McKenzie Wark on Tue, 21 Aug 2001 03:20:59 +0200 (CEST) |
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<nettime> R is for Reality... |
VECTORAL TIMES / 20th August 2001 R is fo REALITY… McKenzie Wark In this vectoral world, where nothing you can touch matters, and where nothing matters that you can touch, the definition of reality is in the hands of lawyers and accountants. How much money did Lucent Technologies make in 2000? Is it this number, or is it this other number, a mere $679 million lower than the company originally claimed? During boom times, and during the collapse of booms when desperation sets in, reality becomes particularly elusive. Silicon Valley, where the tech boom was born, is now home to one in five "accounting restatements" across the land. Take the case of Indus International, which paid $4.3 million to settle investor law suits concerning its statements of revenue. The company neither confirmed nor denied any wrong doing. It simply ponied up enough green to make the disputes about its version of reality go away. Indus is still under investigation by the Feds, and the current state of accounting reality may soon give way to that other kind of reality, adversarial reality, decided by lawyers in courtrooms. But one group not getting its day in court are investors misled by brokerage firms about the stocks into which they sank their money. The brokers would rather push the disputes into arbirtration, where they expect a more lenient time from a more financially informed panel than from mug jurors in a court case. Not everything is going the broker’s way in artibration, however. Merrill Lynch shelled out $400,000 to settle a case against one of its ‘analysts’. Arbitration panels are ruling against brokerage firms who recommended stocks touted by biased analysts. The brokerage firms that insisted on arbitration rather than a court venue for testing the reality of their machinations may soon change their minds and insist that the courts arethe best place to decide what’s what and who owes who. In the liberal imagination, a public sphere exists in which competing view points slug it out, and the canny citizen can decide for herself what’s what in the world. But in reality, there is no such sphere of consensus reality. When it comes to reality, you get what you pay for. In the go-go world of boomtime business, the device of the stock option gave a financial officer an incentive to make his firm look as profitable as possible. The law is vague enough to encourage a very optimistic interpretation of things like licencing agreements and other such information age instances of what may or may not be ‘revenue’. The somewhat optimistic view on a firm’s revenue might get a further optimistic interpretation by, say, an analyst at a brokerage firm, given that the same firm is in charge of floating the company on the stock market. And so on. The linkage of the work of deciding on the reality, to the profitability of that reality makes for a highly imaginative reality. If there are disputes about this reality, a new reality may be decided by the arbitrators or the courts out of the competing realities spruiked by the advocates, who of course may want a cut of that reality if it goes their client’s way. In the classical liberal understanding of how markets are supposed to work, the competitive market is a reality machine that matches buyers and sellers by measuring flows of desire against flows of what may be desired. It’s a pure, perfect, relativist world. But its proper functioning assumes ‘perfect information’, or in other words, the ability of sovereign subjects to know what is actually going on in the market. If at least the majority of participants know the score, then the market overall will price everything more or less right. Those prices will determine further activities of buying and selling. Which is to say, prices are reality. This was the dream of capitalist society. But we don’t live in capitalist society. We live in vectoralist society. The vectors along which information travels have become commodified to the point where they don’t provide a map of ‘perfect information’ on which buyers and sellers express their desires through their purchases, and align consumption and production along the magic axis of price. Information is itself a commodity. Those able to pay a premium may be able to get the jump on the mugs who put their money down based on what they hear on TV or read in the paper. But the more imperfect the means of distributing information about the market becomes, the more imperfect the market becomes. The door opens to some highly creative legal and accounting definitions of reality. To the vector the spoils. Of course, the market usually catches up with firms who don’t earn what they claim, but not before a good many people have lost a great deal of money. And often enough that money is the retirement nestegg or junior’s college fund. What Thomas Frank calls ‘market populism’ may have persuaded people that we can all participate in the great democratising dream of capitalist society, but many woke up to the nightmare of vectoralist society. The only aspect of the market that has been ‘democratised’ is the downside. Everyone is at risk of sudden redefinitions of reality. Except those able to pay for the most up to date and reliable definitions of reality on which to place their bets. For more on information on vectoralist society, see: A HACKER MANIFESTO 2.0 http://www.feelergauge.net/projects/hackermanifesto/version_2.0/ REFERENCES Karl Schoenberger, ‘When the Numbers Just Don’t Add Up’; and Gretchen Morgenson, ‘Why Investors May Find Arbitration on Their Side’, in Money & Business, New York Times, 19th August, 2001, http://www.nytimes.com Thomas Frank, One Market Under God: Extreme capitalism, Market Populism and the End of Economic Democracy, Doubleday, New York, 2000 _______________________________________________________ mckenziewark@hotmail.com is a temporary address. Please reply to mw35@nyu.edu .... ah, technology.... _______________________________________________________ _________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: majordomo@bbs.thing.net and "info nettime-l" in the msg body # archive: http://www.nettime.org contact: nettime@bbs.thing.net