ran a good summary of this work in this article, published in 1983 to mark Schumpeter’s centenary. The review makes for much more satisfying reading than Schumpeter columns in The Economist nowadays – such as this one, where the author attributes Schumpeter’s ideas to Ayn Rand.


The sleeper-waker

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December 9, 2017 by AK

“If one uncouples the last car from a train, the train will have no last car.” This pseudo-paradox is supposed to illustrate a certain property of natural languages. “Russia’s next president will be Vladimir Putin” is based on a similar, if inverted, logic, but few Russians experience it as a paradox. A case of bad infinity, rather – not in Hegel’s sense, not even in Dostoevsky’s, but in the simplest, most literal sense: it’s bad and feels like forever.

Dmitry Bykov is an extremely prolific Moscow-based writer, poet and all-round pundit. He used to produce excellent poetry and prose. His literary erudition is beyond belief. On the other hand – to put it uncharitably – he reads a lot, writes a lot, talks a lot but understands relatively little, although in view of the humongous amounts of textual fodder he consumes, “relatively little” could be quite a lot in absolute terms. At his best, he’s a grandmaster of inspired nonsense. At his absolute best though, he can get me to agree with him – up to a point:

Putin guarantees a relatively comfortable decomposition to the country, and the country is ready to pay dearly to prolong this comfort. Strictly speaking, it has nothing to pay with already. It would have to exert too great an effort to break this trend. Its current priorities are degradation, pushing out (not physically destroying, thank God) dissidents, and slow decomposition. It regards all other options as too bloody and bothersome to boot.

A while ago I wrote about a parallel between the country in its present state and Mr. Voldemar from Edgar Poe’s short story The Facts in the Case of Mr Valdemar.

Monsieur Valdemar, actually: M., not Mr. I read that story, in translation, at 12 or 13. Around that time, my best friend admitted that the tale gave him the creeps, being frightening and disgusting at once. It failed to raise my hackles then but it’s a high-quality horror story by most accounts:

The narrator of the story is a hypnotist who believes that mesmerism will preserve a dying person on a plane of consciousness and “the encroachments of death might be arrested by the process”. He decides to test the technique on a dying patient…

It works, in a way: the patient is put into a coma or a similar state. As Poe’s narrator explains:

It was evident that, so far, death (or what is usually termed death) had been arrested by the mesmeric process. It seemed clear to us all that to awaken M. Valdemar would be merely to insure his instant, or at least his speedy dissolution.

Seven months later, they try to awaken Valdemar despite this deadly certainty. The “speedy dissolution” that follows is worse than anything the experimenters expected. “…[H]is whole frame at once… absolutely rotted away beneath my hands. Upon the bed… there lay a nearly liquid mass of loathsome—of detestable putridity.”

I can’t argue with Bykov on this: Russia’s frame – its social compact, economy, and governing bureaucracy – might, after years of lifeless existence, decompose at some unexpected point, “within the space of a single minute, or even less.” On the other hand, the Russian society is larger and more varied than Bykov’s native segment, or mine to that matter, and its apparent unresponsiveness to political and economic stimuli, mostly negative of late, could be a sign of wintertime hibernation, not deathbed catatonia.


Which emperor, though?

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December 7, 2017 by AK

Yelena Suponina writes in Forbes Russia about Trump’s recognition of Jerusalem as the capital of Israel:

Trump has approached it [the problem of Jerusalem] with the sangfroid and superciliousness of a Roman emperor, who is not supposed to seek insight into his vassals’ petty squabbles for some overseas territories. He is not ready to untangle this ball of yarn but is full of bravado to cut it apart straight from the shoulder. Being emotionally estranged from the problem is helping Trump not to dwell on the dangers of this blow.

It’s a bit of a stew with medieval vassals, Roman emperors and Alexander the Great mixed in together. Anyway, the image of an aloof and all-powerful Rex Regum is amusing, especially if the author is not familiar with the God Emperor meme.


Through a fen to the pit

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December 3, 2017 by AK

I’ve never listened to AC/DC, but let’s say I grew up with it. At school and at college, every other desk bore a semblance of their logo – carved, scratched, inked, penciled. (I’m talking about late-Soviet Moscow, to be clear.) Everybody pronounced the name IS-sy DIS-sy or EES-sy DEES-sy – I still don’t know why. There was something demonic, forbidden about the band: someone had died among them, whispered kids in the know.

Come Perestroika, AC/DC and other hard and heavy groups were soon heard on the radio and seen on TV. I remember “young pioneer” Angus Young doing a duck walk, and one line still rings in my ears, muffled now but piercingly half-yelled, half-squealed then.

While I suspect that AC/DC’s best-known song establishes Russia’s current direction pretty accurately, the country’s pitward path is more of a long and winding road. Of the “ordinary Great Russian country road,” Vassily O. Klyuchevsky wrote in his History:

What in all the world could by more dilatory and tortuous in its progress than it? Yes, try to go straighter than it does, and you end either by losing your way altogether or by finding yourself back in its sinuous windings.

There will be hope-inspiring twists and false reversals, like dead cat bounces in the stock market. Some things have actually improved along the way: lower inflation, better public transport, online tax filing and internet banking. After all, no one can say with perfect certainty where it will end, nor whether Hades’s Trans-Scythian regions will be immediately recognized as such upon arrival. At least my foes are gonna be there too.

Much better to lose our way altogether.


Jayda Fransen’s “hate crime(s)” as 1st Amendment-protected speech

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December 1, 2017 by AK

President Trump has retweeted three videos posted by Jayda Fransen, an English anti-Muslim activist. It has been reported that Fransen has been convicted of a “hate crime” and charged with two others in the UK. Closer inspection reveals that the laws she has purportedly broken are mildly Orwellian – with apologies to Ben Judah. The “hate crimes” she is being charged with seem to have been instances of political statements made in public, possibly in an offensive manner – the kind of speech that would be protected by the First Amendment of the US Constitution.

According to Wikipedia’s summary of Fransen’s conviction, in November 2016…

….Fransen was convicted of religiously aggravated harassment after she harassed a Muslim mother-of-four because she was wearing a hijab and ordered to pay a fine of £1,000. In addition, she was also fined £200 on account of breaching the Public Order Act 1936 by wearing a political uniform and ordered to pay £620 in costs (including a £100 surcharge)…

From other sources, it is clear that the alleged harassment occurred during a verbal altercation and involved no threat of violence. This case, however, is complicated by the allegation that Fransen approached her involuntary interlocutor against the lady’s wishes, which would push this case from the freedom of speech area into disorderly conduct territory.

The charges currently pending are these, according to Wikipedia again:

In September 2017, Fransen was… charged with religious harassment. Their arrests followed an investigation by Kent Police into the distribution of leaflets in the Thanet and Canterbury areas, and the posting of online videos…

Here, the offending acts involved the distribution of verbal or visual information (leaflets and videos) to the public – a criminalized variety of political speech.

On 18 November 2017, Fransen was arrested in London by detectives from the Police Service of Northern Ireland following a speech she had made at a rally held outside Belfast City Hall on 6 August. She was charged with employing “threatening, abusive or insulting words or behaviour”…

We’re dealing with a speech at a public rally here, so the imputed offense is a speech crime, as it were.

If I understand correctly, offensive speech was criminalized by the 1986 Public Order Act. It has been amended several times, with new varieties of prohibited speech being introduced, but it remains the legal root cause of “hate speech” prosecutions. The Act does not distinguish between a pack of drunks hurling racial slurs at a passer-by and a speech at a peaceful gathering. All that matters is the content of the speech: if it’s deemed abusive or threatening, even potentially, the speaker has broken the law.

The US, in contrast, has the First Amendment. Every now and then, some state or federal statute gets struck down by a court as violating the free speech clause of the US Constitution. (See, for instance, Prof. Eugene Volokh’s latest post, “Ban on speech ‘about a person’ that negligently causes ‘significant mental suffering, anxiety or alarm’ struck down.”) Recall Fred Phelps and his crazies holding “God hates fags” signs at Matthew Shepard‘s funeral and, later, at the burial of an American Marine killed in action in Iraq. The later gave rise to Snyder v. Phelps, in which the Supreme Court affirmed the homophobes’ right to speak out without getting sued for the hurt caused. In general, it can be said that hate speech, as long as it’s political and public, is protected speech in the US.

However, while federal and state authorities may not restrict speech based on content, they have the right to outlaw certain ways of speaking. Understandably, it may be against the law to stop passers-by to yell insults at them. If Fransen accosted the Muslim lady in the street and subjected her to an unpleasant harangue, that could be an offense again public peace and order under state-level laws in the US.

It is the third, the latest charge against Fransen that is particularly alien to the American legal tradition. Getting arrested for something you said at a public rally smacks of WWI persecution of pacifists and of Eugene Dobbs’ imprisonment.

To sum up, if someone pointed out (again) to President Trump that Jayda Fransen has been convicted of a “hate crime” and is charged with two more in the UK, he could simply say that “hate speech” is no less protected by the US Constitution than love, peace and harmony speech, and that’s not negotiable.


“I was more wicked than I had imagined”

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November 29, 2017 by AK

Last week, Ben Judah wrote in The American Interest:

Why is it always Orwell o’clock? Why is everything mildly unpleasant about government instantly Orwellian? Why is every banal propaganda effort obviously 1984 sprung to life?..

Most of the Orwell cult only irritates, but one thing legitimately grates: the idea of Eric Blair as a monument to British decency.

Agreed. The whole “What would Orwell do?” business is a joke. St. Eric’s relics have petrified into crutches and cudgels. Admit it – good writers tend to be doupleplusunnice. So do bad readers: half the comments to Ben Judah’s piece are a variation on “who are you to insult the Great Martyr?” (My comment is here.) Sad or amusing, it’s all barely relevant to the man’s output.

Why read Orwell? “For to admire? Nah, for to see,” to mangle a good bad poet. There isn’t much to enjoy in 1984 or in Such, Such Were the Joys but if one has nothing to learn from them – at all! – one must already be enlightened beyond belief. There’s even something to envy – for instance, the way Orwell retraces the birth of Calvinism from the miasma of an English prep school:

It was possible, therefore, to commit a sin without knowing that you committed it, without wanting to commit it, and without being able to avoid it. Sin was not necessarily something that you did: it might be something that happened to you. …this was the great, abiding lesson of my boyhood: that I was in a world where it was not possible for me to be good… Life was more terrible, and I was more wicked, than I had imagined.

Or take the mats and cale:

The hallway smelt of boiled cabbage and old rag mats.

I’m convinced both odors had traveled from St. Cyprian’s, 1914, to London, 1984. But, coming from another time and place, I recognized at once the smell of boiled vegetables and dirty rags. Simple, ugly, working, Orwellian.

Going back to Ben Judah’s article, it’s probably fair to say that he doesn’t much like either Orwell the writer (“boring”) or Orwell the man. Not to argue about tastes, if one insists on judging Eric Blair, one would do well to measure his prejudices against those of his peers, of his time and class. As a fan of V. S. Naipaul in particular, Judah could cut Blair some slack when it comes to personal imperfections.


Tchaikovsky’s civil service career: an early advantage

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November 26, 2017 by AK

I’ve spotted this little detail in Wikipedia’s article on Tchaikovsky;

On 10 June 1859, the 19-year-old Tchaikovsky graduated as a titular counselor, a low rung on the civil service ladder. Appointed to the Ministry of Justice, he became a junior assistant within six months and a senior assistant two months after that.

The rank of titular counselor was hardly “low” for a young man entering civil service – it was probably the highest possible for a 19-year-old. In the Table of Ranks, the titular counselor belonged to Class 9 – five rungs above the lowest rank (14), and five below Class 4, which conferred hereditary nobility.

The entry rank for a civil servant depended on his parentage and education. An uneducated member of an unprivileged class would be required to spend years in the civil service before being allowed to take an exam for the lowest rank, Class 14. A graduate of a classical gymnasium would be accepted without an exam but only with a Class 14 rank (“collegiate registrar”). University graduates with a high enough grade average received a Class 10 rank automatically (“collegiate secretary”).

Moreover, honors graduates of select colleges – including the St. Petersburg School of Jurisprudence, from which Tchaikovsky graduated with mostly “excellent” and “very good” grades – were eligible for Class 9 as their entry rank.

Thirteen years earlier, Konstantin Pobedonostsev had likewise graduated to enter civil service as a titular counselor. One year before Pobedonostsev, Dmitry Nabokov (the writer’s grandfather) had finished the School and started service as only a Class 10 chinovnik but went on to become minister of justice and the father of the great legal reform. Nabokov and Pobedonostsev didn’t like each other much; the latter engineered the former’s resignation in 1885. In terms of the Table of Ranks, both reached the highest available to a mortal, the full (“actual”) privy counselor, Class 2.

As a graduate of an elite school with a mission to produce highly educated and motivated civil servants, Tchaikovsky had a good shot at a successful career at the Justice Ministry, so the opportunity cost of resigning and switching (in 1863) to studying and, later, teaching music was considerable.

On the other hand, the Russian Wiki says that, despite effectively leaving state service in 1863, Tchaikovsky only resigned formally in 1867, by which time he had finished his studies at the St. Petersburg conservatory and accepted a professorship at the Moscow conservatory. Moreover, seven years after joining the Justice Ministry, in 1866, Tchaikovsky was promoted to “court counselor,” a Class 7 rank, corresponding to lieutenant-colonel in the army. He was only 26.

There was, of course, a world of a difference between a 19-year-old and a 50-year-old titular counselor – a promising graduate and a… Let’s say two of the saddest losers in Russian literature – Akaky Akakievich Bashmachkin from The Overcoat and Semyon Zakharovich Marmeladov from Crime and Punishment – were both titular counselors. I’m not sure of Akaky Akakievich’s age but Marmeladov was past 50. There’s a hint somewhere in the novel that Marmeladov came from a modest background so his civil service rank is not so pathetic considering this as well as his likely inadequate education.


It didn’t start in 1917

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November 23, 2017 by AK

The organizers of Revolution: Russian Art 1917–1932 – the London show mentioned in this post – seem to believe that Russian arts burst into dazzling blossom in 1917 as the revolutionary spring ushered in a kingdom of liberty:

…we will mark the historic centenary by focusing on the 15-year period between 1917 and 1932 when possibilities initially seemed limitless and Russian art flourished across every medium.

Russian art was already flourishing across every medium in 1913, before the great wars and revolutions. Since the London exhibition seems to focus on Malevich, it’s worth remembering that the first version of The Black Square appeared in public in 1913, as part of the stage set for Victory over the Sun, an avant-garde opera by Mikhail Matyushin (music) and Alexey Kruchenykh (libretto).

As I’ve said in one of the Someone 1917 posts, the events of 1917 broke out in the midst of a golden age for Russian visual and performative arts. Actually, the Moscow exhibit makes it more or less clear that relatively few creators perceived the revolution as a chance to finally start some artistic project impossible under the old regime. It also helps to bear in mind how many artists left or declined to return to Russia in 1917-1932.

On the other hand, enough of them stayed behind for the cultural milieu to linger on for a while and to raise a new generation of competent artists to serve the needs of the Soviet state. The unasked question is how Russian arts would have fared in 1917-1932 under a less murderous and divisive regime. 


“Someone 1917”: Boris Grigoriev’s portrait of Nicholas Roerich

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November 21, 2017 by AK

I can’t recall whose portrait, and by whom, this visitor is photographing. However, the painting to the right of it is the 1917 portrait of the Russian Futurist poet Vasily Kamensky by another famous Futurist, David Burliuk. (Here’s another image of Kamensky by Burliuk, from 1916.) The painting on the left must be this portrait, also dating from 1917.

I believe I first saw it in a journal as a child and my first reaction was, “who is this, Lenin?” Two weeks ago, I had the same reflex at an art exhibit. It is, of course, a portrait of the painter Nicholas Roerich (Nikolai Rerikh) by Boris Grigoriev. It is probably worth adding that Grigoriev, who fled by boat to Finland from St. Petersburg in 1919, continued to paint until the late 1930s, but was underappreciated in Soviet Russia even in the 1970s and the 1980s, when émigré artists were no longer seen a pariahs. Nevertheless, his portrait of Vsevolod Meyerhold (the last two images on this page), if I remember correctly, was  much reproduced in Soviet times, as part of the Russian Museum’s collection.

As for Nicholas Roerich, I’m tempted to ascribe his pseudo-Leninesque appearance to Grigoriev’s prescience of that family’s – mostly Elena Roerich’s – bizarre attempt to link Leninism and Buddhism, a few years after the revolution. But that would obviously be facile and superficial. Grigoriev’s work stands out in the long row of Roerich portraits, a class of its own compared with the earlier images by Golovin and Kustodiev, with David Burliuk’s NYC painting and drawing (1929) and with the numerous portraits of their father painted by Sviatoslav and Yuri, Nicholas’ sons.

[Update.] This post includes a better reproduction of the 1917 portrait (and a lot of other Grigoriev works): scroll down – it’s right above Rachmaninov. One imagines the artist – the subject – was caught in a moment of uncertainty, indecision, introspection (so he’s avoiding eye contact), at a crossroads perhaps, unlike his later depictions as a Himalayan sage.


This is not the Red Army

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November 21, 2017 by AK

In the London Review of Books, T.J. Clarke reviews Revolution: Russian Art 1917-32, an art show put on by the Royal Academy in London. His review is illustrated, among other images, with this photograph, captioned “The Red Army with the black square.” It gets at least one of the colors wrong.

This cannot be the Red Army: the servicemen in the foreground are pictured wearing shoulder boards. Their absence was a distinguishing feature of Red Army uniforms during the Civil War. Old-style shoulder marks were anathema, sometimes a rage-inducing red rag, to the Reds in the early years after the revolution. It was only in 1943 that shoulder boards were re-introduced, so that at the end of WWII Soviet army uniforms resembled the imperial army of 1916 more than the Red Army of 1920.

In addition, everyone in this photograph seems to be wearing peaked caps, and soldiers in the background have rolled-up greatcoats over their shoulders. Both would be typical of the Russian army during WWI, prior to October 1917, but not of the Red Army in the Civil War years.

A Google image search reveals that the photograph shows servicemen of the 39th Tomsk infantry regiment and the scene depicted is a political meeting in 1917 – apparently in summer, between the February and October revolutions. The officers in the foreground seem to be skeptical of the men with revolutionary slogans and the black – or red? – square. With good reason, considering the likelihood of being killed in the next 5 years for a commissioned officer in this army.

Curiously, the regiment’s “chef” – which probably means “patron” or “honorary colonel-in-chief” – was the Austrian archduke Ludwig Viktor, from 1873 until, I imagine, the start of WWI. Wikipedia’s English entry on this gentleman, nicknamed Luzi-Wuzi, uses amusing archaisms such as “homophile soirées” and “transvestitism.” James Conway at Strange Flowers has written about Ludwig Viktor’s (mis)adventures here and here.


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