Tag Archives: Politics

Organs without bodies: Symbolic reattachment & hystericization of American politics

20.VI 2017

Phallus is not an organ that expresses the vital force of my being, but an insignia that I put on in the same way king puts on his crown. Phallus is an organ without body, which gets attached to my body, but never becomes its organic part, forever sticking out as its incoherent excessive prosthesis. [S. Žižek]

If a king holds a scepter in his hands (no matter how small they might be) and wears the crown, his words are taken as royal. Such insignia are external, not part of who he really is. He wears them to exercise power. As such, they define the gap between what he actually is and the function he exercises[1]. But, what remains of the real person if the symbolic title is taken away? This question becomes the center of the neurosis of power. Imagine a corrupt judge: I know very well that the person in front of me is a corrupted weakling, but I nonetheless treat him respectfully, since he wears the insignia of a judge — when he speaks, it is the law itself that speaks through him. However, when he takes off his toga and steps out of the courtroom, he is nobody.

Symbolic castration is the gap between a real/actual person and his symbolic title. The gap is irreducible — the symbolic persona always dominates the real one. This is the fundamental dichotomy of symbolic castration. It is synonymous with power as it gives power to the person who is castrated, but that transaction comes with castration as its price. The actual subject cannot ever fully identify with the symbolic mask or title (phallus never loses its autonomy) and his questioning of the symbolic title becomes the center of hysteria[1].

Donald Trump’s presidency is the hystericization of American politics. He represents a case of an attempted symbolic reattachment — a reverse of symbolic castration — a desire to reduce the irreducible, which gives his presidency an aura of a logical paradox. Trump’s determination to undermine his symbolic self has become especially clear in the last two months: The presidential tweets are screaming of self-sabotage, and the display of conflicts of interests is just too obvious and explicitly self-incriminating to be unintentional. The nonlinearity of his relationship with facts and his propensity to lie have reached alarming proportions; it is unlike anything we have seen in the public life of western democracies. The antagonism of the press and media, which seems to be continuing with unrestrained intensity, has created massive negative externalities for the entire administration. The absence of any foresight in his conduct is stunning: It does not take much thought to realize that this could have never produced any positive effects for his presidency. Same goes for his compulsive divisiveness of the populace, and deliberate undermining of his allies, his staff, and supporters, which has isolated him to the point that no one wants to work with or for him. There is no one who takes him seriously any more — he is the laughing stock of the entire world and a butt of every joke. He seems to take some pride in helping in the process of the collective ritual of public denigration of his presidency. One can sense something almost vindictive in his pursuit of the symbolic self.

Trump’s conduct is a suicide from the ambush. What in the one-dimensional space of his subjectivity appears as logically obscure suddenly becomes transparent once the real and the symbolic are identified and separated. His presidency represents a rebellion of the hysterical person against his symbolic persona, an attempt of Donald Trump the citizen to take out Donald Trump the president — an assassination of the symbolic self – a desire to re-attach phallus to the body.

Politics, economics, society, and collective reality are temporarily suspended as the public is caught in this spectacle of self-annihilation. No one knows how to react, because this play has never been played before. Such intrapersonal conflicts and battles normally take place in the privacy of the analyst’s office, away from the public eye. We are now watching its premier in real time.

As Immanuel Wallerstein remarked in his June commentary, Trump equates his presidential position with being the most powerful individual in the world. For him, the main priority is to stay in the office as long as possible (everything else is secondary). True. And, this will go on until real Donald Trump scores a victory by firing his symbolic self and when, at the end, there is only one of them standing — real Donald Trump.

Trump has converted our political and social reality into a reality show featuring his personal encounter with his symbolic persona as the main (and possibly the only) attraction. It is no wonder that people have felt violated from his first day in office. His presidency is a subversion of our experience of reality. His desire for self-annihilation will drag everyone into the vortex of the Vanishing Point. From there we will be able to imagine what the world looks like in our absence, and to see beyond the end and beyond the subject.

[1] ibid.

[1] S. Žižek, How to read Lacan, (2007) W. W. Norton & Co.

Event horizon and the physics of Donald Trump

8.VI 2017

Donald Trump is like a new celestial formation, a cognitive black hole, a strange attractor, and a quantum-mechanical paradox, all at the same time. He has a unique way of distorting the social space around him. Everyone who enters his event horizon begins to not make sense. There is something terminal about coming too close to Trump. The list of casualties who have crossed the point of no return, and became permanently trapped on the other side, is getting longer every day. Trump is a new phenomenon whose functioning falls into domains of exotic physical theories. Here are some theoretical requirements for understanding the strange cosmology of his universe.

Compared to classical physics which guides our intuition, the general theory of relativity is like playing billiards on a soft table (think: jello). Each stationary ball creates local distortions on the table’s surface (picture) – the area around each ball is curved due to the indentations it produces. When the white ball is kicked, it is the local curvature around each ball, which causes it to make a bend precisely when it wants to get directly at the stationary ball. From the point of view of the white ball, the curvature is primary and matter (stationary balls) serves only to herald its presence.

Paralax2

Nothing is where it appears to be: The curvature of the space is a source of an apparent displacement of objects; it causes moving bodies to make a bend precisely when they want to get directly at the object. caption

Imagine now that one of the stationary balls on the table becomes very heavy and shrinks in size. The dent around it becomes deeper and more pronounced, and the heavier and the more concentrated its mass, the deeper the dent. So, if the white ball passes slowly and comes closely, it will be “sucked” in. The fall into the singularity can be avoided only if the ball’s speed exceeds the escape velocity.

The presence of concentrated mass defines the event horizon. The event horizon of a black hole separates two permanently disconnected regions. It is the shell of “points of no return”, a boundary beyond which the gravitational pull becomes so great that it makes escape impossible. Nothing can escape the event horizon of the black hole – the escape velocity is greater than the speed of light – what happens inside cannot affect an outside observer.

black-hole-diagram

Once something is inside the event horizon, collapse into the black hole is inevitable

Donald Trump is a political black hole. He is a cognitive singularity, an intellectual triviality with complex consequences — a source of curvature of the social space that makes everything look displaced.

The strange matter of Trump’s universe

Information entering a black hole is lost forever

Whoever comes within Trump’s event horizon becomes afflicted with the same cognitive incapacity as Trump himself. There is a long list of transient (and a shorter list of persistent) surrogates, all of them disposable victims of cognitive asphyxiation: Kellyanne, both Steves, Giuliani, Christie, Newt, Ben Carson, Jeffrey Lord, and a long list of anonymous spokespersons. Not that these people were ever beacons of rationality, but they have broken new boundaries and set new records after entering the domain of Donald Trump. These creatures thrive in the space between real news and reality TV. They roam different mediascapes, mostly to boost the ratings of the mainstream networks — people tune in only to see the spectacle of public humiliation. And the list does not stop there. Now, even former bankers, Cohn and Mnuchin, who, one can argue, may be ethically challenged, but are nominally still highly rational, they are not making any sense either, even when it comes to counting money.

One-child-left-behind

But no one has experienced the gravitational crush of Trump’s black hole like Sean Spicer, the White House press secretary, the Sisyphus of morons who performs the same futile task day after day, repeatedly trying (and failing) to convince the public that verifiable lies are truths and that palpable truths are lies. His press briefings have become a spectacle no one wants to miss, and a guilty pleasure of liberals and Trump haters. People tune in to be entertained, not to get informed. Over the course of time, the public has developed a certain emotional attachment to him, bordering on empathy, but not exactly; something along the lines you would feel about the bulldog your girlfriend gave you: He is fun to play with and you want to love him, but he makes a point of shitting in your living room, not occasionally, but every day. As it is becoming clear that under the existing criteria of this administration his gross incompetence will never be grounds for dismissal, there are active debates about the mode of his exit from the scene.

Divided subject is inconsistent with itself

Trump is the embodiment of the divided subject of American politics. On one side, he suspends the gravity of the Real and sets in motion the weightless state of a facts-free universe, while on the other, the singularity of his cognitive incapacity crushes everything that comes within his event horizon. He is the sugardaddy of alternative reality. He attracts people as a political novelty by offering a taste of the other side. He tempts them with fruit from the tree of ignorance. And the more fruit they eat, the more they need.

Trump’s base, which pretty much has been functioning as a doomsday cult, constitutes the core of the strange matter of his universe. These people have entered Trump’s event horizon from which escape is impossible. They are passengers on a boat approaching the waterfall – they notice nothing at the time when the boat crosses the boundary of no return, but the boat is doomed to go over the waterfall.

Coda

Trump is an event in a true sense of the word – he divides the time into before and after. It is difficult to remember our lives before Trump announced his candidacy. What did newspapers write about? What did news media report on? What was tweeting like? What kind of jokes did comedians tell? And what did people disagree about before they were unified in their hatred of Trump? Crowds and media hate him, but they cannot resist him. Life without him is becoming impossible to imagine. The whole nation will be depressed if he ever goes away.

The great redistribution and the biopolitical penetration of the American brain

13.V 2017

Wealth is inherently empowering and motivating; poverty is neither [Jonathan A. Winters].

Rising inequality is not the result of economical rationality and neither is it only a function of erosion of empathy or moral fiber (although the latter is its sine qua non). It is rather a direct reflection of redistributive policies that have helped the richest get richer. On the other hand, poverty by itself neither motivates nor provides a core set of common interests for the poor the way wealth does for the rich. The presence of wealth focuses the political attention of the rich on wealth defense; its absence has no parallel effect on the poor[1].

Inequality has always been a topic in public discourse. However, after the 2008 financial crisis, the destruction of wealth on a massive scale awakened much larger segments of society to the reality that they were unable to finance the lifestyles they had previously enjoyed. Response to the crisis has been articulated through an unprecedented injection of “easy money”. But, this money was hoarded by capital and did not filter down to labor. Rather than serving the collective interest in financing general economic progress, “easy money” turned into the extraction of resources from increasingly impoverished societies. The case of airlines industry presents an illustrative example of this mechanism. Even as the price of fuel collapsed, little of that benefit was passed on to consumers or airlines’ employees: Air travel is as uncomfortable as ever, ticket prices have gone up and none of the profits resulted in higher wages of the airlines employees. Most of the “easy money” has been used to reinforce their monopolistic power.

Democracy requires commonality, inequality undermines it. The democratic process was originally conceived as a way to peacefully resolve economic disputes between people who share common values, either cultural, religious, or in terms of lifestyles or visions of the future. When inequality reaches the critical point, the bonding tissue that keeps society together begins to tear and democracy becomes compromised. In the absence of commonality disputes can no longer have peaceful resolve. Instead, the resolution occurs through negotiation or war. As electoral democracy alone can no longer safeguard the economic interests of the many people from American oligarchs, economic initiatives are no longer effective. A quest for social change takes center stage and a search for a new equilibrium is set in motion.

Social stability defines equilibrium. Social transformations, therefore, represent a change of equilibrium. They are always disruptive and have the appearance of discontinuous processes. Economic changes always take place against a particular social backdrop: When a social equilibrium is reached, society stabilizes allowing the economics to set in. The subsequent economic developments are typically linear – small departures always revert back to the equilibrium — restorative forces overpower those that destabilize the system.

2008 was a paradigm shift not only for economics but for the entire way of empirical approach to reality, which has laid the foundation of rationality and has dominated the Western thought. The crisis has set in motion a social change – the system has begun to search for a new equilibrium, announcing the end of 500 years of history. And, as history is getting unwound, the repositioning in the oligarchic space is taking the center stage. There is no left or right any more. The only meaningful distinction that reflect the type of oligarchic redistribution and its re-functioning is their emancipatory or regressive orientation.

The mindfuck

Where there is inequality of estates, there must be inequality of power. (James Harrington)

Oligarchy rests on the concentration of material power, democracy on the dispersion of non-material power. The American political economy is both an oligarchy and a democracy — a distinctive fusion of equality and inequality. Civil oligarchies represent the most significant political innovation, never seen in history before the creation of the modern state. As a characterization of the Western (predominantly American) political system, civil oligarchy is the result of a shotgun marriage of two contradictory concepts, brokered by an interesting play of numbers: The vast majority of citizens exert very little concerted material power in politics, but a small number of individuals each have at their disposal the resources it would take tens of thousands of their fellow citizens acting in sustained coordination to match[2]. The two groups stand in constant opposition — their conflict never disappears, but defines the driving force behind the underlying sociopolitical dynamics. It pushes all other themes out and becomes the main axiom of the political economy. This disparity of numbers forces a continuation of underlying antagonisms until one side declares victory. As a result, the political process loses its connection with democracy.

The reconciliation of oligarchy and democracy requires a Hegelian Aufhebung, a non-linear logical maneuver whereby the resolution of the inner contradiction is suspended until the concept is completed during synthesis — abolition of the Real to realize the Idea.

Oligarchs represent individuals endowed with enormous wealth which both empowers and exposes them to threats. In America, they constitute only a fraction of one percent of the population and have at their disposal material “voting” power that is hundreds, and in some cases tens of thousands, of times that of the average citizen. To understand the power multiplier, which reflects the underlying wealth differential, one should think of wealth as an instrument that enhances the persuasive power and influence of an individual. For example, being able to convince poor people to vote against their direct interests and in favor of the oligarchs, and to convert these things into laws and tax codes – the essence of the Republican Southern Strategy program as outlined by Lee Atwater — requires considerable resources and access to media, religious and secular institutions, lobbyist and a variety of political consultants that only money can bring. Mind-fuck is an essential ingredient for the functioning of civil oligarchies; without it, they could not persist.

The Material Power Index (MPI) is a way of quantifying the disparity of democratic participation. MPI assigns a base value of one to the average material power position of Americans across the bottom 90 percent of the population. The weakest American oligarchs have between 125 and 200 times the material power of an average citizen. Oligarchs at the very top of American society have an MPI just over 10,000, which happen to approximate the MPI of Roman senators relative to their society of slaves and farmers[3]. This has gone even more extreme after the 2010 Citizens United ruling. In this way oligarchs can legitimate their position with all of their power and influence, without resorting to force – which time and again has proven to be an expensive and fragile tool of stability.

It is not very difficult to see haw a handful of super rich oligarchs can tip the scales of any election. According to 2007 data, the 400 richest Americans have an MPI in excess of 10,000; these 400 top oligarchs have the “voting power” of four million people. Outside of this group, the average MPI of the 1/100th of a percent of the top earning taxpayers (who own about 2% of all American wealth), about 15,000 people, is around 1000. This means that 1/100th percent of the population had the “voting power” of 20 million. This is a significant fraction of the voting population (about 130 million in the 2016 US elections). Normally, elections are most often won within 1-2 million margin. Therefore, a victory can be achieved by attracting 100-200 top oligarchs.

Synthesis: Oligarchies as new cognitive coordinates

The essence of oligarchy within democracy rests on the near-veto power oligarchs retain on threats to concentrated wealth. The wealth protection instinct has been one of the strongest sociopolitical forces in human history. Although the attitude towards all kinds of inequality like slavery, racial and gender exclusions had been revised in the past, the same cannot be said for wealth inequality. The resistance against radical redistribution of wealth has been remarkably robust and resilient across a variety of political systems, from dictatorships, monarchies, peasant societies, to post-industrial formations and democracies[4].

As an approach to the problematics of comparative politics, oligarchy as the politics of wealth defense emerges as a better candidate for a unifying framework than the traditional framework based on assumptions that the dominant dimension of a country’s political actions is geographically conditioned. The oligarchic landscape defines new cognitive coordinates necessary for understanding current geopolitical developments. A variety of complex socio-political configurations and their transformations gain instant clarity and simple intuitive interpretation when seen from the point of view of oligarchic redistribution and repositioning.

The mechanism and logic behind this is relatively simple. Oligarchy should be understood as the politics of wealth defense. Outside of the context of wealth defense, different oligarchs can, and generally do, have vastly different agendas (e.g. democrats vs. republicans in the USA, pro-choice vs. pro-life, Tesla vs. Uber, or Bill Gates vs. the Koch brothers). However, they are all united in one common goal – their wealth preservation. This explains why one single common driver alone captures such a wide diversity of developments that sometimes, on the surface, appear to have no logical or rational connections.

[1]  Jeffrey A. Winters, Oligarchy, Cambridge (2011)

[2] ibid.

[3] ibid.

[4] ibid.

Trump in wonderland

8.III 2017

In many areas of life, incompetent people cannot recognize just how incompetent they are, a phenomenon that has come to be known as the Dunning-Kruger effect. Logic itself almost demands this lack of self-insight: For poor performers to recognize their ineptitude would require them to possess the very expertise they lack. To know how skilled or unskilled you are at using the rules of grammar, for instance, you must have a good working knowledge of those rules, an impossibility among the incompetent. Poor performers fail to see the flaws in their thinking or the answers they lack. What’s curious is that, in many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge. (David Dunning)

Things got a little different in 2017. Within less than a month in the office, Trump’s cabinet managed to accumulate spectacular cognitive deficit never before seen in the White House. This deficit, accompanied with a commensurate loss of credibility, is threatening to become a permanent trademark of his troubled presidency.

The biggest change introduced by Trump’s arrival has been the reversal of information flows in the communications between the White House and the press. Until now, the White House had always been the center of political information and, through press briefings or other communication channels, shared a fraction of that information with the press. What the press knew was a subset of what was known to the White House. Because of this asymmetry (to avoid answering unpleasant questions or possible self-incrimination), the White House would engage in deception. There was a stable symbolic pact between the government and the press; the press got something to work with, while the White House was occasionally allowed to get out of an uncomfortable situation. No one’s intelligence was insulted.

All this underwent a 180 degree reversal with Trump. First of all, and this is the root of the problem, Trump’s administration seems to be reluctant to accept the fact that they won the election — as if that was never really a part of the plan. Instead of governing, they continue to behave like the opposition, always arguing from the position of the victims of establishment and raising objections and outrage at how the system functions. They have remained reactive instead of proactive, systematically behind the curve.

Trump’s White House is populated predominantly with political amateurs, dilettantes and professional yes-men who, themselves, do not produce any substantial informational content. They are by and large either misinformed and making things up or getting their facts from the low-tier media such as Fox News, Breitbar, tabloids or reality shows, who themselves are known to habitually make things up (their business model often based on fabricating “facts”). As a consequence, the mainstream press has been much better informed than the White House, both in terms of the area covered and the depth and quality of information. Trump’s White House operates with a subset of the information available to the press and the press can run circles around its staff. Because of that, current White House spokespersons have had a great difficulty engaging with the press. They are incapable of creating a deception when they need it – the conceptual difference between a deception and a lie seems to elude them — so they lie instead, and when they are called on a lie, they lie more and blame facts, which further undermines their credibility until there is none left. As a result, after less than a month in office, Trump had to declare war on facts and pronounce the press the enemy of the people.

Masochistic self-destruction

Power cannibalizes itself — it carries the seeds of its own destruction (Jean Baudrillard)

In their infinite political naïveté, Trump and his cabinet do not understand that by waging a war on facts, media and dissent in general, they are actually writing their own obituary.

The current administration is deluded by the idea that their rise to power and their program in general have a strong historical, messianic mission of correcting the years of imbalances caused by neoliberalism, globalization, and cultural displacement. In their minds, weakening of their power, even temporarily, would be a betrayal of that mission, and so, any voice of opposition has to be inhibited and ultimately subdued.

The fatal flaw of this position is that by suppressing the opposition, and the information its existence and voice provide, the leadership is left essentially blind to whatever is happening in their back yard. Within a very short time, they will have no vocabulary to discuss socio-political conditions and develop an approximate description of social reality.

In the face of perpetual conflict with reality, Trump’s political machine will foster a continued state of cognitive dissonance and with the help of spectacle possibly provide a temporary life support for their existence through the suspension of disbelief. However, Trump’s administration’s non-linear relationship with facts and truths will gradually turn whatever remains of their constituents into a cult following. Like most other authoritarian ideologies, both Trump and his followers will remain non-adaptive not allowing any feedback to penetrate the boundaries of their fortress of ignorance, and when the end becomes inevitable, they will be unable to transform or adjust. The autopsy of the communist experience and other totalitarian forms of political rule offer numerous illustrations of this trajectory.

Aside from this, there is a practical question regarding the sanity of Trump’s approach: How does one get away with a lie as a policy tool in the world of total information? This might be easier to implement in a society like the old Soviet Union, which had never been given a chance to properly embrace modernity and where the population had been subdued by chronic scarcity, where bare necessities had been a luxury for decades, and where people were ready to make any compromise that would restore their dignity and bring their lives closer to normal. In the era of relative affluence and absolute information such a project cannot take root, even in the short run — it would require an extraordinary force to maintain its stability.

And this is where things begin to break down. Large-scale systemic oppression requires the mobilization of enormous resources to keep control of political subjects and effectively turns them into hostages. Attempts to oppress growing discontent require a heavy-handed rule which in turn reinforces the hostage syndrome and brings about further escalation of discontent with generally adverse economic side effects. At that point, legitimation becomes the system’s biggest problem and requires mobilization of all resources, primarily aimed at its glorification. But, by then the oppression is the only thing the system knows how to deliver. It is the only strategy, and a very expensive one. Finally, when existing resources are fully exhausted, the system has to collapse.

Send in the rubes: Technology and political snake oil

Everybody has a plan until they get punched in the mouth (Mike Tyson)

Although with the help of social media, artificial intelligence and technology in general, oppression can take on subtler forms, the standard of tolerance will change with it and oppression will always be recognized for what it is. The illusion that this battle can be won by “psychological operations”, a systematic form of mass propaganda that acts on peoples’ emotions — a half-baked idea of crowding out the info-highway with misinformation — is a reflection of both ultimate ignorance and arrogance that comes with it. It is an ill-conceived program initiated by data analytics companies and funded by the right wing plutocrats who specialize in election strategies, based on an erroneous assumption that, in the era of total information, the society outside the governing party’s sphere of influence and control will remain static and non-adaptive, and that the pattern-recognition models of their currently employed consulting companies, will remain only their (and nobody else’s) proprietary tool forever. The absurdity of such assumption is best illustrated by the fact that every major hedge fund has already caught up with this trend and either has a similar platform and capabilities or is in the process of getting one very soon. Words like artificial intelligence and machine learning are the most frequently used buzzwords during the incoming student orientations at all major American universities — these topics are the most rapidly developing areas of science and technology. It is not difficult to imagine what this landscape will look like in four years or beyond.

After all, when it comes to economics and social sciences, there is one thing we learned about our attempts to model their dynamics: All models are wrong; some of them are useful (at best). So, it is all about how we decide to use these models, what sample and assumptions we choose to calibrate them etc. And, sooner or later, we realize that all these models of social behavior do not offer any substantial new wisdom, but can make our tasks of data manipulation easier only if we give them correct instructions as an input. In other words, it is garbage-in-garbage-out at the end, no matter what (this is the best outcome). In that context, alternative facts, misinformation, alienation from reality, or other forms of self-indulgence (an emotional state Trump’s cabinet is particularly prone to) can only compromise effectiveness of any given technological platform.

Yes, these companies can help you win the elections, but they can never become an instrument that secures a smooth and peaceful governing — that erroneous extrapolation is the new political snake oil. People like Stephen Bannon are real rubes here. Their anti-elitist sentiment, combined with their messianic fantasy, which has been running in displaced mode as a war on facts and critical thinking in general, compromised their own resistance to nonsense – they start believing the nonsense they are peddling and ultimately become victims of the snake oil sale themselves.

The ultimate delusion, however, remains a belief that this battle can be won at all. Ignorance by design is the trap any hegemonic ideology faces. Monochromatic political systems are vulnerable to loss of robustness and long-term fragility. The authoritarian project is self-defeating — even a temporary victory on that front is a guarantee of a defeat in the long run. History offers countless examples, collapse of the communism being just the latest one. Diversity of opinions, multiparty systems, and what is generally referred to as freedom of speech (even when existing only pro forma) are always superior in this context. Tolerance for existence of alternative forms of interpretation of social reality as well as social organizing (from street gangs, organized crime, religious cults, and self-sustainable communes to fringe or mainstream political parties) carries enormous informational value. After all, wasn’t the spectacular defeat of the centrist ideology in 2016 (and the traction of the right wing populism in the West) a direct consequence of ignoring the voice of the people who were left behind by progress and globalization — the people whose existence had been systematically delegitimized by neoliberalism. The diversity of opinions of the socio-political landscape allows rule of force to be replaced by a more efficient rule through freedom or self-conduct, which, while not necessarily less oppressive than the totalitarian structures, could be an economically superior alternative resulting in more robust and stable systems.

I have returned there where I had never been

30. VI 2016

Debt and guilt are two intimately related concepts. In some languages (Sanskrit, Aramaic, Hebrew, German) the two words even have the same root — the German makes it particularly explicit: Schulden (debt) vs. Schuld (guilt). In the same way guilt implies that we will have to atone in the future (or in the afterlife) for the sins committed today, debt is a handover of a part of our future in exchange for present consumption.

The dynamics of capital accumulation is based on the perpetual process of investment in a borrowed future. “Borrow today and repay later” logic carries an implicit bet on the future. Without an optimistic outlook on the future, there is no lending or borrowing. Debt links the present and the future in a circular way: A prosperous future cannot happen without the present, and the present cannot take off without a belief in (better) future. In this way, the very concept of the future undergoes a transformation in capitalism: It no longer represents a timeline we experience, but a concept we envision.

By now, accumulation of debt has become so pervasive that today there is more debt than wealth in the world. No debt will ever be repaid. It exists in a virtual space with an understanding that it can never be allowed to intersect with the real world. Today, debt links institutions and individuals through virtual default — everyone is both a victim and an accomplice in that game[1]. So why does debt still persist?

Debt defines the power structure inherent in the debtor-creditor relation. It has become the main instrument of biopolitics, especially in the last decades of neoliberal hegemony. In the absence of a real collateral (like house, car or any material good), creditor feels entitled to impose upon the debtor’s modes of behavior consistent with initial expectations of debt issuance. It is logical for the creditor to demand from the debtor maintenance of a lifestyle that guarantees his creditworthiness and ability to honor his obligations. For example, in the case of welfare (social debt), government has the power and (it assumes) the rights to pressure the welfare recepient into a conduct that increases his chances of getting back on track — rehabilitated and reintegrated into the mainstream society — so that his social debt is effectively reduced.

In the past, the United States, and other developed countries, used to finance the production of others — this was the traditional center-periphery interaction. Its credit-financed growth, which came to a halt in 2007, created domestic imbalances. This “domestic debt” had to be paid by borrowing from abroad — borrowing to service an already existing debt — a grand pyramid scheme of a sort. In an odd and misguided interpretation of the theory of comparative advantages, the United States specialized in the production of debt, but in international currency (US dollar). This enabled others, e.g. China, to “buy dollars” in exchange for its commodities[2]. To put it more bluntly, the United States imported from China commodities, labor and real products, in exchange for debt – a piece of paper, an IOU. (Who really got a better deal here, or who could get potentially screwed in this transaction?) Thus came about a strange situation in which the emerging world producers, the periphery, also became the net world creditors on condition, however, that payment of debt never be demanded.

United States, the world’s largest economy, owes foreign countries more than $6 trillion dollars, about 1/3 of its GDP (and another $10-12tr domestically). To China alone, it owes $1.2tr, to Japan $1.1tr and to European countries around $1.5tr — about 2/3 of its total foreign debt is concentrated in three economic regions. In principle, these three (and not to forget, rather powerful) creditors have the right to tell the United States how to “behave” — how to conduct its policies to insure its ability to service and repay its debt. In turn, the US is incentivized to comply with whatever the imposed rules, this implicit “code of conduct”, in order to maintain its creditworthiness and ability to borrow more in the future.  Global capital, thus, can demand access to the US political process, and, in order to allow that access, the US laws should be modified accordingly: Global creditors are given a way to have a say about who is elected in policy making offices, including the president of the United States. This is how debt becomes an instrument of global governance. This is the same mechanism already seen at play when IMF and the European Union used their “creditor rights” to disagree with the results of the Greek elections, their choice of the finance minister and a general shape of the local political landscape, followed by their insistence to impose austerity measures in order to insure Greece’s ability to service its debt to the large European banks and to the detriment of the Greek economy and people.

In this way, democratic process becomes compromised by influence of global capital which demands as collateral the ability to protect its interests through presence in domestic policy or eventually access to the real US assets, demand tighter regulations and smaller financial markets as a way of reducing the default risk, or more favorable trade agreements.

Submission to the tyranny of the Global becomes the other side of debt. Our lives become arranged to harmonize with demands of extraterritorial capital flows over which local politics has no jurisdiction and little or no influence. In order to keep global capital happy, budgets have to be balanced, welfare state dismantled, safety net removed and precarity and asymptotic unemployment as a way of life accepted. In this constellation of things politics becomes the problem instead of solution and status quo the only (peaceful) way ahead.

The acceptance of the existing democratic mechanisms as the ultimate frame is preventing a radical (or any other) transformation. Peaceful social life is itself an expression of the (temporary) victory of one class- the ruling one, with the state as an apparatus of class domination. Unable to perform the functions that states generally do, all states eventually become failed states.

Compromised democracy and loss of autonomy is the price to pay for excessive government debt. This is a perpetual process whose end is becoming only more elusive with time. It looks increasingly less like atonement and more like an eternal damnation.

[1] Jean Baudrillard, The Transparency of Evil, Verso 2009

[2] Massimo Amato & Luca Fantacci, Saving the Market from Capitalism, Polity 2014

 

A commodity like no other

10. IV 2016

While imposing the globalization of agriculture on the Third World economies, developed countries are taking a great care to maintain their own food self-sufficiency. The West has never abandoned this policy and with systematic financial support for their own farmers (in Europe, this support accounts for more than half of the entire European budget), it is blatantly violating the free-market economy rules it is trying to impose globally. In this process, many countries are kept in a state of postcolonial dependence and are becoming increasingly vulnerable to market fluctuations (e.g. starvation in Haiti and Ethiopia as a consequence of higher prices of corn due to biofuel usage).

The following three examples give a sample of strategies that have been employed in the past. The methods range from outright bullying in the global markets, to stalling tactics when it comes to financial aid measures.

1) The bulk of the economy of the African county of Mali is based on two commodities, cotton in the south and cattle in the north. Mali produces top quality cotton. However, it can not compete on the global markets because the financial support of the US government to its own cotton farmers exceeds more than the entire state budget of Mali. The cattle industry suffers a similar handicap as the European Union’s subsidy for every single cow (around 500 Euros) is higher than GDP per capita of Mali.

2) West has been continuously pressuring African countries into dropping government subsidies for fertilizers, improved seed… Without subsidy, agriculture could no sustain itself based on the domestic market alone. In that way, the western pressures opened the way for the best land to be used for export crops ruining these countries’ capacity to be self-sufficient in food production. This led to integration of local agriculture into global economy: as more domestic crops were exported, countries had to rely increasingly on imported food while farmers thrown off their land were forced into slums, where the only work available was in outsourced sweatshops.

3) To put things into perspective in terms of scale, priorities and timing, compare $700bn spent on stabilization of the banking system in the US with $22bn pledged (by the rich nations) to help develop poorer nations’ agriculture, out of which only 1/10th ($2.2bn) has been made available so far.

The circle of postcolonial dependence is closing again

Systematic extension of these strategies is spreading globally with large international companies (from Korea, Saudi Arabia etc.) leasing long-term arable land in undeveloped areas. By investing in infrastructure, these companies will create jobs for the locals and, at the same time, secure the consumers for their products as they will spend that money on “imported” food farmed on their own land. The proponents of the new world order use this part to argue that the lack of food is in itself and indicator of progress, since people in fast developing third-world countries earn more and so can afford to eat more. However, this new demand causes withdrawal of supply from millions in the countries lacking such fast growth.

Unlike other commodities whose abundance or scarcity can be converted into quality of life upgrade or downgrade, basic resources like food, water and energy are a matter of survival whose absence at some point could have irreversible effects on the entire economy. The list of products and services which, like food, are not commodities like others extends further including defense, the environment as such, culture, education, health etc. Substantial fluctuations and otherwise normal market uncertainties in prices of these resources can not be tolerated and decisions regarding their accessibility can not be left to the market. By extension of this argument, the free market should be left to rule only inessential products (toys, cosmetics, clothing,…).

From production to rent economy and the growing scarcity premium of the basic resources

We are approaching a global state in which the potential scarcity of basic resources like energy, water and food, would become the determining factor in international politics. A proper approach to these problems can not be addressed as a short-term issue. It is unlikely to be handled by any regulations, but rather with a long-term agenda in mind and out of the realm of free-market economy.

With the advancement of technology, the production costs are likely to continue to decline, but the price of basic resources (like other technology related products) need not  decline in tune with production costs (e.g. the price of oil does not reflect its production costs). Rather, the economy in this area will evolve from production to rent based. The consumers of the basic resources (in this case the entire planet) are likely to pay a rent premium to the owners of these resources and this scarcity premium is likely to continue to grow due to their diminishing supply.