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Critics of capitalist finance tend to focus on its speculative character. Our financial markets, they lament, encourage irresponsible bets on the future that reflect no real underlying value. Why is it, then, that opportunities for speculative investment continue to proliferate in the wake of major economic crises? To make sense of this, Capital and Time advances an understanding of economy as a process whereby patterns of order emerge out of the interaction of speculative investments. Progressive critics have assumed that the state occupies a neutral, external position from which it can step…mehr
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Critics of capitalist finance tend to focus on its speculative character. Our financial markets, they lament, encourage irresponsible bets on the future that reflect no real underlying value. Why is it, then, that opportunities for speculative investment continue to proliferate in the wake of major economic crises? To make sense of this, Capital and Time advances an understanding of economy as a process whereby patterns of order emerge out of the interaction of speculative investments. Progressive critics have assumed that the state occupies a neutral, external position from which it can step in to constrain speculative behaviors. On the contrary, Martijn Konings argues, the state has always been deeply implicated in the speculative dynamics of economic life. Through these insights, he offers a new interpretation of both the economic problems that emerged during the 1970s and the way that neoliberalism responded to them. Neoliberalism's strength derives from its intuition that there is no position that transcends the secular logic of risk, and from its insistence that individuals actively engage that logic. Not only is the critique of speculation misleading as a general approach; it is also incapable of recognizing how American capitalism has come to embrace speculation and has thus been able to generate new kinds of order and governance.
Produktdetails
- Produktdetails
- Verlag: Stanford University Press
- Seitenzahl: 184
- Erscheinungstermin: 23. Januar 2018
- Englisch
- Abmessung: 216mm x 139mm x 20mm
- Gewicht: 251g
- ISBN-13: 9781503604438
- ISBN-10: 1503604438
- Artikelnr.: 48063001
- Verlag: Stanford University Press
- Seitenzahl: 184
- Erscheinungstermin: 23. Januar 2018
- Englisch
- Abmessung: 216mm x 139mm x 20mm
- Gewicht: 251g
- ISBN-13: 9781503604438
- ISBN-10: 1503604438
- Artikelnr.: 48063001
Martijn Konings is Associate Professor of Political Economy at the University of Sydney. His most recent book is The Emotional Logic of Capitalism (Stanford, 2015).
Contents and Abstracts
Introduction: Introduction: Beyond the Critique of Speculation
chapter abstract
This introductory chapter discusses the shortcomings of the heterodox
critique of financial speculation as an irrational divergence from real
values. It argues that the capitalist subject speculates not in defiance of
fundamental values but precisely because it has none to fall back on. The
critique of speculation is not only misleading as a general approach; but
it is also incapable of recognizing the ways the neoliberal reconstruction
of American capitalism has actively engaged this speculative dimension and
the specific ordering mechanisms and governance rationalities that it has
engendered in this way. The chapter introduces three sets of themes that
the rest of the book elaborates in a more systematic way: the speculative
character of economic value; the role of banking as a normalizing dynamic
within the logic of risk; and the significance of neoliberalism in
reconfiguring the place of speculation, risk and banking in governance.
1Foundationalism and Self-Referentiality
chapter abstract
Heterodox approaches consider speculative practices problematic because
they view them as driven by an irrational belief in the self-referentiality
of financial signs that fails to distinguish between real and fictitious
forms of value. This chapter argues that in this way the heterodox critique
of speculation has remained hostage to an essentialist understanding of
value. We can move beyond such persistent foundationalism by taking
seriously the paradoxical character of money as self-referential
value. From the perspective developed in the book, it is precisely the
inability to think of self-referentiality properly that binds the heterodox
critique to foundationalism. A deeper understanding of the role of
self-referentiality in economic life would allow us to move beyond the
perceived need to locate phenomena in external grounds or substances and
instead to foreground the question of how systems self-organize by
endogenously generating their conditions of possibility.
2Constructions and Performances
chapter abstract
The persistence of economic essentialism in the heterodox critique of
capitalist finance is curious given the prominence of constructivist ideas
in fields such as political economy and economic sociology. This chapter
argues that the constructivist turn has become stuck in an idealist or
rationalist constructivism, which sees norms and values as transcending the
dynamics of secular time and contingency, rather than as stabilizing risk
from within. Like the materialist essentialism that it is so critical of,
such an idealist approach is unable to do justice to the role of complexity
and contingency in the emergence of norms and systems. The prominent theme
of performativity has ended up reproducing similar problems, and the
chapter discusses the travails of actor-network theory from its origins in
a critique of Kantian idealism to the adoption of precisely such a
theoretical perspective in its recent engagement of money and finance.
3Luhmannian Considerations
chapter abstract
This chapter argues that Luhmann's more radical brand of constructivism
allows us to move beyond the conceptual antinomies discussed in the
previous chapters. Luhmann's work emphasizes that the processes through
which an identity is assembled never generate an external consciousness or
a totalizing view. The self-referential character of systems means that
they principally cannot transcend the condition of contingency and the need
to speculate. Luhmann thus advances a specific problematic of order -how
does a logic of interacting contingencies produce coherent norms and
identities? His work explores how systems generate their own conditions of
possibility, in the absence of external foundations. In some respects
Luhmann's understanding of how entities emerge runs parallel to the way
actor-network theory depicts this process, but the emphasis on contingency
and temporality gives his work a significant critical edge.
4System, Economy, and Governance
chapter abstract
This chapter argues that although Luhmann's understanding of contingency
and order provides a useful way to frame the distinctive problematic of
economy, Luhmann himself did not see this connection clearly. His work
remained overly concerned with the interaction of discretely differentiated
social subsystems. He was unable to see the economy as anything other than
just another social subsystem and consequently his analysis of the dynamics
of hierarchization were somewhat abortive. His work does little to
acknowledge the growing influence of money and finance and the erosion of
boundaries between the economy and other spheres. In other words, Luhmann
did not seize the opportunity afforded by his work to formulate a
"non-essentialist economism"-a perspective that takes economy as the
central ordering mechanism of modern life without succumbing to the problem
of essentialism.
5Foucault beyond the Critique of Economism
chapter abstract
To develop a non-essentialist economism, this chapter looks to Foucault's
later work on governance through risk, which presents an understanding of
normalization as a process of self-organization. The engagement of risk is
understood in terms of a continuous breaching of existing norms that
nonetheless generates its own sources of normativity. Foucault's analysis
of neoliberal reason emphasizes the way it has intuited the necessity of
contingency and has brought speculative logics into the heart of
governance. The chapter develops this point to argue that neoliberal
rationality functions on a logic of preemption, a paradoxical practice that
blurs the distinction between prevention and activation. The paradoxes of
preemptive temporality intensify during times of crisis, when concern with
the future comes to be attended by a reactionary quality.
6Time, Investment, and Decision
chapter abstract
This chapter pursues the analysis of capitalist temporality. The rise of
modern capitalism was accompanied by the emergence of a distinctive
experience of time, one in which humanity sees itself as making its own
temporality, understanding present practices as having emerged out of a
past and as shaping a contingent future. Time becomes a practical question,
and the present becomes a moment of decision. Such decision involves the
need to reassess the value of past investments and to adjust one's
portfolio of speculative investments. The distinctive temporal logic that
governs the dynamics of capitalism is best reflected in the rules of
double-entry bookkeeping, which codify the principle that a subject needs
to make promises and invest the cash proceeds of those commitments in
promises made by others.
7Minsky beyond the Critique of Speculation
chapter abstract
This chapter advances a new reading of Minsky's work that moves beyond the
standard interpretation of it as a post-Keynesian critique of financial
speculation. Minsky understands economic units as balance sheet entities,
and he views the dynamics of capitalism as generated by actors taking
speculative positions on the future. He sees the logic of banking as
central to the endogenous production of economic order, but is at the same
time acutely aware of the ever-present possibility of sudden breakdown.
Rejecting perspectives that see financial policy as operating on the
economy from the outside, Minsky emphasizes the continuity between
practices of banking and their governance, as well as the ways financial
instability has often accelerated dynamics of financial hierarchization.
This book places Minsky in a distinctive tradition of thinking about
central banking that takes the lender-of-last-resort function as the key
modality of financial governance.
8Practices of (Central) Banking, Imaginaries of Neutrality
chapter abstract
A Minskyan understanding of central banking implies that financial
governance can in principle never be neutral. Last-resort lending protects
the payment positions and sustains the asset values of banks deemed to be
systemically significant, and by providing this kind of too-big-to-fail
insurance it sustains the practices that gave rise to instability in the
first place. An element of "moral hazard" is inherent in central banking.
Much of the history of modern finance can be understood in terms of the
tension between the endogenous character of money production and the
fantasy that we can bypass the logic of economic self-organization to
define money exogenously. This chapter explores the dynamics of this
interaction between practices and conceptions of (central) banking and its
governance.
9Lineages of US Financial Governance
chapter abstract
This chapter examines the evolution of US financial governance to the
1970s. In response to the crash and the Depression, the New Deal reforms
expanded the "financial safety net" of the banking system. Dynamics of
financial boom and bust were replaced by a constant inflationary pressure
that was increasingly experienced as problematic. The practical problem of
financial management consisted in the fact that the American state needed
to conquer an inflationary dynamic that was sustained by its own basic
insurance and lending operations. Minsky seemed to feel there was no real
way for the American state to escape the awkward dynamic in which it was
constitutively embroiled. But it was the policy turn initiated by Volcker
at the end of the decade that changed some of the key parameters of
financial expansion.
10Hayek and Neoliberal Reason
chapter abstract
If Volcker perceived the problem in terms of how the state might change the
way it related to a process in which it was constitutively implicated, he
framed the question of financial management as a broadly Hayekian
problematic: How is ordering possible if there is no political agency that
can place itself outside the logic of risk and speculation? This chapter
examines the rationality of neoliberalism through the lens of Hayek's work
and his critique of idealist constructivism. For Hayek, there is no outside
to the logic of risk, and he considered acting without certainty not just
possible or acceptable but necessary and imperative. Insisting on a
purposeful embrace of a speculative orientation, neoliberalism functions on
a logic of preemption, in the dual sense of both activating contingency and
so forestalling the most serious threats it represents.
11Neoliberal Financial Governance
chapter abstract
The Volcker policy turn was driven by the wager that the instability it
caused would set in motion wider adjustments. In this way it laid the basis
for the emergence of a distinctly neoliberal rationality of financial
governance that centers on a dynamic of speculation, bailout, and
austerity. Whereas heterodox perspectives have often viewed the
proliferation of sources of contingency in the neoliberal era as a
destabilizing development that undermines order, this chapter draws
attention to the paradoxical sources of resilience that characterize this
logic. While the chapter identifies the concern to provoke the future as a
key feature of neoliberal governance, it emphasizes that this logic
involves a reactionary moment that manifests itself fully when uncertainty
becomes acute. Such times are marked by an absence of meaningful choice,
and the logic of preemption now manifests itself in yet a third sense, as a
foreclosure on the future.
12The Critique of Capital in Neoliberal Times
chapter abstract
Following the crisis of 2007-8, many commentators announced the end of
neoliberalism. In response to the unexpected survival and even
intensification of neoliberalism, critical scholarship has become
increasingly interested in what it views as neoliberalism's ability to
suspend its own contradictions. Current policies are often said to be
merely delaying the inevitable crisis of neoliberal capitalism, a system
that is no longer in touch with its foundations and long past its objective
date of expiration. This chapter emphasizes that such critiques are unable
to theorize how capitalist finance produces its own, immanent temporal
structures or to recognize the distinctive governance rationalities and
ordering mechanisms that are engendered in this way.
Introduction: Introduction: Beyond the Critique of Speculation
chapter abstract
This introductory chapter discusses the shortcomings of the heterodox
critique of financial speculation as an irrational divergence from real
values. It argues that the capitalist subject speculates not in defiance of
fundamental values but precisely because it has none to fall back on. The
critique of speculation is not only misleading as a general approach; but
it is also incapable of recognizing the ways the neoliberal reconstruction
of American capitalism has actively engaged this speculative dimension and
the specific ordering mechanisms and governance rationalities that it has
engendered in this way. The chapter introduces three sets of themes that
the rest of the book elaborates in a more systematic way: the speculative
character of economic value; the role of banking as a normalizing dynamic
within the logic of risk; and the significance of neoliberalism in
reconfiguring the place of speculation, risk and banking in governance.
1Foundationalism and Self-Referentiality
chapter abstract
Heterodox approaches consider speculative practices problematic because
they view them as driven by an irrational belief in the self-referentiality
of financial signs that fails to distinguish between real and fictitious
forms of value. This chapter argues that in this way the heterodox critique
of speculation has remained hostage to an essentialist understanding of
value. We can move beyond such persistent foundationalism by taking
seriously the paradoxical character of money as self-referential
value. From the perspective developed in the book, it is precisely the
inability to think of self-referentiality properly that binds the heterodox
critique to foundationalism. A deeper understanding of the role of
self-referentiality in economic life would allow us to move beyond the
perceived need to locate phenomena in external grounds or substances and
instead to foreground the question of how systems self-organize by
endogenously generating their conditions of possibility.
2Constructions and Performances
chapter abstract
The persistence of economic essentialism in the heterodox critique of
capitalist finance is curious given the prominence of constructivist ideas
in fields such as political economy and economic sociology. This chapter
argues that the constructivist turn has become stuck in an idealist or
rationalist constructivism, which sees norms and values as transcending the
dynamics of secular time and contingency, rather than as stabilizing risk
from within. Like the materialist essentialism that it is so critical of,
such an idealist approach is unable to do justice to the role of complexity
and contingency in the emergence of norms and systems. The prominent theme
of performativity has ended up reproducing similar problems, and the
chapter discusses the travails of actor-network theory from its origins in
a critique of Kantian idealism to the adoption of precisely such a
theoretical perspective in its recent engagement of money and finance.
3Luhmannian Considerations
chapter abstract
This chapter argues that Luhmann's more radical brand of constructivism
allows us to move beyond the conceptual antinomies discussed in the
previous chapters. Luhmann's work emphasizes that the processes through
which an identity is assembled never generate an external consciousness or
a totalizing view. The self-referential character of systems means that
they principally cannot transcend the condition of contingency and the need
to speculate. Luhmann thus advances a specific problematic of order -how
does a logic of interacting contingencies produce coherent norms and
identities? His work explores how systems generate their own conditions of
possibility, in the absence of external foundations. In some respects
Luhmann's understanding of how entities emerge runs parallel to the way
actor-network theory depicts this process, but the emphasis on contingency
and temporality gives his work a significant critical edge.
4System, Economy, and Governance
chapter abstract
This chapter argues that although Luhmann's understanding of contingency
and order provides a useful way to frame the distinctive problematic of
economy, Luhmann himself did not see this connection clearly. His work
remained overly concerned with the interaction of discretely differentiated
social subsystems. He was unable to see the economy as anything other than
just another social subsystem and consequently his analysis of the dynamics
of hierarchization were somewhat abortive. His work does little to
acknowledge the growing influence of money and finance and the erosion of
boundaries between the economy and other spheres. In other words, Luhmann
did not seize the opportunity afforded by his work to formulate a
"non-essentialist economism"-a perspective that takes economy as the
central ordering mechanism of modern life without succumbing to the problem
of essentialism.
5Foucault beyond the Critique of Economism
chapter abstract
To develop a non-essentialist economism, this chapter looks to Foucault's
later work on governance through risk, which presents an understanding of
normalization as a process of self-organization. The engagement of risk is
understood in terms of a continuous breaching of existing norms that
nonetheless generates its own sources of normativity. Foucault's analysis
of neoliberal reason emphasizes the way it has intuited the necessity of
contingency and has brought speculative logics into the heart of
governance. The chapter develops this point to argue that neoliberal
rationality functions on a logic of preemption, a paradoxical practice that
blurs the distinction between prevention and activation. The paradoxes of
preemptive temporality intensify during times of crisis, when concern with
the future comes to be attended by a reactionary quality.
6Time, Investment, and Decision
chapter abstract
This chapter pursues the analysis of capitalist temporality. The rise of
modern capitalism was accompanied by the emergence of a distinctive
experience of time, one in which humanity sees itself as making its own
temporality, understanding present practices as having emerged out of a
past and as shaping a contingent future. Time becomes a practical question,
and the present becomes a moment of decision. Such decision involves the
need to reassess the value of past investments and to adjust one's
portfolio of speculative investments. The distinctive temporal logic that
governs the dynamics of capitalism is best reflected in the rules of
double-entry bookkeeping, which codify the principle that a subject needs
to make promises and invest the cash proceeds of those commitments in
promises made by others.
7Minsky beyond the Critique of Speculation
chapter abstract
This chapter advances a new reading of Minsky's work that moves beyond the
standard interpretation of it as a post-Keynesian critique of financial
speculation. Minsky understands economic units as balance sheet entities,
and he views the dynamics of capitalism as generated by actors taking
speculative positions on the future. He sees the logic of banking as
central to the endogenous production of economic order, but is at the same
time acutely aware of the ever-present possibility of sudden breakdown.
Rejecting perspectives that see financial policy as operating on the
economy from the outside, Minsky emphasizes the continuity between
practices of banking and their governance, as well as the ways financial
instability has often accelerated dynamics of financial hierarchization.
This book places Minsky in a distinctive tradition of thinking about
central banking that takes the lender-of-last-resort function as the key
modality of financial governance.
8Practices of (Central) Banking, Imaginaries of Neutrality
chapter abstract
A Minskyan understanding of central banking implies that financial
governance can in principle never be neutral. Last-resort lending protects
the payment positions and sustains the asset values of banks deemed to be
systemically significant, and by providing this kind of too-big-to-fail
insurance it sustains the practices that gave rise to instability in the
first place. An element of "moral hazard" is inherent in central banking.
Much of the history of modern finance can be understood in terms of the
tension between the endogenous character of money production and the
fantasy that we can bypass the logic of economic self-organization to
define money exogenously. This chapter explores the dynamics of this
interaction between practices and conceptions of (central) banking and its
governance.
9Lineages of US Financial Governance
chapter abstract
This chapter examines the evolution of US financial governance to the
1970s. In response to the crash and the Depression, the New Deal reforms
expanded the "financial safety net" of the banking system. Dynamics of
financial boom and bust were replaced by a constant inflationary pressure
that was increasingly experienced as problematic. The practical problem of
financial management consisted in the fact that the American state needed
to conquer an inflationary dynamic that was sustained by its own basic
insurance and lending operations. Minsky seemed to feel there was no real
way for the American state to escape the awkward dynamic in which it was
constitutively embroiled. But it was the policy turn initiated by Volcker
at the end of the decade that changed some of the key parameters of
financial expansion.
10Hayek and Neoliberal Reason
chapter abstract
If Volcker perceived the problem in terms of how the state might change the
way it related to a process in which it was constitutively implicated, he
framed the question of financial management as a broadly Hayekian
problematic: How is ordering possible if there is no political agency that
can place itself outside the logic of risk and speculation? This chapter
examines the rationality of neoliberalism through the lens of Hayek's work
and his critique of idealist constructivism. For Hayek, there is no outside
to the logic of risk, and he considered acting without certainty not just
possible or acceptable but necessary and imperative. Insisting on a
purposeful embrace of a speculative orientation, neoliberalism functions on
a logic of preemption, in the dual sense of both activating contingency and
so forestalling the most serious threats it represents.
11Neoliberal Financial Governance
chapter abstract
The Volcker policy turn was driven by the wager that the instability it
caused would set in motion wider adjustments. In this way it laid the basis
for the emergence of a distinctly neoliberal rationality of financial
governance that centers on a dynamic of speculation, bailout, and
austerity. Whereas heterodox perspectives have often viewed the
proliferation of sources of contingency in the neoliberal era as a
destabilizing development that undermines order, this chapter draws
attention to the paradoxical sources of resilience that characterize this
logic. While the chapter identifies the concern to provoke the future as a
key feature of neoliberal governance, it emphasizes that this logic
involves a reactionary moment that manifests itself fully when uncertainty
becomes acute. Such times are marked by an absence of meaningful choice,
and the logic of preemption now manifests itself in yet a third sense, as a
foreclosure on the future.
12The Critique of Capital in Neoliberal Times
chapter abstract
Following the crisis of 2007-8, many commentators announced the end of
neoliberalism. In response to the unexpected survival and even
intensification of neoliberalism, critical scholarship has become
increasingly interested in what it views as neoliberalism's ability to
suspend its own contradictions. Current policies are often said to be
merely delaying the inevitable crisis of neoliberal capitalism, a system
that is no longer in touch with its foundations and long past its objective
date of expiration. This chapter emphasizes that such critiques are unable
to theorize how capitalist finance produces its own, immanent temporal
structures or to recognize the distinctive governance rationalities and
ordering mechanisms that are engendered in this way.
Contents and Abstracts
Introduction: Introduction: Beyond the Critique of Speculation
chapter abstract
This introductory chapter discusses the shortcomings of the heterodox
critique of financial speculation as an irrational divergence from real
values. It argues that the capitalist subject speculates not in defiance of
fundamental values but precisely because it has none to fall back on. The
critique of speculation is not only misleading as a general approach; but
it is also incapable of recognizing the ways the neoliberal reconstruction
of American capitalism has actively engaged this speculative dimension and
the specific ordering mechanisms and governance rationalities that it has
engendered in this way. The chapter introduces three sets of themes that
the rest of the book elaborates in a more systematic way: the speculative
character of economic value; the role of banking as a normalizing dynamic
within the logic of risk; and the significance of neoliberalism in
reconfiguring the place of speculation, risk and banking in governance.
1Foundationalism and Self-Referentiality
chapter abstract
Heterodox approaches consider speculative practices problematic because
they view them as driven by an irrational belief in the self-referentiality
of financial signs that fails to distinguish between real and fictitious
forms of value. This chapter argues that in this way the heterodox critique
of speculation has remained hostage to an essentialist understanding of
value. We can move beyond such persistent foundationalism by taking
seriously the paradoxical character of money as self-referential
value. From the perspective developed in the book, it is precisely the
inability to think of self-referentiality properly that binds the heterodox
critique to foundationalism. A deeper understanding of the role of
self-referentiality in economic life would allow us to move beyond the
perceived need to locate phenomena in external grounds or substances and
instead to foreground the question of how systems self-organize by
endogenously generating their conditions of possibility.
2Constructions and Performances
chapter abstract
The persistence of economic essentialism in the heterodox critique of
capitalist finance is curious given the prominence of constructivist ideas
in fields such as political economy and economic sociology. This chapter
argues that the constructivist turn has become stuck in an idealist or
rationalist constructivism, which sees norms and values as transcending the
dynamics of secular time and contingency, rather than as stabilizing risk
from within. Like the materialist essentialism that it is so critical of,
such an idealist approach is unable to do justice to the role of complexity
and contingency in the emergence of norms and systems. The prominent theme
of performativity has ended up reproducing similar problems, and the
chapter discusses the travails of actor-network theory from its origins in
a critique of Kantian idealism to the adoption of precisely such a
theoretical perspective in its recent engagement of money and finance.
3Luhmannian Considerations
chapter abstract
This chapter argues that Luhmann's more radical brand of constructivism
allows us to move beyond the conceptual antinomies discussed in the
previous chapters. Luhmann's work emphasizes that the processes through
which an identity is assembled never generate an external consciousness or
a totalizing view. The self-referential character of systems means that
they principally cannot transcend the condition of contingency and the need
to speculate. Luhmann thus advances a specific problematic of order -how
does a logic of interacting contingencies produce coherent norms and
identities? His work explores how systems generate their own conditions of
possibility, in the absence of external foundations. In some respects
Luhmann's understanding of how entities emerge runs parallel to the way
actor-network theory depicts this process, but the emphasis on contingency
and temporality gives his work a significant critical edge.
4System, Economy, and Governance
chapter abstract
This chapter argues that although Luhmann's understanding of contingency
and order provides a useful way to frame the distinctive problematic of
economy, Luhmann himself did not see this connection clearly. His work
remained overly concerned with the interaction of discretely differentiated
social subsystems. He was unable to see the economy as anything other than
just another social subsystem and consequently his analysis of the dynamics
of hierarchization were somewhat abortive. His work does little to
acknowledge the growing influence of money and finance and the erosion of
boundaries between the economy and other spheres. In other words, Luhmann
did not seize the opportunity afforded by his work to formulate a
"non-essentialist economism"-a perspective that takes economy as the
central ordering mechanism of modern life without succumbing to the problem
of essentialism.
5Foucault beyond the Critique of Economism
chapter abstract
To develop a non-essentialist economism, this chapter looks to Foucault's
later work on governance through risk, which presents an understanding of
normalization as a process of self-organization. The engagement of risk is
understood in terms of a continuous breaching of existing norms that
nonetheless generates its own sources of normativity. Foucault's analysis
of neoliberal reason emphasizes the way it has intuited the necessity of
contingency and has brought speculative logics into the heart of
governance. The chapter develops this point to argue that neoliberal
rationality functions on a logic of preemption, a paradoxical practice that
blurs the distinction between prevention and activation. The paradoxes of
preemptive temporality intensify during times of crisis, when concern with
the future comes to be attended by a reactionary quality.
6Time, Investment, and Decision
chapter abstract
This chapter pursues the analysis of capitalist temporality. The rise of
modern capitalism was accompanied by the emergence of a distinctive
experience of time, one in which humanity sees itself as making its own
temporality, understanding present practices as having emerged out of a
past and as shaping a contingent future. Time becomes a practical question,
and the present becomes a moment of decision. Such decision involves the
need to reassess the value of past investments and to adjust one's
portfolio of speculative investments. The distinctive temporal logic that
governs the dynamics of capitalism is best reflected in the rules of
double-entry bookkeeping, which codify the principle that a subject needs
to make promises and invest the cash proceeds of those commitments in
promises made by others.
7Minsky beyond the Critique of Speculation
chapter abstract
This chapter advances a new reading of Minsky's work that moves beyond the
standard interpretation of it as a post-Keynesian critique of financial
speculation. Minsky understands economic units as balance sheet entities,
and he views the dynamics of capitalism as generated by actors taking
speculative positions on the future. He sees the logic of banking as
central to the endogenous production of economic order, but is at the same
time acutely aware of the ever-present possibility of sudden breakdown.
Rejecting perspectives that see financial policy as operating on the
economy from the outside, Minsky emphasizes the continuity between
practices of banking and their governance, as well as the ways financial
instability has often accelerated dynamics of financial hierarchization.
This book places Minsky in a distinctive tradition of thinking about
central banking that takes the lender-of-last-resort function as the key
modality of financial governance.
8Practices of (Central) Banking, Imaginaries of Neutrality
chapter abstract
A Minskyan understanding of central banking implies that financial
governance can in principle never be neutral. Last-resort lending protects
the payment positions and sustains the asset values of banks deemed to be
systemically significant, and by providing this kind of too-big-to-fail
insurance it sustains the practices that gave rise to instability in the
first place. An element of "moral hazard" is inherent in central banking.
Much of the history of modern finance can be understood in terms of the
tension between the endogenous character of money production and the
fantasy that we can bypass the logic of economic self-organization to
define money exogenously. This chapter explores the dynamics of this
interaction between practices and conceptions of (central) banking and its
governance.
9Lineages of US Financial Governance
chapter abstract
This chapter examines the evolution of US financial governance to the
1970s. In response to the crash and the Depression, the New Deal reforms
expanded the "financial safety net" of the banking system. Dynamics of
financial boom and bust were replaced by a constant inflationary pressure
that was increasingly experienced as problematic. The practical problem of
financial management consisted in the fact that the American state needed
to conquer an inflationary dynamic that was sustained by its own basic
insurance and lending operations. Minsky seemed to feel there was no real
way for the American state to escape the awkward dynamic in which it was
constitutively embroiled. But it was the policy turn initiated by Volcker
at the end of the decade that changed some of the key parameters of
financial expansion.
10Hayek and Neoliberal Reason
chapter abstract
If Volcker perceived the problem in terms of how the state might change the
way it related to a process in which it was constitutively implicated, he
framed the question of financial management as a broadly Hayekian
problematic: How is ordering possible if there is no political agency that
can place itself outside the logic of risk and speculation? This chapter
examines the rationality of neoliberalism through the lens of Hayek's work
and his critique of idealist constructivism. For Hayek, there is no outside
to the logic of risk, and he considered acting without certainty not just
possible or acceptable but necessary and imperative. Insisting on a
purposeful embrace of a speculative orientation, neoliberalism functions on
a logic of preemption, in the dual sense of both activating contingency and
so forestalling the most serious threats it represents.
11Neoliberal Financial Governance
chapter abstract
The Volcker policy turn was driven by the wager that the instability it
caused would set in motion wider adjustments. In this way it laid the basis
for the emergence of a distinctly neoliberal rationality of financial
governance that centers on a dynamic of speculation, bailout, and
austerity. Whereas heterodox perspectives have often viewed the
proliferation of sources of contingency in the neoliberal era as a
destabilizing development that undermines order, this chapter draws
attention to the paradoxical sources of resilience that characterize this
logic. While the chapter identifies the concern to provoke the future as a
key feature of neoliberal governance, it emphasizes that this logic
involves a reactionary moment that manifests itself fully when uncertainty
becomes acute. Such times are marked by an absence of meaningful choice,
and the logic of preemption now manifests itself in yet a third sense, as a
foreclosure on the future.
12The Critique of Capital in Neoliberal Times
chapter abstract
Following the crisis of 2007-8, many commentators announced the end of
neoliberalism. In response to the unexpected survival and even
intensification of neoliberalism, critical scholarship has become
increasingly interested in what it views as neoliberalism's ability to
suspend its own contradictions. Current policies are often said to be
merely delaying the inevitable crisis of neoliberal capitalism, a system
that is no longer in touch with its foundations and long past its objective
date of expiration. This chapter emphasizes that such critiques are unable
to theorize how capitalist finance produces its own, immanent temporal
structures or to recognize the distinctive governance rationalities and
ordering mechanisms that are engendered in this way.
Introduction: Introduction: Beyond the Critique of Speculation
chapter abstract
This introductory chapter discusses the shortcomings of the heterodox
critique of financial speculation as an irrational divergence from real
values. It argues that the capitalist subject speculates not in defiance of
fundamental values but precisely because it has none to fall back on. The
critique of speculation is not only misleading as a general approach; but
it is also incapable of recognizing the ways the neoliberal reconstruction
of American capitalism has actively engaged this speculative dimension and
the specific ordering mechanisms and governance rationalities that it has
engendered in this way. The chapter introduces three sets of themes that
the rest of the book elaborates in a more systematic way: the speculative
character of economic value; the role of banking as a normalizing dynamic
within the logic of risk; and the significance of neoliberalism in
reconfiguring the place of speculation, risk and banking in governance.
1Foundationalism and Self-Referentiality
chapter abstract
Heterodox approaches consider speculative practices problematic because
they view them as driven by an irrational belief in the self-referentiality
of financial signs that fails to distinguish between real and fictitious
forms of value. This chapter argues that in this way the heterodox critique
of speculation has remained hostage to an essentialist understanding of
value. We can move beyond such persistent foundationalism by taking
seriously the paradoxical character of money as self-referential
value. From the perspective developed in the book, it is precisely the
inability to think of self-referentiality properly that binds the heterodox
critique to foundationalism. A deeper understanding of the role of
self-referentiality in economic life would allow us to move beyond the
perceived need to locate phenomena in external grounds or substances and
instead to foreground the question of how systems self-organize by
endogenously generating their conditions of possibility.
2Constructions and Performances
chapter abstract
The persistence of economic essentialism in the heterodox critique of
capitalist finance is curious given the prominence of constructivist ideas
in fields such as political economy and economic sociology. This chapter
argues that the constructivist turn has become stuck in an idealist or
rationalist constructivism, which sees norms and values as transcending the
dynamics of secular time and contingency, rather than as stabilizing risk
from within. Like the materialist essentialism that it is so critical of,
such an idealist approach is unable to do justice to the role of complexity
and contingency in the emergence of norms and systems. The prominent theme
of performativity has ended up reproducing similar problems, and the
chapter discusses the travails of actor-network theory from its origins in
a critique of Kantian idealism to the adoption of precisely such a
theoretical perspective in its recent engagement of money and finance.
3Luhmannian Considerations
chapter abstract
This chapter argues that Luhmann's more radical brand of constructivism
allows us to move beyond the conceptual antinomies discussed in the
previous chapters. Luhmann's work emphasizes that the processes through
which an identity is assembled never generate an external consciousness or
a totalizing view. The self-referential character of systems means that
they principally cannot transcend the condition of contingency and the need
to speculate. Luhmann thus advances a specific problematic of order -how
does a logic of interacting contingencies produce coherent norms and
identities? His work explores how systems generate their own conditions of
possibility, in the absence of external foundations. In some respects
Luhmann's understanding of how entities emerge runs parallel to the way
actor-network theory depicts this process, but the emphasis on contingency
and temporality gives his work a significant critical edge.
4System, Economy, and Governance
chapter abstract
This chapter argues that although Luhmann's understanding of contingency
and order provides a useful way to frame the distinctive problematic of
economy, Luhmann himself did not see this connection clearly. His work
remained overly concerned with the interaction of discretely differentiated
social subsystems. He was unable to see the economy as anything other than
just another social subsystem and consequently his analysis of the dynamics
of hierarchization were somewhat abortive. His work does little to
acknowledge the growing influence of money and finance and the erosion of
boundaries between the economy and other spheres. In other words, Luhmann
did not seize the opportunity afforded by his work to formulate a
"non-essentialist economism"-a perspective that takes economy as the
central ordering mechanism of modern life without succumbing to the problem
of essentialism.
5Foucault beyond the Critique of Economism
chapter abstract
To develop a non-essentialist economism, this chapter looks to Foucault's
later work on governance through risk, which presents an understanding of
normalization as a process of self-organization. The engagement of risk is
understood in terms of a continuous breaching of existing norms that
nonetheless generates its own sources of normativity. Foucault's analysis
of neoliberal reason emphasizes the way it has intuited the necessity of
contingency and has brought speculative logics into the heart of
governance. The chapter develops this point to argue that neoliberal
rationality functions on a logic of preemption, a paradoxical practice that
blurs the distinction between prevention and activation. The paradoxes of
preemptive temporality intensify during times of crisis, when concern with
the future comes to be attended by a reactionary quality.
6Time, Investment, and Decision
chapter abstract
This chapter pursues the analysis of capitalist temporality. The rise of
modern capitalism was accompanied by the emergence of a distinctive
experience of time, one in which humanity sees itself as making its own
temporality, understanding present practices as having emerged out of a
past and as shaping a contingent future. Time becomes a practical question,
and the present becomes a moment of decision. Such decision involves the
need to reassess the value of past investments and to adjust one's
portfolio of speculative investments. The distinctive temporal logic that
governs the dynamics of capitalism is best reflected in the rules of
double-entry bookkeeping, which codify the principle that a subject needs
to make promises and invest the cash proceeds of those commitments in
promises made by others.
7Minsky beyond the Critique of Speculation
chapter abstract
This chapter advances a new reading of Minsky's work that moves beyond the
standard interpretation of it as a post-Keynesian critique of financial
speculation. Minsky understands economic units as balance sheet entities,
and he views the dynamics of capitalism as generated by actors taking
speculative positions on the future. He sees the logic of banking as
central to the endogenous production of economic order, but is at the same
time acutely aware of the ever-present possibility of sudden breakdown.
Rejecting perspectives that see financial policy as operating on the
economy from the outside, Minsky emphasizes the continuity between
practices of banking and their governance, as well as the ways financial
instability has often accelerated dynamics of financial hierarchization.
This book places Minsky in a distinctive tradition of thinking about
central banking that takes the lender-of-last-resort function as the key
modality of financial governance.
8Practices of (Central) Banking, Imaginaries of Neutrality
chapter abstract
A Minskyan understanding of central banking implies that financial
governance can in principle never be neutral. Last-resort lending protects
the payment positions and sustains the asset values of banks deemed to be
systemically significant, and by providing this kind of too-big-to-fail
insurance it sustains the practices that gave rise to instability in the
first place. An element of "moral hazard" is inherent in central banking.
Much of the history of modern finance can be understood in terms of the
tension between the endogenous character of money production and the
fantasy that we can bypass the logic of economic self-organization to
define money exogenously. This chapter explores the dynamics of this
interaction between practices and conceptions of (central) banking and its
governance.
9Lineages of US Financial Governance
chapter abstract
This chapter examines the evolution of US financial governance to the
1970s. In response to the crash and the Depression, the New Deal reforms
expanded the "financial safety net" of the banking system. Dynamics of
financial boom and bust were replaced by a constant inflationary pressure
that was increasingly experienced as problematic. The practical problem of
financial management consisted in the fact that the American state needed
to conquer an inflationary dynamic that was sustained by its own basic
insurance and lending operations. Minsky seemed to feel there was no real
way for the American state to escape the awkward dynamic in which it was
constitutively embroiled. But it was the policy turn initiated by Volcker
at the end of the decade that changed some of the key parameters of
financial expansion.
10Hayek and Neoliberal Reason
chapter abstract
If Volcker perceived the problem in terms of how the state might change the
way it related to a process in which it was constitutively implicated, he
framed the question of financial management as a broadly Hayekian
problematic: How is ordering possible if there is no political agency that
can place itself outside the logic of risk and speculation? This chapter
examines the rationality of neoliberalism through the lens of Hayek's work
and his critique of idealist constructivism. For Hayek, there is no outside
to the logic of risk, and he considered acting without certainty not just
possible or acceptable but necessary and imperative. Insisting on a
purposeful embrace of a speculative orientation, neoliberalism functions on
a logic of preemption, in the dual sense of both activating contingency and
so forestalling the most serious threats it represents.
11Neoliberal Financial Governance
chapter abstract
The Volcker policy turn was driven by the wager that the instability it
caused would set in motion wider adjustments. In this way it laid the basis
for the emergence of a distinctly neoliberal rationality of financial
governance that centers on a dynamic of speculation, bailout, and
austerity. Whereas heterodox perspectives have often viewed the
proliferation of sources of contingency in the neoliberal era as a
destabilizing development that undermines order, this chapter draws
attention to the paradoxical sources of resilience that characterize this
logic. While the chapter identifies the concern to provoke the future as a
key feature of neoliberal governance, it emphasizes that this logic
involves a reactionary moment that manifests itself fully when uncertainty
becomes acute. Such times are marked by an absence of meaningful choice,
and the logic of preemption now manifests itself in yet a third sense, as a
foreclosure on the future.
12The Critique of Capital in Neoliberal Times
chapter abstract
Following the crisis of 2007-8, many commentators announced the end of
neoliberalism. In response to the unexpected survival and even
intensification of neoliberalism, critical scholarship has become
increasingly interested in what it views as neoliberalism's ability to
suspend its own contradictions. Current policies are often said to be
merely delaying the inevitable crisis of neoliberal capitalism, a system
that is no longer in touch with its foundations and long past its objective
date of expiration. This chapter emphasizes that such critiques are unable
to theorize how capitalist finance produces its own, immanent temporal
structures or to recognize the distinctive governance rationalities and
ordering mechanisms that are engendered in this way.