Tag Archives: #RageCapital

Adventures in Rage Kapitalism

29. XII 2020

Between 1996 and 1997, during the de-Sovietization of Eastern Europe, Albania was convulsed by the dramatic rise and collapse of several huge financial pyramid schemes. At the peak, the nominal value of the pyramid schemes’ liabilities amounted to almost half of the country’s GDP. About two thirds of the Albanian population invested in them.

Last summer, ten years after my first reading, I took a second shot at Peter Sloterdijk’s, Rage and Time[1]. While the first take was illuminating, the second round was nothing short of transformational — a pure bliss and an altogether new experience. The framework, which it laid down a decade ago, when put in the current context, has acquired visionary relevance. The book has aged marvelously. Like the best wine, it developed complexity and nuance, which I failed to detect originally.

Rage and Time was published in its original version in Germany in 2006 and appeared in the English translation four years later, in 2010. It was written while the economy in the developed world was booming and neoliberal hegemony remained uncontested, before any hint of the global financial crisis was on the horizon. As such, the book had been deprived of the new landscape of rage and the most interesting decade of its evolution. Nevertheless, it became a true testimony of the future. Solterdijk’s work laid a precise fundamental groundwork for what was to come soon after its publication. Post-2008 developments flow seamlessly as a natural extrapolation of the ideas expressed in the book, making it practically effortless to imagine what would have been the content of additional chapters had the book been written in 2020. This period is possibly the most explicit celebration of the book’s framework and a stunning “out of sample” confirmation of its main theses.

Sloterdijk’s argument begins with the observation that political parties and movements define a non-monetary banking system where they function like rage banks and operate as collection points of affects; they facilitate transactions with the rage of others in the same way monetary banks operate with the money of their customers. They provide a liaison between rage capacities and a desire for dignity. Their contract is based on a promise to their clients to disburse a return in the form of increased self-respect and a more powerful grasp of the future, provided the clients refrain from independent utilization of their rage. By doing this, they relieve their clients of the difficulty of having to take their own initiative, while nevertheless promising thymotic gains[2].

With these transmission mechanisms of rage in place, political developments in America and Europe nowadays can be interpreted as conceptually the same phenomenon that took place in financial systems of emerging post-socialist Europe some 25 years ago.

At the core of these developments reside continuous attempts to manage the crisis of legitimation of a system that has run its course with pyramid schemes of rage: Populist movements, which have emerged as a consequence of this crisis, have enticed people to deposit every last molecule of their grievances in rage banks run by the current Right Wing political parties. Their game plan is to appropriate those deposits and declare bankruptcy, in pretty much the same ways as regular banks did in 1990s Albania.  And who’s better suited for this job than a certified conman with an uncontested record of fraud and serial bankruptcies?

Surrogate capitalism

The main characteristic of pyramid schemes, what distinguishes them from traditional capitalism, is that they have a finite duration and irreversible collapse. Capitalism, which has booms and busts, crashes, and recessions, recovers because it has an elastic modus of fleeing ahead that includes creative behavior; it is capable of controlling tendencies that signal collapse[3]. A pyramid scheme, on the other hand has no inner mechanisms and patterns of behavior; it is a hollow project financed only by a continuous inflow of (gullible) newcomers who are willing to pay for an opportunity to take risk against empty promises. While those at the top could pocket sizable profits, the bottom echelons lose with certainty. It is the absence of transparency and information about individuals’ places in the hierarchy of the pyramid scheme that determines its extent and duration.

The underlying mechanism and logic of cash flows of a general pyramid scheme can be understood using a simple three-level example with Captain, Crew, and Passengers. Everyone has to recruit two new members, and each member chips in with $100, which is then distributed upwards. At the end, the Captain goes with $400, the Crew breaks even, and the Passengers lose their investment, a total of $400[4].

For a pyramid scheme to continue to work, it’s expansion must not stop – once it stops, it is over, all the funds have already been distributed and no new are coming in. Because of that, the scheme is a catastrophic process of finite duration — its collapse must occur because the number of new recruits, which are essential for its financing, is required to grow exponentially and very quickly the number of newly recruitable players is exhausted — all newcomers who can be recruited are already on board.

The inevitable collapse occurs either suddenly or it needs to be brought about consciously because the number of momentarily recruitable players necessarily becomes zero after only a few rounds, which is why even with good camouflage it is hardly possible to extend a game longer than a few years.

Albanian capitalist apprenticeship as a template of American right-wing politics

There is an unmistakable similarity between the Albanian transient apprenticeship in capitalism during the 1990s and the Right Wing populist attempts to crash the American political market in the 21st century. Sloterdijk’s detailed account of conditions that led to the Albanian crash transcribes almost verbatim to present-day America once conventional money is replaced with rage as political currency.

Albania has always held a singular position in Europe. Its history is an undeserved tragedy of Albanian people who had been innocent victims of circumstances created by geopolitical forces over which they had no influence. The country epitomizes physical, political, and cultural exclusion, with a heavy stigma of isolation and backwardness, similar to today’s North Korea.

Decades of systematic and absolute isolation have caused a gradual atrophy of general exchange mechanisms necessary for normal functioning of society[5]. And the more these mechanisms became necessary and urgently needed to keep up with the rest of the world, the more intense oppression had become, leading ultimately to their total disappearance and Albanian disconnect from the rest of the world. Albania was a failed state long before that concept existed. While the only thing at their disposal was time and patience, the world moved on leaving them light years behind and practically impossible to catch up. As Albania gradually learned to live without the world and the world without Albania, after more than half a century of total disconnect, reintegration became unachievable.

The excess population in America, the growing body of excluded white underclass, shares a similar destiny as Albanian folks — both have been the victims of systematic and irreversible exclusions and both have had their own Hillbilly Elegies:Like Albanians, who remained largely prisoners of their own past, the American white underclass felt equally cut off from luck, wealth, and privilege and its distribution for too long.

Their uprisings share a similar pattern as well. Like the newly minted Albanian capitalists of the 1990s, who were fed by grandiose phrases about their past, their American counterparts felt it was their turn to take part in the satisfying injustices of the affluent world. Both fell, naturally and expectedly, into the trap of their precarity and impatience. In the same way Albanians fell for the massive pyramid scheme in the 1990s, 20 years later, the American white underclass had fallen victim to the rage pyramid scheme of Right Wing populism following the same logic of the old-fashioned misconceptions and empty promises of capitalist alchemy.

Pyramid schemes have a strange effect on our minds: When easy money is readily available, we don’t ask for rationale, we take it; everyone sees themselves as perpetrators and not the victims.

Bundling rage deposits of the American excluded underclass into old and new (stillborn) right-wing narratives did it’s magic by saturating the public discourse with low-brow paranoia of deep state, assault on the 2nd amendment, right to life, and the fear of government control, while delivering the inflated thymotic premium in the form of worthless pseudo-nationalist pride as a surrogate for the old-fashioned white (male) supremacy. Although this was not a new development, it’s tempo, set by the last four years, was.

By normalizing corruption, Trump, with a lifetime of experience in fraud and embezzlement, demonstrated how to cash in more efficiently on the rage investments of impatient, gullible, and vulnerable constituents, by pretending to rais the stakes and by deepening the commitment of the Republican base, he drained the last atom of their rage, and after harvesting and monetizing it, declared bankruptcy. In that respect, he achieved in four years more than the GOP did in the prior 40 years.

And things went predictably wrong for all depositors, as they did for Albanian “investors” 25 years ago. Rage deposits were used to deliver lower taxes for the rich, while defaulting on all other promises to bring back manufacturing, healthcare, coal industry, immigration reform, the wall, healthcare debacle… Trump emerged as Bernie Madoff of rage capitalism and the movement became the rage version of the Albanian capitalist experiment.

By now, it is clear that the scheme is over; the pyramid has collapsed. COVID was Trump’s (and the GOP’s) Stalingrad. It outlined the contours of the bursting of the rage asset bubble and the crumbling of the Right Wing pyramid scheme. The result has been a replay of the Balkan opera buffa, which, if it hadn’t had tragic consequences, involving real people and human misery, would have been extraordinarily funny: Caged children irreversibly separated from their parents, massive economic devastation together with the rise of precarity, and the criminally incompetent mishandling of the pandemic with hundreds of thousands of unnecessary victims.

When reality becomes a parody of itself

Unlike Albanian “capitalists” who, after getting financially wiped out, got over it and figured out the obvious that a pyramid scheme is just a pyramid scheme, American comrades (self-proclaimed entrepreneurs, risk takers and believers in the “free-market” supremacy) seem to be immune to the same learning process. Their social metabolism works differently. The myth that there’s a first prize for everyone is still the basic axiom of American cultural ideology. The deep-rooted belief of the underprivileged that they are not victims, just temporarily embarrassed millionaires, is still the fundamental determinant of the American social identity.

After being robbed by one pyramid scheme, they rush straight into another, as if nothing happened — same type of scam, organized often by the same person who robbed them the first time (or by his cousin); it doesn’t matter, there are always rubes to be recruited. There seems to be a culturally conditioned chronic delusion about the wealth alchemy that pushes the entire nation to aspire to become instant millionaires, which prevents them from resisting a scam, even when it is transparent and clearly defined as such[6].

The last decade stands as the final stage of the transformation of the American psyche, from Protestant ethics of hard work to compulsive risk takers and lottery winners, a residual of the gold rush mentality that has mysteriously survived centuries of reality checks. This is the something for nothing mindset that has been going since the discovery of the New Continent. It received strong reinforcement and entered an accelerated phase by the Silicon Valley paradigm. The attempts to contain the psychological fallout of that episode have defined the social tensions of the new century.

Like the biological immune system of Native Americans, who early settlers decimated with diseases, which for the newcomers were not lethal, but proved so for the natives, the contemporary American social immune system remains permanently compromised.

The holy grail of this ideological affliction is the belief in the sovereignty of luck: 1) There is a first prize for everyone and 2) Who wins is right and who loses should not complain[7]. If a person commits a crime and gets away with it, instead of condemnation, society responds with: “Good for him”. This transposes ex-ante any transgression as another failed attempt to realize what is rightfully yours, and thus blurs the boundary between right and wrong. There is no room for ethical judgment – hurting people or doing social damage, is not assessed in a broader context of ethics and general system of values, but is, at most, taken as an error in calculation.

The unwavering emotional investments in the ideology of meritocracy and, at the same time, inability to understand subtle differences between capitalism and pyramid scheme prevents them from being able to resist and defend themselves against fraud. Capitalism is prepared to put up with every form of irrationality as long as conditions for its technical rationality are preserved. And because of that, American self-declared libertarians and defenders of the “free-market” capitalist value system, as much as they believe in the power of rationality, fail it repeatedly. There is a little Albanian capitalist with a learning disability under each MAGA hat, all 74 million of them.


[1] Peter Sloterdijk, Rage and Time, Columbia University Press (2010)

[2] ibid.

[3] ibid.

[4] In a four-period pyramid scheme passengers can be divided in to 1st class (4) and economy class (8). The latter lose all their money (total $800), while former break even, crew divides $200 and captains takes $600. With a more realistic branching number, where each participant has to recruit ten new members, we realize that pyramid schemes can have only a handful of levels. A twelve level pyramid scheme with this branching already exceeds the entire human population.

[5] For more than half a century, Albania was completely sealed – nothing could come in and nothing could get out. They had no political allies or sympathizers. There was no cultural exchange with the rest of the world and no flow of information. That was the vision of their political leadership, imposed on the entire population with considerable force. Albania was a poor country doomed to endure its isolation alone relying solely on its meager resources. The net result was an incredible poverty, both economic and cultural.

[6] The latest example of the post-election scam is just another data point. After realization that there are more than 70 million rubes ready to participate and invest in an already bankrupt project, the number that stunned even its creators, the new scheme started while the ballots were still being counted. Trump already raised several hundred millions after his defeat in terms of donations for “legal” costs, “Patriot League” and “Elite Club” memberships from the people who just didn’t want to see the small print informing them of a true trajectory of their donations.

[7] Ibid.

Rage Kapital

12. XII 2020

Thymos is that area of the soul where feelings of pride, indignation, and shame are located. It is the middle realm between reason and desire, the unreflective striving towards what is noble — the courage to be. (Paul Lee)

How do individual grievances become streamlined into a collective expression of dissidence, political opposition, and aggregate supply of discontent? This socio-affective landscape functions very much like a traditional banking system in which rage replaces money and becomes the main political currency. In Peter Sloterdijk’s highly original approach to the role of rage and thymos in political history, the starting point is the mapping between political systems of dissidence and financial markets. He adopts the framework of Niklas Luhmann’s systems theory[1], which allows a straightforward generalization, and extension of banking to the social and political context:

Economics defines a bank as a collection point for capital. The deposits of customers, which are fruitless monetary treasures when deposited, are transformed immediately into capital. They are invested in profit-oriented forms of business, which allows clients to partake in successful investments while protecting them whenever possible against disappointments. The banking system transforms the temporal profile of money through the transition from treasury (a mode of storage as a static configuration of accumulated presence aimed at the preservation of value) to its capital form (a dynamic mode of being, subject to constant externalization, constantly occupied with using itself, but never in full possession of itself)[2].

How rage becomes transactional

Political parties and movements define a non-monetary banking system where rage banks operate as collection points of affects; they facilitate transactions with the rage of others in the same way monetary banks operate with the money of their customers. They provide liaison between rage capacities and a desire for dignity. Their contract is based on a promise to their clients to disburse a return in the form of increased self-respect and a more powerful grasp of the future, provided the clients refrain from independent utilization of their rage. By doing this, they relieve their clients of the difficulty of having to take their own initiative, while nevertheless promising thymotic gains[3].

Rage banks

In the 20th century, such rage banks/political movements were (with one notable exception) invariably on the left. In the 21st century, however, rage has moved completely to the right or, more precisely, to the far right, which has taken upon itself the main rage-banking role. This has come about as a consequence of two factors: The left’s abdication of its traditional role and its compromised position after the collapse of the Soviet experiment, and the reign and subsequent decline of neoliberalism and its current legitimation crisis. These two processes have not been completely independent — their evolution has had a strong causal interplay after the new initial conditions had been set in 1968.

Neoliberalism and the disappearance of the Left

The migration of sponsorship of rage from the Left to the Right is a consequence of the spontaneous self-destruction of the neoliberal social system. Paraphrasing Zizek’s summary of this transition, the causality chain begins with neoliberalism as an ideology which disseminates market values to every segment of life. However, once one allows the market to impose its values and criteria, society has to be managed as an auxiliary to the market. The welfare state has to be dismantled and the economy deregulated. Identified with social statism, the Left finds itself without either a program, project or perspective. It is gradually absorbed (and dominated) by the center and is tolerated only when it can persuade labor movements to accept the need for liberalizing reforms. As a consequence, the main task of the Left is to convince lower classes to articulate their fury without disturbing the status quo and voting themselves into economic ruin. Hijacked by the center, the Left becomes an Uncle Tom of the labor movement. It is only the Left in name – a name that it merely continues to discredit[4].

Rage assets and rage economics

The American white underclass never forgave the Center/Left coalition, which in combination with the general trend of emancipation, allowed/enabled black people to climb the class ladder and disrupt what they (the white underclass) perceived as the “natural” hierarchy. This sowed the racist seed for what would become the culture war, in reality a class war in a displaced mode, tipping the scales from the Left to the Right, and outlining the contours of that transition.

After decades of labor’s disappointment with the faux Left and the Center, the Tea Party emerged as a genuine right-wing rage bank in the days following the peak of the global financial crisis in 2008. Conservative opinion outlets like Fox defined the cognitive coordinates of the right-wing narrative and became the epicenter of the outrage industry with Roger Ailes as the James Pierpont Morgan of rage banking.

Bundling grievances of the white underclass into rage assets has been the core of contemporary right-wing political alchemy – an analogue to the financialization of the economy. The first draft of this project was outlined in the aftermath of the Watergate scandal. After the Republican party was pronounced clinically dead in the post-Nixon years, Lee Atwater drafted the blueprint of its comeback with the right-to-life issue, which mobilized emotions that united evangelicals, rural Christians and the general white underclass under the same umbrella with financial elites and the wealthy. The continued persistence and functionality of this counterintuitive ideological stunt, this unique American experience that goes against all odds of logic and economics, has never ceased to astonish.

American white underclass has deposited its grievances into rage banks which converted them into rage assets: Right-to-life and general misogyny (both representing an actual maneuver to reduce the social influence of women), 2nd amendment hysteria, small government fetish, tax affliction and the obsession with dismantling the welfare state, Deep State paranoia, Birtherism, and the production of  a wide spectrum of deniers (from Flatearthers and  anti-maskers to vaccine-, evolution-, holocaust-, climate change, and election-deniers).

The main suppliers of rage remained the white underclass, excess population, and those, generally, left behind, while Libertarian think thanks, the NRA, evangelicals, special interest groups and right-wing liminal players acted as purveyors of discontent, rage asset managers, and strategic investors in rage markets.

Disinformation and conspiracy theory centers like Rush Limbaugh, Talk Radio, Breitbart, Info Wars, OAN, NewsMax, and Qanon became the centers of treasure against which rage assets have been printed and used as capital. They became the main innovators of structured rage finance and suppliers of rage volatility, rising as the shadow rage banking system while social media became platforms for day trading in rage transactions and a way to whip up emotions and create additional rage volatility. Fox and (on the local level) Sinclair remained the main nodes of this action, acting like credit unions or the Fannie Mae of rage.

Nationalism as the white collar crime of rage banking

The depth of Sloterdijk’s insight and the power of his framework become manifest when it comes to discussions of the emergence and effects of nationalism on the eve of WWI.  During the late 19th century and until the beginning of the war, capitalism as a source of economic misery and political repression was the primary origin of the supply of discontent and raw rage. In that configuration, political alliances and parties of the left became collection points of dissidence, which organized the thymos of the disadvantaged[5]

As capitalism spread through the developed world and internationalized, the anticapitalist impulse could maintain the level of its enemy only if it reached the same supranational level as the enemy in terms of organization and operation. This insight led to the internationalist pathos, which persisted for all authentic parties of the left uninterrupted until 1914[6].

All this came to a halt in August 1914 when it became clear that the collective grievances of the international proletariat had to be unwound and the underlying rage redirected toward national interests of individual warring countries. There were no longer any parties with any other mandate except for the national one. This sentiment and attitude was the obituary for transnational solidarity[7].

This was the major rage bank crisis. The rage deposits of the masses of internationally operating banking houses were now at the disposal of national political leaderships.

The emerging nationalism effectively represented a large-scale devaluation of rage assets and an embezzlement of rage banks. By withdrawing decades worth of accumulated quantities of rage and dissidence from the frontline against the capitalist order and making it available for the war between imperial nations, the leaders of the moderate workers movement committed a white-collar crime of unparalleled extent[8].

Arousing thymos of the abject: 21st century populism

Nationalism is the worship of the smell of our collective shit (Charles Simic)

In the 20th century, WWI was the catalyst of the large-scale devaluation of rage investments of the oppressed and excluded. Similarly, modern 21st century nationalism is, more than anything, an insurrection against the consolidation and internationalization of global aggregate rage. It is an ill-conceived, discoordinated struggle for the appropriation and misuse of the global underclass’s rage.

The core of the conflict of the Right Wing populism resides in the debasement and degeneration of American conservatism. The main idea behind the alignment of the two opposite ends of the social spectrum (the privileged and the excluded) with fundamentally incompatible interests under one umbrella consists of redirecting rage into cultural instead of class struggle.

As the world (and capitalism as the center of discontent production) has been getting increasingly more global, in an effort to cash in on the accumulation of global grievances and latent dissidence, populism, with largely nationalist platforms and pseudo-protectionist agenda, has felt the need to internationalize its movement.

However, while Right Wing populism was pacifying the growing white underclass and keeping the movement of the excluded small, it, at the same time, was laying the groundwork for the formation of the conditions that would unite and reaffirm the interests of the oligarchs of the world. This was its primary task. The Right Wing was simultaneously running both a revolution and a counterrevolution.

The ridiculous idea of internationalizing nationalism, which screams of self-contradiction, was meant to result in the incorporation of a world rage bank, like the International of the labor movement some 100 years ago.  

Subordinated to national interests, and as a partial compromise to their global oligarchies as ideological sponsors, anti-global grievances have been converted into nationalist rage directed against immigrants, porous borders, and disrupted class hierarchies.

Given their inherent priorities, Right-Wing populist movements, in reality, have always harbored preparations for a betrayal of rage investments without a world war – they represent the beginning of a political pyramid scheme. The inner conflict of this dual mandate reached intolerable levels in the last decade creating a sociopolitical configuration, which demanded its resolution.

The internationalization of nationalism came out naturally as an inherently racist proposal. Considering simultaneously the heterogeneity and essential exclusivity of each individual nationalism that was awakened in developed (and some developing) economies, the only axis along which the project could take place is white racism. Ultimately, globalization has forced the resolution of the irreconcilable inner contradiction of bundling the underprivileged with the ultra-wealthy in a singular way – racism.

On a purely transactional level, the idea behind the meaningless (21st century) populist project has been the appropriation of rage capital betrayed by the left, which abandoned the real grievances of the white (male) precariat created by capitalist self-destruction and further reinforced by globalization, leading to structural job destruction due to the outsourcing and scaling down of manufacturing, the transition to more efficient energy sources, etc. This betrayed discontent was transposed into racist and misogynist rage assets leading to an establishment of new organs of collective grievance.

From the outset, the Right Wing platform of the capitalization of the rage of the oppressed, excluded, and forgotten has been loaded with self-sabotage. Bankrupt at inception, it could only be conceived as a part in a pyramid scheme of rage, not sustainable, able to last only as long as new members could be recruited.

Communism abhorred nationalism as the kryptonite of its cause, the toxic substance that paralyzed their defense abilities against capitalism. However, when the tables turned and communism imploded under its own weight and the baggage of its internal malfunctioning, the very same actors, those who remained in power and in leadership positions after the system’s rebranding from a pseudo-egalitarian dystopia to a state sponsored organized crime syndicate, became rabid nationalists. They quickly realized the mobilizing potential of identity politics and its essential role in the get-rich-quickly scheme.

This was yet another realization of the general rule: When the system exhausts itself, it turns to identity politics.

Some thirty years later, capitalism in the developed world is facing the same problems and challenges. Paraphrasing Sloterdijk’s account of the post-revolution era of Bolshevik’s reign and extrapolating it to the 21st century America, the paradox of freedom and equality for all had never been exaggerated more convincingly than during the accelerated phase of the attempted takeover by Right Wing populism: The alpha dogs of that deception achieved their plan to accumulate (almost) all of the power in their hands.

In the same way Soviet Communists had done so during the early post-revolution years a century ago, current turbo-capitalism continues to argue that in order to “save” the system of values and lifestyle of millions of Americans, one had to accept that a few thousand people would have to be sacrificed. Throughout 2020, we were continuously reminded how hundreds of thousands have been sacrificed so that a few hundreds, and ultimately a few dozen, could stay in power and enjoy or even extend their privilege.


[1] Dirk Baecker, Womit handeln Banken?: Eine Untersuchung zur Risikoverarbeitung in der Wirtschaft, Suhrkamp (1991)

[2] Peter Sloterdijk, Rage and Time, Columbia University Press (2010). Although the book was published in its original, German, edition in 2006, it was difficult to shake of the feeling that the author didn’t really know what was about to happen in the subsequent decade.

[3] ibid.

[4] Slavoj Zizek, A Permanent Economic Emergency, New Left Review, 64, July/Aug 2010

[5] P. Sloterdijk, ibid..

[6] ibid.

[7] ibid.

[8] ibid.