Capital flows and nations

The previous post doesn’t imply that resistance to nation-based solutions has been the only response to the crises. That’s not been the case, as the recent explosion of nationalist idiocies — to use just some of the proper names: tea parties, Germany’s program of austerity in defense of its exports, and France’s explusions of the Roma — show clearly enough. Not surprisingly, the twin crises, of the economy and of finance, have produced autarkic fantasies everywhere, and not just on the political right.

The key word here, I think, is produced. It’s become standard analysis to describe nationalist upsurges in the last few decades as reactions to the increasing borderlessness of capital. The implication is that older economic forms that used the nation as the primary determining economic and political boundary actually tamed, or at least rationalized, these latent tendencies, while globalization’s deterritorializations have loosened them. But even though such views give the nation a certain amount of autonomy that is missing in economistic accounts, they still assume that nationalism is natural, eternal even, and overlook how it is created and maintained, however fragilely and imperfectly. It would be better to investigate how the global movement of capital has produced these nationalisms — in both their quotidian and evental expressions — rather than relegate them to the status of mere anachronism.

Of course that’s a big project, one definitely worth researching but more than I will or can do here. For now I’d like to look at just one aspect of the recent crises and its relation to a nation: the flow of foreign capital into the United States. Obviously it’s impossible to draw definitive conclusions from these very partial figures, but I think the flow of money is certainly a matter worth investigating.

 

As this first chart shows, at the onset of the crises, the flow of private capital into the United States completely stopped. Of course in one sense this is hardly a revelation: as everyone already knows, in 2008 private credit flows completely froze. But less frequently acknowledged is that their immobility was due in large part to the fact that the multibillion dollars coming into the United States each day, which was required to sustain the current world dynamic, dropped to below zero. (Significantly, it was also at this time that another incoming flow turned negative: the flow of labor.) Nonstate investors everywhere held on to their cash.

In the absence of flows, the world economy started living off its stock.

 

The next chart shows this in more detail: In 2008 and 2009, there was no incoming capital from private sources for private investment. But notice also that as total inflows dropped off massively, the levels remained the same or increased dramatically in three areas: foreign official (i.e., government) purchases, U.S. Treasuries, and U.S. currency. In other words, though foreign private capital fled away from the United States (and back to its “home”), foreign states still invested strongly in the United States and they did so by resorting to safe-haven investment: government bonds and currency. (This turn to certainty was mirrored by domestic private investors, who either hoarded their money or parked it in nationalized instruments.)

The intertwinement between the U.S. government and foreign governments grew ten-fold in five years, and this relation became almost exclusively based on conservative modes of investment, became directly correspondent with and even determinative of national regimes of production and accumulation, and became the primary mover of capital. Without the government’s direction of flows, there would have been almost no movement of capital at all. So Tea Party delusions about Obama’s socialistic expansion of government are not entirely fanciful, but they ignore that their beloved market turned to government, not vice versa, and that the state only performed its historic role both as chief reterritorializer, and added to its resume the role of only efficient allocator of capital.

It’s probably also worth pointing out that also in 2008 foreign ownership of total U.S. Treasuries decisively topped 50%, after hovering around 35-40% for most of the aughties.

So private capital is largely staying to its national territory while public capital seeps more fully into the pores of global capitalism, looking primary for safe, nation-based investment. Meanwhile, within the United States something else notable is happening: an immense increase in the rate of domestic/household savings, and to a lesser extent business savings. As the following chart shows, U.S. households underwent an epochal transformation from huge deficit spender (“the consumer of last resort”) to huge saver almost overnight.

 

As soon as the crises hit, Americans withdrew from the world, holding onto their cash and not spending either on investment or consumption. This hoard of money became, I think, the basis for the moral revulsion of government debt and of the foreign lenders who enabled it.

So what does this very brief statistical sketch indicate? Well, as I said, drawing exact conclusions directly from the figures would elide the contingencies of politics, but it might be possible to draw a (segmented, perhaps convoluted) picture from the flow of money. As private capital stopped flowing productively, as it either sought safe (i.e., national) foreign investments or (along with the flow of labor) returned home, the U.S. government became the de facto receiver and director of capital flows. This increase in state-directed investment was largely underwritten by foreign investors, particularly foreign governments. It’s not coincidental that this (foreign-financed) state became so hated in the political imaginary, a hatred no doubt magnified by the U.S. president’s race and complicated, enigmatic national history. Rhetoric about Kenyan-Islamist-Marxist-Nazis crept in, but what produced it was as much the decisiveness of foreign capital in the U.S. economy as a president with suspect loyalties.

As the state became so despised, questions about national orientation became primary. There are right-wing versions (kill state socialism!) and left-wing versions (where’s the new New Deal?) of the questions, but the aspirations of independence and self-renewal were fueled by the huge surge in the household savings rate and the government’s increased role in directing industrial policy.

And so from this something like the current situation emerges: a bunch of material (monetary) factors have increased the importance of national economies, which has given rise to politics that are bounded by those national dynamics. The increase in nationalism is not limited to the exceptional varieties I listed at the beginning of this post. The everyday mechanisms of national difference — currency differentials, central bank policy, etc. — which never disappeared even during the high point of “globalization,” are becoming more, not less, decisive. As the recent quantitative-easing flap between the United States, China, and Germany shows, nations’ function of projecting or protecting their economies remains a central element in the world economy. It’s no surprise that political programs would follow from these national requirements.

Filed under: Economy, The State, Walls and Lines

Becoming-rent

The essays collected in Crisis in the Global Economy: Financial Markets, Social Struggles, and New Political Scenarios were researched and written in early 2009 and translated from Italian into English earlier this year. And thank god for that. They are a welcome respite from the social-democratic obsessions of Anglo-American writers: how parasitical finance and predatory lending caused the crisis, the greed of oligarchs who prevent recovery, etc. To say nothing of the technocratic alternatives offered: nationalizing banks, more robust stimulation, etc. In short, the same old moral analysis and the same old nation-based solutions.

 

Crisis in the Global Economy accounts for the last few years of multiple crises in a much different way, starting with a reckoning of finance’s centrality to the global capitalist economy. Though all of the writers have different points of emphasis, they agree that financialization, far from being nonessential and parasitic, represents, in Carlo Vercellone’s phrase, the “becoming-rent” of profit: Finance is today the primary site of valorization and accumulation. As Vercellone says, there is a “general tendency of capital to transform profit into a rentier mechanism of drawing surplus value from a position of exteriority in respect to production and/or founded on the creation of an artificial resource rarefaction.” So for most capitalists, their business is less about the organization of production and the accumulation of capital and more about using financial products to increase profit.

This is a pretty standard take of course, and it’s not really a problem for capital as long as the flows of credit, rent, and labor are moving toward and away from the beneficial targets. But when those flows are blocked — e.g., the freezing up of credit markets — or when their segmentations change in ways that upset the conventional balance — e.g., the default on subprime mortgages — it does become a problem, one that, because most large firms, the ones with the global reach required to help end the crises, operate from a “position of exteriority” to production, can’t as easily or quickly correct those flows.

In response to this situation, socialists and capitalists have articulated a shared set of demands: reregulation of finance, stimulation of demand and credit flows, and state reintegration into industrial planning. All things governments over the world have achieved, from stimulus packages to central bank pump-priming, from huge investments in green energy to nationalization of banks, financial firms, and even auto manufacturers. But still none of it helps, as it appears the world economy is headed for, at best, a double dip recession, and maybe even decades of stagnation. But still, socialists want more of the same, a return to the policies that made Fordism.

Part of the value of Crisis in the Global Economy is that most of the essays predicted this happening: a mantra of the book is the impossibility of Keynesian solutions to the crisis. As Christian Marazzi says, and several others elaborate, “classical Keynesian actions lack transmission channels of state stimuli to the real economy, to the demand of goods and services, and investment goods,” those diminished channels being impoverished welfare states and the state’s lack of involvement in industry, to name but two. (Obviously, these conditions vary by country.) Karl Heinz-Roth points out that Keynesian mechanisms would still be operating in a financialized environment, so that they necessarily wouldn’t be able to increase aggregate demand, only income inequality. Andrea Fumagalli says that’s what lacking is a global system of governance that could direct the transnational flows of “cognitive accumulation,” which remain blocked by national institutions.

All of these impossibilities have been shown to be true by in the nearly two years since the essays were written. But I’m struck by the fact that all of these are, to use the archaic language, “objective” factors. In other words, for texts written by people who are mostly from or associated with autonomism, there is remarkably little “subjective” analysis — very little about class composition, in other words. And it’s in no small part because of the composition of working classes that Keynesianism remains impossible. The working classes are simply not centralized enough to allow it to work. Even more, they seem unwilling to be integrated: Can anyone imagine women heading back to the home? (It’s actually the opposite: in the US, more women now work than men.) The indigenous in Bolivia and Ecuador refuse to allow their populist governments to incorporate them into the world of petrochemical rents. The industrializing proletariats in Africa and China are demanding increases in wages just as the raising of prices of commodities becomes more difficult for producers.

Not that any of these factors will stop governments and their oppositions from asking for more integration and regulation.

Filed under: Economy, Value

Machines and democracy

Tiqqun:

The solution to the problem of political economy, of capitalist alienation, and of cybernetics, was supposed to be found in the invention of a new kind of relationship with machines, a “technological culture” that up to now had been lacking in western modernity.  Such a doctrine justified, thirty years later, the massive development of “citizen” teaching in science and technology. Because living beings, contrary to the cybernetic hypothesis’ idea, are essentially different from machines, mankind would thus have the responsibility to represent technological objects: “mankind, as the witness of the machines,” wrote Simondon, “is responsible for their relationship; the individual machine represents man, but man represents the ensemble of machines, since there is no one machine for all the machines, whereas there can be a kind of thinking that would cover them all.” In its present utopian form, seen in the writings of Guattari at the end of his life, or today in the writings of Bruno Latour, this school claimed to “make objects speak”, and to represent their norms in the public arena through a “parliament of Things.”  [...]  What the utopians pretended not to know was that the integration of technological thinking by everybody would in no way undermine the existing power relations. The acknowledgement of the man-machines hybridity in social arrangements would certainly do no more than extend the struggle for recognition and the tyranny of transparency to the inanimate world. In this renovated political ecology, socialism and cybernetics would attain to their point of optimal convergence: the project of a green republic, a technological democracy — “a renovation of democracy could have as its objective a pluralistic management of the whole of the machinic constituents,” wrote Guattari in the last text he ever published — the lethal vision of a definitive civil peace between humans and non-humans.

I agree with this. Earlier this year I read many of Guattari’s late ecological pieces, and I was struck by the ways in which his ecology, like his machines, were envisioned both as a safe harbor from post-’68 political disappointments and as a new ground on which humans could recompose themselves and regain control over things. Man’s dominion over things and all that. Instead of employing escape and anarchy, Guattari’s ecology was informed by fantasy and sovereignty, an attempt to solve social antagonism by displacing it.

Similarly, I think speculative realists are repeating the cybernetics mistakes that Tiqqun correctly diagnoses: a failure to discuss or even acknowledge the problem of representation, which they attempt to elide by a thorough depoliticization of ontology. (Claiming that objects are “withdrawn” is a symptom of the problem, not a solution to it.) Appropriately enough, this gets called the “democracy of objects.” But objects have a way of not caring, and of biting back.

 

Filed under: Control, War

The veil

“We are an old country anchored in a certain idea of how to live together. A full veil which completely hides the face is an attack on those values, which for us are so fundamental,” [Sarkozy] told his ministers. “Citizenship has to be lived with an uncovered face. There can therefore be absolutely no solution other than a ban in all public places.”

I suppose it’d be predictable and trite to quote the Deleuze and Guattari Faciality plateau here. So that’s what I’ll do. But which part exactly? This one is good:

Filed under: Control, Deleuzeguattari, Democracy

Intersections

The trouble with theories of intersectionality is that they don’t go far enough.

Filed under: Walls and Lines

The herd instinct

Heavy trading in exchange-traded funds means more stocks are likely to move in the same direction on any given day. Analysts call that correlation, a mathematical term meaning similarity of behavior. Correlation is on the rise, to the frustration of investors who are trying to analyze stocks based on their underlying strengths and weaknesses. [...]

Filed under: Economy

Black bloc, democracy, and the one

I didn’t really pay attention to the G8/G20 summit protests in Toronto, either the events themselves or the preparations for them, but I have been reading a lot of the postgame commentary. The reason for the former is that at this date I don’t find summit-protest politics all that compelling; if the first wave of actions attempted to both disrupt the summits’ proceedings and create new political assemblages, the habitual impulse to protest since then seems to have accomplished very little of that.

Filed under: Control, Democracy

Of problems, solutions, and filing cabinets

We are wrong to believe that the true and the false can only be brought to bear on solutions, that they only begin with solutions. This prejudice is social, for society, and the language that transmits its order-words, ‘set up’ ready-made problems, as if they were drawn out of ‘the city’s administrative filing cabinets,’ and force us to ‘solve’ them, leaving only a thin margin of freedom. Moreover, this prejudice goes back to childhood, to the classroom: It is the school teacher who ‘poses’ the problems; the pupil’s task is to discover the solutions. In this way we are kept in a kind of slavery. True freedom lies in a power to decide, to constitute problems themselves. — Deleuze, Bergsonism

Filed under: Bookshelf, Kids

Homonationalism

The name comes from a book by Jasbir Puar, Terrorist Assemblages: Homonationalism in Queer Times, which I’ve just started reading. There’s also an excellent blog inspired by Puar’s coinage called No Homonationalism, by the group Suspect, that tracks some of the movements against it. Of course resistance to and actions against instances of homonationalism are not a new thing, even if the name is.

Filed under: Opposition, Walls and Lines

Slow and fast

In some ways the debate over slow cinema and fast cinema seems like a reformulation of a much older opposition — that between high art and low (popular) art.

Filed under: Economy, Walls and Lines