[Marxism] Special issue tripleC: Capitalist Crisis, Communication & Culture

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Mon Aug 30 04:36:01 MDT 2010



Computing and the Current Crisis: The Significant Role of New Information  
Technologies in Our Socio-Economic Meltdown David Hakken pp 205-220 
_http://www.triple-c.at/index.php/tripleC/article/view/161/193_ 
(http://www.triple-c.at/index.php/tripleC/article/view/161/193)  
 

Comment 
 
Actually, David Hakken article is a technical description of Professor  
Perlman video presentations on modern economics. 
 
20 years - August 1990, ago this article would have been impossible for me  
to grasp, and probably could not have been written in the first place. The  
social consequence of the new non-banking world wide financial architecture 
-  the rise of speculators to dominance over finance capital, has taken a 
full  twenty years to be understood. 
 
This new financial architecture exists based on a new technology regime,  
which according to the article evolved post 1970. David Hakken describes the  
technical basis of this new non-banking world wide financial architecture 
as  follows: 
 
"Computing is heavily implicated in the emergence and trade of all these  
new commodities. Given their complexity, none of them, nor markets in them,  
could have existed without it. . . . . 
 
"In short, to the extent that computing was essential to these commodities' 
 creation, and that market failures in these new financial commodities were 
 central to the crisis, computing caused the crisis. These computered 
financial  instruments strongly afforded the elaboration of national markets for 
capital  into a virtually global single market. Just as a desire for new 
commodities to  trade in, so that more money could be made, drove computing 
development and  implementation, so the development of international computing 
networks strongly  incentivized creation of an unboundried market in 
capital. Indeed, the two go  together; prospects for profitable trading in the new 
financial instruments were  directly related to the extent to which the 
reach of the capital market could be  scaled up." 
 
Some elements of Marxism describe the essence of the above as "over  
production of the means of production" as these "means" function as capital and  
are monetarized. That is capital seeking a maximum profit or an expanded 
value  based on investment. Others understand this stage of finance capital as a 
 particularly intense phase of monopoly. Neither explanation unravels the 
meaning  and impact of a new technology regime and the emergence of capital 
as a notional  (imaginary) value, rather than an expression of surplus value 
extraction. 
 
It is the rise of these now financial products (instruments) in an  
environment of the so-called "scattering of the points of production" or  
de-industrialization of America and revolution in the means of production  (generally 
understood as intense falling rate of wages/profit) defining our  moment of 
history. 
 
Various views on changes in the form of finance capital are expressed as  
body politics. Yesterday - August 28, a demonstration led by the Uaw, Jesse  
Jackson Sr. crew and the Democratic Party establishment had as its lead 
demand  "jobs" with banners demanding "fair trade." That is "bring back my job 
boss, so  I can work." 
 
Even if bringing back jobs to America was possible, the factories that  
would be built creating a mass of commodities would be so advanced and the  
wages so low that restoration  of the "great American industrial middle  class" 
on the basis of capital reproduction is impossible. 
 
II. In his own language Hakken describes capital as a notional value. 
 
"3.1. Asset Value Unknowability as the Core of the Current Crisis 
 
In at least three additional important ways, the computerization of  
financial instruments led to a situation where assets' values became ambiguous  
and increasingly unknowable." 
 
Leaving aside the issue of "mark to market" or the last selling price of a  
financial instrument or commodity, Hakken captures the essence of capital 
as a  notional value: 
 
"In short, a unique, perhaps the unique, characteristics of the current  
crisis is precisely these huge, persisting socio-economic spaces of  
unknowability. Given that a huge proportion of economic activity (Tett estimates  
some 80%) was financialized, this unknowability is lodged at the center of the  
reproduction of contemporary capitalist social formations. The consequences 
of  the lack of fit between the particular forms of computer-mediation of 
financial  assets, on the one hand, and the wide swathes of unknowability to 
which their  use led, on the other, have been amplified by the substantial 
upping of the  scale (e.g., the "globalization" of markets in capital) at 
which some aspects of  social formations (but not all) are able to be 
reproduced, further increasing  the difficulty of establishing what specific value 
any given asset has. Indeed,  it seems to me that the crisis will continue as 
long as a substantial body of  difficult to evaluate assets persists." 
 
III. Hakken describes what it is that is new to capital reproduction that  
exists based on the new technology regime, which could not exist prior to 
the  development of this new world wide financial infrastructure. 
 
"2. Computing is heavily implicated in the emergence and trade of all these 
 new commodities. Given their complexity, none of them, nor markets in 
them,  could have existed without it. Nor was computing's role merely one of 
creating  the possibility of doing such things. Only a few of the forms of  
financialization that were possible to computerize were actually developed 
(Tett  
2009b). Those financial commodities that were developed and marketed were  
given the properties they had via what computer people call  
"affordances"-inclinations that, given existing preexisting developments or  "path 
dependencies," are likely to follow, unless action is taken to prevent  them. 
Indeed, many of the AICTs that made these new commodities possible were  developed 
precisely in order to create things like them. This path dependency  was a 
consequence of the particular mix of the entrepreneurial and technical  
built into contemporary education in and the practice of computing. In short, to 
 the extent that computing was essential to these commodities' creation, 
and that  market failures in these new financial commodities were central to 
the crisis,  computing caused the crisis. These computered financial 
instruments strongly  afforded the elaboration of national markets for capital into 
a virtually global  single market." 
 
Much of Hakken's material is new but all of his conclusions are old and  
discussed in varying degrees on this list at least six years ago and most  
certainly when the investment banker and economist Henry CK Liu regularly  
contributed to the list. One comrades asked a few years ago what "new" did one  
gleam in Mr. Liu economic writings. 
 
The answer which was apparent years ago is universally acknowledged today:  
CAPITAL AS A NOTIONAL VALUE AND THE RISE OF A NEW NON-BANKING FINANICAL  
ARCHITECTURE BASED ON A NEW TECHNOOLOGY REGIME. 
 
WL 
 
 




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