C A P I TA L A N D T I M E C UR R E NC IE S New Thinking for Financial Times Melinda Cooper and Martijn Konings, Series Editors Capital and Time For a New Critique of Neoliberal Reason M A RTIJ N K O N I N G S Stanford University Press Stanford, California Stanford University Press Stanford, California © 2018 by the Board of Trustees of the Leland Stanford Junior University All rights reserved No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or in any information storage or retrieval system without the prior written permission of Stanford University Press Printed in the United States of America on acid-free, archival-quality paper Library of Congress Cataloging-in-Publication Data Names: Konings, Martijn, 1975– author Title: Capital and time : for a new critique of neoliberal reason / Martijn Konings Other titles: Currencies (Series) Description: Stanford, California : Stanford University Press, 2018 | Series: Currencies: new thinking for financial times | Includes bibliographical references and index Identifiers: LCCN 2017019565| ISBN 9781503603905 (cloth : alk paper) | ISBN 9781503604438 (pbk : alk paper) | ISBN 9781503604445 (e-book) Subjects: LCSH: Speculation | Capital market | Finance—Government policy | Capitalism | Neoliberalism Classification: LCC HG6015 K66 2018 | DDC 332/.041—dc23 LC record available at https://lccn.loc.gov/2017019565 Typeset by Classic Typography in 10/15 Janson Contents Introduction: Beyond the Critique of Speculation Foundationalism and Self-Referentiality 31 Constructions and Performances 38 Luhmannian Considerations 45 System, Economy, and Governance 53 Foucault beyond the Critique of Economism 61 Time, Investment, and Decision 69 Minsky beyond the Critique of Speculation 75 Practices of (Central) Banking, Imaginaries of Neutrality 84 Lineages of US Financial Governance 93 10 Hayek and Neoliberal Reason 100 11 Neoliberal Financial Governance 109 12 Capital and Critique in Neoliberal Times 127 Acknowledgments 133 Notes 135 Bibliography 141 Index165 This page intentionally left blank C A P I TA L A N D T I M E This page intentionally left blank I NTR O D U CTI O N Beyond the Critique of Speculation The most real thing is money, but money is nothing more than a form of debt, which is to say a commitment to pay money at some time in the future The whole system is therefore fundamentally circular and self-referential There is nothing underneath, as it were, holding it up —Mehrling 1999: 138 Following the financial crisis of 2007–8, many progressive academics and commentators loudly declared that the event was simply the manifestation of what they had long argued—namely, that rampant speculation in unregulated financial markets was fuelling an unstable accumulation of financial claims entirely out of balance with fundamental values, and that this would sooner or later lead to a massive crisis (see, among many others, Baker 2009; Wray 2009; Gamble 2009; Cohan 2010; Stiglitz 2010; Foster and Magdoff 2009) As financial structures threatened to deleverage, progressive intelligentsia rushed to ring the death knell for the neoliberal policies of deregulation and nonintervention that they viewed as having given free rein to the market’s “animal spirits,” Keynes’s term for the speculative impulses of the financial sector At the height of the crisis, in the second half of 2008, as the American government moved to prop up some of the country’s major financial institutions, excitement about the “return of the state” was palpable The morally problematic aspects of the bailouts did not go unnoticed, of course, but those were seen as only underscoring the basic lesson of the episode—that the financial system is unable to regulate itself and requires external interventions for there to be a coherent economic order The future, it was argued, belonged to public regulation and Keynesian steering Bibliography 161 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Comparing the Federal Reserve’s Responses to the Crises of 1929–1933 and 2007–2009.” Federal Reserve Bank of St Louis Review 92 (2): 89–107 Wicker, Elmus R 1966 Federal Reserve Monetary Policy 1917–1933 New York: Random House Wicksell, Knut 1962 [1898] Interest and Prices New York: Sentry Press Williams, Jeffrey J 2008 “Student Debt and the Spirit of Indenture.” Dissent 55 (4): 73–78 Woodford, Michael 2003 Interest and Prices: Foundations of a Theory of Monetary Policy Princeton: Princeton University Press Wray, L Randall 1990 Money and Credit in Capitalist Economies: The Endogenous Money Approach Aldershot: Edward Elgar ——— 2009 “The Rise and Fall of Money Manager Capitalism: A Minskian Approach.” Cambridge Journal of Economics 33 (4): 807–828 Young, Nancy Beck 2000 Wright Patman: Populism, Liberalism and the American Dream Dallas: Southern Methodist University Press This page intentionally left blank Index Page numbers followed by n refer to endnotes actor-network theory: association in, 41, 43–44, 49–50; contingency in, 49–50; idealism in, 42–43; material semiotics in, 41–42; new materialism and, 130–131; origin of, 40 Agamben, Giorgio, 54, 62–65 Appadurai, Arjun, 135n1 Aristotle, 70–71, 84–85 association: in actor-network theory, 41, 43–44, 49–50; constructive role of, 41–42; Luhmann on semiotics of, 43–44, 48–49; memory and expectation in, 50–52; in normalization, 65–66; plasticity and, 7, 40–41 austerity: criticism of, 122–123; Federal Reserve and, 110, 122; Hayek on, 102–104; speculation, value, and, 12–13, 18, 29, 104, 123; student debt and, 124–125 authority of the state, 63–64 autopoiesis: money and, 79, 111; self-referentiality and, 47, 53; temporality and, 72–73 Bagehot, Walter, 90–91 Bagehot doctrine, 90–91, 93, 94, 119 bailouts: in 2007–8 financial crisis, 64; as function of central bank, 83, 90–92; in heterodox critique, 117; in neoliberalism, 30, 112–113, 119, 121; as systematic feature, 18, 29–30, 96; too-big-to-fail borrowers, 28, 82–83, 112–113, 121 balance sheets, 74, 75–76, 79, 136n1, 137n4 Bank of England, 81–83, 89 banks and banking: bankers’ banks, 81–83; credit in, 77, 95–96; deleveraging moments and, 80–81; deposit insurance, 95; fractional reserve banking, 77, 86–87; free-banking system, 107; interbank payment system, 94– 96, 118, 120–121, 137n2; lenderof-last-resort function, 81–82, 90–91, 92, 115; leveraging by, 17, 77–78, 80–81, 95, 137n3, 137n5; liquidity in, 78, 81, 83, 90; money as bank debt, 17, 77; multiplier banking, 79, 81; in neoliberalism, 28–29; New Deal reforms and, 94–95; in the payments network, 77, 137n2; too-big-to-fail, 28, 82–83, 112–113, 121 See also 165 166 Index central banking; Federal Reserve; shadow banking Baring, Sir Francis, 90 Bernanke, Ben, 118–119, 140n1 Brown, Wendy, 29, 135n2 Burns, Arthur, 97 Callon, Michel, 42 Capital (Marx), 10–11 capitalism: buying time for, 128–129; cyclical model of, 2–3, 12–13, 18–19, 26; endogenous character of money in, 84–87, 137n5; labor in, 10–11; speculation in, 19, 75– 76, 136–137n1; temporality and, 55, 71–72, 128–129; value in, 8; village fair model, 85, 138n1; welfare state and, 20–21, 136n2 See also neoliberalism capture model, 29, 128 cash flow, 76, 77, 137n2, 139n1 central banking: in financial crises, 82–83, 89–90; lender-of-lastresort function, 81–83, 90–91, 92, 115; liquidity and, 81, 83, 90; risk shifting by, 18, 82–83, 120–121; stability and, 82–83, 88–90, 92, 139n3; stress testing by, 120 See also Federal Reserve chrematistics: Aristotle on, 71, 84–85; heterodox critique and, 3, 59; in premodern times, 3, 57, 71; usury and, 85 Christianity, premodern, 3, 71 Connolly, William E., 129–130 constructivism: associations in, 41–42; contingency and, 25–26, 38–39, 47, 50; Hayek and, 100–101, 102, 126; intentionalist, 26, 36, 38; performativity and, 39–40; pluralism and, 38; in political economy and economic sociology, 39; reflexivity and, 45; value and, 8, 11, 19 consumer debt See household debt contingency: Agamben on, 65; bank operations and, 18, 78; in constructivism, 25–26, 38–39, 47, 50; in cyclical model, 2–3, 12–13, 18–19, 26, 80; “double,” 49–50; God’s governance of, 57–58, 64; Hayek on, 102, 104; in heterodox critique, 59; Latour and, 32, 52; Luhmann on, 33, 38, 45–47, 49– 52, 65; money and, 7, 54–55, 88, 111; in neoliberalism, 26–27, 67, 125; performativity and, 39–40; Smith on, 58; time and, 69–72 See also risk countercyclical policies, 91–92, 95 crash of 1929 and Depression, 94, 117 credit: access by women and minorities, 21; expansion and contraction of, 18–19, 28, 82, 89, 91–92, 110; Federal Reserve and, 95–97, 110; in neoliberalism, 111, 123; New Deal and, 20–21, 94–95; in real bills doctrine, 86, 89, 138n2, 139n4; role of banks in, 77, 95–96; shadow banking system and, 21, 28–29; valuation and, 80–81 See also debt critical theory, 34, 131, 135–136n1 critique of critique, 131–132 critique of economism, 32–33, 61 critique of speculation, 2–4, 32, 59, 116–117 See also heterodox critique cultural economy, 39, 129 Index 167 debt: bad debt, 118; government, 94, 121, 123; hedge financing, 16, 79, 136–137n1, 137n4; household, 5–6, 20–21, 28, 94–95, 110, 123; money as bank debt, 1, 77, 84; repayment obligations, 74, 76, 104–105, 110, 139n2; student, 124–125 See also leveraging Deleuze, Gilles, 19 disembedding See embedding and disembedding double-entry bookkeeping, 73–74 See also balance sheets double movement, 3, 12–13, 34, 135–136n1 122; in double movement concept, 3; of financial governance, 83; Polanyi and, 36; social integration and, 35 entrepreneurs, Hayek on, 104 Esposito, Roberto, 67 Ewald, Franỗois, 20, 27 exceptionalism, 26, 65, 67, 102, 119, 128 expectations: inflation control and, 96–99, 115, 121; leveraging and, 50–52; speculation and, 49; temporalization and, 70, 72–74, 76; too-big-to-fail and, 112–113, 114; value and, economic determinism, critique of, 4, 8, 32–33, 35, 61–62 economism, fallacy of, 32–33 economy: cultural, 39, 129; Fordist, 10–11, 20, 37, 110–111; Hayek on, 105–108; imaginary of, 24, 37; Latour on, 130–131, 140n1; modern expansion of reach of, 35, 55– 57; neutrality of, 24, 58, 84–85; ordering mechanisms, 59–60, 61, 75–76, 101–102; political, 4, 10, 18–19, 26, 39, 110–111; precapitalist bank crises, 81; premodern, 7, 57–58, 64, 70–71, 87; sovereignty in, 62–68; temporalization in, 7, 73–74; theology and, 54, 57, 64; village fair model, 85, 138n1 See also contingency; market; neoclassical economics; neoliberalism; ordering; orthodox economic theory; self-organization education, cost of, 124–125 embedding and disembedding: current re-embedding movement, Fatal Conceit, The (Hayek), 102 Federal Reserve: bank balance sheets and, 121; under Bernanke, 118–119, 140n1; creation of, 93–94; expectations and, 115; government debt and, 94, 121; under Greenspan, 113, 114–116; inflation and, 21, 95–97, 110, 112–116, 139n1; interest rate changes by, 90, 92, 95, 113–116, 118; lender-of-last-resort function, 91, 92, 115; under Martin, 95; monetarism and, 97–99, 109–110; mop-up strategy of, 113, 115; in neoliberalism, 28, 113–114; neutral perception of, 88; quantitative easing by, 121–122; speculation in policy of, 109–110; under Volcker, 28, 97–99, 100, 109–114 See also central banking Feher, Michel, 112 financial crises: in 1929, 94, 117; central banking function in, 168 Index 82–83, 89–90; protecting nodal points in, 30, 67–68, 82, 119 See also financial crisis of 2007–8 financial crisis of 2007–8: austerity drive and, 12–13, 104, 110, 122–123; bailouts in, 64; bank leverage in, 17; interest rates and, 118, 140n1; neoliberalism after, 2, 119–126; shadow banking in, 28–29, 118; state sovereignty in, 64, 68 financial governance See US financial governance Fordism, 10–11, 20, 37, 110–111 forward guidance, 121 Foucault, Michel: on classic liberalism and neoliberalism, 22–23; on critique of economism, 61; on disciplinary governance, 62; on human capital, 111–112, 123; late lectures of, 65–66, 136n1; on self-reference, 33; on sovereignty, 65–66 foundationalism: critique of, 4; in critique of economism, 61; in critique of speculation, 2–3; in the cyclical model, 19; in Polanyian framework, 36–37; self-referentiality and, 31–33; in value-form theory, fractional reserve banking, 77, 86–87 Frankfurt School See critical theory free-banking system, 107 Friedman, Milton, 97–98, 108 government See US financial governance government debt, 94, 121, 123 Greenspan, Alan, 113, 114–116 Habermas, Jürgen, 33–34, 130 Hawtrey, R G., 90 Hayek, Friedrich: early work of, 105; on economic self-organization, 100–102; on free-banking system, 107; on market neutrality, 23; preemptive temporality paradoxes in, 105; on repayment obligations, 104–105, 139n2; on speculation in neoliberalism, 23, 102; on state intervention, 102– 103, 106–107, 139n1, 139n3 hedge financing, 16, 79, 136–137n1, 137n4 heterodox critique: countercyclical policy and, 91–92; critique of economism, 32–33; on leverage, 79; as moral stance, 129; on neoliberal financial governance, 29, 60, 63; on persistence of neoliberalism, 2, 29, 127–132; on real and fictitious money, 32, 117; on selforganization, 59–60; on speculation, 2–3, 32, 59, 116–117; on uncertainty, 58; on value as elastic, hierarchization of valuation, 77 History of Sexuality trilogy (Foucault), 66 household debt: neoliberalism and, 110, 123; New Deal and, 20–21, 94–95; predictions of collapse and, 5–6; shadow banking and, 28 human capital, 111–112, 123, 124–125 Hume, David, 85–86, 88, 97, 138– 139n3 idealism: in actor-network theory, 42–43; in constructivism, 38–39, 41–42; Kantian, 26, 37, 42–43; Luhmann on, 45–46; modernity and, 24; new materialism and, 131; value-form theory and, 8–9 Index inflation: bailouts and, 113; central bank and, 89, 92, 139n3; expectations and, 98–99; Federal Reserve and, 21, 95–97, 110, 112–116, 139n1; neoliberalism and, 28, 112; organized labor and, 110; real bills doctrine and, 86, 89; removal of home values from index, 116 inflationary psychology, 97 intentionalist constructivism, 26, 36, 38 interbank payment system, 94–96, 118, 120–121, 137n2 interest rates: in 2007–8 financial crisis, 118; countercyclical policy, 91–92; Federal Reserve changes in, 90, 92, 95, 113–116, 118; in inflation control, 95, 113, 115, 118 Kantian Foucauldianism, 62 Kantian idealism, 26, 37, 42–43 Kantian leaps: by actor-network theorists, 42–43; in idealist foundationalism, 37; market neutrality and, 24–25; nature of money and, 88 Keynes, John Maynard, 12, 58–59, 136n1 Koselleck, Reinhart, 71–72 labor: as human capital, 111–112, 123, 124–125; immaterial, 10; in neoliberalism, 111, 125; organized, and inflation, 110; productive versus unproductive, 13; value of, 8, 9–11, 36; Volcker’s policies and, 110; welfare state and, 20–21 Latour, Bruno, 40–43, 130–131, 140n1 169 lender-of-last-resort function, 81–82, 90–91, 92, 115 leveraging: by banks, 17, 77–78, 80–81, 95, 137n3, 137n5; definition of, 14–15; memory and expectation and, 50–52; norms and values and, 13–14, 50, 136n1; as procyclical, 80; as risk shifting, 18; shadow banking system and, 21; in speculation, 14–16; stability and, 16–17, 79; under Volcker program, 112–113 liquidity: in bailouts, 91, 94, 117; in balance sheet dynamics, 76–77; bank creation of, 78; central banking and, 81, 83, 90; Federal Reserve and, 113–114, 116; interbank payment system and, 94–95, 118, 120; New Deal and, 94–95; operational meanings of, 114 Lucas, Robert, 99 Luhmann, Niklas, 45–52; actornetwork theory and, 49–50; on contingency and risk, 64–65; expansion of finance and, 56–57, 61; on governance, 136n2; on interbank payments, 137n2; on leveraging and expectation, 50–52; on role of money, 55–56; on self-reference, 33–34, 45–48, 131; on semiotics of association, 43–44, 48–49; on time, 72 macroprudential governance, 119– 121, 140n2 Malabou, Catherine, 125 market: in 2007–8 financial crisis, 118, 121; banks and, 77; central banking and, 89; currencies and, 107; denationalization 170 of money and, 107; double movement, 3, 12–13, 34, 135–136n1; Federal Reserve and, 113–114; government debt and, 94; Hayek on, 23, 106–107; in neoliberalism, 22–26, 29, 102–103, 115–117, 125, 130; neutrality of, 23–25, 58, 115, 123, 128; as protection against inequality, 103; as self-regulating, 2, 36; speculation as disordering, 59, 116; village fair model, 85, 138n1; welfare state and, 20–21 See also speculation Martin, William McChesney, 95 Marxist critique: labor as generative principle, 10–11, 111; materialism, 9–11, 36–37; value-form theory, 8–9; on value of labor, 10–11 material semiotics, 41–42, 130–131 Mehrling, Perry, 1, 76, 119 memory See expectation microprudential approach, 140n2 Minsky, Hyman P., 75–83; on bailouts, 117; on balance sheet dynamics, 76; on banks, 77, 82– 83, 137n2; Hayek and, 100–101, 106, 107; on inflation, 95–97, 139n1; on neutrality of money, 84–85, 91; on speculation, 75–76, 79–80, 117 “Minsky moment,” 75, 117 Mises, Ludwig von, 106 Mishkin, Frederic S., 116 modernity: double-entry bookkeeping, 73–74; pressure to make decisions in, 72–73; risk and, 67; speculation in, 76; temporalization in, 70, 71–72 monetarism, 97–99, 110–111 monetarism mark II, 99 Index monetary aggregates, 98 monetary neutrality: arbitrary standard in, 25; Aristotle and, 70– 71, 84–85; countercyclical policy and, 91–92; under Greenspan, 114–115; Hume and Smith on, 85–88, 97, 138n2, 138–139n3; interest rate and, 91; in modern capitalism, 87–88, 139–140n3; monetarism and, 97–99, 108; in neoliberalism, 25; in orthodox economic theory, 6–7; in premodern times, 70–71, 87 money: as bank debt, 17, 77; contingency and, 7, 54–55, 88, 111; denationalization of, 107; endogenous character in capitalism, 84–87, 137n5; Hayek on denationalization of, 107; Hume on, 85–86, 88, 97; as the joker, 54; Luhmann on, 55–56; national currencies, 17, 82, 107; as norm, 17, 20, 55–56; ordering capacity of, 55–56, 87–88; as plastic, 7–9, 53, 117, 129; quantitative easing of, 121–122; quantity theory of, 86, 88; real and fictitious, 32, 117; real bills doctrine of, 86–87, 88–89, 138n2, 139n4; in the Scottish Enlightenment, 85–87, 139n4; as secular god, 54; as selfreferential, 1, 6–7, 31–32, 53–54, 79; Smith on, 86–87, 138n2; as standard of value, 86; as symbol, 31; temporal value of, 55, 129; value and, 17–18, 25, 55–56, 86, 111; under Volcker program, 111; village fair model, 85, 138n1; zero, in money analogy, 54 See also monetary neutrality Index Mont Pelerin society, 128 multiplier banking, 79, 81 neoclassical economics: Hayek on, 23, 106; Minsky and, 84; Shackle on, 138n1 neoliberalism: after 2007–8 financial crisis, 2, 119–126; austerity in, 12–13, 102–104, 110, 122–125; bailouts in, 30, 112–113, 119, 121; banking system in, 28–29; capture theory and, 128; classic liberalism versus, 22–23; contingency in, 26–27, 67, 125; economic self-organization limits and, 130; elite influence in, 12, 29, 63, 88, 103, 127; Federal Reserve in, 28, 113–114; financial expansion in, 19–20; individuals under, 111–112, 123–125; lack of sentiment in, 104–105, 139n2; market in, 22–26, 29, 102–103, 115–117, 125, 130; monetary neutrality in, 25; norms and, 28, 63, 104, 117–118, 135n2; persistence of, 2, 29, 127–132; political rationality of, 29, 135n2; quantitative easing and, 121–122; regressive socialization of risk, 113, 116–117, 119, 121; republicanism and, 25, 103; role of state in, 26–27, 113, 115– 116; shadow banking system, 21, 28–29, 110, 113, 118; speculation in, 22–23, 67, 104; stability and, 22, 28–30, 110, 117–118; on state intervention, 102–103; state use of exceptional measures in, 63–64; student debt and, 124–125; systemic risk interventions in, 120– 121; temporality in, 23, 29–30, 125; Volcker and, 109–110 171 New Deal, 20–21, 94–95 new materialism, 129–131 new pluralism, 35–36, 38 normalization, as self-organization, 65–66 norms: in actor-network theory, 34, 49–51; Agamben on, 62–65; Canguilhem on, 136n1; in constructivism, 38; Foucault on, 62, 65–66; internalized, in disciplinary governance, 62; leverage and, 14–16, 50, 136n1; money as, 17, 20, 55–56; neoliberalism and, 28, 63, 104, 117–118, 135n2; Shackle on, 136n1; in structural functionalism, 34–36, 46 ontological pluralism, 38, 52 ordering: in actor-network theory, 41, 50–52; central banking and, 82; Hayek on, 100–101, 126; heterodox critiques on, 59–60; Luhmann on, 136n2; money and, 55–56, 87–88; in neoliberalism, 67; performativity and, 40, 47; Smith on, 57; speculation in, 5, 22–23, 27–28, 124; through risk, 27–28; Volcker and, 28, 109 orthodox economic theory: on contingency, 58; on leverage, 14–15; periodic expansion and contraction, 18–19; on real and fictitious money, 6–7, 32; on scarcity, 56; on time, Parsons, Talcott, 34–36, 46 Patman, Wright, 98 payment constraints, 76, 78 performativity: constructivism and, 39–40; contingency and, 47; of 172 Federal Reserve announcements, 114–115; of leverage, 14–15; of matter, 129; scholarship on, 42, 47; of value signification, 11–12 plasticity, 4–13, 40–41, 53, 117, 129 pluralism: Luhmann on, 52; neoliberalism and, 19, 130; new, 35–36, 38, 61; ontological, 38, 52 Polanyi, Karl: cyclical model and, 19; double movement of, 3, 12–13, 34, 135–136n1; elastic model of value and, 36–37; re-embedding movement and, 122, 127–128; Streeck on, 135–136n1 political economy, 4, 10, 18–19, 26, 39, 110–111 political rationality, of neoliberalism, 29, 135n2 Ponzi finance, 79, 137n4 post-Keynesian theory, 18–19, 58– 59, 80, 117, 137n5 power, leveraging and, 14, 16 preemptive reason, 67 premodern economy, 7, 57, 64, 70–71, 87 progressives: after the 2007–8 financial crisis, 29, 119–120, 125; capture theory and, 128; on demise of neoliberalism, 1, 5–6; Hayek on, 101–103, 105–107; New Deal and, 20–21, 94–95; on public governance, 60; student debt and, 125 punctualization, 41, 77 quantitative easing, 121–122 quantity theory, 86, 88, 97–98 rational constructivism, 100–102 real bills doctrine, 86–87, 88–89, 138n2, 139n4 Index reflexivity, 45–46 republicanism, 25, 72, 103, 123, 138–139n3 resilience thinking, 125 risk: as breaching of norms and, 66; cyclical theory and, 18–19; governance of, 27, 135n1; hierarchizing, 51–52; in mainstream theory, 15; market neutrality and, 24; regressive shifting of, 113, 116–117, 119, 121; as self-organizing, 27; shifting of, by banks, 18, 82–83; sovereignty and, 62–63; speculation and, 15–17, 66, 136– 137n1; system-level, 120–121 See also contingency Sargent, Thomas J., 99 Schmitt, Carl, 26, 103–104, 117, 139n1 Scottish Enlightenment, 57, 85–87, 103, 138n2, 138–139n3, 139n4 security, modern paradigm of, 67 self-organization: Connolly on, 129–130; Foucault on, 65; Hayek on, 100–102, 104, 106, 139n2; Luhmann on, 46–47, 52, 73; neoliberalism and, 27–28, 125; Smith on, 57–60 self-referentiality, 46; autopoiesis and, 47, 53; of financial capital, 56–57, 59, 131; heterodox critique of, 32–34; Luhmann on, 33–34, 45–49, 131, 137n2; Mehrling on, 1; memory and, 50– 52; Minsky on, 79–80; of money, 1, 6–7, 31–32, 53–54, 56, 71 Serres, Michel, 54 Shackle, G L S., 49, 59, 136n1, 136–137n1, 138n1 Index shadow banking: in 2007–8 financial crisis, 28–29, 118; limitation on credit creation and, 28, 96; monetarism and, 108; New Deal origin of, 21; noninflationary currency in, 116; Volcker program and, 28–29, 110, 113 Simmel, Georg, 54 Smith, Adam: on central banking, 88– 89; invisible hand notion of, 57, 59, 101; on market neutrality, 58; on money, 86–87, 138n2; republicanism and, 138–139n3; on secular nature of economy, 57–58, 59 social engineering, 26, 99, 102, 105 social studies of finance, 39, 129 solvency, 76, 90–91, 94–95 sovereign decisionism, 63, 103–104 sovereignty: in 2007–8 financial crisis, 64, 68; Agamben on, 62– 64, 65; Foucault on, 62, 65–66; as immanent transcendence, 67; leverage and, 16 speculation: austerity and, 12–13, 18, 29, 104, 123; bank organization of, 77–78; Bernanke and, 119– 120; in capitalism, 19, 75–76, 136–137n1; as disordering, 59, 116; government engagement in, 27, 135n1; Hayek on, 23, 102; heterodox critique of, 2–3, 32, 59, 116–117; Keynes and, 59; leverage in, 14–16; Luhmann on, 48–49; Minsky on, 75–76, 79–80, 117; money and, 87–88; in neoliberalism, 22–23, 67, 104; in ordering, 5, 22–23, 27–28, 124; in self-referential association, 48–49; Smith on, 57; stability and, 79–80, 137n5; valuation and, 80; Volcker and, 109–110 173 speech acts, theory of, 39–40 stability: central banking and, 82–83, 88–90, 92, 139n3; Federal Reserve and, 82, 93, 96, 98, 109; Hayek on, 105–107; leveraging and, 16–17, 21, 79; Luhmann on, 55–56; neoliberalism and, 22, 28– 30, 110, 117–118; neutrality of money and, 84, 89–90; regressive shifting of risk in instability, 113, 116–117, 119, 121; speculation and, 49, 77, 79–80, 137n5; toobig-to-fail institutions and, 121 Stigler, George, 128 Streeck, Wolfgang, 34, 135–136n1 stress testing, 120 structural functionalism, 34–36, 46 student debt, 124–125 system cohesion: Agamben on, 62; Luhmann on, 46–47; monetary standard and, 25; in neoliberalism, 29, 118; selfreference and, 47, 53 Taylor rule, 115 Thornton, Henry, 89–90, 107, 139n4 time and temporalization: autopoiesis and, 72–73; buying capital time, 69–72, 128–129; central banking and, 83; double-entry bookkeeping and, 73–74; financial value and, 76–77; modernity and, 70, 71–72; in neoliberalism, 23, 29– 30, 125; in orthodox economic theory, 7; preemptive, 67–68, 105; in premodern worldview, 70; reflexivity and, 46; role of banks in, 78–79, 81; value of money and, 55, 129 too-big-to-fail borrowers, 28, 82–83, 112–113, 121 174 Index US financial governance: austerity drive in, 12–13, 104, 110, 122–123; capture model, 128; central bank need, 93; countering inflationary pressures, 95–98, 139n1; crash of 1929 and Depression, 94, 117; embeddedness of, 83, 122; expectations and, 98–99, 121; federal financial safety net, 114; government debt, 94, 121, 123; inflation control in, 21, 95–97, 110, 112–116, 139n1; macroprudential governance, 119–121, 140n2; neoliberalism and, 25–27, 113, 115–116, 135n1; New Deal and, 20–21, 94–95; ongoing risk and interventions, 66; quantitative easing, 121–122; in speculation, 27, 135n1; welfare state and, 20–21, 136n2 See also bailouts; Federal Reserve usury, 71, 85 utopian socialists, 10 value: of assets, 75–80, 81, 91, 94, 118; in balance sheets, 73, 75–76; as elastic, 8, 36; foundational, 19, 31–32, 61, 88; human capital and, 111–112, 123–125; immanent measures of, 10–11; Keynes on, 59; labor theory of, 10, 36; as malleable, 74, 136n1; money and, 17–18, 25, 55–56, 86, 111; neoliberalism and, 19; as plastic, 4–13, 117, 129; real and fictitious, 3, 5–6, 13–14, 59, 117, 138n2; speculation and, 59, 68; time and, 55, 129; valuation as anticipatory, 3–4, 11–12; value-form theory, 8–9 Volcker, Paul, 28, 97–99, 100, 109–114 Volcker shock of 1979, 28, 110 Weber, Max, 35–36 welfare state, 20–21, 136n2 Wicksell, Knut, 91–92, 107, 115 Wirtschaft der Gesellschaft (Luhmann), 137n2 Currencies: New Thinking for Financial Times Melinda Cooper and Martijn Konings, Series Editors In the wake of recent events such as the global financial crisis, the ­Occupy Wall Street Movement, and the rise of anti-student debt activism, the need for a more sophisticated encounter between economic theory and social and political philosophy has become pressing The growth of new forms of money and finance, which has only accelerated since the financial crisis, is recognized as one of the defining developments of our time But even as finance continuously breaches limits and forces adjustments, much scholarly commentary remains focused on the limits of the market and the need to establish some prior state of political stability, thus succumbing to a nostalgia that blunts its critical edge Not content to adopt a defensive posture, books in this series move beyond well-rehearsed denunciations of out-of-control markets and seek to rethink the core institutions and categories of financialized capitalism Currencies will serve as a forum for work that is situated at the intersection of economics, the humanities, and the social sciences It will include conceptually driven historical or empirical studies, genealogies of economic ideas and institutions, and work that employs new or unexplored theoretical resources to rethink key economic categories and themes ... Aristotelian understanding of identity in terms of substance and accidental qualities or forms (Malabou 2000: 206) Contemporary money is highly plastic, lacking any essence Capital and Time and maintaining... representation of a value substance, even in the capitalism of his own time Capital s measures and calculations are performative devices, and Marx’s Capital (1990 [1867]) can be read as an analysis... 2007; de Angelis and Harvie 2009; Böhm and Land 2009) The standard principally never prevents the emergence of new forms of speculative valuation and in that sense the development of capitalism is