I am endlessly fascinated by the contradictory dynamic of risk in contemporary capitalism. On one hand, risk and its management have become a prime ontological condition and command, the responsibility of self-managed subjects. On the other hand, capital itself, particularly in times of crisis like the last few years, is increasingly allergic to risk; its owners are afraid of losing it and so hoard or stash rather than invest in productive ventures.
Neoliberalism’s critics often say its essential component is individualism, an uncomplicated definition that takes its enforcers’ claims too seriously. But to the extent that it can actually said to be individualist, it is so in this way: In moments of doubt, capital tends to fear, more than it has at other times, the social immersion of money and to take flight to safety, in tax havens and in government instruments that, in most of the world, yield returns that are near zero–meaning that in real terms, such capital loses value each year. Capital would rather destroy itself than risk the uncertainty of circulation.
Not surprisingly, then, as this post and its charts detail, recent data shows that private investment in the United States is continuing to mine new lows, less than half of what it was during the heights of the dotcom boom and lower even than the dark days of late ’08 and early ’09. Even though corporate profits remain strong and even though the growth in productivity continues to decline, which indicates a need for upgrades to fixed capital, U.S. corporations continue to keep capital in safe investments and buy back stock rather than invest in productive outlets.
Consumers, on the other hand, continue to spend. As Michael Roberts notes, consumption as a percent of GDP is just off the all-time high, and growth in consumer spending still outpaces growth in the economy as a whole. Consumers in the United States, enduring slow wage growth and high unemployment, continue to spend and assume the risks of living beyond their means.
And so the paradox I mentioned earlier isn’t really much of a one at all. It’s not about contradicting dynamics of risk but, as Angela Mitropoulos has said, its allocation, the lines on which risk is distributed. Right now, capital is counting on highly exploited workers, indebted consumers, and precarious subjects to navigate the dangers of risk so it doesn’t have to.