On the 30th anniversary of Australian pub-rock band Cold Chisel's LP East and in anticipation of the release of Crow's Arcane, here's "Cheap Wine" (below, at this post's end). Indeed, with the wine glut in Australia and having maintained a permanent rash of greying ginger beardiness for a while now, I can relate to the chorus.
East itself is thematically unified by a blues and reggae-tinged isolation and anger; an uncertain masculinity coming to terms with Asia and the demise of the Labourist-social-liberal armature in Australian political culture. It still bites. And swings, with a lyrical and romantic lushness that comes out in Barnes and even Moss's voices and in Moss's classy blues guitar lines, these elements at times given spot-on support by the spaciousness of the arrangements. It's the link between the piano and the drums that work so well and I think I was, not consciously at the time, going after this feel and reverbating sound when I played with drummer and musical production powerhouse Richard Andrew in Crow.
On one of Chisel's comeback tours--Yakuza Girls (I think it was called)--Crow played support in the concrete arena of Sydney Entertainment Centre. We set up on our small allotted space--which was massively large in comparison to other venues like the Globe or Annandale--and were introduced by Chisel's keyboard-playing lead songwriter Don Walker. Walker asked the Chisel audience to give us a go, and praised Pete Fenton's songwriting.
True dat, Pete Fenton is a fine songwriter, up there with Robert Forster, David McComb and Don Walker. And Pete Archer, now back in the My Kind of Pain era line-up, is an outstanding songwriter and six-stringed soundscaper. Reunited with Jim Woff and John Fenton on bass and drums, whose sophisticated feel for rhythm and arrangement brings the band into the ambit of a dynamic power, subtlety and depth.
Crow are now in the midst of launching their reformation LP, and while I'd like to be there with them I'm looking forward to Arcane and hope it's what they were hoping for and that it proves for those who see them as heirs to Chisel, the Birthday party (and even Midnight Oil), that they have always spoken their own musical language.
Once I smoked a Dannemann cigar . . .
Monday, June 7, 2010
Governing the biosphere
One of the problems with implementing national and global policy regimes toward mitigating carbon pollution is that while we can agree with how and even why such regimes are necessary, we are at the limits of current knowledges in attempting to understand anthropogenic global warming. This is Dipesh Chakrabarty’s essential argument about the disconnection between climate scientists’ almost universal urging of polities to take significant action to mitigate carbon pollution and the recent u-turn away from such political action after the Copenhagen Conference and in the face of a concerted attack on this climate science consensus by a small band of contrarians and so-called skeptics, aided, in Australia at least, by the immensely influential News Limited.
The complexities and, it must be said, uncertainties of climate science—a science which relies on limited data and whose findings are often projections into the future—have increasingly entered into what we might still want to call a public sphere, where they must compete with deeply embedded discourses that are antithetical to any project that takes anthropogenic global warming as its starting point. Before I get to what I think these discourses are, a more obvious point to make about why a policy response to anthropogenic global warming is currently fading is that media can more easily frame and tell a story of small heroic individuals holding onto their critical independence from a monolithic conspiracy in which government and self-interested scientists attempt to dupe a gullible public into implementing an authoritarian left-wing form of anti-market control. If media seek to dramatise events so that we more readily consume its productions, then the recent climate science believers versus skeptics battle can be seen as one example of this media form. Of course, the dramatizing of this debate into a two-sided battle has other motivations beyond the drive to sell newspapers and, ultimately, advertising to media consumers. There are other discourses at work in such Manichean oppositions, and it is to a consideration of these that I now want to turn.
It is important that we historicise this debate, and it is no surprise that the first periodizing move I will make is to assert that we are in the age of Neoliberalism. Still. Because despite what Kevin Rudd wrote in his Monthly essay about Neoliberalism back in 2008, and despite claims that the Global financial crisis is the death knell of Neoliberalism, as a set of practices and techniques that are combined with forms of reasoning and goals, Neoliberalism continues as the dominant governmentality, if not as the dominant ideology. The distinction I am making here between ideology and governmentality is essentially a Foucauldian one, and it seeks to cut through the seeming paradox of an essay in which Rudd professes his social democratic beliefs, offering a critical genealogy of Neoliberalism, while his government continues to practice key Neoliberal techniques of governing our conduct, such as an unemployment services sector where the unemployed person is subject to a barrage of self-monitoring and self-governing actions designed to empower and enable them to make choices through which a more flexible and entrepreneurial self is formed. I’m not arguing that the regime of deregulation, privatization, financialization and so on is not Neoliberal. Rather, I’m seeking to make what I think is an important distinction between the social democratic or even Marxist critiques of Neoliberalism—whose essential argument is that the state has abandoned its protection of the citizenry while the capitalist market has been given free reign—and the Foucauldian critical genealogy of Neoliberalism, which seeks to understand it as the governmentalisation of the state rather than its shrinking and disappearance. It is not so much that under Neoliberalism the market is what governs us as the social state has vacated the field, it is that in many of the significant spheres of life we are conceived of as human capital, and thereby we are conducted to be entrepreneurs of ourselves: to risk manage our lives, make investments with our time, to manage a portfolio of interests and activities, to seek to appreciate our assets. As individuals as human capital under Neoliberalism, so too the state. And what I’m arguing here is that the various arms of the state in Australia and in the Anglosphere, has not ceased to be Neoliberal in these senses that I’m outlining.
Climate science enters the contemporary public sphere under a number, but primarily, these conditions: under Neoliberalism seemingly in retreat as ideology but remaining as dominant governmentality. And it fundamentally challenges key components in the assemblage of Neoliberalism. Rather than conceiving of humans as individual atoms of capital, climate science sees humans as one species among many, but that species which now are affecting the global climate. For some scientists this aspect of human species history’s impact on earth’s geology and climate requires a new periodization in geological time from the Helocene to the Anthropocene.
**
We are at an historic opening. What needs to be settled on is how we govern the future. If Neoliberalism is the cultural and political logic of financial capitalism in a time of digital technology, then its techniques of future management have failed. As the Global Financial Crisis continues to ramify and we move from states bailing out private wealth to states bailing out other states, as is evident in the response to Greece’s sovereign debt crisis, there is an opening for new forms of future management, new forms for governing the future. Such a project presents a profound challenge to the liberal political project. This is due to the liberal project’s reliance on a tight coupling between negative freedom—defined as freedom from the state—and an epistemology in which a non-state sphere of human interaction—under Neoliberalism: the market, under earlier forms of liberalism: civil society, or society—produces its most liberating, productive and efficient results when no one entity seeks to understand and explain how it functions and how to improve it. This second component in this coupling is emblematized by Adam Smith’s invisible hand: a force akin to nature, one that is sublime to the extent that it can’t be understood and explained by a sovereign, and that if let be will promote these liberating, productive and efficient results.
Of course, the corollary of this liberal coupling is that individuals are autonomous, self-governing. Thus Hayek’s Neoliberalism, as some commentators observe, is a type of liberalism mixed with a set of conservative injunctions about the importance of slow change, and the traditions embodied in the family and other institutions. What distinguishes Hayek’s (Neo)liberalism from classical versions like Adam Smith’s is that, unlike Smith, Hayek believes our freedom is produced by a realm of artefacticity: a type of cultural activity in which institutions emerge with the weight of tradition and the flexibility that comes from being produced by free people. This realm lies between that of reason (which codifies laws) and that of nature. While Smith sees the invisible hand as natural, for Hayek human civilization is produced in this in-between realm, where traditions mix with radical freedom, mediated by that most free of structures: the market.
What, then, are the implications of this understanding of Neoliberalism’s coupling of negative freedom with an epistemology that disavows the sovereign’s knowledge of society for the politics of climate change? Under Liberal rationalities, markets will naturally produce solutions to climate change, rather than governments. Under Neoliberalism, markets will artefactually produce solutions. At this conjuncture, we are left at the mercy of the delay that suits industries of mining and fossil fuel-based energy manufacture. This delay is justified by a commitment to growth and the trickle-down of jobs and shareholder equity.
What is at stake is the future and that is problematic in a global system still governed by a future in which short-selling and complex derivatives circulate and structure our basic orientations toward time.
It is only when we can sort out the financial culture that has come to be so dominant a forcefield since 1973, that we can begin to articulate a politics of the future outside of that which stymies and panics the present. Coming to terms with and surmounting the autumnal post-1973 global financial system, are prerequisites for dealing with the internalisation of carbon in a system of exchange which seeks neither to defer or displace its waste.
The complexities and, it must be said, uncertainties of climate science—a science which relies on limited data and whose findings are often projections into the future—have increasingly entered into what we might still want to call a public sphere, where they must compete with deeply embedded discourses that are antithetical to any project that takes anthropogenic global warming as its starting point. Before I get to what I think these discourses are, a more obvious point to make about why a policy response to anthropogenic global warming is currently fading is that media can more easily frame and tell a story of small heroic individuals holding onto their critical independence from a monolithic conspiracy in which government and self-interested scientists attempt to dupe a gullible public into implementing an authoritarian left-wing form of anti-market control. If media seek to dramatise events so that we more readily consume its productions, then the recent climate science believers versus skeptics battle can be seen as one example of this media form. Of course, the dramatizing of this debate into a two-sided battle has other motivations beyond the drive to sell newspapers and, ultimately, advertising to media consumers. There are other discourses at work in such Manichean oppositions, and it is to a consideration of these that I now want to turn.
It is important that we historicise this debate, and it is no surprise that the first periodizing move I will make is to assert that we are in the age of Neoliberalism. Still. Because despite what Kevin Rudd wrote in his Monthly essay about Neoliberalism back in 2008, and despite claims that the Global financial crisis is the death knell of Neoliberalism, as a set of practices and techniques that are combined with forms of reasoning and goals, Neoliberalism continues as the dominant governmentality, if not as the dominant ideology. The distinction I am making here between ideology and governmentality is essentially a Foucauldian one, and it seeks to cut through the seeming paradox of an essay in which Rudd professes his social democratic beliefs, offering a critical genealogy of Neoliberalism, while his government continues to practice key Neoliberal techniques of governing our conduct, such as an unemployment services sector where the unemployed person is subject to a barrage of self-monitoring and self-governing actions designed to empower and enable them to make choices through which a more flexible and entrepreneurial self is formed. I’m not arguing that the regime of deregulation, privatization, financialization and so on is not Neoliberal. Rather, I’m seeking to make what I think is an important distinction between the social democratic or even Marxist critiques of Neoliberalism—whose essential argument is that the state has abandoned its protection of the citizenry while the capitalist market has been given free reign—and the Foucauldian critical genealogy of Neoliberalism, which seeks to understand it as the governmentalisation of the state rather than its shrinking and disappearance. It is not so much that under Neoliberalism the market is what governs us as the social state has vacated the field, it is that in many of the significant spheres of life we are conceived of as human capital, and thereby we are conducted to be entrepreneurs of ourselves: to risk manage our lives, make investments with our time, to manage a portfolio of interests and activities, to seek to appreciate our assets. As individuals as human capital under Neoliberalism, so too the state. And what I’m arguing here is that the various arms of the state in Australia and in the Anglosphere, has not ceased to be Neoliberal in these senses that I’m outlining.
Climate science enters the contemporary public sphere under a number, but primarily, these conditions: under Neoliberalism seemingly in retreat as ideology but remaining as dominant governmentality. And it fundamentally challenges key components in the assemblage of Neoliberalism. Rather than conceiving of humans as individual atoms of capital, climate science sees humans as one species among many, but that species which now are affecting the global climate. For some scientists this aspect of human species history’s impact on earth’s geology and climate requires a new periodization in geological time from the Helocene to the Anthropocene.
**
We are at an historic opening. What needs to be settled on is how we govern the future. If Neoliberalism is the cultural and political logic of financial capitalism in a time of digital technology, then its techniques of future management have failed. As the Global Financial Crisis continues to ramify and we move from states bailing out private wealth to states bailing out other states, as is evident in the response to Greece’s sovereign debt crisis, there is an opening for new forms of future management, new forms for governing the future. Such a project presents a profound challenge to the liberal political project. This is due to the liberal project’s reliance on a tight coupling between negative freedom—defined as freedom from the state—and an epistemology in which a non-state sphere of human interaction—under Neoliberalism: the market, under earlier forms of liberalism: civil society, or society—produces its most liberating, productive and efficient results when no one entity seeks to understand and explain how it functions and how to improve it. This second component in this coupling is emblematized by Adam Smith’s invisible hand: a force akin to nature, one that is sublime to the extent that it can’t be understood and explained by a sovereign, and that if let be will promote these liberating, productive and efficient results.
Of course, the corollary of this liberal coupling is that individuals are autonomous, self-governing. Thus Hayek’s Neoliberalism, as some commentators observe, is a type of liberalism mixed with a set of conservative injunctions about the importance of slow change, and the traditions embodied in the family and other institutions. What distinguishes Hayek’s (Neo)liberalism from classical versions like Adam Smith’s is that, unlike Smith, Hayek believes our freedom is produced by a realm of artefacticity: a type of cultural activity in which institutions emerge with the weight of tradition and the flexibility that comes from being produced by free people. This realm lies between that of reason (which codifies laws) and that of nature. While Smith sees the invisible hand as natural, for Hayek human civilization is produced in this in-between realm, where traditions mix with radical freedom, mediated by that most free of structures: the market.
What, then, are the implications of this understanding of Neoliberalism’s coupling of negative freedom with an epistemology that disavows the sovereign’s knowledge of society for the politics of climate change? Under Liberal rationalities, markets will naturally produce solutions to climate change, rather than governments. Under Neoliberalism, markets will artefactually produce solutions. At this conjuncture, we are left at the mercy of the delay that suits industries of mining and fossil fuel-based energy manufacture. This delay is justified by a commitment to growth and the trickle-down of jobs and shareholder equity.
What is at stake is the future and that is problematic in a global system still governed by a future in which short-selling and complex derivatives circulate and structure our basic orientations toward time.
It is only when we can sort out the financial culture that has come to be so dominant a forcefield since 1973, that we can begin to articulate a politics of the future outside of that which stymies and panics the present. Coming to terms with and surmounting the autumnal post-1973 global financial system, are prerequisites for dealing with the internalisation of carbon in a system of exchange which seeks neither to defer or displace its waste.
Saturday, May 8, 2010
Dancing the arrhythmia of financial derivatives
I've just started to dip into Gillian Tett's 2009 narrative Fool's Gold: How unrestrained greed corrupted a dream, shattered global markets and unleashed a catastrophe. Tett's book tells how J.P Morgan bankers "developed an innovative set of products with names such as 'credit default swaps' and 'synthetic collateralized debt obligations' which fall under the name of credit derviatives" in the 1990s and 2000s. Ok, the subtitle is a bit 'tabloid screamer' and any 'dream' in the world of financial capital is hardly going to be pure or innocent prior to its corruption by 'bad people'. But I'm interested in gaining a better understanding of contemporary finance and financial derivatives, in particular, and Tett--whose PhD was in social anthropology--has written a book that comes with a reputation for offering graspable explanations of phenomena in the arcane world of credit derivatives.
At this early stage of reading, I'm getting my head around the definitions.
In this next set of quotes, Tett is recounting the emergence of "a bold new era of derivatives innovation" "in the late 1970s" (11).
And the final quote for the time being concerns what is the central concept of contemporary finance capital: risk. For any British readers, you'll probably already hearing that a hung parliament and minority government are bad for business because business doesn't like uncertainty: it proposes too great a risk. Coming from Tasmania--a small state at the far south-east end of Australia--our proportional representation system of voting has recently allowed a symmetrically hung lower house parliament to be voted in: 10 Labor [sic], 10 Liberal [cf. American Republicans and British Tories] and 5 Green.
Prior to the election, voters here were warned that a hung parliament would be bad for business and the delay in establishing a minority Labor government with Green support was met with cries from business groups that capital investment in the state was being lost due to this uncertainty. But if, as Foucault cogently argues, neoliberalism is that form of governmentality in which the human being is recast as an entrepreneur of him or herself, then it should follow that the rewards from investing one's own human capital in such a system are commensurate with the level of risk involved. Surely, successful entrepreneurs are those best able to live with and take advantage of risks and uncertainty?
According to Tett, however, capital wants it both ways:
This doubleness in the function of derivatives and in the discourse of contemporary finance capital reminds me of one of Zygmunt Bauman's key ideas in his long sociological essay Liquid Modernity [Link here is to a pdf file, containing a lecture by Bauman, where he writes on the idea of liquid modernity. See here, for the book]. For Bauman, the power of the global elite resides not just in their finance-enabled capacity to not get stuck in any one place; to move quickly and flexibly around the world, making lightening-fast investments, exploiting opportunities before others even know they exist, able to avoid legal systems. Their power lies also in how dense and solid they can become, how they can materialize and make the world material to their needs, desires and drives. Neoliberal techniques of flexibility and fluidity are, in Bauman's understanding, complemented by something like a business sublime: an awesome, monolithic, material power that digs itself into a territory, which it defends and advances.
Is it the capacity to do both, to be both solid and liquid, to seek to eliminate risk and cultivate it, that makes contemporary capitalism so disorienting and difficult to understand? Coming to terms with the conceptual form (their temporality, in particular) of what I think are neoliberal capitalism's leading instruments--financial derivatives--should help to better grasp the present conjuncture and ways out of and through it. If, as Tett writes, "[a]t the heart of the business is a dance with time", then perhaps it is the rhythms of these forms that we need to hear and feel in order to play them differently; in ways that take the pulse of all those times that are, have and will be abjected.
At this early stage of reading, I'm getting my head around the definitions.
As the name implies, a derivative is [. . .] nothing more than a contract whose value derives from some other asset -- a bond, a stock, a quantity of gold. Key to derivatives is that those who buy and sell them are each making a bet on the value of the asset. Derivatives provide a way for investors to protect themselves, for example, against a possible negative future price swing, or to make high-stakes bets on price swings for what might be huge payoffs. At the heart of the business is a dance with time.
Say, on a particular day, the pound-to-pound exchange rate is such that one British pound buys $1.50. Someone who will be making a trip from England to the US six months from now and thinks the exchange rate may become less favourable might decide to make a contract to ensure that he can still buy dollars at that rate just before his trip. he might even enter into an agreement to exchange 1,000 [pounds] with a bank in six months' time, at $1.50, no matter what the actual exchange rate is by then. One way to arrange the deal would be to agree the deal must happen, no matter what the actual exchange rate is at the time, and that would be a future. A variation would be that the traveller agrees to pay a fee, say $25, to have the option to make the exchange at the $1.50 rate, which he would decide not to exercise if the rate actually became more favourable. (10-11)
In this next set of quotes, Tett is recounting the emergence of "a bold new era of derivatives innovation" "in the late 1970s" (11).
[T]he best way to insulate against such volatility [in currency prices and inflation, as was present in the post-1970s period of the breakdown of the Bretton Woods system of pegged exchange rates and inflationary pressures caused by the OPEC oil shocks] was to buy diversified pools of assets. If, fore example, a company with business in both the US and Germany was concerned about swings in the dollar-to-Deutschmark rate, it could protect itself by holding equal quantities of both currencies. Whichever way the rate might swing, the losses would be offset by equal gains. But an innovative way to protect against swings was to buy derivatives offering clients the right to purchase currencies at specified exchange rates in the future. Interest rate futures and options burst onto the scene, allowing investors and bankers to gamble on the level of rates in the future.
Another hot area of the derivatives trade [. . .] was the highly creative business [. . .] known as 'swaps'. In these deals, investment banks would find two parties with complementary needs in the financial markets and would broker an exchange between them to the benefit of both, earning the bank large fees.
Say, for example, two home owners have $500,000 ten-year mortgages, but one has a floating rate deal, while the other has a rate fixed at 8 per cent. If the owner expects the rates to fall, while the other owner expects them to rise, then rather than each trying to get a new loan, they could agree that each quarter, during the life of their mortgages, they will 'swap' their payments. The actual mortgage loans do not change hands, they stay on the original banks' books, making the deal what the bankers call 'synthetic'. (12)
And the final quote for the time being concerns what is the central concept of contemporary finance capital: risk. For any British readers, you'll probably already hearing that a hung parliament and minority government are bad for business because business doesn't like uncertainty: it proposes too great a risk. Coming from Tasmania--a small state at the far south-east end of Australia--our proportional representation system of voting has recently allowed a symmetrically hung lower house parliament to be voted in: 10 Labor [sic], 10 Liberal [cf. American Republicans and British Tories] and 5 Green.
Prior to the election, voters here were warned that a hung parliament would be bad for business and the delay in establishing a minority Labor government with Green support was met with cries from business groups that capital investment in the state was being lost due to this uncertainty. But if, as Foucault cogently argues, neoliberalism is that form of governmentality in which the human being is recast as an entrepreneur of him or herself, then it should follow that the rewards from investing one's own human capital in such a system are commensurate with the level of risk involved. Surely, successful entrepreneurs are those best able to live with and take advantage of risks and uncertainty?
According to Tett, however, capital wants it both ways:
Players also had different motives for wanting to place bets on future asset prices. Some investors liked derivatives because they wanted to control risk, like the wheat farmers who preferred to lock in at a profitable price [when making a futures contract]. Others wanted to use them to make high-risk bets in the hope of windfall profits. The crucial point about derivatives was that they could do two things: help investors reduce risk or create a good deal more risk. Everything depended on how they were used, on the motives and skills of those who traded in them. (14)
This doubleness in the function of derivatives and in the discourse of contemporary finance capital reminds me of one of Zygmunt Bauman's key ideas in his long sociological essay Liquid Modernity [Link here is to a pdf file, containing a lecture by Bauman, where he writes on the idea of liquid modernity. See here, for the book]. For Bauman, the power of the global elite resides not just in their finance-enabled capacity to not get stuck in any one place; to move quickly and flexibly around the world, making lightening-fast investments, exploiting opportunities before others even know they exist, able to avoid legal systems. Their power lies also in how dense and solid they can become, how they can materialize and make the world material to their needs, desires and drives. Neoliberal techniques of flexibility and fluidity are, in Bauman's understanding, complemented by something like a business sublime: an awesome, monolithic, material power that digs itself into a territory, which it defends and advances.
Is it the capacity to do both, to be both solid and liquid, to seek to eliminate risk and cultivate it, that makes contemporary capitalism so disorienting and difficult to understand? Coming to terms with the conceptual form (their temporality, in particular) of what I think are neoliberal capitalism's leading instruments--financial derivatives--should help to better grasp the present conjuncture and ways out of and through it. If, as Tett writes, "[a]t the heart of the business is a dance with time", then perhaps it is the rhythms of these forms that we need to hear and feel in order to play them differently; in ways that take the pulse of all those times that are, have and will be abjected.
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