Brian Holmes: Is it Written in the Stars? IPF09

Perhaps the insight we’re missing is the answer to a simple question: What is a derivative? We know that it is a fungible contract, created by applying a mathematical formula to an underlying asset or commodity whose price is susceptible to fluctuation on volatile markets. By assembling constellations of values that statistically tend to fluctuate in opposite directions, derivatives were supposed to mitigate the risks of globalization with the highest degree of efficiency. The idea was that that all risks, including collective ones, should be made into salable products, formatted for the market by private actors in search of a profit. Yet although it is salable, the derivative cannot be understood as an ordinary commodity. Marx described the commodity as that product of human labor whose exchange value, seemingly animated with a life of its own, acts to render invisible the social relations that produced it. Derivatives, however, have nothing directly to do with production; instead they are conceived to manage the environmental risks that weigh on the future of speculative activity. In this sense they are meta-commodities that govern the unfolding of the contemporary economic model. Their fascinating appearance acts to conceal the private deliberations that effectively shape the environment in which any productive or consumptive activity can take place.18

The lifeform of the financial markets is now animated by these meta-commodities, which lend the new cityscapes their dazzling character. But what the pulsating lights of the central business districts hide is the privatization of the social state – indeed, the privatization of government. Gentrification is the fetishism of severed democratic relations. Meanwhile, as Lee and LiPuma point out, the proliferation of derivatives actually increases the risks that they are supposed to mitigate.19 Yet the breakdown, when it comes, can also have its payoffs. Consider the way that Enron’s manipulation of energy markets led first to rolling blackouts in California, then to the recall of the Democratic governor Gray Davis and the election of Arnold Schwarzenegger, who has used the credit crisis as an historic chance to destroy public services.20 In the name of future prosperity for the middle-class citizens of California, the “Governator” is terminating public funding for the socialized university system that allowed so many Californians to achieve middle-class status.21 What European activists call “precarity” – that is, a condition of generalized uncertainty regarding education, employment, housing, health care, retirement and other life chances – now appears as a destiny, rising up against horizons blocked by the advancing threat of climate change. The supernova has finally imploded, leaving black holes in the future.

via brianholmes.wordpress.com

Comments

[threehegemons]

All these variations of the shock doctrine--that capitalist crisis is a great opportunity to ram more privatizations and cutbacks down our throats--are symptomatic of the lack of imagination on the left. These crises are also our opportunities, if we got our act together to take advantage of them.