Magician Argues for the Existence of Magic

Argentina's new president, Javier Milei, hopes to conjure forth the omnipotent Market.

Consider the scenario of people who, having planted their seeds to grow crops, then perform some magical or religious ritual in the hope that this will facilitate a good harvest. The planting of seeds may be considered a rational act, based on the rational belief that the crop will grow (given proper conditions and attention), and the knowledge that the food provided by the crop will sustain their life. Yet to accompany such a rational act of planting seeds with an irrational act of some magical rite to encourage the crops to grow appears to be somewhat incompatible, at least at face value. However, the irrationality of the act of magic misses the point; it is the attending belief to which we should direct our attention.

The philosophers Ian Jarvie and Joseph Agassi thus distinguished between “weak rationality” and “strong rationality”¹; a person could be said to be acting in a “weak” sense of rationality if, even if their act was sincerely directed towards some outcome (i.e., the believed it would work), there was no coherent principle or evidence by which it could work. Conversely, a person could be said to be acting in a “strong” sense of rationality if their action was grounded in a belief based on good evidence. Thus, magical (including religious) rituals and rites could only ever be considered rational in the weak sense because even if the beliefs are sincerely held, there is no coherent reason or evidence by which the desired outcome would occur by those means.

The anthropologist, Sir James George Fraser, articulated a theory of magic according to an ends-means conception; when warriors perform their rituals to invoke bravery, or hunter-gatherers make sacrifices on the promise of a successful hunt and harvest, they do so in the belief that these acts bring about the desired ends. Jarvie and Agassi termed this “a misplaced faith in the association of ideas.”² The thoughts, paired with the right behavioural manipulations, will bring about the outcomes. The implication of such worldviews has always appealed to human cognition because they provide a unifying theory for the occurrence, or not, of events. If the harvest fails, then it is simply a case that the rituals were offered incorrectly, or the powers invoked determined that the people had erred in other ways; if the harvest is bountiful, it is a testament to the benevolence of the powers invoked and the power of the ritual to bring about the desired outcomes. Religion once held a similar position in society, and for many still does. However, the advent of science meant that, eventually, religion ceded its attempt to provide truth-claims as to, for example, the orbit of the planets or the nature of gravity. Indeed, magic and religion were concurrent in the Medieval period, as concepts of demons and divine intervention were considered by their respective doctrines to be rationally explainable, albeit by reference to different causal principles.³

However, the conjurers of contemporary times are not necessarily magicians or religious fanatics, but politicians and academics, the latter most prominent in the social sciences and economics. The social “sciences” may appear more amenable to such a critique given the proliferation of pseudo-academic “something studies” predicated largely upon tautological theories and faith-based premises about the nature of reality. Economics, however, despite constituting a social science, has a way of escaping such a critique, possibly because economists carefully cultivate an image as the Adults in the Room, the suits and seriousness and assumed sophistication, all serving as subterfuge for the reality that these are alchemists at work. Into the alchemy goes untestable hypotheses sincerely held as representative of reality and blended with a mix of unfalsifiable and falsifiable assumptions to produce a potion, known by the grandiose-sounding title of “Economic Model”. Add an infusion of political ideology, and little more than retrospective data to examine the relative success or failure of the potion, and the alchemmists truly represent misplaced faith in the association of ideas. Indeed, our contemporary conjurers would find a home within Fraser’s theory of magic; invoking The Market in the sincere belief that the “thought-enactment”⁴ is sufficient to bring about the desired ends. When The Market appears to find subsequent validation, it is a testament to the prescience of the alchemists and the omnipotence of The Market; where there is a failure then the people have erred and fault must lie elsewhere, as The Market and its assumptions remain omnipotent. In the latter case, the alchemists like to offer a sacrifice to The Market, which they term “austerity”, in the hopes that it pleases The Market and returns them to its benevolent favour.

Sometimes it is possible to see such alchemy at work. So it was recently with the speech by Argentina’s newly elected president, Javier Milei, at the annual World Alchemy Forum in Davos, Switzerland. Milei invoked The Market and chanted incantations in the hopes of conjuring forth some other iteration of the economic catastrophe of the past 40 years, presumably in the hope that this time it would produce the promised harvest. When Milei the Magician exclaimed that “market failures do not exist”, he was merely highlighting that the omnipotence of The Market is beyond reproach, that any failure in the harvest is simply a case of the rituals being conducted incorrectly for The Market to be sufficiently pleased to bestow its benevolent bounty. The precise wording of Milei’s incantations was interesting because in suits and seriousness, as is the custom of alchemists, it could have been mistaken for a rigorous analysis and exposition of replicable evidence. The Wall Street Journal and others predictably thought so, as strong believers in the alchemy espoused by the likes of Milei.

And therein lies the rub; the sciences operate under the principle of falsifiability and seek not only to test assumptions but to remove assumptions from a hypothesis in seeking parsimony, i.e., the fewer assumptions a hypothesis requires, the better a likely explanation the hypothesis provides for the reality it seeks to describe. The economic alchemists, however, are impervious to falsifiability, instead insisting that their assumptions (like “perfect knowledge” or “rational utility”) are universal truths upon which to build their theories, no matter how much such assumptions fail to accurately correspond to reality. Science tests empirical reality to bring us closer to an approximate truth of that reality; economists act as if already possessed of truth and thus have no need to incorporate reality, constructing theory-as-truth. In other words, magic; a cosmology, a “complete theory of the universe.”⁵

There are three themes we could distil from Milei’s incantations: unrestricted free-market capitalism constitutes “freedom”; The Market as the “invisible hand” that must be divisible from the State, and; corporate success as a “social benefactor”, as the only “morally desirable” means to alleviate poverty. The first theme is arguably one of the quietest revolutions to occur within Western democracies in the post-Second World War period; the deliberate conflation of economic freedom with individual liberty. When Milei and his ilk talk about “freedom” and “liberty” they are not talking about individual rights and freedoms, but an environment of unrestricted negative freedoms (i.e., freedom from) for corporations to act in self-interest [read: profits] entirely unimpeded by rights and responsibilities to society. This conflation of economic with individual freedoms inverted the social contract that had underpinned the evolution of post-war democratic capitalism, which was oriented around a positive conception of individual freedoms (i.e., freedom to) in which social freedoms could be realised in the context of economic progress (e.g., State-sponsored childcare to allow women return to the workforce).

These were individual rights and liberties that would not easily be given up, so the neoliberal revolution required a Trojan horse to be brought through the gates of the post-war democratic order, and co-opting the language of individual freedom for corporate ends provided such a horse. Within the Trojan horse hid the consequences for individual freedoms: employment instability, reduced salaries, disembowelled public services, trashed pensions, increased working hours, and gutted social safety nets. These were the requirements to create neo-serfdom, a precarious employment landscape serving the feudal lords of the private sector's oligarchies and monopolies. The idea that this is where individual freedom and liberty are found is as laughable as it is rebuttable. What the likes of Milei et al. don’t appear to have grasped is that we know what happened to Troy once the horse was allowed in, and we’re standing in the smouldering ruins some 40 years after this great socio-economic experiment was unleashed. Yet there he was in front of Davos Man, chanting incantations for a new Trojan horse from the ashes.

The foundation of individual freedoms in our societies is rights-based, not based on abstract economic theories. It takes only a cursory glance over history to understand that the conception of a rights-based social order has absolutely nothing to do with free-market capitalism as an economic model, as the former preceded the latter by about 500 years.⁶ Neither is democracy and free-market capitalism necessary or sufficient for the existence of each other, although there are characteristics of both that may be reciprocally facilitating, e.g., the emergence of capitalism in Western societies from the early 19th Century occurred concurrently with the abandoning of hierarchical and/or hereditary social structures, expansion of rights, and political institutions based on the rule of law and citizen participation. The rights-based conception of individual freedom in early Christian theology was grounded in reciprocal responsibilities, i.e., for an individual’s freedoms to be realised required relational co-responsibility between actors in society, both between individuals and between individuals and institutions. These concepts eventually underpinned the separation of Church and State, among other delineations oriented toward individual freedom.

This is the true ontological and epistemic origin of individual freedoms in Western societies. Understanding this basis of individual freedoms exposes the lack of substance to the nebulous references to “the West” and “freedom” that the likes of Milei and other neoliberal/libertarians invoke, seemingly without the slightest grasp that their conceptualisation of “individual freedom” (read: corporate freedom) is diametrically opposed to the concepts of freedom and responsibility in the tradition they purport to represent. In the neoliberal revolution, removing all responsibility from corporate actors stripped the relational and reciprocal element that held post-war democracy and capitalism together, because individual freedoms could now be trampled on by corporate actors (acting legally, and ironically, as corporate “individuals”). It ensured that the economic gains associated with globalisation, deregulation, financialisation, and tech, would be shared narrowly among a minority, while any disruption to the system would be burdened broadly on the shoulders of the Serfs. Relational co-responsibility was supplanted by unaccountable feudality.

This relationship between democracy and capitalism is also the crucial lens through which to view the second theme that could be distilled from Milei’s speech, expressed as a slightly different dichotomy: that of The Market vs. The State. The past two decades of economic turbulence and the disintegration of democratic institutions have unleashed waves of social discontent that represent the breakdown of the relationship between democracy and free-market globalised capitalism. It is interesting to note that for all the blustering rhetoric of “freedom”, “liberty”, and “the West”, not once did Milei mention the word “democracy”, as the political system in which individual freedoms are best realised. This is also instructive because, for Milei and others of the hard market-fundamentalist variety, democracy is considered an obstacle, an impediment to the pursuit of self-interest.⁷ Their emphasis on unrestricted free markets over democracy illustrates their barely concealed contempt for individual rights and freedoms over corporate interests.

This contempt has, however, been cleverly concealed behind the “Markets vs. State” dichotomy. This dichotomy is a foundational principle of the neoliberal order, which is based on a specific conception of the role of markets and relations with individuals and the State. The essence of neoliberalism is that supply and demand market forces self-correct to create an optimal allocation of resources in society, in turn maximising the welfare of individuals and society. This self-correcting assumption thus requires the minimisation of the State, as The Market is viewed as omnipotent for knowledge on the allocation of resources. When Milei stated that it is “impossible for there to be such a thing a market failure”, he was articulating this view of The Market as omnipotent and self-correcting and, consequently, requiring the State to entirely step aside to create a pure market.

However, the articulation of the core premises of the unrestricted and unregulated model, with the assumptions of a self-correcting omnipotent market, that the model renders itself falsifiable. Take maximisation of human and societal welfare; were the premises of this model to be true, deregulation should have produced Utopia. For nearly four decades, corporations and financial institutions have acted within the freest markets in human history, but have failed to maximise the welfare of individuals and society as a whole. On the contrary, while over the past two decades global inequality, i.e., between-country inequality may have declined, within-country inequality has exploded to the point where low-income groups in Western countries are no longer ranking high in global income distributions.⁸ The economic polarisation of society into groups belonging to very different locations on the global income distribution is a critical driver of political polarisation, with implications for democracy.

Or take the premise of self-correction if markets are left unregulated and free from State interference; were this premise to be true, calamitous financial crashes like 2008 should, in the “theory” of the alchemists, never occur. Yet the myth of self-correction has also been repeatedly falsified by the lurching from one financial crisis to the next, culminating in the global crash of 2008. In contradiction to Milei’s absurd assertions, the only replicable aspect of the neoliberal model is market failure, repeated cycles of boom and crash. And take the premise that the market is always more efficient than the State in self-selecting the “winners” and “losers”, and requires no intervention from the State. This is perhaps the most obvious model falsification, also provided by the 2008 crash with the fact that enormous corporate enterprises ran to the State to be saved from their own free market. If The Market is perfect when the State steps aside, then the mass financial intervention by governments to save failing banks provides a full repudiation of the very core of the neoliberal model; it was the intervention by the State that allowed for the private sector to solidify its power in The Market.

This point is crucial to understanding the difference between the end of the demand-management post-war model and the survival of the unrestricted neoliberal model; the former only failed because there was no longer the political will to sustain it⁹, while the latter has only survived because of the political sustenance of the State. Once the “Market vs. State” dichotomy is recognised as a clever smokescreen, it becomes necessary to inquire what purposes the smokescreen could be masking. As Colin Crouch in particular has drawn attention to¹⁰, that purpose is the triumph of the giant corporation over economic competition and the ultimate concentration of corporate monopoly power. To Milei et al., this is the true project of their economic Utopia. And this is why deregulation is at the core of the project. Prior to the advent of the neoliberal model, the concept of economic competition in a free market was seen as a process, and the State played a role in maintaining a large number of competing businesses through antitrust regulations to avoid concentrated monopoly power. This economic goal was also viewed as having political implications, the recognition that concentrated economic power would translate into political power given the nature of democratic institutions.

Under the deregulated and unrestricted neoliberal model, competition came to be viewed not as a process, but an outcome, one in which the elimination of small-medium business and concentration of corporate power in giant corporations was viewed as a natural, and justifiable, result of success in The Market. This was recognised specifically concerning BigTech in the U.S. in the report of the House Antitrust Subcommittee, which concluded that tech monopolies control access to markets, determine “winners” and “losers” in markets, and control the dissemination of information that is crucial not only to competition in markets, but to the political process itself. This latter horse is one already bolted from the stable; corporate power is an insider in the political process, further rendering the idea of a separation between “Market and State” as merely a rhetorical ruse. What this ruse masks is that corporate monopoly giants are increasingly now bigger than the State and exercise the powers of a State in influencing markets, trade, employment, and the political process itself.

This brings us to the third theme of Milei’s speech, that of corporate success as a net “social benefactor”, and the only the only “morally desirable” system through which to achieve benevolent social ends. This again conflates capitalism with democracy in such a way as to portray an unrestricted free market as the only means of achieving socially and morally desirable outcomes. A comparison between post-war social democracy and contemporary neoliberal oligarchy reveals this argument to be devoid of substance, socially and morally. Only the social democratic model has managed to combine governments and markets to avail of market efficiency while protecting a working class that, lacking property ownership, is more vulnerable to market predation and unpredictability. The interdependence of capitalism and democracy was predicated upon this post-war compromise and the creation of a secure working class that could also participate as consumers in the market economy to the benefit of both.

This compromise constituted an acknowledgement of the relational responsibility of actors, individual, corporate and institutional, in society. The neoliberal model removed the relational aspect of society, thus removing the duty to be responsible, i.e., by removing positive freedom obligations to act with wider moral implications in mind. Stripped of any corporate requirement for responsibility, concepts like morality and justice were deliberately divorced from corporate interests and market behaviour. There was nothing “morally desirable” about the behaviour of financial institutions that crashed in 2008, nor the austerity policies that followed in heaping punishment on the working class. There is nothing “morally desirable” about giant corporations using sweatshops and child labour, or energy companies declaring windfall profits while a population struggle to heat homes and eat. There is no “social benefactor” in an economic model that dismantles and offshores industries, slashes wages, abolishes unions, guts healthcare systems, and trashes public education systems, in an unrelenting assault on its working class and, now, middle class citizens. Milei’s vision of unrestricted neoliberal and libertarian ideology represents a form of social atavism. To quote Crouch:

“…when, as happens when neoliberal ideas dominate, market principles are erected as the principal standard of judgement for virtually all institutions, amorality spreads right across social life.”¹¹

But alas. The alchemists will chant their incantations in the sincere belief that speaking the words aloud will bring about their desired ends. Strip away their thin-skinned conception of freedom and liberty, and those desired ends a clear: a brand of corporate power that can supplant the State itself and subvert democracy, the actual political model of freedom.

1. Jarvie I.C.,  Agassi J. The Problem of the Rationality of Magic. The British Journal of Sociology. 1967(18):55-74.

2. Ibid.

3. Kieckhefer R. The Specific Rationality of Medieval Magic. The American Historical Review. 1994 Jun;99(3):813-836.

The early church also deliberately incorporated elements of paganism from cultures it was converting, including significant calendar days and elements of ritual.

4. Jarvie and Agassi (note 1).

5. Ibid.

6. This would depend on the definition applied to capitalism; one could argue that the foundation of the Dutch stock market in the early 17th Century marks the beginnings of the capitalist model, and one could argue that modern capitalism, as we might recognise it today based on market exchange and property rights, emerged in the early 19th Century. Either way, the Christian theology of individual freedom and its expression in canon law developed over a long trajectory but was largely established by the 12-14th Centuries.

7. Note how many neoliberals/libertarians drool over Singapore, a country graded as "partly free" by Freedom House, and in particular that the petri dish for the neoliberal experiment was the CIA-installed dictatorship of Augusto Pinochet.

8. Milanovic B. The Great Convergence: Global Inequality and Its Discontents. Foreign Affairs. 2023;July/August:78-91.

9. The abandonment of post-war Keynesiansim primarily occurred in Britain and America; it survived, in varying degrees, in the Nordic countries, the Netherlands, and Germany, with “varying degrees” meaning a reflection of the extent to which government is deployed with markets to avoid dramatic economic shocks and sustain a minimum social standard that cannot be achieved through markets alone. Zu viel Markt wie möglich; zu viel Staat wie nötig (“As much market as possible; as much State as necessary”).

10. Crouch, C. The Strange Non-Death of Neoliberalism. Cambridge: Polity Press, 2011, pp.49-70.

11. Ibid. p.25.