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Re: <nettime> A Movement Without Demands?
Ed Phillips on Fri, 13 Jan 2012 01:44:27 +0100 (CET)

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Re: <nettime> A Movement Without Demands?

ïI'm sitting here reading yet another interesting thread on nettime,
reflecting on the fact that this little watercooler on the nets is a
more enduring institution than many large ones of Internet era
discourse and finance. We can all print money as Minsky says, 
but to find a place where freshly minted thoughts or coins are accepted and
used is something. I am thankful for that.

Part of the appeal of this list to me is that we can discuss what
Keith calls the banal. I find it helpful to rehearse what we "already
know" so that some shared understanding starts to emerge. And one person's
banality may be another's new way of thinking as well, or new twist on an
old story. I found Jodie's and snafu's discussion of demands to be very
helpful, for example.

In an earlier thread, in a conversation with Keith, we started to
discuss the relations between profit, interest, and rent in the
capitalist system. On that note, I found an interesting remark from
Claudio Napoleoni in 1970 in which he states that in an advanced money
economy under so-called Keynesian conditions "interest cannot be
regarded as a reward which is necessary to the production
process. Interest instead takes on the nature of a rent, which is how
Keynes in fact saw it. Thus, the characteristic capitalistic income is
reduced in status to an income typifying a pre-capitalistic economy."

It does not fit capitalism's self image to be seen as an old
pensioner living off of interest, nor a parasite
collecting rent by squatting on the commons. Propping up the
image of the capitalist as great risk taker, as heroic entrepreneur, or
even as smart investor in production seems vital to the system itself. It
increasingly looks more and more a farce. Farced up, stuffed,
propped up. And we arrive at demoralization the more obviously the
system is propped up and the more that losses are openly socialized.
A moral lassitude is evident that is as damaging as any devaluation,
or perhaps more damaging, in that it gives the lie to the system
itself. Not only the self-validation of the system but also the
motivation of groups and individuals within it is at stake if the only
reasonable, viable option for return is rent seeking or tax farming.

Discussions of interest, rent seeking, and tax farming are particularly relevant during this time of 
a structural crisis in capitalist finance. During times of extreme
uncertainty, financiers will tend to hold a premium on liquidity and
on the preservation of capital, which is exactly what the steersmen do
not want or need. In the parlance of finance such a flight to safety is what is
termed pro-cyclical. In other words, and this is laid out by Keynes and
others, the very uncertainty of crisis conditions exacerbates the

As Minsky said investors or capitalists if they are to invest or use their capital, will use or will
seek some kind of protection from uncertainty or market forces. In
other words, and especially during times of uncertainty, investors will seek safe
haven returns in protected spheres. 

And if interest has been brought to zero in an effort to prop up asset
prices and to forestall devaluation, then rent-seeking and tax farming
become even more vital to survival even as they are more obviously
alienating and demoralizing. They obviously not capitalist, or not a
pretty or heroic version of capitalism.

Chief amongst the rent-seekers and demoralizers, the center of the
moral lassitude, and of the farce, are the big banks, the very large banking
entities that are deemed systemically important enough to receive
subsidy and lender of last resort support. These very large banking
enterprises can be and are described as rent seekers who use the implicit
guarantee of the policymakers to validate and support their worth,
even if they are technically insolvent. They also give the lie to idea
that somehow capitalism in aggregate promotes efficiency or efficient
markets, as inefficiency is purposefully promoted in order to forestall
devaluation and insolvency in the center of the financial system.

The big banks are the other side of the coin of the public markets;
they sell volatility insurance and underwrite the insurance of capital
markets, and then they get bailed out when they cannot pay on the
insurance (Taleb). Rent-seeking emerges here at its purest and as it becomes clearer in
form, it becomes even more demoralizing.

Paul Sweezy, of kinked demand curve fame, was looking at a similar
world in the late 30's when he first started writing about monopoly
capitalism and monopoly rent and about the ensuing stagnation of
bureaucratic big business capitalism.

Kenneth Burke wrote in 1937 that monopoly capitalism had given up the
lie and that the then current socialization of losses had already
created a situation in which the "casuistic stretching" necessary to
validate capitalism to itself had already reached the level of
untenable farce and that a new collectivist era may be in the offing.

The following great war and subsequent hegemony of a Washington
consensus capitalism actively promoted a myth of a kind of heroic
capitalism that was already in the rear view mirror. It was able to
keep growing and to route around chaos in ways that are now history.

And here we are in another great demoralization, up against even
greater limits for capitalism itself. And tax-farming looks like a last
great business model. Except for the fact that government spending has
also reached limits to its growth. Oops.

At any such time as any system cannot validate itself on its own
terms, it should have need of either "casuistic
stretching" (Burke's term) in the best case or outright obfuscation or magical, self
-immolating action in the worst case.  One can look at the actions of the "system"
in response to the crisis and see an opacity, innate inefficiency, and
fetishism that would rival any parody of a cargo cult. Policy and
booster response to the crisis looks like revivalist ritual, ineffectual and demoralizing.

We all of us share in the reality of the crisis, although many will
suffer much more severely than others the effects of the crisis and
the effects of efforts to maintain the status quo. 

It may seem bizarre to honest observers that capitalism, which has
been lurching from crisis to crisis and by some views has ever been in
continual crisis, could have ever produced a congratulatory self
commentary that purported to have escaped the business cycle and to
have produced a kind of great moderation in which technocrats could
use monetary and fiscal means to produce "soft landings". In the risk
of sounding banal, as Keith Hart says, that view has been completely
discredited. It is hard to measure and I suspect that it's hard to
underestimate the shattering effect of uncertainty on the previously
complacent. Every person, whatever the status, has felt the effects of
this crisis and that is surely one of the starting points for

If we take it as a given that commentary and discussion both about
the implications of the crisis and about what current conditions of
contemporary capitalism are will be extremely distorted and will at
all costs avoid any discussion of the difficulties or contradictions
that are evident, then we will have to look at the edges of discourse,
at the lacuna, at the places of denial in mainstream and official

For example, in the interview with Steve Keen that was posted to
nettime, the interviewer brought up the subject of moral
hazard. However, the subject of moral hazard was only brought up in
discussion of the effect of a debt jubilee on borrowers. No mention
was made of the fact that the whole discussion of
moral hazard has arisen out of a history in which the most
damage has been created by continual bailing out of
banks and investors in the saddling of loss on the public. It is, in
this historical context, obscenely obfuscating to use the language of
moral hazard to talk about the potential effects of socializing
the losses of individuals and not of of the financial system and its
representative zombie banks.

We can see the same kind of obfuscation in the fear that individual
borrowers will create a condition of moral hazard if their loans or
debts that they cannot repay are forgiven. One excellent quote from
Steve Keen in the interview was the statement that, "any debt that
cannot be repaid will not be repaid". 

Another point of commonality can be and is the precarity of
labor. In the developed world the credit bubble masked many
of the problems attendant to the precarious state of labor. This may
be a way of beginning to talk about the enormous social and political
costs that will ensue with this continued global crisis. If history and the
mismatch between commentary and reality are any guide then the
conditions will continue get extremely difficult even as policymakers and the
commentariat refuse to discuss the truth or the implications of the

There's a good chance that things will get a lot worse and that as John
Gray has said a new kind of Gresham's law is in order in which the
socially responsible varieties of capitalism will be pushed out by
a "race to the bottom" in which "more humane capitalist economies are
compelled to deregulate and trim back taxes and welfare provisions."
(John Gray. False Dawn, page 218, 1998).

That last sentence sounds funny because most countries have already
reached the limits of deregulation and of incentivizing anemic
capitalism through tax measure. We have only welfare provisions to lose.

With that fact looming, people may  more and more be pushed to the edge, and at the edge, with
less to lose, and with less of a stake they may be less inclined to
accept the official views and begin to seek arrangements,
collectives, and understandings of of their own. 

Until such time as people are pushed the edge and as long as the
status quo can at least maintain even some appearance of stability, then I
would suspect that many people will continue to seek reassurance
rather than understanding from commentary. There is however enough
discontent with the status quo for dissent to continue to grow and garner
support. And uncertainty is evident in the core and not
just the periphery.

This may be a very propitious time for engineering of what Kenneth
Burke called "the shift in allegiance to the symbols of authority." In
his still relevant book of 1937 he defined the term that he calls
"symbols of authority": he calls it a 'vague term which mashes together
attitudes toward rulers, courts, parliaments, laws, educators,
constabulary, and more slogans linked to such. It is fundamentally connected
with property relations." Kenneth Burke discusses also "how allegiance
and obedience to the structures of authority is natural." 

"One owns his social structure insofar as one can subscribe to it
wholeheartedly feeling the reasonableness of its arrangements, and by
being spared the need of segregational attitudes. Insofar as such
allegiances are frustrated, both the materially and spiritually
dispossessed must suffer. We may not be in the mood to pity the losses
of those who are not dispossessed materially; but it would be poor
gauging for critic not take them into account in considering
historical processes. Such spiritual dispossession explains why so
many men with the material stake in feudalism could take a sympathetic
interest in the revolutionary writings of the encyclopedists. It even
explains why Marx, when given a fairly sufficient income from Engel's
cotton mills, could nonetheless persist as a renegade. And
over-stressing a material possession alone may lead one to alienate
men who may be his allies in the gigantic task of engineering shift in
allegiance to the symbols of authority. In fact, the peripheral class
(the spiritually alienated but still materially rewarded) can
contribute insight of the sort to which the holy dispossessed are
blinded. To the holy dispossessed, the matter may look to simple,
thereby inducing them to make an oversimplified drawing of
alignments. And in such oversimplification, they not only organize
themselves; they also, by antithesis, organize the enemy â forcing into
the enemy camp many who might otherwise have been with them. The
issues are aggravated by the negativistic processes we have discussed
elsewhere, in connection with the problem of authority and its

I also found Brian's discussions about of both the apparatus and and of
profane communication helpful. 

The apparatus is an excellent way to begin to think about the ways in
which the social order in oligopoly capitalism is controlled and
channeled through a kind cybernetic normalization. And
profane communication is an excellent term for the kind of creative
thinking and writing that are necessary to anyone who would seek
freedom, clarity, and new alignments. Brian captured something of the
casino of the public markets in finance. If we add to that casino, the
socialized normalization of the system by a demoralized and shame-faced
infrastructure that is not free but that cannot openly declare itself
as planned, do we get something of an understanding of the structural
and moral crisis of capitalism?

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