Going Stag


In the comments to yesterday’s post, DMF posted an interesting, albeit short article published yesterday by Yanis Varoufakis on the topic—appropriately enough—of stagnation. The bulk of piece deals with what Varoufakis considers to be the myth of the single, floating, real (that is, one adjusted for inflation) interest rate, that concept so central to what we might describe as ‘neoliberal governmentality’ (though I must add that, as time goes on, I find the term ‘neoliberal’ and the politico-economic histories associated with it to be suspect). Such a thing cannot exist, he argues, for if it did capitalism would never stagnate – unless a meddling government or self-seeking trade union damaged its dazzling machinery”. Varoufakis then proceeds to lay out three reasons for why this is not true:

  1. The ‘real interest rate’—what Varoufakis calls the “magic number”—does not exist.
  2. Even if it did exist, there is no rational mechanism that would drive things towards that convergence point.
  3. Capitalism has a relative tendency that sees the market “usurp[ed]… via the strengthening of what John Kenneth Galbraith called the cartel-like managerial technostructure'”.

A key pivot for Varoufakis is that capitalism’s absolute tendency is not towards a roaming equilibrium, but towards stagnation. It is the universal law of development, occulted by the rhetoric of the free marketeers and the complexity of the global financial markets. He correctly notes that investment is lagging, and that insofar as firms are doing something with their cash reserves, it is mergers and acquisition and financial instruments that rule the day. We thus encounter a forking path:

…capitalism has only one natural tendency: stagnation. Like all tendencies, it is possible to overcome by means of stimuli. One is exuberant financialization, which produces tremendous medium-term growth at the expense of long-term heartache. The other is the more sustainable tonic injected and managed by a surplus-recycling political mechanism, such as during the WWII-era economy or its postwar extension, the Bretton Woods system. But at a time when politics is as broken as financialization, the world has never needed a post-capitalist vision more. Perhaps the greatest contribution of the automation that currently adds to our stagnation woes will be to inspire such a vision.

There are several points, all of which are in need of further elucidation, I would like to make:

  1. The positioning of stagnation as the absolute tendency, as opposed to a relative tendency, is a dubious maneuver. Similarly, the implications, as far as governmental policy is concerned, for stagnation to be posed as the absolute is that the need for stimulation becomes ubiquitous and diffused across the whole of developmental history writ large. This too is dubious, and runs roughshod over the highly bounded character, historically speaking, of such forms of state management.
  2. A proper analysis of the role of stimulation must unfold alongside the proper positioning of the state—which, after all, is the bourgeois state—not as some transcendent figure standing in some Archimedean point outside the capitalist mode of production, but as fully enmeshed within the matrices of that mode’s historical epoch.
  3. The analysis of state managerialism, of which fiscal stimulus is just one tool, needs to look the interrelationship between the paradigm-shifting productive technologies, uneven socio-economic development relative to those technologies, and the moment of institutional recomposition. Similarly, we would do well to head the avenue of approach staked out by the Regulation School, in which the content of managerial forms—which really alludes to the formal and informal coordination (or lack thereof) of increasingly sophisticated specialization—is bound to changes in the way that relative surplus value is realized.
  4. The Galbraithian technostructure is best understood through the lenses of the program advanced in point no. 3, and thus its operations tend not to prevent capitalism’s slippage into stagnation from an exogenous position, but one that is endogenous.
  5. There is an implicit identification of capitalism with the market in Varoufakis’s essay. This can be challenged, not only on Marxist grounds, but on Braudelian one as well: capitalism understood via the unity of anti-markets (which, for Braudel, is really what capitalism is about) and markets— or, more properly, the capture and subsequent redeployment of markets forces by anti-market entities.

Also relevant: Adam Tooze’s excellent reflections on Bretton Woods, and why calls for a ‘New Bretton Woods’ are profoundly missing the point.

4 thoughts on “Going Stag

  1. is this Greece’s ex-Finance Minister?

    either way, it could be argued (and i sense it has, by Freud?) that the tendency of all living systems is to stop, here, now. fortunately, they can’t. points to negative cybernetics.


    1. Yeah it is.

      It’s an interesting point, with regard to Freud, and it opens up a giant can of worms. Freud did pose that the drive goal of life was diffusion back into inert, dead matter — it’s a manifestation of the entropic paradigm that flourished as a cultural force in the wake of the discoveries around the 2nd law of thermo, which is also the source stagnationist ideas that ground themselves in transcendental entropy (I actually have an uhhh like 7 part post series planned on this, linking tracing notions of techno-economic decadence back through the evolution of this paradigm. Hopefully I can get back to it soon enough).

      Deleuze critiqued Freud quite viciously for articulating the death drive in this way, arguing that he mistook the manifestant, empirical form of death (death as we know it, in our lives) as the transcendental form of death. It plugs with his critique of the primacy of entropy as well, which he designates as a transcendental illusion. This all needs to be formalized to a higher degree as of course, but it seems like it could very easily be slotted into these frameworks. On what grounds is there to suggest that the tendency of the capitalist mode of production is towards stagnation, as a transcendental principle of development? It seems odd to me, especially when it comes from people who ostensibly label themselves Marxists, like Varoufakis does.


      1. One of Freud’s weakest speculations, some bits and pieces of compulsions to repeat (against pleasure), outward aggression against the lifeworld , masochism, and the like, best left to the Schopenhauerites I think along with the general notion of repression as something that registers at some level but then is pushed down/away, bring on the fun-house mirror glasses of the cognitive-biases.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s