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Currencies: New Thinking for Financial Times
Capital and Time: For a New Critique of Neoliberal Reason
Critics of capitalist finance tend to focus on its speculative character. Our financial markets, they lament, encourage irresponsible bets on the future that reflect no real underlying value. Why is it, then, that opportunities for speculative investment continue to proliferate in the wake of major economic crises? To make sense of this, Capital and Time advances an understanding of economy as a process whereby patterns of order emerge out of the interaction of speculative investments. Progressive critics have assumed that the state occupies a neutral, external position from which it can step in to constrain speculative behaviors. On the contrary, Martijn Konings argues, the state has always been deeply implicated in the speculative dynamics of economic life. Through these insights, he offers a new interpretation of both the economic problems that emerged during the 1970s and the way that neoliberalism responded to them. Neoliberalism's strength derives from its intuition that there is no position that transcends the secular logic of risk, and from its insistence that individuals actively engage that logic. Not only is the critique of speculation misleading as a general approach; it is also incapable of recognizing how American capitalism has come to embrace speculation and has thus been able to generate new kinds of order and governance.
184 pages, Hardcover
Published January 23, 2018
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Displaying 1 - 5 of 5 reviews
March 4, 2018
This book would make for a much better read had Konings been more sincere about its scope and rather limited - but valuable - contribution he's making to current critical readings of finance instead of making sweeping statements on how he is the only one to get it right while other commentators (which he often refers to by using such broad categories as "heterodox", "critical" or "Post-Keynesian" without explaining in detail what particular strands of these heterogenous movements he has in mind) are unable to go beyond critiquing finance solely for its ficitious and speculative nature. While this has to strike anyone having a cursory knowledge of post-crisis critical takes on finance as well as of more established traditions, as a very uncharitable interpretation, even more stiking is the ease with which critiques to which this generalized description applies are dismissed as "foundationalist" with no explanation being provided as to why "foundationalism" is bad in and of itself - it seems to be a postmodern shibboleth Konings takes for granted, while most of the authors he calls out on this issue do have a pretty good justification as to why the difference between fundamentals and speculative ficition matters and why the former should be cultivated while the latter is utterly harmful (Hudson, Keen, Toporowski, Minsky, Lapavitsas etc.), a justification which which resists being reduced to some kind of pre-poststructural metaphysical attachements or some moral intuition on "just price", as Konings seems to have it.
The main point of Koning's book is that the radical contingency of markets engenders speculation as the defining condition of economic and more and more often traditionally non-economic (e.g. education) - activities under neoliberalism. Speculation needs to be understood not as some excessive superfluum arising in special circumstances, not in the tradition of "irrational exuberance" of the markets, but to the contrary as t h e rationality of markets par excellence, generating the internal order thereof and encompassing ever wider areas of social life, binding more and more actors, excluding any possiblity of positioning oneself outside of this logic. Specualtion is not only a response to the contingency but works itself as a strategy for reshaping this contingency, altering the futurity of markets so that they favor more leveraged actors (literally l;everaged banks but also indebted gradutes). Speculation thus generates a certain order, or as Foucault would have it a certain rationality of governance over contingent future. The state, central banks and regulators are imbricated in this rationality themselves, they too become entangled in this logic and as a consequence cannot be seen as constraining the speculative logic of markets or to provide markets with an alternate, man-made order - if anything they normalize contingency and speculation.
Now this surely must ring a bell to anyone familiar with Foucault's work on neoliberalism or the logic of power in Foucault at large - located nowhere and everywhere, without a privileged cluster. This position seems to be loosened when Konings attacks agambenian exeptionality as a model for neoliberal consitution (or rather imposition thereof) but the general aversion towards hierarchy or percieving state as a priviledged actor prevails and, as highlighted above, a sovereign intervention is only permitted insofar as it works along the lines of endogenously generated rationality - in a bitterly foucauldin fashion everyone is a slave to the "discourse", to the intangible and infintely malleable rationality, which arises out of its own conditions of possiblity while simulatnously creating them in a self-referential cricle, the break of which is unattainable (at least not from the outside, because there is no outside).
This is a sketch of the main idea in this book. This idea is then contrasted against different theoretical backgrounds, in a search of an intellectual post-foundation ally. In this search Latour is rejected as too indecisive and Agamben as too sovereignist while Luhman and Minsky (as well as Foucault, as mentioned above) become Koning's principal allies. Luhman supplies him with the self-referentiality of systems (including the financial one) and Minsky is used to establish the finance and speculation as laying at the core of capitalist enterprise rather than at peripheries.
While the choice of Minsky as an ally is absolutely natural given Koning's aims, the uncharitable accusations thrown around, directed inter alia at "the Post-Keynesian" seem to be even more bizzare in light of this choice of friends. First of all, Minsky is a staunch foundatiuonalist and there is a strong normative side to his critique of finance - it is so not without a good theretical justification in his work. Second of all, Minsky, among Schackle who is also treated unfairly, is peraphs the most diligent retriever of the notions of risk and uncertainity from Keynes' work. Konings largely dismisses the postkeynesian theoratization of unceratinity as thinking the risk as a memre residuum beyond the more common and calculabe risk rather than as the primary condition of entrepreneurial decision-making. This does seem to constitute a very reductive reading not only of the postkeynesian tradition at large but even of the work of Keynes himself. As if the elaborate treatment of unceratinity in chapter 12 of General Theory was not enough, there is still chapter 14 where the aspect of temporality and uncertainity are used to develop a theory of asset-pricing, further developed in his 1937 paper. Both ch. 13 and that paper are Minsky's favourites and Konings must have been aware of them. In the light of them not only does his need to position himself as the one who finally gfot the dynamics of the system right looks like a reinvention of the wheel (btw, some of his remarks on value of money in time seem to be more poetic reiteration of liquidity preference); it also casts shadow on his intellectual integrity. Last remark on Konings relation to Keynes - it is funnywho he employs the term "market neutrality" several times, as if stopping shortly of refering to "money neutrality" (the latter term is only invoked in later chapters on monetarism in US). Of course the principle of non-neutrality of money is one of the tenets of original keynesianism and Minsky's theory. But the theory of non-neutraility of money provides good justification for critique of finance as speculative, elucidating the connection between nominal and real variables, showing how it is not the case that we should dismiss the bloated, the euphoric, the fictious as "not real" as in "non consequential in the long run" (as monetarism would have it) but instead showing precisely how finance can disturb the functioning of the economy at large, disturb the fundamentals. This, of course, sits uneasy with the uncharitable depiction of "heterodox" critiques which serves Konings as a background against which to draw his purportedly more nuanced theory.
Overall it was a stimulating read but a more honest and direct engagement with a very well established tradition of critique of the very same phenomena Konings wants to critique would make this book much better and would help to present its insights as what they really are - not groundbreaking revelations but rather interesting refolmulation of known thesis in a more foucauldian language.
__________
If you want to get the gist of the argument Konings is making, see this very accesible and concise essay he wrote for LARB: https://lareviewofbooks.org/article/t...#!
The main point of Koning's book is that the radical contingency of markets engenders speculation as the defining condition of economic and more and more often traditionally non-economic (e.g. education) - activities under neoliberalism. Speculation needs to be understood not as some excessive superfluum arising in special circumstances, not in the tradition of "irrational exuberance" of the markets, but to the contrary as t h e rationality of markets par excellence, generating the internal order thereof and encompassing ever wider areas of social life, binding more and more actors, excluding any possiblity of positioning oneself outside of this logic. Specualtion is not only a response to the contingency but works itself as a strategy for reshaping this contingency, altering the futurity of markets so that they favor more leveraged actors (literally l;everaged banks but also indebted gradutes). Speculation thus generates a certain order, or as Foucault would have it a certain rationality of governance over contingent future. The state, central banks and regulators are imbricated in this rationality themselves, they too become entangled in this logic and as a consequence cannot be seen as constraining the speculative logic of markets or to provide markets with an alternate, man-made order - if anything they normalize contingency and speculation.
Now this surely must ring a bell to anyone familiar with Foucault's work on neoliberalism or the logic of power in Foucault at large - located nowhere and everywhere, without a privileged cluster. This position seems to be loosened when Konings attacks agambenian exeptionality as a model for neoliberal consitution (or rather imposition thereof) but the general aversion towards hierarchy or percieving state as a priviledged actor prevails and, as highlighted above, a sovereign intervention is only permitted insofar as it works along the lines of endogenously generated rationality - in a bitterly foucauldin fashion everyone is a slave to the "discourse", to the intangible and infintely malleable rationality, which arises out of its own conditions of possiblity while simulatnously creating them in a self-referential cricle, the break of which is unattainable (at least not from the outside, because there is no outside).
This is a sketch of the main idea in this book. This idea is then contrasted against different theoretical backgrounds, in a search of an intellectual post-foundation ally. In this search Latour is rejected as too indecisive and Agamben as too sovereignist while Luhman and Minsky (as well as Foucault, as mentioned above) become Koning's principal allies. Luhman supplies him with the self-referentiality of systems (including the financial one) and Minsky is used to establish the finance and speculation as laying at the core of capitalist enterprise rather than at peripheries.
While the choice of Minsky as an ally is absolutely natural given Koning's aims, the uncharitable accusations thrown around, directed inter alia at "the Post-Keynesian" seem to be even more bizzare in light of this choice of friends. First of all, Minsky is a staunch foundatiuonalist and there is a strong normative side to his critique of finance - it is so not without a good theretical justification in his work. Second of all, Minsky, among Schackle who is also treated unfairly, is peraphs the most diligent retriever of the notions of risk and uncertainity from Keynes' work. Konings largely dismisses the postkeynesian theoratization of unceratinity as thinking the risk as a memre residuum beyond the more common and calculabe risk rather than as the primary condition of entrepreneurial decision-making. This does seem to constitute a very reductive reading not only of the postkeynesian tradition at large but even of the work of Keynes himself. As if the elaborate treatment of unceratinity in chapter 12 of General Theory was not enough, there is still chapter 14 where the aspect of temporality and uncertainity are used to develop a theory of asset-pricing, further developed in his 1937 paper. Both ch. 13 and that paper are Minsky's favourites and Konings must have been aware of them. In the light of them not only does his need to position himself as the one who finally gfot the dynamics of the system right looks like a reinvention of the wheel (btw, some of his remarks on value of money in time seem to be more poetic reiteration of liquidity preference); it also casts shadow on his intellectual integrity. Last remark on Konings relation to Keynes - it is funnywho he employs the term "market neutrality" several times, as if stopping shortly of refering to "money neutrality" (the latter term is only invoked in later chapters on monetarism in US). Of course the principle of non-neutrality of money is one of the tenets of original keynesianism and Minsky's theory. But the theory of non-neutraility of money provides good justification for critique of finance as speculative, elucidating the connection between nominal and real variables, showing how it is not the case that we should dismiss the bloated, the euphoric, the fictious as "not real" as in "non consequential in the long run" (as monetarism would have it) but instead showing precisely how finance can disturb the functioning of the economy at large, disturb the fundamentals. This, of course, sits uneasy with the uncharitable depiction of "heterodox" critiques which serves Konings as a background against which to draw his purportedly more nuanced theory.
Overall it was a stimulating read but a more honest and direct engagement with a very well established tradition of critique of the very same phenomena Konings wants to critique would make this book much better and would help to present its insights as what they really are - not groundbreaking revelations but rather interesting refolmulation of known thesis in a more foucauldian language.
__________
If you want to get the gist of the argument Konings is making, see this very accesible and concise essay he wrote for LARB: https://lareviewofbooks.org/article/t...#!
April 9, 2018
an extremely unwieldy attempt to defend neoliberal economic policy by utilizing multi-syllabic terminology and various political and economic philosophies... the retread idea of the inevitability of the domination of neoliberalism... besides my disagreement with his premise that arguing about speculation is pointless ("some people win doing it!" being the implication), i find his snatch-and-grab references to other people's work (fully footnoted, at least) to be unoriginal and thoroughly unconvincing, if not academically questionable... too much philosophizing and vagueness, not nearly enough concreteness... it's as if he has bought lock-stock-and-barrel that neoliberalism works, so it's just as well we accept it AND try to fit all the pieces as a necessary process of progress... i hate when people try to overcomplicate economics and economic theory... sure, it's complex, but complex is NOT complicated (look them up)... but if we continue to allow "professionals" to prey on us by claiming "let us handle this, it's too hard for regular people to understand" then we lose, they win, and nothing changes... sorry, peeps, but there's not "an app for that" and we should hopefully have learned by now turning over anything to those claiming "our best interests" surely ends with them controlling us and laughing all the way to the(ir) bank...
June 20, 2019
wrong in interesting ways, but extremely right about a handful of things from a very specific perspective i think. some of the background is a little tedious, and he's a little too cavalierly dismissive of PKs, but people do need to start bringing pk theory into productive discussion with process philosophy stuff. not a huge fan of the writing style, but beggers can't be choosers. glad to see someone take a torch to the lefties still enthralled with schmitt. anyway, some cool new theorizations of uncertainty and a surprisingly interesting take on Volcker and Hayek. damn shame to see a book that relies so much on the arisal of the shadow banking system not cite zoltan pozsar extensively but what can you do
probably the best way to think about this book is if Dark Deleuze by andrew culp had known about economics, and also had something useful to say
probably the best way to think about this book is if Dark Deleuze by andrew culp had known about economics, and also had something useful to say
August 27, 2024
I’ve just revisited Capital and Time after reading it a few years ago, and its relevance has only deepened with time. Konings’ conceptualization of the relational ontology of money is nothing short of illuminating. He delves into how money functions not just as a medium of exchange, but as an epistemic tool that shapes our understanding of the economy, while simultaneously acting as a productive force that is both conservative and radical.
This dual nature of money lies at the heart of Konings’ analysis. On one hand, money seeks to establish security through the securitization of future events, using time and uncertainty as productive forces. On the other, it inherently constrains and circumscribes what is possible within the economy. This paradox is what makes money such a potent instrument within neoliberalism, as it continuously balances between maintaining the status quo and pushing the boundaries of what can be leveraged.
Konings argues that neoliberalism’s true "secret sauce" is its ability to ascetize all aspects of society, effectively constraining the range of possible futures by turning every potential outcome into a financial instrument. Through this lens, the commodity itself becomes secondary to the real point: the productive engagement with temporality and uncertainty. The financial tools at play, from cash to more abstract instruments of speculation, all serve to manage and exploit these uncertainties, turning them into avenues for profit and control.
What stands out in Konings' work is his insight into neoliberalism’s durability. He doesn’t just attribute its endurance to simple market forces or ideological dominance; instead, he pinpoints how neoliberalism has institutionalized leverage as a core principle. This leverage creates nodal points within the economic system—critical junctures that must be maintained, especially during crises. This logic ensures that the system can absorb shocks and prevent the total wipeouts that were common in the 19th century. Instead, what we see is a controlled narrowing of potential futures, a phenomenon I refer to as "the great flattening."
As the system grows, it doesn’t necessarily become more stable in the traditional sense. Rather, it becomes more adept at managing risk and uncertainty, funneling possible futures into a more predictable, albeit constrained, set of outcomes. This is the genius of neoliberalism—it has turned crisis management into a form of governance, ensuring that long-tail events are mitigated through the very logics of leverage and derivatives that underpin the system.
This dual nature of money lies at the heart of Konings’ analysis. On one hand, money seeks to establish security through the securitization of future events, using time and uncertainty as productive forces. On the other, it inherently constrains and circumscribes what is possible within the economy. This paradox is what makes money such a potent instrument within neoliberalism, as it continuously balances between maintaining the status quo and pushing the boundaries of what can be leveraged.
Konings argues that neoliberalism’s true "secret sauce" is its ability to ascetize all aspects of society, effectively constraining the range of possible futures by turning every potential outcome into a financial instrument. Through this lens, the commodity itself becomes secondary to the real point: the productive engagement with temporality and uncertainty. The financial tools at play, from cash to more abstract instruments of speculation, all serve to manage and exploit these uncertainties, turning them into avenues for profit and control.
What stands out in Konings' work is his insight into neoliberalism’s durability. He doesn’t just attribute its endurance to simple market forces or ideological dominance; instead, he pinpoints how neoliberalism has institutionalized leverage as a core principle. This leverage creates nodal points within the economic system—critical junctures that must be maintained, especially during crises. This logic ensures that the system can absorb shocks and prevent the total wipeouts that were common in the 19th century. Instead, what we see is a controlled narrowing of potential futures, a phenomenon I refer to as "the great flattening."
As the system grows, it doesn’t necessarily become more stable in the traditional sense. Rather, it becomes more adept at managing risk and uncertainty, funneling possible futures into a more predictable, albeit constrained, set of outcomes. This is the genius of neoliberalism—it has turned crisis management into a form of governance, ensuring that long-tail events are mitigated through the very logics of leverage and derivatives that underpin the system.
June 25, 2019
Interesting book on neoliberal time but oddly summarizing.
Displaying 1 - 5 of 5 reviews