Spectres of Capital: The Political Economy of Ghostwriting

Ghost City, by raysheaf

Nearly every book you have read by a celebrity or politician has been written by someone else: the ghostwriter, whose name remains unknown (or else slyly inserted in the ‘acknowledgements’ section). At a moment’s thought we know this; many people would be quite offended, after all, if they thought that Barack Obama truly sat down and wrote the several(!) books under his name. Likewise, for a CEO to actually take the time to write a business book would be “widely perceived as an act both desperate and pathetic”—in a word, “it would have made him [or her] a schmuck” (Hitt, 1997). Yet, nobody thinks about this—we cling to the reified notion of The Author even as it becomes more and more separate from that of the Writer. The present essay addresses ghostwriting in all its apparitions, from celebrity ‘autobiographies’ to its increasing prevalence in music and online dating. We will trace out its phantasms in ancient and contemporary philosophy, from Aristotle to hauntology, underscoring its implications for both theory and anti-theory. And lastly, we will argue that increasing ‘spectrification’ of society (and the emergent spectra and spectralities arising in its wake) places deeply into question the method of ‘textual analysis’ of capitalism.

§1. “I care not who writes a nation’s laws, as long as I can write its op-eds”

In the film Ghostwriter, Ewan McGregor explains the process to a client: “I interview you and turn your answers into prose.” We might recall Molière’s bourgeois gentilhomme, who realized with pride that he had been speaking prose all his life—but writing prose is another matter entirely, as any modern ‘ink-stained wretch’ will tell you. Writing is hard, yes, but no one seems to care: surveys show that most authors earn less than $1,000 per year (D’Agnese, 2014). The task of writing is an increasingly precarious one in light of the looming prospect of speech recognition technology phasing out the writer’s role entirely (replaced by that of the editor), as well as the increasing prevalence of algorithmic journalism.

Furthermore, as of 2011 (the latest year for which data is available) the number of new books published in the US reached 292,014—the highest in the world, followed by 241,986 in China (as of 2012) and 149,800 in the UK (as of 2011). Adding up the latest data for each country yields a total of 2,200,000 (via; see also). These, moreover, are the best of the lot, the ones that managed to escape the ‘slush pile’—every publisher and agent has one—of “unsolicited manuscripts, synopses and letters of enquiry lying in wait for someone to pick them up and respond with glowing encouragement” (Crofts, 8). In short, it’s virtually impossible for an unknown writer to make themselves heard, even in the unlikely situation that they have something interesting to say.

The process of ghostwriting is disarmingly simple. Often only two or three days of intensive interviewing are needed—one interview for the synopsis, several more for the full-length manuscript (Crofts, 104, 116): maybe 50 hours in total, 20 if they’re especially concise. The ghostwriter Sally Collings gets by with 10 interviews, each an hour long, followed by about four months of writing (or up to a year for larger projects)—far less personal than one might expect (Mayyasi, 2013). In return, ghosts are able to make a steady living doing what they love. One of the more ‘famous’ ghostwriters, Andrew Crofts, quotes a passage from the narrator in The Great Gatsby: “I was within and without, simultaneously enchanted and repelled by the inexhaustible variety of life” (in Crofts, 4). This, he says, “sums up the attraction of ghostwriting.” One peculiar case is Janofsky (2013), who found himself ghostwriting blog posts for an Arabian sheikh in exile; he even wrote a series of reflections on Ramadan—despite being Jewish—that were published verbatim. Culture shock is a concrete problem, keeping ghostwriters on their toes: Crofts (2004: 114) recalls writing an autobiography for African chief who was modest to the point of nearly obscuring his actual importance in his home country, “and indeed in the international business community.” Another of his examples is ghostwriting for the Chinese billionaire Tan Sri Loy, who flew Crofts to China to meet his relatives: “there were extraordinary things about his background that he would have taken for granted and not mentioned if I hadn’t seen them for myself” (ibid, 106).

“Ghosting a book for someone,” says Crofts, “is like being paid to be educated by the best teachers in the world.” The ghostwriter’s position also lets them query their subjects in ways that would otherwise be obnoxious: it’s part of the job to ask someone how much they earn, who they’re sleeping with, why on earth they married who they married—and the client is obliged to answer (ibid, 15). This joint venture of Writer and Author is often win/win: even if someone enjoys researching, there’s no guarantee of finding a publisher for their book after the months or even years required for its completion. Given that advances are at historic lows, and that in the absence of authorial cachet, work-for-hire and ghost gigs bring the highest advances (D’Agnese, 2014), the immediate appeal is clear. The process is even qualitatively easier than writing on one’s own, since the ghostwriter needn’t grapple with their own insecurities and daunting standards: ghostwriting an entire book may well be easier than writing several blog posts for oneself (Kihara, 2014). Another consideration is that it’s easier to elicit readers’ pathos through first person rather than third person narrative (Crofts, 9); evocative tropes such as dream sequences are awkward to write in a biography of someone else. For many struggling writers, the lack of a byline is a small price to pay.

These are D’Anglese’s self-reported gross revenues; for the net value subtract 15% agenting fees from each. They were also paid in halves, thirds, and fourths.

These are D’Anglese’s self-reported gross revenues, paid in halves, thirds, & fourths. For the net value, subtract 15% agenting fees from each.

The author’s motivation is simple enough—namely, outsourcing. Many authors initially have a go at writing on their own, but find that the job involves far more work than anticipated; the opportunity cost is just too high. For a successful expert (and/or celebrity, CEO, etc.), the main appeal of hiring a ghost is saving countless hours of niggling with a pen that could be far better spent contributing to their enterprise. Ghostwriters often even perform the author’s email interviews and blog posts during the publicity run (Huff, 2013), letting the author focus on making contacts and enjoying the spotlight. In short, ghostwriting embodies the principle of comparative advantage. Ghosts are defined by the lack of opportunities on their part: their universe of possibilities is far smaller, and it is precisely this discrepancy in ‘potentiality capital’ (Guattari) that makes ghostwriting a worthwhile venture. The receipt of money from the author in turn opens up the ghostwriter’s ‘universe’ more than they could have done alone, so that both parties gain from trade. It is easy to show numerically that, provided ‘transaction costs’ are sufficiently low, there will be mutual gains even if the client is a better writer than the ghostwriter they hire, due simply to their differing relative costs. In a list of common misconceptions about ghostwriting, Deckers (2012) comments:

[People often] don’t think they have a high-enough position to need a ghost writer. They don’t think they’re that important to ‘deserve’ it. They think their company needs to be bigger, or they need to have a more prestigious position. I saw this a lot when I was doing speechwriting for a Congressional candidate in 2004. It’s not a matter of prestige, it’s a matter of having the time to do it.

Counterintuitively, it becomes clear upon researching the subject that most professional ghostwriters don’t write well. Articles on the subject are replete with gratuitous and absurd similes, purple prose, and even simple grammatical errors. Rather than a troupe of down-on-their-luck Joyces, Raphaels (or Hemingways, Dostoevskies…) without hands, and other poets manqué—many ghostwriters’ main comparative (and competitive) advantage lies in unapologetically producing dull writing. “Some editors are failed writers, but so are most writers” (T.S. Eliot). In fact, this is often a selling point—as one successful academic ghostwriter boasts (Dante, 2010):

Over the years, I’ve refined ways of stretching papers. I can write a four-word sentence in 40 words. Just give me one phrase of quotable text, and I’ll produce two pages of ponderous explanation. I can say in 10 pages what most normal people could say in a paragraph. […] I think about how Dickens got paid per word and how, as a result, Bleak House is…well, let’s be diplomatic and say exhaustive. Dickens is a role model for me.

Read the rest of this entry

Proofs and Calibrations: An Interview with Élie Ayache

Swans, by Divine-Anarchy

Only Élie Ayache could take something as tedious as plugging variables into a formula and turn it into something charming. The costs of entry to his corpus are high—readers must be familiar with avant-garde Continental philosophy plus actively interested in the materiality of options markets. Nevertheless, Ayache earns a place alongside such thinkers as Bataille, Klossowski, Baudrillard, Deleuze/Guattari, and Lyotard, who smash the concepts of political economy into brick walls to see what remains intact—the concepts or the wall. And yet, The Blank Swan is so much more. The syntax of options (‘optionetics’, to pilfer a lovely phrase) lies entirely outside the purview of post-Marxist ‘critical’ theory that has grown crusty at best, procrustean at worst. “Cantor’s transfinite seems to be materially operative in our derivatives world,” notes Ayache (après Meillassoux), as derivatives create new intensive ‘surfaces’ on which yet more exotic derivatives can be written. The market is therefore untotalizable, im-probable (beyond the very category of probability); it is not meaningful to speak of ‘capitalism’ as such.

As with Nietzsche or Niels Bohr, to write ‘about’ Ayache places the preposition in conflict with itself. “The market proposes a way of thinking of the future that is no longer mediated by knowledge” (2006: 34). One tries to find a position from which to describe, or critique, but finds the ground pulled out from underneath: “The market never starts. You are immediately in the middle of it or you are nowhere.” (Local, 12:27–12:44). Philosophical ‘depth’ has no meaning for the surface of the market, in which “the infinite is often the best approximation of the finite” (2007: 262). Thus the following interview is not an introduction to Ayache’s work, but outlines some less obvious aspects that help to illuminate the whole.

In one of your essays you said that Meillassoux referred to your notion of the market as an ‘arché-market’, but it’s not clear to me how it’s analogous to the arché-fossil. Could you explain the link?

If I understand Meillassoux well, arché-fossil is what provides evidence to science that dates back to days when thought and as a matter of fact life didn’t exist and when givenness of being to thought didn’t exist; so arché-fossil is the light reaching from the outermost recesses of the universe or the fact that decaying isotopes can help science to establish contact with periods of time that predate thought, etc. Arché-market is something different. In conversation with Meillassoux, I once pointed to him that the ‘market’ wasn’t limited to my eyes to the financial market or even to the market in the sense of exchange of goods against prices. Rather, the market was a new logic or a new category of thought, a medium that conducts contingency ‘instantaneously’ without the apparatus of possibility and probability. Ideally, I wanted to convince him that my ‘market’ is the register where his whole factual (i.e. non metaphysical) speculation should be conducted. He then advised me to no longer call this category by the name of ‘market’ but, in order to avoid confusion, by the more venerable ‘arché-market’. For one thing, a contingent event can make the ‘market’ disappear; however, the arché-market as higher category and register cannot disappear as it is the very medium of contingency.

How does your philosophical position account for the fact that relativistic effects cause minute differences in the ‘same’ price in different regions of the world, noticeable only on the nanosecond scale in HFT? This strikes me as a crucial issue for your own theory, especially since you focus on the market as ‘surface’, whereas relativistic arbitrage would imply ‘ruptures’ in this surface.

HFT is not really my cup of tea. It is a necessary and unavoidable development of the technology and this is all that I have to say. Financial theory holds that prices should verify arbitrage instantaneously and I can only welcome a technology that now applies this ideal requirement of financial theory. Doubtless financial theory understands ‘instantaneous’ arbitrage in pre-relativistic terms and doubtless there must be interesting extensions of arbitrage to relativistic physics, and doubtless the HFT technology may be hitting on that limit. However, all this is of no interest to me; the market is not equal to HFT. Sadly, HFT is distracting the attention of thinkers and of philosophers away from the hard problem of the market, which is the real metaphysical and ontological problem that derivatives pose. Surely HFT is attracting money and investment from the banks and surely the sociology of finance should look into it. However those banks are (in my opinion) investing in HFT because they have abandoned the thought of derivatives. The hard problem of the market is the smile problem. To solve the smile problem you need something else than probability; you need a new metaphysics. This is what I am trying to develop both technologically in my company (ITO 33) and philosophically in my personal research and writing. The smile problem is simply that statistics and the corresponding paradigm have to be replaced by the prices of contingent claims. The smile problem is that we imply volatility from the option instant prices and not from the historical series of prices of the underlying. Why this is essential and not accidental, why this is a crucial problem and not just an ‘approximation’ or a temporary defect of the theory/technology, is a question that I am still amazed that neither the bankers nor the quants nor the philosophers of probability have started to tackle. And why are derivatives so important? Because the definition of the market to me is the place where underlying and derivative trade on the same level and floor. Why a surface? Because of this identity of levels and absence of depth or hierarchy between underlying and derivative. There are no possibilities and states of the world underlying the prices of the underlying and consequently evaluating the derivatives. All there is is the surface of prices of derivatives and derivatives on derivatives. While derivatives can certainly be traded by HFT as proxys of the underlying, the problem which they pose really, or the smile problem, is a very ‘slow’ problem in the sense that it requires calibration and recalibration to all the prices of all derivatives written on that underlying at once. To repeat, time and time series are not the proper dimension here. Place and writing is.

What is your opinion of Taleb’s latest book Antifragile?

I think Antifragile is a very clever concept. Taleb is trying to generalize convexity (of options) to life and beyond the strictly financial realm. But with this he is becoming less and less of a dynamic trader and more and more a fan of static hedging (take care of your losses and your profits will take care of themselves). By contrast, I advocate dynamic hedging and the dynamic trading of derivatives. There is a constant battle between convexity and time decay (the cost of convexity) which Taleb seems to (want to) ignore. This battle is what the dynamic market is all about. My work is to try to generalize the matter or the category of the market beyond the financial realm.

How did you discover philosophy? When did you become interested in writing?

At the age of six, on my way to school, I once wondered whether the pedestrian crossing the street in front of me would have accomplished the same act and crossed the street if, for some reason that day, say because of illness, I had not gone to school. Then I realized that I wouldn’t have been there in the first place to even notice the pedestrian and even conceive of his being.

When I found myself stuck in a military camp in Lebanon in 1982 with nothing really interesting to do and wasn’t allowed to travel to France to study. I then discovered how writing was there and had nothing to do with time.

Like many readers, I have a hard time getting my bearings in Part III of your book, despite your insistence that it’s the most important part. You claim that the virtual cannot be theorized, only narrated, which is understandable (and reminiscent of Lyotard’s Libidinal Economy), but your writing often reads more like a Hegelian bildungsroman than like Deleuze. Could you perhaps spell out what you’re trying to do in Part III? Why did you choose Barton Fink, of all films?

Barton Fink is the key to my philosophy. From possibility (Barton Fink in his room) to the total of possibilities (Karl Mundt) to the writing surface (the liberation of Barton Fink at the end). Also notice that he ends up writing the same play as in the beginning of the movie, in true Menard fashion.

Part III: The book is the arché-arché-market

Most of your essays over the past few years have been revisions to The Blank Swan. Have you thought of writing another book, perhaps a sequel of sorts? (Or does your book place under erasure any attempt at doing so?) If so, what sort of problems and material would you want it to address?

I am currently completing a book. More strictly critical of financial theory. More metaphysical. Better. Harder.

“There is no economic world.”

There is no economic world. There is only an abstract economic description. It is wrong to think that the task of economics is to find out how the economy is. Economics concerns what we can say about the economy…

This thesis (adapted from Niels Bohr, the father of quantum theory[1]) is, to anyone not thoroughly debauched by philosophy, clearly nonsensical—the sort of postmodern tripe that embodies everything wrong with ‘theory’. Yet, it is quite the opposite. François Laruelle argues that any notion of ‘world’—as a priori/mnemotechnic cognitive mapping—is a product of philosophical thinking; in fact, he often uses the words ‘philosophy’ and ‘world’ interchangeably. Therefore, if the corpus of economics has a ‘world’, this implies that any worthwhile statements it makes are translatable into philosophy, which thus becomes privileged as a meta-discourse in relation to the ‘regional knowledge’ of economics. Such a role has been traditionally claimed by Marxism, as well as obliquely by disciplines such as psychoanalysis, whose proponents believe that they can have knowledge of the economy by imposing their concepts a priori upon whatever data is at hand (regardless of whether said theorist knows minutiae such as the difference between stocks and bonds…). To subvert this hierarchy—to argue that economics is properly non-philosophical, thus eliminating all grounds for the use of postmodern tripe—the thesis that ‘there is no economic world’ becomes essential. This paper presents a unified theory of economics and philosophy, arguing that economics consists of nonknowledge rather than knowledge (episteme/technē), that economics operates through unwriting or deconceptualizing the material of the other social sciences, and that economic models should not be viewed as attempts to represent the world, but as a radically non-Bayesian method of framing events in their contingency.

§1. World versus ‘World’

There is a famous story involving the British analytic philosopher A.J. Ayer and the French continental philosophers Georges Bataille and Georges Ambrosino, in a midnight conversation in January 1951 (Bataille, 2001: 111-3). Ayer introduced the simple proposition that “the sun existed before man,” which as a scientific realist he saw no reason to doubt. Ambrosino, a physician steeped in French phenomenology, insisted that “certainly the sun had not existed before the world.” Bataille, on the other hand, was agnostic. As he wrote afterwards (111):

This is a proposition that indicates the perfect non-sense that a reasonable proposition can assume. A common meaning must have a meaning within all meaning when one asserts any proposition that in principle implies a subject & an object. In the proposition: there was the sun and there were no humans, there is a subject without an object.

The easy way out of this dilemma (or as Bataille put it, this “abyss between French philosophers and English philosophers”) is to say that while Ayer was talking about the sun (as a well-defined scientific object composed of various elements, etc.), Ambrosino and Bataille were talking about ‘the sun’ (as ideal representation of the Real).[2] While Ambrosino had taken a purely idealist position, Bataille’s stance is much more interesting: he had, in fact, hit upon a problem that would later become known as the ‘arché-fossil’. This idea would be central to Quentin Meillassoux’s attempt to philosophize in a way that avoids what he calls ‘correlationism’—that is, the idea that “we only ever have access to the correlation between thinking and being, and never to either term considered apart from the other” (2008: 5), with ‘thinking’ and ‘being’ meant in the sense of ‘models’ and ‘objects’. In more visual terms, Meillassoux is searching for a way of doing philosophy that doesn’t just involve the imposition of a ‘grid’ of concepts (or ‘syntax’) upon the mass of data comprising the world—as has been the norm in philosophy since Kant’s Critique of Pure Reason.[3] An arché-fossil is any sort of scientific object or datum describing the state of the universe prior to the existence of subjects (e.g. humans) that could experience it—or, recalling the above anecdote: the arché-fossil describes the state of the world prior to ‘the world’. After introducing this concept, Meillassoux goes on to outline the ‘mechanics’ of why this idea is so immediately absurd to philosophers in the phenomenological tradition. The existence of ‘ancestral’ data implies (15):

  • that being is not co-extensive with manifestation, since events have occurred in the past which were not manifest to anyone;
  • that what is preceded in time the manifestation of what is;
  • that manifestation itself emerged in time and space, and that consequently manifestation is not the givenness of a world, but rather an intra-worldly occurrence;
  • that this event can, moreover, be dated;
  • that thought is in a position to think manifestation’s emergence in being, as well as a being or a time anterior to manifestation;
  • that the fossil-matter is the givenness in the present of a being that is anterior to givenness; that is to say, that an arché-fossil manifests an entity’s anteriority vis-à-vis manifestation.

DCP_0086 by Phillip Stearns

The notion of the arché-fossil underscores the tension between the world and ‘the world’. From the perspective of ‘the world’ there is either ‘world’ or ‘non-world’, whose boundary is set by the existence of an experiencing subject. Yet, by carbon-dating a meteorite (for example), it is possible to state that the ‘non-world’ and the world existed simultaneously (or: co-extensively), and moreover, that the evidence for this is given to us within ‘the world’. Philosophically, this is clearly unacceptable. Yet, it sheds some light upon an old Daoist koan:

庄子:“如果把天下就藏在天下,就不会被丢失,这是一般事物的通理”

“Hide the world in the world and the world will never be lost—this is the eternal truth.” ~Zhuangzi[4]

Zhuangzi is the same person who, upon waking up from a dream that he was a butterfly, wondered if he was actually a butterfly dreaming that he was a man. The anecdote is no doubt as popular as it is because of its stark opposition of ‘world’ (dream) and world (reality). A dream, after all, proceeds according to an internal logic where any sort of (arché-)hints that it is a dream, e.g. words on a page changing the second time you look at them, just don’t count. The most absurd events may occur in the most bizarre of settings, but any sense of contingency (the idea that it could be otherwise) is lost. If we take the lack of contingency in dreams as a principle, however, the very fact that Zhuangzi can ask whether he’s a butterfly or a man proves he isn’t dreaming! Zhuangzi’s query creates a partition—with ‘dream’ and ‘non-dream’ as the only members of the state space—and is thus self-defeating: nonknowledge is in fact the most useful kind of knowledge he can have. So in order to avoid a performative contradiction, Zhuangzi must accept that the principle can’t be psychologically necessary. This gives rise to a fundamental contingency, where in order to make a convincing case that he is a butterfly, Zhuangzi has to argue that the current laws of psychology (and perhaps even of nature) would have to be able to be other than they are—the same position as Meillassoux!

For Meillassoux, this division of world and ‘world’ is the problem, and ought to be gotten rid of; Zhuangzi’s stance is similar, though his method eliminates this opposition in an entirely different way—which is the same as that of economics. Anyone accustomed to think in philosophical terms may be inclined, on reading the following sections, to suppose that the argument rests on a tacit assumption of this dyad. If such a supposition is found helpful, there is no harm in the reader’s adopting it as a temporary working hypothesis. In fact, however, no such division is made.

§2. Econo-fiction

To verify the claim ‘oil prices are manipulated by the USA’, a political scientist could (in theory) physically go to each stage of the oil production/distribution process, from oil wells to spot or futures markets, to various nodes along logistical networks, to gas stations, etc. In the above claim, ‘oil price’ is well-defined as a variable; moreover, its role as subject of the sentence makes the former claim ‘economic’ in its genre. (Cf. the political statement ‘the USA manipulates oil prices’, with its focus on agency.) ‘USA’ is of course vague, but suffices for the problem at hand. The verb ‘to manipulate’ reifies (in this context), but is in principle observable. Our political scientist could measure the ‘value added’ in each stage as it is expressed in price, then perform an (unavoidably qualitative) analysis of how fluctuations in the magnitude of this value-added (with respect to production costs, etc.) can be causally traced to the USA. In this context, economic methods would not per se be needed, only mercantile arithmetic. Economics is often thought of as simply an armchair version our poor political scientist’s task (implying that an ideal model is one that is just as complex as the real world). Yet, in the above statement economics acknowledges not the subject, verb, or object, but the preposition ‘by’: in a sort of econo-fiction, it shows the numerical properties that make ‘manipulation’ possible.

Economics can be defined as the science of non-discursive social relations, with a broad definition of ‘discourse’ such that one could equally say ‘non-conceptual’.[5] In fact, economics takes place through a process of deconceptualizing the findings of business, finance, and politics. As soon as you think you can understand an economic notion (e.g. an algebraic relation) intuitively and talk about it lucidly, economists develop a way to formalize it (via econometrics and so on) so as to make it entirely untranslatable into normal language. John von Neumann once remarked: “in mathematics you don’t understand things. You just get used to them.” This is exactly what Bohr was saying! By continually deconceptualizing its former results economics systematically prevents itself from creating a ‘world’. As in Roland Barthes’ famous formulation, the task of economics is to inexpress the expressible.[6]

Read the rest of this entry

Exogeneity – Economics and Nonknowledge

2009_07_07, by Tas Vicze

An economic fact is structured as follows: “consumers in the sample place a premium on liquidity β = 0.73.” This serves its task in economic models and allows economists to draw conclusions that are correct for all practical purposes. But in everyday life such a number is meaningless. The reason for this is that this number cuts across all discourse, all affect, and the social conditions that engender it, rendering these causalities exogenous to the non-conceptual statements of economics. As such, an economic fact’s epistemological scope is not sufficiently expressed by the all-too-philosophical categories of episteme (‘know-what’) and technē (‘know-how’)—though obviously these cannot help but play a significant part—but can be better characterized as a form of nonknowledge. This use of the term ‘nonknowledge’ is, however, not reducible to the Confucian dictum “To know what you know and to know what you do not know, this is knowledge”—which merely redoubles epistemology on itself in a transcendental begging of the question. To know what we don’t know would require that we know what we don’t know we don’t know, ad infinitum. The nonknowledge of economics is, as it were, the last instance of the Confucian limit statement. This nonknowledge takes place in a single number, which unifies (without being unitary) and commensurates (without commensurability) disparate orders of causality. The purpose of such a number is, borrowing a phrase from Roland Barthes (a far better political economist than Althusser ever was), to inexpress the expressible. Exogeneity is the reason why economics must necessarily be (in)expressed by numbers, not words—as well as why philosophy, mired in discourse, is unable to speak of economics.

In its disjunction from Knowledge proper, economics is non-paranoiac precisely to the extent that it is okay not to know. This has in the past led to accusations that economics is a form of religion, by analogy with the latter’s suppression of questions via dogmatism. This is not internal to economics, however, but rather takes place in its traversal (and subsequent travesty) in(to) discourse, where causality is truncated and contingency forgotten. Economics deals in facticity without fact (Heidegger), which as such remains open, ‘closable’ in the last instance only. The clause “for all practical purposes” helps to underscore its (non-)answerality, its indecisionality between practice and theory. Yet, economics tra(ns)verses into discourse precisely by supplying this ‘last instance’—by endogenizing it, as best illustrated by Milton Friedman and the money supply. Philosophy cannot handle exogeneity. Its own limit statement is that economics become a Theory of Everything.

2009_06_30 by Tas Vicze

A concept is a model. This implies that the only form of ‘concept’ in economics is an economic theory itself, in its entirety. This goes unnoticed because the first idea associated with economics in the public mind is “supply and demand”—this despite the fact that real economists never use these terms in practice. An introductory course in economics (many people’s only exposure to the discipline) teaches students to play around with such concepts as supply and demand, interest rates, and so on. Philosophy ‘of’ economics likewise proceeds by attaching to an economic ‘object’ such as ‘labour’, then trying to relate it to other concepts. But those few who take an intermediate economics course find that they are being taught the same information, but without concepts. ‘Objects’ are replaced with exogenous variables, or rates of change x/y (read: “derivative of x with respect to y”). An economic model is an elaborate tautology, in the extended Wittgensteinian sense of the term where pq is a tautology, since the concept of p is contained in the concept of q. Its conclusions arise from the syzygy (roughly, coalignment) of its variables along with its presuppositions (made for the sake of simplification). In an elaborate process of synergy, this syzygy creates a concept that may be imposed at will. Conclusions (prescriptive and descriptive) seem obvious to an economist but are not so to a layperson, and philosophy students pontificate about neoliberalism while econometrics students are incapable even of articulating what they don’t understand in class. Yet, it’s precisely this para-conceptual syzygy that constitutes all that is valuable in economics. What separates a good model from a bad one is that in the latter, a specific presupposition may be shown to do all the ‘work’ in providing the model’s conclusion.

Semantically, all of the interesting statements of economics take place within the preposition of a philosophical statement. As Laruelle writes, “The identity of the with (the One with the One, God with God), is the true ‘mystical’ content of philosophy, its ‘black box’.” The armchair philosopher is forced to engage in an amphibological attempt to render (pseudo-)exogeneity as endogenous, forced to autopositionally posit black boxes in the form of virtus dormitiva (Molière). Philosophy creates names for the Real, and by these purports to have explained it. Conversely, an economic variable is a name that does not name (Lao Tzu: 名可名,非常名), but non-conceptually gestures toward radical ( absolute) exogeneity.

**Thanks to Tas Vicze for the artwork; you can view the rest of his portfolio here.

Currency War: An Extremely Short Introduction

John Maynard Keynes once wrote that “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.”[1] Bretton Woods, hyperinflation, and stagflation have increased this view’s sway, and some would argue that Keynes’ own economic theories have given his statement a veracity that it would not possess otherwise. Nevertheless, this statement is capable of being combined in a fruitful way with the notion that “the way a society makes war reflects the way it makes wealth.”[2] These two theses become crystallized in the concept of a currency war, the implications of which will first be outlined historically, then contextualized within contemporary discourse on international politics, and discussed in terms of how it problematizes typical discussions of security.

Prior to Bretton Woods, the value of money was pegged to the price of gold, i.e. the gold standard. This led to phenomena such as ‘Gresham’s Law’, where if the price of bullion was higher than the value of a coin made of a precious metal, people would melt down the coin and sell the bullion, pocketing the difference; this tendency can be observed even today with respect to the penny. More importantly, as Lyotard argues, this structured international trade into a zero-sum game. As he comments:

[T]he quantity of metallic money which is ‘circulating in all Europe’ being constant, and this gold being wealth itself, in order that the king grow richer he must seize the maximum of this gold. This is to condemn the partner to die, in the long or short term. It is to count the time of trade not up to infinity, but by limiting it to the moment when all the gold in Europe is in Versailles.[3]

This was not, however, a currency war per se, but rather a ‘wealth war’—the difference will shortly be made clear. In 1933, facing the Great Depression, the United States finally abandoned the gold standard, and soon after devalued its currency 40 percent, which greatly boosted the US economy as well as that of the rest of the world.[4] Deprived of a ‘universal’ numeraire, the currencies of the world subsequently became valued relative to each other, creating a competitive atmosphere of an entirely different kind. The lower a state’s currency is valued, the more businesses in other countries will be incentivized to import their products, and this fact (particularly in the case of Japan) is explicitly taken into account in monetary policy. The picture is complicated further when it is considered how the US dollar is a reserve currency—i.e. the ‘default’ currency which states use to allow for current account surpluses (i.e. countries importing more than they export) or to purposively modify exchange rates (particularly in the case of currencies pegged to another currency, such as China’s yuan to the dollar). As one article[5] describes: “the effect of a devaluation of a non-reserve currency…is implicitly to put upward buying pressure on the USD,” and conversely,[6] “every time the Fed debases the US Dollar it forces the Euro and other currencies higher, hurting those countries’ exports.”

Read the rest of this entry

Alessandro Bellini on Sraffa and The ‘Capital-World’

Who_Can_Hold_These_Words_For___by_Versatis

{The following is excerpted from Bellini’s dissertation (supervised by François Laruelle), entitled “Suspension of the Capital-World for the Production of Jouissance” (pp. 35-41; abstract here), shittily translated from the French by moi. I’m interested to hear what philosophers (e.g. Lyotard) have to say about Sraffa, but although Bellini’s description is initially quite interesting it eventually resorts to shameless straw man arguments, as well as rejecting Sraffa’s position purely on the basis of metaphysical preferences. I’ve added a couple of translator’s notes specifying the most egregious distortions of Sraffa’s work, and my more lengthy criticisms can be found at the bottom of the post, above the endnotes.}

§ 3. Production of commodities by means of commodities

The interpretation that the Italian economist Claudio Napoleoni has given of Piero Sraffa’s Production of Commodities by Means of Commodities[20] is a very radical interpretation, in disagreement with both the apologists of the Cambridge economist and their neoclassical adversaries, and it is rooted in a vision of political economy as critical knowledge that seeks always to emphasize the philosophical issues that relate to the theory and that constantly pushes its way forward with inexhaustible political authority.[21]

What should first be noted is the way in which Piero Sraffa places himself in the classical tradition of the history of economic thought, which follows from the perfect circularity of his model, and unfolds through the role played by surplus; yet “the fact that the image of the economic process based on the concept of surplus is presented in the classics in a way logically untenable but historically significant, whereas in Sraffa it is presented in a way that is logically rigorous but historically silent” was for Claudio Napoleoni one of the fundamental features of the theoretical context in which the 1960 Production of Commodities by Means of Commodities appeared.[22] A solution such as Sraffa’s must therefore be interpreted as a break with the Marxian structure – in its Classical sense – rather than as its extension.

Let us try then to go a bit into details of the book, despite its level of abstraction, paying very specific attention to its use of the language of classical economic theory, of which we have already given an overview [in §2]. According to Claudio Napoleoni, what the Sraffa model presupposes is a given configuration of production – that is to say, a system of algebraic equations which represent the contributions that each branch of the productive system provides to the aggregate of economic processes, without including demand for goods – through which we may define a “net product” or a surplus in physiocratic and Ricardian terms. Sraffa’s theoretical aim is to show that if one separates the determination of price from the general problem of equilibrium one performs an operation endowed with meaning, because it is precisely by this link that prices are determinable.[23]

Indeed, the operation performed by Sraffa is a revival – through its definition of surplus – of Ricardian theory, though abandoning the pretension to link price-formation to quantities of labor objectified in commodities. It consequently eliminates any circular reasoning, thanks to the simultaneous determination of the rate of profit and of prices.

In particular, according to Claudio Napoleoni, the Sraffian “reduction to dated quantities of labor” can be used as a critique of the labor theory of value, although Sraffa does not make explicit his criticisms of Böhm-Bawerk’s theory of capital. From the ‘reduction equation’ used by Sraffa, it seems clear that in fact the price of a commodity depends not only on the amount of labor contained in it, but it also depends on the distribution of labor between direct and indirect labor: therefore, if there is a change in the distribution, the reasons for exchange between commodities vary, even if the quantities of work contained in the commodities does not change.[24]

It is then possible to state that “Sraffa’s system is the first theory of price that is formulated entirely outside of a theory of value, or at least the two theories of value that had previously been presented in the history of economic thought.”[25] In this way, the possibility of developing a theory of economic foundations vanishes. From this there arises, in fact, a definitive fracture between scientific analysis and the philosophical dimension, in the sense that Sraffa’s model no longer refers to any philosophical position; it simply adapts to the reality of capital to explain its pure functionality.

§ 4. Economic science

In the beginning of the century, in fact, Gustav Cassel had posed the problem of breaking free from the metaphysics which, in both theoretical traditions, sought a foundation in value as separate from price.[26] Sraffa was not the only one to realize the goal of Cassel, since at the same time a rigorous formulation of the theory of general economic equilibrium was achieved by Debreu.[27] The latter, through the explicit assumption of an axiomatic method, also obtained results leading to “a perfect conceptual identity, or a nullification of value by price.”[28] That’s why, starting from Gustav Cassel, both Sraffa and Debreu “seek to construct a non-founded economic theory—that is to say, one which does not require a foundation outside itself.”[29]

Consequently the idea that with Sraffa there is a definitive solution to the problem of a stable measure of value as the basis of relative prices – which according to Claudio Napoleoni takes the form of a suppression and not a solution to the question of value – represents unequivocally the final term in the history of political economy, as a science founded precisely on its decision as regards the problem of value: if we recognize that Sraffa’s theoretical proposal overcomes all non-empirical or purely metaphysical presuppositions so as to obtain full formal coherence, one is forced to recognize at the same time the end of political economy.

Read the rest of this entry

Laruelle Bibliography (English & French)

A_Doubt_within_Daylight_by_Versatis

{Someone needed to compile this, so I did. Let me know if I missed anything. I took two French bibliographies (1, 2) and put the English versions in bullets, adding links to online material (whole or partial). Essays with English translations are bolded. Some repeated publications were omitted. My own citations are in APA style, but French citations are not.}

Read the rest of this entry

Follow

Get every new post delivered to your Inbox.

Join 634 other followers