Hyperreality

By Carl Raschke

Jean Baudrillard’s well-known characterization of the “hyperreal” as the “precession of simulacra” would certainly apply to what we have witnessed in this week’s global financial crisis, or “meltdown”, catastrophe, or Armageddon - or whatever you choose to call it. Germany’s Der Spiegel proclaimed that “the foundations of US capitalism have shattered.” But there were really no foundations to begin with. One bit of hazy consensus among the multifarious pundits and political voyeurs of the dramatic financial events that had been building steam, lurching, and making feints for over a year at this point was that no one really understood what was going on at all, and no one really knew what to do, even though markets tumbled, entire stock exchanges (as in Moscow) were shuttered, huge corporations disappeared in a day, and a veritable army of central banks from Japan to the EU were airdropped overnight to put out a fire that was raging out of control.

The simulacra that could loosely be termed “market valuations” of substanceless, arcane, and indecipherable “instruments” of investment - “structured finance”, as they call it - that had been precessing since the 1990s (so-called “derivatives”), when the first “bubble” post-Cold War global capitalism was building, had now passed the point of even deconstructibility. As one mystified business writer in The New York Times put it, “nobody understands who owes what to whom — or whether they have the ability to pay…The crisis continues because nobody knows what anything is worth.” As Shakespeare would have aptly put it, it is all “sound and fury signifying nothing.”

One commentator in London’s Financial Times compared the global financial system that was now heaving and hauling to Moses’ “golden calf”, spending more time doing Biblical exegesis than financial analysis. His point was that the golden calf was not really an idol, really a throne or altar on which the terrified Israelites, left to themselves in a trackless desert without their charismatic leader, decided to salve their existential dread and insecurity by crafting a hospitality center for all the household gods they had left behind in Egypt. The analogy wasn’t completely clear, but one could easily draw the inference that while our postmodern Moses had stepped out for a while (actually climbed a mountain) to get a revelation for all humankind in the post-Communist, neo-liberal, new world order, the Israelites - them is us - had decided we couldn’t bear, as Sartre would have said, our “dreadful freedom,” so we constructed a “bullish” and seemingly infinitely expandable and revisable financial Golem to satiate consumer lusts and desires. Like the Israelites, we partied heartily (even the stiff ex-Communists were break-dancing)…until Moses came back. Moses, of course, in a fit of anger smashed the tablets of revelation, but they still had a Torah to chew on for centuries thereafter. One wonders if Ben Bernanke perhaps wasn’t up, like Charlton Heston, to playing the role of Moses. Alan Greenspahn had already failed the screen test.

But there are more complex factors at work. Indeed, “complexity” rather than the old Platonic metaphor of essence and appearance, real and unreal, may be the operative theoretical term. An investment banker, quoted in an article by The International Herald Tribune over the background of the crisis noted that “the degree of complexity is so great, the products are new and untested and the operations are now global.” In one lf his least noticed, but most important books, Mark C. Taylor analyzed half a decade ago in his book Confidence Games: Money and Markets in a World Without Redemption (University of Chicago Press, 2004) how complexity and what he calls “dematerialization” are intricately intertwined with the growth of global financial markets. Taylor, who had just come off a stint as an entrepreneur with a digital age high tech company that finally went the way of many of its counterparts, discerned the the inescapable relationship between changes in business and finances, “the postmodern moment” (the transition from an epistemology of mirroring and mimesis, the “crisis of representation”) and what has become a watchword of his more recent writings, the “moment of complexity.” “The play of signs prefigured in late modern and postmodern art expands to encompass the world of finance. As the financial economy displaces so-called real economy, money becomes increasingly virtual and markets morph into webs of circulating images and information.” (p. 3)

Taylor’s book follows a long, winding road from this juncture through Derrida’s discovery of “spectrality” as well as the complexities of the brave new planetary financial world enabled by digital communications and and powered by “difference engines” (for example, the derivatives and methods of short selling exploited by hedge funds). As one would expect, it ends on a theological note. “Virtual reality is the current guise of what once was called sacred or perhaps even God. Virtuality, however, is a strange God. In a world where reality is virtual, nothing is certain or secure. Purpose and meaning are as elusive and shifty as the constantly morphing networks in which they emerge.” (p. 331) It is probably the theological conclusions ironically that are the weakest aspect of the book, even though Taylor’s contributions to “theology” are widely known and accepted and the subtitle communicates a sense of gratuitous fatality which may or may not really be appropriate to what is really at stake here. Even in hyperreality bubbles do burst, as the events of the past week clearly show. The “confidence” game does not go on indefinitely. The art of “conning” depends on some “fiduciary” presumption on the part of the conned - i.e, the one who believes he or she has a ground to stand on when such assumptions are groundless. Even Nietzsche who talked about the lie of the metaphysical considered it a “vital lie,” something necessary to life itself.

When virtual networks of sweet signifying nothings crash, they are always restored through efforts to restore “confidence.” That is what the current “confidence game” in Washington about the federal government buying up “toxic paper” is all about. Note that despite all the talk about “paper assets”, we are really talking these days about electrons. The skeptics are saying “it’s not really a fix,” which is another way of saying the grand illusion of naive confidence in what was previously thought to be a basically intelligible global financial system is no longer possible.

The great global financial crisis of 2008 - the true “September surprise” - raises a lot of compelling questions for a lot more people than merely money people. Taylor’s theological point aside, it does retain a yet unspecifiable “theological” aura. In Confidence Games Taylor seems to miss the upshot of Derrida’s own take on specters and de-materialization in his pivotal work Specters of Marx. For Derrida, the secret of the spectral is not the unredemptive but the religious in the guise of the “messianic.” We are obliged “to think the virtualization of space and time, the possibility of virtual events whose movement and speed prohibit us more than ever…from opposing presence to representation, ‘real time’ to ‘deferred time,’ effectivity to its simulacrum…in short, the living to the living-dead of its ghosts. It obliges us to think, from there, another space for democracy. For democracy-to-come and thus for justice.” (Specters of Marx, Routledge, 1994).

The September surprise may turn out to be the surprise of this sort of thinking, even though in an age when the coinage of the “to come” (avenir) is as politically manipulable and as commodifiable as the illusory confidence in occult structured investment vehicles (SIVs) that just exploded en bloc. Confidence means not having faith “in” but “with” (con-fides). It is this Mit-Sein rather than the pure Da-Sein of signs in the new world financial disorder’s demise that will count as we go forward. Noah’s “rainbow sign” or the sign of Jonah? Those are what we would call “faith-signs.”

Specters of Derrida. Signs of the times.

Carl Raschke is Professor of Religious Studies at the University of Denver and Senior Editor of the JCRT.