A brand of progressivism soothes itself by making reference to “apocalyptic Marxism”; this seems little more than weak comedy, as when an acquaintance stumbles up to you at a party, eyes glazed, to slur, Oh my god you are so wasted. But of course we must recognize the moment of truth in such a projection. The phrase “apocalyptic Marxism” is merely capital’s admission that the end of the current arrangement of private property, and of extracting value from human bodies, would indeed be annihilation of all. The capitalist is entirely identified with surplus value; when it dies, the world dies with it.
In realityland it is capitalism that is apocalyptic; so says the news every quarter of an hour. This is internal to the logic of capitalism itself, and particularly finance capital; even the closest camp followers of money cannot produce any external reason for this disaster. The two core characteristics of finance capital, correlation and credit, tend irrevocably toward this apocalyptic situation. Correlation is the situation produced by the need for increasingly rapid and voluminous transfers throughout the financial network; credit, what is transferred. Profits are made by balancing local risks, and then striking at increasingly slighter and briefer differentials. The strikes must therefore be delivered with ever-greater force. So there must be ever more channels and ever more liquidity to pour through them. Thus the rise in the extension of “leverage” — the ratio of borrowed to held assets — is not a “failure of fundamentals” but an absolute inevitability of finance capital. Correspondingly, because of these channels, an illness in one sector is increasingly likely to express itself as contagion systemwide. And because states as well as financial institutions are imbricated in correlation — this is the import of the phrase “too big to fail” — systemic risk is not just fiscal but global and political. One can even buy insurance against this eventuality, insurance against the end of the world, to improve one's bond rating as one sells dubious derivatives on to the next station.
The trade is the purchase of insurance against what would in effect be the failure of the modern capitalist system. It would take a cataclysm — around a third of the leading investment-grade corporations in Europe or half those in North America going bankrupt and defaulting on their debt — for the insurance to be paid out. (Mackenzie here)
Another way to describe the relation between correlation and credit, alongside channels and liquidity, is that between circulation and production. The credit has to be credit against something. It is a series of guarantees made and believed, stacked one atop the other like turtles. Even wagers that certain promises won’t be kept — insurance, credit default swaps, etc — are not external stabilizing forces on this stack of turtle; they're internal to the operation of the financial system. They too are part of the series of guarantees. They too have to be believed. And something has to produce this belief.
That is to say, it is not turtles all the way down (Buddhism is an opiate too). The bottom turtle rests on the production floor: the “real economy” where people go to work, make stuff, are paid wages minus surplus value, and in turn purchase stuff. The problem, from the perspective of financial capital, is that the value generated in that process can no longer keep up with the accelerating needs generated by financial competition: derivatives trading now far outpaces the commodity economy. And so, at the point where production floor and the stack of turtles meet, consumer credit becomes the pivotal guarantee: the promise that the real economy of the future, and of new and distant lands, will be paid into the ongoing apparatus — and thus can be spent now, guaranteeing all the other guarantees above it. Consumer credit is the bottom turtle. It’s a balloon turtle, really, that needs to be continually inflated; we call these “credit bubbles.”
It is clear enough that this abstract situation dominated by a single, endlessly expanding, relentlessly interconnected aggregation of corporations and states premised on the increasing internalization of labor across space and time is nothing but the financial expression of the concept of globalization, of neoliberalism itself. This is a point that Jasper is making here. And it thusly is clear that the attempt to “rescue” the financial sector is an attempt to rescue the neoliberal project.
There is perhaps something to be gained from recognizing the bailout as yet another credit bubble: money from future work to be made available now, but this time without even the choice to take out a mortgage or take home a flatscreen TV. When people keep asking “where will the money come from” they are simply asking about this problem, about the relation of circulation to production. For the bailout to work, one has to believe in the first place that the real economy can and will pay out such a figure in addition to its other requirements, in the future and in distant as-yet-unincorporated lands.
In the penthouse of the bailout debate, however, the central question seems to concern which turtle to inflate. And so even the most “liberal” economists simply suggest it will work better if we treat a lower turtle. Pure liquidity, at the head of the top turtle? A turtle slightly lower in the pile, like a stratum of financial corporations? Small business turtles? The lowest turtle of consumer credit and consumer demand? This set of choices is called “the political spectrum.”
None of this can answer the question about what will be made, sold, purchased within the real economy as it is abstractly mortgaged against this present loan. More commodities, more houses? Ironically, what is on offer this month is apocalypse itself. Or rather, safety from it. We are getting nothing for 700 billion but promised protection against the threat of systemic failure, a threat issued hour by hour on the news, by politicians and economists. We are made to purchase the very insurance Mackenzie discusses, but may sell nothing onward. Apocalypse is merely capitalism’s last new line, the latest in use value, though we are compelled always to imagine that it comes from somewhere else, is someone else’s idea…