15 thoughts on “Some Thoughts on the Crisis”

  1. Hi,

    I thought this was a very interesting article and it’s great to see more theorists scrutinizing issues of political economy. I have a question, however, about the end of the article, where you discuss the non-neutrality of money. I was wondering if perhaps you could elucidate this a bit, since I found the last three paragraphs to be a bit enigmatic on how exactly the materiality of money is non-neutral, and how this non-neutrality relates to crisis. I know Kojin Karatani discusses this a bit at some length, pointing to money as an often ignored yet crucial focal point of the capitalist economy, split as it is between the processes of circulation and production, as well as the asymmetry between commodity and money, and the latter between its form of value and necessary appearance (out of which generates the transcendental illusion of money as something more than it actually is).

    I suppose my question is to what extent you side with Karatani’s Kantian reading of money and its role in the capitalist economy and how money’s non-neutral character would provide an adequate starting point (rather than, say, theoretical terminus) for grasping the dynamics of present transnational global capitalism.


  2. Bryan, I don’t have any easy answers to what you are asking. I find Karatani helpful in the sense that his Kantian or transcendentalist reading of Marx’s analysis of capitalism helps us to see that money works as a kind of “transcendental condition” for the workings of our society, which is why particular changes or reforms don’t actually dislodge it.

    As for a starting point vs a terminus: consider how Marx starts with the commodity, even though his larger point is that the commodity is itself a symptom of processes of exploitation (the expropriation of surplus value), or that we need to move from circulation to the “hidden realm of production” to make sense of things.

  3. Thanks for your response, I think that does clear up a few things. One additional thing I recalled is that in the footnotes to Althusser’s Preface to Capital, Vol 1, he urges readers to immediately skip the first part in order to concentrate on Part II, the chapter on the transformation of money into capital. I think this is the quote:

    „I therefore give the following advice: put THE WHOLE OF PART ONE ASIDE FOR THE TIME BEING and BEGIN YOUR READING WITH PART TWO: ‘The Transformation of Money into Capital.’ In my opinion it is impossible to begin (even to begin) to understand Part I until you have read and re-read the whole of Volume One, starting with Part II.“

    So at the very least, it would seem that Althusser places a similar emphasis on money as a transcendental condition (a fact which is perhaps made a bit less obvious by Marx’s own arrangement of chapters). Anyhow, not sure how relevant or useful that is, but it’s at least interesting that Althusser so vehemently urges readers to ignore Marx’s own organization in favor of his recommendation.

  4. From Steve’s essay:

    “The crisis was unpredictable, but also unsurprising. It came upon us suddenly, without warning.”

    wrong. As with anything based around exponential growth and digital replication, it was predicted by a number of people, including myself. I even discussed the roots of the issue here on your blog, here:


    where I talk about the federal reserve’s h3 report, which can be seen here:


    I began to pay attention to the h3 in 2005 or 6, when the Bush admin stopped publishing the h4 report, saying that no one was interested in it. A British reporter (name escapes me) sounded an alarm on this, and had a link to the h3 and how to read it. so, every few months I’d go look at the h3.

    If you look at the data NOW, you will see that a year ago, the aggregate reserves of ALL American banks was at $-332 Billion (B). Yes, NEGATIVE 332 billion. The next month, after Bush Junta dumped hundreds of billions into the system, it went to $-88B, and in Dec 08 it was again in the black $167B. However, since the data “scrolls off” after just over a year, what you don’t see is that the value was in the red since a year prior, and before that ,the reserves had dropped down below $20B for a few months and below $50B for most of the year prior.

    The warning signs had been there for quite a while. The rumour mill is that the h4 was actually taken down because it would have shown that the Bush Admin had been dumping stupid amounts of money into the system, which was already showing signs of failure in 05 – 06. I don’t have the access or data to prove that allegation, but given the evidence I do have, it is not much of a stretch to believe that.

    Since all these reserve values are the product of the govt dumping a trillion$ (T) into the system, the h3 is no longer a real guide to the monetary health of the USA.

    Steve also wrote:

    “Lots of people, both on the Left and the Right, blame the crisis upon the proliferation of “fictitious capital”: of money that was not grounded in concrete, physical wealth.”

    This is because there is no other kind of wealth.

    I would recommend the following article as a counterpoint:


    Contrary to what Steve is saying, I would argue that in fact it is the “transcendental” nature of money that allowed it to expand far beyond its actual basis in resources and energy, and as these are now (in some cases) flat or reducing in growth or (in other cases) approaching peak, the entire growth based money system will simply have to go away, and with it, industrial capitalism as we have come to understand it.

    Debt is a claim on future labour. Labour is the practice of humans in work. Work is the result of energy. Constrain energy production and you constrain debt. Note: Global petroleum production has been basically flat since 2005 – just before the Fed stopped publishing the h4.

    I leave you with some lecture notes from the geologist M King Hubbert from 1981:

    “The world’s present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and inter-relationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin.

    “The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance. The second, an inheritance from the pre-scientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is superimposed.

    “Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely, exponential growth, which has made a reasonably stable coexistence possible. But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is by now almost over. The monetary system has no such constraints, and, according to one of its most fundamental rules, it must continue to grow by compound interest. This disparity between a monetary system which continues to grow exponentially and a physical system which is unable to do so leads to an increase with time in the ratio of money to the output of the physical system. This manifests itself as price inflation. A monetary alternative corresponding to a zero physical growth rate would be a zero interest rate. The result in either case would be large-scale financial instability.”

    “With such relationships in mind, a review will be made of the evolution of the world’s matter-energy system culminating in the present industrial society. Questions will then be considered regarding the future:

    * What are the constraints and possibilities imposed by the matter-energy system? (Can) human society (be) sustained at near optimum conditions?

    * Will it be possible to so reform the monetary system that it can serve as a control system to achieve these results?

    * If not, can an accounting and control system of a non-monetary nature be devised that would be appropriate for the management of an advanced industrial system?

    “It appears that the stage is now set for a critical examination of this problem, and that out of such inquiries, if a catastrophic solution can be avoided, there can hardly fail to emerge what the historian of science, Thomas S. Kuhn, has called a major scientific and intellectual revolution.”



  5. If indeed money is the transcendental condition of current social organization this is founded upon the foisting of current relations into the future through the organization of Debt (stock, insurance, bet). If money constitutes our very ability to organize unto a future, the material nexus of possibility and belief, why would this be regarded as “symptomatic”. Commodification (which seems to be a huge affective and debt oriented investment/expression) cannot be a symptom when it is the very condition that produces the possibility to abstractly organize into the future through expectation and belief.

    Is there imagined a non-Debt vision for how wholesale society can organize (at least one that is not planned by a State apparatus)? Should we be talking about (dreaming about) a non-monetary, rather than non-Capitalist, solution of relating?

  6. Great article!

    The fact that some experts on economic studies insist in treating financial/economical issues only through the exact sciences perspectives, fullfiled with idealism, as if we were living in a smooth perfect world where everything is completelly under control, ignoring human behavior, ignoring environmental issues, ignoring the unpredictable, ignoring the forces of the chaos, ignoring the resistance,etc. had contributed a lot on this recent crisis, as in others.

    I remember also that in July, in a chat with a friend who is a theoretical physics in Europe, he had mentioned that subjectivity shouldn’t be taken into consideration when he employs the mathematical models and abstractions of physics in an attempt to explain economic stuff. In fact he and his folks used to gain a lot of money making future maps on predictable financial/economical market.

    In december he called me saying that he and his friends were losing their jobs because of the unpredictable aspects that came upon the table.

    I remenber that I used to suggest him the studies of the nobel prize Kahneman & Tversky (among others), … in connection with Deleuze and Guattari (wow, what a strange connection!), Zizek, Negri, etc. and he used to say that thes guys and their ideas were not necessary.

  7. Shaviro: “The crisis was unpredictable, but also unsurprising. It came upon us suddenly, without warning. Nobody knew about it ahead of time — and nobody could have known. There was no way to plan for it; no way to forecast it; no way to take it into account, financially or otherwise. It is only in retrospect that we can trace the incipient signs of the crisis, follow the slow progression of its advent…

    …Of course, the bankers, the businessmen, and the economists were indeed taken by surprise. But they shouldn’t have been. If the world financial system hadn’t teetered on the edge of the abyss in September 2008, it would have done so at some other time. There is no way it could have avoided falling apart eventually.”

    Kvond: Is this near metaphysical unknowability of the crisis necessary for your thesis? Is the fact that someone actually did know about it, and worked very hard to avoid it empirical evidence against your thesis? It would seem that the very image of markets as an boom/bust machine of some undecidable nature is exactly the image of a fatalism that you suggest is produced by Capitalism itself. What if SOMEONE knew what was going to happen?

    Frontline: “In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation’s worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

    “I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”

    Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.

    “I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'”

    Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”

    Interview: http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

    The show: http://www.pbs.org/wgbh/pages/frontline/warning/

    One can say that Capitalism follows a binge and purge logic, but indeed there are different kinds of binges and different kinds of purges, different degrees of each. It is not enough to simply absorb this as a fact of logic. Brooksley Born may indeed have succeeded in predicting and regulating parts of the problem that lead to “the” crisis, but it strikes me as wrong headed to simply dismiss her success or failure (those two possibilties) as inconsequential to an inevitable future of disasters.

  8. Hello, I just started reading your blog today and I have several loose replies to other posts which I will try to orient towards this post. Before this, I will state that I have started reading Michel Serre’s “The Parasite” and my concern is about “the parasite”, although I am in no way equipped to paraphrase his description of it:

    1. I see a convergence between your post on Levinas and your post on Hardt & Negri’s characterization of a new parasitic capitalist relationship in terms of neo-liberal economics (which, I think includes a specific protocol of ethics). If I’m not mistaken, you state that they misrecognize the parasite relationship as an emerging or empirically inducted or teleological relationship that unwittingly cultivates a class that will lead to its destruction. In terms of economic analysis, this appears analogously to be the “Medea Hypothesis” in opposition to the neoliberal “Gaia Hypothesis.” I just realized that.

    I was going to comment that, you are saying that this parasitic relationship allows for the conditions of exchange, as Serres, I think argues, that noise is the precondition for communication; which could be read in line with Levinas, i.e. the noise of the Other is the precondition for self-enjoyment. However, this, of course, is not a parasitic relationship, it is a responsible relationship, where in it would have to seem like something happens where the self has to be responsible for the other because the other, as parasite or noise, has allowed the conditions of self-reflexivity and thus allowed the subject into its state of super-abundant existence (the super-abundant part I like) [This line of thought became too complicated to continue… but it doesn’t, it’s different from Zizek’s identification with the master, because, in this case, the master is a parasite, which is supposed to be a radical involution– this one is, actually, too hard right now]

    The atomic dimension of your arguments toward not being skeptical towards pan-psychism but also towards being skeptical of self-organization bring into question a fidelity towards being or becoming. I only mention this because of the breadth of your analysis; I think what I’ve seen from you and Graham Harman’s work already resolves this. I think, Michel Serres would call this a “black box.”

    2. The end. I hope it was helpful, and not too indulgent of me to reflect in one evening over a few months of your thinking on this blog.

    thank you,


  9. Rules that forced lending to minorities who couldn’t repay was a big part of the collapse. Banks have to only have money to repay about 3% of the loans. If more than 3% suddenly default, therefore, the banking indsutry will collapse.

    ACORN among other groups was forcing lenders to give mortgages that they knew the clients couldn’t repay. When a bunch of them folded, so did the economy.

    There should be better rules.

    On the other end, there are too many big salaries for CEOs. Billions went into golden parachutes.

    It’s going to take a while — but ACORN is now going out of business, and some caps on salaries will be introduced. I do think the monetary business can be managed better, and that it is comprehensible not as something in and of itself (staring at a dollar bill won’t help much), but working on the rules (the grammar) will make the thing comprehensible.

    Also, you’re simplifying Hayek and turning him into a strawman. His thinking is a lot more complex than the way you misrepresent it here.

  10. I wish you’d sometimes lean on more reliable sources — Smith — for instance.

    Lunatics like Althusser and Marx are so terrible.

    Capitalism is a charming thing compared to the messes those guys have made of things.

    I loved Pol Pot’s notion to get rid of money altogether — a bag of rice could not be traded for anything but the exact same bag of rice. There was to be NO TRADING.

    That’s of course a bit extreme — and charming — to get rid of any kind of representation altogether.

    But capitalism is marvelous. It is exactly like nature. It is the attempt to do something MArxist, or along the lines of a Social Gospel, that screws everything up.

    Why on earth do you want to politicize money? It is like politicizing language. You just screw up the language when you introduce PC euphemisms.

    Let the first amendment and the free market roll as Smith would have had it, and as Hayek valiantly attempted to protect it.

    Shrink the government’s role to a watchdog instead of to producer of wealth, and the economy will get going again.

    We need a smarter money person in the White House. Romney would be pretty good. The last thing we need is anybody like Althusser anywhere near the Treasury Department.

  11. KO: ACORN among other groups was forcing lenders to give mortgages that they knew the clients couldn’t repay.

    Kvond: Pretty hilarious. The “economic crisis” as it has become known, is now because ACORN and “other groups” forced, literally forced banks to make riskier loans (and not also the desire to open up the red lined social strata to idealized market growth). “Charming” as some might say. Perhaps ACORN, that heinous group of no-gooders, also “forced” an unregulated multi, multi trillion dollar derivatives market.

    Perhaps it is not a society without representation exchange, but a society without representation of representation of representation of representation, whereby “what” is being represented is no longer a corrective to exchange itself is a good idea. No… as Greenspan dreams, “fraud” is not “corrected” by the “market”.

    I do think that the sum total of Capitalist criticism is logically pushed towards a logic against representation (I love the Pol Pot example). Really though, the problem is simple. When capitalist corporeal organizations grow strong enough to leverage a re-writting of the laws that govern their own actions (and the actions of governance in general, wars fought, tax policy), when political will is submitted to “market” processes as if the market were some kind of “hand of God” evolutionary beneficence, the cart quite literally is before the horse.

  12. The problem in both the Great Depression of the 1930s and the Recession we’re now in seems to have been caused by a gap between representation and reality. Saussurians would not countenance such a gap or allow that it exists, but representation is meant to represent real wealth, that is, wealth that you have in your hands, and can transfer.

    The banks lend money that they don’t have. It is used by people who cannot repay it.

    And then at some point it’s called in, as it was in the Great Depression, or as it recently was in the Bank crisis of our own time. And it wasn’t there, and the credibility was gone, and the banks went under.

    I think the problem is that banks even now only have to have on hand 10% of the money they are loaning out.

    If they are suddenly asked to show 50% of the money, for instance, they go under.

    Money is funny, but it has to be based on something real. That’s hard for Saussurians to get, because they try to separate reality and representation. That’s wrong.

    I admit I didn’t understand your last paragraph, especially the last phrase about the cart being “literally” before the horse. If you could set up that imagery with something having gone before it, as a reference, it might be easier. I didn’t understand what the horse referred to, or the cart, especially after the mixed metaphor of the hand of God, and the actions of re-writing.

    I also didn’t know what a “derivatives market” is. Shall google.

    I think the whole system is built on money that people don’t really have, but if it’s all called in at once in a panic, the system obviously will collapse, as the collateral doesn’t exist except on paper.

  13. Ok, I now have a definition for derviatives:

    “A market where various financial derivatives such as forwards, futures, options, and swaps are bought and sold”

    I think I understand this. What brought the market down at first was that ACORN forced loans that they knew their clients couldn’t repay. When those loans all came due, it was about 3% of the total money that the banks had. So they needed then to call in other money. And none of it was there. It was all built on the confidence that someone else had the money. But no one had the money. They were all borrowing from a future that didn’t yet exist.

    And so the thing collapsed.

    Obama has now borrowed from a future (our grandchildren’s future) and put us into a trillion dollars of debt, borrowing also from the Red Chinese.

    That has stopped the collapse for the nonce.

    But we are now in hock to the Red Chinese, who sell us their unregulated junk lined with lead, and other crummy products while dumping billions of tons of mercury and other stuff into the ocean, while they make their products which we buy.

    I don’t quite understand how this is supposed to be sustainable, but no one has time to think about the whole system, we just try to hope that our one little link of the vast chain won’t collapse to the point that we end up living beneath a bridge.

    It would be excellent to have a real-money person in the White House. The last two have been disasters. I’m putting my money on Romney.

  14. “Media theorists ought to study money as a medium, in the same way that they study television, video, and Web 2.0 as media — but unfortunately, for the most part they don’t.”

    I could not agree more, and since they don’t, I have done so myself. Check this text:


    For some time now I have been researching the use of second-order cybernetic modeling techniques in the financial markets. An extraordinary artwork called Black Shoals Stock Market Planetarium gave me the opportunity to formalize some of the conclusions of this research, which does not stop with the explication of complex financial instruments, but rather attempts to see what they do to the environment, particularly the built environment of cities and the labor environments within which people are compelled to earn their livings. So, for whatever it’s worth, someone out there is doing more or less what you call for.

    cheers, Brian Holmes

  15. Steve, Have just come across your blog and worksite (I was searching some aspect of William Gibson) and found your very fine review article, “Gamer”…..found my way then to this older October post, your thoughts on the Crisis. Though it’s perhaps a bit of a tangent, let me bring to your attention the article, “Money As We Knew It” by Joachim Kalka (2008) translation published in New Left Review 60, Nov / Dec 2009 http://www.newleftreview.org/?page=article&view=2811 . The connection would be, 1) your comments about the materiality and non neutrality of money and fictitious capital, and 2) vis film studies, Kalka’s use of the example of the Donald Duck animations, i.e. Scrooge McDuck the miser. Enjoy, and I hope it can be of use…….. S.

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