Financialization in the neoliberal age

Like many universities, VCU’s one and a half billion dollar endowment has become a site of conflict between students and administrators, fighting over the ethical implications of the particular investments that VCU has made. On the one hand, to the extent that VCU invests in the multitude of businesses contributing to climate change1 (or, for that matter, anything problematic, but, then, there is also a history of divestment campaigns that climate change divestment campaigns can be situated within, lending credibility to activists), students’ concerns about the effects of their tuition payments on the world around them seem valid. College attendance is frequently motivated by a desire for a better job and larger pay – when contextualized with the increased funding for oil, coal and natural gas extraction that attendance causes, students appear less like aspiring scholars and more like profiteers. On the other hand, university officials often report a fiduciary responsibility to maintain diversified and profitable investment profiles (whether or not these officials actually have fiduciary responsibilities, as a matter of law, or if this is just a rhetorical technique is another matter), which could arguably reduce tuition, pay for instructors, improve facilities and provide increased funding for students.

This apparent double bind is hardly typical of the university as an institution from a historical perspective, nor is it simply a component of a dominant and fixed ideological imperative that must be adhered to, but rather is a co-production of the development of neoliberalism and finacialization2. As asserted by Cornel West (2004), western democratic states are increasingly characterized by the reification of the firm (or corporation), aggressive militarism dominated by intangible, ever-present threats, and increasing authoritarianism, enabled by increasing faith in quantified accounting measures and a bureaucracy of technocratic managers3, thought to be uniquely capable of finding solutions to political problems (Swyngedouw, 2010)⁠. Government and public institutions are increasingly pressured to model themselves upon business (not that the adaptation of this model does anything to quell ideological opposition to government), and, in conjunction with an elevated emphasis on individualism, it is not surprising that the individual is expected to think of one’s self as a firm as well. All of these institutions, whether it is the privatized post service or the classic nuclear family, are now normatively required to seek profit for their beneficiaries, in the same way a corporation is normatively required to seek profit for the benefit of their shareholders, and the public university is no exception.

This observation is not enough to explain the profit-seeking behavior of universities and university endowments, without the broader context of of the development of capitalism in the 20th century – the modern corporation simply isn’t analogous to the classic factory and its appropriation of unpaid labor. While the larger system is still structurally dependent on finding unpaid labor somehow, somewhere, increasing emphasis on the profit of shareholders in the 1980s demanded that corporations adapt the profit-generating strategies of shareholders, or, in other words, that they invest in other companies (Fligstein, 2001)⁠. So long as common economic wisdom holds diversification and and long-term investment as the safest vehicles to wealth, we will continue to see toaster manufacturers buying media outlets and public universities funding fracking and arctic drilling operations. In terms of the individual, normatively required to invest and diversify, but often incapable of paying the high opportunity cost of personal financialization, this need is often met through investment in the “total market fund,” which is essentially a symbolic investment in the market at large (including everything bad) – ironically, an act that erases whatever small impact individualized market choices might have had on the market in the first place, and situating the individual as small and unimportant in the larger corporate hierarchy of neoliberalism.

For more information about the VCU divestment campaign, check out their Facebook page at https://www.facebook.com/DivestVCU/⁠



 

Fligstein, N. (2001). The Architecture of Markets. Princeton: University of Princeton Press.

Swyngedouw, E. (2010). Apocalypse Forever?: Post-political Populism and the Spectre of Climate Change. Theory, Culture, Society, 27(2–3), 213–232. http://doi.org/10.1177/0263276409358728

West, C. (2004). Democracy Matters. New York: Penguin Books.

1Arguably, this includes the entire market, whether for being, in any which way, a component of the capitalist paradigm, or, otherwise, simply because of the observation that money is fungible. The former is a broader concept of the topic of this blog post, which specifically focuses ⁠on the neoliberal phase of the capitalist project, while the latter is something of a slippery slope argument that can make anything meaninglessly problematic.

2I’m tired of seeing, writing about and thinking about Trump, which is why I decided to focus on the somewhat more optimistic trend of local protest, but much of my discussion about this co-production could be applied to the public display/trainwreck of Trump trying to annihilate the very concept of “conflict of interest” from public discourse.

3An extraordinarily sad but telling example of this was on display in the fifth Republican debate, where candidates tried to manufacture contrast between each other through their insistence that their potential administrations could find more targets to bomb in Syria, which only served to reveal their own ignorance of the day-to-day world of the bureaucrat-soldiers actually waging the war.

 

All the world’s a stage — Erving Goffman

For many writers, the election of Donald Trump has been presented as inextricably linked to the rise of the alt right, which is alternatively framed as a dangerous, unquantifiable subculture of Internet trolls, or as a youthful spin on the misogyny and racism associated with the so-called silent majority. However, the unifying thread between these perceptions is a type of public invisibility, characterized by public disengagement, a lack of an offline, “real world” organizational structure, and a private, online community seething with resentment over eroding white privilege – in other words, they are organizationally “alone together.” Particularly well articulated by Siyandra Mohutsiwa’s viral Twitter thread (https://twitter.com/SiyandaWrites)1, this viewpoint situates the electoral results as predicated on racism and misogyny, and attributes this group’s apparent invisibility to an intentional effort to blend into perceived, “liberalized” environments. In short:

mohutsiwa

These tactics are particularly well-suited to analysis using Erving Goffman’s dramaturgical microtheory. Goffman likens social interaction to a stage, best understood by adapting the terminology of the performing arts. Individuals understand the roles associated with particular social situations (for example, the role of “teacher” is expected in a school but not a bank), and associate themselves and others with roles through contextual and physical cues, and through an individual’s performance. For example, individuals can distance themselves from a role by presenting themselves as an apathetic individual, or embrace the demands of the role by conflating it’s characteristics with one’s own sense of self. Furthermore, according to Goffman, social interaction is often characterized by face-work, where individuals mutually avoid actions that might challenge an individual’s social status in a situation, in order to avoid uncomfortable situations.

The incognito nature of the alt right is more than cognitive dissonance – it is a massive face-management effort, brought to be by increasing polarization. As displays of overt racism and misogyny are increasingly sanctioned both informally and formally, it becomes more difficult to reconcile these beliefs with incompatible role definitions – given this context, asking somebody to moderate their speech can be interpreted as a righteously imputed demand. Furthermore, according to Goffman, the more one inhabits a role the more likely one is to embrace is it – therefore, to borrow a term from Anthony Giddens, these changing role definitions threaten these individual’s sense of ontological security.

The solution to this threat is the creation of an alternative role – that of a covert participant. By instructing individuals to blend in, the alt right has allowed for a convenient solution to this threat that not only allows them to maintain their perception of their core selves, but also allows them to save face in radically different settings. One protects their core self from the danger of repeated role taking by defining their roles in terms of the covert participant, who is consciously tricking others into believing that their personal beliefs can be accurately conflated with their role. This deception effectively avoids disequilibriums that require increased face-work, while simultaneously barring this particular performance from threatening their status in less progressive settings. Their online, solitary togetherness could therefore be seen as a form of backstage work – one in which participants try to gain the knowledge and cultural capital necessary to “pass” on the front stage.

Microtheory is often thought of as inadequate to describe complex systems, but in so far that it is capable of explaining this phenomenon it is also capable of offering some proscriptive solutions. First and foremost, the emergence of this structure leads some credence to Goffman’s observation that role taking is linked to role embracement, leading credence to efforts to redefine roles on an institutional level. Similarly, the deep attachment to saving face suggests an aversion to the state of social disequilibrium that Goffman describes – while it is not my intention to encourage empathy for racism and misogyny, it does illuminate the extraordinary fear that we all have of social sanctions, exclusion and inclusion, and shame. That’s not to say that the only acceptable response to violence is compassion, but it is important to consider how empancipatory politics, poorly executed, could plausibly reinforce and pattern racism and misogyny. Attributing these politics to stubbornness is a form of reductionism – albeit it misguided, there are clearly threads of role conflict, threat aversion and rationality throughout.

1I’ve chosen to link directly to her Twitter page, but a succinct summary of the thread which I’m discussing can alternatively be found at http://www.huffingtonpost.co.uk/entry/explanation-polls-wrong-us-election_uk_58234de2e4b0c2e24ab20c4f .

 

Du Bois and the construction of whiteness

In The Scholar Denied, Aldon Morris argues that Du Bois should not only be seen as a prominent American sociologist, but as one of the founders of sociology, elevated to the same status as authors like Marx, Weber and Durkheim. As his argument unfolds, it’s not hard to see why – DuBois, trained by German empiricists, was possibly the first American sociologist to use statistical techniques in his groundbreaking study, The Philadelphia Negro, which probably required more legwork and math than anything that has been published in years. His writings, although somewhat antiquated relative to modern sociological jargon, present race as a social construction during a time when prominent sociologists like Robert Park were still focusing on assimilation theory. Similarly, Du Bois preempts standpoint theory with his idea of second sight, the role of language in constructing social concepts before contemporary feminism, and Wallerstein’s worlds systems theory in Darkwater. Perhaps most famously, Du Bois also correctly predicted that the defining conflict of the 20th century would be centered around the color line. In short, Du Bois was a prolific author, a gifted thinker and might as well been clairvoyant when it came to speculating about the future.

With the efforts of Black Lives Matter, increased scrutiny is being paid to both police violence and economic injustice in the media and in the national discourse, meaning that Du Bois’s work is perhaps as relevant today as it was when it was originally published. While much of Du Bois’s theory is essentially canonized in modern discussions about race, I’d like to draw attention to one of his works, The Souls of White Folks, in which Du Bois considers the concept of whiteness. Du Bois mainly focuses on imperialism and an early concept of white privilege, but even the title is somewhat radical. Too much of modern race literature focus on marginalized peoples and why/how they are oppressed. While it is rarely the intent of the author, this sort-of frame often leads to putting blame on victims, and elevates the white baseline as a model to emulate. In other words, the question the authors are often asking is “why can’t blacks capture as much of the income distribution as whites?” instead of “How did it come to be that whites captured so much more of the income distribution than every other group?”

A lot of these empirical questions are covered by the concept of white privilege, but there is perhaps still some work to be done to examine cultural whiteness, both on the domestic and global level. For example, the anthropologist Ira Bashow’s The Meaning of Whitemen provides a fascinating account on how whiteness is constructed by individuals with very few cultural frames to situate it within, but I’m not aware of similar efforts in the US. It might also be helpful to go back to Du Bois’s writings on language to see how the media might play a role in these constructions – this might be similar to many of the content analyses that consider the role that media’s use of language serves in constructing concepts of race.

RQ1: What role does the media play in the construction of race, and, specifically, in what contexts do they employ words like “white” and “black?”

RQ2: Does our current concept of whiteness play a legitimizing role in the construction of white privilege?

 

 

 

Morris, A. D. (2015). The Scholar Denied. Oakland, CA: University of California Press.

 

Decreasing income inequality?

While Donald Trump rarely uses the word “inequality,” economic justice, and a growing sense that Americans are getting a smaller piece of the pie at the expense of somebody else, is clearly at the center of his campaign. Similarly, Clinton has frequently spoken about income inequality, which was an issue at the core of her contentious primary race with Democratic Socialist Bernie Sanders. Even proponents of the conservative pro-growth perspective, who suggests that income inequality is essentially good when paired with economic growth, have been getting attention, with increased attention being paid to pro-capitalist views expressed by characters like Martin Shkreli and Mark Cuban.

In the midst of this debate, and, tellingly, on the Friday before the first presidential debate, comes some very interesting messaging from the Obama administration: https://www.whitehouse.gov/sites/default/files/page/files/20160923_record_inequality_cea.pdf

And, for some perspective, a FiveThirtyEight piece analyzing the report: http://fivethirtyeight.com/features/the-income-gap-began-to-narrow-under-obama/

Essentially, the Obama administration is arguing that income inequality is beginning to drop, as a direct result of the economic policies of his presidency. While much of this administration’s policy has undoubtedly been crafted to reduce inequalities generally (such as health care reform that has expanded access to insurance), and even crafted to reduce economic inequality (such as tax increases primarily targeted at the wealthy), a close reading of Piketty demonstrates how decreasing income equality isn’t necessarily a good thing.

Piketty essentially argues that income inequality has traditionally not been the largest issue, but, rather, the issue has been wealth inequality (or, if you prefer, capital inequality). The wealthy have traditionally maintained their wealth not through wage labor, but through the dividends of invested capital, passed through generations by inheritance and marriage. Piketty illustrates this with an allusion to Balzac’s Pere Goriot, in which the shady Vautrin tries to convince his industrious friend Rastignac that hard work is a waste of a lifetime in contrast to marrying rich: “By the age of thirty, you will be a judge making 1,200 francs a year, if you haven’t yet tossed away your robes…But can you name five lawyers in Paris who earn more than 50,000 francs a year [50000 is 5% of the fortune that his perspective wealthy wife possesses] at the age of fifty?” (Piketty, 2013, pp. 239–240)⁠. One of Piketty’s major findings is that economic shocks in capitalism demonstrably reduce the return on capital (and, by extension, the viability of living off of capital), and that the economic shocks caused by the events of World War II resulted in a paradigm shift in both the US and France (but more so in the US) where the wealthy were forced to seek wage labor in order to offset the declining profitability of their wealth. This results in the formation of a “super manager” class, who are paid increasingly absurd salaries that are so high that it dramatically increases the visible income stratification. The differences between the 19th century method of inheriting wealth and the 20th century model of supplementing the declining value of wealth by directly appropriating money from corporations is marginal, but the latter method is more visible to the public and conceptually easier to think and talk about.

Piketty’s model means that we can presume that capital lost a degree of profitability in the wake of the 2008 economic crisis at the beginning of Obama’s presidency, meaning income inequality would presumably expand as executives take larger paychecks to compensate for their reduced capital gains. As the economy recovers, income inequality will presumably contract, since their capital gains will provide sufficient revenue once again. In light of Piketty’s research, it would appear that the economy is structurally configured to act in the exact ways that the Obama administration would like to take credit for.

Furthermore, Piketty’s research reveals a major flaw in the Obama administration’s perception of their struggle with income inequality: nobody really knows how bad it is. Much of the Obama administration’s efforts to fight income inequality have focused on improving the economic situation of the poor. As a strategy for fighting income inequality, this is analogous to trying to balance a see-saw with an elephant and a frog on it by fattening the frog – the difference is just too great. But, distressingly, nobody really knows how fat the elephant is. Even the most basic descriptive statistics on the ultra-wealthy, who polarize both income inequality and wealth inequality so greatly, are essentially missing. This sabotages an enormous amount of research on income inequality – if Obama wants to contribute more to the fight of the income inequality than simply being President during a time period where the “invisible hand” happens to make him look good, enabling the social sciences to perform deeper research into the extent of income and wealth inequality in the US would be a good place to start.

Research questions:

RQ1: Do measures of return on capital vary with amounts of CEO compensation?

RQ2: Does the degree of income inequality in a country vary according to how much a country values investment?

 

© Karl Marx

For academics, copyright can be a tricky issue. Much like non-academic authors, musicians, and artists, control of the copyright of their completed works is their only tangible symbol of possession of the product which they have been laboring to produce. Distressingly, publication typically results in the author losing control over the work, who must cede the publication rights to a publisher. Similarly, a graduate student or doctoral candidate might find themselves actually paying the publisher, simply to allow their work to be accessed without subscriptions to electronic journals.

Competing narratives surround the introduction of copyright into society, but it is certainly an invention of modernity, introduced approximately a century before Marx’s lifetime. To the best of my knowledge, Marx didn’t specifically write on intellectual property (though volumes have probably been written on it in the Marxist tradition since his lifetime), but the establishment of copyright laws does offer compelling examples of the essential elements of Marx’s arguments about the nature of capitalism. The introduction of copyright allows for the commodification of an essential element of human life, artistic and scholarly expression, and this commodification services a structural necessity for the propagation of an economic system that can only exist in states of expansion or crisis. After purchasing the publishing rights from the author, the capitalist replicates and sells the product through various, largely worthless mediums, such as bound paper, plastic discs or the transmission of data packets over the Internet, beautifully illustrating the differences between use-value and exchange-value. Consider the example of the modern textbook – why, other than the value of the information in the textbook to a particular individual, would an individual pay $200 for an object that costs less than $5 to produce? Minus the $5 of production costs and a 10% royalty ($20), the publishers (who are increasingly trying to sell to students directly) walks away with $175, or 87.5% of the profit. The value of the book, which is access to the ideas within it, is entirely supplied by the author, but when the capitalist reconstitutes these ideas in combination with near-worthless commodities, the capitalist is able to lay claim to almost nine times more profit than the author, which illustrates the surplus value of labor and exploitation of labor.

Even more shocking than the exploitation inherent in this system is the legitimacy that we provide it, with thoughts such as “publication is an inherently risky business, therefore it makes sense that publishers should assume more of the profits because they assume more of the risks.” Similarly, copyright enforcers such as the RIAA and MPAA produce narratives in which people who are not authorized to receive a commodified artistic/intellectual expression are guilty of theft, as if passing by an individual playing Rihanna on a cell phone in a public space without the express and written consent of Rihanna’s label is enough to make that individual into some type of anti-social deviant. Online, the present refrain goes something like “if we don’t pay content-producers to produce content, content-producers will stop producing content because they won’t be able to support themselves,” as if the very act of installing an ad-blocking plugin in your browser or opting not to drop your personal debit card numbers into a paywall will somehow lead to no new movies, news articles or paintings ever being produced again, and the destruction of a tradition of the free exchange of ideas that stretches back millennia before the capitalist paradigm even emerged. In short, catering to these types of capitalist ideologies, explicitly constructed to suppress free and creative production, is a defining characteristic of living in a state of false consciousness.

http://www.nytimes.com/2014/05/01/arts/claiming-a-copyright-on-marx-how-uncomradely.html

This article, which is admittedly a couple of years old at this point, focuses on a conflict over the publication rights of a translation of Marx’s writings (Marx’s copyright is expired, and his work is in the public domain, but the translation is a distinct work that belongs to the translators). My point in bringing this cultural artifact into the discussion isn’t to mediate a specific conflict between radical publishing houses using Marxist thought (after all, both belligerents in this conflict are probably a lot more experienced in this school of thought than I, and this is presumably old enough that the conflict is probably over), but rather to illustrate the immense difficulty of transitioning from a state of false consciousness to the state that Marx termed as class consciousness. Institutional pressures demand some form of revenue in order for the institution to survive in a capitalist system, even from charities, nonprofits, and radical publishing houses – the very institutions that are devoted to the overthrow of capitalism are structurally required to actively participate in it, if such institutions want to last. Knowledge isn’t enough – one cannot enter into a state of class consciousness by simply reading the Communist Manifesto, by obsessing over it and memorizing the text verbatim, or even devoting one’s life to Marxism. Only when an entire class begins to understand the nature of capitalism does it begin to achieve the power to not participate in it – cooperation and solidarity are prerequisite needs to the dismantlement of this system.

A couple of research questions that emerge from these examples:

RQ1: What are the different ways in which societies have typically viewed the concept of authorship?

RQ2: Do individuals purchasing online access to intellectual property perceive themselves as purchasing a commodity – or, in other words, do individuals view the purchase of social, immaterial objects as analogous to the purchase of physical commodities?

 

Introduction (SOCY 502)

Hi all! My name’s Peter Jameson, and I’m in my second semester of the sociology program at VCU. I also finished my undergraduate degree here, which was a BA in political science. I’m typically interested in issues surrounding economic inequality, but I’d also like to learn more about gender and sexuality. So far, I’ve been working on topics surrounding consumer debt, but I’m trying to refine and maybe rethink this before the spring. I’m super excited for this course, as I’ve had an entire semester of graduate school without theory, which really gives you time to reflect on how important it is to know what your classmates are talking about. I also really enjoyed this course as an undergraduate, but I definitely need a refresher.

I truly despise writing these sorts of introductions, so I’m just going to close with a not very professional picture of my cat, Mister Fluffy Pants. It’ll probably necessitate me scrubbing this post off my page before the end of the semester, but hopefully somebody will appreciate it. I swear he has a tail, I must have just cropped it off..

 
Privacy Statement