It’s possible that the poet or philosopher of the financialization of economics, which comes down to nothing but the corpse of what had been understood to be economics since Adam Smith—meaning economics as solving the riddle of scarcity—is Jean Baudrillard, a French cultural theorist who died in 2007 (a time when his popularity as a thinker was actually low—Baudrillard’s moment in the sun, particularly in the English-speaking world, was between the mid-80s, which saw the rise of postmodern theory, and the mid-90s, which saw the beginning of its decline).
In 1976, three years after the year David Harvey (the British-born and NYC-based Marxist geographer—his Companion to Marx’s Capital: Volume 2 was published this month on Verso) claims neoliberalism departed from the academic realm and assumed control of economic policy and practice, wrote this in Symbolic Exchange and Death: “Capital no longer belongs to the order of political economy: it operates with political economy as its simulated model. The entire apparatus of the commodity law of value is absorbed and recycled in the larger apparatus of the structural law of value, this becoming part of the third order of simulacra. Political economy is thus assured a second life, an eternity, within the confines of an apparatus in which it has lost all its strict determinacy, but maintains an effective presence as a system of reference for simulation.”
This is indeed the point of my After Economics series: in the early 70s, neoliberalism essentially replaced economics with finance, which is not even economics, but simply the dark art of making money on the market. Baudrillard describes the transition from Fordist production to finance as the transition from the real to the hyperreal. But is the solution to our current problems (booming financial markets; high unemployment) a return to the real? No. Why? Because by the 70s, the real was actually exhausted. Endless growth was over even by then. The environmental movement emerged and began pointing out the limits of industrial production. Hippies were adopting alternatives to capitalist-driven consumption. Confronted with the real limitations of the real, capital simply abandoned it.
Many imagine that the job market will grow again if we leave the hyperreal and return to the real, return to the fundamentals, return to making things, like cars. This is how the Dems think, but this thinking is wrong and shows an ignorance of the character of the crisis that hit capital in the 70s. The limits of real growth where reached in the West; all that was left was financial growth (or semiocapitalism). When growth is no longer a solution but a problem, then economists are no longer needed (or they have to completely redefine their profession). Neoliberals understood this in the 70s; they knew that economics as it had been practiced since the birth of capitalism in the 18th century was dead, and they were also smart enough not to waste the good and noble (Smith, Ricardo, Keynes) clothes on the corpse. Neoliberalism, which is preoccupied with models that attempt to beat the market, dressed itself up as economics and called itself such. But the question we should really be asking is not how to create more jobs or how to make money from money but instead: What do we do with our free time?
My next post will focus on an important passage in this book, which is also by Baudrillard...