Two questions provoked by Michael Betancourt's insightful essay, "Immaterial Value and Scarcity in Digital Capitalism":
First, with and against the ineluctable logic traced out by the essay concerning the migration to the realm of the immaterial from the material, from the physical commodity-form to a new capitalist regime based on semiotic manipulation, I would add a counter-thesis and a dissent.
The counter-thesis is this. Certainly Betancourt is correct in his superb theoretical diagnosis of immaterial value and periodic crises provoked by the scarcity of capital, but he may have overlooked something Jean Baudrillard noted before his death, namely that for all the fast circulation of capital, for all the excess signs of panic debt, for all the manipulation of currency exchanges in a desperate attempt to liberate immaterial value from the hauntology of the real, the system can only function as a pure satellite-function. If there can be such a desperate capitalist will to a floating commodity-form, circulating currencies liberated from real measures of value, imaginary dreams of wealth-creation without production, that's probably because the system is already haunted by the waiting reality of crashing to earth. And perhaps not only haunted, but deeply seduced, indeed energized, by the accident of the real that the quest for immaterial value has released in its digital wake.
Consequently, the dissent: Today, we experience only the illusion of immaterial value and the scarcity of capital. Everywhere, capitalism is only twenty-four hours away from collapse if any part of its real material base stops working in real-time: the collapse of the electrical grid, slippages in network routers, glitches in trading systems supporting complex financial transactions, oil that will not stop flowing, wage strikes that shut down emergent economies. In this case, the "aura of the digital" always involves a twisted strand of two extreme conditions, both co-present, both parallel, both opposite inflections. On the one hand, a drive toward immateriality that is haunted by the specter of crashing from its floating orbit into the detritus of its earthly remains; and, on the other, an increasing rise to prominence of the failing material base of production. In the latter instance, this would explain why the capitalist future of immaterial value is accompanied today by the incipient violence of the Global War on Terror. When capitalism ceases to float, when the realm of immaterial value falls from the sky of semiotic manipulation into the remains of political struggles over increasingly scarce resources, the Global War on Terror dictates the necessary political strategy in defense of global capitalism. The disciplinary state is quickly called in to impose austerity measures, to freeze the mobility of otherwise fungible labor, to impose punitive restrictions on labor, on street dissent, on any and all political struggles for freedom, to criminalize popular expressions of democratic opposition.
In this case, a future of global capitalism under the doubled sign of seduction and discipline. Here, catastrophe capitalism is really never purely immaterial nor material but always a violent impulse animated and energized by the sacrificial ritual of simultaneously floating away from and inhabiting the ruins of earth, sky, water, and fire. Always in motion, always inflating and deflating, capitalism in the end does not really care for the question of value -- immaterial, physical or otherwise -- but only for the process of putting the question of value in motion, driving the value-form to the waiting extremes of (virtual) seduction and (born again) discipline. When Marx theorized a future of "dead labor," he was his own best grave-digger, a theorist who simultaneously unearthed the hidden codes of capitalism and accurately foretold its future disappearance. Today, we are living in the time After Marx, but for all that still firmly trapped in a doubled hauntology of seduction and discipline that he could prophesy but not stop. In the riddle of history, could it be that stopping the acceleration of really existent capitalism can only now be done by the book, namely by reading Marx again with the intention of turning from within his haunting prophecy concerning the dead labor, dead value, and dead capital that is everywhere the pervasive scent of the everyday.
Michael Betancourt has developed a very insightful, powerful, and, most importantly, a very timely intervention in our understanding of contemporary capitalism. In a time of such dramatic upheaval, clearly the old ways of thinking and interpreting will not be sufficient. Works such as these which provide us with new conceptual tools, ('the aura of the digital', 'immaterial capitalism', 'capitalism's agnotology'), are crucial in engaging the challenges of this new era of crisis and catastrophe. In my response, however, I want to challenge the conception of a hard break between an immaterial and material capitalism, arguing there might be more continuity between the two than first appears.
First, is it possible that what Betancourt describes as a categorical shift in the nature of capitalism from essentially a material capitalism to an immaterial capitalism is, in fact, not a global transformation, but simply a transformation in the American style of capitalism? Betancourt very effectively describes the shift from productive manufacturing economies to speculative/financial economies. The question remains whether this might not be the latest incarnation of a similar transition that has happened often in the rise and fall of every global capitalist hegemony since capitalism's inception -- whether it be the Venetians, the Dutch, the English -- that is, the shift from a manufacturing-based system of production during its rise, to a financialization phase during its decline (an argument developed by economic historians such as Giovanni Arrighi or Immauel Wallerstein). Indeed, to speak to some of the parallels, these financialization phases have frequently been marked by speculative, immaterial 'bubbles' as the economy seeks to develop new investments for capitalism (the classic example is Tulipmania in Holland in the 17th century).
Arguing in favor of this shift as being slightly more regional in character, we must note that 'material', manufacturing-based capitalism has not disappeared, but simply moved to Asia (as Betancourt identifies). Indeed, only the fact that China continues to underwrite US debt has allowed the American economy to continue to function, and hence also allowed the speculative bubbles that have occurred over the last several decades. Why then argue on behalf of a genuine shift in the nature of capitalism itself when what we are witnessing presently may be simply a decline of American capitalist manufacturing hegemony, requiring, in turn, the shift to various new fundamentally unsound strategies to cling to economic relevance?
This leads to my second question, which also seeks to put some pressure on the somewhat hard break with Marxist analysis in dealing with this new world of digital immateriality. Specifically, why cannot the concept of 'capital scarcity', as developed in Betancourt's article, be effectively harmonized with a neo-marxist account of a crisis of overaccumulation of capital, as developed by David Harvey? Though in principle these concepts seem diametrically opposed, they may in fact be describing very similar processes. My understanding of capital scarcity is as a reference to material capital, in other words, the sum total possible productive labor that society can muster (labor+resources+commodities, etc.). The scarcity of capital is thus a problem insofar as circulating immaterial capital, artificially inflated through speculative financial instruments, outpaces this actual concrete capital production. It is in this context, as Betancourt discusses, that currency goes from being a repository for past labor, and becomes rentier currency, premised on a claim to future labor which material capitalism can never fulfill. Harvey's theory of the crisis of capital overaccumulation begins with the saturation of a local market, thus resulting in a lack of reasonably profitable investment opportunities and production lines, in effect seizing up circulating capital [from any perspective, stasis means death for a capitalist economy). In both cases, what we have is a market that simply cannot provide any more effective commodity production, which is to say material exchange-value production. Harvey identifies how, in this situation, the capitalist system responds by searching out spatio-temporal fixes that can take circulating capital out of the system for a time; Betancourt describes how immaterial capitalism develops speculative economies as a source of profitable investment. In both accounts we see a situation in which actors are forced to cast about for sites and times outside of the concrete cycle of material production to prevent of systemic collapse.
What is more, there is an effective connection between Harvey's spatio-temporal fixes and the speculative, immaterial economies discussed in the article (the Savings-and-Loan scandals of the 80's, the tech bubble '90s, the housing bubble of 00's), which lies in their cyclical, boom-and-bust character. The fact that these immaterial, speculative economies have consistently collapsed once the inherently overvalued nature of these fictitious commodities becomes apparent (or rather once the collective studied ignorance, the "Agnotology," as the article describes it, which allowed them to come into being disappears) suggests, as, of course, Betancourt's article acknowledges, that materiality will not be denied. Eventually the lack of a material productive base underlying the apparently infinite valuation of immaterial production will break through, eradicating the illusory successes. However, this suggests that there is not a sharp division between the material and immaterial economy. In effect, "bubbles" are best understood as immaterial episodes within a broader material economy.
My argument does not really constitute a critique of Betancourt's article, which does an exceptional job of investigating the specifics of this new form of digital capitalism. What I want to suggest is that there are resources within Marx that might provide an explanation for him as to why there is this shift to 'fiat' currencies and 'immaterial' production in the first place. The article identifies a set of automated processes in which actors are forced to make fundamentally self-destructive, "agnatological" decisions. I certainly agree that this is an element at play. But I want to push it even farther and suggest that these seemingly self-destructive decisions might actually serve a systemic purpose. In effect, we are not necessarily seeing a break with Marxist logic, merely the introduction of a new technique to deal with an old problem.
Indeed, even the subsequent bust portion of the cycle is productive. As Harvey points out, periodic cycles of devaluation and catastrophe are profoundly useful to capitalism by opening up new spaces for investment and production. Naomi Klein speaks of the emergence of "shock capitalism" that adopts this cycle of boom and bust as the fundamental principle of capitalist production. Once again, speculative economies would not represent a departure from a broader material economy, but simply different moments within an expanded capitalist repertoire. At the end, we are left with the paradoxical fact that immaterial economy might not so much exist in opposition to material economy, but represent its necessary supplement.
I think there may be fewer points of disagreement and greater overlap between my proposal and the excellent and insightful commentaries made by Arthur Kroker and Simon Glezos than this discussion may imply; it is the nature of such exchanges to appear dialectical even when they are not.
Personally, I feel this exchange of views is very exciting and productive, and am pleased we have this opportunity.
It is important to recognize that my discussion of immaterialism does not represent a rupture with physicality: the immaterialism that is the defining feature of digital capitalism is intricately and innately tied to physicality. The "rupture" I describe is the ideological claim made by immaterialism following the aura of the digital: to understand and critique this claim I feel a need to explore how it emerges and functions; at no point does this analysis make the claim that the rupture with physicality claimed by immaterialism has any basis in reality, or is anything other than ideological. In fact, much of the pathological and self-destructive aspects of digital capitalism develop from this ideological claim being false.
The development of immaterial labor and its consequent deployment of financialization necessarily generate asset bubbles followed by crashes precisely because the denial of physicality that is the aura of the digital is an illusion (this, in fact, is the point about the aura of the digital -- it is an illusion that denies physicality). My proposal is less a hard break with traditional Marxism than a shift in the fundamental assumptions about the structure and relationship of key foundational concepts that are so significant they are literally defined at the outset of his analysis: commodity-form, exchange-value, relative value, labor and their relationship/role in/as currency. It is precisely because currency is coincident with commodity-form that Marx had no need to address currency as a dynamic separate from the concept of commodity-form.
What digital capitalism poses for Marxist analysis is not a hard break with established interpretations as much as a fundamental modification whereby certain questions that are not resolved by existing interpretations can be readily answered. Such a modification does not mean that all existing interpretations are necessarily no longer applicable, but rather that their application should not be assumed to function in precisely the same fashion.
The emergence of digital capitalism as a dominant ideology is a reflection not of an escape from physicality but a systematic attempt to deny physicality that results from an interlocking set of structural changes to the historical nature of exchange-value (currency) in relation to the preservation of already-produced value, the relative value of commodities, and labor. The inability to preserve produced value accelerates both the circulation of currency and the attempt to maintain systematic equilibrium. (The speed of circulation is currently many multiples of what it has been historically.) The emergence of digital capitalism and the shift to immaterialism will necessarily collapse simply because there cannot be a break with physicality however much the ideology may claim it and the social agents may behave as if there has been such a break.
What Naomi Klein has termed the 'shock doctrine' or "disaster capitalism" is quite simply what Marx termed "primitive accumulation" -- in this case, the forced valorization of industries and resources in the public commons -- those domains that create sources of income that do not require repayment, a factor predicted by the Ponzi model's description of the needs posed by fiat currency; it is notable that this doctrine came into effect at the same historical moment as the shift to a fiat currency. These types of enforced co-options become necessary (and possible) only when the social domains in question can be seized -- the 'shock' or disaster provide this opportunity. However, this kind of seizure entails both a risk of failure (counter-revolution) and generates resistance; the deployment of affective labor and agnotology enables the same kinds of annexing of social domains without the collateral resistances the 'shock doctrine' inevitably generates. I do disagree with the suggestion that capitalism (digital or otherwise) is not concerned with the question of value: capitalism is very much concerned with the question of value, but with a specific qualification -- it is the collapse of value which endangers the translation of value into hieratic affects. The role of discipline, as much as agnotology, within this construct is to produce equilibrium in a system that is basically incapable of equilibrium.
While I agree with the premise that immaterial economy and material production are linked, the distinction I would like to make is that this linkage does not require the social agents to behave as if the concerns of physical production are dominant over those created by immaterialism. The ascent of the aura of the digital is the dominance of immaterial concerns over and against physicality. It is this dominance of an immaterial ideology, not a disconnection from physicality, that produces digital capitalism.
At the same time, I believe the shift to digital capitalism is global for several, interlocking reasons: (1) the US Dollar functions as the global reserve currency, meaning that all other currencies' value and conversion is in relation to the US Dollar; (2) that in spite of deep systemic shifts in American industrialization via offshoring and globalism that have resulted in the United States becoming a net exporter of raw materials for manufacturing in China, Japan and elsewhere (in effect resembling a developing nation in its dependency on foreign manufacture), it remains in a position of global economic dominance. While (2) almost certainly is a function of (1) -- that the economic dominance is a function of the role the US Dollar plays in global economics, David Harvey's crisis of over-accumulation of capital where the local market is no longer capable of providing sufficiently profitable investments in production and infrastructure driving a move to financialization cannot be reconciled with the reality that (3) China, like Japan in the 1980s before it, invests its trade surplus not in developing and expanding its domestic infrastructure and market, but instead in US Treasury bonds and other immaterial assets. This is a discrepancy between theory and actual market behavior where Harvey's model (much as with those developed by Giovanni Arrighi and Immauel Wallerstein) does not offer an obvious resolution or explanation. Yet it is precisely this factor (3) that shows an international basis to digital capitalism, and is logically predicted (and required) by the ascendancy of immaterialism. That it serves the dominant economic interests of the United States follows from the central position that the US Dollar plays as global reserve currency and the relationship between the US Dollar and the Chinese Yuan. The global economy is intricately tied to the United States.
Internal asset bubbles in China (credit, real estate, et al) should not develop given Harvey's model where the financialization producing these bubbles are symptoms of a decline in hegemonic dominance, and the over-accumulation of capital without productive sites for investment; similar bubbles developed in Japan in the 1980s and are present throughout the global market: consider the construction/debt bubble in Dubai, and the various problems of the so-called "PIIGS" in Europe. Consider too the discrepancies in labor value in the form of the minimum wage between the United States and those sites where offshore production occurs, including China; and that China's currency is directly "pegged" to the US Dollar in the way the US Dollar was "pegged" to specific quantities to gold prior to its transition to fiat currency status (1 oz. = US$35, set by the Bretton Woods Agreements in 1946). These facts are the key distinction between his concept of over-accumulation of capital and my suggestion of the scarcity of capital. It is not that there is too much capital in this global system, but that there is too little to meet the obligations posed by the production of immaterial values on a global scale, with the US securities markets and investment firms in a central position.
Thus, the contemporary shift to financialization is not driven by a lack of physically productive sites for investment in these developing markets, but rather by (1) an ideology of rupture between physical and immaterialist value, recognizable as the aura of the digital; and (2) the use of fiat currency as the globally dominant reserve currency; the possible transition to a currency created by the IMF's SDR, or Special Drawing Rights, would be the substitution of one fiat currency for another. In this respect, the scarcity of capital may be a negative reflection (or logical inversion) of Harvey's over-accumulation of capital, with consequently some homologous effects, and some significant differences.
The issue of immaterial asset bubbles is not that they eventually collapse, but rather the belief structures which produce them: it is a question of behavior and ideology. The cyclical boom-bust character of capitalism has been a continuous feature of capitalism itself stretching into the nineteenth century; what has changed is not that these cycles continue to happen. The shift to immaterialism that appears as digital capitalism is a reflection of a desire to transcend these cycles; the claim that these cycles had been surmounted was commonly in circulation throughout the run-up in asset values, most apparent in the claim (by Alan Greenspan among others) that there was no "Housing Bubble."
The instability of capitalism that creates collapse (and the movement towards necrosis) is fundamentally the imbalance predicted by the Ponzi model of accumulation: the inability of production to meet the demands posed by capital. The shift to fiat currency (as much as the use of rentier currency) appear, much as the aura of the digital does, as solutions to this inherent paradox. It is ironic that these "solutions" are exaggerations of the underlying problematic itself; yet this factor is the ideological blindness that enables the shift towards immaterialism as much as the emergence of agnotology. What I have termed "digital capitalism" is less a rupture with the past than the heightening of key elements present at all times within capitalism itself, and their shift into positions of dominance does not entail a disappearance of physicality.