August 4, 2011

Taking Stock


If anything, the stock market is even more fictive as an issue than the federal debt. And a stock market crash ought to have no more significance for real people and their real work than deficits and debt ceilings.
To be clear, gambling with stocks (everything that happens on “the market”) has nothing to do with investment even in principle. The capital was already raised with the initial offering. From then on the stock is just batted about unproductively by a bunch of scammers trying to get something for nothing. A lot of foolish ones lost a lot of paper money yesterday. (I’m sure the banksters will do just fine.)
If, as capitalist propaganda would have it, stocks are supposed to be productive investments in the real economy, then the stock market shouldn’t exist at all. So there’s my remedy. The big bucket law I’ve proposed so many times, to outlaw (in the sense of declaring the “contracts” unenforceable) all sorts of gambling, would encompass the stock market itself.
(Even better would be to simply get the government out of contract enforcement period. Which would mean getting rid of centralized government as such.)
Unfortunately, the finance sector has used the government to impose a parasitic tyranny on the core economy. That means that bizarre reifications like stocks and deficit ceilings become real forces wreaking havoc on real people and real work. As we continue our descent into a Depression far worse than that of the 1930s, we’re passing the same milestones of mass unemployment and wastage of labor goodwill, which is really the wasting of lives, alongside bountiful production which is promptly thrown worthlessly down ratholes, and even more production potential which simply goes to waste.
This waste, which is the result of nothing but intentional policy on the part of criminal elites, is just as profoundly destructive as the murder of physical bodies. This is the murder of souls.
Is there any way out of the trap? It’ll have to include breaking free of the command cash economy of the financializers. Those who will be capable of taking in hand the stagnant potential and rendering it kinetic, in order to meet the needs of those in material peril, at the same time they uplift these needy masses and turn them into kinetic producers for themselves, and who will do all this without resort to cash, taking it for granted that there’s no need for it – who will they be? Is it possible that the time banks which are sprouting up everywhere can function as training programs for such cash-transcending cadres? And could the time banks themselves function as such revolutionary nuclei?
That’s a lot to ask of something starting out so modestly. But then, vision must see as far as the circumstances of the day compel it. Today we must look to everything with only one question – what role can this play toward our liberation and transformation? 


  1. Speaking of bizarre reifications, I got my copy of David Graeber’s “Debt: the first 5000 years” today and plowed through the first three chapters. It’s quite good so far, very accessibly and entertainingly demolishes conventional economic histories about money/debt/barter. In just the first part of the book he shows how almost all conventional economists think of a linear progression from barter to hard currency and then debt, and then shows how that’s totally wrong, that debt actually developed first, that hard currency was rarely used at all, and that barter is mostly what happens in one-off transactions between strangers or is what people who are used to hard currencies do when they suddenly lose access to them. It’s pretty interesting. I’ll post more about it when I’ve finished it.

    Comment by paper mac — August 4, 2011 @ 7:11 pm

    • That sounds compatible with Nietzsche’s speculations, which were focused on primal culture and religion rather than economics. He gave a primarily psychological explanation for how the concept of debt first arose (and envisioned the original concept and feeling of debt being involved more in enforcing fidelity to custom and the rudiments of law rather than a specific economic focus).

      So if debt itself came prior to the economic modes of measuring it, that would seem to concur with the primal psychological focus.

      And it also agrees with what we observe today, where non-rich people remain faithful to the idea of their being indebted contrary to both direct economic self-interest and the overwhelming evidence of the bad faith and criminality of those to whom they allegedly owe (not to mention how, with the Bailout and corporate welfare in general, its really they who owe us, not the other way around).

      This kind of self-sacrificial fidelity to an obvious crook and oppressor can’t be explained merely with resort to the old stand-bys of stupidity, laziness, and cowardice on the people’s part. No, there has to be some affirmative psychology here, which may once in prehistoric times (the era of what N called the morality of mores) have been practical, but by now has become completely maladaptive.

      Maybe I should read that book. A project I keep turning over in my mind, but whose ideas are still raw, is how to simultaneously destroy the misdirected morality of loyalty to the system while building a new morality of community fidelity.

      Comment by Russ — August 5, 2011 @ 1:54 am

      • I think you’ll really enjoy this book. Graeber actually specifically references N’s account of the origin of debt in Genealogy of Morals, classifying it as an account of the origin of debt as Primordial Debt to one’s parents, ancestors, gods, etc. Graeber places this within a framework of origin-stories about debt, but indicates that he doesn’t have a particular interest in justifying or dealing with those stories, but rather with producing a typology of economic interactions, which are communistic, exchange, and hierarchical interactions. He also thinks that N recognises how crazy it is to describe human interactions in terms of commercial exchanges, and that’s part of what he’s doing in pursuing that line of thinking. I’m getting a real kick out of this book so far. Graeber’s ability to incorporate anthropological and historical sources from across the globe is prodigious, and I’m finding that he hasn’t ignored any major thinker or contributor to the field that I can think of so far (at one point I was wondering whether he might address Margaret Atwood’s recent book on debt, and then found that indeed he did, a few paragraphs later). In any case, if you can grab this at the library, it’s really worth a read.

        Comment by paper mac — August 6, 2011 @ 12:33 am

      • It sounds good, and I’ll definitely check it out. I started out writing a reply to the ideas here as a comment, but turned it into the time-banking-and-debt post instead, so you’ll find the rest of my reply there.

        Given the categories you say Graeber discusses, it sounds like time banking, at least by formalizing the accounting, is an exchange network, although it’s implicitly transitional toward a communistic/cooperative one.

        Comment by Russ — August 6, 2011 @ 1:43 am

  2. “If anything, the stock market is even more fictive as an issue than the federal debt.”

    Yes. Of course. Money is the first derivative of the real economy. Bonds are the second derivative of the real economy. Equities are the third derivative of the real economy. “Derivatives” are the fourth (through n?) derivatives of the real economy. Each layer of “derivation” tucks in hidden transaction costs that manifest themselves and area accounted for as rents. Debt-based money, such as the U.S. dollar, creates a positive feedback loop between bonds and the real economy and allows all later derivatives to dictate how the real economy is managed.

    Each layer of derivation is a fiction, and each successive layer magnifies the fiction of the preceding layer by an order of magnitude. Of couse, our understanding of each layer of derivation is limited by the human decision-making function. The result is self-similar, iterative function that has all the hallmarks of a fractal, and if you look at the right data, you can even see the fractal geometry of finance.

    “Is there any way out of the trap? “

    Yes. Recognize there is no trap. It is only our conviction that fiction is truth that traps us. Insisting that a dynamic, ever-changing world is a static thing is doomed to fail, yet all Western belief systems seem to insist that the world is defined by a static truth. Focus on the truth of the human dynamic, and the fiction of these belief systems melt away.

    Comment by Tao Jonesing — August 4, 2011 @ 11:36 pm

    • Yup. Everything I propose is about trying to free the human dynamic from all artificial economic and political restraints upon it.

      Your fractal model of the derivatives is a good way of looking at it. It offers a specific description of how financialization works. (Although technically I wasn’t talking about the things themselves but their political facade. Which is really the same thing, as the things don’t really exist at all except as political scams. The problem is that people still believe in the scam.)

      Comment by Russ — August 5, 2011 @ 1:55 am

      • “It offers a specific description of how financialization works.”

        It’s all about leverage.

        Comment by Tao Jonesing — August 5, 2011 @ 10:35 am

  3. Wow Tao! That sounds like the end of the N quote that Russ gave us just recently about the ever-changing continuum.

    Comment by tawal — August 5, 2011 @ 1:41 am

    • Which quote was that again, tawal?

      Comment by Russ — August 5, 2011 @ 1:55 am

    • I get a little carried away when I try to put my fractal theory of human cognition into words . . .

      Comment by Tao Jonesing — August 5, 2011 @ 10:30 am

      • It sounds clear and logical to me. Although I agree that it’s not always easy. Do you remember the time at Naked Capitalism I used the phrase “fractal Walmartization”, somebody scoffed at it as meaningless, and you said you found it to convey real meaning in the context? (Right now I don’t remember exactly what it meant; I’d have to go dig the comment out of my neoliberalism file.)

        Comment by Russ — August 5, 2011 @ 10:42 am

  4. […] temporary structural framework, and perhaps even as a politico-economic nucleus like I described in this post.   I used the term debt in this comment, but that term’s not frequently used in time bank […]

    Pingback by Time Banking and the Concept of Debt « Volatility — August 6, 2011 @ 1:36 am

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