Now to the more controversial aspect of the July 20 post as well as of the June 25 and 29 ones. It seems the distinction I make between low-grade (or low-intensity) and high-grade (or high-intensity) radicalism leaves quite a few people skeptical. Fine. The skepticism is associated with doubts as to the role that can be played by the "consciousness" or "awareness" of actors in the business and finance world. Top-down imposition of regulation and constraints, so the skeptics argue, is the only way to circumvent both people's ignorance (and/or plain laziness) and their ingrained interest in things not changing. F-i-n-e. Now let's suppose we do agree -- not a wild assumption, given that this view of top-down governance, based on a de facto elite that has understood things and has the intellectual means to know what's best from the vantage point of the "common good" (the "We" that's to be desired), is very widespread in both academic and political -- as well as juridical -- circles. Let's suppose we subscribe wholesale to Frédéric Lordon's idea (see the July 20 post) that
"given the manifest -- and manifestly dangerous -- degree of autonomy acquired by contemporary finance, bringing it back into subordination will no doubt require imposing on it brutal, if healthy, regressions"
(Frédéric Lordon, Jusqu'à quand?, p. 164, © 2009, Raisons d'agir)
and that the finance sector's
"extravagant privilege of profitability is an aberration to be eradicated as radically as possible. As always, the privileged, who present their privilege as something self-evident, will scream denouncing a refusal of modernity, an assassination of talent or God knows what else, perhaps even an 'injustice' since nothing seems to stop them. History has shown that there are more violent ways [than regulation] of reducing privileges -- such as reducing the privileged! --, and so they will simply have to get used to the idea that the perspective of merely getting pulled back into the general, common order of things in terms of profitability is actually exceedingly soft and caring."
(Frédéric Lordon, Jusqu'à quand?, p. 169, © 2009, Raisons d'agir)
The affect of anger is clearly perceptible here, and the black humor is indeed funny enough. But is it helpful when it comes to understanding transition?
Lordon's basic stance is that the protests of the finance industry are nullified by anticipation because, given the self-interest class to which they belong (see the July 20 post for an explanation of this), bankers and financiers are now lagging behind history. In French: "... eux sont des retardataires" (p. 184). True enough, many finance actors as well as finance economists seem not to want to let the extreme seriousness of the 2008 crisis, as well as its roots in a decades-long monetary binge, sink in. The historical breaking point represented by the 2007-8 meltdown may be lost on quite a few minds still. No doubt about it. And there's little doubt, either, that this coordinated myopia has led to both intellectual and political misinterpretations as to what needs to be done to repair the effects of the crisis, or at least to mitigate them. When a sufficient number of people's self-interest is sincerely aligned with visions of the "We" that involve problematic or dangerous mechanisms (such as the legally sanctioned use of almost unrestrained leveraging to generate alleged "prosperity" in a slow-growth economy, betting against all odds on a massive jump-start effect that will later on allow all outstanding debts to be repaid), then terrible collective effects can be generated without the slightest evil intentions on anyone's part. All this is true. Being embedded, through a necessity not of their own choosing, in a system that operates on cutthroat competition, lightning-speed information technologies, and a generalized scramble for "high (or ever-higher) yield," bankers, financiers, entrepreneurs, and investors play the game they are made to play. This game shapes their perception of their own interest to such an extent that many of them de facto become not just passive participants in, but active promoters of, the existing logic. It provides them, as Lordon rightly says, with existential meaning.
Along that line of reasoning, "alternative" investors or entrepreneurs are an oxymoron, a mere linguistic construction without actual substance: They are, by assumption, tied into a class of interests which acts like the noose on a fox trying to pull himself free from a trap in which he is caught -- the harder he pulls to get away, the more firmly he remains stuck until, eventually, he strangles himself to death. Along the exact same line, we could disqualify the credibility of any movement of consumer liberation or "critical consumption" since, supposedly, consumers in today's consumerist system are constitutionally incapable of envisaging life without the complete trappings of what feeds their self-interest. If overconsuming makes up your existential meaning, how can you break free of it and suddenly become "alternative"? So, both in the case of financial regulation and in the case of taxing excessive consumption or reducing work hours, those who can and might call for rules and regulations are not, by assumption, those whose interest class traps them in the system. If this is so, the question arises: For whom is Frédéric Lordon (in this case) writing his critical analyses? To whom does he address his ideas about the radical re-regulation of the financial sector? Inevitably, they will only be taken seriously and absorbed -- to the point of prompting action -- by citizens who have undergone a sufficient degree of what I would call cognitive emancipation: (a) they have actually bothered to gather information and ideas about what happened in the finance sector and its repercussions on the rest of the economy; and (b) what information and ideas they have gathered has led them to agree with the sort of analysis Lordon is offering. Both are necessary. What (a) means is that the person is a concerned citizen -- one who has formed the desire to understand key aspects of the system s/he lives in. As to (b), it means that this concerned citizen has furthermore undergone existential experiences such that his/her interest lead him/her to subscribe to Lordon's analysis.
All this may sound pretty tautological, but it isn't really. It's quite crucial to our reflection on transition. It means that we are going to go along with Lordon's critical analysis and conclusions -- again, I'm just taking him as a case in point here -- only if there is some sort of peculiar resonance between the reasons he, as a citizen who does research, had for developing his ideas and the reasons we, as citizens who seek information and ideas, have for adhering to his ideas. In other words, apart from eloquence and a particular talent for doing research and for writing and communicating, there really isn't that much difference between Frédéric Lordon and the citizens who, upon reading his ideas, agree with him and are led to act on what they read. At a deep existential level, anytime someone agrees with you it means you've been "preaching to the choir" all along: The audience that responds favorably to certain ideas is always the group of people who were just waiting to have a moment of recognition, or of what Plato called anamnesis. The question now is, Can an investment banker, a business lawyer, or the CEO of a multinational have such a moment of recognition? Strictly speaking, Lordon's own theory of structure-induced interests would forbid it: If such a person were to claim that they had a moment of recognition and that they realized how flawed the system in which they've been living and working really is, they'd be immediately suspected of hypocrisy or, worse still, of strategically appearing to agree in order to be able, actually, to "hijack" the regulatory process later on by watering it down or even standing in its way. That this is what often happens is obvious; that it always necessarily happens isn't obvious at all. I know people who have had genuine moments of recognition based on ideas and analyses that didn't cohere at all with their supposed interests as the incumbent systemic logic defined it for them.
The trouble is, of course, that the systemic logic does impose constraints and interests that must be pursued no matter what. You indeed cannot be an investment banker in a highly competitive banking sector and, just because you've had a moment of recognition, immediately reverse the logic of your trade, offering your clients "triple-bottom-line" investments which, while not much less risky than single-bottom-line ones, yield a lower financial return in exchange for a higher sustainability, or "intangible," return. Given the current accounting rules, the existing regulations, and the prevailing mentality among the bulk of your own clients, you'll be speedily driven out of the market and disposed of by your shareholders. So what do you do? Either you manage, out of sheer talent and visionary force, to become a pioneer in a new field and you carve out a niche for yourself -- a niche in which you can shine as an exemplar of what ought to be done but which, given the prevailing logic of the overall system, isn't large enough to accommodate many more exemplars like you. (To wit, the ferocious competition that goes on in academia amongst otherwise anti-competitive "heterodox" economists to occupy the very, very few university positions in which they can actually exercise their "heterodoxy.") Or you stay in the mainstream as long as necessary for better opportunities to present themselves, so that you remain outwardly indistinguishable from your pro-system colleagues -- even though there's once crucial interior difference: You, contrary to them, are playing along with the existing rules of the game while quietly but alertly waiting for a possibility to act on what you are convinced is right. Why would you do this? Well, there are as many reasons as there are personal histories, but basically they all boil down to the fact that individuals, too, have transition trajectories -- so that having had existential experiences that led you (let's say) to read Lordon's work and agree with him may not immediately lead you to leave your position as an investment banker and create a radically "alternative" investment firm. In the same way, just because you may have heard a jarring, life-changing talk by John Ivanko and Lisa Kivirist on their 2008 book ECOpreneuring: Putting Purpose and the Planet Before Profits doesn't mean you'll become an eco-preneur next week, or even next year. In fact, the system may simply not allow you to do so, for a while or maybe for a long time. (Besides, you may have a family -- or two -- to take care of, kids in college, and a mortgage to pay off, and such fundamental career changes just don't occur on the spur of the moment. They need to be prepared.)
So there are two categories of concerned citizens (trait (a) above) who agree with novel, alternative ideas impelling them to act (trait (b)): on the one hand, pioneers and, on the other, potential followers who are poised but still hesitant. The pioneer plays within the existing rules of the economic system and, for whatever reason, is able to dig him/herself into a niche where something exemplary can be built up and displayed to the rest of the world. This invariably means that there's some resilience factor allowing the pioneer to disconnect from the constraints imposed by the prevailing system: S/he may have a personal fortune from previous mainstream ventures (like the private banker turned eco-preneur, or the no-holds-barred tycoon turned lavish philanthropist); s/he may have adopted a lifestyle that simply makes her/him less dependent on what the system has to offer (like the couple of academics turned subsistence farmers, as in the case of Sharon Astyk and her husband -- see the sidebar); or s/he may, for a more or less extended period, rely on unconditional public income support or on public subsidies (like the academic who uses the shelter of his/her statutory wage to develop non-mainstream ideas not yet palatable to the private sector, as in Lordon's case). In all cases, the pioneer will be trying out things, building ideas, or taking actions that can't, given the prevailing rules of the systemic game, be universalized yet. The position of the potential followers is different. They don't enjoy the same degree of resilience with respect to the system, and they may also not have the same talent for imaginative action and for visionary thinking. But this is actually not a bad thing: It will impel them (since they, too, are blessed with traits (a) and (b)) to think about what more they would need, in terms of practices, resources, and infrastructures put at their disposal, so that they too might "make the jump." (And remember, again, that this is a jump they're just waiting to make, given the convictions they've built up through trait (b).)
It turns out that potential followers -- and not just pioneers -- actually play a very important social role: While the pioneers are fully busy developing an exemplar of possibility that has no chance yet of being taken up by everyone, the potential followers can -- impelled by the very frustration they feel at being "trapped" in a system they'd like to change -- get busy developing modest everyday "bridges" that will ever so slightly tweak existing practices and ever so discreetly instill new questions into existing mental reflexes. (One of my close acquaintances is a very high-ranking bank manager. Another is a former CEO of a very big capitalist group. Together, they co-organize a forum of managers who invite academics and "pioneers" to think about new management practices. The jury is still out on whether this will end up revolutionizing the system. Neither of them is probably him/herself going to become an eco-preneur or a triple-bottom-line investor anytime soon. But the questions and ideas circulated in their forum are new, and unheard of compared to even a decade ago.) These potential followers can also -- and this may, in fact, be an even more important role -- interact with the pioneers, on the one hand, and with political decision-makers, on the other, to begin to militate for larger-scale regulatory changes to be imposed by the government or by international or supranational bodies, so that the potential followers may soon have more leeway to become second-wave pioneers in a less hostile environment.
Notice that I have written "to be imposed." The idea is not that first- and second-wave pioneers will create a whole new, "ethical" business and financial world in which no external regulation is necessary, and in which self-regulation through do-good ethics and spontaneous "social responsibility" is sufficient. Not at all. Regulation is needed to have a level playing field at whatever level is deemed collectively desirable. (In fact, so-called deregulation is merely a particular case in which the State regulates itself into irrelevance so as to create a level playing field at the lowest possible level of "collectivity." It is still a form of regulation, after all. Indeed, officially proclaiming that a game has no rules is still a way of ruling. I would claim that the deregulated capitalist market with its alleged optimality properties is, in fact, a form of collective planning. This is why, unsurprisingly, the State was called in by the private-finance sector itself to help as soon as free-market capitalist finance failed in 2008 due to its own excessive credit dependence and risk-taking. There is never a clear-cut distinction between a so-called "public" sector and a so-called "private" one.) To the extent that a sufficient number of us are convinced that Frédéric Lordon's severe re-regulation of private finance is warranted -- including within the private finance sector itself -- so that alternative finance practices can develop from small pioneering ones into generalized ones, we will indeed push for such severe reforms to be imposed. But this obviously requires two things: first, that alternative finance practices have already developed within the incumbent logic -- which keeps them marginal and embryonic, as well as only moderately successful; and, second, that they are inspiring a sufficient number of "insiders" who would want to become alternative, too, if only more favorable regulations were put into place.
Why should people from outside the financial sector be more compelled in favor of severe reform than actors within that sector? Lordon's own answer, based on his interest-class model, is that it's rational and logical for actors within the finance sector to oppose regulation that might reduce their access to high yields and force them to bear more of the costs of their own risk-taking. Thus, the argument continues, citizens from outside that sector, who have no such rational interest and whose sense of existential meaning doesn't depend on high yield, on competitive ranking, and on a jet-set life -- citizens who, moreover, realize that recent and current financial practices actually go against their own best interests -- will rationally and logically call for regulation to cap yields and increase accountability. Now this would be a valid argument if all actors in the financial sector were exclusively after high yield and competitive ranking no matter what. But even if this were the case, a question remains: Who would devise the regulation? It couldn't be the anti-regulation financiers (and the economists who subscribe to the same views as them), who know much too much to give away their tricks, nor could it be the incompetent average citizen (including the average politician, as well as all economists who understand too little about finance), who know far too little to be able to think up regulatory measures on their own. So the only persons left are, in Lordon's model, those critical economists who know enough about the subtleties of financial mechanisms, such as himself and a handful of others. That doesn't create a political movement. So popular adhesion must be sought outside the financial sector -- by assumption -- and this means enough citizens must be made to realize how flawed this system really is. Faced with the prospect of not being reelected if they continue to support current financial practices, politicians will then presumably follow suit.
Now this model may actually work in Lordon's case, since his proposals for financial reform don't really, for all their radicalism, move very much out of the box. He doesn't consider a multiplicity of currencies as a challenge to the monolithic debt-money model of credit creation, nor does he question the basic growth model inherent in capitalism. He doesn't call for a plural economy and his re-regulated capitalism is still, in its essential features, a form of capitalism -- to be pitted against what he rightly calls deregulated capitalism. The re-regulated capitalism he calls for is a return to social democracy in its respectable, traditional form: a full-employment capitalist economy, hence a growth economy, which (thanks to a suitably reined-in financial sector) generates investment in such a way that upward-drifting wage incomes can fuel consumption and hence employment. Deregulated capitalism in and after the 1980s has wrecked the social-democratic regulation framework, and this is what Lordon is lamenting. He certainly can't be blamed for doing so. Very few of us are still, after the 2007-8 financial debacle, claiming that social-democracy's hara-kiri in the late 1970s brought on a durably better economic climate. However, at best, the framework ushered in by Lordon's calls for re-regulation would be some form or other of "green capitalism" -- not as a stepping stone for a genuinely plural economy such as the one I've been suggesting in Parts 1-4 of this blog, but as a further "regime" of capitalism, coming after the Fordist regime and the deregulated financialized regime. (Remember, again, that so-called deregulation is basically a form of regulation.)
By being skeptical -- to say the least -- of the existence of genuinely "alternative" trends, people, and interests within today's financial sector, and therefore by condemning investors, financiers, bankers, and managers as a class to be "latecomers" (retardataires) on the stage of history, Frédéric Lordon is effectively claiming that the only way of implementing the intermediary goal of re-regulation is to vindicate re-regulated capitalism as the sole ultimate goal. This is where his "metaphysics of struggles" (see the July 20 post) comes fully into its own: As a social democrat steeped in the belief that the role of the State is to regulate the struggles for the sharing of surplus value between capital and labor, Lordon isn't interested in de-growth, in reasoned re-localization, or in bioregionalism -- that is, he doesn't believe in a transition trajectory that would lead through a period of coexistence between capitalist and non-capitalist modes of economic organization, and would end up with a durably plural, sustainable economy. Full employment and high social protection seem to imply, for him, one form or other of capitalism along with a strong regulatory State that controls money and finance. The rest is mere bucolic fantasy. There are no credible later stages. Here's how one of the characters in his play, more precisely one of the President's advisers, ironically expresses the dismal things that will occur if the crisis is allowed to wreck the existing economic system:
"Disparition brutale des moyens de paiement,
Toute l'économie prend un tour amusant:
Retour au jardinet ou bien à la cueillette,
Vivent les joies du troc et celles de la diète...
Nous payerons en fleurs, ou bien avec des glands.
[aux banquiers]
-- Ça n'est pas dit pour vous, ce serait déplaisant...
En tout cas mes bravos, magnifique avancée,
Le retour à la terre, il fallait y penser!
Est-ce cela qu'on nomme "Nouvelle Economie"?
N'hésitez surtout pas, développez, je vous prie.
En revenir au foin ou bien à la luzerne,
Quel projet audacieux, et du dernier moderne,
Cette modernité dont vous étiez si fiers --
Quand vous nous ramenez droit à l'âge de pierre."
(Frédéric Lordon, D'un retournement l'autre, p. 57, © 2011, Editions du Seuil)
(Here's a loose translation, with no attempt to mimic the alexandrine meter and all the very French traits of humor: "All means of payment brutally disappearing, and the economy taking a pleasant turn: Back to the little garden or to picking from trees, long live the joys of barter and of dieting... We shall pay with the help of flowers, or perhaps using acorns. [He turns to the bankers.] I am not saying this for you, that would be discourteous... In any case, you have my applause: What a great leap forward -- back to the land, why did we not think of it before? Is this what goes by the name of "New Economy"? Do not hesitate, I beg you, and be even more precise. Back to straw (or is it alfalfa?) -- is that not one bold project, the epitome of modernity? -- This modernity you were so proud of, and which is now leading us back to the stone age.")
Now a severely re-regulated green capitalism would, of course, need its own brand of pioneers, in the form of a new generation of Schumpeterian entrepreneurs, innovators, and investors able to ride the "Green-to-Gold" wave and to make ecology into good (albeit, in this case, severely re-regulated) business -- and this is fine in itself, except that these green-capitalist pioneers, who fill the pages of today's "sustainable investment" literature, don't seem to be very interested in the six framework conditions I've been setting out in Part 4. Again, this is quite normal and not, in itself, objectionable: In line with Lordon's theory of structure-induced interests, re-regulated capitalist private finance will generate... well, new capitalists, what else? He seems to believe that such a re-framing will allow a better power balance in the ongoing struggle around wages and profits. He's right, of course, and from a traditional social democrat's perspective this is the best one could wish for, since capitalism as a monolithic system is simply assumed to be here to stay. [Lordon's other book on the financial crisis, entitled La crise de trop, does contain a final chapter on ways to exit capitalism -- among others, participatory coordination akin to what I discussed in the May 9, 2011 post. However, he starts out by acknowledging that he doesn't see that scenario as "the most likely." That's reasonable, of course, but his proposals in that book aren't very clear, either, about how intensely he believes ideas such as bioregionalism, re-localization, or de-growth ought actually to be promoted. Pointing towards Albert and Hahnel's participatory economics, as he does in that final chapter, isn't quite enough to ensure that the five other framework conditions I've set out will be promoted as well. I suspect they won't in Lordon's approach.]
I, on the other hand, believe that the true, deeper potential of green capitalism is to serve as a first-generation transition mechanism towards yet more ambitious goals, and that we should therefore use the innovations, the dynamism, and the enthusiasm generated by the "green economy" movement in order to reach a sustainable pluri-economy such as the one I've been describing in Parts 3 and 4. Sure enough, this does require a strong regulatory State. But its role shouldn't just be to rearrange today's framework conditions -- be it drastically in the way Lordon suggests -- so as to have the same old actors with the same old interests and motivations playing a somewhat new game. We do need a new game, no doubt, but within that new game have to find ways to (re-) regulate green capitalism in such a way as to also foster the emergence of new types of actors, with new types of consciousness or awareness, hence with new types of interests and motivations, so that eventually a much more deeply renewed set of framework conditions can be pushed politically. Of course, we have nowhere else to begin but the world as it is now -- but there are indications that within the critical sectors of today's economy, and within banking and finance in particular, there already is a fringe of "new consciousness" people who would want to put their atypical and counter-systemic motivations into action but haven't all found the best climate to do so. A few are pioneers, but most are potential followers, poised but hesitant. So instead of operating as if the deeply renewed framework conditions were already in place (which they indeed aren't), they go for more modest things like social business, sustainable investment on Wall Street, or trying to start thinking outside the box within mainstream business schools. It's these people who are strategic so that new framework conditions can be pushed for, because they're already operating within the existing structures and trying to work out whatever "alternatives" can be worked out even while the educational, regulatory, and political support superstructure hasn't yet been upgraded. This is what I mean by low-intensity radicalism as a prelude to high-intensity radicalism.
It isn't a question of whether "top-down" should be replaced wholesale by "bottom-up," as if it were a binary, either/or choice. It's a question of which types of new economic "leaders" (a term from the management literature which I don't particularly like in other, more mainstream contexts, but which is apt nevertheless) can be made to emerge from within the system as it is today -- and this means that pinning self-interest classes against one another too rigidly probably isn't the most productive strategy. If green capitalism is going to be a positive transition tool instead of becoming the next obstacle to further transition, all actors involved, from management schools to trade unions, from government to the banking and finance sectors, from the fledgling social economy sector to our massive industrial mammoths, from our towns to our myriad of small-and-medium enterprises, need to be pulled into a broad and demanding discussion around two inextricably interconnected questions: on the one hand, how do we raise our levels of consciousness and change our ways of life (our "existential interests") so that we can push for really deep regulatory changes in the future -- and on the other hand, how do we already create sufficiently new regulations in the present so that our levels of consciousness and our ways of life can change more easily in the future?
As economists and social scientists know, this sort of micro-to-macro-to-micro loop implies a host of very difficult technical issues -- particularly about the timing of reforms and about how to detect and exploit hidden potentials in individuals and organizations -- but if we are to engineer a three-tier transition that eventually leads us towards a genuine pluri-economy with equal opportunities, we can't avoid these difficulties. The whole idea of this blog is to -- modestly and, no doubt, very imperfectly -- set the stage for tackling at least some of them.
This post from the "Eco-Transitions" blog by Christian Arnsperger is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
No comments:
Post a Comment