Everyday life and business as usual

Everyday life and business as usual
Bob Jessop

In my first blog, I reflected on the return from panic in September-November 2008 to the appearance of business as usual some 12 months later. Wearing my political economist’s hat, I suggested that this was related in part to the role of economic crisis in facilitating the concentration of power in the hands of a few key decision-makers, in this case, the ‘usual suspects’ who knew where the bodies were buried because they had placed them there. In terms of the classical definition, this could be seen as a ‘dictatorship’ of limited duration, focused on crisis-management, and accountable to normal politics in due course. I might have added that such exceptional measures in response to an emergency were possible because the financial crisis had not been accompanied by a crisis in the state and a broader political crisis. The contrast between Weimar Germany and the United States in the Great Depression is interesting here. On some counts the economic crisis in the USA was more sudden and severe than in Germany but ‘normal politics’ prevailed and, eventually, institutional changes introduced through the New Deal (plus the demand generated by a war-time economy) enabled the US economy to return to prosperity. In contrast, an interlocking and mutually reinforcing series of crises in the state, political legitimacy, and class hegemony blocked ‘normal politics’ and created the conditions for a turn to dictatorship in the modern sense, i.e., a more durable set of political arrangements based on the suspension of normal democratic politics and a more expansive and extensive coordination of different institutional orders and social fields. I had intended to expand on these points in my second blog but have been diverted by a news item and an academic article that I have read in the past two days.
First, the news item: reading The Wall Street Journal on a flight from Manchester to Hong Kong (and, yes, a propos my last blog, I did manage to get past the temperature monitors in Hong Kong airport after having signing a form about my incipient recovery from the flu), I learned that a Bank of England survey has show that: “the financial crisis and the recession that followed appear to have changed Britons’ attitude to debt and spending. … The BOE poll data showed that households increased their saving for reasons largely connected to concern about the economic outlook. Reasons frequently cited were fear of losing employment, a desire to reduce debt, additional personal commitments and extra money from lower mortgage payments or bills, as well as a desire to save for retirement or the future, and having extra cash from a new job or inheritance” (The Wall Street Journal, 14 December 2009, p 6). Similar reports could no doubt be found covering other advanced economies in the grip of, or newly emerging from, recession. And, of course, anthropologists, above all, don’t need to be told about the resilience of households and social networks in relation to crisis, whether in advanced economies or, even more importantly, in economies where informal employment and informal work more generally are significant.
Second, the journal article: in the latest issue of Review of Radical Political Economics, there is a fine piece by three radical political economists, Dick Bryan, Randy Martin, and Mike Rafferty, on the topic: ‘Financialization and Marx: giving labor and capital a financial makeover’. They refer to a recent IMF paper on the crisis, which describes the household as the “shock absorber of last resort” in the current economic situation. In one sense, of course, this has always been the case in relation to emergencies, crises, and other forms of turbulence. But there is also something new in the present situation, which has been gathering speed for some time: the financialization of everyday life, reflected not only in changes in the practices of financial institutions but also in the practices of wage earners and households. The authors suggest that:
In the language of finance, the household is increasingly to be seen as a set of financial exposures to be strategically self-managed. Calculations and decisions must now be made about a range of issues. Some such issues have emerged because the management of certain exposures is no longer undertaken by the state: there is now need for private calculation and decisions about such things as health insurance, education investment, and investment in an asset portfolio for retirement. There are also issues that have emerged with increasing competitiveness within the financial sector: decisions about the proportion of (expected) income to dedicate to home loan interest payments; the time profile of loans, fixed or floating rate loans, the management of consumer credit options; the preferred pension scheme. Finally, there is an emerging set of choices to be made in the face of new financial products, in particular the emergence of derivative products that permit people to hedge exposure to risks relating to their employment and the value of their home (Shiller 2003). In each one of these calculations there are (at least retrospectively) right and wrong choices, requiring the household to be financially savvy, not just in the sense of prudence, but in identifying the range of financial risk exposures and knowing how to manage them. Hence the new and emphatic push by financial regulators at all levels to generate programs for financial literacy, so that households can be assumed to have the strategic financial capacity necessary to understand the financial pressures they now face. The corollary … is that the (assumed) financially literate worker can morally and legally take responsibility for their own financial success and failure.
Such observations are commonplace in work on consumption and I cite them here not only because they were the direct trigger for this blog but also because Bryan, Martin, and Rafferty relate them to a much more complex set of innovative arguments about financialization and class formation in contemporary capitalism. I don’t want to take us down this road here, however, but to relate these remarks to the return to “business as usual”.
In contrast to the 1930s, whether in Germany, the USA, or other developed metropolitan economies, wage-earning households are far more heavily enmeshed in the circuits of finance capitalism as consumers of and, indeed, investors in, financial products and services. This is reflected in several aspects of the financial crisis. First, one significant line of explanation for the financial crisis has been that it is really the fault of greedy consumers who took out mortgages that they had no realistic prospects of repaying should the housing bubble burst, used equity in their homes to finance personal consumption, borrowed too much on their credit cards, and generally consumed as if there would never be a day of reckoning. Whilst blaming consumers is a useful distraction from other causes and has the added advantage in the USA that it can be linked, however dishonestly, to claims that state intervention forced banks to relax loan requirements in order to democratize access to the housing market, there is also a kernel of truth in this one-sided account of the crisis. This leads to my second observation: that, insofar as consumers were sucked into debt and now realized that they were ‘suckers’ for being so seduced, they have accepted some measure of blame for the impact of financial crisis on their present condition. The household has then kicked in as the shock absorber of last resort, the crisis has been normalized, accepted as a fact of life, and business as usual has been restored in everyday life. Moreover, third, because of the opacity of many financial innovations, which exceeded the abilities (one hesitates to say ‘even’) of financial innovators themselves to fully grasp, it is difficult for ordinary wage-earners and households to see where else the blame for the crisis might be located. This is reflected in populist rage against ‘greedy bankers’, mis-selling of financial products, and poor regulation but is not translated into effective grass-roots resistance to the complex web of financialization that has emerged in the last twenty years.
In short, if one part of the story of the apparent return of ‘business as usual’ is the capacity of key financial decision-makers to dominate decisions over the financial rescue-package, another part is the self-responsibilization of households grounded in their integration into the circuits of financial capital, leading them to become shock absorbers of last resort in the current crisis. If the former aspect is ripe for further investigation as part of the political anthropology of the state and elite power, the latter is ripe for investigation into financial practices of everyday life and new practices of economic governmentality. None of these remarks imply, of course, that there these are the only two sets of causal factors or sites for further research.

About Bob Jessop

Bob Jessop is Distinguished Professor of Sociology at Lancaster University and Co-Director of the Cultural Political Economy Research Centre. He has a long-standing interest in the nature of capitalism and the modern state, has written extensively on post-war British and European economics and politics, has been researching the contradictions of the knowledge-based economy for some years, and is now examining the contradictions of finance-led accumulation on a global scale.
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6 Responses to Everyday life and business as usual

  1. Keith Hart says:

    Thanks for these reflections. I wonder if your principal conclusions could be attributed to a method that starts from characterizing the crisis and its aftermath as a unified whole and then proceeds by means of dichotomy: all change or no change, global North and South, society at the top (the state and elite power) and bottom (households).

    As I understand your argument, “the neoliberal order” has absorbed the shocks of late 2008, neutralized any possibility of systemic change and transferred responsibility to households (whose own financialization has been revealed by the crisis). The distribution of global wealth and power has been largely unaffected, except that the South is even more marginal than before. Therefore 2008 is unlikely to go down as a break in the history of world political economy and no-one need change views they held before then.

    You point out with some justice that no amount of ethnography could illuminate how, if at all, the world has been altered by recent developments. But after reading your two posts carefully and more than once, I am at a loss to figure out how radical political economy offers an improvement. Perhaps the postulate of a divided totality is one reason, although the lack of sufficient hindsight at this time is surely another. I wonder if the world systems approach, with its logic of core and periphery, lingers on in your analysis.

    If neoliberalism pitted the anglophone economies against the rest and in the process exposed the UK and US to the greatest financial risk, the crisis has surely underlined the greater political resilience of these countries in addressing the collapse, when compared with the Eurozone and Japan, for example. In pulling off a drastic early devaluation, Mervyn King may have achieved a result comparable to 1931-33 which ensured for Britain a less severe Depression than either the US or Continental Europe suffered. In any case, a European Union crippled by impotent political institutions faces further deflation next year, a banking system still full of toxic assets, an overvalued exchange rate and the economic collapse of Southern and Eastern Europe. My bet is that the principal loser from this crisis will be Europe.

    The expression ‘Global South’, successor to ‘The Third World’, was always pretty vacuous, but as a category in the present analysis it is worse than useless. Where are the BRIC countries (with Russia having dropped out for the moment as a dynamic force in the world economy)? If we are relying on conventional wisdom, this would have the shift of economic power to Asia as the one irreversible consequence of the crisis. On what grounds might one claim that Africa, Latin America and the Middle East have suffered disproportionately from the crisis? Surely, any uncertainty it provoked should make us cautious about lumping together the ‘excluded poor’ as its main victims. Books are already coming out with positive messages about political, economic and demographic progress in these regions.

    Maybe the failure of “the left” to take advantage of the crisis comes from being willing to embrace a monolithic view of world society as seen from its decadent former centres.

  2. Bob Jessop says:

    Life would be very easy if one could get by with dichotomies as a means of going on in the world. As the old saw has it, there are two kinds of people in the world: those who divide the world into two kinds of people and those who don’t. Perhaps there is a meta-version of this: those who expect to see people divide the world in terms of dichotomies and those who don’t.

    I had this feeling when reading the first half of your comment on my blog. It seems to rely on the prejudicial assumption that “scholars on the left” are supposed to work with dichotomies and, even worse, “split totalities”; to work with high-level abstractions rather than micro-level cases; to see black and white rather than shades of grey; to see continuity or rupture when actual change is always an issue of continuity in discontinuity or discontinuity in continuity; to believe that unless there is a revolution, then capitalism is the same as it always is. I am not that name.

    Turning to the substance of the comment, I have long argued for an approach that resists reductionisms of all kinds and have been criticized from many sides for introducing notions like “contingent necessity” to deal with the complex interactions that produce actual events, processes, and structures or, again, for talking about competing modes of societalization (Vergesellschaftungsmodi) to address the failure of all attempts at totalization of social relations. This blog is not the place to elaborate on these issues. Nor am I someone who ever bought into “world system theory”. On the contrary, I argue for a “variegated capitalism” based on the interdependence and co-evolution of so-called “varieties of capitalism” (another notion that seems to me far too simple to capture the complexities of the world economy).

    I imagine that your bet on the future of a politically blocked Europe as opposed to the UK (with its early devaluation) and the relative strength of the US recovery will be reflected in your forward bets on the currency market. I hope the proceeds are put to good causes.

    The form of calculation reflected in those remarks (with their focus on currencies rather than broader economic issues or their social repercussions) is also evident in the reference to the BRIC economies. This is a term of art introduced by investment fund managers (initially, surprise, surprise, Goldman Sachs, in 2001) within the context of the broader category of “emerging markets” (identified as an object of policy by the World Bank). The little investment story told about the BRIC economies to garner in funds was that Brazil would be the agricultural power house, Russia the energy powerhouse, India the services powerhouse, and China the manufacturing powerhouse of the ‘new global economy’. This seems to me to be an equally vacuous notion as the global south, were we taking bets, but perhaps more profitable for investors for a while than for the excluded in its ‘other’. What is at stake in both cases is the choice of ‘strategic essentialisms’, i.e., ways of categorizing the world not as it ‘really’ is but for purposes of economic investment or political contestation, as the case may be.

    Analogous terms used in the investment world include, of course, advanced emerging economies, secondary emerging economies, big emerging economies, frontier economies and pre-emerging markets. Nor is there any need to stop with BRIC – we could also include BRICK (BRIC + South Korea). BRICS (BRIC + South Africa), BRICM (BRIC + Mexico). These are interesting construals of the uneven development of a multi-speed world economy and, together with Ngai-Ling Sum, I have been mapping how they have been constructed as investment and economic policy categories. Whether they have substance as serious political or inter-regional blocs is another matter – the first BRIC Summit was held only recently. It is also a moot point about their differential integration into the global economy. What is clear is that they are quite heterogeneous categories in terms of their substantive political economy content, their capacity for political action, and their internal social relations, patterns of wealth and income, rural-urban divides, and so on. They also function quite differently from the equally heterogeneous notion of “global south”. As Keith Hart notes, BRIC has already lost Russia — but there’s nothing to stop him speculating (in more ways than one) on the future growth prospects of BICK, BICM, BICS, or some other subset of emerging, post-emerging, or near emerging economies. Such reflections nonetheless invite reflection on how the macro-, meso-, and micro-economies interact and what the logic (or logics) that shape(s) the coupling, de-coupling, and re-balancing of the world economy is (are) likely to take.

    As to books coming out on the prospects of Latin America, Africa, and Asia (in whole or in part), I don’t believe everything that I read and assume that skilled anthropologists and hard-nosed investors don’t either. There’s quite a bit of money to be made, I understand, from being contrarian (if your pocket is deep enough and can, as Keynes noted, withstand the irrationality of the stock market when it makes a series of wrong bets). Thomas Friedman and Francis Fukuyama are just two of many public intellectuals who have made lots of money by following the Zeitgeist and retracting just in time to ride the next wave. I recall similar books ‘coming out’ on Japan as Number 1, that this time it the new economy really is different, that we were now experiencing the Great Moderation (as Bernanke called it), that neo-liberalism was the panacea for all ills and that globalization should be welcomed as inevitable. Only recently Greenspan admitted to deep disappointment that the intellectual foundations of light or no regulation had been shown to be lacking. Many economists wrote books (and highly cited journal articles in top quality journals) assuring us that this was the case too. I advise a pinch of salt be taken when reading the current crop of books and taking a less dichotomous view of the world: it is not based on a zero-sum game in which Western decline means Asian gain. That Asia is becoming the new centre of economic gravity in the world (after a 1000 years when Europe and then the US filled that role) may be true. But let’s have a more nuanced discussion of why this might be the case rather than just claim it to be so.

  3. I much enjoyed Bob’s posts, and his conversation with Keith. When seasonal bugs and festive chaos abate, there are several things I’ll enjoy thinking about, notably ‘the financialization of everyday life’, and how one sets about connecting bottom-up and top-down approaches to the current crises. On thinking-up, Keith has done much to broaden anthropological horizons, and Bob evidently writes in the venerable pol-econ tradition of reaching down towards elemental social units like ‘the household’. The challenge in this convergence is of course how one sets about aggregating and disaggregating argument and evidence. This exchange suggests we might readily admit that simple dualist categories usually obscure more than they reveal; but also that while insisting on complexity, contingency, &c may relieve the tension in heartwarming ways, neither complexity nor contingency is in itself very informative. I find that those who argue dualistically tend to founder on complexity, while those who insist on fine-grained particularism usually end up talking in analytical dyads. Here, given his declared interests, I’m worried about Bob’s ‘ordinary wage-earners and households’, which look suspiciously like contraposed black boxes. Call me complicated, but I truly don’t know what an ‘ordinary wage earner is’ and have devoted a lot of time and empirical attention to sassing out what that might mean. On the household, I’ve for long been obsessed with time and reproductive processes as an axis of differentiation, and have learned much from an earlier generation of economists who wrote extensively on ‘cyclical’ behaviour in ‘families’ and ‘households’. Bob invites us to attend to ‘the self-responsibilization of households grounded in their integration into the circuits of financial capital, leading them to become shock absorbers of last resort in the current crisis’. That sounds frightfully interesting, but over the past two years I’ve found myself thinking about the very different sorts of involvement of pensioners, youth economically immobilised in parental domains, parents of babies and of teenagers, &c, &c, in the unfolding dramas. These various time-linked categories plainly respond differently to the macro-economic opportunities (e.g. new low-rate mortgages) as well as the predations (old high-rate mortgages) of the current crisis, but for me the real challenge is how these reproductively-geared differences gross-up into large-scale historical forces. No, it’s not obvious.
    Everyone now seems to be whining about how we have all succumbed to short-term rationalities, and no longer think far enough ahead. But one of the things that all but the most debilitated or afflicted households _have_ to do is think trans-generationally – that’s their job, that’s why they _have_ to kick in ‘as the shock absorber of last resort’ when the poop hits the financial fan, and that’s why they ultimately have more to do with the making of history than the moronic antics of Fred Goodwin et al.
    Now where did I put that goddam Whisky Mac?? Happy New Year everyone!

  4. Bob Jessop says:

    I am not a natural blogger but I am getting the hang of it now. It seems to me that we are using these exchanges between anthropologists and political economists to rehearse some classical and incompressible debates (they just keeping popping up whenever we think we’ve pushed them back) rather than to address the financial crisis. But these are closely related sets of issues, expressed in mainstream economics in terms of the problem of the micro-foundations of macro-phenomena and dynamics. For what it is worth, my own view is that an evolutionary and institutional perspective is useful here because it suggests some mediating factors between the two levels. In brief, there is usually less enduring micro-diversity than casual observation of variations in individual behaviour at any point in time would suggest – a lot of variation doesn’t get reinforced and is therefore selected out rather than in; conversely, there is less macro-necessity than structuralists seem to believe because structures are never fully closed, let alone self-reproducing. So, apart from identifying the demi-regularities associated with the tendentially emerging, always provisional, temporary, and unstable properties of macrophenomena (where macro is always relative to a given micro, hence always nested but not always in a single set of Russian dolls – since different macros, just like different micros, can be articulated into diverser networks of interaction), we also need to consider how these emergent properties feedback onto subordinate levels of action and interaction. A similar line of investigation can run in the opposite direction from bottom up to increasingly superordinate sets of social relations and their emergent properties. Somewhere in this micro-meso-macro set of interactions we’ll need to identify the sources of the regularities that occur across time and space in the dynamics of financial crises — including the recurrent belief that ‘this time, it’s different, the new economy operates quite otherwise than in the past, we’ve now learnt the right lessons’, and so on.

    On another note entirely, it’s an easy game to play to reject generalities on the grounds that generalities can always be broked down into more complex particularities. Alexander does not know any ‘ordinary workers and their families’. Perhaps. Does he know how to tell the difference between the super-rich, the core members of the Royal Family, A-list celebrities, top politicians in powerful states, or academic gurus, on the one hand, and the long-term and involuntarily unemployed, the lumpenroyals, the unknown and uncelebrated, party workers for unelectable parties in minor states, or casualized research students? Notions like ‘ordinary worker’ are not meant to be literally descriptive but to serve useful, contrastive purposes. almost (but not quite) everything depends on context. If my meaning was not clear, then I apologize. But let’s not get into a game of who can particularize more than someone else. Blogging is, or should be, another type of genre.

  5. I like Bob’s last riff on matters of scale. I still don’t know what we variously expect of a blog, and how generally interesting this one has been, but I’d have thought exchanges which lead into such loosely familiar but complicated and unresolved issues like this could well be a useful part of the game.

    But Bob’s second paragraph makes me wince. I was commenting on his phrase ‘ordinary wage earners and households’ which Bob picks up as ‘ordinary workers and their families’. If he thinks these – especially ‘wage-earners’ and ‘workers’ – are the same things, we have a lot more than blogging to do!

    Sandy Robertson

  6. Bob Jessop says:

    Well, I’ve just learnt one thing from Sandy’s reply to my reply. Standards of good academic practice can slip when blogging. I certainly don’t think that “ordinary workers and their families” are the same as “wage-earners and households”. Indeed, the terms belong initially to different types of discourse – more sociological and more economic respectively. I would surely have checked my sources in a journal debate that has a more durable form than a (presumably) evanescent blog. So, following Alan Greenspan’s modest mea culpa, let me add my own mea maxima culpa.

    The reason for the neglect was my over-eagerness to react in “blog-time” to a rhetorical trope that is so common among those who prefer to work at the micro-level as opposed to more meso- or macro-levels, namely, I don’t know any “x”s. This always privileges the most fine-grained analyses and particularized cases. It has a useful, indeed, important function in reminding us that crude generalization is likely to be misleading; and, in some cases, can generate stereotypical discrimination, positive or negative. But it can also work as a put-down, establishing hierarchies of disciplinary or scholarly styles of work, when what we need to encourage is dialogue and mutual learning, without this leading to a bland “middle of the road” consensus.

    Since my own work is heavily parasitic upon detailed micro-level analyses, I try not to establish hierarchies (at least intentionally) in which one scale of analysis gets privileged. The point about scale, which Sandy acknowledges before feeling the need to wince, was the more important one for me. To get at meso- and macro-level effects, we have to work with representative cases (or, more often, typologies of representative cases that are appropriately weighted to reflect their presence in a larger population) and to recognize that a lot of individual variation gets lost in the wash. Actuarial calculation, macro-economic modelling, sociological generalizations about “mass” consumption (or, indeed, “elite” consumption), and so forth, would be impossible with such simplifying assumptions. Short of mandating scare quotes around every identity or category that does not relate to a specific case at a specific time-place from a specific reference point, I am not quite sure how one deals with this problem in polite academic discourse. I wonder how anthropologists deal with the question of “ordinary” Trobriand islanders, mortgage securitizers, or, indeed, anthropologists? And, yes, this time I did look at my blog on a big white screen, before cutting and pasting it to the blog upload page.

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