18 July 2011

Understanding the Debt Clash

The chief difficulty in a crisis, and the purpose of this blog, is to understand what's going on. A crisis is a moment of genuine indeterminacy, where the rules of the game, indeed the whole game, that were present before are no longer valid. This poses a difficult problem for research and is only worse for research meant to intervene in the historical transformations (which is the point of this blog). The challenge is not only to give an account of why one thing or another happens, but to draw lines of significance that can help us in our attempts to position ourselves facing toward a free society.

The American political clash around the debt ceiling provides an excellent example of what makes moments of crisis so difficult.

What Isn't happening:
1) America is not caught in an unsustainable debt trap due to a crash in GDP.

Unlike the sovereign debt crisis in the Eurozone, America is not swamped under a crisis level of debt. Those crises occurred because the bond markets in Europe became so scared of default that rates began to rise. Thus Greece, Ireland and now Italy have all faced skyrocketing borrowing rates that mean any budget deficit (which necessitate some borrowing) becomes compounded by deadly interest rates. This is very similar to the debt crisis of the global south we saw at the beginning of neoliberalism 20 to 30 years ago (and a chief way neoliberalism established itself globally), where the World Bank and the IMF made borrowing impossible for states that did not get behind radical privatization and free-trade programs.

While it is an anomaly, Italy's situation demonstrates very clearly why America is not caught in these kinds of crisis producing dynamics. Financial Times's investment editor (and my vote for best hair in Britain), James Mackintosh lays this out quite clearly in a recent analysis video. Both Italy and the US have comparable debts, Italy at 120% GDP and the US at just under 100% GDP, but the difference is in the interest rates they can borrow at. In the last few years Eurozone bond markets have become terrified of the less secure national economies, known as the PIIGS (Portugal, Ireland, Italy, Greece and Spain). As a result Italy now has to borrow money at 5.5% for 5 year bonds. As a matter of fact, Italy is projected to actually run a small surplus before interest, something unthinkable in the US. America, however, borrows at nearly 0% interest. The uncertainty in the equities and bond market have sent investors fleeing to US Treasury bonds as the safest bet around, plummeting US borrowing rates. This means that, in the short term, it's becoming nearly impossible for Italy to stay afloat, while the US has nothing to worry about. Certainly mounting American debt might be a problem somewhere down the line, but it's not a crisis.

2) There is no mass populist movement for government austerity.

This seems almost common sense. I have a lot of trouble imagining poor and working class folks deciding and fighting en masse for cuts to the government programs that help them get by. But this nonsense is the very image that the Tea Party and Fox News would like us to believe. Unfortunately due to the bankruptcy of American media this narrative has become fairly mainstream. There are plenty of polls that say most Americans do not support cuts to medicare, medicaid, or social security. Even without polls we only have to think back to the confusing scene during the healthcare debate when a woman passionately cried at a town hall for a Democrat to, "lay your hands off my medicare!"

That's not to say the Tea Party does not have a populist character. Their appeals to patriotism, simple financial principles, and social conservatism (to a degree) resonate with large swaths of the American population. But this, as with most populisms, has nothing to do with mass belief in the political program. Instead it seems to be out of fear and desperation. People have been unemployed for dangerous lengths of time, wealth inequality is becoming more egregious and apparent, and many of the basic social traditions like family life and religion that made all this palatable are falling apart. As Walker says the tea party does provide a coherent response to the crisis and there's a populist desire for that regardless of content.

3) There is not a popular collapse of "the social."

Here is where I might be disagreeing with Walker's analysis if he wants to locate the collapse of "the social" in mass popular consciousness. I agree that the Tea Party ideology is an extreme extension of the Thatcherite position that "there is no society," but this is a very abstract and rarefied thought. "Society" as an abstract entity rarely appears as such in popular consciousness. In Fordism it appeared largely as the state, in Liberalism it was largely national tradition. It doesn't seem like "the market" experienced under neoliberalism is any less a mode of appearance of "society" than either of these. The one distinction, and this is crucial, that the market is wholly out of our collective control. The nation is, drawing from Benedict Anderson, an imagined community to which one was a part. The state is subject to one's collective political will. The market however is like the weather, it's hopeless to hope to effect for most people. It's this hopelessness of active participation in society, of truly having any agency in society, that's still gone for most people, and it would take a great deal to change that belief.

How do we think about all this?
Right now I have no hope of giving an account of what is happening, because I don't think we're clear on what kind of account we need. It would be simple to give a journalistic/factual story for how the Tea Party rose to this position of holding the country hostage. But that wouldn't be enough. From that perspective this moment looks like a repeat of 1992, when Newt Gingrich took control of the house, with the stakes raised. But from the perspective of trying to articulate a Left response to this unique moment of crisis, this falls short.

We shouldn't be after a better account of how one thing or another happened in a crisis. All the stable lines of causality that exist in a stable form of accumulation are out the window. Most of the dominoes that were going to fall with any necessity have already fallen, and the rest is radically contingent. Will the Euro survive? Will austerity take hold? Will China become financially hegemonic as well as productively? Even these economic concerns are up for grabs, let alone the cultural and social transformations afoot.

What we need to do instead is try to judge the significance of events. Instead of asking how we got here, ask what "here" means. This means asking questions like what form of accumulation might austerity and tea party politics fit into, or what the conditions of "solution" to the crisis are. It also means that we can't always build up our understanding purely from the facts (if this were ever possible), we have to know what we're looking for. This is why I'm so curious about the responsible business practice discourse, not because it's got any traction, but because it seems to be the kind of thing that could take hold in a moment of crisis. Most importantly, this also means looking for lines of thought and action that might articulate an oppositional or emancipatory politics. It will almost always be provisional, and hypothetical. It takes a great deal of theoretical wagering, hedging and some faith. This all looks like bad science, but we're not doing science in the usual sense.

Historical significance is something that is never in fact stable and is almost always post festum. However the desire for a better world means actively attempting to intervene not simply in the world, but in history. We must find ways to do things that are historically significant. Our analysis must not simply tell us what is, but what it means for our larger struggle and semi-blind quest for justice.


  1. We must also reckon with an analysis of the left. I don't believe that I have yet seen (here or elsewhere) a satisfying account of the left in the period of neoliberalism. It is easy of course to deride the left at a time when it has all but vanished. But it seems vital to me to understand the left's decline, as well as to understand how it has contributed to the establishment of the neoliberal system. Such an account would surely have to deal with the emergence of anti-colonialism as a major theme, the left's response to financialization, as well as environmentalism. Ultimately, I think that one of the most important goals of this project would be to gain a better and clearer understanding of our agency, how it is constrained and has been constrained by recent historical formations, and how we may proceed.

  2. I definitely agree that the Left is historically weak, and that it did decline under neoliberalism, but I don't think we should go too far down that road. There has indeed been a great deal of growth and development that we will miss if we keep our Bolshevik blinders on.

    Yes, there's nothing in the metropole like the mass movements of the early 20th century, but that most of that revolutionary moment went away already with fordism ('68 was very different than '19), and this lack is in may way peculiar to the metropole. The rebellions going on in southern China, South Africa, Latin America, and South Asia are truly remarkable and while they do not seem to be coalescing into a single global revolutionary movement they do seem promising.

    Also I don't think we should be so dismissive of the development of the American and European left over the last 30 years. Under neoliberalism North American anarchism and Autonomism, despite theoretical problems, have become very dynamic and productive discourses. There has been massive creativity in lifestyle and social infrastructure (mostly of the bookstore variety) and the summit hopping scene had some very real (if mostly symbolic) effects. That's not even to mention the Zapatistas or Venezuela, which, despite problems, are peculiar products of the neoliberal period and offer very interesting models for Left practice.

    So while yes, we need to understand why much of "What is to be Done?" or more importantly "History and Class Consciousness" have no referent in the era after neoliberalism, and why the left traditions that come from that discourse seem so historically inadequate especially in America and Europe, we also need to remember that that does not mean the death of the Left. We must follow new lines of thought, discover (and make) new traditions from the forms of resistance that /have/ sprouted and flourished.

  3. Actually what I had in mind was more like what you're mentioning in the third paragraph. Of course there has been a lot of writing on these issues, but little of it is critical and clear-eyed, at least from my point of view. Do you think that the analysis is basically out there and would be redundant at this point?

  4. Let me give a little additional clarification on my intent, because I don't think my original comment was particularly clear. There are clearly no lack of critiques of the left and its "decline" in the twentieth century. You make a good point that I'm overstating the situation (I was thinking of the US specifically when I wrote that.) But what I actually wanted to say was that these critiques are really missing so much. In particular, I think the development of anti-colonial and identity-based politics and all their negative and _positive_ aspects need to be critically examined. As I said above, one of the most important aspects of this would be understanding what kinds of forms of agency we can claim under capitalism.

  5. Totally. Especially under fordism I think there was a great deal of theoretical clarity lost due to changing material conditions. Even in '68 Lukacs would have had to be read differently, at least in the metropole. What's more, and what I think you're getting at, is that this might not be a loss of revolutionary potential, but simply a transformation of material of the material conditions and an ossification of existing theory. At the same time even within this ossification a lot of productive and powerful new ideas were developed. Getting out of that ossification, and creating an emancipatory theory adequate to this historical moment is the whole problem. To be perfectly honest I'm not clear on how one goes about that or even what the "end goal" would be, though I certainly believe we can't merely rely on the closest of readings of Marx or Luxemburg or C.L.R. James. We have to be attuned to the ways that the world itself, and our attempts at intervention into it, might push forward our theory as well.

  6. To be a little concrete about what I mean by "the world pushing forward our theory":

    I wrote a piece here (http://www.hypocritereader.com/2/madison) about my experiences in Madison. I meant it as an analysis of what historical problems were pushed forward by the protest, in particular how a political subject (in Ranciere's technical sense if you know his work) might have become able to appear. Madison simultaneously brought (for me at least) three sticky theoretical points into relief. Occupation as a way that "the people" might make an appearance. We have been unable to manifest a political subject in the past. And once this subject appears we don't know how to keep it around and manifest some agency on its part. So the events in Wisconsin exposed and change the theoretical landscape.

  7. It would seem to me that the problem facing the left cannot be understood outside the model for society advanced in the first post: "It doesn't seem like "the market" experienced under neoliberalism is any less a mode of appearance of "society" than either of these. The one distinction, and this is crucial, that the market is wholly out of our collective control. The nation is, drawing from Benedict Anderson, an imagined community to which one was a part. The state is subject to one's collective political will. The market however is like the weather, it's hopeless to hope to effect for most people. It's this hopelessness of active participation in society, of truly having any agency in society, that's still gone for most people, and it would take a great deal to change that belief."

    This seems right to me (at lease initially) and I don't think we can understand the left as existing outside of this concept of society. Certainly, those on the left have chosen to claim some agency, whereas those on the sidelines have not. But I wonder to what extent this focus on agency itself is not tied up in the neoliberal order. Let me forward two observations: 1) politics operates as a marker of identity that is fully compatible with the proliferation of "lifestyle identities" that have been the socio-cultural, and according to some accounts, economic backbone of neoliberalism. Configuring politics as identity loosens its claims to grasping more adequately or accurately the present. In this sense, politics must be preceded by an analysis that renders that politics more adequate than others to the present. This cannot be done through activism and activism lacking such an analysis is doomed to flail amongst the rocks of identity politics.
    2) Chris mentioned anti-colonialism. I am not sure why he groups it in with identity politics, but in my own thinking the two get aligned in conversations focused on agency. This was what the anti-colonial was all about -- rescuing and recuperating native agency. Doing so has all but rendered invisible the structures of historical transformation and the abstract forms of domination taking place in the present. (I have in mind here particularly dominant currents of academic scholarship.) So here the politics of the West and the politics of the subaltern are united in a misrecognition of the issue -- which is not agency, but the structures that both give rise to the idea of agency and constrain it. Agency, I might just forward for now, is a concept that does not get beyond the order of capital, but is in fact and expression of the juridical subject that historically develops as part of capital.

  8. Very interesting stuff AB, thanks for posting. I'm bored sitting in front of gmail so I'm responding quickly.

    I like your cut of left positions around the concept of agency, but I'm confused by your notion of needing to have categories beyond the order of capital. The idea of thinking beyond the notion of agency is super sexy, so I would love to hear more.

    You're right I was implying that the adequate left position calls for more agency over society, and I agree that's a notion consistent with the juridical subjectivity implicit in capital. I don't think that's necessarily such a problem. To my mind our categories must be immanent and lead to the overcoming of capital rather than already beyond capital. The notion of having agency on the level of the totality is not possible under capitalism, but it first appears as an idea and under certain circumstances appears as a good. For me it seems like the left position states that this possibility, which is only nascent, is a glimmer from over the horizon that we can follow down the path of the overcoming of capital. Part of overcoming capital (and value and the commodity etc.) is to take this immanent category and articulate visions that at once makes sense in the persent and point beyond it. I think this is pretty close to the spirit of old school Marxism (though with some more contemporary rhetorical flares), but I think it doesn't necessarily lead down the path of Stalinism. How does it sound to you?

  9. If I implied that there are categories beyond the order of capital, I mis-spoke. I agree with you that categories must be immanent and lead to the overcoming of capital. But I am not sure that a standalone emphasis on agency will get us there.

    I will have to continue this later. . .

  10. In Marx's discussion of the struggle for the ten-hour day, he makes the point that it was through collectivization that the working class realized themselves as commodity owners -- that their agency within capital was realized. This indicates that the realization of agency is not immediately a means of overcoming capitalism. The issue of agency resonates too much with a language of classes and class struggle, which following a Postonian interpretation of Marx, does not necessarily mean that the core dynamic of capital has been identified. Indeed, the focus on class fundamentally mis-recognizes that the central domination in capital is that of people by time, not people by other people. This is how in lived history socialism got it wrong. So a conversation about agency, in so far as we see action is necessary to enacting historical change (though it is not the only drive of historical change), is part of the picture, but can be effective only in so far as the objective system of domination has itself been properly recognized. Stated in terms of the juridical subject, I think what we have to come to terms with is that when speaking about rights, we have only course to the legal system and force to mediate, and in so far as capital is itself a juridical subject (I am thinking here of the recent Supreme Court ruling on campaign contributions), I don't see a battle on the basis of rights undermining the basic structure of alienation which grounds juridical subjectivity, the legal system, and present politics. Now, I realize this is of little help in formulating a politics. And perhaps my eventual point (only hinted at here) is that the eventual overcoming is beyond politics. But this is a point that would require some major substantiation, which I am not ready to forward at this time.

  11. You're right, and the "agency on the level of the totality" that I was pointing to is essentially a notion of planning as the overcoming of capital, which, according to Postone, is grounded on a critique of distribution rather than production and hence not an overcoming of value as such.

    That being said I think it's very hard to avoid questions of agency in so far as we want to maintain the category of "freedom." I'm definitely down to challenge bourgeois/Kantian notions of freedom, be it through Lukacs, Heidegger or Foucault, but I don't know if it's possible to articulate a left politics without it. That being said I think that the agency/freedom relationship is beyond my current understanding, but I do think there is one. So detangling freedom from agency and from "rights" is pretty crucial. I've got a copy of Kant's second critique sitting in one of my stacks of books for that very reason.

    As a side point I want to flag Ranciere in all this especially in relation to your comment about an overcoming that's beyond politics.