Alex has a brief but brilliant post up, in which his recent series of posts on the Hardcore Continuum dovetails with a revival of his xenoeconomic speculations from last year. To summarize, the claim is that capital operates by extracting novelty from its local productive sites, or generic sectors. In fact, capital is nothing more than an investment in such extraction combined with the returns on this investment.
This raises the question of how capital transfigures ontic diversity or ontological novelty into its own universal quantitative terms. Moreover, why privilege novelty as the source of surplus-value? Isn’t the realization of value over an investment a function of the demand for the product on the market? Why should novel objects necessarily warrant greater demand?
To address the latter questions, we should realize that a demand for redundancy nonetheless presupposes the redundant product was innovated and hence once novel. So even if redundancy is capable of commanding a greater demand, it is only through investment in innovation or the extraction of novelty that potentially redundant products can come to be, and demand-redundant markets can spread.
As for the conversion of novelty into value such that there is a return on investment in excess of the amount invested, well, I’ll return to this in a moment. First, I’d like to note how the xenoeconomic problematic Alex is outlining has essentially shifted. Last fall, the basic problem of xenoeconomics, as the theory of a radically alien Capital that has become completely unbound from human restrictions, limitations, and the human condition altogether, was that of the potential for accelerating dynamics – acceleration of novelty-extraction, and simultaneously, acceleration of investment-return-reinvestment (which, more than a loop, is even more like an instantaneous leap in place) – to exceed the threshold of the human-Capital dyad, freeing Capital to its alien destiny.
Yet now, the tone is less hysterical and more depressive, less panicked and more despairing. Alien-Capital is no longer to be sought after in the hyper-reflexive finality of a kind of ‘economic singularity’, the point at which acceleration increases exponentially. Rather, there is a new fear, or dread, over a kind of ‘Great Deceleration’. The crisis now begins to confront us with the finitude and mortality of productive sites or generic sectors, the fundamental exhaustibility of the intra-sectorial reservoirs of combinatorial novelty.
The problem is not that we might confront the complete exhaustion of all possible novelty in any given situation, productive in the industrial/material or post-industrial/immaterial sense. The problem is that capital, as relation between investment and the incorporation of the return by that investment, is basically an algorithm or program that will cease investment in a given enterprise long before such exhaustion. Eventually, the combinatorial possibilities of a given site will begin to grow thin, and the process of extraction will become more costly and procure a smaller return. As returns diminish, the rate of investment will also diminish, until novelty-extraction decelerates to its pre-capitalized rate, or lower.
Now this deceleration is certainly not a general movement, but occurs sector by sector; nor is it regular, as it rather proceeds in jumps and starts, exhibiting variations and anomalies. It can be turned around through changes in extrinsic factors, and its contours can be as diverse as the sectors it afflicts. Yet the implications here are drastic: in shifting from manic-ecstatic acceleration down to depressive-despairing deceleration, the figure of alien-capital suddenly is no longer opposed to the hauntological specter, but incestuously attracted to it.
Allow me to return to the question of how capital converts ontico-ontological novelty into quantitative surplus-value. The secret to this process lies in the reflexive structure of Capital itself. While Alex claims that we shouldn’t fret about a sudden and general deceleration, and that this will more likely happen in a patchy, uneven manner, this misses the problem of Capital that is invested in investment itself, as an autonomous financial sector, rather than in extra-financial productive sites tied to non-economic, material extraction systems.
Capital is not only a patchwork collection of productive sites qua fields of investment/extraction, but also a meta-investment in itself, taken as its own ‘productive site’, replete with strange, often unimaginably complex financial instruments and products. It seems that in finance capital, a market for immaterial products so dramatically alien to our intuitive human condition has grown and taken root that, in retrospect, many finance professionals admit to not understanding their own creations. Commodities in this market no longer resemble the humans that produce them, and seem more akin to those strange life forms populating the oceanic abyss, thriving around volcanic vents without oxygen, light, or any of the conditions we normally associate with life. These commodities or comm-oddities can do without material productivity, labor-time, consumption of use-value, and so on, capable of thriving in the complete absence of human purposes.
Now these financial aliens evolved in the hyperaccelerating spiral of the finance sector, but growth in this sector could only be sustained on the basis of the minimal support of the material human world. Hence, the very human problem of mortgage debt was capable of undermining said dynamics. Yet my claim is not that this alien market is parasitic upon the material base of production, and only disavows this basis in an ideological obfuscation. Rather, I’m tempted to say that the problem is that material productivity now has the financial netherworld as its base, and the collapse of this base could in fact trigger a kind of global ‘Great Decleration’ of novelty-extraction or productivity.
Capital is capable of translating raw ontico-ontological novelty into figures of its own abstract calculus by virtue of the fact that investment in novelty-extraction in productive sites becomes not the base of the economy, but one instance of investment-return amongst others. Production is no longer the foundation of economy, which rather becomes self-founded and invests productive sites as only inessential opportunities for self-expansion. Surplus-value or returns on investment are no longer side effects of novelty-extraction, or an analytic index of its value-factor as one property amongst others, but rather the ultimate form of novelty. All ontic novelty, or novelty of ‘use-value’, amounts to an epiphenomenal side effect of the pure quantitative novelty of a sum greater than initial investment. So the problem is not how capital transforms ontico-ontological novelty into value – novelty is primarily value, and only secondarily can express itself ontically in material life.
Finance becomes the paradigm of economy itself, with production only serving as one possible support for financial endeavors, one possible investment opportunity. Hence, novelty extracted in productive sites is essentially defined by the surplus-value it yields, and any novelty that does not fetch a price higher than the cost of its extraction is simply nothing new at all, it doesn’t even register for econontolgy. If the finance sector was brought down by the extra-financial reality of mortgagees deferring on their loans, this is not because finance is essentially based upon material life, but because it was overly invested in this one inessential and contingent site.
The threat here is that a dramatic deceleration of reflexive investment in investment, or of investment in the finance sector, could potentially trigger a global deceleration of investment in material production. Or even worse, this could take the form not of a more or less gradual deceleration, but of a sudden impotence of material novelty to register financially and hence to count as truly novel or ‘valuable’. Entire generic regions may suddenly appear as sterile wastelands, deprived of their substance and worth, abandoned by capital as ruins or remnants of a vanished abundance.
Such a financial collapse is by no means inevitable, but any economist will tell you that we are teetering on the edge. Yet even if finance capital can recover this time, how long until the next bubble bursts? How long before we reach a crisis that does in fact become a catastrophe? Such a catastrophe would likely not spell the end for capital, but only its next insulatory recovery, its next set of protective and defensive mechanisms for isolating itself from the ruin of the material world, and situating itself to further profit by making of this ruin an new investment opportunity.
Yet such crises, if not threatening capital itself, certainly threaten the de facto complicity of the material world with its financial base. Here we find the new problematic of xenoeconomics: not of a mutation of capital into something radically alien, but of the gradual degeneration of the material world of production into something alien to its former capital-financial essence. What kind of life, what praxis and economy might be born – perhaps stillborn – amidst this wreckage?