Speculating on the crisis

January 2009 Written for Shift magazine

We are an image from the future
Graffiti at the occupied University of Economics and Business in Athens, December 2008

When we wander the streets of Leeds, Mexico City, Mumbai the wealth we see seems somehow familiar, yet we wonder where it has come from. That wealth is familiar because we produced it. But we feel disconnected from it because it has come not from our past, but from our futures. It is this problematic, this peculiar relationship between the past, the present and the future, that offers one of the keys to understanding the present crisis of capitalism.

A deal based on debt

The social relations and the processes that make up neo-liberalism have been blown apart. And it’s in times like this, when a system is in far from equilibrium conditions, that it is easier to see what these social relations and these processes are. Like an exploded diagram helps us understand how an engine is assembled… except the capitalist mode of production isn’t an engine and this explosion was neither small nor controlled.

Neo-liberalism meant deregulation, of labour markets and of trade. It meant the removal of state-guaranteed protections for workers and the environment, and attacks on trade unions. It meant the removal of subsidies – e.g. for food staples – and the dismantling of public provision of services, such as health and education. It meant greater ‘fiscal discipline’ – enforced on governments of the South, largely flouted by the US government – and greater discipline on workers. It meant new enclosures and the expansion of property- and market-relations into ever wider areas of our lives. Globally, neo-liberalism meant stagnant or declining real wages, a declining ‘social wage’, longer working hours, fewer employment rights and ‘civil liberties’, less job security and increased general precarious. As a result of these shifts, profit rates have risen – almost relentlessly since the late 1970s, in countries such as the United States – and we have seen huge concentrations of wealth and dramatic increases in inequality.

But neo-liberalism also involved an implicit or tacit deal, at least for workers in many of the so-called advanced capitalist economies. This deal was necessary for the ‘resolution’ of two problems that neo-liberalism creates for capital. The first problem appears to be ‘technical-economic’, it’s the problem of ‘over-production’. Capital is only capital when it is in the process of increasing itself, increasing its own value; commodities are only commodities (and hence capital) when they are being sold. But how can the increasing pile of commodities be purchased if real wages aren’t rising? Economists describe this as the problem of ‘effective demand’, Marxists call it the ‘realisation problem’. The second problem is the danger that the mass of people made poorer by neo-liberalism will revolt and reject what is fundamentally an enormous transfer of wealth from workers, peasants – the planet’s ‘commoners’ – to the wealthy.

Capital’s answer to both problems was to be found in the same mechanism – plentiful access to cheap credit, which sustained a series of asset bubbles, primarily a sustained bubble in house prices – the so-called ‘Greenspan put’. In fact increasing house prices have been fundamental to the deal, making us appear wealthier and so disguising the terms of the deal.

Credit – borrowing – and house price inflation have acted as the necessary stimulus to growth. Or seen from our perspective, the whole world economy has rested on our ever-increasing personal indebtedness: “Between 2001 and 2007, homeowners withdrew almost $5 trillion in cash from their houses, either by borrowing against their equity or pocketing the proceeds of sales; such equity withdrawals, as they’re called, accounted for 30 percent of the growth in consumption over that six-year period.” In fact the current global meltdown began with a credit crunch, provoked by the spread of bad debt: this crisis goes straight to the heart of the neo-liberal deal.

A categorical crisis

Capitalism may be in crisis, neo-liberalism may be over, but that doesn’t mean we’ve won. Far from it. Crisis is inherent to capitalism. Periodic crises allow capital to displace its limits, using them as the basis for new phases of accumulation. In that respect, it’s true to say that capitalism works precisely by breaking down.

But this is only when it works: all of the above only appears to be true when seen in hindsight – after the resolution of the crisis. In fact crisis is mortally dangerous to capital. The word ‘crisis’ has its origins in a medical term meaning turning point – the point in the course of a serious disease where a decisive change occurs, leading either to recovery or to death. This has been the case for every capitalist crisis.

Take the example of the New Deal in the US in the 1930s, and the more global Keynesian settlement of the post-war period. It’s easy to see this as the inevitable and sensible solution to secure full employment, economic growth and prosperity for all. But there was nothing inevitable about it. The poverty of the Great Depression was only a problem for capital because we made it so. (Capitalists never concerned themselves with poverty in the 19th century before workers were organised.) In the 1920s and the 1930s the real threat was one of global revolution, and capital’s future was always in doubt. In fact the New Deal never ‘worked’: it took the death of millions and the destruction of half the world to establish a fully functioning settlement.

Just as the idea of a ‘deal’ only makes sense retrospectively, the very terms we use to describe what’s happening obscure the contingent nature of crisis. When we talk about ‘credit crunch’, ‘recession’, ‘deal’, ‘unemployment’, or even ‘financial crisis’, we’re framing the problem in a way that pre-supposes a capitalist solution.


How can we think of this in a different way that reveals our own power? One of the reasons we appear weak is because we don’t understand our own strength. Of course, when you’re in the middle of a shit-storm, it’s impossible to make a hard-nosed assessment of the situation: in the current global meltdown, the future is only certain if we are written out of history. (And predictions risk dragging us into a linear temporality, one where the past, present, future are open to simple extrapolation.)

But tracing the lines of our power, and identifying the roots of the current crisis in this power are also difficult because of the way neo-liberalism has set out to displace antagonisms. Many of the elements we associate with neo-liberalism have this as their main aim – globalisation of production (‘blame Mexican workers’), sub-contracting (‘blame the suppliers’), labour migration (‘blame immigrants’), expanding hierarchies (‘blame your line manager’) and so on. The clash between worker and boss is shifted, sideways, into a bitter struggle between worker and worker. These effects have been amplified by the process of ‘financialisation’: our pensions, our schools, our healthcare etc increasingly depend upon the ‘performance’ (exploitation) of workers elsewhere. Generally our own reproduction is so linked to capital’s that worrying about ‘the economy’ has become commonplace.

But neo-liberalism also depends on a temporal displacement of antagonism, established through the mechanism of debt. As we said above, part of the neo-liberal ‘deal’ involved cheap and plentiful credit. For capital this solved the realisation problem; for us it offered access to social wealth in spite of stagnant wages. Rather than a struggle over social wealth in the here and now, it shifts this antagonism into the future.

Capitalist social relations are based on a particular notion of time. Capital itself is value in process: it has to move to remain as capital (otherwise it’s just money in the bank). That moving involves a calculation of investment over time – an assessment of risk and a projection from the present into the future. The interest rate, for example, is the most obvious expression of this quantitative relation between the past, the present and the future. It sets a benchmark for the rate of exploitation, the rate at which our present doing – our living labour – must be dominated by and subordinated to our past doing – our dead labour. It’s hard to over-state how corrosive this notion of time is. It lies at the heart of capitalist valorisation, the immense accumulation of things, but it also lies at the heart of everyday life. “The rule of value is the rule of duration.” Under neo-liberalism, if you want a picture of the future, imagine a cash till ringing up a sale, forever.

But the crisis has brought the future crashing into the present. Once we take inflation into account, interest rates are now below zero. In the relationship between capital and labour – or rather between capital/labour, on the one hand, and humanity, on the other – we have reached a singularity. We are at ZERO. Capital’s temporality – one that depends upon a positive rate of interest, along with a positive rate of profit and a positive rate of exploitation – has collapsed. And the debts are, quite literally, being called in.

It is not always obvious how the creditor/debtor antagonism maps on to the antagonism between humanity and capital: it’s an antagonism that is refracted and distorted almost as soon as it appears. But the everyday appearance of debt collectors and bailiffs underlines the violence at the heart of the debt relation. In the words of a Swiss central banker, in the relationship between debtor and creditor “the strategic situation is as simple as it is explosive”. Explosions are decidedly non-linear events – they are a rapid expansion in all directions. In the last few months, our relation to the present and to capital’s linear temporality has shattered, and multiple futures are now more visible.

Short circuits

From capital’s perspective, this crisis needs to be contained, that is closed down. In these exceptional times, measures are rushed through and solutions imposed because the priority is to re-affirm capital’s temporality and reinstate discipline. This will be the prime purpose of the G20 summit in April (in the UK) and the G8 summit in July (in Italy).

It’s important not to over-state the importance of summits – summits are trying to ride a dynamic that they don’t necessarily understand, and one that they can’t control. Capital’s logic is as simple as its metronomic beat – all it seeks is a chance to valorise itself. Like a river flowing downhill, it will go around any obstacles put in its way. Of course regimes of regulation can make this flow easier or harder, but they can’t stop it. But summits have in the past provided a focus for our energies and desires. During these moments, against one world of linear time, value and the present (the-world-as-it-is), we have been able to construct many worlds, live other values, and experience different temporalities.

But the United Nations Climate Change Conference (COP15) in Copenhagen raises a new set of problems. It’s a summit where institutional actors could be forced to faced up to longer-term, structural contradictions, and dwindling faith in market-based ‘solutions’. Seen through the prism of temporality, runaway climate change is a non-linear process but capital’s responses so far have been based on a linear timescale, as if climate change is reversible at the same speed at which it started. The problematic raised by COP15 is how a world of values and non-linear time can relate to a world of value structured in a linear, monomaniac fashion. One of the difficulties in working out our relation to institutions lies precisely in the fact that movements operate at different speeds and with a different temporality. It’s doubly problematic because while the crisis of our environment demands that we act quickly, we also have to resist the pressure from capital’s planners for a quick fix. As soon as crises are ‘solved’, our room for manoeuvre is diminished.

We find ourselves faced with different timescales of struggle. Fights against job losses, wage cuts, house repossessions, rising prices and old-fashioned austerity are the most immediate. We also have to keep an eye on the G20, and then, in an even longer timescale, on COP15. But events like the recent uprising in Greece and the ‘anomalous wave’ movement in Italy can collapse all these timescales into one.

In Italy, the Gelmini educational reform law has provoked a three-month long mobilisation, marked by sit-ins, occupations, demonstrations and strikes. The movement started with high school collectives but spread quickly to encompass students, researchers and workers in education. The ‘anomalous wave’ has taken up the slogan ‘we won’t pay for your crisis’, which is fast becoming a NO! around which heterogeneous movements are uniting. The ‘anomalous wave’ has been able to address even wider themes of precarity, economic crisis and neoliberalism’s future. And another of its slogans expresses participants’ refusal to become subordinate to neo-liberalism’s universalising identities: ‘We are students, we will never be clients!’

In Greece, a wave of anger over the shooting of a 15-year old has snowballed into a ‘non-electoral referendum’ which has paralysed the government and traditional institutions. Major riots have been accompanied by mass assemblies, occupations of public buildings and attempts to take over TV and radio stations. In some ways it marks the return of ‘youth’ as a category in a way that’s not been true for 30 years. Schoolchildren and students have led the first wave, and commentators talk of a self-styled ‘€700 generation’ (a reference to the wage they expect their degrees to get them). But the revolt has been so ferocious and generalised because it has resonated with thousands who feel hemmed in by the future. In the words of an initiative from the occupation of the Athens University of Economics and Business, ‘Tomorrow dawns a day when nothing is certain. And what could be more liberating than this after so many long years of certainty? A bullet was able to interrupt the brutal sequence all those identical days!’

As movements step outside capital’s temporality, the categories of ‘past’, ‘present’ and ‘future’ stop making sense: actions in Greece clearly draw on a history of resistance against the dictatorship, just as the anomalous wave in Italy riffs on a whole period of Autonomia in the 1970s. These movements may now spread to Sweden, Spain, France in what is being described as ‘contagion’. Our temporality is one of loops and ruptures – violent breaks with the present that throw us forward into many futures while breathing new life into a past. Even President Sarkozy has acknowleged the danger (from his perspective) of such a rupture: “The French love it when I’m in a carriage with Carla, but at the same time they’ve guillotined a king.” Of course, by definition exceptional times can’t be sustained. But while the world is in a state of shock, it opens up the possibility for us to impose our desires and reconfigure social relations.


As usual we’ve borrowed ideas from all over the place, but we should make clearer a few sources of inspiration and quotations. The figures on debt are from Doug Henwood’s ‘Crisis of a gilded age’, in The Nation, 24 September 2008. John Holloway offered some useful insights as well as providing the line about the rule of value, from ‘Drive your cart and plough over the bones of the dead’, Herramienta. There’s great material about Greece on http://www.occupiedlondon.org/blog/, and we found the following two pieces useful: George Caffentzis and Silvia Federici, ‘Must the molecules fear as the engine dies?’, October 2008, and George Caffentzis, ‘Notes on the ‘bailout’ financial crisis’, InterActivist Info Exchange, posted 13.10.08.