The Read: Michel Feher, Rated Agency: Investee Politics in a Speculative Age
Friday's Child Is Loving and Giving
Why did I get this book?
I think capitalism and capitalist societies have changed in some important ways in the last twenty years that is not captured very well in conventional descriptions of “neoliberalism” and that is obscured by a lot of the attention to Big Tech and the follies of a new gilded age. So I’m always on the look-out for work that might help me think about that.
Is it what I thought it was?
Yes and no. It feels a bit more like an extension of influential analyses of neoliberalism, and a bit more familiar to me than I expected. I was hoping for something a bit closer to Benjamin Braun’s incredibly useful paper “Asset Manager Capitalism as a Corporate Governance Regime,” though there is a fair amount that I found interesting and surprising in that direction.
What continuing uses might I have for it?
It’s a clearly written book that I could imagine using in a number of teaching contexts or as the focus of a reading group of some kind.
Quotes
“Though begrudgingly conceding that as integral parts of the liberal heritage, freedom of association and universal suffrage could not be altogether forsaken, they feared the confiscation of the former by trade unions and the sway of demagogy over the latter were speeding Western societies down the socialist ‘road to serfdom’. To avert such a tragic fate, the economists, jurists and historians later called ‘neoliberals’ by their critics made it their mission to design the safeguards that would protect representative democracies from the heedless use of the civil and political liberties they granted.”
“Confronted with neoliberalism’s gradual takeover of common sense—at least among mainstream politicians, economic elites, and media pundits—its detractors on the Left were understandably inclined to attribute their own disarray to the successful implementation of the neoliberal project. On the one hand, they blamed the impoverishment of democratic debates on the combined effects of the shackling of fiscal and monetary policies, the transfer of formerly public goods and services to private capital, and the replacement of mandatory regulations by contractual settlements predicated on the issuance of tradable claims. On the other hand, they came to impute the growing impotence of their own critiques and ideals to the corrosive impact that representations of the individual as self-entrepreneur had on wage earners’ class consciousness and capacity for indignation.”
“Worried about the technocratic drift of corporate culture already denounced by Schumpeter, these disciplines of Milton Friedman blamed the declining productivity of the American economy on the disconnection between power and ownership within corporations.”
“At a time when capital accumulation is driven by finance, reenacting the strategy developed by the labor movement in the age of industrial capitalism entails exposing and appropriating the condition to which investors subject the potential recipients of their beneficience. Such reprisal thus has two tenets: it involves identifying the subjective form that financial markets constitute as the object of their assessment…but also assuming its features in order to challenge financial capitalists on their own turf.”
“The liberty that financial capitalism grants equally to everyone, investors and investees alike, is no longer the freedom to negotiate that industrial capitalism conferred on employers and employees. It is the liberty to speculate—or rather, to speculate on the speculations of others—so as to shape their assessments.”
“What the champions of the agency theory of the firm call ‘corporate governance’ is no longer centered on the pursuit of endogenous growth, which Fordist managers saw as their mission, but instead focuses on the valorization of the financial asset that the firm represents in the eyes of investors.”
“For once the stock value of the firm becomes its managers’ chief concern, it will not be long before this priority harms all economic agents who have a stake in but do not own a share of the company. In other words, the social and economic impact of measures intended to bolster investor confidence is likely to persuade the various stakeholders that faced with the wrongs they suffer collectively, they would do better to combine their claims than to confine their struggle to their own particular interests.”
“Need we be afraid that such engagement portends rallying, if not to financial capitalism itself, then at least to the mindset of its abettors? This would be to forget that labor union strategy in the late nineteenth century largely mirrored agreements among bosses to fix the level of wages.”
“Because governing largely consists in parrying the most pressing risks, the putative wishes of investors constantly preempt the hopes of voters.”
“The deactivation of the time-honored center-left versus center-right polarity—supporters of embedded markets in the name of equality and solidarity versus champions of unhinged competition in the name of freedom and efficiency—has prompted the rise of a new structuring antagonism: the defenders of national identity versus the promoters of uprooting globalization.”
“The various functions that credit relations assign to private citizens—borrower, lender of last resort, social creditor—are all subject to a form of activist appropriation.”
“To discover how the bondholder value of a state can become the object of counterspeculations, we should consider the residual commitments that rulers still feel comfortable making to the population they govern, once the share reserved for maintaining investors’ good will has been set aside.”
“To popularize their castigation of those allegedly parasitic groups, neoliberal ideologues have had no qualms occupying the terrain of class struggle, albeit not without altering its traditional terms.”
“To maintain the financial attractiveness of the territory over which they preside, political leaders have become more inclined to dispose of—or at least conceal—those citizens and denizens who seem to lack valuable assets, rather than invest in their skill sets.”
“The prospect of Uberization is already haunting a wide variety of professions…To offset the isolation and vulnerability characteristic of this new professional environment, engaging in the formation of freelancers’ collectives increasingly seems more promising—more realistic, as well as more desirable—than petitioning public or private institutions for more permanent employment contracts.”
Commentary, asides, loose thoughts, unfair complaints
The take on 1980s conservatism across Western liberal democracies that’s interesting is that it was the result of the melancholia of Hayekian-style thinkers of the Mont Pelerin Society who believed that the entrepreneurial spirit that made capitalism dynamic and creative had been smothered first by the bureaucratization of the corporation and second by the rise of professionals and intellectuals who were manipulating the working-class towards a social democracy. I think this is at the least an incomplete account (e.g., there was more to Reagan and Thatcher’s policies than just indebtedness to Mont Pelerin’s intellectual project) but it’s a fertile ground for discussion.
One thing that I’d want to look at in Hayek et al that I just don’t remember from a fairly long-ago reading is whether or how the notion that corporations institutionalized a long-term vision of utility in capitalist societies against the short-term horizon of individual interest figures at all. Feher’s reading is that Schumpeter’s late writing was set against corporations because of a tendency to managerialism, stasis, stability, etc. and thus against the capacity for entrepreneurial change, innovation, ‘creative destruction’. But if financialization was actually meant to unshackle that drive, at least one very potent side effect has been to more or less destroy any longer-term thinking in capitalist organizations (or any neoliberal organization, really), despite the proposition that many asset managers offer about growing their principal in order to secure the indefinite future.
Feher’s account very strongly argues that a very particular set of political and intellectual elites accurately perceived the likely trajectory of social democracy (in terms of its hostility to their interests and outlook) and accurately devised effective countermeasures in the program of neoliberalism and that these countermeasures have done exactly what they were intended to do. He sees hope in that he thinks there is a left political project that can drive a wedge in investor-investee structures under financialization, but I just have a deep inclination to be skeptical of histories in which some subset of the powerful accurately perceive the unfolding of history, accurately devise a plan to change its trajectory and accurately execute that plan with the intended outcomes.
Many of the footnotes are enjoyable mini-essays.
I have a hard time not constantly going back to the fossil fuel divestment movement as a political blunder (apropros of my entry yesterday) but Feher gives me some new things to consider here. The error may just have been in the way that the first wave of divestment activists understood shareholder power and the reputational effects of divestment (next to none at this point). The activists really needed someone who understood what financialization had wrought and how the environment was radically different than the one that anti-apartheid activists were looking to in the 1980s. But following Feher, the idea that investment holdings are an important possible vector of left activism still has a lot of promise. “The liberty to speculate” in his reading opens some unintentional vulnerabilities in financial capitalism. But that thought, in terms of the next observation, might mean that if you’re going to focus on a university endowment, the way you do it is via “stakeholder consciousness”—hence, you go hard at austerity within a neoliberal institution and hard at the way that risk management and trustee approaches to investment have the effect of setting the university against its community and its stakeholders. A lack of commitment to thinking about climate change is somewhere in that mix, but it’s not the low-hanging fruit or the place to start.
If I understand Feher correctly in his first chapter, “a stakeholder class consciousness” is what he looks to emerge from a recognition of a common interest in what companies, institutions or other large-scale economic projects do in the world where those stakeholders are not investees or investors. So, for example (perhaps?), this would argue that doctors and other credentialed medical professionals, clerical staff, environmental staff, patients, community members, first responders, etc. could achieve a “stakeholder consciousness” around a for-profit hospital where their divergent interests (the doctors expect a high salary; the patients expect affordable service, etc.) can be overriden by an awareness of their common exclusion from authority over and authority within the hospital, which is relegated to investors. The other hook is that he argues that stakeholders should express their collective interest through interventions in the logic of investee activity—e.g., through forming something like an alternative ratings agency that wrenches the criteria for investor value towards whether the investment vehicle is properly oriented towards serving its stakeholders (and thus trying to threaten investor value if it is not).
The second chapter on bondholders and politicians was interesting to me, but I have to confess that I just lack basic literacy about bonds as financial instruments, particularly their history, and it made it hard for me to judge his interpretation. Something else I need to learn, added to a long list. There’s an interesting reading of “populism” in this chapter as well as the evolution of party politics over the last decade.
Ronald Coase plays an important role in Feher’s intellectual and institutional history, so that’s yet another target for future learning for me—I am not familiar with him at all.
The major drift at the end of the book seems to be that financialization, neoliberalism and asset power are the water in which we must swim, so stop trying to get back up on land and restore pre-1980 social democratic possibilities or older forms of labor activism. Here I have to say I’m not so sure—but at the least we can’t just speak as if those older forms are even understood or intelligible in the current environment by what Feher calls “post-wage-labor” workers.