[...] financial crises occur when the gap between fictitious capital and the real value it claims to represent becomes too great. The culture of belief and credulity that underscores the financial sector and the proliferation of fictitious capital stutters or grinds to a sickening halt [...] Financiers stop returning one another’s calls and cease to accept one another’s metaphors for wealth. There is a necessary contraction that brings the volume of fictitious capital into greater proximity to the volume of actually existing labour power. Some financiers’ claims to that labour power must be sacrificed, or other social resources must be privatized or liquidated to fill the shortfall, which is precisely what is happening in our current age of austerity. [...]

[...] Drawing on Marx’s crisis theory, which (basically) holds that capitalism is based on fundamental contradictions which can never be resolved, only elevated to a higher level of abstraction and violence, Luxemburg sought to show how the inherent limits of capital manifest themselves in destructive wars (notably the First World War), colonial relations of seemingly non-capitalist exploitation (slavery, unfree labour, etc.) and inter-capitalist rivalry. Importantly, for Luxemburg and others, all these more abstract, systemic processes are driven by the growth and increased power of the financial sector. War, colonialism, financialization and monopolies are all Pyrrhic strategies by which capital reproduces itself by elevating its inherent contradictions to a higher level.

[...] we can understand “fictitious capital” writ large as the way capital spins a crucial social fiction about the nature of the world. Like all fictions, this is not merely a harmless story. It has incredible power. Financialization represents the dawning supremacy of fictitious capital over all other means of explaining and imagining (global) society. Financialization has become the dominant narrative of our times, and therefore shapes the imaginations of all varieties of social actors in ways that fundamentally orient their reproduction, largely towards its own reproduction. It becomes the metanarrative that increasingly influences and shapes social fictions throughout the social fabric.

[...] while finance might be a modality of social fiction which functions by telling a performative story about the world, it is a story that is, essentially, almost nonsense: a frenetic jumble of metaphors built on metaphors that never resolve into a coherent or linear narrative. Wealth is generated not by seeing the greater narrative in the market, but by spinning out new metaphors and abandoning them once they have done their work. The system is held together not by internal coherence, but by sheer momentum. Corporate strategy, disciplined by stock markets and financial institutions, is increasingly guided by frantic short-term efforts to secure higher financial returns, rather than by any long-term concept of fiscal sustainability, let alone any commitment to workers or consumers. Government policy, guided by the influence of bond markets, eschews any pretence to long-term planning and seeks largely to manage potential risks to the future profitability of transnational capital. Even individuals, driven increasingly by the dictates of debt or lonely financial acumen in a “liquid” world without guarantees, have difficulty envisioning the future as anything more than the endless continuation of the present (see Žižek 2010). As Jameson (1997) observed over 15 years ago, financialization is part and parcel of a postmodern moment of late capitalism wherein social narrative at all levels has been reduced to a jumble of relationalities.

The age of austerity dawned as a moment of neoliberalism without apology. Citing only the voracious demands of the market as the highest government obligation, a grim unanimity emerged among world leaders that put the famous “Washington Consensus” to shame: social spending would be dramatically slashed in order to provide bailouts to banks and other financial corporations and to pay for highly targeted and temporary economic “stimulus” measures that largely amounted to handouts and tax cuts for corporate interests. The triumphalism that had announced the ascendency of markets in the early 1990s, emblematized by Francis Fukayama’s (1993) celebratory pronouncement of the End of History, was over. Instead of a rhetoric of a “rising tide lifting all boats,” austerity is marked by a post-ideological candour, emerging from politicians both left and right: expect only precariousness, now and forever.

Financialization, then, drives and benefits from both precariousness and is presented as its purported antidote. On the one hand, hypercompetitive financial markets, hell-bent on ever-higher returns, have a tremendous disciplinary power [...] Meanwhile, market pressures to privatize, deregulate and otherwise dismantle the social welfare of the state have created conditions in which social life is rendered more precarious than ever, with access to old-age security, healthcare, education, disability benefits and other forms of insurance increasingly left up to individuals and their lonely financial accumen. In the atmosphere of precariousness, the market then offers itself as the solution. Respond to precarious employment by “investing in yourself”: [...] Financialization both drives precariousness and offers itself as its solution.

Indeed, the dominant cultural politics and economics of financialization rely on and promote the idea of leveraging precariousness. Individuals are beholden to comprehend and maximize returns on the risks they bear, transforming the vicissitudes of neoliberal biopolitics into opportunities for individual competition and uplift. In the dawning age of austerity, precariousness is not only the norm; it is a gift, an opportunity for the financialized subject. With great risk comes the possibility of great reward, and those who fail to leverage their personal “risk portfolio” into economic wealth (and an escape from existential and economic precariousness) have only themselves to blame [...]

The Street relies on a constant stream of young hopefuls who have “invested” hundreds of thousands of dollars in an elite education so as to be “job ready” when recruited (42–67). Typically in their early twenties when hired, new investment bankers and traders are ushered into a culture of hyper-individualist competition that requires not loyalty to the company, but the desire to sacrifice one’s life for the pursuit of money. Ho demonstrates that the fundamental insecurity and overwork germane to financial occupations are taken by bankers as evidence of their intellectual and moral superiority and their intimacy with and knowledge of the market (2009, 67–72). This gives rise, however, to what Ho calls “a strategy of no strategy” at both the personal and the corporate level: a fixation on short-term gains, on the quantity of deals made, which has practically no longterm vision or plan and which is, broadly speaking, highly inefficient (firms routinely fire whole departments based on a failure to improve on quarterly earnings, only to find the sector in question booming a few months later) (2009, 277). The system hurtles forward, with investment fads, risky ventures and speculative bubbles forming as each banker, in spite of their individual prescience and insight into the possibility of market collapse, constantly seeks to accelerate their deal-making before the inevitable mental breakdown or systematic crash (see also Hayward 2014).

Ho’s central argument is that the institutional culture of Wall Street, based on the uncut neoliberal values of performance, flexibility, individualism, competition and risk management, is then downloaded by finance onto other firms in manufacturing, retail and service (and, indeed, onto governments) over which it has sway (2009, 4–13). Investment bankers are encouraged to see themselves as capitalism personified, and their culture of self-congratulation is supported by reference to the laziness, stagnancy and lack of ambition assumed to be the norm in other sectors of the economy. As a result, bankers feel they are doing society a service by encouraging nonfinancial firms to downsize and work leaner, forcing on the wider economy the dynamism, market-responsiveness and efficiency on which they pride themselves. Here Wall Street’s institutional culture takes on a viral characteristic, infecting and recoding a huge range of social and economic institutions with its own values and practices. I shall, in Chapter 5, have occasion to suggest that, in their capacity to evangelize their fundamental faith in markets at the point of a proverbial sword, financiers imagine themselves as angels of creative destruction.

It is no surprise, then, that financiers are held up as the ideal workers of the new precarious global economy (Preda 2005). They appear not to suffer from precarity, but to leverage it to their maximal advantage. They invest their time and money (or take on debt) in their own human capital and gain an elite education, then leverage their subject positions to form a mutually beneficial temporary relationship (not an occupation) with a financial corporation. This corporation is not seen as a paternal employer, but as a financier writ large – the individual financier and the firm exist in a relationship of mutual exploitation, and the financier embraces this as evidence of his or her own worth (Crosthwaite 2010). As such, he or she is not only willing but eager to actively play the labour market, embracing precariousness to make quick moves between employers, seeking to advance his or her career and make more money. This ambition is matched by a willingness both to live in the moment, making quick deals and forming tenuous bonds (networks), and to privatize the future by taking on all the costs of health, old age and other forms of insurance (see Holmes 2007). For these “workers” (who rarely even see themselves as workers) traditional corporate structures and government strictures are viewed as rigid and “slow” institutional constraints, anathema to a culture of overwork, swiftness, cleverness, ambition and competitive individualism.

In the financier, we find the paragon of leveraged precariousness, the ideal to which all workers, no matter how humble, are instructed to aspire. They lead a form of life that strives towards maximum liquidity: one that has few durable bonds and is highly adaptable to profitable circumstances, able to respond with almost inhuman alacrity to the needs of the market. [...] Many take the “work ethic,” ethos and connections they cultivated in the financial realm into private and public management of non-financial firms and government bureaucracies, imposing their austere expectations on other workplaces and sectors. While it might be tempting to imagine that these immaterial workers transcend the body itself, such an approach would be misleading: not only do the pace and form of work take their toll on the body, but those whose bodies are marked by gender, race or ability find it challenging to persist and succeed in an informal macho corporate culture based in many ways on whom you know and what you do in your precious “down time” [...]

[...] Just as the myths of the “golden age” occlude the very real precariousness that capitalism imposed upon everyone except a select few in the post-war period, so, too, do narratives that stress post-Bretton Woods finance as out of control and corrupted mask or sideline the tremendous corrosive power it has always wielded (Lapavitsas 2013; Luxemburg 2003). As Ian Baucom (2005) illustrates in his fascinating study of finance in the transatlantic trade in enslaved Africans, financialization has long been a means to strip individuals and groups of their humanity. Quantitative and speculative techniques have consistently been employed to facilitate amoral and short-sighted processes, and to spread the liability, risk and culpability of such acts across a broad cross section of society (see LiPuma and Lee 2004). The Bretton Woods era saw the mobilization of finance towards neocolonialism, and the vast expansion of consumerism and industrial growth that is today manifesting as a massive ecological crisis (see Foster, Clark and York 2010; Ndikumana and Boyce 2011). While there is much that is new and dangerous about today’s financial economy (notably its global, computerized character, its incredible speed and chaos, and its tremendous power over all aspects of the economy), we should not make the mistake of either (a) imagining that what came immediately before was inherently “better,” or (b) that the problem is simply “finance” or “financialization.” The problem is, and has always been, capitalism, of which finance is one key articulation and mediation. Certainly there have been and yet could be less violent forms of capitalism, at least for certain populations. But this does not justify limiting our theoretical, political or ethical horizons to the reregulation of the financial sector.

[...] Those aspiring to find work are now forced to borrow in order to cultivate knowledges, skills and competencies that save their future employers time and money: where an electrician, a fashion model or a security guard might have once been trained on the job at their employer’s expense, today they must purchase credentials and qualifications. Further, the experience of entering the workforce already in debt and fearing the grave economic consequences (not merely the higher interest rate) of failure to make payments makes for more compliant workers, fearful of losing their jobs. The so-called “developed” economies of the world are largely kept afloat by the willingness of populations to go further and further into personal debt in ways that allow retail sales, housing prices and other economic indicators to increase year over year. But, more profoundly, after 40 years of declining real wages in America, and with the rise of increasingly precarious and low-paying work, debt is a critical means by which people manage to continue to survive and participate in an increasingly consumer-driven society (McNally, 106–107). Where more and more aspects of life are commodified, debt becomes a means of survival (Ross 2014). At the very least, access to credit helps cover the (increasingly frequent) times between jobs; at worst, it supplements insufficient incomes. Soederberg (2014) has called this a system of “debtfare,” where access to sub-prime credit has largely replaced the now diminished welfare state.