Arjun
Appadurai
Capitalism today surrounds and saturates us
in a way it never did before. In its home regions, notably in the United
States, it has taken the form of deep financialization. Finance now far exceeds
the sphere of production and manufacture of industrial goods. Since the early
1970’s we have had the rapid development of a host of financial instruments,
which were barely imaginable in the time of Karl Marx. The breakthrough that made
this financial explosion possible was the idea that risk itself could be
monetized, allowing a small set of actors to take risks on risks. This is the
core of the logic of the derivative, an instrument that has allowed financial
technicians and managers to make virtually every part of our everyday lives
susceptible to monetization. In this way, housing has now been turned into a
machine for monetizing mortgages, the environment has been monetized through
carbon trading and many other derivatives, education has been captured through
sophisticated methods of creating student debt, health and insurance have been
thoroughly penetrated by models of risk, arbitrage and bets on the future. In
short, every day life is linked to capital not so much by the mechanism of the
surplus value of labor but through making us all risk-bearers, whose aggregate
risk can be endlessly combined and recombined to provide new forms of
risk-taking and profit-making by the financial industries. We are all laborers
now, regardless of what we do, insofar as our primary reason for being is to
enter into debt through being forced to monetize the risks of health, security,
education, housing and much else in our lives.
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This situation is most visible in the
advanced capitalist countries and hence the financial collapse of 2008 was
primarily felt and amplified in these very countries. But very few countries in
the world escaped the effects of the collapse, since finance capital had been
spreading its activities worldwide for at least the last 30 years. Still, many
parts of the global South, including South Africa, did not experience the shock
of the collapse as profoundly as did the United States and Europe. The buffers
that created this measure of insulation were primarily that the new derivative
logics, creating multiple loops between debt, risk and speculation, were less
advanced in these countries. Another way to put it is that in the countries of
the global South, the process by which all debt is made potentially
monetizable, through derivative instruments, has been less rapid and more
uneven than it has been in the countries of the North Atlantic.
However, the global spread of the
capitalist imaginary has by no means been arrested or compromised. Banks, hedge
funds and insurance companies are aggressively pushing their way into new
markets, seeking to lobby for legislation that will allow them to bring the
same untrammelled debt markets from which they profited (and which also crashed
in 2008) to the countries of the global South. Thus, it is only a matter of
time before the countries of the global South also find themselves fully
exposed to the volatility, inscrutability and extra-legality of the
derivative-based financial markets of the North. As James Baldwin once said in
another context, “no more water, the fire next time”.
One of the many challenges we now face is
how to resist the sense that this global process is inevitable and that it cannot
be subverted. The question is: what sort of politics needs to be produced to
resist it? The main answer that has emerged in various parts of the world is
debt-refusal, as in important segments of the “Occupy ‘ movement. Debt-refusal
by mortgage owners, students, pension-holders and others certainly is a
legitimate political tactic, insofar as it offers an immediate tool for
starving the beast of financial capitalism. But is it enough? Is it even the
best way of making capitalism work for the 99%?
In this lecture, I develop the outlines of
a different view of financial capitalism, one that does not see the logic of
the derivative as inherently inequitable or evil. My point of departure is to return to Marx,
but through a financial lens. Marx’s central insight about the workings of
industrial capitalism was (in the three volumes of Capital) to notice the distinction between absolute and relative
surplus value. In simple terms, absolute surplus value was to be found in
increasing the amount of labor that a firm could apply to producing commodities
for sale, as by increasing the number of workers or by increasing the length of
the workday. Relative surplus value, on the other hand, was generated by
improvements in technology, workplace organization or other means by which
labor productivity could be increased without hiring more workers or paying for
more labor time. This is how a given firm could compete with other firms which
were producing the same commodity. The key to the appropriation of relative
surplus value was to make a given amount of labor produce more profit, without
increasing wages. The difference was profit in the hands of the capitalist.
Today’s financial capitalism, which Marx
could not have entirely foreseen in his day, does not primarily work through
the making of profit in the commodity sphere, though a certain part of the
capitalist economy still operates in this sphere. By far the larger portion
works by making profit on the monetization of risk and risk is made available
to the financial markets through debt in its myriad forms. All of us who live
in a financialized economy generate debt in many forms: consumer debt, housing
debt, health debt, and others related to these. Capitalist forms also operate
through debt (since borrowing on the capital markets has become much more
important than issuing stock or “equity”). The complex technical issue is how
consumer debt becomes the basis of corporate debt and vice versa.
From this point of view, the major form of
labor today is not labor for wages but rather labor for the production of debt.
Some of us today are no doubt wage-laborers, in the classic sense. But many of
us are in fact debt-laborers, whose main task is to produce debt, which can
then be further monetized for profit by financial entrepreneurs who control the
means of the production of profit through monetizing debts. The main vehicle
for this form of profit-making is the derivative, and thus the derivative is
the central means by which relative surplus value is produced in a
financialized economy.
From this it follows that the key to
transforming the current form of financial capitalism is to seize and appropriate the means of the
production of debt, in the interest of the vast class of debt producers,
rather than the small class of debt-manipulators. From this point of view, it
is not debt as such which is bad, since it allows us to bring future value into
the present. The challenge, rather, is to socialize and democratize the profit
produced by monetization of debt, so that those of us who actually produce debt
can also be the main beneficiaries of its monetization. This vision of the
nature of the capitalist imaginary is what I seek to elaborate and justify in
the remainder of my lecture.
Arjun
Apppadurai (New York University), is the author of The Future as a Cultural Act (Verso, 2012)
