Putting into question the imaginary of recovery: a dialectical reading of the global financial crisis and its aftermath

Abstract

In this article, we put into question the discourses that emerged during the global financial crisis (GFC) and that coalesced around a particular socio-economic imaginary of ‘recovery’ over the period 2009–2012. Our reading of these discourses is very much guided by the notion of the dialectic as developed by Fredric Jameson, and as such this paper can be read as an attempt to put his theoretical ideas to work. Through our dialectical reading, we aim to create a certain estrangement effect that makes the imaginary of recovery seem very odd and unnatural. In order to achieve such an effect, we postulate four theses which are deliberately antagonistic: first, there has been no ‘crisis of capitalism’; second, we must change the valence of the GFC from negative to positive; third, the relationship between finance capitalism and ‘free markets’ is deeply contradictory; and fourth, we must resist the regulation discourse.

Keywords:

• dialectic
• finance capitalism
• global financial crisis
• imaginary
• Fredric Jameson

Notes

LIBOR is a benchmark interbank lending rate which forms the basis for a wide variety of other rates (including those of mortgages, corporate loans and credit cards). It transpired that a large number of global banks had colluded in manipulation of LIBOR by misreporting the rate at which they could borrow from each other. Fines handed out by the regulators in 2012 and 2013 ran into hundreds of millions of pounds for individual banks.

Samman (2012, 216) suggests that the FT and the WSJ grasped together can ‘be construed as a realm of appearance that is entirely specific to contemporary financialized capitalism’. In his study, he detected a difference in representations of the 1930s that informed interpretations of the 2007–2009 crisis between the US- and UK-based publications (e.g. p. 225); a split in the ‘commentariat of global finance’ (p. 227) as it were which was not there pre-GFC. As the focus of our work is very much UK-based (as evidenced in our use of quotes from the UK policy-making elites), it made sense to stick to the FT as a source in order to keep the narrative and contextual complexity to a manageable level (we collected FT articles which already fill two lever arch files). Rubtsova et al. (2010) who studied the interaction of policy-makers and financiers in the USA only used the WSJ in their historical analysis for a similar reason.

When articles were authored by FT contributors or editors we simply attributed them as ‘FT’ and dated them. FT articles that were authored by members of the business elite were attributed personally, as, for example, in the case of Stephen Roach of Morgan Stanley.

As Jameson (2005, 37) reminds us: ‘the political is first and foremost the decision about friend and foe … a central and constitutive issue both in Machiavelli and in Marx and Engels’.

In the same issue (FT 27 January 2012) a rather different appropriation of Occupy as ‘stormtroopers’ was made on the letters pages: ‘Politicisation of the economic system … was likewise a key feature of Nazi Germany, including wage controls and house building initiatives, further objectives the Occupy London thinkers also advocate’.

In his famous ‘Bageshot’ speech, King (2010) used the word ‘alchemy’ five times. Its most damning use was: ‘For a society to base its financial system on alchemy is a poor advertisement for its rationality’. In a rare mea culpa Lloyd Blankfein admitted that ‘The industry let the growth and complexity in new instruments outstrip their economic and social utility as well as the operational capacity to manage them’ (FT 9 September 2009).

The quote is taken from the start of chapter 17 in Weber (2008, 250).