HACK THIS BOYS, or, Slightly Digressive Research on Electronic Circulation, or, The Latest Control Revolution

(NOTE: the following is convolute material from Agorachronotistics—as yet this remains in a fragmentary form and should not be quoted from.)

Two tendentious questions requiring further research:
1. Have media theorists, globalization theorists, and recent Marxist writers (Hardt and Negri, for instance) underappreciated the role played by electronic movements of finance capital within the global economy?
2. Do ideology critics tend to pay too much attention to consumption and not enough attention to circulation (or, how come no one reads Capital, vol. 2, or, how come our Brother Blog seems so hung up on retail)?

A DERIVATIVE DÉRIVE, or, A DÉRIVE THROUGH DERIVATIVES

The credit card is the only kind of electronic money taken into account by Marshall McLuhan in his chapter on “Money” in Understanding Media. McLuhan acknowledges that money is a kind of language, and he places extraordinary emphasis on its role in producing and sustaining the symbolic order within media cultures. But he does not anticipate the widespread use of electronic technologies for circulating wealth—everything from ATMs, direct payment and payroll, electronic retail, or (most influentially in geopolitical financial terms) stock, currency, and derivative trading.

As the anthropologists Edward LiPuma and Benjamin Lee remark in their compellingly readable Financial Deriviatives and the Globalization of Risk, the vast majority of wealth now exists in electronic form. The internet enables not only news, pornography, and useful information. It is also the foremost of the communications technologies that have fundamentally reshaped the global circulation of capital:

The conditions of connectivity, which permit someone, living almost anywhere, to download medical information to help diagnosis for a relative in need of medical care, to read a report on human rights and political detainees that the state would better like unread, or to correspond regularly with a friend living overseas, are also the conditions of encompassment and domination by circulatory capital and the infrastructure of the metropole generally. (47)

Derivatives, in other words, are a direct result of a globally integrated network; they are in fact a vast network unto themselves, constituting the “planet’s largest market” (46). Lee and LiPuma ask us to

Consider that according to the crystals of economic history, [the $100 trillion] derivatives market is approximately the same as total global manufacturing product for the last millennium. Or that deposits of that magnitude must be electronic, notional, and virtual because the amounts being circulated exceed the total quantity of the world’s currencies. (47-48)

Lee and LiPuma derive the figure of $100 trillion from the International Bank of Settlements 2000 report. In the interim, the derivative market has more than quintupled in size to $516 trillion. This would compare to a US annual gross domestic product of $15 trillion and a total US money supply also of roughly $15 trillion. (An accessible non-scholarly synopsis of the derivatives market is available at marketwatch.com current derivatives market) Perhaps physical money has lost much of its power, and is now merely a fetish by comparison to the electronic means by which wealthy individuals and corporations transfer money and finance capital. McLuhan calls paper money the “poor man’s credit card,” but the credit card is merely an instrument of individual borrowing. Individuals are hardly relevant to this largest of all markets: derivatives are primarily the province of large corporations and hedge funds. They transcend national boundaries, and they elude direct investment by all but the most intrepid (or wealthy) of individuals. McLuhan notes tamely that

Money, like writing, has the power to specialize and to rechannel human energies and to separate functions, just as it translates and reduces one kind of work to another. Even in the electronic age it has lost none of its power. (133)

McLuhan doesn’t consider whether the money he speaks of could take an electronic form, or if the acceleration of circulation enabled by electronic transfers of wealth might influence society. Indeed, one can hardly blame McLuhan: derivatives did not exist in 1964.

Not surprisingly, the non-specialist faces daunting challenges in trying to account for the influence of derivatives on the global economy. Lee and LiPuma argue that is in part because derivatives by their nature resist representation:

…the culture of derivatives posits itself as a space lying beyond the power of representation, one that is discernible only through quantification, grasped objectively as the necessity (emanating from the thing itself) of reducing all event structures to forms of differential equations, and subjectively as a kind of mathematical intuition embodied (as a quasi-genetic endowment) in those who master the financial practices. This culture of finance appears in academic and inside publications as well as newspapers and electronic media. It also appears in the organization, day-to-day operation, and distribution of money and power at investment banks (and nonbank banks), electronic trading sites, and hedge funds. Ironically, its own social determination and specific historical character lie in its unconscious refusal to recognize the socio-historical construction of the (derivative) object or (participating) subjects. (65)

The electronic movement of money and power is in some sense completely visible (detailed global financial transaction statistics are freely available at the International Bank of Settlements website; their annual report in some ways reads like a gross parody of the UN Human Development Report). And in another sense the electronic movements of money and power are completely invisible—in that the electronic transaction is always a fetish, i.e. it takes place electronically between infinite nodes; it naturalizes its own existence; and it largely divorces itself from the actual means of production. It seems at least indisputable that Lee and LiPuma are right when they suggest that

The culture of circulation of derivatives, especially those that regulate exchange rates and capital flows, structurally reproduces existing forms of global asymmetry and, more importantly perhaps, introduces a new form of structuring and structural asymmetry that owes its coherence to a set of ideologically impregnated conceptual schemes. (173)

Deleuze and Guatari make a similar point in stronger terms when describing the overwhelming influence of markets on the current global order. Perhaps they should have the last word:

In capitalism only one thing is universal, the market. There’s no universal state, precisely because there’s a universal market of which states are the centers, the trading floors. But the market’s not universalizing, homogenizing, it’s an extraordinary generator of both wealth and misery. A concern for human rights shouldn’t lead us to extol the “joys” of liberal capitalism of which they’re an integral part. There’s no democratic state that’s not compromised to the very core by its part in generating human misery" (Negotiations 78).

PS

Or perhaps D&G shouldn’t have the last word:

PPS
Please don’t ask me to define a derivative. As many times as I’ve memorized Lee and LiPuma’s definition of a derivative as “the generic name for any security whose value is tied to an underlier,” I still find the derivative to verge on the indescribable—to verge on the banal, or the hopelessly general. The derivative is the post-script which ignores the letter which has come before the signature. The post-script lies beyond writing, after the labor of writing has been done. The derivative is underivable from experience; it is a sign within a language without etymology. The postscript is the post-crypt of the labor of communication, where the letter dies as afterthought, its signature effaced—now a dead letter, part of a postal crypt. There are potentially as many varieties of derivatives in cyberspace as there are varieties of human beings in cyberspace. Or, as Lee and LiPuma put it, “there are as many kinds of derivatives as there are forms of connectivity” (192).

Sunday, March 16, 2008 5:19 p.m.