Investors and investees: class struggle in the age of credit Open PEI Seminar by Michel Feher

Michel Feher will focus the seminar in the following subjects:
1. My life is my business: the neoliberal agenda and the entrepreneurial self
In the immediate post-war period, the founding fathers of the neoliberal movement worried about the impending conflict between democracy and capitalism. Majority rule, they feared, would enable demagogues to fuel the resentment of affluent minority groups such as capital owners – thereby paving the way for the advent of socialism. At the same time, since Friedrich Hayek, Milton Friedman and their followers saw themselves as the true keepers of the liberal heritage, they could hardly advocate the suspension of the electoral process – except in “peripheral” countries like Chile.

Thus, in order to combine the safeguard of economic freedom with the exercise of political liberties, neoliberal reformers started working on a multilayered program purported to wrest market prices and competition from the realm of democratic debates. While largely comprised of measures designed to keep corporations eager to compete and governments focused on enabling competition, their agenda was ultimately about modifying the psychological outlook of the salaried classes: as they saw it, if people who did not belong to the business world were made to think and behave like entrepreneurs, they would be likely to vote accordingly – thereby making democracy safe for capitalism.

2. Appreciable projects: financial capitalism and the invested self
After being sidelined for about thirty years, the proponents of neoliberal reforms eventually prevailed: on both sides of the Atlantic Ocean, their recommendations formed the intellectual framework of the 1980s “conservative revolution”. Regarding the role of the State, neoliberal policies delivered what they had promised: whereas under the previous regime of welfare capitalism, governing agencies had been required to shelter the vulnerable segments of the population from the roughness of market relations, they were now asked to protect the fragile mechanisms of the market against the unreasonable demands of the population. However, with respect to the social engineering dimension of their project, the implementation of the neoliberal program did not produce the anticipated results.

To soften the impact of monetarist shock therapy and supply-side economics on their constituents, governments inspired by Hayek’s and Friedman’s guidelines endeavored to lift all restrictions to the circulation of capital – across national borders and financial institutions – as well as to the creation of assets – hence the development of the derivatives market. Yet, far from enticing people to envision their lives as a profit-seeking business, the ensuing hegemony of financial markets led them to treat the various aspects of their existence as so many credit-seeking projects. In other words, rather than an entrepreneurial self whose choices proceed from calculations of costs and benefits, what neoliberal governments have actually fashioned is an invested self whose behavior is modeled on the speculative bets of an asset manager.

3. Investee activism: another speculation is possible
Though hardly planned or even foreseen by neoliberal scholars, the invested self is the character that the triumph of their perspective actually produced. For that reason, his or her advent also points to a gradual yet decisive change of emphasis in the critiques leveled at capitalism. Indeed, once centered on corporate profits, criticism is now primarily aimed at the conditions under which financial institutions allocate credit. What has shifted is thus the focus of the discontent generated by capitalism: previously located in the market where labor is made into a commodity and priced accordingly, it has moved to the market where capital is turned into assets and evaluated as such.
In the socialist tradition, exploitation designates the conditions of employment under capitalism. The so-called “free” workers are exploited insofar as their wages are inferior to the exchange value of the wealth they produce. According to this description, capitalism’s core relationship involves employers who exploit and workers who are exploited. Investors, however, do not easily fit into this description of capitalist exploitation. What is specific to them is their ability to select the endeavors that deserve resources: their distinctive prerogative resides in the allocation of capital, rather than the extortion of income. In light of this functional difference, to claim that financial markets are hegemonic should have major implications for the critics of capitalism. Having to stress a type of harm other than exploitation, they necessarily need to identify a harmed party other than the exploited worker, and are consequently led to delineate another form of resistance than the time-honored modes of struggle against exploitative bosses.

Michel Feher