The Reproduction of Fictitious Capital: The Social Fictions and Metaphoric Wealth of Financialization

Abstract

It is no exaggeration to say that, since the 2008 crisis, there has been an explosion of academic interest in the financial sector, its peri-odic crises, and the impacts and implications of both for society at large. I started my own research into finance capital in 2005, and it was my great misfortune to be trying to complete a PhD thesis on the topic as a monumental and historical financial crisis unfolded, in a time when, every week, new analyzes of the very sector I was looking at were emerging from nearly all political and disciplinary quarters. The only option, really, was to continue with the lines of inquiry with which I had begun: how do we account for not only the tremendous power of financial wealth in a moment of neoliberal globalization (see Bryan and Rafferty 2006; Lapavitsas 2013; LiPuma and Lee 2004), but also the fact that what is perhaps the most pow-erful and pervasive economic force in human history is made up of what are, at first glance, imaginary assets? After all, the fabled credit default swaps and collateralized debt obligations at the core of the 2007/2008 meltdown were, essentially, made up. Sure, they referred back to " real " assets in terms of the homes owned by sub-prime borrowers, but, as financiers and the rest of us were to learn as the crisis unfolded, the value ascribed to these assets was dramatically less than the price at which these financial instruments circulated. In other words, there is something profoundly and tantalizingly cul-tural about contemporary finance capital, about the way confidence, belief, identity and rhetoric are rolled into an evolving economic 15 M. Haiven, Cultures of Financialization © Max Haiven 2014 16 Cultures of Financialization landscape dominated by themes of speculation, immateriality and communication. It is tempting here to reach for the postmodern canon, for the work of Jean Baudrillard (1997), for instance, and identify these speculative objects as " fourth-order " simulacra: objects which have abandoned all reference to the real world, which just refer back to an eternal hall of mirrors, an infinite play of signification. There is merit to this approach, and I have used it myself (Haiven 2013b), drawing on Jacques Derrida's (1974; 2007) theory of metaphor to help explain the character of financial wealth. Derrida's intervention was to suggest that the line between metaphor and other elements of speech is " always already " blurred. This is in contrast to ana-lytic theories that see metaphor as merely a second-order element of speech, an artificial creative substitution of meaning used for stylis-tic purposes. Derrida argues that a large number of the words we use every day were once metaphors, and that metaphor is a process at the very core of language. Take, for instance, the word invest-ment. It stems from the Latin vestire, from which we also derive the word vest: it means to dress or to cloak oneself. Early-modern Italian merchants used this as a metaphor for the different profitable purposes to which money could be put – they were dressing their money up when they lent it to trading or manufacturing ventures that would bring a favourable return. This metaphor resonated, and the word invest became independent of its original meanings, fold-ing into living language. It began to become what linguists call a dead metaphor, a metaphor whose metaphoric quality has disappeared or goes unremarked or unobserved. Lo and behold, by the late 20th century investment not only named the most profitable activity in a hyper-financialized global capitalist economy, but was increasingly borrowed as a metaphor to explain all manner of activities in our social lives. Education, for instance, is increasingly talked about as an indi-vidualized " investment in the future, " rather than a shared social good (Williams 2006; 2008), and, likewise, we are constantly being told that the fostering of children by parents and society at large is an investment. Books are being published that advise people to learn to invest time and affect in their relationships for later payback (see Martin 2003, 91–107). All these new meanings of investment are now being folded into common parlance: they elicit almost no