I'll try to discuss the question of value and measure in the process of financialisation not from a written paper but on a list of points and questions that I'll share with you later on. Maybe let me start from the end to make sure that we'll get somewhere.
That is to ask: what are we talking about when we pose the question of measure or of unit of measure of something? I'll put it very straight: the only interest we usually have in the way the Marxian tradition defines value or constructs a theory of value, the only interest in this effort lies in the contradiction to which the theory of value leads. To measure value is, first of all, to pose the question of the crisis of value. The unit of measure of the process of valorization is the crisis, the mechanism of exploitation is unveiled through the crisis, and the material conditions of liberation are posed by the crisis. This is where I want to arrive at.
So, let's go back to the beginning. I think that the question of value and the question of measure in the process of financialisation always lies in the understanding of the transformation of the nature of work. Without an attempt to understand what has happened to work, it is impossible to fully understand what finance is. I wrote a book on the financial crisis 10 years ago, it was in 1997/1998, and I spent a lot of time catching up with the changing financial terminology, but there was a particular chapter on derivatives �. I must tell you that I don't remember what I wrote very well. But one thing I remember is that when I approached the question, the meaning of financial derivatives, I understood, I think I understood, that derivatives are just a way of commodifying risk. They are interesting precisely because they pose the question of how to commodify something that is usually out of the market of commodities, like risk, which is directly implied in technological changes and capitalist investment. Another thing I remember about the experience of writing or in any way trying to understand what was going on at the time, during the Asian crisis of 1997, is that I found myself immediately dissatisfied with the traditional critique or approach to finance. You know that there is a whole tradition, both in orthodox Marxism and Keynesianism, or anyway in something linked to neo-Ricardian visions of finance, that considers finance as a deviation from real productive capital. I don't think that we can talk about finance in this way anymore. This doesn't mean that finance has become sexier. Now it is as painful and awful as it's always been.
This is not the point: the point is that there is a transformation of the categories used in the 20th century. For instance it is difficult today to make a distinction between profit and rent, there is a becoming rent of profit, the dividing line between them is falling apart, but this is not because capital is not accumulating or growing anymore and so everything is just speculation, but because this is a new mode of production in which the relation between capital and labour has changed. So, in what way has it changed recently?
In order to understand value, or measure, the new measure, the unit of measure, we have to tackle the question of class composition, at least in my view. Even though this expression is in becoming, because we don't have a homogenous composition, but the thing is that the relationship between capital accumulation and finance is based on a specific change or transformation. I think that what characterises the transition from the fordist regime of accumulation to the present one (whatever you call it) is this: to speak about the change in the nature of work, what really characterises this transition is the fact that the main functions of fixed capital, of the machine, which had been hegemonic in the fordist period, have been transposed into the body of labour power. This is what I mean by the emergence of a new general intellect, post Grundrisse, post-Marx's Grundrisse (when it was still fixed in fixed capital). Now what has allowed the overcoming of the crisis of fordism is this transposition of the functions previously fulfilled by fixed capital into the body of labour power. The previous general intellect is in living labour. In that sense there is a becoming machine of the body of labour power. Which is also the basis of Luciana Parisi's idea of vitalism in yesterday's presentation and Tarde as interpreted by Lazzarato, and the theory of multitude theorised by Hardt and Negri.
But this is just the basis of this theoretical and critical interpretation. This poses many questions: when we talk of transposition of the functions of fixed capital, for instance cooperation, and the production of knowledge, the contradiction between what we know and what we want to discover, is a typical contradiction in Marx's theory of value: already fixed capital cannot be amortised on the basis of the labour theory of value. The only way to recuperate what is invested in fixed capital is through the mechanism of prices, which are not a reflection of the portion of value that has been created by labour. This problem and contradiction is now inside our bodies and us as labour power, which poses a political question; today we can define the value of labour power as C+V but this C has no legitimacy in the labour market in the new regime of capitalist accumulation so the amortisation which is inside us, the effort that we make to stay alive, find a job, the effort we make to keep educated, is not acknowledged and implies at its foundation the institutionalisation of labour power.
We seem to be at great difficulty in finding the way to invest in this fixed capital that is inside us. National accounting still considers education as expenditure rather than an investment, for instance. But this transposition of fixed capital into the body of labour power is an anthropogenetic problem. The production of man by means of man. It means that the sectors that are the motor of capitalist accumulation are health, education and culture. These produce the most of income, jobs, and the most of problems because they are the new frontier of capitalist privatisation since these sectors used to be the realm of the welfare state or the public common. Hence, the anthropogenetic problem and the model resulting from this shift and transposition. The general intellect that we used to identify with the forces of production and the content of machinery of the industrial type now has to be seen in living labour's body. If there is some hesitation when we deal with immaterial and material, because it is easy to see all these theories as something separated from the materiality of life and concreteness of work, I don't think that there is a distinction in so far as there isn't a possible distinction between bodies and minds, there has been a sort of immaterialisation of work due to the fact that technology has reshaped domestic housework, but the effort of it has increased: there is more work today in the reproductive sphere than there was before, it might be more cultural work, more conceptual work, organising the life of children, but nonetheless it is very physical, painful. Maybe to see if fixed capital is in the body of living labour is to overcome these ambiguities, but we cannot underestimate the importance of intangibles today in order to meet the needs of the concrete effort to work.
This is the premise for my reasoning on the process of financialisation. The latter starts in the 1970s with the New York fiscal crisis, when public pensions invested in city bonds in order to save the city confronted the fright of private investors. See for instance the idea of pension funds socialism. Financialisation is the new way capital produces the common, paradoxically, by means of private property rights, instead of social property rights, it is the nature of property rights that is at stake.
The usual way to look at finance is to see it as a parasitic process, but it is not, it is the equivalent of Keynesian deficit spending in Fordism. What makes it so different is that there has been a process of privatisation of deficit spending, now it is private debt that is adding the effective demand for accumulation, whereas in the past the state created this additional demand. But this deficit at work is a privatised deficit spending that cannot just be seen in parasitical terms but on the contrary relates to the property of what has been produced. To think that a few people have for a few months become the owners of their houses� This process started in the 1970s, opening up the chapter of what is the communism of capital. Years ago Toni said why don't you look at this, and whatever he says I look at it carefully because it changes my whole life and stability so I try to see him as little as possible, but he saw something there that was really at stake. But this process didn't simply have to do with this capitalisation or socialisation of our collective savings (by the way, when we speak of biocapitalism we need to look at the financial role of pension funds but also at what it means for us, for our future life, to be on the market). It also started a crisis of profit; the composition of capital in the 1970s was such that capital was unable to suck and extract surplus value anymore.
Normally when analysts look at these profit crisis of the 1970s they say that financialisation was a way of recuperating profit there that could not be realised within the factory, which is true, but this doesn't mean that we can on this basis consider what happened afterwards as something unproductive. The going out of the factory in order to recuperate what could not be realised inside the factory is a parallel and symmetrical process to the process of valorisation that has moved beyond and out of the gates: the socialisation of the proletariat, the social worker, we used to call it, meaning that the boundaries of the process of value production could not be confined within the factory. I think we can understand how financialisation is a form of capital accumulation and what effects of production are in society, diffused in the bodies of labour power. So indeed profit which used to be considered in a Ricardian or Marxist way as production of value inside the factory, is more similar to rent as ever to value extraction, but there is an externality of profit which is symmetrical to the autonomy of the new proletariat. As in, autonomy forms the means of production, not necessarily a good thing, as precariousness is an articulation of this autonomy. What used to be the externality of rent vis a vis the process of production as a dispositif of capture of value producing wealth, now is the same externality. What used to be the earth is now knowledge, to say it with the Physiocratic way of reasoning. Instead of the earth you have social knowledge, cooperation, you get close to what the situation is today. For the Physiocrats the means of production were unproductive, the only thing that was productive was the earth. Fixed capital is losing strategic importance. Financialisation is the way to capture surplus value from the new class composition.
What is measure at this point then? When we look at these processes of financialisation, we are confronted with emotions, sentiments, panic, all these Spinozian affective aspects of man, and I agree with the fact that the anthropogenetic model of capitalist accumulation is centred around these sentiments, but as far as finance is concerned, to return to the opposition between real and fictitious capital, there is a perfect rationality in these sentiments, which is due to the information deficit or overflow, which forces us to act in a way that is normally and rationally imitative because we don't know what to do. But emotions are part of the process by which we select the stocks in which to invest.
Alternative energy seems the new convention that in two years will lead to another bubble, the only way to introduce the notion of measure is that measure is possible not in terms of measuring infinity but to measure the process that leads to infinity and the measurement of these bits and pieces that lead to infinity is crisis.
*This was presented at 'Measure for measure: a workshop on value from below', Goodenough College, London, 21st September 2007.