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7

Chapter 1: Once in a Lifetime

6
terms
4
notes

Dienst, R. (2017). Chapter 1: Once in a Lifetime. In Dienst, R. The Bonds of Debt. Verso, pp. 7-32

11

The turning point might be sought about thirty or thirty-five years ago, that is to say, somewhere in the mid to late 1970s, when an Anglo-American blend of neoconservative politics and neoliberal economics gained ascendancy and unbridled capitalist globalization took off. Whatever historical basis there may be for this periodization [...] it has the polemical advantage of treating the current crisis as a moment of truth for a whole passage of world history, up until now dominated by the triumph of the market model, the emergence of the US as the sole superpower, and the emergence of China as the biggest new engine of wealth creation and accumulation. [...]

There is one problem with this attractive story: the moment of truth never happened. Th ere has been no transformative revelation, no collective coming-to-our-senses, no realignment with reality, no Vergangenheitsbewältigung for the boomer generation. Th e passage from unhinged cries of panic to the restoration of confidence has been rather smooth, even while trillions of dollars of paper wealth were disappearing. The crisis of knowledge—as messy, confusing, and embarrassing as it was—did not turn into a crisis of faith. Capitalism could be declared saved from the brink of disaster precisely because its partisans and guardians cried out for a rescue without ever admitting any mortal danger.

—p.11 by Richard Dienst 2 years, 11 months ago

The turning point might be sought about thirty or thirty-five years ago, that is to say, somewhere in the mid to late 1970s, when an Anglo-American blend of neoconservative politics and neoliberal economics gained ascendancy and unbridled capitalist globalization took off. Whatever historical basis there may be for this periodization [...] it has the polemical advantage of treating the current crisis as a moment of truth for a whole passage of world history, up until now dominated by the triumph of the market model, the emergence of the US as the sole superpower, and the emergence of China as the biggest new engine of wealth creation and accumulation. [...]

There is one problem with this attractive story: the moment of truth never happened. Th ere has been no transformative revelation, no collective coming-to-our-senses, no realignment with reality, no Vergangenheitsbewältigung for the boomer generation. Th e passage from unhinged cries of panic to the restoration of confidence has been rather smooth, even while trillions of dollars of paper wealth were disappearing. The crisis of knowledge—as messy, confusing, and embarrassing as it was—did not turn into a crisis of faith. Capitalism could be declared saved from the brink of disaster precisely because its partisans and guardians cried out for a rescue without ever admitting any mortal danger.

—p.11 by Richard Dienst 2 years, 11 months ago
17

[...] In Brenner’s account, however, the tech boom should be seen as only one component of the equity bubble of the late 1990s. That glorious surge was driven not by the advent of a new technological wave but rather by the codependent irrationality of markets intoxicated by the prospect of endless short-run returns and a Federal Reserve confident that it could make everybody feel wealthier (due to rising stock and real estate prices) without ensuring that some kind of underlying wealth was actually being produced. [...]

I think I encountered similar reasoning in a different (Verso?) book but it's worth saving it as a note cus I really had no idea about this until recently

citing 2 books by Robert Brenner: The Economics of Global Turbulence, and The Boom and The Bubble

—p.17 by Richard Dienst 2 years, 11 months ago

[...] In Brenner’s account, however, the tech boom should be seen as only one component of the equity bubble of the late 1990s. That glorious surge was driven not by the advent of a new technological wave but rather by the codependent irrationality of markets intoxicated by the prospect of endless short-run returns and a Federal Reserve confident that it could make everybody feel wealthier (due to rising stock and real estate prices) without ensuring that some kind of underlying wealth was actually being produced. [...]

I think I encountered similar reasoning in a different (Verso?) book but it's worth saving it as a note cus I really had no idea about this until recently

citing 2 books by Robert Brenner: The Economics of Global Turbulence, and The Boom and The Bubble

—p.17 by Richard Dienst 2 years, 11 months ago

(noun) preponderant influence or authority over others; domination / (noun) the social, cultural, ideological, or economic influence exerted by a dominant group

20

For Arrighi, this alternation of material and financial expansions, anchored by a hegemonic center, accounts for the emergence of capitalism itself, yet as each cycle concentrates a greater degree of power, it also hastens its own exhaustion.

citing Giovanni Arrighi's The Long Twentieth Century and Adam Smith in Beijing

—p.20 by Richard Dienst
notable
2 years, 11 months ago

For Arrighi, this alternation of material and financial expansions, anchored by a hegemonic center, accounts for the emergence of capitalism itself, yet as each cycle concentrates a greater degree of power, it also hastens its own exhaustion.

citing Giovanni Arrighi's The Long Twentieth Century and Adam Smith in Beijing

—p.20 by Richard Dienst
notable
2 years, 11 months ago

(noun, Greek mythology) protective mantle of Zeus given to Athena

20

First comes a “material expansion” under the aegis of a dominant bloc powerful enough to control interstate competition and “ensure material cooperation.”

—p.20 by Richard Dienst
notable
2 years, 11 months ago

First comes a “material expansion” under the aegis of a dominant bloc powerful enough to control interstate competition and “ensure material cooperation.”

—p.20 by Richard Dienst
notable
2 years, 11 months ago

the highest point in the development of something; culmination or climax

22

destined for hegemonic domination and financial apotheosis

—p.22 by Richard Dienst
notable
2 years, 11 months ago

destined for hegemonic domination and financial apotheosis

—p.22 by Richard Dienst
notable
2 years, 11 months ago

a economic theory relating to the origin of capital (Adam Smith saw it as a peaceful process with natural imbalances in wealth distribution; Karl Marx saw it as a violent enclosure of the commons etc etc)

25

the various forms of “primitive accumulation” described by Marx (whereby land, labor, and natural resources are turned into commodities)

—p.25 by Richard Dienst
notable
2 years, 11 months ago

the various forms of “primitive accumulation” described by Marx (whereby land, labor, and natural resources are turned into commodities)

—p.25 by Richard Dienst
notable
2 years, 11 months ago
28

Yet it is important to remember that debts and obligations shape economic prospects and life possibilities in even more fundamental ways. In the most elementary sense, debts enable economic activity by liberating present resources from the most immediate pressures of productivity or profitability. Brenner’s account makes clear that this enabling capacity of debts, tapped ever more desperately throughout the long downturn, has been squandered: the mass of unproductive debts on the supply side has been greatly augmented by a new mass of unproductive debts on the demand side. Insofar as all those debts will be held and enforced by a class of creditors keen to preserve the prerogatives of free-ranging capital, the only economic trend that seems certain to continue is the ongoing transfer of wealth to those who already have a lot of it. Meanwhile the basic political function of public debt—channeling resources toward socially necessary investments—has been redefined as a subsidy program to increase the power of the private sector. [...]

—p.28 by Richard Dienst 2 years, 11 months ago

Yet it is important to remember that debts and obligations shape economic prospects and life possibilities in even more fundamental ways. In the most elementary sense, debts enable economic activity by liberating present resources from the most immediate pressures of productivity or profitability. Brenner’s account makes clear that this enabling capacity of debts, tapped ever more desperately throughout the long downturn, has been squandered: the mass of unproductive debts on the supply side has been greatly augmented by a new mass of unproductive debts on the demand side. Insofar as all those debts will be held and enforced by a class of creditors keen to preserve the prerogatives of free-ranging capital, the only economic trend that seems certain to continue is the ongoing transfer of wealth to those who already have a lot of it. Meanwhile the basic political function of public debt—channeling resources toward socially necessary investments—has been redefined as a subsidy program to increase the power of the private sector. [...]

—p.28 by Richard Dienst 2 years, 11 months ago

a term for the loans provided by the IMF and the World Bank to countries that experienced economic crises, which come with strings attached: privatisation and deregulation, mainly (the conditions are also known as the Washington Consensus)

28

we can see how this “structural adjustment” of public finances has played out rather badly in most places where the Washington Consensus was implemented, not least in Washington itself

—p.28 by Richard Dienst
notable
2 years, 11 months ago

we can see how this “structural adjustment” of public finances has played out rather badly in most places where the Washington Consensus was implemented, not least in Washington itself

—p.28 by Richard Dienst
notable
2 years, 11 months ago

a set of 10 economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions like the IMF and the World Bank (in a nutshell, neoliberalism); term first used in 1989 by English economist John Williamson

28

we can see how this “structural adjustment” of public finances has played out rather badly in most places where the Washington Consensus was implemented, not least in Washington itself

—p.28 by Richard Dienst
notable
2 years, 11 months ago

we can see how this “structural adjustment” of public finances has played out rather badly in most places where the Washington Consensus was implemented, not least in Washington itself

—p.28 by Richard Dienst
notable
2 years, 11 months ago
30

By emphasizing the problem of debt in the present crisis, then, we can cut across many of the other explanations currently on offer, whether those highlight the hubris of financiers, the folly of borrowers, the irrationality of the institutional structures, or the imbalances rooted in the international system. It might be best to say that all of those explanations are somehow true, and more: we are living through a generalized crisis of the regime of indebtedness, that ensemble of structured, codified, and lived social relations upon which the reproduction of the system depends. That is to say, this regime comprises not only the financial and legal infrastructure that upholds capitalist enterprises and imposes market constraints, but also the interwoven expectations and responsibilities that put the whole apparatus in motion. The current regime of indebtedness operates on a rather different scale, and along a greater number of axes, than earlier ones. Today it is not just the “national debt” and the provision of industrial or commercial credit that is under pressure, but also new flows of international credit, as well as various deeply penetrated kinds of household debt. At the limit we may say that the collective that is now indebted to itself has become unbounded—perhaps it is itself what some theorists have started to call the global multitude. So we are witnessing today a crisis in the way structures of credit seize, partition, and exploit the productivity of the multitude, which finally owes its powers to nothing other than itself.

—p.30 by Richard Dienst 2 years, 11 months ago

By emphasizing the problem of debt in the present crisis, then, we can cut across many of the other explanations currently on offer, whether those highlight the hubris of financiers, the folly of borrowers, the irrationality of the institutional structures, or the imbalances rooted in the international system. It might be best to say that all of those explanations are somehow true, and more: we are living through a generalized crisis of the regime of indebtedness, that ensemble of structured, codified, and lived social relations upon which the reproduction of the system depends. That is to say, this regime comprises not only the financial and legal infrastructure that upholds capitalist enterprises and imposes market constraints, but also the interwoven expectations and responsibilities that put the whole apparatus in motion. The current regime of indebtedness operates on a rather different scale, and along a greater number of axes, than earlier ones. Today it is not just the “national debt” and the provision of industrial or commercial credit that is under pressure, but also new flows of international credit, as well as various deeply penetrated kinds of household debt. At the limit we may say that the collective that is now indebted to itself has become unbounded—perhaps it is itself what some theorists have started to call the global multitude. So we are witnessing today a crisis in the way structures of credit seize, partition, and exploit the productivity of the multitude, which finally owes its powers to nothing other than itself.

—p.30 by Richard Dienst 2 years, 11 months ago