INVISIBLE STATES

EUROPE IN THE AGE OF CAPITAL FAILURE

 

michaelblum.jpg
Michael Blum, Wandering Marxwards
featured in the exhibition Capital (It Fails US Now)

 

Introduction
After 9/11 and its worldwide consequences, after the travesty of Iraq’s supposed weapons of mass destruction, after the collapse of the project for an EU Constitution, after the banlieue riots in France and all they reveal about neocolonial racism on the Old Continent, it might be easier to agree that capital is really failing us, right now. But the most important question is: who are “we”? And how exactly do we experience the very real breakdowns of that immense and highly abstracted articulation of society which goes under the name of capital? How to map out that articulation, as it changes over time to reach a point of what now appears as permanent crisis? How to locate and name the living flesh of capital failure?

The exhibition Capital (It Fails Us Now) has its locus in two national states on the northern edges of Europe: Norway, which has declined to be a formal member of the European Union, and Estonia, which is among the new members in the former East. In both these countries (but for very different reasons) the form of the state as a democratic instance and an economic project is intensely at issue.

In what follows I will not give any account of the exhibition itself, but rather focus on the changing forms of the capitalist state, within a European context that is structured not only by its shaky supranational architecture, but also by far-ranging transformations of the world economy. The point is not to expect salvation or damnation from what Engels famously referred to as “the ideal collective capitalist.”1 Instead, the point is to create a framework for understanding the transformations of an institutional and legal mix (the state) that attempts to mediate, on the one hand, between the inhabitants of a national territory and the individual capitalist enterprises that organize their productivity; and on the other, between this bounded national territory and the relatively anarchic transnational space into which it is inserted by the constant flux of trade, investment, interstate alliances and relations of force.

Within the world-system composed by the capitalist democracies of the post-WWII era, the state has in effect been called upon to act a kind of double filter, articulating the specific relations between its various classes of inhabitants, as well as their general relations with the outside world. In this respect, the state is – or more precisely, has attempted to be – the “integral of power formations,” to borrow the phrase with which Félix Guattari once described capital.2 The democratic state, as a crossroads of economic power and popular representation, has at its best been something like the means which society has given itself to make capital visible, to place its operations on the negotiating table. One need not be surprised, then, to find a complex and problematizing exhibition of visual art exploring precisely the ways in which this project of visibility now appears to fail.

Indeed, the postwar democratic state has claimed to be an integrally public and fully transparent articulation between all the conflicting forces at play in the human universe, including not only the powers of capital and its associated imperatives of military production and warfare, but also the expressed needs and desires of populations outside any economic logic or will to domination. It is precisely the existence of this claim, or this aspiration – concretized for a time in what was known as “the welfare state” – that allows us to speak of the failure of capital. But it is also this democratic claim that is clearly and inexorably breaking down, as the form and function of the mediating national state morphs and reconfigures under the pressure of global economic forces and conflicting wills to dominance. The result of the breakdown is a murky, opaque society, a world of unexpected clashes and fires in the night. What we should then explore – if there is any wish to even begin rediscovering a “we” – is the very texture of this opacity: the forms of capital failure.3 Which are also the forms of our lives today.

 

Metamorphoses of the Welfare State
In an article published in 1982, and destined to become an enduring definition of a fast-disappearing reality, the American specialist in international relations John Gerard Ruggie described the structure of the post-WWII economic compromise as “embedded liberalism.”4 This was before the days of US Army journalism, when one could still aspire to express complex meanings. Ruggie borrowed his key term from an anthropologist, Karl Polanyi, who had maintained that in all known societies prior to that of nineteenth-century England, exchanges of goods were embedded in an institutional mix, indeed in a human ecology: there was no separation between specifically economic calculations and a broader set of social reciprocities regulating the care and reproduction of land (i.e. the natural environment), labor (the human body/mind) and money itself (whether the cowrie shells of the Trobriand Islanders, or the fiduciary currencies of nation-states). Polanyi showed that the development of English economic liberalism, propelled by the industrial revolution and extended to worldwide dimensions by the gold standard, had effectively disembedded the economy from society, transforming land, labor and money into what he called “fictitious commodities,” continuously bought and sold on a supposedly “self-regulating market.”5

Why are these three commodities any different from the average widget? The thing that makes them “fictitious,” in Polanyi’s sense, is that their production and sustainable reproduction is not ensured by market mechanisms. Land that isn’t cared for beyond the cycle of a cash-crop or a mineral dig can be durably blighted by misuse; labor with no life-support outside the workplace can be physically destroyed by downward pressure on wages; and the very medium of exchange, money, can be discredited by speculative trading of promissory notes without regard for the institutions from which their value derives. All these phenomena, which had been observed since the Industrial Revolution, were experienced at their cruelest extremes during the early twentieth century, and most acutely, during the Great Depression of the 1930s – and Polanyi was hardly alone in identifying the liberal doctrines of free trade and self-regulating markets as the underlying causes of the wars themselves. The essence of the postwar international regime could therefore be convincingly portrayed by Ruggie as an attempt to “re-embed” the worldwide economy of liberalism within territorial systems of checks and balances, regulated at the level of the nation-state.

“Embedded liberalism” described the effort to reconcile the benefits of international trade with the domestic policies for full employment and social welfare that had first emerged (though in disastrously isolationist forms) during the period of closed currency zones and trading blocs in the 1930s. The postwar instruments of this reconciliation were regulated international currency exchange (Bretton Woods), import quotas and tariffs to protect certain productive sectors (the General Agreement on Tariffs and Trade) and labor legislation and social programs (the domestic welfare states). This compromise, striking a balance between the two normative principles of domestic well-being and international free trade, provided what Ruggie called the “generative grammar” of postwar interstate relations, shaping the possible forms of action by the participating states and contributing to what he called “the internationalization of political authority.”

Closer to our time, the regulation-school economist Bob Jessop has developed the most comprehensive description of the general form or ideal-type of the capitalist state that resulted from the postwar compromise.6 He calls it the “Keynesian Welfare National State” (KWNS), in reference to the economist and statesman John Maynard Keynes, the English negotiator at Bretton Woods. Keynes was the first to theorize the full employment of the working classes, supported by government debt-financing of works projects, social services and social insurance payments. He saw full employment as the source of “effective demand,” which could spur industrial economies to virtuous cycles of continuous growth. The application of this type of policy accompanied the postwar exportation to Canada, Western Europe, Australia and New Zealand of the American Fordist model of industrial development, driven by large, multi-divisional, vertically integrated mass-production corporations. These were the engines of extraordinary economic expansion for some thirty years, in the context the reconstruction boom in Europe, and at a time when mass production had not yet begun in most other regions of the world (excepting Japan and the Asian “tiger” economies, which developed more centrally planned or authoritarian variations on the Euro-American model).

The Keynesian pattern of state intervention took on different shapes depending on the size and political culture of the country in question, with the most purely social-democratic forms developing in Scandinavia. The aim (and the some extent, the result) was to create a nexus of supportive and reparative institutions in which competitive economic functions could be embedded, so that their violence could be tempered, softened (while at the same time it continued to be exported outside, in the new forms of corporate neocolonialism). Today, for better and often for worse, the KWNS, and the white, male, industrial factory worker who was its privileged subject, still serves as the normative and nostalgic horizon for discussions of public economic policy. But the interest of Jessop’s analysis, and of the regulation school more generally, is to help us see how a change in the “generative grammar” of international relations, from the mid-1970s onward, has provoked a gradual metamorphosis of the forms of the state, which would only be given clear ideological expression with the “Third Way” programs of the British New Labour party at the very close of the century.

What happened to the compromise of embedded liberalism? As markers of its crisis, all the historians point to the breakdown of the Bretton Woods currency system in the period of 1968-71 and the emergence of the floating exchange regime, the oil shock and recession of 1973-75, and more broadly, the spread of Fordist production throughout the world and the resultant saturation of markets for mass-produced industrial goods. Equally important from a more radical viewpoint were high levels of labor militancy, rejections of bureaucratic normalization and widespread protests against the colonial and imperialist postures of the Western powers.7 The industrialized countries were beset with persistent conditions of industrial stagnation coupled with inflationary wage-price spirals (“stagflation”), and from the mid-1970s onward, the decline of the United States itself was widely predicted. More recently, however, understanding has grown of the way that the US hegemon was able to convince the rest of the world to go on funding what seemed to be a terminally indebted economy, both by forcing the OPEC countries to continue pricing their oil in dollars, and more broadly, by ensuring that dollar-denominated financial markets remain the most highly performing investment destination for global liquidity – among other things, because only those markets are insulated from the violent exchange-rate swings that periodically affect all other currencies with respect to the dollar.8 The upshot of all this has been to make the US (with its sophisticated financial markets, its control over transnational institutions like the IMF and the World Bank, its far-reaching media sector and its unparalleled army) into the institutional support-structure of what, for all other economic agents, is essentially a stateless world currency, a necessary but uncontrollable medium of exchange. Thus the dollar remained the linchpin of the floating exchange regime, while around it multiplied the sophisticated forms of credit-money (futures, options, swaptions and the entire panoply of derivatives, managed in direct competition with national fiduciary currencies by hedge-fund operators like George Soros).

From the early 1980s onward, this new position of the US as an extremely aggressive world financial player, with its industrial production shifting towards a strategic focus on cutting-edge growth technologies (stimulated and directed by lavish defense spending), gave it every reason to force greater trade and investment liberalization on all the countries that wanted access to its gigantic and endlessly debt-financed consumer markets. The IMF emerged as the global prophet and enforcer of this liberalization, which was to be coupled with austerity policies for all governments other than that of the hegemon.9 The liberalization of foreign direct investment (and the ultimate disappearance of the revolutionary threat posed by really-existing Communism) meant that much more productive plant could be located outside the core countries of the world-system, and therefore, beyond the reach of the national labor and ecology movements. A new pattern of global circulation then took form, where formerly underdeveloped countries (such as China) could export not only raw materials, but also high-level manufactured goods; while the professionals of the former industrial core would focus on financial management, technological innovation, project coordination, and cultural services (including tourism, which has become one of the largest sectors of the world economy). Such was the basic system of constraints – the underlying grammar of international relations – that generated the initial trend toward what Jessop analyzes as the SWPR: the “Schumpeterian Workfare Postnational Regime,” named in reference to the Austrian economist Joseph Schumpeter, who focused on entrepreneurial innovation as the motor of economic growth.10 What’s indicated with that reference is the transformation of the welfare state according the requirements of the transnational information economy.

The SWPR, also known as the “competition state,” does not represent the clean break with welfare and the eclipse of interventionist “big government” that is usually evoked in simplistic descriptions of neoliberalism. Instead it signifies a deep and still-ongoing modification in the ways that intervention is carried out, for whom, and to what ends. The former goal of extending employment and benefits programs to all citizens is effectively cast aside, having become impossible under the conditions of functionally borderless economies. The wage is treated, not as a source of effective demand to be propped up for the general good, but instead as a factor of production among others, which can be pushed downward according to the needs of the competitive struggle. The primary focus of intervention now becomes high-quality information access and lifelong education: in other words, the grooming of the most productive citizens for innovation in transnational knowledge and image markets, whose operations can no longer be regulated by a national state, but only adapted to by a postnational regime, which seeks insofar as possible to influence the parameters within which productive individuals make free choices.

A pattern of changes in the forms of state intervention then sets in, which is fulfilled unequally, depending on the specific conditions of each country. These changes are often proposed in the form of “performance-based contracts” between public administrations and citizens. Automatic unemployment benefits, suspected of encouraging idleness, tend to be scrapped in favor of workfare “activation” programs that require continuous job searches, compulsory retraining, or community service (with the Danish “flexicurity” model becoming the new paragon of perfectly calibrated government intervention to meet the needs of a high-turnover job market). In the name of efficiency (but also as a disguised form of societal indoctrination) the former notion of public services provided to citizens is replaced by that of “public enterprises” competing with each other on subsidized “quasi-markets” for the patronage of non-paying “customers.” Vouchers or compensatory tax breaks may also be offered to those who prefer private service-providers, notably in the areas of health and education. Voluntarist or charitable “third sector” associations (often religious in nature) are called upon to fill in the gaps of stripped-down social programs; while in business operations, centralized state regulation is limited in favor of “governance” exercised by networks of interested parties or “stakeholders.” Infrastructures to support high value-adding sectors, which would formerly have been built by employment-generating state agencies as a form of pump priming for the Keynesian economy, are now done almost exclusively by “public-private partnerships” (PPPs), which are renowned (justifiably or not) for their superior efficiency – and which above all do not create more fiscal liabilities on the state’s unemployment or retirement rolls.

This is the basic repertory of the “New Public Management” that has spread from Britain throughout the formerly social-democratic countries (including Norway in particular), and has also been proposed as a model of state-formation for the post-socialist countries of the former East.11 The avowed aim of its neoliberal ideologues is to gradually strip the public sector down to the hardcore functions of a night-watchman state: police, justice, diplomacy, army. But for electoral reasons that goal can never be attained, at least not in northwestern European lands, because it would require a break with too many core constituencies, even on the right side of the political spectrum. Full neoliberal “regime shift” has occurred only in a few countries, primarily the US and Britain. Elsewhere, what results are subtle but far-reaching changes in the way the state socializes its populations, the kinds of expectations it cultivates, the types of subjectivity it fosters.12 Thus the “disembedding” of the transnational economy from its sustaining institutional nexus is accomplished under the veil of a persistent, but increasingly attenuated and gradually hollowed-out social democracy.13 The hope, it seems, is that the gaping zones of exclusion and alienation of entire populations can be covered over for just a little while more – until the productive classes have learned to take responsibility for cultivating their own blindness.

 

Towards a New Political Ecology
A deeper understanding of the structural transformations that have come to bear upon the European societies obviously requires consideration of the European Union, in its relationship of cooperation and competition with the United States. Postwar European reconstruction was decisively influenced by the US, first via the Marshall Plan, then through the formation of NATO. For the US, Europe was a less an export market than a region for direct foreign investment and the implantation of industry. This was chiefly done in Germany, the largest and most industrially advanced European nation, whose postwar constitution had been written by the United States. The creation of the European Economic Community offered an expanded market for US corporations established in Germany, and as such received strong US encouragement.14 In the 1960s and 70s, only France resisted the fundamental Americanization of Europe; but even there, the resistance was merely gestural and diplomatic. Yet as understanding grew, in the 1980s, of the ways in which the US had succeeded in changing the rule-sets of global production and trade, European elites came to press for a single means of exchange, which would lessen their dependence on the dollar as the de facto international reserve currency. Monetary union was proposed in 1986 with the Single European Act, launched in 1992 with the Maastricht treaty, and completed with the introduction of paper notes in 2002. In order to escape similar dependence on the American consumer market, the European Economic Area (EEA) was created in 1994, and has been continuously expanded since then. It should be noted that despite its refusal to be part of the EU, Norway is a fully fledged member of EEA, via the European Free Trade Association (EFTA), of which it was a founding member as far back as 1960. In this way it has become something like an invisible member of a purely functional, non-democratic European economic union.

From 1994 onward, a specular rivalry can be observed between European expansion and the process of hemispherical integration in the Americas. The EU tends to become the distorted mirror-image of NAFTA – though without recognizing itself as such. In many ways, it is again the embedding and disembedding of liberalism that is at stake. From the idealizing perspective of European social democrats, monetary union and the single market should allow the reconstitution of a domestic territory outside the dictates of the world market, so that social relations can be regulated democratically, not just economically. Indeed, the classic European diplomatic posture is to insist on such regulation; and the EU’s leading cosmopolitan philosopher, Jürgen Habermas, constantly invokes the normative horizon of a “world domestic policy” (Weltinnenpolitik).15 But one should never forget that the EU only functions as a democracy at one remove, via the Council of Ministers and the European Commission, both of which emanate from the arcana of national administrations, leaving room for only very limited direct representation of the continent’s voters in the European Parliament. And behind the internationalist symbols of the Hague Court and the Kyoto climate-control protocols, the EU’s tendency toward an objective alliance with the US within the World Trade Organization, against the demands of the Global South, reveals a quite different function of international public law. As Peter Gowan remarks: “The imperial secret of the whole concept lies in who writes the rules in the first place… The model here is, of course, the European-inspired WTO which presents its rules as rooted in universalist-liberal free trade norms while in fact they are a concoction of positive law rules serving Atlantic capitalist interests.”16

A similar pattern can be seen within the really-existing domestic territory of the EU, particularly since the ten-member enlargement of May 2004. The result of the enlargement is a three-part division: Core Europe, New Europe, and what might be termed “Edge Europe,” i.e. the peripheral countries to the south and east of the current borders. Ideally, the social rights of the core countries would be extended through redistribution programs to the new members, while foreign aid and the umbrella of cosmopolitan trading laws would allow the gradual integration of the peripheral zones, whose resources and labor forces are, in any case, streaming into the center. In reality, a hierarchy emerges between the full citizens of Core Europe, who expect some democratic control over the evolution their societies; the subordinated citizens of New Europe, whose political privileges have been substantively weakened by the loss of economic control over their industries and the westward migration of their younger and more educated people; and the dominated populations of Edge Europe, whose territories and resources are wide open to exploitation by transnational corporations – and whose rights, if they are migrants, can be curtailed arbitrarily, as painfully shown by the experience of French citizens of African origin under the recent state of emergency.

A New Europe country like Estonia exemplifies this three-tiered situation. Its most promising industries and the mainstays of its banking sector were snatched up by corporate investors from the core countries, particularly Finland and Sweden, in the wake of the worldwide financial crisis of 1997-98 (which put an end to the period of “primitive accumulation” in the post-Soviet sphere). Meanwhile, the country’s enormous Russian-speaking population – imported from across the empire to work in the Soviet versions of Fordist industry – languishes for the most part without employment and without any right to citizenship and a passport, which are unobtainable without mastery of the complex Estonian language. This means that full-fledged Estonian citizens occupy what at times can seem like a narrow strip of their own small country, between the economic incursions of their more powerful European neighbors and the inconvenient presence of a former working class which they feel they did not ask for, and to whom, in any case, they cannot really speak. The current heroin epidemic among this former working-class population, and the explosion of HIV that inevitably accompanies it, raises the specter of a long-term condition of ghettoization and social exclusion, with the attendant development of the police apparatus and prison complexes that have been characteristic of neoliberal regime-shifts. Under these circumstances, the formation of a state to match far-off Keynesian standards of inclusion and social welfare is more than just difficult; it is impossible. Demands for European-level social regulation from labor interests in the core countries are understandably rejected, because there is no way to redistribute money to the population and remain competitive internationally, as membership in Europe also demands. The “social question” can only become a yawning chasm. Leaders, parties, political programs succeed each other in a confusing whirl; and what stands out from the rest is the default option of nationalist populism.

But just how far from that same sort of predicament are the hollowed-out social-democratic states of the European core, including Norway and the other Scandinavian lands? The generative grammar of global liberalism – which has structured the development of the EU, and was even written into the articles of its proposed constitution – has given rise to an extraordinarily dynamic upper-middle class, whose members, often involved in the business of culture, are able to switch countries, languages and affective universes with an ease and fluency that could be staggering, if there were any outside perspective from which to judge it. However, the very acceleration of transport and transaction tends to isolate the rarefied upper echelon of the core populations within a highly cohesive network of mobility, insulated from the increasingly heterogeneous composition of the societies they live in (or move through). The decline of the old working classes and the relative eclipse of national traditions in favor of a syncretic, recombinatory culture, coupled with the arrival of new service classes and technology specialists from Edge Europe and beyond, makes it very difficult for the would-be reformers of state services to craft a political platform that can appeal to any kind of majority. The needs of the rising sectors of society and of the financial elites will be satisfied in any case, since these are the foundation stones and principal clients of the SWPR state-form. But to address the people outside the ideal profiles of the knowledge-workers and the corporate financiers, two basic solutions present themselves, which are generally taken together. The first is to cut sectoral deals for specific voting blocs: farmers, unionized industrial workers, functionaries, small businessmen, state pensioners, etc., all of whom still have access to established representational mechanisms dating back to the Fordist era. And the second solution is to cover over those sectoral deals with a broad populist rhetoric of national identity and national dramas, which do not necessarily exist in reality.

The obvious danger in Core Europe today is that of slipping into a new political ecology of fear, which sutures the gaps between diverging social fractions by the knee-jerk scapegoating of the easiest targets, who are the immigrants, the people gathered to do the jobs that aging Core Europeans no longer desire to perform, or are no longer allowed to perform in an economy that needs under-the-table employment as the only possible way to compress the wage-variable, and therefore continue to make a profit in a fiercely competitive economy. To manipulate the figure of the immigrant as a security threat (or even worse, of the Muslim as a civilizational threat) is the most expedient way to cover up much more difficult negotiations over the dismantling of the old welfare state, while avoiding complaints about its replacement by a hodgepodge of changing dispositions that obey no particular sense of justice or even economic rationality. And the problem is that this dynamic of scapegoating and cover-up can only get worse, as core populations grow older and more immigrants are called in to replace them, despite the growing crunch on work permits and residency papers. The question then becomes, why does such an obviously short-sighted tactic seem to be spreading throughout Europe? Why are we looking at the rise of liberal-fascism, and talking about something else? What explains this inability to see the future, when it’s already right here before our eyes?

 

The Chances of Vision
In the finance-driven, networked economy of the postnational competition regimes, it is necessary to add a fourth “fictitious commodity” to Polanyi’s list of three (land, labor and money). This fourth fictitious commodity is knowledge, in a spectrum of forms ranging from science, technology and law to literature, cooking and everyday know-how. Its production depends on long-term institutionalized learning and teaching experiences, publicly available libraries, archives, museums and databanks, internalized modes of individual self-cultivation, urban spaces of improvisational or structured group interaction, processes of hybridization between different cultural traditions, the constitution of critical and dissident discourses ranging from punk rock and poetry slams to networks of concerned scientists or alliances of traditional and organic farmers, and so on through a near-infinite spectrum of practices whereby objective observation, theoretical abstraction, individual expression and patterns of social solidarity are laid down in complex traces and artifacts that can be taken up and transformed by successive individuals, groups and generations. The impossibility of completely functionalizing this subtle interweave of practices and motivations is obvious, and was recognized throughout the long era of national institution-building, from the early nineteenth century onwards in most parts of the Western world. As Jessop writes concerning education during the Keynesian period: “In stylized terms that were never fully matched in reality, we can say that education was expected to promote equality of access and opportunity, to create the basis for a talented and just ‘meritocracy’ that would undermine inherited class and status structures, to create, codify and disseminate a shared national identity and culture appropriate to a universal and solidaristic welfare state, and to develop knowledgeable and critical citizens able and willing to participate in an expanding public sphere as well as a mass plebiscitary democracy.”17 In terms of practices, values, experiences of time and the other, the educational and cultural spheres undoubtedly formed the most complex institutional mix produced by the era of embedded liberalism.

The expansion of the state’s cultural and educational mandate, and its hesitant extension to class, gender and ethnic groups that were formerly excluded from representation, brought new conflicts and challenges to this institutional mix, which undertook a difficult period of transformation in the wake of 1968 and the decade of unrest that followed. It is precisely this “difficulty of representation,” precluding any simple reiteration of supposed national icons and values, that has been the source of most vitally engaging developments in culture over the last thirty years; and the same kind of questioning has even extended into a reevaluation of certain economic and technoscientific functions. However, with the educational streamlining of the Bologna process, with the corporate sponsorship and instrumentalization of the arts and sciences, with the retooling of national cultural institutions for the transnational tourist market, and with the pervasive trend towards the commodification of knowledge under intellectual property law, what is being challenged right now is the very ideal of the educational-cultural sphere as the locus of a problematic quest for mutual understanding in a pluralist society. Indeed, the commodification of knowledge is the driving force and central goal of the Schumpeterian competition state, to the precise extent that the leading edge of capitalist production is redefined as technological and managerial innovation (particularly in the financial sphere). All the flowerings of human aspiration and experience can then be treated not just as commodities, but as investments in an entrepreneurial self, as the economist Gary Becker has shown with his notion of “human capital.”18 One of the ways Europeans now experience capital failure is when education and culture come packaged with a price tag that disfigures them, even when it doesn’t leave them completely out of reach.

Paradoxically, the damage caused by this capitalization of knowledge is at once a primary factor in societal blindness, and a chance to bring the new states of human coexistence under the neoliberal regimes to visibility. The collaboration of artists with social scientists, labor organizations and ecology movements during the recent cycle of antiglobalization counter-summits, and now around the theme of the “precariousness of existence” in the flexible economy, has marked a step forward in the ability to name and describe the effects of the neoliberal transformation process. Art has become one of the means of investigation, akin to social science, but irreducible to it. Similarly, a transnational organization such as Attac, whose economic critique has gained a certain influence in social-democratic countries like Norway, seeks to make visible the negative influence of a stateless, privatized currency on the fundamental realms of human labor and the natural environment, but also on the cultural-scientific domain that constitutes a second nature or an artificial environment (just as necessary as the air we breathe – and as likely to be polluted).19 The growth of the Socialist Left Party in Norway (reaching 12.5% of the vote in the 2001 general elections) represents an attempt at a political translation of such investigations. When artists begin to explore the operations of capital, and to point directly to instances of capital failure, they are participating with their own expressive methods in a complex response to the gradual installation of the competition regime, imposed as a single set of exclusive and increasingly intolerant rules for the difficult and irrevocably multiple states of human coexistence in society. The process of exploring and interpellating these currently invisible states is one aspect of the broader effort to constitute social formations that might act in common, having not only shared objective interests but potentially even an interest in each other.

The problem, however, is not only the gradual phasing-out of national cultural institutions, together with their outdated canons of beauty and elitist ideals of identity. The deeper problem is that in order to survive as exploratory and transformative practices, and in order to generate enough interest and involvement to reconstitute a socialized cultural sphere under fresh auspices, the contemporary arts have to throw off their blatant or subtle dependence on the new corporate-oriented institutions that promote an opportunistic and flexible subjectivity. And this is easier said than done, as shown by the ambiguous relations between cultural producers on the museum circuit and activists seeking forms of organization for precarious labor.20 Because it’s easy to invest in a little anguish over the biopolitical instrumentalization of one’s own creativity, in order to produce a new niche product for the originality markets. And it’s just as facile to criticize that investment. Indeed, hyperindividualization and the capitalization of everything seems to be the very formula for the breakdown of solidarities, and the emergence of liberal-fascism. What’s more complicated – as those involved in different aspects of the precarity movements are discovering – is to create lines of invention and critique that reinforce each other in their differences, across professional and class divides. In this respect, the role of knowledge producers in recreating an ability to say “we” is potentially decisive.21 By pursuing a new transvaluation of the old national values, it may be possible to arrive at what is now lacking: a sustainable constitution of multiplicity. But there is no assurance whatsoever that this potential will be realized.

The accession of ten new members to the European Union underscores the difficulty. The problem is that none of these countries can find any interest in maintaining the conditions of a welfare state which they cannot afford, and whose restrictions would block their own path to development. One can then only “join the union” on a battle footing – as proved by the preemptive drafting of certain former Eastern states into the Iraq war. Fighting to support the US petrodollar becomes a paradoxical guarantee of sovereignty, at the very moment of subsumption under a supranational hierarchy. As though the long-held project of becoming a fully fledged member of the EU could only be realized through a dream of the American way of life. To be sure, great dreams are natural, positive, after decades of foreign occupation. But what some Estonian observers consider to be a contemporary culture of wish-fulfilling narcissism (punctuated or punctured by deep mistrust and aggressivity) could also be understood as a way of coping with traumatic change, in the sense of the Polish sociologist Piotr Sztompka, who goes so far as to speak of a “trauma of victory.”22 How to lend tangibility and public visibility to theoretical freedoms that are not always matched by substantive improvements? An entire cartography of existence has been redrawn in fifteen years. The ambiguous class-status and uncertain integration of whole populations along Europe’s eastern rim, within and beyond the New Europe, marks the need for lucid and challenging artistic practices that can reveal and transform the unconscious conflicts that lurk beneath the surface of contemporary experience. Ways must be found to carry on this kind of work within the framework of new social relations that are unfolding across the entire European territory, at a time when cultural institutions have no clear mandate or support base for dealing with the difficult questions of identity and difference.

These concerns must surely feel distant to those who live in the state of Norway, outside most of the EU’s political constraints, and close to the North Sea oil wells, with a newly elected center-left government coming into power in the fall of 2005. The Norwegians seem to inhabit a different cartography. Yet despite the hopes of intellectuals, the Socialist Left Party lost ground to traditional Labor in the last elections; while the conservative liberal right-wing Progress Party, with its populist and racist leanings, received “only” 22% of the vote, making it the second largest force. Is it possible for a small nation to steer itself safely through tumultuous changes in the world-system? For a few weeks that same fall, in the self-run space of the artists’ union in Oslo, highly abstracted forms of capital failure were on display. Behind them, one could almost glimpse the invisible states of the union.

 

 

 

I would like to thank all the people, in Estonia and Norway, who generously allowed me to interview them in preparation for this text; as well as Anders Härm and Trude Iverson, for arranging those conversations.

Notes

1 F. Engels, Herrn Eugen Dühring’s Umwälzung der Wissenschaft (1878), part 3, chap. 2: “Der moderne Staat, was auch seine Form, ist eine wesentlich kapitalistische Maschine, Staat der Kapitalisten, der ideelle Gesamtkapitalist”; online at http://www.mlwerke.de/me/me20/me20_239.htm#Kap_II. English version: “The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital”; online at /www.marxists.org/archive/marx/works/1877/anti-duhring/ch24.htm.

2 F. Guattari, “Capital as the Integral of Power Formations”, in: Chaosophy: Soft Subversions (New York: Semiotext(e), 1996).

3 In this text I will use the term “capital failure” to describe the combined shortfalls in human well-being caused by what sociologists know separately as “market failure” and “state failure.” As I will show, the possibility of separating these two categories is increasingly reduced as the entrepreneurial dimension of neoliberal governance comes to predominate.

4 J. G. Ruggie, “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order,” in: International Organization 36, vol. 2, 1982.

5 K. Polanyi, The Great Transformation (Boston: Beacon, 1957/1944).

6 B. Jessop, The Future of the Capitalist State (Cambridge: Polity, 2002), chap 2 and passim. The introductory chapter can be dowloaded here.

7 For the crisis of US hegemony in relation to previous world-systemic crises, cf. Giovanni Arrighi, Beverley Silver et. al., Chaos and Governance in the Modern World-System (Minneapolis: University of Minnesota Press, 1999).

8 For interpretations of the shift towards a new international regime, cf. among others David Harvey, The New Imperialism (Oxford UP, 2003), as well as Peter Gowan, Global Gamble (London: Verso, 1999).

9 For the new role of the IMF since the early 1980s, cf. D. Harvey, A Brief History of Neoliberalism (Oxford UP, 2005), chap. 1.

10 Cf. J. Schumpeter, Capitalism, Socialism and Democracy (New York: HarperCollins 1975/1942), chap. 7, “The Process of Creative Destruction,” p. 83: “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.”

11 The term was coined by Christopher Hood, in the article “A Public Management for All Seasons?.” in: Public Administration 69 (1991). For a critical review of the practices it describes (which date from the 1980s, and betray the influence of the “Total Quality Management”procedures developed in Anglo-Saxon business circles), see among others Linda Kaboolian, “The New Public Management: Challenging the Boundaries of the Management vs. Administration Debate,” and the articles from the symposium on “Leadership, Democracy and the New Public Management,” in: Public Administration Review vol. 58, #3 (May-June 1998).

12 For an ideal-type of “flexible subjectivity” in fully neoliberalized societies, see B. Holmes, “The Flexible Personality,” in Hieroglyphs of the Future (Zagreb: WHW, 2002).The text is also available in my archive at http://www.u-tangente.org.

13 A classic case in this respect is France. For an account of the way the country’s economy has been flexibilized around a dwindling core of unionized workers who still serve as representative for the entire labor force, via the classic tripartite state-labor-employer bargaining structures, cf. Christian Boltanski and Eve Chiapello, Le nouvel esprit du capitalisme (Paris:Gallimard, 1999), chaps. 4 and 5 (“La déconstruction du monde du travail” and “L’affaiblissement des défenses du monde du travail”).

14 Consider this quote from Arrighi et. al. (Chaos and Governance in the Modern World-System, op. cit., p. 139), which sums up the perspective of the postwar American elites on European unification: “As John Foster Dulles had declared in 1948, ‘a healthy Europe’ could not be ‘divided into small compartments.’ It had to be organized into a market ‘big enough to justify modern methods of cheap production for mass consumption.’ To this end, the new Europe had to include a reindustrialized Germany. Without German integration into the European economy, remarked General Motors corporation chairman Alfred P. Sloan, ‘there is nothing that could convince us in General Motors that it was either sound or desirable or worthwhile to undertake an operation of any consequence in a country like France.’”

15 See for example J. Habermas, “The Postnational Constellation and the Future of Democracy,” in: The Postnational Constellation: Political Essays (Cambridge: Polity Press, 2001).

16 P. Gowan, “US Hegemony Today,” in: Monthly Review, vol. 55, #3, July-August 2003, online at: http://www.mail-archive.com/marxist-leninist-list@lists.econ.utah.edu/msg04762.html.

17 B. Jessop, The Future of the Capitalist State, op. cit. pp. 162-63.
18 G.Becker, Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (University of Chicago Press, 1993/1964).

19 See http://www.attac.no and http://www.attac.org.

20 The missed encounter between ärtists and activists at the Klartexte! conference in Berlin in January 2005 was an example of this ambiguity. As Marcelo Expósito writes: “It’s essential to understand what blocks the compatibility in practice between the remarkable work of the Kleines postfordistisches Drama and Marion von Osten on the new figures of cultural production, and the necessary process of politically organizing precarious social subjects defended by Alex Folti of Chainworkers.” See Expósito’s review of the conference, “Hablando Claro,” in: Brumaria 5 (Barcelona, 2005).

21 See the text by the French intermittents du spectacle, “La puissance du nous” [The Power of the “We”], at http://www.cip-idf.org/article.php3?id_article=1124. The absolute untranslatability of this text, which is immersed in the remnants of the French welfare state, itself speaks volumes about the difficulty of establishing solidarities on a European level.

22 P. Sztompka, “The Ambivalence of Social Change: Triumph or Trauma?” (2000), online at http://skylla.wz-berlin.de/pdf/2000/p00-001.pdf. Also see Sztompka’s contribution to J.C. Alexander et. al., Cultural Trauma and Collective Identity (Berkeley: University of California Press, 2004).

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