[Text of a talk given at the BSA conference Understanding the Financial Crisis, 8 October 2012]
‘Today, anyone opening a newspaper often bumps up against the word “crisis”. It indicates insecurity, suffering and uncertainty, and alludes to an unknown future whose presuppositions cannot be clearly elucidated’. These lines are not my own, but are taken from a political dictionary published in France in 1839. In what follows, I want to approach the question of how we reckon sociologically and theoretically with the financial crisis from a somewhat oblique angle, that of crisis as a mode of historical and temporal experience, which is also to say a structure of feeling. I then want to sketch some of the ways in which the idea, and the structure of feeling, of ‘reform’ can serve as a hindrance to our sociological imagination of crisis.
Though these might appear to be very speculative concerns (in the philosophical, rather than financial sense of speculative) I think it is worth attending to the kind of intellectual conventions and expectations that govern how we approach the relationship between economic process and political decision, insofar as these govern both public and academic debate about ‘the’ crisis. I think it is particularly important to reflect on the horizons and experiences of social temporality that govern our responses to a situation in which the short term (e.g. state responses to credit ratings of treasury bonds) and the long run (the momentous social effects of austerity policies on the very prospects of social reproduction) appear hopelessly entangled and confused.
In order to sketch out some of these questions, I want to begin by turning to the conceptual history of the notion of crisis, which was elucidated with striking erudition by the German conceptual historian Reinhart Koselleck. Examining its etymology and history of use, with particular focus on its military, medical, and philosophical definition in ancient Greece – where crisis incorporated notions of urgent judgment, social conflict and political choice – Koselleck’s work underscores the relationship between time and agency, which lends crisis both its importance for social theory and its often maddening ambiguity, as well as its easily inflated and indiscriminate use (such that everything, at all times, can be said to be ‘in crisis’).
Relying on its medical meaning, as derived from Hippocratic medicine, where it referred to the phase in a disease where the patient will either succumb or recover (‘the critical phase of sickness in which the battle between life and death was [to be] definitively settled’), Koselleck defines crisis as ‘that point in time in which a decision is due but has not yet been rendered’. The language – the idea of a ‘point’ in time – is ambiguous, since social crisis (as Antonio Gramsci noted in the 1930s, and as is evident to any present observer) rarely takes the form of an instant or event.
The time of crisis is a time that has not yet been taken on or assumed by an agent or subject – it is a time of uncertainty, of expectation – but it does include the idea of an eventual decision, and thus of an agent, within its concept. Neither a simple phase, nor a caesura, crisis here denotes a temporal tension from a finite and ambivalent period to a moment or act of decision, or as Koselleck defines it, it is ‘a compulsion to judge and act under the pressure of time’. Koselleck encapsulates this nicely in the idea that crisis implies a ‘knowledge of uncertainty’ and a ‘compulsion towards foresight’.
Within the general framework of decisive judgments under the growing pressure of time, which he links to the secularisation of ‘the apocalyptic foreshortening of time’ in ‘the acceleration of historical progress’, Koselleck presents us with three semantic models of crisis, all of them of theological derivation. The first is that of history as permanent crisis, a global process that is also a total judgment, as in Schiller’s dictum ‘The history of the world is the tribunal of the world’: ‘World history as the judgment of the world’, writes Koselleck, ‘implies foremost and above all the statement that every situation is marked by the same urgent sense of decision’. The second semantic model is of singular processes of acceleration and thresholds of change. Here crisis is ‘an iterative periodising concept’ allowing for comparison and analogy. This is the model that pertains to ‘ordinary’ understanding of economic crisis, with the added complication that, unlike a medical understanding of crisis, which is broadly homeopathic, (capitalist) economic crises have incessant growth and accumulation, and not stability, as their counterpart. Here Koselleck poses an interesting question, perhaps worth returning to, as to ‘whether “progress” is the guiding concept for “crisis” or whether the iterative periodising concept of “crisis” is the true guiding concept under which “progress” is also subsumed’. The third model, that of a final crisis, is both the most theologically laden. It is also one that we can see haunting popular culture, or, if we are to go by some of the fascinating interviews in Alexandra Ourozoff’s Wall Street at War, the imaginaries of business elites. In Koselleck’s words, ‘this semantic option is taken up more and more frequently the less the absolute end of history is believed to be approaching with the Last Judgment’. Koselleck’s own conservative response to the idea that we live in an epoch of potentially terminal crises is to resort to the Christian notion of a ‘katechon’, of forces that may stabilise or restrain the unleashing of the end, the possibility of collapse. It is worth noting for our purposes that in his brief treatment of the semantics of crisis Koselleck repeats a common observation about the ambivalence or polysemy of Marx’s concept of capitalist crisis – precariously, or dialectically, poised between the second and third model. As Koselleck notes, in a debatable but suggestive formulation: ‘One the one hand, he operated with a concept of crisis immanent to the system while he expounded the iterative structure of economic crises. On the other side, he knew of a concept of crisis destroying the system which he derived from other premises, making it possible to see world history drifting toward a last great crisis’.
It is particularly relevant in regard to our purposes that the twentieth-century history of reformism is the child of the socialist debate over the political consequences to be drawn from Marx’s crisis theory and from the strategic question of how worker’s parties were to intervene faced with the cyclical, and seemingly intensifying, bouts of destruction characterising the capitalist economy. The century-old debate about reform and revolution took place on these grounds, pitting Rosa Luxemburg’s interpretation of this crisis – which in Koselleck’s terms treated it as the catalyst for an urgent alternative – with Eduard Bernstein’s evolutionary view of reformism, of a reforms acting not as a katechon, holding back disaster, but as a gradual move towards a telos of social justice that revolution could only botch up. But the classical prospect of a teleological reformism, and the strategic council of caution and gradualism that accompanied it, has all but vanished from our political imaginary.
Luxemburg’s rejection of Bernstein’s notion that capitalism could adapt its way out of crisis by means of credit, the unification of capitals, and the spread of communication – a socialist precursor of Ben Bernanke’s ill-fated views about ‘The Great Moderation’ – seems rather apt in our age of consumer credit and collateralised debt obligations. But the seemingly more sober idea of a reformist katechon taming capitalist barbarism, so widespread today, is not any more persuasive for that. It is not simply the case that the balance of social forces speak against it; it appears to rely on the prospect of something like a capitalism without capitalism: a durable manner of embedding accumulation, neutralising its tendencies to crisis, and arresting its intensifying exploitation of labour and nature, as well as its expulsion of ever greater swathes of the world into various forms of superfluity.
For some years now, advocacy of a pragmatic, sensible left has depended precisely on the prospect of a tamed, ‘responsible capitalism’. This is a perspective which we could note holds a special allure for sociology, to the extent that the discipline’s spontaneous political philosophy – evident all the way from Durkheim corporativist speculations to the palliative emphasis on ‘social capital’ – may be seen to involve an ’embedding’ of capitalism, and in particular of its tendencies to abstract and dissolve social bonds. Thinking back to Koselleck’s conceptual investigation, we could also suggest that, to the extent that capitalist modernisation has been perceived as a deep and enduring epochal crisis of experience and value, sociology has often presented itself as a kind of intellectual department of crisis management or crisis prevention. Whether pessimistically shoring up the idea of a need to preserve the social against the feral spirits of capitalist abstraction, or optimistically proposing a virtuous dialectic between markets and society, whether taking ‘left’ or ‘right’ variants, I think this is a tendency that has deeply marked the discipline.
If we can historically, and perhaps sociologically, argue that there is an elective affinity between the sociology and a certain reformism, then this moment of protracted ‘crisis’ (a period which is replete with decisions, yet all of which do nothing but reinforce the everyday perception that this is a malady without resolution), poses a particular problem, which we could call that of the melancholy of reform. The economic crisis has all-too-predictably morphed into an opportunity for the reiteration, intensification and entrenchment of the selfsame dynamics that occasioned it in the first place. Residual regions of non-commodified social life are again primed for stripping and colonisation. Even those policy moves that seem to transcend the neoliberal matrix – US health care ‘reform’ for instance – intensify the financialisation of everyday life even as they purport to reinforce the social. In this context, the post-war Euro-Atlantic compact between big labour, big capital and big government has become an imaginary focal point for those still wedded, however nebulously, to the notion of social justice.
The pining for trente glorieuses, the thirty-odd years of postwar affluence – ‘when we still used to make things’, when working classes formed communities, when even ardent capitalists recognised the notion that some domains of social life are a priori unmarketable – can readily be registered in popular culture and critical thought alike, as well as in incoherent ideological constructs like Red Toryism or Blue Labour. (Here, we could do worse than recall Ralph Miliband’s warning in the conclusion of his 1969 The State in Capitalist Society: ‘The trouble does not lie in the wishes and intentions of power-holders, but in the fact that reformers, with or without inverted commas, are the prisoners and usually the willing prisoners, of an economic and social framework which necessarily turns their reforming proclamations, however sincerely meant, into verbiage’.) When the corrosive criticisms and energetic struggles to which Fordism and the welfare state were subject aren’t simply neglected, they are viewed as culprits of an ebbing of sensible progressivism, irresponsible pretexts for capitalist revanchism. Works whose ideological compass is set by postwar social democracy are likely to chastise ‘the sixties’ for making excessive demands and thus spoiling a good thing through a petulant inflation in needs and demands.
Ever since the last, thwarted burst, of genuine reformism, in the guise of the measures to socialise capital proposed by Rudolf Meidner in Sweden, the very notion of reform has been fundamentally evacuated of meaning or irrevocably traduced. With the mutation of social democracy into social liberalism, it has come to signify either the rollback of the postwar gains of labour, in ominous expressions such as ‘pension reform’, or the (rarer) proposal of initiatives to alleviate inequality or offset the more parlous effects of the profit motive, without, needless to say, in any way questioning it. Though it could be argued that high, Keynesian reformism also didn’t fundamentally intervene on the basic parameters of capital as a social relation, the ‘reformism’ of today’s social liberals is immeasurably more cosmetic. Indeed, as we are reminded of on a daily basis, it can only present itself as a benevolent political manager of accumulation on the upswing of the business cycle, and descends into verbiage as soon as it is faced with a crisis.
This reformism without reforms can be contrasted with the proliferation of prescriptions for reform shorn of reformism; measures, be they political or economic, that propose radical alterations of current relations of power and production, without heralding a fundamental upheaval in the social structure, or an overall strategy or agency for transformation. These range from fiscal interventions into the superpower of transnational finance (the Tobin tax) to political measures against new patterns of exploitation and welfare retrenchment (the guaranteed basic income), from proposals for audits of odious debt and policies of sovereign default (in the cases of Ecuador and Greece) to the socialisation of pension funds. We can speak of reforms without reformism here in the sense that, for all of the declarations that another world is possible, the connection between such measures and a broader horizon of emancipatory social change remains rather opaque. For most observers, neither the laws of motion of capital nor the collective biography of labouring classes provide the sense of a ‘progressive’ movement that a reformism could assume and channel into egalitarian ends.
The reformist hypothesis has long been abandoned by the political class, which can at the very best imagine palliative measures directed at restraining the further degeneration of the status quo, but never at actually presenting a plausible path for public welfare. Crisis management and diminishing returns have replaced the promise of growth and affluence. From the debt-fuelled euphoria that things have never been better to the depressive nostrum and the lived experience that things will never again be as good, in a little over a decade. But the possibilities of reviving, even in a considerably altered guise, a classical social-democratic reformism, with its reliance on waged work as the crucial mediator of political rights, seem far-fetched.
Incapable of thinking the structural determinants of unemployment, together with the principled desirability of a radical diminution of work and the elimination of the compulsion to labour to produce noxious commodities under noxious conditions, the current response to the crisis, including on much of the left, appears to imagine that ‘a society founded on work’, to quote the Italian constitution, remains the irremovable horizon of our social and economic life. A Fordist nostalgia impedes the elaboration of forms of social antagonism pertinent to a situation in which the relation between class and labour, the place of industry, the overall dynamic of accumulation and the international division of labour have mutated significantly from the postwar period – a postwar period which was itself marked by many dimensions, even if we limit ourselves to the Euro-Atlantic North, that are customarily overlooked in airbrushed visions of Fordism as a social paradigm: the gargantuan devaluation of capital through wartime destruction, which made a US-led boom possible, military Keynesianism, the critical effects of Cold War political competition, the racial and gender limitations of the welfare compact, and so on.
Sociologists and social theorists are bound to share much of the historical common sense of their epoch, but it is obvious that taking the intellectual challenge of the ongoing crisis, or perhaps crises, seriously involves doing some violence to that common sense – a common sense which needless to say sociology, as a public discipline, has also played a not insignificant part in forming. Some very resilient, and in many ways indispensable, habits of mind and theory can serve as hindrances to our understanding. By way of conclusion, I want to briefly discuss two of these.
The first could be placed under the twofold rubric of periodisation and paradigm. Ever since Thucydides writing on the Peloponnesian War, thinking about epochs or processes as unified natural kinds has been a critical dimension of reflection on society, which can never proceed with the blinkered empiricism that sees history as the train of ‘one damn thing after another’. The kind of periodising concepts that social thought has long traded in – above all the concept of modernity or industrial society which inaugurates the very notion of sociology – are indispensable for any kind of cognitive mapping of social relations at the analytical and prescriptive level. And we can of course add that it is an effect of capital’s logic that it can indeed be seen to throw up temporal phases as ‘natural’ kinds of sorts – cycles of accumulation, Kondratieff waves, and so forth. However, there is a profound tendency to reify these orienting concepts, which frequently interferes with the sociological cognition of political economy. ‘Fordism’ is an important case in point. For all of its heuristic value it has also led to eliding the remarkable continuities in forms of capitalist discipline and exploitation, and to painting, in an intensely parochial way, a precarious and partial social compact in certain advanced liberal societies as a homogeneous reality. To characterise a period thusly, by formatting it in terms of a paradigm, also carries significant political effects – chiefly among them, in this case, the oscillation between viewing those postwar decades as a kind of regulative ideal for a meliorist conception of social justice, or declaring that as we are now in a ‘new capitalism’ all of our political practices must change. A particularly curious matter here is of course the way in which social theory tends to turn certain economic theories and categories into period and paradigms. ‘Keynesianism’ – that exquisitely unstable congeries of theoretical innovations, policy proposals, state strategies, and so on – is accordingly often paired with ‘Fordism’ in misleading ways. Thus, for example, the intensification of deficit-priming of aggregate demand well into the supposed era of liberalism (just think of the Reagan deficit) becomes entirely enigmatic, and is therefore ignored, the moment the economy becomes a domain to be approached in terms of its forms of appearance, so to speak, much less than in those of some resilient underlying patterns. Similarly, we could consider the way in which phenomena central to any sociological comprehension of the crisis – such as the predatory inclusion of racialised US working classes into the mortgage market, one if not the key determinant of the first phase of the crisis – become more or less unintelligible if we are unduly fascinated by such pedagogical shorthand as ‘Fordism’ or ‘Keynesianism’.
The second, closely related, I have already alluded to. It has to do with the often unreflective tendency in sociology to think of the social, and in the postwar period, the social state, as that which ’embeds’ the abstractive, de-socialising dynamics of capital. Needless to say, a formidable efficacy, or even performativity, of abstractions seems to characterise a moment dominated by financial instruments of great mathematical complexity, whose negative feedback on individuals and communities is now there for all to see. But we must be careful not to give disciplinary support to the imprecise imaginary of a contemporary reformism that sees the return of the state and of regulation as a panacea for crisis. As a number of commentators have underscored this would be to fundamentally misunderstand the dynamics of neoliberalism. If we can reasonably ‘periodise’ neoliberalism – perhaps identifying its inaugural moment in the 1979 Volcker shock – it is not an as an epoch of deregulation and state rollback, but of different uses of regulation and a different employment of the capacity of the state – mainly in order to shore up problems of profitability by making possible a kind of ‘asset price Keynesianism’, and by deeply integrating the working population in a system of financial exploitation and expropriation (among whose symptoms are such staggering statistics as the 57 billion dollars raked in by financial institutions from late repayment charges on credit cards in 2003 alone). As Albo, Gindin and Panitch note in their In and Out of Crisis: ‘It is crucial to distinguish between neoliberalism as an ideologically-driven strategy to free markets from states, and as a materially-driven form of social practices and rules which has required state intervention and management to liberalize markets’. And to understand this, we may again need to break with much of our sociological and political common sense, and recognise, as they suggest, that: ‘As the most recent state interventions make clear, given the current balance of social forces, regulation is about finding a technical way to preserve markets in the face of their volatility, not about any fundamental reordering of relative power in society to conform to social needs’. Crisis, and this is a truism, is itself the principal means of ‘regulation’ under capitalism. Rather than being bewitched by a simplistic schema pivoting around the disembedding and embedding, or the de-regulating and re-regulating, of capital, sociology should perhaps turn its attention more to the crucial enigma that the impasse in the smooth reproduction of the capital/labour relation is posing to any contemporary model of reform. The regressive evocation of the ideology of work combined with increasing unemployment, the manner in which the credit crunch has broken the precarious balance between depressed wages and continued consumption, the lived experience of crisis as both daily urgency and interminable horizon, the novel role of labouring populations as the shock absorbers of transferable risk – these are some of the social tensions and contradictions that sociology should explore, beyond the comfort zone provided by the paradigms with which we imagine, rather melancholically, the embedding of capitalism in the recent past.