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    The South Atlantic Quarterly114:2, April 2015

    10.1215/00382876-2862706 2015 Duke University Press

    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 isthat 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 responsi-

    ble for recurrent instability and so undermine the

    possibility of a rational and legitimate economicorder. 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 invest-

    ment in promises that lack foundation, the irratio-

    nal attribution of substantive value to mere fictions.

    It is through the fetishistic worship of empty signs,

    the groundless belief in moneys powers of self-

    multiplication, 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

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    speculation generates financial signs whose claim to value is fake and illu-

    sory. 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 ortho-

    dox 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 com-

    plex 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 stan-dard. 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 practi-

    cal 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, ortho-

    dox theory contributes to this by reproducing the duality of money in an unre-

    flexive 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 (Aristote-lian) 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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    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 dif-

    ferentiations 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 emphasiz-

    ing 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 commit-

    ment to a substantivist theory of value is motivated by a concern that to con-ceive 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, pas-

    sive, and epistemic rather than practical and performative, entailing a persis-

    tent tendency to assess its salience in terms of the capacity for accurate rep-

    resentation. Value-form theory has not gone far enough in theorizingfictitious forms in terms of their capacity to generate constitutive associa-

    tions, 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 emer-

    gence 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 stra-tegic 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 icon-

    oclast (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. Mod-

    erns 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 defi-

    ance 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, ithas become more and more itself a pragmatic stance in the specular logic of

    economy, serving as a position of not-knowing that disavows its experien-

    tially 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 butassumes 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 imagi-

    nary 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 distinc-

    tion 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 Aristo-telian 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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    Konings Contingency, Measure, and the Politics of Plastic Value 255

    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 cre-

    ation, 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 comprehen-

    sible why theologians saw no essential difference between activities such asmoneylending, 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 anysecular

    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 invis-ible and beyond human measure (Mondzain 2005: 38). The icon marked a

    lack in the here and now (Pentcheva 2006: 631) and functioned as a vanish-

    ing point of the secular. Emphatically a mere symbol, its overt humility

    served as a constant reminder of the inherent insufficiency of secular dis-

    course. 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 contin-

    gency 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, insti-

    tuting 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, econ-

    omy (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 necessar-

    ily an irrational, corrosive force but could serve as the basis of a new eco-

    nomic 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 alliancebetween Protestantism and capitalism famously highlighted by Max Weber

    ([1905] 2003). It is precisely in a Protestant ethos, hyperaware of the dan-

    gers of idolatry, that money assumes a tremendous degree of symbolic den-

    sity and affective force. Moneys mundane futility allows it to organize a dis-

    tinctly modern form of faith, a belief that incorporates a reflexive aware-

    ness of the dangers of idolatrous belief. It holds out the promise not of magic

    but of redemptive austerity, the purifying effects of taking personal respon-

    sibility for the operation of the economy. If the nascent capitalist ethosencouraged the belief that investment in the secular promise of a future per-

    formance (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 exter-

    nal 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, mir-

    rored the paradoxical movement whereby the Protestant ethic valorized the

    contingency of human history through the emphatic insistence on its separa-

    tion from eternity. The rise of modern capitalism was accompanied by theemergence 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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    Konings Contingency, Measure, and the Politics of Plastic Value 257

    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 pros-

    pect that our imaginary constructions may come to enjoy internal cohesionand 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 nec-

    essary. 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 factorof 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 specula-

    tion (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 capital-

    ism, far from representing a movement of chrematistical disembedding,

    was centrally driven by a renewal of the iconoclastic impulse of the Protes-

    tant 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 con-

    cerned 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

    iconoclasmin 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 idola-

    try 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 scien-

    tific 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 inthe 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 value-

    form theory (Bellofiore 1989), but notions of fundamental value are rou-

    tinely 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 specu-

    lation outside this public anchorage of the currency. The notion that money

    supersedes its origins as bank debt and becomes a state token suggests a cer-tain idealism, a Kantian leap from the concern with contingency to an inten-

    tionalist 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 accu-

    rate 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 criticof speculation, and the term Minsky momenthas 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 prob-

    lem of temporality to the issue of the double coincidence of wants and then to

    posit money as an one-off solution.2For 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 pre-

    cisely in how the interaction of speculative investments might generate a sta-

    ble 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 invest-

    ments, and the need to generate sufficient revenue from ones investment to

    be able to service ones debts becomes a survival constraint (a term recov-

    ered by Perry Mehrling [1999: 139] from Minskys doctoral thesis).3Throughthe 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 clear-

    ing and settlement services, banks serve as nodal points in the payments

    network, and consequently their short-term promissory notes assume a spe-

    cial 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 invest-

    ments, but they are distinctive because they can borrow cash liquidity by cre-

    ating 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 loosenthe 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 deci-

    sions while lacking key information about what others will do next and what

    the future will look like. The orientation points it generates never preemptthe 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 idola-

    ters 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 ensur-

    ing survival. The performative paradox of money is that we are always recon-

    sidering 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 capi-

    talist standard of value never transcends its promissory character (cf. Adkins

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    2012: 626) and works precisely through provoking (Muniesa 2011: 32), the

    possibility of activating patterns of connections and prompting their reorga-

    nization 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 inEngland that bank obligations came to function as the basis of a national


    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 external-

    ity of measure from value production. Autonomist approaches have a ten-

    dency to theorize the growing immanence of measure and value in post-Fordism 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 society-

    wide 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 toserve 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 con-

    fidence (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 specula-tive 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 man-

    agement 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 contractualcommitments, 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 institu-

    tions 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 pro-

    vision 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 nine-teenth 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 mid-

    twentieth-century capitalism in terms of the suppression of speculative spir-

    its, 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 government-

    assisted refinancing, with access dependent on investment in various formsof 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 last-

    resort 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 theFederal 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 capital-

    ization 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 autono-

    mist persuasion) have seen to be at the heart of mid-twentieth-century eco-

    nomic order.

    Monetarist Reason, Neoliberal EconomyThese institutional arrangements created a permanent inflationary pres-

    sure (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 vari-

    ety of contracts, chief among them collective industrial agreements, became

    indexed to inflation expectations) and so created a distinctive set of gover-

    nance 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 man-agement, 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, expand-

    ing publicly sponsored options for securitization (Green and Wachter 2005)

    and increasing the level of protection for the payments system (Mengle1985). 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 sus-

    tained 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 anunconditional ability to buy thingsand that is why it requires absolute sub-

    mission. Monetarism thus amounts to an injunction to purify the currency

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    Konings Contingency, Measure, and the Politics of Plastic Value 265

    through austerity. This appeal has significant affective force and has given

    monetarist tenets closer connections to democratic sentiments than is typi-

    cally 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 achiev-

    ing monetary neutrality was a straightforward affair of controlling the quan-

    tity 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 expecta-

    tions.4This take on monetarism went together well with the vision of econo-mists 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 wasconstitutively implicated. We might therefore say that in Volckers thinking,

    the Minskyan problematic of economic order was completed by a Hayekian

    one.5Volcker was well aware that the states lending and insurance functions

    were an integral part of the endogenous process whereby the dollar was con-

    stituted as a stable measure and were for that reason indispensable infra-

    structure, but he also saw the role of the state as a problem insofar as it con-

    tributed 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).6A 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 (Scheuer-

    man 1997). And this reflects a more general tendency to ground a critical

    analysis of the neoliberal state in an Agambenesque concern with its excep-

    tional nature (Klein 2007; Brassett and Vaughan-Williams 2012). But to

    view Hayek as embodying neoliberalisms hypocritical reliance on sovereigndecisionism misses something important about the logic at work, both in

    his work and in neoliberal practice. Hayek, after all, is emphatic that the

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    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 evolu-

    tion 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 Conceitthat only rea-

    son 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 interven-

    tions was itself the intervention that was needed. Speculation was permittedand indeed required, but it should abandon any hope of transcending its par-

    tial 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 per-

    formative nature, fully own their organically embedded responsiveness to

    moneys demands, and use their reflexive capacities not to entertain irratio-

    nal fantasies of rational institutional design but to ensure the servicing of

    their debts. For the economy to work properly, we must fully own our tacitknowledge and respect the moment of not-knowing on which our practical

    reason is founded.

    Hayeks thinking foregrounded a problematic that led a more subter-

    ranean life in other strands of neoliberalism: how the awareness of the lim-

    its of rational constructivism could be internalized into the practice of gov-

    ernment 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 sov-

    ereignty nor a resurgence of sovereign decisionism, but a recalibration of the

    connection between speculation and austerity as the axis of modern sover-

    eignty. Far from representing a cynical advocacy of chrematistics, neoliberal-

    ism 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 evi-

    dent in the rise of Reaganism and has most recently been on display in Tea

    Party populism. What heterodox critics of contemporary capitalism often failto discern, then, is that neoliberal discourses already offer their own critique

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    Konings Contingency, Measure, and the Politics of Plastic Value 267

    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 expecta-

    tions, 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. Rap-

    idly rising interest rates altered a key parameter in the temporal logic of bal-

    ance sheet interactions, increasing funding costs and tightening the survival

    constraint on most financial institutions. But throughout it was clear thatinflation 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 neo-

    liberalism 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 itselfto 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 back-

    ground that we should see the golden age of inflation targeting overseen byAlan Greenspan. Monetary management at times appeared to have become

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    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 expec-

    tations, rational beliefs about the future that could be manipulated according

    to the Taylor rule (Woodford 2003).7The 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 onlyto 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 manage-

    ment 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 dis-

    courses 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 trig-

    gering 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 ficti-

    tious from real value, mere form from substance. The post-Keynesian appro-

    priation of Minsky that has come to dominate the literature sees uncer-

    tainty 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

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    Minsky did not see any real solution to the inflationary pressure that this

    had created, and it was precisely this problem that monetarism and neolib-

    eralism sought to address.

    If heterodox predictions of financial collapse have a shockingly poor

    track record, recurrent failure has only served to intensify conviction.9Crit-

    ics 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 under-lining the inevitability of a Polanyian countermovement. This was a pro-

    found 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 ofmeasures 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 too-

    big-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 author-

    ity is assessed against an idealized conception of sovereignty, one that tran-

    scends the economic logic of risk, speculation, and temporality, command-

    ing 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 logicof value.

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    During the following years all hoped-for measures to curtail specula-

    tion 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 imagi-

    nary, 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 hun-

    dreds 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 ideologicalmisrecognition 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 Benja-min ([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 capital-

    ism (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 possi-

    bility 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 vin-

    dication only several years ago means that it increasingly appears more as a

    moral stance than as a serious attempt to comprehend the dynamics of capi-talism. 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

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    Konings Contingency, Measure, and the Politics of Plastic Value 271

    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 opportuni-

    ties 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 valueand 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 fas-

    cination 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, Frank-

    furt schoolstyle idolatry critique only serves to generate cynical reason thatfails 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 incorpora-

    tion 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 criti-

    cal impulses altogether. Crucially, they appear unaware of the extent to

    which their work is in tune with the Hayekian spirit of the critique of cri-

    tique: to realize that there is no external vantage point from which to judgeour constructions becomes itself the change that is needed. The notion that

    idolatry critique merely represents a nave belief in the others nave belief

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    (Latour 1997: 81; italicized in original)which essentially turns the accusa-

    tion of groundless irrationality back on the idolatry criticlays the ground-

    work for an all-too-familiar Kantian leap from contingency and performativ-

    ity 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 plu-

    ralism of the sociology of value (Boltanski and Thvenot 2006; Stark 2011)

    and social studies of finance (Callon 1998; MacKenzie 2008). But the combi-

    nation of claims to theoretical radicalism and penchant for political accom-modation is especially visible in the rise of speculative materialism (Galloway

    2010). In Elie Ayaches (2010) work (which closely follows Quentin Meillas-

    soux [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 thatmight 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 con-

    version of contingency into necessity appears as a remarkably painless

    affair, Sloterdijk (2012) has spelled out with much greater clarity the politi-

    cal 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 irrele-

    vant but becomes more and more a technique of blaming, a way to contrast

    our own investments and commitments to the imagined superstition ofothers and justify our demand that they change their inaustere ways. Sloter-

    dijks state is a resentment bank, extending short-term promises of revenge

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    Konings Contingency, Measure, and the Politics of Plastic Value 273

    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 charac-

    ters attachment to non-Hayekian knowledge, the rejection of a subjectivity

    that refuses to acquire vocational skills and seeks knowledge without sub-

    mitting 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 unableto 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 mod-

    ern student loan precisely does not come with any such guarantees. At work

    here is what Angela Mitropoulos (2012: 27) has referred to as infinite con-

    tractualism, 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 infor-

    mational). 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, progres-

    sive intellectuals still predominantly use their brain to fantasize about fun-

    damental 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. Contemporarycapitalism should be understood not as a process whereby speculative finan-

    cial forms become disconnected from fundamental values but in terms of

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    274 The South Atlantic Quarterly April 2015

    the interacting imperatives of speculation and austerity. The financial mea-

    sure 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 eco-

    nomic and spiritual certainties. Money is a major blind spot of the contempo-

    rary social sciences in large part because they have been concerned too much

    with debunking the orthodox idea of money as a neutral numerator and insuf-

    ficiently with understanding the imaginary that is expressed in that notion.


    Research support for this article was provided by the Australian Research Council under grant


    1 This I take to be the thrust of recent contributions that have sought to understand mea-

    sure 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 quintes-

    sential expression of casino capitalism), any hard-and-fast distinction between hedging

    and speculative financing breaks down. Risk avoidance and security become them-

    selves speculative propositions, requiring the continuous differentiation of financial

    positions. Derivatives trading can be understood as responding to the absence of fun-

    damental 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 Min-

    skys 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 his-

    torical 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 funda-mental 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 inter-

    est, but there would not have been any reason for it to have been originated by Italian


    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 mone-

    tary 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 propertyof 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.

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    Konings Contingency, Measure, and the Politics of Plastic Value 275

    6 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 addi-

    tional insight into the character of neoliberalism, but for the argument of this essay themain 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.

    7 On the continuity between monetarism and new Keynesianism, see DeLong 2000.

    8 From that angle, the bailout and not the crisis itself might be seen as the real Minsky

    moment (Beggs 2012: 17).

    9 For some representative recent works in this spirit, see Das 2011, Keen 2011, Engel and

    McCoy 2011, Duncan 2012, Hudson 2012, Palley 2013.

    10 Put less generously, it mirrors the tendency of neoliberal discourse to recycle clichs as

    profound insights (cf. Harney 2005). 11 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?

    12 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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