Extended Book Review: Five theses on the debt economy

Thesis 1: the hegemony of finance capital is not an anomaly of capitalism

What is inherent in the very logic of capital, Lazzarato reiterates throughout his texts, is not production for production’s sake but valorisation, and the purpose of valorisation is appropriation and expropriation of social production, ad infinitum. Accordingly, it is not only that separating finance capital – as parasitic – from industrial capital and commerce capital – as healthy – is absurd, for it is finance capital that concludes and unifies the capitalist cycle as an integral whole; that is, the real subsumption of society under capital (Lazzarato 2012: 61–65). Beyond that, finance capital ‘constitutes the form most appropriate to the concept of capital’ (Lazzarato 2015: 141), inasmuch as it, inscribed in the formula of M-M’, that of money that self-valorises by appropriating all forms of value, has ‘no other end than the appropriation of [current and future] monetary surplus regardless of the type of production and labour’ (my emphasis, p. 141). In Lazzarato’s reading of finance capital, therefore, it is the hegemony of the industrial capital of the great Fordist corporations that comes as an anomaly in the longue durée.

But what is to be understood by the hegemony of finance capital? For the author, it does not imply the end of industrial and commercial operations. Nor does it merely imply capturing and appropriating a surplus from these operations in the form of abstract quantities of money. The hegemony, first and foremost, implies directing and governing the whole of the capitalist cycle as a response to the exigencies of finance capital (M-M’). More precisely, it consists in, as Marx (1992) had anticipated very early, the becoming of finance capital as the representative of common/social capital under the command of a financial oligarchy, endowed progressively with all the adequate elements of economic and political power to ‘ascertain exactly the position of the various [individual, local and global] capitalists, then to control them, […] and finally to entirely determine their fate’ (Lenin 1964: 214).

Considering a period extending from the 1870s to today, Lazzarato marks two major phases in the hegemony of financial capital. The first phase, running from 1870 to 1914, is identified through a reading of Lenin (Imperialism, the Highest Stage of Capitalism) who analysed the period’s subsuming and expansionary tendency of finance capital as a driving force of imperialist wars. The second phase, which we still experience today, begins with the neoliberal turn in the 1970s. The novelty of the contemporary period concerns: first, the articulation of not only industry and services but also society as a whole to the logic and imperatives of interest-bearing capital through the mechanisms of debt (student credit, mortgages, pension funds, state sovereign debt, etc.); second, today’s novelty concerns the fact that financialisation is no longer achieved through the direct intervention of transcendent nation-states. The latter, ‘given their diminished sovereignty’, are now ‘only one constituent of the power apparatuses [under the command of supra-national organisations] that facilitate and guarantee the existence and proliferation of the logic of finance capital’ (Lazzarato 2015: 230).

Thesis 2: capitalism has never been liberal; it has always been state capitalism

Against the backdrop of Deleuze and Guattari’s (1983) Anti-Oedipus, Lazzarato (2015) defends a thesis that ‘liberalism understood as a practice and theory situating itself between capital and the state in order to defend and augment the freedoms of market and society’ has historically been ‘a pure illusion’ (p. 92). Capital, for the author, has always depended on the intervention of sovereignty which, in turn, has always functioned in concert with governmentality (pp. 10–11). Since the birth of capitalism, more generally, the central task of governmentality, of which liberalism is only one of the possible subjectivations, has essentially been facilitating, first, the composition of fundamental heterogeneities between capital and the state and, second, the reconfiguration and subordination of state principles to the valuation processes of capital; to wit, the construction of a state perfectly conforming and responding to the demands and vicissitudes of capitalist accumulation (pp. 96–97).

Drawing on Schmitt’s (1987, 2003) and Foucault’s (2007, 2008) writings, Lazzarato follows the development of German ordoliberalism and American neoliberalism as two – articulated – modes of (liberal) governmentality constituting a new configuration in the union of capital and the state; of sovereignty and the market. What ordoliberal governmentality facilitated, Lazzarato extracts from Schmitt, was the transformation from transcendent state to the ‘the social state, an economic state underpinning the socialisation of valorisation whose target [has progressively become] society above all’ (Lazzarato 2015: 100). In particular, Lazzarato discusses how ordoliberal governmentality techniques inaugurated the design of a new state which then acted on the social sphere in a distinctive manner so that the central objective of capitalism, the real subsumption of society (not only industrial labour) under capital, could be realised. The turn to American neoliberalism, with the becoming-hegemony of finance, intensified the integration of state and society to the logic of capital by at once ‘weakening … the monetary sovereignty in favour of the economy, submitting sovereignty to a process of privatisation’ (p. 101) and reformulating the limits of popular sovereignty according to the demands of supra-national organisations.

According to Lazzarato, the crisis (begun in 2007) and the ensuing logic of ‘govern everything down to the last detail [i.e. maximum state]’ (p. 11) has affirmed once again that ‘capitalism [always] exceeds and integrates the dualisms of the economy and the social … of the state and the market by deploying a governmentality with multiple articulations’ (Lazzarato 2015: 128). The ‘ultraliberal’ managers of today’s crisis have not hesitated to activate a maximum state whose intervention has been designed not only and typically as ‘saving the banks, finance, and liberals themselves’ but also as making living ‘populations pay the political and economic costs of the first intervention’ (Lazzarato 2015: 96, 247).

Thesis 3: in contemporary capitalism, debt is infinite, unpayable and inexpiable

Lazzarato develops a critique against the accounts (e.g. Graeber 2011) proposing that ‘archaic societies produce an inexhaustible debt, one which cannot be repaid, whereas in modern capitalist societies [thanks to the freedom of the market] we are able to free ourselves from debt through monetary reimbursement’ (Lazzarato 2015: 78). In reference to Nietzsche (2006), Lazzarato upholds an opposite argument, ‘archaic societies are characterised by a finite and mobile debt, while with the emergence of empires, states, and monotheistic religions, debt has become infinite debt’ (p. 78). For Lazzarato, capitalism (and in particular finance capitalism) has preserved and intensified this process: today ‘debt is infinite, unpayable, and inexpiable – except through political redemption’ (p. 84).

There might be discerned two arguments (Lazzarato 2012: 37–89; Lazzarato 2015: 61–91), articulated in relation to each other, which claim that debt ‘must be systemically repaid and yet immediately and necessarily renewed, ad infinitum’ (Lazzarato 2015: 88). First, Lazzarato turns to Deleuze and Guattari who, through Marx, affirm that capitalist mode of production runs intrinsically on the endlessness as inscribed in the formula of money-commodity-money (M-C-M’). ‘The movement of capital as the self-generated movement of value, of money that makes [more] money’ (Lazzarato 2012: 67) has immanent limits. Nevertheless, capital reproduces this on an ever-expanding scale. In this movement, credit–debt presents itself as one of the key apparatuses that enable capital to go beyond its limits, reproduce itself continuously and thus secure an open-ended economic exploitation. In finance capitalism, in particular, capitalist valorisation and credit–debt relation are so interlocked with each other that ‘debt’ comes to be ‘the alpha and omega of capitalist valorisation’ (Lazzarato 2015: 124). Since money-debt operates as the driving force of the processes of valorisation and accumulation, as a force of both destruction of old forms and creation of new forms of the exploitative order, ‘definitive repayment [of debt] is, logically, the death of capitalism’ (p. 88).

Inseparable from this objective-economic account, debt–credit relationship, second, operates as an apparatus for political domination in capitalist societies. ‘Debt is not only an economic mechanism, it is also a technique of government’ (Lazzarato 2012: 33), aimed at producing and reproducing the asymmetrical relationship between active forces (e.g. subsuming creditor) and reactive forces (e.g. subsumed debtor). Debt, Lazzarato (2012) argues in reference to Nietzsche, ‘constructs a subjectivity endowed with a memory, a conscience, and a morality’ (p. 37); it produces a subjectivity that is at once guilty and capable of promising. And ‘to breed an animal with the right to make promises means to ordain the future in advance … the effects of the power of debt on subjectivity allow capitalism to bridge the gap between present and future’ (Lazzarato 2015: 87). By way of ‘closing and pre-emptying time, mortgaging its indeterminacy, stripping it of all creativity and innovation, normalising it’ (p. 87), debt ‘subordinates all possibility of choice and decision which the future holds to the reproduction of [asymmetrical] capitalist power relations’ (Lazzarato 2012: 34). Lazzarato thus expands on his thesis from the subjective dimension: ‘to honour one’s debts [would] mean escaping the creditor-debtor relation [embodying the class differential] and this would mean existing capitalism altogether’ (Lazzarato 2015: 88).

Thesis 4: the weakness of neoliberal capitalism lies in the production of negative subjection

What Lazzarato underscores repeatedly, as an axiom articulated to a Deleuze–Guattarian (1987) non-economistic concept of the economy, is that ‘economic activity and the ethico-political activity of producing the subject go hand in hand’ (Lazzarato 2012: 26). The constitution of economic production and valorisation is ‘inseparable from a genealogy of morals that produces and governs the formation of a labour force’ (Lazzarato 2015: 178). ‘In order to produce commodities and profit’, he elucidates, ‘the capitalist social machine must first be able to produce a world and its universes of values, desires, and its existential territories’ (p. 206). In capitalism, the production and control of subjectivities are organised and exercised, by the complex of capitalist state and private capital, in two ways through the dispositifs of social subjection and machinic enslavement.

Social subjection refers to ‘techniques of governmentality that pass through and mobilise representation, knowledge, discursive and visual practices, etc., producing subjects of law, political subjects, as well as subjects per se, selves, and individuals’ (p. 183). By producing as individuated subjects, social subjection assigns us identity, profession, pre-determined and future roles, and so on in response to the needs of the social division of labour. Machinic enslavement, on the contrary, ‘refers to non-representational, operational, diagrammatic techniques that function by exploiting partial, modular, subindividual subjectivities’ (p. 184). Run by machines (and signs, objects, diagrams), the techniques of enslavement work, first, to decompose the individuated subject into his constituent elements (e.g. memory, perception, intelligence, feelings), that is, into multiple pre-individual vectors of subjectivation, and then recompose them in view of producing a subjectivity responsive to the demands of production and reproduction of capital.

The techniques of social subjection in neoliberal governmentality are directed towards producing a subject in the model of ‘human capital’, to wit ‘entrepreneur of the self’ who is invested by the forces of individualism (e.g. being an individual enterprise; Foucault 2008). In the recent debt crisis, the promises of neoliberal homo economicus were entirely nullified with the realities of indebted subject (e.g. precarity, unemployment, underpayment). However, the latter, who is constructed as a responsible individual for her fate (promise-debt), comes to interiorise the systematic failure of capitalism, ‘assuming the consequences by atoning for [her] faults, paying and reimbursing creditors’ (p. 210). On one side, then, it is the ensemble of disenchantment-guilt-loneliness-fear that traverses the subject in neoliberal societies. On the other side, the ‘deterritorialisation of machines and signs [e.g. financial algorithms, stock prices, the spread, scientific equations and formulas], their diffusion as constant social capital, defines a new machinic enslavement’ (p. 193) in which ‘humans act in the same way as mechanical parts’ (p. 184) of a debt-machine, ‘with no need of representation or consciousness’ (p. 189). Neoliberal capitalism, in brief, pushes both subjectivation and desubjectivation to the extreme and hence produces a negative subjection at once guilty and automatically responsive, ‘that no longer reflects’ (p. 200).

Thesis 5: what is to be done? The refusal of work and subversion

Lazzarato offers the use of operaist refusal of work, in the form of ‘laziness’, as a form of political action, an event, that ‘at once refuses and eludes the roles, functions, and significations [expropriation, normalisation, and standardisation] of the social division of labour, and in so doing, creates new possibilities’ (Lazzarato 2015: 246). Lazzarato does not understand laziness as non-action or minimal action but as a political action against ‘the general mobilisation’ (p. 245). The refusal of work or lazy action, for the theorist, ‘entails taking a [subversive] position with respect to the conditions of existence in capitalist society’ (p. 247). It expresses, more precisely, a refusal of both economic and subjective impoverishment imposed by capital. That is, a refusal aimed at both waged-labour and contemporary valorisation as well as the dispositifs of neoliberal governmentality.

Lazzarato is cautious that the refusal of work does not at first transform the world or society. Nevertheless, it suspends the chronological time, and in so doing, it interrupts the established modes of living and introduces possible modus vivendi by ‘revealing other movements, speeds, and rhythms’ surrounding all of us (p. 250). The refusal of work, therefore, potentially leads to ‘the reversal of the way of conceiving subjectivity and opens the way from one mode of existence to another’ (p. 19). The refusal of work, in other words, produces possibilities for ‘moving beyond the arrogance of producers and the promethean promise of mastery over time’ (p. 19).

Understood in these terms, the refusal of works constitutes a line of rupture, yet only as a first step. It immediately faces another line: ‘a line of self-interest invested in current power relations, in established significations and domination’ (p. 19). ‘The possibilities created by the rupture … are the political stakes over which the political battle for their actualisation and neutralisation is fought’ (p. 20). At this point, Lazzarato refers to Schmitt (2003) according to whom every economic-political regime, including the capitalist regime, is constructed and organised on the basis of three principles or nomos: capture/appropriate, distribute/divide and production. He accordingly defends the argument that the line of demobilisation, activated by the refusal of work as a first step, against the line of self-interest would be an illusion ‘without the expropriation of expropriators [appropriation], without a radical challenge to appropriate individualism [distribution], without subverting the concept of production’ (p. 19).

A critical remark

Even though Lazzarato explicitly dissociates himself from theory of cognitive capitalism (Vercellone, Moulier-Boutang) or biopolitical production (Hardt and Negri, Fumagalli); more precisely, from knowledge, immaterial labour and the common as the analytical categories for the analysis of contemporary capitalism, he seems to share the optimistic postulate of post-workerism that ‘positive collective powers or energies are not only poised on the edge of liberation, or already embody it, but also [are] closer to communism’ (Toscano 2014, para. 14). The subject is invested by debt but it is, at the same time, a potentially revolutionary subject. This fits well into my perspective. However, he seems to consider the debt-economy and neoliberal governmentality as a one and only; that is, a sort of univocal strategy of counterattack against the subversive multitudes. Toscano’s remark is therefore important: ‘debt economy … if anything … concerns the regimenting of non-insurrectionary class struggles over wages … rather than the task of frontally countering a radical political challenge to capitalism’ (para. 14).