WAGES OF SIN?

Abstract

The ‘global credit crunch’ is only the latest and most virulent among a series of financial crises stretching back to the 1970s and beyond. Yet, more than any of its predecessors, the current crisis is being presented in apocalyptical libidinal terms. Accounts of the crisis and its aftermath tend to be predicated on a sharp contrast drawn between prudent, conservative, risk averse, sober financial practice and a more exuberant, greedy, hedonistic, risky counterpart.

This kind psychosexual analysis is neither new, nor does it represent an accurate depiction of the dilemmas and challenges posed by modern finance. It tacitly suggests, for example, that a return to ‘traditional financial values’ (akin to repeated calls for returns to ‘family values’) would restore calm and normality to a system undermined by the excesses of the perverse few.

This paper argues that although a return to ‘traditional values’ is unlikely to solve any of the current problems, the representation of the crisis and its aftermath is significant. The crisis and its aftermath are embroiled in a wider fundamentalist and puritanical backlash against ‘hedonistic’ capitalism. It represents not a crisis of capitalism as a whole, but a schism within (predominantly) financial communities over the morality and acceptability of ‘risk’. As such, a strongly libidinal language already common within the markets is being adapted and redeployed to create new divisions and exceptions in the context of crisis.

Keywords:

• credit crisis
• banking
• libidinal political economy
• finance
• sub-prime
• liquidity
• Freud
• morality

Notes

1. As can be seen in the quote from Weber above, this is nothing new. Weber's analysis of the relationship between Protestantism and western capitalism highlights the ways in which narratives of propriety, sobriety and restraint formed the foundations of ‘good’ capitalism. Weber's bourgeois business man represented the (temporary) resolution of a fundamental contradiction in the relationship between Christianity and capitalist accumulation. Wealth was not only acceptable, but a moral duty, so long as a set of ethical principles was observed. These included a prohibition of excess – specifically including excess in the sins of the flesh.

2. Though Castoriadis (1987) takes somewhat a distinct approach to Freud and Lacan compared to the rest (compare Gammon & Palan, 2006).

3. The origin of the term ‘fucker’ in contemporary English and much deployed in the context of the crisis (compare Hind 2009) is a conflation of an older Anglo-Saxon word with the name of the sixteenth century German banking house Fugger (or Fokker). The allegedly amoral and rapacious way that the Fugger did business – creating, as they did so, the basis for what would subsequently become the global banking system – led to this epithet being applied to them from very early on (compare Ehrenberg 1928, pp. 83–84).

4. This statement is from a plenary address given by a senior manager of the Standard and Chartered Bank at an Annual Credit Risk Summit held in London in October 2008. The audience was not impressed and there was only one question at the end of the talk: ‘So has your bank avoided all the losses then?’ In fact it later emerged that Standard and Chartered was the only British Bank to have withstood the credit crunch with minimal losses.

5. SIFMA – Securities Industry and Financial Markets Association.

6. John Taylor, 43, a fiduciary risk manager for Barings, cited in Gimson (2008).