Short Circuits: Finance, Feedback and Culture
‘There is no such thing as an empty space or an empty time. There is always something to see, something to hear.’ So said John Cage in his 1958 lecture, ‘Experimental Music’. This article argues that the aesthetic or cultural transformation of absence into presence, the revelation, by subtraction, of new raw materials or free inputs, bears a relation to the logic of accumulation in an era of financialised capitalist self-cannibalisation. What Cage valorised in the aesthetic sphere, developing concepts of feedback and self-regulation formulated in cybernetics, anticipated the innovations of modern finance and the production – by subtraction – of empty/full spaces of accumulation.
The term ‘feedback’ originates from the inter-disciplinary science of cybernetics. Cybernetics is concerned with regulation within closed systems. It looks for and exploits circular causal relationships, ‘feedback’, within these systems. Negative feedback is a process in which action and its effects are fed back to the actor in order to better coordinate aim and result. The loop proceeds from action (e.g. firing a machine gun at an enemy plane in order to shoot it down), to sensing (how is the target affected?), to comparison with the desired goal (has the plane been shot down?), to action (shoot again, a degree to the right), and so on. The circle of action, monitoring, correction and further action, integrates error in order to regulate and improve performance. Incorporating indeterminacy and recursive logic enables an automation and expansion of control. On the other hand, as we will see, this virtuous circle of negative feedback can also invert into its opposite. ‘Positive feedback’, from the perspective of control, is not positive at all, but represents a spiralling disorder or perturbation of the system. A vicious circle.
It is no accident that the circular causality of the feedback loop resembles the cycle of capital accumulation described by Marx (Money – Commodity – more Money). Information feedback has played an increasingly important role in the larger loop of capital accumulation for decades, if not centuries. The cybernetic revolution simply radicalises solutions to capitalist crisis proposed by Ford, Taylor and Keynes, expanding the ambit of control by flattening the world into a single dimension of information. Tiqqun claim in their essay ‘The Cybernetic Hypothesis’, that the internet has become a global cybernetic system, enabling capital to manipulate and monitor consumer preferences. Consumer behaviour, for example, is subject to the management of financial markets: ‘Each actor in capitalist valorization is a real-time back-up of quasi-permanent feedback loops.’
We may disagree that the information society has brought about a new form of value creation in which information is wealth. Nevertheless the rise of the information society certainly coincides with the installation everywhere of feedback loops which monitor and regulate consumption, production and distribution. Capital strains to reduce its overheads by outsourcing labour to consumers – witness the rise of social networking – and subjects all social processes to measurement and quantification. Through privatisation, marketisation and the destruction of earlier modes of welfare, society is subsumed under the commodity form. Like good students of cybernetics, New Labour set about installing forms of performance measurement and modification across the public sector, primarily in health and education, imposing value as a dominant metaphor on all areas of social reproduction. This indexed a need to generate growth, no doubt, to find substitutes for industrial production and to increase the pressure on workers of all kinds. The deepening penetration of informational feedback loops contributes to an extension of the working day and a breakdown of limits to exploitation. The ‘efficiency’ of this process was predicated on another order of feedback, however: the continued rise of the UK as a global centre for the creation and retail of fictitious capital. The production of a specific form of ‘information’, credit and debt, is crucial. The UK’s health and education sectors, not to mention the UK’s other ‘unproductive’ services, could only deliver a facsimile of ‘growth’ in relation to the City’s siphoning off of the global value product.
To understand the larger feedback loop in which the circuits of ‘information society’ function, then, we need to look at the feedback loops of finance capital. An increasingly large proportion of this information represents claims on non-existent value, i.e. credit and debt, as well as the plethora of financial instruments – derivatives, Collateralised Debt Obligations, Credit Default Swaps, etc. – that dominate the global finance market. In this process information does indeed become hegemonic – not as value, but as fictitious capital. This does not amount to an actual process of valorisation, merely the ever-increasing generation of claims on future, as yet non-existent (or no longer existent) value. In order for these claims on value to be made good, supported and sustained, an anterior process of valorisation and expropriation remains necessary. As in Marx’s day, there remains no substitute for the expenditure of human labour in the creation of value.
Fictitious capital comes to function as a kind of effective, but precarious, surrogate for value which both depends on and is undone by the financial feedback loops that constitute it. In David McNally’s excellent 2008 essay, ‘From Financial Crisis to World Slump’, he describes how the becoming-pervasive of value as the form of measurement of all social activity coincides precisely with its becoming tenuous and volatile as a measure of… value. Its absolute triumph is predicated on its increasing shakiness as a claim. McNally writes, ‘With the end of dollar-gold convertibility in 1971 and the move to floating exchange rates (rates that literally fluctuate all day each and every day according to values determined on world markets), currency values, especially for the dollar, became much more volatile. As a result, the formation of values at the world level became much more uncertain and less predictable.’
The growth of finance is predicated on an actual decommodification of (world) money. To put it another way, the commodification of everything else stems from the decommodification of the dollar as global reserve currency: ‘The measure of value property of money – the capacity of money to express the socially necessary (abstract) labor times inherent in commodities – was rendered highly unstable.’
The suspension of value as measure is, paradoxically but logically, expressed in a new over-accumulation of forms of measurement, beginning with those most influential forms of measure – the financial instruments called derivatives.
In essence, derivatives set out to measure and price risk. As McNally says, the increased uncertainty of value relations put an increased emphasis on risk assessment and monitoring for all capitalists, but especially those who, in a globalised market, have to deploy multiple currencies. These currencies themselves became more volatile because of the suspension of dollar-gold convertability. The basic loop of financialisation is thus the movement from the suspension of dollar-gold convertability to the increase in volatility of currencies to the proliferation of mechanisms (derivative contracts) for monitoring and insuring against these fluctuations. But a further cybernetic spiral immediately arises from the growth of derivatives as risk measure and hedge. Derivatives become themselves a source of risk. Because one can buy insurance against risks to assets one doesn’t actually own they can function instead as forms of financial speculation. For instance, a Credit Default Swap [CDS] against the risk of GM defaulting can be purchased even if one owns none of GM’s stocks or bonds. Speculators can win by shorting the circuits of value they feed on.
Whether gambling on currency movements or exploiting value gaps between markets (arbitrage), the same logic applies. Tools originally conceived as a way to measure and so more precisely price risk, and so master volatility, become themselves a source of fluctuations in prices as their use en masse gives rise to new forms of financial feedback. As well as impacting on the material world immediately through the devaluation of currencies and drastic price changes, the diffusion and networking of risk enabled by derivatives displaces risk from the local to the systemic level. The virtuous circle (‘negative feedback’) of debt creation, becomes ever more likely to invert into a vicious circle (‘positive feedback’) of depreciation. Guaranteed returns based on risk-managed revenue streams prove to be fictitious.
There isn’t space here to properly go into the workings of Value at Risk (VaR) and other measures and models of risk. It should be noted, though, that such forms represent the repetition at a higher power of the basic reifications of capital. Homogenising and objectifying particular socially and politically determined risks as ‘abstract risk’, they are the financial sphere’s cognate of ‘abstract labour’ in the sphere of production. Markowitz’s ‘Portfolio theory’ of risk management and the VaR measure depend on this abstraction of risk to automate and autonomise the assessment of specific investments. Once achieved this becomes an industrial process. Human oversight and investigation of particulars is displaced by ‘black boxes’ computing homogenised variables.
These phenomena are not alone sufficient to explain the systemic crisis of capital, however. The growth of speculative finance is inseparable from the larger process of social reproduction and the productivity of capital as a whole. To put it crudely, a crisis of over-production and under-consumption arising from massively increasing technical productivity dictates the expanding destruction of both exchange and use values in order to reproduce the conditions for capital accumulation.
If information does not produce as much value as is claimed, then not only fictitious claims but also productive assets must be cancelled for accumulation to continue. As fictitious values, previously treated as if they were real assets, went into freefall during the credit crunch, real capital began to be wiped out, too. McNally: ‘factories are mothballed, corporations go bust and sell off their buildings, machines, land, customers lists and so on at bargain basement prices.’ This process of destruction is still in its early stages, with many more forms of financial feedback yet to begin unwinding.
Here we see the real signature of cybernetic capitalism: not infinite growth through deregulated feedback but rather an intensified and expanding destruction of value. The zero growth ideology was first enunciated in a report, ‘The Limits to Growth’, by a group of MIT cyberneticians commissioned by the capitalist think-tank the Club of Rome in 1972. From this set of scenarios for capitalist ‘sustainability’, published at the very moment the dollar was being decoupled from gold, to Thatcher-era deindustrialisation and privatisation, the feedback loops of finance have been intimately linked to the driving down of social reproduction (the sustenance of humans, infrastructure and environment) at a global level. As McNally notes, the imposition of the value form – ‘value logics’ – across every sphere of social existence simultaneously reflects unprecedented financial volatility and impels an epochal attack on proletarian reproduction through dismantling of subsidies to subsistence goods, removal of wage protections, welfare and privatisation of public services, etc. All this contributed to the further rise of financialisation, and such accelerated value destruction is visibly the telos of ‘cybernetic’ capital again now that the financial feedback loops have begun to unwind, in our current phase of aggressive and open austerity.
Before and After Feedback: Culture, Politics and Finance
There is poetry as soon as we realize that we possess nothing.
– John Cage
What then of culture, not to mention politics, in this by no means completed era of financialisation and cybernetic self-regulation? Long before the rise of derivatives, feedback was being explored as key to new artistic forms and practices. If, as Tiqqun claim, network society is a kind of massive global cybernetic system, and the social/cultural structures of feedback (internet, social networks, workplace monitoring of performance, logistics, meta-finance, etc.) possess distinctive political and economic characteristics, how does culture anticipate, reflect or resist these?
We can begin by considering how the cultural and social structures of feedback, like the financial ones, today mesh with capital’s major feedback loop. Capital is now compelled by its own logic to destroy an increasing amount of the means of production it commands. It needs to devalue labour-power and avoids paying for reproduction of other forms of capital. So today we see expanding forms of ‘non-reproduction’, including: the annexation of labour-power outside the advanced capitalist countries through globalisation; the bolstering of profits by paying workers less than the cost of their reproduction; the non-maintenance of infrastructure; the non-replacement of natural resources, etc.
Considered from this perspective, feedback – both financial and cultural – is not just about abstraction. Rather the growth of the network form, and the measuring and monitoring of all areas of social existence, extends the scope of non-reproduction exponentially. The annexation of ‘free inputs’ – environmental, infrastructural, and re/productive – is enabled by the network. At the theoretical level cybernetics’ collapse of the distinction between man and nature, between states (and between States) subsumed under a universal set of feedback loops, anticipates the unified field of (self-)regulation and ‘self-reproduction’ to use editorial collective Midnight Notes’ term, imposed in neoliberal capitalism.
Cybernetics’ higher order of abstraction implies an expanded field of increasingly ‘extractive’ accumulation, in which both waged and unwaged labour are available. Readers will no doubt be familiar with the idea of ‘free labour’ as precondition of the social network. Both fictitious claims (finance) and social networks (culture) require ‘free inputs’ – unpaid labour and unpaid for assets – to perform. Derivatives’ performativity as claims on value assumes and commands unpaid and non-reproductive labour – for example, through their effect on the price of commodities and labour in ‘low GDP’ countries. Networked cultural production solicits ‘plabour’ and ‘prosumer’ activity and individual capitals are able to reduce their overheads, if not increase their rate of exploitation, by the outsourcing of content production to the end-user. ‘Paying attention’ may not create value directly but clearly the formerly ‘passive’ consumer has been activated. Both terms – culture and finance – are increasingly interchangeable; finance is aestheticised as it claims become absurdly fictitious, culture is reduced to finance as its fictions become absurdly monetised.
I would like to suggest here that the rise of such a culture of ‘free inputs’ and financial feedback is anticipated and prepared – if not foreseen or desired – in the neo-avant-garde of the ’50s and after. Seeing feedback as a route to a more autonomous and egalitarian cultural and social existence, a way of dissolving the hierarchical structures of a bureaucratised mass society, the pioneers of cybernetic and network culture generally failed to target the Ur-form of feedback, that is, the value form per se. Both counter- and corporate culture converged on a more ‘liberated’, technocratically enlightened, form of circulation (and re/production), which, ironically, presupposed the deregulation of money and the looting of those subject to the diktats of decommodified wealth.
John Cage’s ethos of impersonality in artistic production shares, by no means accidentally, something of cybernetics’ flattening of the man/nature (organism/environment) distinction. Conceived as an aesthetics of Buddhist self-abdication, the shift from subjective intention to aleatory process has structural similarities to the outsourcing of evaluation and decision later seen in black box trading and other forms of financial feedback. Rather than creating finished works, the (post-)cybernetic artist or composer becomes a programmer of cultural software, setting up self-regulating, ideally self-executing systems or processes. From La Monte Young to Phillip Glass, Sol LeWitt to Hans Haacke, the implications of processual feedback as form are manifold but an overall shift in orientation is apparent. The Duchampian readymade, the ultimate, or rather foundational ‘license to loot’ already implicit in Fordist artistic production (and productivism), becomes ‘for-itself’ with the post-Cageian phenomenologists of feedback. Cage makes the audience into producers with 4’33”, his own production being confined to a minimal instructional score. La Monte Young seeks ways to let the untreated raw sonic material resonate without intervention – ‘we must let the sounds be what they are’. Rather than working on the world in instrumental fashion to shape it, we must find ways to give it back its independence and listen to it better. This may be a higher-level ‘reskilling’ of the deskilled listener set free from their traditional interpretive duties, but it could also be read as a miniature manifesto of non-reproduction.
The composer’s (non-)work shifts from the creation of teleological musical narrative to the precipitation and harvesting of psycho-acoustic ‘free inputs’. These are catalysed by the creation within interacting streams of sound-data, of virtual or ‘gestalt’ musical lines (Young’s ‘combination tones’, Steve Reich’s ‘resulting patterns’, etc.). Phillip Glass, whose additive compositional process eschews a goal-directed temporality or offers ‘recombinant teleologies’ (in Robert Fink’s phrase) discovered a similar unplanned qualitative ‘plus’ while listening to a performance of one of his works in a concert hall, deciding to consciously incorporate such psycho-acoustic effects in future works. Unplanned outputs become new inputs within an infinite, responsive, musical feedback process. Notoriously, musical Minimalism synced opposing temporalities to a single pulse, in the process becoming ‘crossover music’. As in financial derivatives, which align existing revenue streams to produce more than the sum of their parts, it is enough to bring two repeating musical patterns into coordination to produce a virtual third. The temporality of the derivative is also anticipated in the split or schizoid time of minimalist composition, in which ceaseless activity at the molecular level produces stasis and stability on the macro scale, simultaneous acceleration and deceleration.
Both financialisation and Minimalism can be described as ‘machines for the suppression of (historical) time’, and with some justice have been criticised as exhibiting the positivist/mystic drive to master and suspend temporal succession, to preempt and overcome history by application of self-correcting models. (Stockhausen is overtly anti-historical in his pronouncements, while Glass and Reich seem to want to tap into a secular eternity that mirrors the reticulated flow of advertising and TV). Musical feedback can signify as a dream of perpetual motion, as growth without excess, as a regained cosmic balance. Whatever the ideological orientation or intentions of the individual composers, many aspects of systems-influenced music seem to dream capital’s subsequent involutions as a utopian exit from it. The creation of musical feedback loops yields a form of sonic (sometimes spiritual) ‘added value’ that is attributable to neither composer nor performers, but depends on their environment (the concert hall or studio) and the reverberations released, or captured, by the unfolding musical material. In this magical aesthetic gift economy there is nevertheless an echo of the larger restructuring of production, and contraction of social reproduction, in which such cultural forms were discovered and developed. Call it ‘unmediated adjacency’, but Downtown New York Minimalism was certainly born somewhere between Madison Avenue and Wall Street. The suspension of dollar-gold convertibility and of linear musical development in Minimalism certainly occur at the same point on the historical score. As does the bankruptcy, and then gentrification, of New York…
Whatever one makes of this brief exercise in cultural-economic isomorphism, it does seem worth urgently asserting the currency (or rather, bankruptcy) of certain post-cybernetic conceptions of culture. An ethos of self-limited and self-sustaining activity, freed from the hubris of modernist telologies of growth, linked to a notion of ‘generosity’, ‘gift economy’ and ‘DIY’ emancipation may (still) seem appealing. Yet, however militant the refusal of instrumental reason, linear time, progression, etc., this ethos predominantly operates by bracketing out the dull compulsion of the value form. This leaves it hostage to the kind of reappropriation now being conducted by the capitalism of the Big Society. In many counter-cultural products and processes the commitment to dissolution of the work into the flow of negative feedback and free-floating (non-consumerist) desire coexisted with a project for the creation and replication of enclaves or islands outside the sphere of consumerism or ‘capitalism’ conceived as a bureaucratic regime of unfettered development. Today we see the reductio ad immiseration of this larger trajectory into an ethics of ‘doing more with less’ (famously dissected in season 5 of The Wire‘s extended montage of the restructured institutions of news and policing). Architects and theorists such as Rem Koolhaas and artists such as Marjetica Portc encourage us to embrace the self-organising, self-regulating ‘creativity’ and ‘improvisation’ of the ‘entrepreneurial’ slum dweller, hymning the efficiencies of outsourcing former state services to the absolutely destitute. Policy wonks such as Charles Leadbeater eulogise the mendicant refuse collectors of Recife Brazil, with their supermarket trolleys and contract-free labour. Networked creativity can be read as a euphemism for the harvesting of ‘free inputs’, which the eulogists assume will add up to sufficient savings and value creation to keep the financialised system in motion.
All this is the consummation of the cybernetic capitalist tendency to ‘activate’ potential by removing means of support and subsistence, letting the raw (human) materials resonate to the newly opened up environment of non-reproduction. The dead hand of the state or over-arching structure of welfare and services is withdrawn to facilitate the free play of the system’s molecular constituents. Capitalism as open system is increasingly dependent on the annexation of the ‘outside’ in all its forms, and where this outside is definitively assimilated it must be recreated endogenously by the subtraction of existing social reproduction.
Rather than recycling forms of cultural feedback developed more or less consciously as a subversion of the (Fordist, statist and bureaucratic, etc.) social order – a project that was always, at best, ambivalent in its implications for the majority of the population – perhaps we should shift our focus, both culturally and politically, to the ways financial feedback has laid the ground for today’s era of struggles around subsistence in a society subsumed under an ever more volatile value form. As an expanding global proletariat confronts contracting social reproduction, the question for cultural producers is whether one (solely) serves an extended programme of value destruction or (at least) contests it.
Revolts catalysed by Twitter and Facebook, alongside the offline networking of all those put into contact with, and forced ever closer to slavery by, financialised systems are the positive feedback loops beginning to resonate after years of controlled deregulations and informatisation. The accelerating repetition of ineffective financial moves generates an ever greater financial contradiction which is transposed across the social scale from banks to states to populations. As subsidies are withdrawn and barriers to capital dismantled, this contradiction is translated into food and fuel price inflation, in turn triggering riots and a proletarian music of revolt ripping through once stable states. With the socialist – and now fundamentalist – control circuitry torn out or severely compromised by financialised capital itself, perhaps an unregulatable feedback will ensue.
An unprecedented coordination of class decomposition and social non-reproduction has made systemic risk, in every sense, far greater than it has been for decades, greater than in the entire history of capitalism, perhaps. If the spiral of feedback leading from financial bubble to insurrectionary wave that now seems possible is fulfilled, then we may yet have to revise our opinion of the long era of financialisation. It will have been more than just a fiction of wealth – the imposition of the value form as a volatile but empty claim to value creation. In a final spiral of cyber-capitalist feedback, finance may prove to have been the amplifier par excellence of the noise that abolishes the capitalist signal, that is of the signal which is value – the one, supremely abstract, supremely material thing it always must communicate, send and receive. An exponential positive feedback in class struggle should not be assumed, however, any more than the teleological projections of cybernetics (e.g. inevitable planetary death by overpopulation, etc.). But one would have to be more myopic than a risk analyst, or middle-eastern CIA operative, to miss the current potential for the destructive cycle of financial feedback to invert into an unprecedented global cycle of struggles against capital per se.