The Universal Solvent of Money, Research Time, 18/12/2017

The irony is coming on thick today. I want to write a little about Gilles Deleuze’s comments on capitalism in What Is Philosophy?. Capitalism – the universal solvent of total freedom.

I move in pretty left-wing political circles, so that sounds pretty damn funny to me. Probably to a lot of my semi-regular readers.

The structures that conditioned every aspect of your lives are blown
apart – you now have total freedom of movement. Not even the
ground can restrict you. Of course, that means you can do nothing
but aimlessly and endlessly fall.

It's one of the ironic difficulties in understanding Deleuze's work and concepts. He lived and worked in a very left-wing context. His writing partner Félix Guattari was himself a marxist militant, who had materially supported anti-French guerrilla armies in Algeria. Their first book together, Anti-Œdipus was a philosophy for the anarchist revolutions of May 1968 Paris.

As well, Deleuze helped Italian militants escape prison to France and found them places to live in the city. This while they were wanted by a militant right-wing Italian government who reacted to the murder of Prime Minister Moro.

Deleuze was a profound critic of capitalism. So profound that he could, at the same time, point out its destructive flaws and celebrate it as a social and economic force of liberation.

Say it like that, and it looks like he contradicts himself. But actually look at what he says, and you realize how profound this idea is.

Look at history this way. Big urban centres, states, and military organizations develop. They expand their regional power as their population, wealth, trade networks, and military force grow. But eventually some sudden shift – military invasion, ecological disaster like several years of drought – throws off their productivity.

Now get to Europe, as the old monarchist states are falling. Modern industrial capitalism is kicking into gear. The new class of wealthy business leaders are growing more powerful than the land-owning gentry that consolidated around the kings, princes, armies, and administrations at the heart of the state.

Totally losing your grounding is losing your shape itself.

All those oppressive powers were being destabilized. That’s what capitalism does – the profit motive, acting on the scales of entire societies and planets, destabilizes existing structures and institutions of a whole region.

That was one key insight that sets Deleuze – and those who understand his lessons for contemporary politics – apart from the more typical anti-capitalist activists. Capitalism produces a powerful freedom – it really is a liberating force.

With old institutions and power structures destabilized and falling apart, it opens up a space for people to reorganize their societies. New institutions can be built that are more egalitarian and open.

The problem sets in when capitalism destabilizes those structures too. Not in the same way as the old despotic state models were overthrown, but differently. You can very easily see that capitalist profit motive activities are destabilizing the liberal democratic institutions that developed from the ashes of despotic institutions.

We now have a class of business leaders so wealthy that they’re able to remove billions of dollars in raw holdings – bank account assets – from their countries to rest in tax haven accounts. That’s billions of dollars that aren’t being invested in new businesses or institutions that provide people services and career opportunities.

There's another form of capitalism that Deleuze and Guattari describe in Anti-Œdipus, which is smacking our civilization – hedge fund piracy. A company with billions of dollars in assets and liquid holding accounts invests in another company, which has prospered by making and selling real things to people.

When we think about the destructive effects of capitalism, we think
of imagery of greed and consumption. But that doesn't really get to
the heart of what capitalism specifically is, how capitalism as an
economic and social system differs from others. All living systems
involve consumption and production – to understand capitalism,
you have to understand what its singular kind of production and
consumption involves.

Hedge funds regularly buy these productive companies and strip them for parts or find other ways to bleed them dry. Here are some examples. Dupont Chemicals was bought by Trian Fund Management. Then its research labs were sold to peak share prices and Dupont was merged with Dow Chemical to slam more billions from it.

Hedge fund guru Eddie Lampert bought Sears, merged it with K-Mart to create billions from redundancies, then things got diabolical. Sears owned almost all the real estate where its stores sat – paid off and owned outright. But Lampert sold that property to a real estate firm his hedge fund also owned, which began charging Sears enormous rent.

Then Lampert loaned Sears billions of dollars to pay its rent to the firm he owned himself. So Sears now had two massive debts – bleeding money to its owner twice over. No matter how much money it made, the retailer couldn’t manage all that debt.

That is capitalism – profit-seeking that sets money and wealth free from its current structures. It’s the universal destabilizer – great for overthrowing an oppressive system like feudalism or monarchism. Also great at overthrowing even the stuff you want to keep, like manufacturing companies, steady jobs, and democracy.