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January 07, 2011

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Alain

Really interesting post Jodi. I have struggled to make the link between drive and ideology and this sums it up very well. Ideology is embodied practice, it is not what we think as much as it is what we do. But I wonder if the infrastructure spending being described here is a real manifestation of drive - I don't mean to be banal but isn't it just another way to make money?

But it is interesting that Mutual Fund investors get a brief mention - most ordinary Americans like myself and perhaps you too - invest in the market through our 401K or 403b or 457 retirement accounts at work. These accounts are almost always invested in mutual funds, the slow "buy and hold" approach that Wall Street used to promote and still does for their average retail investors. As you point out, these warp speed trades can wipe out a stock or, at the very least, have nothing to do with the underlying value of a given company. It is simply using arbitrage to take advantage of miniscule inefficiencies across global markets.

My question for you is do you think Drive, at least as it works under the conditions of communicative capitalism, is what makes ideology work in this way? Is it that compulsion to click and get immersed in the communicative/consumer networks of the market that forces us to act as if we believed? Perhaps you have been saying this all along and I just got it now, so forgive me if it is that simple.

As always, thanks.

scepticus

Jodi, I would say that HFT is a phenomenon of technology, not psychology. If you connect market players together with high bandwidth (and crucially, low latency) communication technology then HFT is the obvious result.

But ultimately, HFT is a red herring. The natural outcome of markets left to themselves is to ensure that yields are depressed as near to zero as they possibly can be, which is achieved by price increases of the assets being traded such that the income they provide as a fraction of their face value is minimised. It is also an outcome of increased volume and participation, which is mostly provided by the pension and insurance industries.

So with or without HFT, markets in conjunction with credit mechanism, will always depress yields and increase prices to the maximum degree that is afforded to them by the technology in place.

Ultimately this is a just and fair outcome (at the equilibrium point if not on the approach to it), since assets only have high yields because of the arbitrary scarcity of money or other arbitrary rules that end up conferring a yield/rent on some favoured sector of society.

More here:

http://liminalhack.wordpress.com/2010/11/02/let-there-be-money/

Jodi Dean

Alain--sorry for the late response; the ideology is in part in the justification "whatever it takes," also, isn't the very idea "just another way to make money" ideological?

On your last question: this is the hardest part; I think about it in contrast to other notions of ideology that viewed it in terms of desire, constructing desires, or providing fantasies about what we might unconsciously desire; it seems clearer to me now (and I wonder if Zizek was saying this all along--hard to say) that the difference in communicative capitalism is the way drive is ideologically configured. And I think that the compulsion is not individualized, but rather 'the whole thing', the mobilization of compulsion. And, it also seems like this is but the same way that Marx described capitalism in the Manifesto, but that Marx couldn't see that his could actually become not just a revolutionizing force, but paradoxically a revolutionizing force with a weird, stuck staying power; convergence: drive is a loop/circuit, revolution is a loop/circuit.

Scepticus--I don't think one can separate technology and psychology so easily; I also think that 'obvious' results are those that call out for ideology critique. I also don't think there is such a thing as markets naturally left to themselves; nor do I think 'this is a just and fair outcome.'

scepticus

I take your point about technology and psychology, ultimately culture, collective psychology and technology have a recursive relationship.

Sometimes culture might lead technology and sometimes vice versa.

In this case, a very sudden increase in communication bandwidth and latency leads to a cultural response. It can happen the other way round too.

As for what's just, perhaps you could suggest to whom asset yields should be due, and what would prevent the sector this chosen from selling their assets, thereby leading to a sustained price increase in said asset until the yield be as close to zero as the carrying costs and risk premium allows?

Jodi Dean

It doesn't really make sense to treat culture and technology as separate wholes rather than as completely intertwined.

I think that the people organized as a dictatorship of the proletariat should determine distributions.

Alain

Thanks again Jodi. But if you are correct, and the compulsion works on "the whole thing," that is, it works at a macro or perhaps even metaphysical level (my phrase, not yours) how are we to respond? In this account the forces and contradictions that were to allow capitalism to sublate itself merely have us stuck in re-inscribing its coordinates - a very powerful notion that seems to describe this moment. How to live a different way of being, beyond drive, or perhaps to go through it?

Jodi Dean

yep--it's going to be hard. technical answer: reinscribe the gap of desire. practical answer: hard work, organizing, weaning ourselves from capital's teat...

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