Konings2015 - State of Speculation

South Atlantic Quarterly
Martijn Konings
State of Speculation:
Contingency, Measure, and
the Politics of Plastic Value
One of the main arguments employed by pro-
gressive critiques of contemporary capitalism is

that it is all too often driven by speculation. Where
orthodoxy discerns little more than self-correcting
deviations from equilibrium, heterodox theory sees
the growth of an unsustainable system of casino
capitalism (Strange 1997) and fictitious capital
(Harvey 2007), irrational forces that are responsible for recurrent instability and so undermine the
possibility of a rational and legitimate economic
order. This harkens to the critique of chrematistical
moneymaking and in particular the way this was
reformulated as a critique of idolatry in premodern
Christianity: speculation is depicted as the investment in promises that lack foundation, the irrational attribution of substantive value to mere fictions.
It is through the fetishistic worship of empty signs,
the groundless belief in moneys powers of selfmultiplication, that financial markets are seen to
take on a life of their own and to become unmoored
from their economic foundationsdisembedded,
to use Karl Polanyis (1944) increasingly prominent
metaphor. At the heart of the heterodox critique,
then, is a distinction between real and fictitious
value. Money may, for reasons of economy, serve
as a simple indicator of fundamental values, but
The South Atlantic Quarterly 114:2, April 2015

doi 10.1215/00382876-2862706 2015 Duke University Press
Published by Duke University Press

252 The South Atlantic Quarterly
April 2015
speculation generates financial signs whose claim to value is fake and illusory. We could say that heterodox perspectives tend to understand the relation
between real and fictitious value as an elastic one: value can be stretched or
inflated through speculation, but at a certain point the material will either
have to return to its original state or it will snap or burst.
It has, however, proved extremely difficult to specify the parameters
that govern values stretchability, and present-day capitalism enjoys a strong
track record of disproving predictions of collapse (Konings 2011). An orthodox perspective would simply view this as underlining the inherent futility
of second-guessing monetary valuations. In orthodox economic theory, the
tension between real and fictitious value does not appear: it is precisely
because money is nothing but an arbitrary numerator to facilitate exchange,
a mere accounting fiction, that it can command respect as a neutral measure
and serve as a source of unquestioned authority. We might say that orthodox
theory reproduces the iconic character of money. An icon is a paradoxical
combination of fiction and fact, contingency and necessity, a sign that
instantly and authoritatively communicates a meaning that remains complex and diffuse. We simply know the value of money, even if we are unable
to articulate this. In everyday life, we do not experience any problem treating
money as both a complex imaginary construction and a fully objective standard. It is only when we need to give expression to our discontent with
money that we begin to polarize these two aspects and become concerned
that there is something irrational and fetishistic about attributing value to
mere symbols.
What we have, then, is a tendency either to uncritically reproduce the
paradoxical duality of money, as in orthodox theory, or to turn a blind eye to
its practical relevance, as in heterodox theory. On the one hand, the critique of
fetishism dismisses as groundless irrationality what we experience as practical reason, implicit knowledge. On the other hand, if the immediacy of the
meaning of money is premised on our willingness and ability to rely on our
embodied knowledge and respect the limits of our explicit knowledge, orthodox theory contributes to this by reproducing the duality of money in an unreflexive way, declining to thematize the paradoxical iconicity that it registers.
To explore money through the lens of its iconicity is to suggest that we
might understand value as plastic rather than elastic. The capacity for
plasticity is the paradoxical ability to experience profound changes in form
without losing integrity. This implies a challenge to a traditional (Aristotelian) understanding of identity (Malabou 2000: 206), and at the limit it can
mean the absence of any fixed, essential properties. An icon is a fully plastic

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Contingency, Measure, and the Politics of Plastic Value 253
sign: its forms coincide with its meaning, its topological structure with its
identity. It does not represent something else; it just means what it means.
But by the same token there is no discrete object that we can identify as the
bearer of the dollar identity, and in that sense the icon itself remains invisible,
operating merely as an organizing force in a complex pattern of relational differentiations and contingent derivations. This echoes key tenets of value-form
theory (Rubin 1972; Elson 1979; Clarke 1982), which has sought to go beyond
the long-standing problems of substantivist theories of value by emphasizing the constitutive role of the symbolic forms in which value is expressed.
Such approaches, however, have generally been unable to fully break
with a conception of value as elastic (Knafo 2007). This persistent commitment to a substantivist theory of value is motivated by a concern that to conceive of the constitution of symbolic forms as itself the process whereby
value is generated would make value an arbitrary and tautological concept,
providing no basis for distinguishing between fictions and facts, between
irrationally speculative and sound forms of value. Such concerns tend to
reflect a residual attachment to a conception of signification as external, passive, and epistemic rather than practical and performative, entailing a persistent tendency to assess its salience in terms of the capacity for accurate representation. Value-form theory has not gone far enough in theorizing
fictitious forms in terms of their capacity to generate constitutive associations, affective relations, and practical investments, that is, to provoke the
production of facticity (Negri 1999; Arvidsson 2009). Although speculation
certainly involves the creation of fictions, this does not mean that it defies
existing fundamental values but rather means that it instigates a temporal
dynamic that revolves around the possibility of actualizing the virtual claim
(see Mirowski 1990: 712). The signification of value is performative, driven
by the aim to elicit the generation of the value that it claimsa process that
never comes to a halt with the discovery of a real economy but involves the
ongoing generation of new expectations.
The blind spot of the heterodox critique of speculation is that the emergence and development of capitalist value forms has been and continues to
be driven by a critical awareness of the dangers of unsound investments and
irrational expectation, by a concern not to attribute an unwarranted degree
of reality to secular promises. History, and capitalist history in particular, is
pervaded by a strong streak of idol anxiety (Ellenbogen and Tugendhaft
2011). The human connection to signs incorporates strong elements of strategic motivation and pragmatic use and is therefore always more reflexive
and organic than the idolatry critic recognizes. The groundless belief and

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willful irrationality of the fetishist is always a fantasy entertained by the iconoclast (who of course imagines himself or herself as an idoloclast), who
turns a blind eye to the practical economic reason of the subjects speculative
investments and the iconic qualities of the signs generated by them. Moderns have an intuitive certainty that not speculating is not an option and that
our speculations are pragmatically motivated positions in an interactive
dynamic of expectations, that is, in a logic of specularity (Orlan 1989), and
we know money to be a meaningful product of, and an efficacious point of
orientation in, this game. The subject knows that it speculates not in defiance of fundamental values, but precisely because secular life offers no such
foundations to fall back on (Knafo 2013; Bryan and Rafferty 2013).1
Although idolatry critique is of course alive and well in modern life, it
has become more and more itself a pragmatic stance in the specular logic of
economy, serving as a position of not-knowing that disavows its experientially embedded awareness of the iconic qualities of the sign. The spirit of
contemporary capitalism is a paradoxical combination of iconoclasm and
iconophilia, forever concerned with the corrupt state of hegemonic signs
without ever losing faith in their redemptive promises. It demands not a
destruction of the sign or an attenuation of the attachment to it, but precisely
a nonidolatrous commitment, a faith that does not idly hope for magic but
assumes personal responsibility for ensuring the transformation of fictions
into facts. Such austerity itself takes the form of speculation: it involves a
willingness to gear the creation of new symbolic forms to the validation of
past promises. Speculative austerity can be seen as the affective structure of
the plastic logic of value, the ghost in the financial machine (Appadurai
2011), the force field that holds together contingent assemblages of imaginary relations and allows them to work as unitary facts.
Icon and Economy
In premodern Christianity, the critique of speculation was subsumed under
the condemnation of the love of money. This reflected the ancient distinction between economy (the responsible governance of the resources of the
household and the wider political and cosmic order of which it was part, in
which money could play a legitimate role as a means to facilitate exchange)
and chrematistics (the irrational pursuit of money as an end in itself, seen to
be corrosive of economic order) (Singer 1958). Christianity allied the Aristotelian critique of chrematistics to the condemnation of idolatry, the pagan
attribution of essential properties to human-made signs. Money was sterile,

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a dead object that could not multiply or grow itself (Dppe 2011: 95), and its
worship amounted to a challenge to Gods monopoly on the power of creation, an attempt to disrupt the divinely ordained economic order. The crime
of usury, the most serious form of idle speculation, was typically said to
involve the attempt to deal in something that belonged to God: time (Le Goff
1988). Secular time was a gift from God, and the duration of worldly things
was dependent on the continuous renewal of divine grace. The present was
not understood as a bridge between past and future, as having emerged out
of a historical past and generating a contingent future (Thrift 1990: 108).
The future was not uncertain; it was just that humanity could not know
Gods plan for the world. This emphasis on temporality makes comprehensible why theologians saw no essential difference between activities such as
moneylending, hoarding, insurance, and gamblingthey all involved
attempts to speculate on the future and so to subvert Gods economy.
Christianitys foundations in the insistence on the separation of heaven
and earth created a specific problem of governance: how could any secular
ordering be legitimate and economic? The churchs approach to this problem
was articulated most clearly in the doctrine of the iconic sign. Whereas an
idol claimed supernatural status and pretended to partake of eternity, an icon
merely directed human attention to a reality that principally remained invisible and beyond human measure (Mondzain 2005: 38). The icon marked a
lack in the here and now (Pentcheva 2006: 631) and functioned as a vanishing point of the secular. Emphatically a mere symbol, its overt humility
served as a constant reminder of the inherent insufficiency of secular discourse. In this way, this marker of absence acquired a tremendous capacity to
format the relational complexity of human affairs, organizing a power that
is both centripetal and centrifugal (Mondzain 2005: 146). Functioning as
the pivot of the ecclesiastical economy, the icon was a curious combination of
fiction and fact, nothingness and potentiality, a point where pure contingency and pure necessity coincide. It constituted a paradoxical standard,
founding a logic of secular value on idol anxiety and transforming suspicion
toward the contingent sign into potentiality and semiotic force. In this way,
the paradoxical effect of the rejection of pagan idolatry was the intensified
regulation of earthly affairs through human-made symbols: the churchs
liturgical icons became highly efficacious sources of earthly authority, instituting an immense force field of affective power (Buck-Morss 2007b: 178)
that led rulers to seek an alliance between state and ecclesiastical economy.
The expansion of commerce and finance beginning in the fourteenth
century was a problem for princes no less than for popes. The question of

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how the state might govern amid the onslaught of these chrematistical forces
gave rise to the problematic of political, as distinct from ecclesiastical, economy (Buck-Morss 2007a: 445). Adam Smiths ([1776] 1997) work occupies
such a central place in the history of economic thought because it recast the
problematic of economy and chrematistics: moneymaking was not necessarily an irrational, corrosive force but could serve as the basis of a new economic order. In Smiths work money fulfills a role that is analogous to the
role of the icon in Christian theology: a conventional sign that indexes an
invisible dimension ordering human life in unseen ways (see Foucault
[1979] 2008: 27879).
The paradoxical process whereby the economy becomes secularized
and its signs gain in regulatory efficacy is also at the heart of the alliance
between Protestantism and capitalism famously highlighted by Max Weber
([1905] 2003). It is precisely in a Protestant ethos, hyperaware of the dangers of idolatry, that money assumes a tremendous degree of symbolic density and affective force. Moneys mundane futility allows it to organize a distinctly modern form of faith, a belief that incorporates a reflexive awareness of the dangers of idolatrous belief. It holds out the promise not of magic
but of redemptive austerity, the purifying effects of taking personal responsibility for the operation of the economy. If the nascent capitalist ethos
encouraged the belief that investment in the secular promise of a future performance (a contingent contract) could be perfectly legitimate, this was
always closely tied to the condition that such promises be validated through
discipline, subjectivitys willingness and ability to reorganize its practical
commitments around the validation of such prospective claims. In this way,
money becomes a paradoxical measure: it only works properly, economically,
if we engage it not as a transcendent standard but as a mere fiction indicating
the fact that secular life offers no ultimate truths or foundational substances.
It does not passively take stock of what is already there, but it demands a
response, tugging at the strings of our subjectivity with an ease that an external measure cannot. It is precisely the iconic signs nothingness that makes
it, to borrow Simon Critchleys (2007) phrase, infinitely demanding.
The process whereby money, the quintessential idol of premodern
times, became an icon, a combination of nothingness and potentiality, mirrored the paradoxical movement whereby the Protestant ethic valorized the
contingency of human history through the emphatic insistence on its separation from eternity. The rise of modern capitalism was accompanied by the
emergence of a distinct experience of time (Koselleck 1981: 170), one in which
humanity sees itself as making its own history, increasingly understanding

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present practices as having emerged out of its past presents and as shaping a
contingent future. History increasingly comes to be thought of as a domain
of probability and human prudence (Koselleck 1981: 173), and the present
becomes the turning point which switches the process of time from past
into future (Luhmann 1976: 133). The lack that the icon signifies becomes
the absence, in the actuality of the present, of our own history and future, and
its potentiality the prospect that we might redeem our investments and
secure our future. Humanitys tendency to grasp its world in terms of risk,
probability, and uncertainty sets up a problematic of governance that centers
on the transformation of contingency into necessity, fiction into fact (Cooper
2012; Mitropoulos 2012). Capitalism is constitutively regulated by the prospect that our imaginary constructions may come to enjoy internal cohesion
and affective powers that ensure their persistence. The fact that we never
reach a point where we have secured our future only accelerates the logic at
work, rendering participation in the performative logic of risk even more necessary. The rationality of secular value is expansionary, always breaching the
limits of its existing forms just to maintain itself (Ewald 1993).
Once the investment in contingent promises and fictitious signs
becomes permissible, it becomes imperative. The austere speculation is not
merely acceptable but becomes the marker of virtue, the integrating factor
of the state (Koselleck 1981: 176). Modern republicanism, which arose in
parallel with the Protestant ethic and became inextricably intertwined with
it in the American context, can be seen as the richest manifestation of this
rationality. It is centrally concerned with the projection of the secular state
into the future, with the problematic of founding security on contingent
promises (Pocock 1975). As Alexis de Tocqueville already observed, early
Americans had a high degree of facility and comfort with risk and speculation (Levy 2012: 17), and this was allied to a political culture characterized by
strong millenarian affinities, preoccupied with the creation of redemptive
institutional arrangements in the seculum (Zakai 2005). New World capitalism, far from representing a movement of chrematistical disembedding,
was centrally driven by a renewal of the iconoclastic impulse of the Protestant ethic and the concern that Old World attitudes to money were fetishistic,
indulgent, and sinful (Hatch 1989). The subject of the republican imaginary
would steer clear of moral corruption by living in the world of commerce
while being fully committed to the validation of its speculations through an
ethos of austerity (Appleby 1984; McCoy 1996).
Demanding not the destruction of money but the full actualization of its
promise, the republican ethos of American capitalism epitomizes modernitys

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paradoxical simultaneity of iconoclasm and iconophilia. It is forever concerned with the corrupting influence of chrematistical interests but never
abandons faith in the principal capacity of financial institutions to serve as
the neutral regulators of a republican economy. That moderns use the word
iconoclasm in a distinctly figurative sense (reflecting an implicit awareness
that there is something pointless about destroying an image as if it were a
discrete object) has never meant a diminution of the affective force of idolatry critique. Indeed, those marked as idolaters are no longer seen just as
jeopardizing their own soul but are seen as preventing the emergence of a
redemptive state here on earth. The republican imaginary features elaborate
fantasies of corrupt subjectivities whose idle expectations prevent money
from playing its proper economic role and dispensing its legitimate credit.
The parasitical speculator, incapable of austerity, is all that stands between
the degenerate present and an authentic republic. This alliance of blaming
and utopian millennialism has always enjoyed a strong emotional charge
and significant mobilizational capacity, giving the republican imaginary its
distinctive populist flavor and allowing it to play a key role in the historical
development of American democracy.
Pragmatics of Economy
That capitalist speculation has emerged through its differentiation from
other practices (many of which we still reject) has also been argued by other
authors (Zelizer 1983; Fraser 2005). Often, however, the main aim of such
work is primarily to undermine the claims of present-day finance to scientific objectivity by defetishizing its categories. The genealogical awareness
of the process whereby certain forms of speculative investment have become
differentiated from idle, chrematistical wagering tends to be employed as a
rhetorical means to reassociate them. What fades into the background is the
problematic of how the performative logic of speculation constitutes an
infrastructure of practical reason that endogenously generates economic
order and a standard of value. An emphasis on the endogenous character of
money, its origins in contingent relations of debt and credit, can be found in
post-Keynesian (Wray 1990; Dow 2006), chartalist (Ingham 2004; Wray
2012), and monetary circuit theories (Parguez and Seccareccia 2000; Keen
2009). Strikingly, however, all of these approaches remain closely associated
with the critique of speculation as irrational chrematistics. At some point in
the analysis, a notion of real economic value value gets smuggled back in,
against which speculation is then assessed as the generation of mere fic-

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tions. In the work of some Marxist authors this follows the logic of valueform theory (Bellofiore 1989), but notions of fundamental value are routinely employed by perspectives that reject the Marxist emphasis on labor.
The work of authors such as L. Randall Wray and Geoffrey Ingham is
particularly paradoxical in this respect: while arguing that capitalist money
historically emerged from within the interaction of contingent contracts as
promissory notes issued by banks, their analysis of modern capitalism is
anchored in a chartalist approach that understands money as a token issued
by the state. On this reading, the substance of money lies in the state, and the
problem in the neoliberal era has been the growth of a vast system of speculation outside this public anchorage of the currency. The notion that money
supersedes its origins as bank debt and becomes a state token suggests a certain idealism, a Kantian leap from the concern with contingency to an intentionalist constructivism. The institutions of the modern state are certainly
constitutively involved in the making of money, but this does not involve the
transcendence of the basic modalities of its emergence. It may be more accurate to say that the capitalist state assumes bank-like properties than that
money becomes, in Weberian fashion, a product of public institutions.
To clarify the dynamics at work here, we can draw on some of Hyman
Minskys insights. Minsky is of course best known as the quintessential critic
of speculation, and the term Minsky moment has been widely adopted to refer
to the moment when a top-heavy financial structure reaches a tipping point
and begins to fall apart. But Minskys work has another, more interesting
face, rooted in his rejection of orthodox theorys tendency to reduce the problem of temporality to the issue of the double coincidence of wants and then to
posit money as an one-off solution.2 For him, the dynamics of capitalism are
generated by subjects taking positions on the future, speculative investments
with uncertain outcomes (e.g., Minsky 1996: 359). A clean present with
fully cleared markets that is unencumbered by past commitments and future
expectations is an impossibility, and the problem of economy consists precisely in how the interaction of speculative investments might generate a stable financial measure. Minsky understands economic units as balance sheet
entities, clusters of promises incurred and promises made: households issue
short-term obligations and use the proceeds to make longer-term investments, and the need to generate sufficient revenue from ones investment to
be able to service ones debts becomes a survival constraint (a term recovered by Perry Mehrling [1999: 139] from Minskys doctoral thesis).3 Through
the activation of the survival constraint the temporal dimension of financial
promises and commitments can make itself felt in the present.

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In depicting how such balance sheet interactions generate money,

Minsky assigns a crucial role to banks. In origin institutions offering clearing and settlement services, banks serve as nodal points in the payments
network, and consequently their short-term promissory notes assume a special status and begin to circulate, allowing banks to issue more notes than
they have cash on hand (fractional reserve banking). We might view this as
an endogenous hierarchization of valuation practices, a process whereby
some promissory notes come to be measured in terms of others. Banks, like
other units, issue short-term obligations in order to fund longer-term investments, but they are distinctive because they can borrow cash liquidity by creating it. The banks obligations now come to be a condition of possibility for
the very financing practices out of which it emerged. This serves to loosen
the banks survival constraint, which at the same time confers on the bank a
capacity for loosening the survival constraints of other economic units.
This process needs to be understood as a confidence game, a specular
logic of observers observing observers (cf. Esposito 2011). The distinctive
characteristic of a confidence game is that it never eliminates uncertainty,
the need to imagine the future; it works precisely by forcing us to make decisions while lacking key information about what others will do next and what
the future will look like. The orientation points it generates never preempt
the need for further speculation. We never end up taking money at face
value; its just that it becomes a focal point for our speculations, a point of
reference in a calculative rationality, the obligatory passage point (Callon
1986: 205) for our ability to imagine and secure our future. We persist with
the game and develop organic affinities to its rules not because we are idolaters and take its signs literally, but because we have skin in the game and
working through the obligatory passage point offers the best odds for ensuring survival. The performative paradox of money is that we are always reconsidering our relation to it but that this nonetheless only has the effect of
making it more indispensable.
The monetary standard does not prevent the emergence of new forms
of speculative valuation, and in that sense the development of capitalism is
an ongoing crisis of measure. But we should not be too quick to frame this
in terms of the impossibility of economic order: to assess the operation of
capitalist money against the model of external measure and passive, linear
registration is to pay insufficient attention to the distinctive dynamics and
paradoxically generative character of an immanently generated measure
(Clough et al. 2007; De Angelis and Harvie 2009; Adkins 2009). The capitalist standard of value never transcends its promissory character (cf. Adkins

Konings
2012: 626) and works precisely through provoking (Muniesa 2011: 32), the
possibility of activating patterns of connections and prompting their reorganization around the validation of its speculative promise.
The monetary standard does not enjoy a magical capacity for binding
heterogeneous elements into its regime: financial confidence games can and
do fail, and financial standards can and do collapse. Bank runs occur when
bank obligations come to be perceived as too risky and creditors seek to cash
in their holdings of bank promissory notes. As banks sell parts of their asset
portfolio and exert downward pressure on asset prices, liquidity pressure
becomes generalized, creating further doubts about bank solvency and
intensifying the panic. During the Renaissance such crises were so frequent
that rulers sought to suppress fractional reserve banking, and it was only in
England that bank obligations came to function as the basis of a national
economy.
This of course occurred in the context of the transition first to agrarian
and then to industrial capitalism and the normalization of wage labor, but
we should be careful not to assume that the classic era of liberal capitalism
made possible this new monetary regime because it allowed for an externality of measure from value production. Autonomist approaches have a tendency to theorize the growing immanence of measure and value in postFordism by contrasting it to earlier periods of capitalist development, seen to
be characterized by a certain externality that allows for linear measuring
(e.g., Hardt and Negri 2001). But as George Caffentzis (2005) argues, Marxs
critique of David Ricardos substantivist theory of labor value already rested
precisely on the arguments that capitals valuation practices were to be seen
not as external, timeless standards but as prospective strategies employing
performative devices and that capital was not a passive appropriator of what
had already been produced but played a constructive role in generating the
very surplus it was after. The stability of capitalist measure is never a result
of its externality or the absence of a speculative dimension, but always an
outcome of a specific articulation of speculative value forms to austerity.
The art of capitalist exploitation involves the management of a societywide specular dynamic that is often prone to instability. Modern capitalism
might not have materialized had it not been for the crucial role of the Bank
of England in managing the dynamics of financial crisis. Its transformation
into a public institution was driven by the awareness that its obligations had
come to occupy a special position in the payments system. It had come to
serve as a bank to bankers, essentially replicating the financial confidence
game at a higher level (cf. Hawtrey 1932: 116; Mehrling 2000b; Bell 2001).

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This further hierarchization of money meant that the Bank of England

enjoyed a considerable capacity for loosening the liquidity constraints of
other banks. When a regular bank became subject to a drain on its reserves,
the Bank of England would temporarily take the banks assets on its own
books, buying it time and allowing it to meet its obligations and restore confidence (what has traditionally been referred to as the lender of last resort
function). Such interventions were premised on the notion that a bank
should not be forced by temporary illiquidity problems to sell sound assets,
thereby driving down prices and so eventually threatening the solvency of
other banks (Bagehot 1877).
As there are no known fundamental values to offer unambiguous
guidance here, the states effort to secure its future involves taking speculative positions on the speculations generated in the economy (cf. de Goede
2012). State personnel possess no special powers of foresight, and they too
tend to imagine the future with reference to the systems key constituents, its
obligatory points of passage. As a consequence, the process of financial management can appear remarkably banal: when risk spreads and becomes a
systemic threat, often little is to be done other than to fortify the nodal points
of the payments system. Central banking is about the rearrangement and
redistribution of the liquidity pressures generated by existing contractual
commitments, making available new contractual options to a select number
of financial institutions to allow them privileged access to refinancing
options and so alleviate their survival constraint. This means that there is a
constitutive asymmetry at the heart of financial management: the central
banks protections do not redound democratically except to those institutions that function as financial hubs and have gathered sufficient power that
their survival is of systemic importance. In that sense, too big to fail is the
core operational modality of central banks (Konings 2010): it works to give
some identities more time than others.
The dynamics of financial leveraging and deleveraging have always
been particularly pronounced in the United States, and after the postbellum
consolidation of capitalist industrialization these had come to center on the
stock market. The various central banking arrangements that emerged in
the United States provided lender of last resort support, but the post hoc provision of liquidity tends to be insufficient when intense doubt about the value
of key securities sets in motion a fire sale of bank assets that has no prospect
of bottoming out and so continues to feed on itself. During the late nineteenth and early twentieth centuries, crises became progressively more
severe, culminating in the crash of 1929.

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It is against this background that we should understand the New Deal

reorganization of the financial system. Although it is common to view midtwentieth-century capitalism in terms of the suppression of speculative spirits, this historical picture is highly inaccurate (Konings 2011). Progressive
reformers saw their own role as reformulating republicanism for modern
times (Feffer 1993: 9), and one of their key objectives was to open up access
to credit (Marron 2009). Although they were harshly critical of financiers
exploits in the stock market, their concern was emphatically not with the
idea of speculative credit as such, but precisely with the perverse forms that
this had assumed. The credit and securitization programs of the New Deal
expanded the central banking function by making available governmentassisted refinancing, with access dependent on investment in various forms
of household debt (Hyman 2011). The effects of this were magnified by the
Federal Reserves role in facilitating the massive growth of Treasury debt,
which meant that from the 1930s to the 1950s it served as a permanent
source of liquidity. But no less important than these forms of preemptive lastresort lending was the introduction of deposit insurance, which undercut
the rationale behind bank runs and prevented the dynamic of debt deflation
(Gorton and Pennacchi 1990).
The central banking function, then, was performed not just by the
Federal Reserve but by a wider complex of organizations (Minsky [1986]
2008: 52). Insofar as the New Deal represented a class compromise, deposit
insurance can be seen as its emblematic expression, guaranteeing the funds
of ordinary people while also serving to greatly relax the survival constraints
of banks and allowing them to engage in new forms of credit extension
(such as consumer credit and long-term mortgages). In a very important
sense, the postNew Deal era was a key step in the direction of the capitalization of almost everything (Leyshon and Thrift 2007), the performative
measurement of human capacities in terms of their ability to provide a flow
of revenues (cf. Palan 2013: 67). The proliferation of speculative financial
forms, then, is the crucial complement to the disciplinary socialization that
a variety of thinkers (notably those of Gramscian, Foucauldian, and autonomist persuasion) have seen to be at the heart of mid-twentieth-century economic order.
Monetarist Reason, Neoliberal Economy
These institutional arrangements created a permanent inflationary pressure (Minsky [1986] 2008: 17). Creeping inflation was timid compared to

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earlier bouts of inflation, but it was also more tenacious (especially as a variety of contracts, chief among them collective industrial agreements, became
indexed to inflation expectations) and so created a distinctive set of governance challenges. Although the postwar Federal Reserve viewed managing
inflation as one of its key tasks, it was essentially counteracting the pressure
that the New Deal arrangements had built into the system at large. When
beginning in the late 1950s the Fed became more concerned about inflation
and sought to limit banks abilities to create money, banks invented new
financial forms that remained outside its regulatory remit.
Minsky (1957) was one of the first commentators to perceive these
changes and the challenge they posed to the central bank, but he viewed this
primarily as a rebuttal of the Feds pretenses of discretionary precision management, that is, as a reminder that the basic operational logic of financial
management consisted in the stabilization of the payment network through
the fortification of its nodal points. The accuracy of this assessment was
borne out by developments during the 1960s and 1970s: even as regulators
were increasingly concerned about inflation, they saw no real alternative to
accommodating the financial practices that kept the problem alive, expanding publicly sponsored options for securitization (Green and Wachter 2005)
and increasing the level of protection for the payments system (Mengle
1985). Attempts to contain inflation merely fueled the growth of what has
recently come to be known as a shadow banking system (composed of
institutions that are unable to issue money in the specific sense of Federal
Reserve notes but nonetheless operate on the multiplier principle), much of
which could draw directly or indirectly on the facilities offered by the central
banking complex. The result was a return to dynamics of leveraging and
deleveraging and increased instability. During the 1970s, as it became clear
that even economic stagnation would not slow down inflation, the Federal
Reserve increasingly came to understand the problem as one that was sustained at basic operational levels of financial management. It is against this
background that we need to see the turn to monetarism.
Monetarism tends to associate itself both with the claim that money
matters and with the postulate of the long-run neutrality of money. Money
is to be a mere convention that facilitates exchange, and it matters only in the
sense that failure to respect its status as an arbitrary convention can produce
dangerous distortions. Precisely because money is nothing, there is danger
in attributing inherent powers to it and in imagining that it possesses an
unconditional ability to buy thingsand that is why it requires absolute submission. Monetarism thus amounts to an injunction to purify the currency

Konings
through austerity. This appeal has significant affective force and has given
monetarist tenets closer connections to democratic sentiments than is typically recognized.
This is evident in the populist affiliations of the prewar quantity theory
(Laidler 2004), but equally in the fact that during the 1960s and 1970s it was
Congress that forced a reluctant Fed to engage monetarism more seriously
(Kane 1975). Although Milton Friedman (1956) might have felt that achieving monetary neutrality was a straightforward affair of controlling the quantity of money, even Paul Volcker (1978), who was appointed Federal Reserve
chair in 1979 and had strong monetarist leanings, did not set much store by
such ideas and looked to monetarism above all as a means to affect expectations.4 This take on monetarism went together well with the vision of economists such as Karl Brunner and Allan Meltzer and the Shadow Open Market
Committee they were part of, which had considerable influence on populist
sentiments in Congress (Weintraub 1977, 1978). They were keenly aware
that determining what counts as money was not a straightforward affair,
but, just as the ambiguities of language should not motivate us to abandon
language but to improve its functionality, the difficulty of definition was seen
to make definition all the more urgent. Volcker perceived the problem as one
of how the state might change the way it related to a process in which it was
constitutively implicated. We might therefore say that in Volckers thinking,
the Minskyan problematic of economic order was completed by a Hayekian
one.5 Volcker was well aware that the states lending and insurance functions
were an integral part of the endogenous process whereby the dollar was constituted as a stable measure and were for that reason indispensable infrastructure, but he also saw the role of the state as a problem insofar as it contributed to expectation-driven inflationary dynamics.
This systems-theoretical problematicwhat kinds of agency and
capacities for intervention are made available by endogenously evolving
processes?is at the heart of Friedrich Hayeks work (Cooper 2011; Mirowski
2011; Kessler 2013).6 A common critique of Hayek is that in his advocacy of
neoliberal policies he allied himself with exactly the kind of ambitions for
nonspontaneous ordering that he had spent his career attacking (Scheuerman 1997). And this reflects a more general tendency to ground a critical
analysis of the neoliberal state in an Agambenesque concern with its exceptional nature (Klein 2007; Brassett and Vaughan-Williams 2012). But to
view Hayek as embodying neoliberalisms hypocritical reliance on sovereign
decisionism misses something important about the logic at work, both in
his work and in neoliberal practice. Hayek, after all, is emphatic that the

April 2015
state has no privileged foresight and does not occupy an exceptional space
vis--vis the historical logic of economy.
Hayeks work is best read as a plea for a heightened awareness of the
limits of knowledge, an injunction for subjects to abandon all ambitions for
intentionalist constructivism and play their proper role in the secular evolution of the world (Davies and McGoey 2012). Summarizing the conclusion to
which his turn to the problem of knowledge half a century earlier (Hayek
1937) had eventually led him, he insisted in The Fatal Conceit that only reason that recognises its own limitations and submits itself to the invisible
logic of economy is reason properly used (Hayek 1988: 8). The awareness
of the impossibility of truly objective observations and real external interventions was itself the intervention that was needed. Speculation was permitted
and indeed required, but it should abandon any hope of transcending its partial and contingent nature and fully submit to the invisible logic of economy.
For Hayek, economy was a process of emergent evolution, and he insisted
that the resulting actants austerely recognize their secular origins and performative nature, fully own their organically embedded responsiveness to
moneys demands, and use their reflexive capacities not to entertain irrational fantasies of rational institutional design but to ensure the servicing of
their debts. For the economy to work properly, we must fully own our tacit
knowledge and respect the moment of not-knowing on which our practical
reason is founded.
Hayeks thinking foregrounded a problematic that led a more subterranean life in other strands of neoliberalism: how the awareness of the limits of rational constructivism could be internalized into the practice of government itself. For Hayek, neoliberal expectations management was not a
matter of enforcing an external limit but a biopolitical project that sought to
leverage the affective logic transforming fictions into facts (Spieker 2013).
On this reading, neoliberalism involves neither a retreat from claims to sovereignty nor a resurgence of sovereign decisionism, but a recalibration of the
connection between speculation and austerity as the axis of modern sovereignty. Far from representing a cynical advocacy of chrematistics, neoliberalism has always managed to cast itself as the true heir to the republican vision
of economy. Its discourses promise purification through austerity, and the
very significant moral appeal and emotional resonance of this was richly evident in the rise of Reaganism and has most recently been on display in Tea
Party populism. What heterodox critics of contemporary capitalism often fail
to discern, then, is that neoliberal discourses already offer their own critique

Konings
of chrematistics, of an unhealthy, fetishistic relation to money. Indeed, in

neoliberal discourses it is precisely the progressive character that features as
the embodiment of moral corruption, an idolatrous subject that fails to own
the history of its investments and lives on idle hopes and dependent expectations, is happy to take out a loan but lacks the moral strength to service its
debts and validate its speculations.
The Volcker program was a frantic and short-lived effort to measure
and control the most relevant monetary aggregates through continuous
interventions that needed adjusting as soon as they were implemented. Rapidly rising interest rates altered a key parameter in the temporal logic of balance sheet interactions, increasing funding costs and tightening the survival
constraint on most financial institutions. But throughout it was clear that
inflation would quickly reemerge if nothing else were to happen. Volcker
was, to borrow Lisa Adkinss phrase (2012: 625), prospecting for potential,
and his policy turn amounted to a gamble that it would force a reorientation
in wider policies. The link between monetarism and the wider turn to neoliberalism was most readily evident in Volckers (2000) admission that the
success of his policies was helped immeasurably by Ronald Reagans assault
on organized labor. As deindustrialization and the destruction of secure
employment contracts accelerated, the Reagan administration devoted itself
to dismantling public income provision. The result was a tremendous growth
of precarity that produced many more imperatives and opportunities for the
creation of speculative contracts than had been closed down (Martin 2002;
Lazzarato 2009). Financial dynamics decisively burst out of the postNew
Deal legislative and regulatory arena, and the 1980s saw a return to financial
instability. Many of the institutions that found themselves in trouble were
considered too big to fail, and as the central bank not only staged a series of
bailouts but also massively increased its support for the payments system
and geared the logic of routine interventions more and more to the needs of
large financial institutions (the Greenspan put), it effectively created an
insurance regime for capital markets (Stern and Feldman 2004).
In the aftermath of the turn to monetarism, the dollar emerged as a
more fully iconic sign, organizing a curiously plastic economy of accelerating
speculation on proliferating contingencies that revolved around a stable unit
of value. Financial networks more complex than ever before in history were
punctualized by a fully dematerialized dollar sign. It was against this background that we should see the golden age of inflation targeting overseen by
Alan Greenspan. Monetary management at times appeared to have become

April 2015
an almost entirely rhetorical affair, with the Fed able to manage inflation
simply through mere announcements of interest rate targets (Kaplan 2003;
Holmes 2013).
This state of affairs was given a highly idealized rationalization in the
new Keynesian literature, which formalized inflation as a function of expectations, rational beliefs about the future that could be manipulated according
to the Taylor rule (Woodford 2003).7 The dynamics of boom and bust, it
seemed, had become functionally incorporated into economic order (Posen
2006). But the notion that financial authorities had no business interfering
with wider dynamics and in particular asset pricesthat changes in asset
prices should affect monetary policy only to the extent that they affect the
central banks forecast of inflation (Bernanke and Gertler 2001: 253)
always appeared more anxiously insistent than calmly confident. What
found no expression in the new Keynesian depiction of financial management was the much wider logic of interactive expectations and performative
valuations in which interest rate manipulations intervened and that beneath
the apparent magic of Greenspans open-mouth operations could be found
an elaborate infrastructure of operations effecting an ongoing redistribution
of liquidity constraintsof which spectacular bailouts were only the most
visible manifestation.
It is in this context that progressive critics began to develop florid discourses to criticize speculation, countering orthodox idealizations by
emphasizing the unpredictable nature and disruptive effects of financial
volatility. At the very same time as capital was proving itself capable of triggering productive responses to its speculative propositions in a variety of
unexpected spaces and making value a more plastic entity than ever before,
heterodox critiques became more and more concerned about separating fictitious from real value, mere form from substance. The post-Keynesian appropriation of Minsky that has come to dominate the literature sees uncertainty as an external limit to risk-based prediction and depicts speculation
as an irrational, destabilizing practice that should be suppressed through
regulation. Decrying each bailout as a hypocritical, external intervention to
save speculators from themselves, it ignores the fact that Minsky saw the
continuous redistribution of liquidity constraints as an endogenous feature
of the financial system itself. As Mike Beggs (2012: 17) has pointed out, the
answer suggested by Minsky (1982) himself to the question, Can it [i.e.,
the crash of 1929] happen again?, was something like probably not,
because of the level of protection embedded in the operation of the system.8

Konings
Minsky did not see any real solution to the inflationary pressure that this
had created, and it was precisely this problem that monetarism and neoliberalism sought to address.
If heterodox predictions of financial collapse have a shockingly poor
track record, recurrent failure has only served to intensify conviction.9 Critics of neoliberal finance quickly seized on the crisis that began in 2007 as a
told-you-so moment, triumphantly declaring that this time the house of
cards had really collapsed and evincing tremendous excitement about the
imminent political turn to a suppression of speculation. The fact that the
Federal Reserve was buying large amounts of unsound assets was taken as
so much more evidence of the extent to which the disordering effects of
chrematistical irrationality had infected the American polity and as underlining the inevitability of a Polanyian countermovement. This was a profound misreading of the role of the state. As interest rate manipulation and
liquidity provision were unable to stop the downward spiral of asset prices,
the state was faced with the choice of letting markets go into a free fall of
debt deflation or sustaining asset values by declaring its willingness to
absorb assets onto its books against minimum prices. Untroubled by the
absence of legitimating theorems, the US state committed itself fully to the
validation of its constitutive speculations. Although this involved a series of
measures without historical precedent (most notably the much-publicized
expansion of the Federal Reserves balance sheet), in an important sense it
was simply the expansion of the central banks basic function. The Fed was
forced to put aside its inflation fine tuning and go back to basics (Mehrling
2012: 107), its core activity of protecting the nodal points in the payments
system (Mehrling 2011; Le Maux and Scialom 2013).
There is of course a definite banality about the bailouts, and the Feds
own understanding of its indefinite support for the balance sheets of toobig-to-fail institutions as forward guidance (Board of Governors of the
Federal Reserve System 2011: 6) claims a degree of foresight that it simply
lacks. But this can be considered grounds for dismissing the significance
and effectiveness of such measures only if the deployment of public authority is assessed against an idealized conception of sovereignty, one that transcends the economic logic of risk, speculation, and temporality, commanding exceptional foresight and autonomous powers of persistence. That is,
such heterodox critiques tend to ignore the states own performative nature
and bank-like character and to downplay its integral role in the plastic logic
of value.

April 2015
During the following years all hoped-for measures to curtail speculation failed to materialize, and then, as if to add insult to injury, came the turn
to austerity, in which populist forces, guided by a decidedly republican imaginary, played a key role (Konings 2012). The acute awareness that the financial
system had been manipulated and corrupted by special interests generated a
demand for purification, for the restoration of money to its proper role as a
neutral regulator of a republican economy. The affective dynamic at work
here has tended to elude heterodox critiques, with Mark Blyth (2013) reducing
the spirit of austerity to a cognitive mistake that has somehow survived hundreds of years of contrary evidence, an irrational policy that merely kills the
economy (see also Schfer and Streeck 2013; Stuckler and Basu 2013).
If the turn to austerity certainly involves major elements of ideological
misrecognition and perverse redistribution, the problem precisely cannot be
productively engaged through an external critique: cognitive dissonance is
produced through emotional modulations, and its operation cannot be
understood if we limit our gaze to the level of cognition. Indeed, precisely
such moralistic dismissal of the spirit of austerity features as the internal
other of the populist imaginary, the progressive enemy within. The Tea
Party movement, which played a central role in supporting the austerity
agenda, can be seen as an emblematic manifestation of what Walter Benjamin ([1921] 2005: 259) called the blaming cult at the heart of the spirit of
capitalism, which embraces the expression of resentment as a productive
practice that improves the prospects of the republic. To argue, then, that the
central bank ... has effectively taken a long position on no-growth capitalism (Bowman et al. 2013: 468) is to turn a blind eye to the affective charge
and generative force of capitalisms secularized spirit, to dismiss the possibility that the American states speculative investments may work out, that it
may get back, with interest, the time it made available to the banks.
Plastic Politics
It is increasingly clear that the crisis did not constitute a turning point or the
start of a countermovement, but has above all served to entrench the logic of
neoliberalism (Mirowski 2013). Although the heterodox critique of capitalist
speculation is a thriving academic industry, the fact that it claimed final vindication only several years ago means that it increasingly appears more as a
moral stance than as a serious attempt to comprehend the dynamics of capitalism. Steve Keen (2013: 3) has suggested, seemingly without irony, that we
are currently experiencing a bubble so big we cant even see it, that we have

Konings
come to identify with the problem to such an extent that we are no longer
able to see it as a problem. The implausible nature of this claim when read as
an attempt to continue the heterodox critique of speculation as a divergence
from fundamentals might prompt us to reread it through a different lens.
That is, we might take Keens notion that we are the bubble as suggesting
that it is increasingly difficult to make any sense of the role that speculation
plays in shaping capitalisms future unless we pay attention to the plasticity
of its financial assemblages. One of the most widely discussed developments
since the financial crisis has been the accelerating expansion of student
debt. With American financial institutions seeing tremendous opportunities in extending to adolescents loans that are secured by nothing other than
their future human capital, it is not particularly far-fetched to say that value
and life are becoming fully mutually constitutive.
Against the background of the accumulating evidence for capitalisms
ability to survive and thrive on instability we should see the ever-growing fascination with the immanent resilience of networks, the ability of entities to
gain from disorder (Taleb 2012). The philosophical structure of this logic is
perhaps best articulated in the development of Peter Sloterdijks (1988, 2011)
thought, which has evolved from a critique of critique (i.e., external, Frankfurt schoolstyle idolatry critique only serves to generate cynical reason that
fails to penetrate capitalisms reflexive bufferings and in the process itself
becomes yet another one of them) to a positive ontology of bubbles, which
depicts world states as nothing but plastic topological structures. A similar
logic is at work in the pragmatic affinities of much contemporary French
thought, which emphasizes the reflexive origins of our signs and the futility
of iconoclastic critique. Luc Boltanski and Eve Chiapello (2007) have argued
that the spirit of neoliberal capitalism was produced through the incorporation of anticapitalist sentiments, generating a supple network capable of
absorbing any number of challenges. For Bruno Latour (2007, 2010), whose
work can be read as an attempt to overcome the polarity of fiction and fact,
there is only construction through association and the paradoxically resilient
logic of plastic networks.
In these theoretical perspectives we find a disconcertingly smooth
transition from a rejection of the critique of idolatry to a weakening of critical impulses altogether. Crucially, they appear unaware of the extent to
which their work is in tune with the Hayekian spirit of the critique of critique: to realize that there is no external vantage point from which to judge
our constructions becomes itself the change that is needed. The notion that
idolatry critique merely represents a nave belief in the others nave belief

April 2015
(Latour 1997: 81; italicized in original)which essentially turns the accusation of groundless irrationality back on the idolatry criticlays the groundwork for an all-too-familiar Kantian leap from contingency and performativity into constructivist idealism and pluralist reformism. The critique of the
critique of idolatry becomes itself a stance with iconoclastic pretensions,
serving to reinvigorate the otherwise malaise-ridden neoliberal politics of
progressive liberalism.
This intellectual logic perhaps goes some way toward accounting for
the otherwise puzzling degree of excitement that surrounds the idealist pluralism of the sociology of value (Boltanski and Thvenot 2006; Stark 2011)
and social studies of finance (Callon 1998; MacKenzie 2008). But the combination of claims to theoretical radicalism and penchant for political accommodation is especially visible in the rise of speculative materialism (Galloway
2010). In Elie Ayaches (2010) work (which closely follows Quentin Meillassoux [2008]), money is an absent cause, a point where absolute contingency
coincides with absolute necessity, an icon more perfect and enigmatically
spectral than the medieval church could ever have hoped for. This kind of
radical orthodoxy (cf. Milbank, Pickstock, and Ward 1998) reproduces the
paradoxical combination of iconoclasm and iconophilia that is at the heart of
the spirit of neoliberal capitalism.10 The affective force field of economy that
might have been made visible gets to hide behind a renewed fascination with
the icon, the weird object, and the critical space between idolatry critique and
iconophilia that might have been occupied is quickly closed down. These
fashionable approaches decline to engage the terrain that is being actively
measured, formatted, and exploited by capital, foreclosing the possibility of a
productive implication of theory in the plastic logic of value. Paraphrasing
Catherine Malabou (2008: 12), we might say that they appear to have little
interest in exploring how we might use our awareness of the plasticity of
value to generate performances and speculations that do not coincide with
the spirit of neoliberal capitalism (cf. uncertain commons 2013).11
Whereas in French pragmatism and speculative materialism the conversion of contingency into necessity appears as a remarkably painless
affair, Sloterdijk (2012) has spelled out with much greater clarity the political stakes of bubble living. Unlike Latour, he does not see a clean or easy
way out of the spirit of iconoclasm: idolatry critique is not rendered irrelevant but becomes more and more a technique of blaming, a way to contrast
our own investments and commitments to the imagined superstition of
others and justify our demand that they change their inaustere ways. Sloterdijks state is a resentment bank, extending short-term promises of revenge

Konings
that it transforms into political legitimacy, building security through the

valorization of blaming.12
As David Graeber (2011) has suggested, we can view the defunding of
public education and the growth of student debt along such lines: as the
revenge of populist-republican sentiments on the progressive-liberal characters attachment to non-Hayekian knowledge, the rejection of a subjectivity
that refuses to acquire vocational skills and seeks knowledge without submitting it to the austere discipline of economy. The expansion of student
debt should be seen in the context of a series of reforms that have effectively
put the option of bankruptcy out of reach, making the contract entered into
by an eighteen-year-old a uniquely sacred bond, binding in a way that no
other secular obligation is. Growing numbers of university graduates unable
to find secure employment live a life that is permanently in danger of falling
foul of the survival constraint. It has been argued that this represents a
return to indenture (Williams 2008), but whereas the traditional indenture
contract included an employment arrangement to settle the debt, the modern student loan precisely does not come with any such guarantees. At work
here is what Angela Mitropoulos (2012: 27) has referred to as infinite contractualism, a paradoxical movement whereby limitless precarity becomes
valorized as the speculative foundation of the state.
If this is the real face of plastic value, there is an unsubtle link here to
the normalization among students of the use of psychotropic medications,
drugs that all work through enhancing brain plasticity (Bousquet 2009). To
say that the logic of speculative austerity centrally involves neural labor
may just be to add yet one more adjective to the theoretical expansion of what
counts as work (following immaterial, cognitive, affective, and informational). But to do so may still be necessary even if only to underline the
uncomic absurdity of the fact that, at a time when capital is exploring the
plastic terrain of value and when speculative austerity is quite literally
becoming the funding model of academic knowledge production, progressive intellectuals still predominantly use their brain to fantasize about fundamental values and a world without speculation.
Issues related to student debt have generated so much discussion in
recent years because they portend a future that is deeply at odds with hopes
for a Polanyian re-embedding movement that would limit the reach of
finance and debt. This essay has sought to theorize some of the historical
sources and operational dynamics of that emerging state. Contemporary
capitalism should be understood not as a process whereby speculative financial forms become disconnected from fundamental values but in terms of

April 2015
the interacting imperatives of speculation and austerity. The financial measure of neoliberal life owes its resilience to the affective charge generated by
the tension between the inescapable need to engage contingency and the
promise that the faithful engagement of risk may itself become a source of economic and spiritual certainties. Money is a major blind spot of the contemporary social sciences in large part because they have been concerned too much
with debunking the orthodox idea of money as a neutral numerator and insufficiently with understanding the imaginary that is expressed in that notion.
Notes
Research support for this article was provided by the Australian Research Council under grant
DE120100213.
1
This I take to be the thrust of recent contributions that have sought to understand measure and money in terms of the logic of the derivative (Bryan and Rafferty 2006;
Esposito 2011; Martin 2013). In derivatives markets (typically depicted as the quintessential expression of casino capitalism), any hard-and-fast distinction between hedging
and speculative financing breaks down. Risk avoidance and security become themselves speculative propositions, requiring the continuous differentiation of financial
positions. Derivatives trading can be understood as responding to the absence of fundamental values (by making risk itself a tradable commodity) and so can be seen as
constituting a (paradoxical) regime of measure.
2
I am drawing here in particular on Perry Mehrlings (1999, 2000a) reading of Minskys work.
3
Double-entry bookkeeping has often been associated with the rise of capitalism
(Weber 1978; Carruthers and Espeland 1991), but such arguments have tended to
emphasize the symbiotic relation between accounting rules and market rationality
without explaining why this form of accounting rather than another emerged. It is
suggested here that double-entry bookkeepingwhich developed in the secularizing
context of the Italian Renaissancecan be seen as expressing a new relation to historical time, a device to represent and manipulate the temporal structure of claims and
obligations. It is crucial to appreciate the constitutive dimension: if there were fundamental values that preexisted the dynamics of speculative interactions, with time and
expectations just practical issues to be discounted in objective ways, then double-entry
bookkeeping would have been a relatively pointless exercise (perhaps of academic interest, but there would not have been any reason for it to have been originated by Italian
merchants).
4
New classical economists such as Robert Lucas (1972) and Thomas J. Sargent (1982)
identified expectations as the missing element in the monetarist conception of monetary neutrality.
5
That Minsky and Hayek viewed the problem of economy in similar ways has not been
sufficiently recognized. The notion that uncertainty (or unsureness) is a deep property
of decentralized systems in which a myriad of independent agents make decisions
whose impacts are aggregated into outcomes that emerge over a range of tomorrows is
Minskys (1996: 360) but could easily have been penned by Hayek.

Konings
7
8
9
10
11
12
In taking Hayek as a useful guide to the financial logic of neoliberalism, I do not mean
to imply that he was a monetaristhe emphatically was not (Hayek 1976). Detailed
consideration of the conceptual logics at work here would no doubt be a source of additional insight into the character of neoliberalism, but for the argument of this essay the
main point to note here is that Hayeks rejection of monetarism was at least in part
bound up with an inability to appreciate the extent to which monetarism was a more
reflexive set of practices than can be gleaned from the writings of Friedman.
On the continuity between monetarism and new Keynesianism, see DeLong 2000.
From that angle, the bailout and not the crisis itself might be seen as the real Minsky
moment (Beggs 2012: 17).
For some representative recent works in this spirit, see Das 2011, Keen 2011, Engel and
McCoy 2011, Duncan 2012, Hudson 2012, Palley 2013.
Put less generously, it mirrors the tendency of neoliberal discourse to recycle clichs as
profound insights (cf. Harney 2005).
Malabous (2008: 12) question reads: What should we do so that consciousness of the
brain does not purely and simply coincide with the spirit of capitalism?
Sloterdijk sees this not as a specifically modern or capitalist problematic of governance
but as a more general historical rationality, and his proposed strategy for escaping the
suction power of the states banking mechanisms is for subjectivity to reconnect to an
ur-principle of rage. Given the difficulty of identifying Nietzschean heroes who can
autonomously practice rage without having to pass through resentment, the practical
upshot of such an approach is of course to contribute precisely to the valorization of
mundane resentment and banal blaming. As a consequence, Sloterdijks work at times
becomes a somewhat unthinking expression of the spirit of blaming (e.g., his 2010
attack on welfare).
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One of the main arguments employed by pro-

gressive critiques of contemporary capitalism is

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In depicting how such balance sheet interactions generate money,

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This further hierarchization of money meant that the Bank of England

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It is against this background that we should understand the New Deal

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of chrematistics, of an unhealthy, fetishistic relation to money. Indeed, in

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that it transforms into political legitimacy, building security through the