Imperial Panorama

A Tour through the Global Financial Crisis

When the editors of Drunken Boat asked for me a reflection on the financial crisis, I had too many and not enough things to say. I cannot say that the crisis has directly impacted me, or that it has severely impacted my family and friends. Even if I remain largely unaffected personally, I do think that the crisis has fundamentally altered the global political landscape, and so I offer here a brief selection from an ongoing work-in-progress titled Minima Temporalia: Reflections from Diminishing Time. These remarks are, I should caution, extremely speculative and highly compressed.1

The market is bound to recover. Business is going to be better than ever. It’s time I want. Time is the only significant factor in this situation.
—Theodore Dreiser, The Financier2

[C]rises are cathartic. Gradually capitalism comes to understand the nature of what it fears but cannot foresake.
—Rudolf Hilferding, Finance Capital3

I. The crisis is the moment of judgment that suspends all other judgments. In the crisis, imperceptibly quick and interminably long timespans are fused together. In the language of physics, the crisis is the strong force, the recovery the weak force.

II. To Each According to His Speed. The crisis funnels capital—rather than redirecting capital, the crisis pressurizes it to the point of inert singularity. The goal of government stimulus—to get capital flowing again—for the most part results in an intensification of existing patterns, nationally and globally. Once the bottleneck has passed, the massive intervention will have found its way back (through thousands of smaller bottlenecks) into the hands of those who lend more than they borrow (a highly approximate modern definition of the modern bourgeoisie). “We do indeed live in a society of risky choices but one in which some do the choosing while others do the risking.”4

III. Marx is often thought to claim that crises are simply a phenomenon of the overproduction of goods (and by extension underconsumption by those who cannot afford those goods). His thinking on the issue is far more complex. In fact, Marx suggests—not unlike the foremost modern theorist of crises, Hyman Minsky—that “the crisis breaks out…with the demand for payment, with the absolute necessity of transforming commodities into money.”5 As Marx puts it, “Crisis is the forcible establishment of unity between elements that have become independent.”6 In the crisis, the period of arbitrage becomes interminable—no one “knows how to price assets,” except the “lender of last resort.” The capitalist is bailed out; the worker laid off. Time flows back into the market, speeded by the government. The investor reallocates; the worker waits.

IV. By setting short-term interest rates at or near zero, the government declares a “time out” for the financial system. Until the market can regain lost time, it is in limbo. Deflation is unthinkable in that it implies a reversal of time. “The world would not be running so fast if it didnít have to constantly outrun its own collapse.”7

V. The Long and the Short. Recent events have drawn unprecedented attention, at least in the popular imagination, to two phenomena which can be usefully viewed through the lens of extremely long and extremely short spans: executive compensation and high frequency trading.8 The crisis, in other words, has put increasing pressure on the global stock market’s ability to justify its profits at both the short end (with high frequency trading taking place often at the shortest possible intervals, down to the sub-millisecond) and at the long end (the lifespan of the Wall Street employee, whose bonus package might well outlive the company from which it was received).9

VI. The most recent crisis—despite a Democratic President, and Democratic Senate and House majorities—is unlikely to result in significant social reform legislation in the U.S. The crisis forestalls any hope of bringing the American health care system into line with the rest of the developed world. Tax policy, trade policy, and climate change are “off the table.” Far from undermining the existing order, the crisis solidifies it. All that is air congeals into law.

VII. The twentieth century produced two great crisis decades of social unrest and social legislation in the United States—the 1930s as the result of an unprecedented depression, the 1960s in conjunction with an unprecedented boom. With the end of the Cold War, much of the crisis quotient of the U.S. came to be focused on Iraq for the better part of two decades. With that crisis waning at the end of the Bush era, a new and more all-encompassing crisis took its place. The financial crisis wiped out what economists referred to as “the Great Moderation,” the period of comparative economic stability from 2003-2008, which paradoxically coincided with the most disastrous Bush and Greenspan economic policies.10 Globalization during “the Great Moderation” could better be described as “the Great Pyramidization.” From Madoff to A.I.G., the buck stopped either with the sucker or the taxpayer—often one and the same abstraction of an individual on the losing end of a game they did not understand.

VIII. The financial crisis is now being referred to as the “Second Great Contraction,” the Great Depression having been the first. But what is being contracted so greatly? Reinhardt and Rogoff claim that this is “the only global financial crisis that has occurred during the post-World War II period.”11 Surely this is a remarkable track record of expansion for the global economy. From a macro-macroeconomic perspective, the crisis is merely a momentary pause in the greatest explosion of energy consumption on the part of sentient beings in the known universe. “Total human energy consumption multiplied many more times in the twentieth century than in all previous human history. At the end of the twentieth century, the total amount of energy consumed by humans may have been 60,000 to 90,000 times that used by humans early in the Neolithic era.”12 The crisis radically exacerbates the tendency of political and business leaders “to think on timescales too short to deal effectively with global and ecological social issues.”13

IX. According to Gramsci, “It may be ruled out that immediate economic crises of themselves produce fundamental historical events; they can simply create a terrain more favorable to the dissemination of certain modes of thought, and certain ways of posing and resolving questions involving the entire subsequent development of national life.”14 Yet what if economic crises in fact create a terrain less favorable to certain modes of thought? Virtually every field of critical inquiry or artistic endeavor in the United States is likely to suffer from reduced funding in the wake of the crisis. In the humanities and social sciences—the institutionalized bad conscience of technocratic society—the academic “job crisis” has reached pandemic proportions. Thousands of academics will be defunded and rerouted into other fields. The Hippocratic intellectual at the very least does no harm, and begins no crises.

X. “Timing is an art. That says nothing—and everything.”15 The crisis demands supreme patience and dizzyingly quick risk-taking. Hilferding is right that crises are cathartic for capitalism. But for the protagonists in the theater of “creative destruction” (through which information age capital is channeled), the structure of the crisis is more often comedic than tragic. The bets are called in, the cycle completed; the losers shuffle offstage, soon forgotten.16

XI. God Market’s theodicy is of permanent acceleration. The crisis is the exception that proves the theodicy’s rule: “It is in the nature of crises that problems crying out for solution go unresolved. And it is also in the nature of crisis that the solution, that which the future holds in store, is not predictable. The uncertainty of a critical situation contains one certainty only—its end.”17

1 In the first half of 2008—before the collapse of Lehman Brothers and the ensuing “global meltdown”—I undertook an intensive study of ideologies of temporality and time management (or what I neologistically call “chronotistics”) and their relation to finance capital. That study culminated in the first installment of “Agorachronotistics (Speculations on Market Time),” which I co-published with Robert Hardwick Weston in the journal Rethinking Marxism (January, 2010): 68-89. There we attempt to bring together a number of specialized discourses—cultural studies, financial anthropology, history, Marxism, philosophy, and literary theory—in order to attempt an ideology critique of accelerating capital flows. As that article was in the process of peer review, the “crisis” unfolded. My remarks here should be considered a supplement to that article.

2 Theodore Dreiser, The Financier (New York: Meridian Books, 1995), 218.

3 Rudof Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development, ed. Tom Bottomore (London: Routledge, 1981), 274.

4 Slavoj Zizek, “To Each According to His Greed.” Harper’s Magazine (October 2009): 15-19,16.

5 Karl Marx, Capital, vol. 2, trans. David Fernbach (London: Penguin, 1978), 156.

6 Karl Marx, “Crisis Theory,” in The Marx/Engels Reader, ed. Robert Tucker (New York: Norton, 1972), 455.

7 The Invisible Committee, The Coming Insurrection (Cambridge, MA: Semiotext(e), 2009), 60.

8 For a quick overview of high-frequency trading, see David Silver, “A Short History of Fast Times on Wall Street,” New York Times op-ed, September 17, 2009. For a brief account of the executive compensation debate, see Paul Krugman, “Reform or Bust,” New York Times op-ed, September 20, 2009. According to Krugman, “Wall Street paychecks are headed back to pre-crisis levels. And the industry is deploying its political clout to block even the most minimal reforms.”

9 For a highly readable recent critique of the financial industry, I recommend Karen Ho’s Liquidated: An Ethnography of Wall Street (Durham: Duke UP, 2009).

10 See Carmen N. Reinhart and Kenneth S. Rogoff, This Time Is Different: Eight Centuries of Financial Folly (Princeton: Princeton UP, 2009), pp. 256-257.

11 Ibid, 248.

12 David Christian, Maps of History: An Introduction to Big History (Berkeley: UC Press, 2004), 459.

13 Ibid, 477.

14 Antonio Gramsci, Selections from The Prison Notebooks, trans. Quentin Hoare (New York: International Publishers, 1971), 184.

15 Charles Kindleberger, Manias, Panics, and Crashes (New York: Basic Books, 1989), 210.

16 I am thinking here in particular of Matt Taibbi’s recent writing on Goldman Sachs. See “The Great American Bubble MachineRolling Stone issue 1082-1083 (July 9-23, 2009).

17 Reinhart Koselleck, Critique and Crisis: Enlightenment and the Pathogenesis of Modern Society (Cambridge: MIT Press, 1998), 127.