>Geld, Finanzen, Kapitalismus, Post-Kapitalismus, Recht, Staat, Nation, Zivilgesellschaft, Soziale Bewegungen
Kapital und Zeit – Für eine neue Kritik der neoliberalen Vernunft
von Martijn Konings
Die interdisziplinäre Reflexion über das Wesen des Wirtschafts- und Finanzlebens erfreut sich steigender Beliebtheit. Das Interesse der Sozialtheorie, Philosophie und Geisteswissenschaften an Fragen der Politischen Ökonomie sowie die Beschäftigung mit den konzeptionellen Grundlagen des Kapitalismus nimmt zu. In diesem Kontext fragt Martijn Konings nach der Bedeutung von Unsicherheit, Kontingenz und Zeit im gegenwärtigen Kapitalismus. Seine Analysen richten sich an ein Publikum mit allgemeinem sozialwissenschaftlichen Hintergrund und ermöglichen eine Auseinandersetzung mit Schlüsselfragen der Finanzwirtschaft und der Politischen Ökonomie.
…”…Die Orthodoxie von gestern ist die Heterodoxie von heute – ein beinahe überdeutlicher Hinweis auf den konservativen und anachronistischen Charakter der Spekulationskritik…”…
rezensionen – amazon.de
soziopolis.de 5-2022 Lisa Adkins, Martijn Konings – Interview – Die Mittelschicht der Eigentümer ist too big to fail
…”…Sie haben argumentiert, dass die Begriffe Verschuldung und Spekulation nicht geeignet sind, um das wirtschaftlich-politische Gefüge der heutigen Finanzialisierung zu erfassen. Könnten Sie erläutern, warum Sie den Vermögenswert anstelle von Schulden und Spekulation in den Vordergrund stellen? Was halten Sie von der Tatsache, dass die politische Mobilisierung die Spekulation zu ihrem Ausgangspunkt macht?
Verschuldung und Spekulation sind zentrale Aspekte der neoliberalen Verfassung. Aber wenn wir dies allein zur Grundlage unserer Kritik machen, bewerten wir die gegenwärtige Dynamik des Kapitalismus im Wesentlichen anhand eines Idealbildes eines kapitalistischen Systems, das keine Schulden erzeugt und die Spekulation unterdrückt. Es ist nicht wirklich klar, ob ein solches System jemals existiert hat oder ob der Kapitalismus ohne diese Dimensionen denkbar ist. Die damit verbundene Argumentation suggeriert, dass irgendetwas aus dem Gleichgewicht geraten ist, dass der Markt „entbettet“, entgrenzt ist und dass die Menge an spekulativen Schulden, die im Umlauf sind, einfach nicht mit der grundlegenden Realität des Wirtschaftssystems und seiner Fähigkeit, reale Werte zu produzieren, im Einklang steht. Das ist eine bekannte Kritik, und sie hat offensichtlich eine gewisse Zugkraft, Anziehungskraft und Mobilisierungsfähigkeit. Aber letztendlich ist es eine moralische Kritik, die sich als wissenschaftliche ausgibt; es ist ein Weg, unsere moralische Empörung in die Sprache der Sozialwissenschaft zu kleiden.
Das wird besonders deutlich, wenn es um die Vorhersagen geht, die diese Art von Perspektiven typischerweise begleiten: Ausnahmslos wird uns gesagt, dass die Diskrepanz zwischen der produktiven Kapazität der Wirtschaft und der entgegengesetzten Pyramide der spekulativen Verschuldung eine Belastungsgrenze erreicht, und dass die gesamte Konstellation in Kürze zusammenbrechen wird. Natürlich gibt es Krisen, aber es handelt sich nie um die Art von umfassendem Zusammenbruch, den die Kritiker der spekulativen Verschuldung uns vorhersagten. Das System wird nie auf eine Art Grundniveau der produktiven Tätigkeit „zurückgesetzt“, und seltsamerweise setzt eine vergleichbare spekulative Dynamik recht schnell wieder ein. Die Zeit nach der Finanzkrise ist ein paradigmatischer Fall dafür, ebenso wie der steile Anstieg der Immobilienwerte während der Corona-Pandemie.
Ein Grund dafür ist, dass die spekulative Tätigkeit nicht notwendigerweise „entbettet“ ist, sondern gerade „eingebettet“, unterstützt und getragen von zahlreichen sozialen Konventionen und institutionellen Konstellationen, die ihre Lebensfähigkeit auf Systemebene sicherstellen. Besonders deutlich wird dies natürlich beim Wohnungswesen: Der Wert von Häusern und Wohnungen wird auf vielfältige Weise vor dem Verfall geschützt, was der Idee des freien Spiels der Marktkräfte zuwiderläuft. In The Asset Economy haben wir argumentiert, dass die Mittelschicht, die Wohneigentum besitzt, eine “too-big-to-fail”-Wählerschaft darstellt: Politiker und politische Entscheidungsträger können es sich einfach nicht leisten, dass die Immobilienwerte in den freien Fall übergehen.
Das wird natürlich nur verständlich, wenn man sich von der Vorstellung löst, dass es diese spekulative „Wall of Money“ gibt, die auf der Grundlage von nichts als fadenscheinigen Erwartungen Kapitalgewinnen nachjagt. Das ist nicht wirklich das, was geschieht: Diese Fonds kaufen Vermögenswerte, die gleichzeitig als Sicherheit für die Aufnahme derjenigen Kredite dienen, mit denen diese Vermögenswerte gekauft werden. Wenn man anfängt, diese etwas selbstreferenzielle oder paradoxe Formulierung zu entschlüsseln, gerät man sehr schnell in ein komplexes Geflecht aus rechtlichen Verfahren, Buchhaltungsrichtlinien und anderen institutionellen Arrangements. Wie Ute Tellman gezeigt hat, spielt dabei die rechtlich-kalkulative Politik der Verpflichtung eine sehr große Rolle, um Anlagen über die Zeit mit der Eigenschaft von Dauer und Sicherheit zu versehen. In unserer eigenen Arbeit haben wir uns speziell auf die Rolle der Liquidität und der öffentlichen Hand konzentriert, wenn es darum geht, sicherzustellen, dass die Eigentümer von Vermögenswerten die Zahlungen für die Schulden, die sie beim Kauf des Vermögenswerts aufgenommen haben, weiterhin bedienen können. Durch eine solche Liquiditätspolitik werden spekulative Investitionen aufrechterhalten, die aus der „Fundamentalwert“-Perspektive keinen Sinn zu haben scheinen.
Das ist einer der Gründe, warum sich große institutionelle Anleger in den letzten zehn Jahren so sehr für Wohnimmobilien interessiert haben. Einerseits wissen sie, dass Häuser sichere Investitionen sind und im Laufe der Zeit wahrscheinlich an Wert gewinnen werden. Andererseits sehen sie aber auch den Trend, dass immer mehr junge Menschen, die einen guten Job haben und über ein gutes Einkommen verfügen, dennoch zur Miete wohnen müssen. Bei einigen Personen dieser Gruppe können sich die Dinge im Laufe der Zeit vielleicht ändern (etwa wenn sie eine Erbschaft erhalten oder beruflich sehr erfolgreich sind). Die institutionellen Anleger erkennen jedoch einen klaren Trend dahin, dass Menschen mit gutem Einkommen ihr Leben lang zur Miete wohnen werden. Und das ist Neuland für die Wertschöpfung. Natürlich sind wir alle in gewissem Maße daran beteiligt, denn diese neuen Strategien eröffnen den Leuten auch die Möglichkeit, ihr Geld in Wohnraum anzulegen, ohne ein Haus kaufen zu müssen. Dies kann über einen Immobilienindexfonds oder auf andere Weise geschehen. Die australische Plattform für Immobilieninvestitionen BrickX ist eine der avantgardistischsten Ausprägungen dieses Ansatzes, denn sie macht Immobilieninvestitionen zugänglich und bedient sich dabei der Vorstellung, man besäße durch die Investition tatsächlich Anteile an Häusern aus Stein und Ziegel. …”…
Capital and Time – For a New Critique of Neoliberal Reason – by Martijn Koning
>financialisation, inequality, neoliberalism, real existing capitalism, rentier capitalism
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.
theoryculturesociety.org/ 2018 Review: Martijn Konings, ‘Capital and Time – by Samuel Kirwan (all emph gg/ca)
This is, inescapably, a time of socio-economic ‘crisis’. Across the countries of Euro-America, discussion of the relationship between economy and the social, whether in a normative or critical mode, seems trapped by the long shadow of the ‘financial crash’ of 2007-8, and more immediately by the ripping apart of the social protections through ‘austerity’ measures. In this context, Martijn Konings has offered a series of interventions (2015, 2016a, 2016b) urging a re-orientation of the ‘progressive’ critical gaze towards enduring economic imaginaries and the emotional and relational dynamics of everyday economic activity.
Building upon these, this book seeks to bring these interventions together into a broad-ranging critique of socio-economic theory, arguing that its dominant tools are not up to understanding the neoliberal ordering of the post-crisis world. Due to a misguided belief in a state that might extricate itself from finance and impose order upon runaway markets, ‘progressive’ observers have failed to engage with how the state is fully and inescapably embedded in forms of neoliberal economic governance that had already incorporated and prepared for the crisis and its aftermath. In so doing, they have been somewhat complicit, he argues, in the deepening inequalities of the post-crisis period.
The book is the first in a new series co-edited with Konings’ co-author Melinda Cooper, whose own recent text The Neoliberal family, as noted below, explores similar arguments to this book, albeit in a different field. As suggested in the title of the book, among Konings’ other collaborators, another prominent voice here is that of Lisa Adkins, whose work on ‘speculative time’ of neoliberalism (Adkins, 2016, 2018) has presented a serious challenge to prevailing orthodoxies in the study of debt, finance and markets, inasmuch as these retain an unreflexive and unquestioned critique of ‘speculation’ as a site of social destruction.
Speculation is perhaps the organising term for this book; I will try below to explain the specific role it plays with reference to my own work in the field of debt. But it is useful first to play out Konings’ identification of two ‘Kantian leaps’ – moments in which complexity and nuance are sought out only to reaffirm ordering structures of reality – that provide some context for why these practices of speculation are so important.
The first Kantian leap, that of the theorist, is partly explained by a failure to see the second, that of the subject in its everyday encounters with money. In the first case, the ‘leap’ represents a failure of imagination. Whilst tentatively delving its hands into contingency and ‘non-foundationalism’, socio-economic theory nonetheless returns, without fail, to an ‘idealist essentialism’ and ‘regulative fantasy’ (24) when it comes the key question; namely the nature and value of money. Heterodox economic theory introduces a welcome pluralism into considerations of financial value, emphasising the ways in which money is inextricable from the social relations and interactions that produce it. Yet smuggled into this is the positing of this same ‘social’ as a stable, durable ‘ground’ for economic value. Money seemingly unmoored from any such social basis – namely that generated through speculative consideration of possible futures – is rendered suspicious.
The idea that money is ‘grounded’ in this way leads to a view of financial value as ‘elastic’: it can be stretched, but ultimately it will snap. The ‘crisis’ of 2007-8, under such terms, has been understood as being triggered by the stretching of value to breaking point in the sub-prime crisis. The necessary response to this, it would seem, is increased regulation of speculative lending; no longer should credit be offered in such reckless manner, entirely un-anchored from predictable futures.
It is indeed hard to argue with the observation that while the broader social sciences have been happy to accept a ‘non-foundational’ approach, incorporating Deleuze, Butler and others into their theoretical framings and core curricula, they have been far more cautious about accepting the non-foundationalism of money. Nervous, that is, of abandoning the distinction between ‘real’ and ‘fictitious’ forms of finance, if not always their work, at least in their political commitments, which remain shaped by a Keynesian belief in the necessity of the state as a regulatory force upon speculative financial activity.
As previous readers of Konings and Cooper will know, is not Keynes that the book sees hiding behind every corner, but rather Polanyi. What Konings finds in Wolfgang Streeck, Nancy Fraser and others is an unthinking allegiance to the Polanyian ‘dis-embedding’ narrative, namely the idea that capital ‘dis-embeds’ social relations, rendering them unanchored and unmoored. In The Neoliberal Family, Cooper describes, among a ‘certain kind of left’, a conflation of capitalism with the ideology of the free market. Once one assumes that capital proceeds as a ‘force of social disintegration’, the only form of resistance is to seek to strengthen traditional forms of connection and respect: family, hierarchy or class. (Cooper, 2018:14)
The argument of both is that the ‘dis-embedding’ narrative not only fails to explain the nature and movement of capitalism, it has done enormous damage to our capacities to combat the workings of neoliberalism and the specific amplification and redistribution of risks it creates. As we have seen with critiques of neoliberalism from the ‘alt’ or traditional right, challenges to ‘neoliberalism’ are perfectly capable of deepening power structures so long as they remain tied of a normative and conservative politics seeking to re-embed social relationships and the true value of money.
The problem with ‘progressive’ perspectives rooted in heterodox economics is that they miss, Konings argues, the way in which the subject themselves performs their own ‘Kantian Leap’. Echoing the turn to theological accounts of money (see Goodchild, 2010), he notes how, in the secular absence of any universal reference point to guarantee meaning and value, the subject attributes an absolute ground to money itself. However much the fantasy of money as a ‘neutral’ actor is just that, a fantasy, this projection has a terrific emotional force. As Konings had argued elsewhere:
it is precisely because money is nothing in and of itself that there is tremendous danger in attributing inherent powers to it, looking to it for magical free lunches and handouts – and that is why it requires absolute submission and commitment. (2016a, 92)
The manifestation of this ‘absolute submission and commitment’ is a drive to purification. In its most recognisable form, this is directed towards cleansing society of financial corruption – what we now recognise in the refrain ‘drain the swamp’. But also, more interestingly, it is directed towards everyday financial practices, and a particular twisting of what is the heart of the book: how the interplay of speculative acts generates the endogenous ordering of systems.
The importance of speculation for Konings lies in a recognition that the subject is always already involved in various considerations of potential futures. That is, we are always considering what might happen in the future, and how we might act now to shape and/or prepare for such circumstances. These considerations are shaped and affected by the legacy of our, and others’, previous speculative acts, most notably where individuals have entered into credit/debt relationships. The acquisition of capital in the present through the anticipation of future earnings binds any future speculations towards the servicing of those repayments. Furthermore, we watch, observe and consider the speculative practices of others; we consider how our own speculative practices might affect theirs. As is well known, taking on debt in a ‘trustworthy’ manner might cause a lender to offer more credit, but borrowing in a reckless manner, so long as it amplifies the lender’s exposure to the borrower’s future, might achieve the same result.
Konings is not offering a critique of speculation, or offering a critique of that critique; he is seeking to give weight and texture to speculative acts. A flat surface of speculations would be of little interest; the book shows how the performativity and productivity of speculation are indicators of the exercise of power. Expanding to a larger scale, we can see how, for certain actors, speculative mobilisations of potential futures are also acts of bending the conditions of future actions to their own interests. What such actors hold is greater ‘leverage’: ‘control or influence operating imminently’. Konings thus positions leverage as a measure of the power certain forms of speculation have to shift the framing conditions of other speculative acts; it is the model of a form of power that maintains and shapes systems from within.
Following Elena Esposito, the book identifies Luhmannian systems theory as the guiding spirit behind such a model of ‘endogenous’ ordering of subjects, institutions and states. Indeed, whether this book adds to Konings’ arguments made elsewhere will depend on whether the reader buys into this specific systems-theoretical framing. What this perspective does lead to is a clear framework for understanding the ‘bailouts’ as a fully normalised practice of neoliberal governance. Under a model of risk-oriented economic governance, the state had become fully incorporated into the world of finance through its role as guarantor of the major nodal points (i.e. the major banks) in a system of generalised speculation.
Yet I am more interested in the re-framing of ‘austerity’ the book proposes. In a dynamic of necessary speculation with an ongoing commitment to a ‘purification’ of money, it is the subject’s past financial investments that become sites of commitment and submission. On the one hand, this explains the enduring popular support for ‘austerity’ measures that have laid a trail of staggering destruction across the UK. The emotional resonance of the narrative that the nation must honour the repayment of debts accrued during the ‘boom’ years is hard to shake. Yet it explains also how, despite the misery they can create, it remains unimaginable that one might simply ignore a credit agreement; this would be to presume (however accurate this might be) that the money came from nowhere. However deleterious or discriminatory this agreement was, any future speculations must be bent to the absolute submission to honouring it. It is precisely the emotionally resonance of this narrative that is used by collectors in the UK to encourage debtors to prioritise ‘consumer’ debts over those that lack this narrative, principally Council Tax arrears.
This would seem to lead socio-economic critique into a cul-de-sac; any challenge to economic governance, or law, is futile without an engagement with the economic imaginary that sustains them. So let me propose another. The concept of the ‘jubilee’ incorporates the various models through which debts are ‘written off’ en masse. It is a concept that contains both an alternative incorporation of the state into economic governance and an alternative economic imaginary. In the first case, this would be a model that reverses the selective ability to ignore one’s past financial speculative actions, organised as this is around degrees of leverage. In the second, it would be an imaginary oriented to the image of the clean slate: however much your past financial actions might define you, there must always be room to one day be free of them.
sagepub.org 5-2021 Review: Martijn Konings, ‘Capital and Time by Michael Keaney
more by Adkins, Konings et al –
newleftreview.org 11-2022 Rearguard Battle – by Martijn Konings
“The award of the Nobel Prize in Economic Sciences to Ben Bernanke last month unleashed a wave of indignation among those who view the former chair of the Federal Reserve as the epitome of unoriginal establishment thinking. Bernanke received the prize for work demonstrating that bank runs were possible and that they could impact real economic activity. Both of those things had been perfectly obvious since at least the 1930s. But the Keynesian models that the economics profession built during the post-war era were unable to account for such events, having no real explanation for the volatile dynamics of debt and finance.
This aporia became more obvious when the era of ‘fiscal dominance’ came to an end and financial instability made a comeback from the second half of the 1960s, challenging the Keynesian paradigm and lending credibility to rival strands of thought. Rational expectations theorists underscored the inherent futility of government attempts to interfere with the inner workings of the market, while Milton Friedman’s monetarism fostered the notion that Keynesian inflationism was responsible for the corruption of America’s monetary standard.
Bernanke and other New Keynesians didn’t buy the idea that the problems of the present could be solved by returning to a pure free market. Yet the shallowness of their take on the problem of capitalism’s instability was evident in the subsequent evolution of Bernanke’s work into a framework for inflation targeting and monetary fine-tuning that looked with suspicion on any attempts to manage stock markets or asset prices. In 2004, while serving on the board of governors of the Federal Reserve, he brought the notion of ‘the Great Moderation’ into mainstream circulation, expressing his conviction that through rule-driven fine-tuning, the Federal Reserve would be able to ensure stable, non-inflationary growth. Above all, Bernanke maintained the illusion that, with the right minds at the helm of the economy, money could be the thing of neoclassical fantasy – neutral, stable, unobtrusive. As his memoir makes clear, this fully neoliberalized Keynesianism comfortably survived Bernanke’s own involvement in the enormous rescue operations that followed the near-collapse of the American financial system in 2007-08.
Alan Blinder’s A Monetary and Fiscal History of the United States, 1961-2021, was published in the US in the same week the Nobel Prize was announced. Following a doctorate at MIT with Robert Solow, Blinder has enjoyed a long and distinguished career in Princeton’s economics department, his alma mater. In the mid-1980s he was instrumental in recruiting Bernanke to Princeton based on the work that would eventually earn him the Nobel. But although Blinder and Bernanke share an intellectual agenda and are apparently good friends to this day, their political orientations are different. Bernanke is a Republican – or at least he was, until he realized how uncivil they can be – and he would not claim the Keynesian label as more than a purely technical description of his conceptual framework, which in any case he sees as largely compatible with the insights of New Classical and monetarist economics.
Blinder, by contrast, is a committed liberal (a self-proclaimed ‘centre-left Democrat’, as he says in the book’s introduction). During an extended hiatus from the academy in the nineties, he served as a member of Clinton’s Council of Economic Advisers, followed by a stint as Vice Chair of the Federal Reserve Board, in which capacity he objected to Alan Greenspan’s eagerness to combat inflation by raising interest rates and inducing higher levels of unemployment. His oeuvre, which stretches from the 1970s to the present, is a sustained attempt to resist the neoliberal dilution of Keynesianism. It aims to preserve both the spirit of its original post-war iteration and its practical relevance as a policy manual, defending deficit spending and fiscal stimulus as means to stabilize the economy and bring it as close to full employment as possible.
Blinder’s new book offers a synthetic account of sixty years of economic policymaking in the US, spanning roughly the period of his own career, and picks up exactly where Friedman and Anna Schwartz left off in their influential 1963 work A Monetary History of the United States, 1867–1960 (Blinder maintains his text ‘is in no sense a sequel’ despite the ‘intentional homage’ of his title). It begins with ‘the New Economics’ enshrined in the Kennedy-Johnson tax cut passed in 1964, which he describes as ‘a watershed event’ – ‘the first deliberate and avowedly Keynesian fiscal policy action ever undertaken by the US government’ – and continues through the rise of monetarism, the Volcker disinflation of the 1980s, the rise of central bank independence during the booming 1990s (‘an important and almost worldwide revolution’ in monetary policy), responses to the 2007-08 financial crisis, and ‘Trumponomics’, before and after the pandemic.
Central to Blinder’s old-fashioned Keynesian project is the famous ‘Phillips curve’, which depicts an inverse relationship between inflation and unemployment. That curve occupied a pivotal but paradoxical place in post-war Keynesian thought. On the one hand, it formalized an unfortunate existential condition: the inevitable trade-off between the need to ensure stable money and the wish to make sure that everyone who wants a decent job has one. On the other hand, it was within this trade-off that Keynesians always identified a certain political agency: we may not like the fact that the trade-off exists, but we do have a choice about how to strike the balance – there is always something policymakers can do.
This was the prized possession of post-war Keynesianism that monetarists and rational expectations theorists sought to undermine. Friedman drew the Phillips curve as a straight vertical line, indicating that there is a non-negotiable, natural rate of unemployment and that attempts to interfere with it will inevitably backfire. Notwithstanding his attempts to ‘relegate my personal political views to second or third fiddle’, the clear purpose of Blinder’s book is to rescue the logic of the Phillips curve from the clutches of neoliberal reaction. For him, ‘being a Keynesian sometimes means worrying more about unemployment than about inflation’ – caring more about the welfare of those who need to sell their labour than the income streams of the rentier. That’s a nice sentiment, but what does it amount to?
Writing with such a defensive and pre-committed intellectual agenda can make it difficult to put one’s finger on the pulse of history. Yet some of Blinder’s previous writings have nonetheless been useful. His 2001 book The Fabulous Decade, co-written with Janet Yellen, presents a lucid though not particularly critical account of the 1990s boom. His study of the 2007-08 financial crisis, After the Music Stopped (2013), ranks among the more helpful mainstream perspectives. And compared to the opportunistic provocations of Larry Summers and other nominal Keynesians, Blinder’s op-ed interventions in the Wall Street Journal are always balanced and level-headed. But his new book makes clear how little intellectual substance there is to back up his normative investments.
Blinder’s most conspicuous lacuna is the same as Bernanke’s: an understanding of financial instability as an active force in the making of history…”…
bostonreview 8-2022 The Asset Economy Strikes Again – The Federal Reserve’s bid to “get wages down” reflects the enduring hold of neoliberal thought at the highest levels of economic policymaking. by Martijn Konings
tandfonline.com 4-2022 Dimensions of the asset economy – by Martijn Konings, Lisa Adkins, Monique de Jong McKenzie, Dan Woodman
(part of an ongoing series of conversations and workshops that take as their starting point the observation that the current conjuncture has been, and continues to be, deeply shaped by the logic of assets )
From a certain angle, the claim that asset logics are a prominent aspect of our time could be seen as almost banal. These days it’s almost impossible to open a newspaper or social media account without being exposed to a list of news items about various new asset economies – bitcoin, NFTs, and a range of other financial inventions. All these are products of complex, somewhat unfamiliar technological design strategies, and they sit in an economic grey zone: nobody seems to be able to say exactly how they should be classified according to traditional economic categories. They are not simple commodities (in Marxist terms, they don’t seem to have any discernible use-value separate from their exchange-value), nor are they money in any straightforward sense (with some exceptions, you can’t use them as general means of payment). This means that they have, almost by default, been classified as assets. But this re-classification doesn’t really resolve the mystery surrounding these new economies. After all, we normally think of assets as property titles or investments that are held because they are anticipated to generate returns in the future. With many of these tokens or symbolic chains, it is not at all clear why we should expect them to generate returns in the future. If they are assets, they are very unfamiliar kinds of assets.
The conceptual puzzle that these strange assets pose is symptomatic of wider social changes. Their advent has entirely upended the notion, intuitively appealing to so many of us and the cornerstone of orthodox economic theory, that money is a simple measure. We are used to thinking (and orthodox economic theory is premised on the formal elaboration of this intuition) that there exists a world of objects, and that money is a more or less arbitrary, neutral convention that allows us to commensurate these heterogeneous objects. The new asset forms that are receiving so much attention these days undermine this distinction: they make it essentially impossible to separate object and measure, commodity and money. If it was at one point in time possible to imagine that we had an economic world that consisted of stable economic objects on the one hand and stable measures on the other, the rise of assetization has eroded this relative stability from both ends.
The way in which the lines between traditional economic categories are being blurred should represent big news. And yet, all this attention lavished on the asset form has got stuck at a somewhat superficial level. This is the case in a very obvious way for discussions on social media platforms, where billionaire fantasies, technological solutionism and conspiracy theories are locked in a battle for the spotlight. But even in the more serious fora of the public sphere, where one might expect to find more sustained reflection on the meaning of these trends, the level of commentary on the phenomenon of assetization has difficulty rising above a certain level. This is especially striking in the current moment, when, in the aftermath of the relative generosity of Covid-driven payments and bailouts, social forces are positioning themselves to build on such developments or to effect a return to austerity on the model of the post-GFC era. Often, the very same commentators that tell us we may be witnessing epochal transformations in the nature of money are happy to keep doling out the most banal economic truisms anchored in the unreconstructed fantasies of orthodox economic theory (about living beyond our means, wage-price spirals and the importance of anchoring and stabilizing expectations). As is so often the case, the exaggerated fascination with novelty is perfectly complemented by the conviction that the basic structures of our economic world are set in stone.
This collection treats the current excitement about crypto and similar phenomena as only the tip of the iceberg. Indeed, it will have relatively little to say about blockchain or crypto. Instead, it takes the confused excitement that swirls around these new economic forms as an invitation to reflect more broadly on the asset form itself and to bring into sharper focus what its role in contemporary capitalism is. Critically, we aim to trace how asset logics are associated not simply with changing dynamics of valuation but also how they drive transformations in the very standards that we use to assess the everyday conduct and governance of economic life. This fluidity is what justifies speaking of ‘assetization’ as a process, rather than the simple spread of asset principles as if this involved the quantitative spread of a mostly static, unchanging principle. In other words, we are not just witnessing dynamics that take place within an existing grid of measures and standards that itself remains unchanged. Rather, by blurring the boundaries of existing economic categories and by confounding our go-to perspectives on commensuration (what counts as what?), assetization is transforming our very sense of what money is and how measures work (Adkins 2018; Konings 2018).
The past years have seen a significant growth in scholarship on the logics of assets, and the papers in this issue will draw on and progress those contributions. But we do so with a specific purpose in mind. Much of the interest in assetization has drawn inspiration from methodologies associated with actor-network theory and social studies of science (Langley 2020; Birch and Muniesa 2020). These approaches aim to understand how ‘things’ are transformed into ‘assets’ by studying the practical financial technologies and institutional devices that are deployed to effect this transformation. The contributors to this issue largely follow this set of concerns, investigating in various ways how assets are produced by making projected futures actionable in the present. However, our concerns are shaped less specifically by a set of methodological concerns and are more oriented to re-joining some wider debates in political economy, economic sociology and social theory. Whereas the assetization literature has generally kept its distance from ‘classic’ questions in political economy and social theory, several contributions to this issue purposely return to such questions. If assets are not ‘things’ but complex property titles that embody elaborate social infrastructures of valuation, this implies the operation of system-wide forces of transformation that have remade the kind of society we live in.
One way of making this point more concrete is to contrast the ‘asset’ form with the ‘commodity’ form. ‘Commodification’ is a frequently (and often productively) employed lens through which contemporary transformations are presented in a critical framing (see e.g. Fraser and Jaeggi 2018; Hermann 2021). It broadly refers to the idea that more and more social spheres and activities are becoming subject to the imperatives of buying and selling. The concept of assetization is often presented as merely an updated version of the concept of commodification, seen as being more in touch with today’s financialized world. But such an approach, we argue, understates some of the qualitative differences between commodification and assetization.
The article by Adkins, Cooper and Konings (‘The asset economy: conceptualizing new logics of inequality’) investigates some of the qualitatively specific dimensions of the asset form. Central here is its distinctive temporal logic. The established critical (Marxist, Weberian or Polanyian) understanding of the commodity form has always remained to some degree marked by the fantasies of mainstream economics, which depict a world where time is mainly a source of inconvenience that we can hope to neutralize with the right institutional design (i.e. by instituting money as a universal commensurator). Even those who are critical of the substantive conclusions of orthodox economics nonetheless often bracket this temporal dimension through the continued conceptual reliance on the commodity as the key social form of contemporary capitalism (that is to say, the critique often focuses on the social consequences of marketization, less on how the market is conceptualized in the first place). The limits of this approach, we argue, become more fully visible when we think through the logic of assets: any attempt to neutralize or bracket the force of time leads us into a situation where we are no longer able to conceptualize the essential characteristics of assets. While commodities can still be understood through the lens of consumption (what is bought is used up instantly and, in that sense, does not have a ‘life’), the interest that economic actors have in assets is only comprehensible if we factor in the temporal dimension, i.e. the possibility or promise of future returns. Adkins, Cooper and Konings show that this distinction allows us to understand how the coordinates of economic action and of everyday life have been transformed by the logics of asset appreciation and depreciation.
The dynamics of asset appreciation and depreciation are especially marked in Anglo-capitalist societies (on which most of the papers in this Special Issue focus), but increasingly we are seeing them in action across the Western world and beyond. In a context of stagnant wages, holding assets that are likely to appreciate in value has become central to economic survival and prosperity. We suggest that, to a large extent, these dynamics mark the specificity of what is often referred to as the ‘neoliberal’ economy: they have engendered a speculative rationality that is oriented to the future and intuitively grasps that its investments exist in an ecology of interactions with the speculative investments made by others (Feher 2018).
For many political economists writing in a Marxist or post-Keynesian vein, this speculative economy is unsustainable, built on nothing but quicksand (Keen 2011; Lapavitsas 2014). They view rising asset values as representing primarily ‘bubbles’ that are detached from the ‘real’ economy – that is, from the foundational structures of value grounded in the world of work and wages. That does not necessarily mean that they view the dynamics of the asset economy as epiphenomenal or of only secondary significance; but it involves the claim that only work and wages are capable of generating the liquidity that is ultimately required to service mortgage debt and pay rent and so to sustain asset values (see e.g. Wigger 2020). Such approaches are too reductionist, unable to recognize the many ways in which dynamics of asset inflation and deflation have become institutionally anchored and embedded in social life. As a consequence, they have had persistent difficulty accounting for the relative durability of the asset economy. For instance, the asset price boom following the 2007/2008 global financial crisis (see e.g. Gane 2015) is not easily comprehensible from this point of view.
Framing asset inflation pejoratively, i.e. depicting it as a product of out-of-control markets, makes it easy to miss the ways in which is embedded in and sustained by a complex configuration of fiscal and monetary policies. This Special Issue places greater emphasis on the institutional pathways that organize and regulate the logics of asset appreciation and depreciation, including the political projects that have sought to promote asset-based capital gains, the active recalibration by policymakers of life chances around asset ownership, and the way in which these have over time produced a mutual imbrication of rising asset prices and stagnating wages. We certainly do not mean to imply here the asset economy is without contradictions. Instead, we argue that those contradictions of the asset economy only become visible if we view them as arising endogenously, i.e. if we understand the distinctive temporality of the asset not as a dysfunctional divergence from a more basic commodity economy but as building a particular economy of its own.
Powered by credit, investments in assets are typically made possible by a series of scheduled payment obligations over time. This means that asset owners face the problem of securing and managing a flow of liquidity to meet their payment obligations. Crucially, access to liquidity and payment capacity are not simply derivative of a more foundational structure. This is visible in everyday life, and in particular, in the area of home ownership, which has for several decades served as the pivot of the neoliberal asset economy. Building on the widespread homeownership achieved during the Keynesian era, successive governments pursued policies (the democratization of credit, low interest rates, and organized reductions in stocks of social housing) that resulted in an expansion of credit-driven home ownership (Andrews and Sanchez A 2011) and drove steady increases in property prices (Ryan-Collins 2021). However, even those who could comfortably participate in this dynamic were never able to transcend the problem of liquidity. Homeowners are a ‘too big to fail’ constituency (Adkins, Cooper, and Konings 2020), and this is reflected in the active concern of policymakers to ensure that homeowners can continue paying their mortgages. But this arrangement does not always work in straightforward ways: for example, the need to keep interest rates low to keep mortgage payments manageable can conflict with other objectives of macro-economic policy. The household can therefore never take its liquidity for granted.
The temporality of the asset form is, in other words, non-linear: there are significant temporal delays and interruptions at work in the process of asset acquisition, debt service, and asset appreciation. These delays can be highly consequential: even a temporary shortage of liquidity in the present, for example, can have far-reaching effects. The temporality of household asset investment strategies entails risk exposures that can be life-making or life-breaking. In this sense liquidity should be understood as the lifeblood of the asset society (Konings and Adkins 2022), allowing households to access the time needed to make their investments in residential property work out.
Payment streams and temporality are also central to Tellman’s contribution (‘The politics of assetization: from devices of calculation to devices of obligation’). Drawing on the distinction between commodities and assets as economic forms, Tellman suggests that the significance of the conceptual shift to assets can be magnified by an accompanying focus on ‘devices of obligation’. Engaging with the conceptualization of assets found in the social studies of finance literature and in particular its focus on the role that devices of calculation play in the constitution of assets, Tellman argues that, somewhat paradoxically, such understandings are still too presentist. Specifically, they are unable to grasp how assets – and especially the payment obligations they require – necessitate the binding of time (that is, the creation of duration) and that this has material and political consequences.
To understand this binding Tellman turns to classical sociological theory, that is, the very body of theory that the pragmatic and technicist social studies of finance has often rallied against. Specifically, she draws on Mauss’ work to analyze how security in the form of collateral as a legal technique functions to format future obligations. That focus can help us understand how chains of obligations allowed the largest housing securities market in Europe to emerge, fuelling major housing development – and how, after the global financial crisis, unsold, unoccupied, and foreclosed dwellings were purchased en masse from insolvent developers by private equity firms who transformed them into rental securities, enabling the transformation of toxic assets back into collateral assets.
Adkins, Cooper and Konings too bring the question of assets into conversation with broader themes in sociological theory, in particular theories of class. They argue that asset inflation has produced a new and distinctive logic of inequality, one in which our relationship to assets increasingly trumps work and employment as determinants of life chances and class position. They contrast their approach with the prominent tendency to focus discussions of resurgent inequality on the super and ultra-rich (see e.g. Piketty 2014; Collins, Ocampo, and Paslaski 2020). While the rise of the 1% is entirely real, a focus on the wealthiest alone ignores broadscale participation in the dynamics of the asset economy, and in particular how the dream of home ownership continues to be the driver of a broad-based middle-class politics. Political parties know all too well that this constituency wields significant electoral influence, and that they are likely to support parties that commit to continuing with pro-home ownership, pro-residential property investment and pro-capital gains policies.
At the current moment, the empirical development of this asset-driven class structure is increasingly shaped by the difficulty of entering the property market. In previous decades, property inflation might have been seen primarily to benefit the wealth portfolios of middle-class households, which often compensated for stagnant wages (Pfeffer and Waitkus 2021). But as house prices have continued to rise, significant segments of populations across Anglo-capitalist societies have found themselves locked out of home ownership. The price of entry has become so high that saving up for a down payment on the basis of an average income has become impossible. Those whose incomes would have allowed entry to the housing market one or two generations ago now cannot use savings from wages alone (Köppe 2018). This development has translated into increases in the proportion of households privately renting and steady declines in rates of homeownership (Ronald and Lennartz 2020).
In this context, support from parents is increasingly how first home buyers are gaining entry to the housing market and accessing the potential asset appreciation and leveraging opportunities that it provides. Homeowners who have benefitted from the capital gains their residential properties have generated, now often transfer part of that housing wealth to their adult children to assist with first home purchases. Of course, substantial asset transfers between generations have always occurred and have been a central mechanism of transferring private wealth across the generations. The difference is that these transfers are becoming a key determinant of stratification not only for the top few percent but well beyond the very top of the wealth distribution.
These developments are driving a re-privatization of the intergenerational social contract. Those whose incomes would previously have allowed access to the housing market and put them in higher categories in most categorizations of class, now have their access to many opportunities shaped by their parent’s housing wealth status. While family wealth transfer is by no means a new feature of the economic system, in the post-World War II period, relatively high inflation, asset depreciation and inheritance taxes partly arrested wealth transfer as a means of reproduction (Cooper 2017). This was also a period when highly influential ideas about the role of education in social reproduction and mobility were developed. Economic transfers now play a greater role again, but they do so in new conditions, reshaping the way other resources like cultural capital and social networks can be deployed. Parents are increasingly the guarantors of loans, not just for housing but for education, for business ventures and supporting other life course transitions (Bessant, Farthing, and Watts 2017).
Woodman’s article (‘Generational chance and intergenerational relationships in the context of the asset economy’) engages with debates about class and social change in the study of youth and transitions to adulthood. He uses the asset economy as a concept to highlight the limitations of existing perspectives on class inequality in the context of generational change. The rise of the asset economy and the growing importance of inter-vivo intergenerational transfers to the lives of young adults has yet to be properly recognized in the sociological study of youth, which remains focused on employment status and its intergenerational correlation. That has led in two contrasting directions: on the one hand an exaggeration of the continuity of the processes underpinning class differences, and on the other an exaggeration of the extent to which young people, as a whole, can be categorized as precarious relative to previous cohorts. Certainly, many baby boomers across many countries benefitted from market investments (including retirement schemes), property market growth and the timing of their employment transitions in a way that can be legitimately understood as on average more beneficial than that facing current generations. However, this has had the effect of strengthening solidarities across generations within families and increasing the importance of family transfers in shaping life opportunities for the next generation.
The rapid growth of such property-based divisions has led some to claim that capitalism is turning in on itself and transforming into a form of feudalism or, as Dean (2020) has described it, ‘neofeudalism’. Here the offspring of the super-rich are the inheritors of property and wealth, while a growing majority live in global cities or their hinterlands as a propertyless mass, at best scratching together a living from directly or indirectly servicing the rich (Neel 2018). While this apocalyptic vision may have some political value, its analytical powers are more questionable. In particular, it understates how familial wealth transfers are increasingly prevalent among and within the ‘middle’ (see e.g. Emmons, Kent, and Ricketts 2018) – however squeezed that middle might be – and, critically, how such transfers have a pronounced speculative dimension. Increasingly, intergenerational wealth transfers serve as an entry point into a world of asset-based capital gains and can be leveraged to access credit-fuelled asset ownership. The asset society is therefore not well-described in terms of a propertied overlord minority extracting rent and surplus from a dispossessed and propertyless majority. Instead, it is a far more complex imbrication of asset logics with lives and lifetimes. Far from returning us to feudalism, asset society instigates a more broadscale speculative life.
Similarly, for some commentators, the price-out of homeownership represents a nascent political tipping point of sorts, whereby just on numbers alone the electoral power of non-homeowners will eventually come to trump that of the propertied, precipitating a necessary disruption to pro-asset ownership policies (e.g. Ansell and Cansunar 2021). But this position understates just how ideologically successful asset politics has been and how asset logics have become embedded in social, political and economic life. Furthermore, while sizeable segments of the population may now be locked out from the possibility of saving for a deposit on a residential property from income from wages alone, alternative strategies for entry into property ownership have emerged. These include adult children living with their parents while saving for a deposit for a residential property or purchasing an investment property; rent-vesting, that is, renting and living in a preferred area while owning and renting out an investment property elsewhere; drawing down on other assets (such as superannuation) to fuel property ownership, and joint mortgaging to pool enough funds to access mortgage financing. Along with familial wealth transmission, these modes are critical to understanding emergent and future fault lines of the asset society, and especially the generation, accumulation and transmission of wealth.
The neoliberal era began with a host of fantasies about the many ways in which the benefits of asset ownership and capital gains could be democratized. The nostalgia that the decade of the 1990s nowadays evokes should be seen in this light: it represented the high point of an asset-focused middle-class politics, when rising home and stock prices delivered benefits widely enough to give credence to the promise of inclusive wealth, and meaningful returns on education gave the human capital dream sufficient traction to divert attention from general wage stagnation. As stock ownership and human capital lost some of their appeal, homeownership became the central pillar of middle-class asset politics. As that dream is now losing some plausibility, we are seeing a shift back to other asset-focused strategies. In other words, while we may well have reached an important turning or tipping point in the trajectory of asset-driven politics, we should not be too quick to align ourselves with the ‘end of neoliberalism’ narratives that left-wing commentators often turn to with exaggerated excitement. In many cases the response seems to be a doubling down rather than a retreat, a further investment in other dimensions of the asset economy.
While property ownership through savings from wages remains out of reach for many young people, retail trading through online platforms is more easily accessible (Hendry, Hanckel, and Zhong 2021). Indeed, the success of the platform economy can to a large extent be attributed to its ‘promise of access’ (Greene 2021). Financial Technologies or ‘FinTech’ is one of the biggest platform types on the internet and provides services such as online and mobile monetary payments, cryptocurrency exchanges, banking apps, crowdfunding, peer-to-peer lending and retail trading (Langley and Leyshon 2021). Retail trading platforms have been successful in breaking down the institutional barriers of stock market trading and they have facilitated an influx of new investors into the market, particularly millennial and gen z investors (Hendry, Hanckel, and Zhong 2021). This trend has also been accelerated by the growth of digital finance cultures that open up access to financial advice and information through social media platforms, podcasts and forums. Young people’s tactics for participation in the asset economy may then be shifting from housing-based strategies to attempts to build a portfolio of non-housing based financial assets.
The tech industry has also been successful in transforming personal property into assets, either through allowing people to rent out these items (CarNextDoor or Airbnb) or to use them to perform labour (Uber, Deliveroo etc). Additionally, many platforms exist that specialize in selling labour through physical (Fivver, TaskRabbit) and immaterial (Upwork, Amazon Mechanical Turk) labour. Platforms promote themselves as simple and flexible tools for households to valorize their ‘spare capacity’. Phrased less euphemistically, in practice this often means access to income for individuals and households who have not been able to find secure employment or are underemployed in their current labour contracts (Prassl 2018; Ravenelle 2019). In her contribution to this special issue (‘Radical flexibility: driving for Lyft and the future of work in the platform economy’), Chihara suggests that gig platforms are successfully tapping into anxieties associated with household liquidity constraints. Critical commentators often depict gig-economy workers as falling for the ‘myth of flexibility’. But, as Chihara’s article makes clear, the benefits here are real. Drawing on interviews with rideshare drivers, she shows how flexibility is a key motivation for joining and remaining on the platform. This flexibility doesn’t just come in the form of choosing working hours but also in the access to expedited pay days and liberation from having to interact with a boss or manager.
Yet it is not only through the transformation of personal property into assets that platforms are part of the infrastructure of the asset economy. Under the guise of trust-building, platforms enable users to rate and review each other, and in this way they have transformed reputational capital from subjective word-of-mouth recommendations to a measurable and appreciable asset. These reputational metrics are now deeply embedded with the process of consumer choice: people use ratings, rankings and reviews on Google, TripAdvisor, eBay and Airbnb to determine which products and services to purchase. These ratings and reviews are the new frontier of human capital: they transform short-term service interactions into a crowdsourced, quantifiable metric able to signify quality and trustworthiness. The importance of good reputational capital often results in users providing labour for little or no renumeration in return for good ratings/reviews (Prassl 2018). In this way, the temporality governing reputational assets is not unlike that of property: workers invest in a future of capital gains, in this case in the appreciation of their value within the platform ecosystem.
It is along these lines that McKenzie’s paper (‘Micro-asset and portfolio management in the new platform economy’) explores the recent evolution of human capital and in particular the mechanisms for its devalorization. As we have suggested, the 1990s represented the high point of the human capital dream: the idea that workers were not really workers but were simply offering a different kind of capital that would be just as likely to attract capital gains as capital itself. Of course, this transcendence of the wage labour condition has remained elusive, particularly as the declining returns on higher education have combined with general wage stagnation to leave many workers trapped in a never-ending cycle of skills upgrading to merely maintain their existing income level and to service their student debt. But the effects of the human capital paradigm have been profound in that it has facilitated a thoroughgoing transition from ‘disciplined’ to ‘controlled’ labour: whereas the Fordist paradigm of work was based on the direct supervision of labour, work in the control society is driven by workers’ continuous self-monitoring of their performance against an ever-proliferating series of metrics that serve to maintain the fantasy of self-appreciation (Feher 2009).
Redden’s article (‘Human capital at work: performance measurement, prospective valuation and labour inequality’) traces the general development of this metricization of labour, suggesting that we are at a signal moment in the history of quantification, similar in impact to the institutionalization of the statistical study of populations in the nineteenth century. These metrics embody a calculative rationality that directs all employees to assess and manage their own capacity to create value amid expectations for continuous improvement in an environment of competition with others. Instituting new performance management techniques of quantitative differentiation has been central to new ways of extracting greater value from some for less reward, while the increasingly bonus-driven equity-owning manager class pulls away from the pack. Performance measurement as a method of control and activation of employees to create economic value and to differentiate reward is an example of a wider tendency to mark out social orders of unequal values through data.
Redden is focused primarily on how metrics have organized the depreciation of labour within the corporate economy. While this process continues undiminished, McKenzie’s article suggests that the platform economy represents the further escalation of this structural depreciation of human capital. In a somewhat paradoxical way, the credentials that workers earn on platforms are less transferable than the credentials workers build up in the corporate economy – they are like special-purpose monies, enjoying currency only in the framework of that specific platform. Micro-assets are both created and controlled by the platform and therefore are significantly less transferable than traditional assets. McKenzie argues that it is by tying these assets to the platform that the enterprise can lock successful workers in by preventing them from taking their trustworthiness to another platform. In this way, human capital has been transformed from transferable, broad assets such as university degrees, work experience and qualitative personal references into corporate owned, fragmented and quantifiable metrics that remained locked into the platform in which they were created.
The upshot of the transformations described in this introduction is the existence of a double movement of sorts – asset appreciation alongside asset depreciation – that has reshaped the core structures of Western society in far-going ways. The last three contributions to this Special Issue engage some of the cultural and philosophical elements of this transformation, reflecting in particular on how it shapes our experience of time. These contributions are all, to one extent or another and in various ways, formulated with reference to what has been a dominant perspective in critical theory and cultural studies on the temporality of late capitalism – that is, the idea that the future is cancelled, compromised or otherwise foreclosed and that we are instead stuck in an enduring and extended present from which there is no reprieve (e.g. Berardi 2011; Fisher 2014).
This idea is often closely associated with a focus on debt: it is the mass indebtedness imposed by finance capital that colonizes or steals the future (Lazzarato 2011). However, we are living not exactly in a ‘debt economy’ but in an ‘asset economy’, which implies a more complex and less one-dimensional temporal structure. Payments on debts associated with assets are, in other words, never mere transfers against liabilities since they always have a speculative, future-oriented dimension bound up with the possibility of capital gains. Everyday scuffles for liquidity are precisely struggles concerning the future, since staying liquid in the present can open out pathways to capital gains, that is, to asset-based futures. Before we can think more clearly about how exactly our asset-driven futures are compromised, we need to shift towards a perspective that can consider this problem from a more open-ended perspective. After all, the idea of a blocked future is a prominent cultural sentiment that exists in tension with the equally prominent sense that all of life is speculative, that nothing is outside of time and that there is no way out of having to engage the future.
Coleman’s article (‘The presents of the present: mindfulness, time and structure of feeling’) opens up the question of time in contemporary capitalism, examining it from such a more open-ended perspective. Prior to putting forward strong hypotheses about how time works in the asset economy, it seems that the first task is to note that contemporary economic objects are so profoundly temporal in nature. Things have become filled with time. Somewhat schematically, we might think that at some point time was a linear grid, a framework within events took place that were not in themselves temporal in nature. But this world where objects and time were external to each other is long gone, and time has become folded into the production and operation of the object itself. This resonates with the distinction between the commodity and the asset that we introduced earlier: it is perfectly possible to conceive of a commodity as an object that exists ‘in’ time but is not itself at its core temporal. An asset, by contrast, is incomprehensible if we don’t view it as being temporalized at its core. This is what we are often still struggling to comprehend: the ways in which temporal logics – and in particular dynamics of appreciation and depreciation – increasingly are not secondary attributes of economic objects but their defining features.
Coleman’s article examines the growing preoccupation with the temporal nature of things in contemporary capitalism through the lens of the growing interest with mindfulness. She reads this phenomenologically, neither reducing it to an ideological diversion nor assuming that mindfulness effectively solves the problems it aims to come to grips with, but approaching it as an expression of a particular affective state brought into being by and in response to the distinctive dynamics of contemporary capitalism. Mindfulness can produce a critical distance, but it can equally produce hypnotic capture (and the latter can masquerade as the former). If the constant engagement with the endogenous temporality of the economic object is often experienced as oppressive or problematic, the difficulty is that there is no obvious way out, no sure-fire way to achieve distance, no neutral point that allows us to survey the terrain and take a breath before re-engaging. Coleman approaches the interest in mindfulness from this angle, recognizing it as a potential way of finding a different relationship to the object’s temporality while also underscoring how precarious and uncertain this option is.
Like Coleman, Elliott’s article (‘Punitive futurity and speculative time’) places time at the heart of the experience of the asset economy but pursues this in a different, more explicitly political direction that engages classic debates about power and control. Whereas Coleman places considerable emphasis on the way temporality is folded into the processual logic of the object, Elliott seems more concerned to keep her distance from strong claims regarding the immanence of temporality in the object, highlighting instead how the asset economy forces subjects to constantly and actively select from a menu of choices not of their own making. Elliott too pushes back against formulations about a blocked future or empty time. She notes that the idea of ‘static time’ is a recurrent one: ever since the 1960s counterculture, this idea has been deployed to account for the apparent inability of the dissatisfaction with capitalism to result in anything other than a further deepening and extension of capitalist logics. But the recurrent character of this response suggests that it is best seen not as a positive explanation of our relationship to time but rather as a cultural manifestation that needs decoding.
It is not that the subject without liquidity is literally deprived of agency or futurity, but rather that it is forced to ‘suffer agency’, a paradoxical formulation that highlights how agency is experienced not as a power to constructively shape the future but as a modality of self-chosen self-harm. We may have to actively participate in the devaluation of our reputational capital in order to prevent an even worse fate. The subject may be faced with a menu of options that are all bad, but it must choose nonetheless. Precisely because there are no positive, desirable options on the table but there may be one that promises survival, the stakes of the forced choice are raised exponentially. The logic of suffering agency that Elliott describes has an affinity with particular genres of horror, and it is far more evental than the somewhat dismal and boring image of the end of time.
Elliott’s summary of her perspective on what she terms the ‘microeconomic mode’ is worth quoting in full:
Whereas in static time our inability to take significant action robs us of positive futurity, in the microeconomic mode suffering agency links our capacity to create chosen effects over time to an experience of domination – to the permeation and seeming inescapability of individual choice. And, rather than the capacity to create chosen futures indicating a political or experiential good, the individual negotiation of choice, action, cause and effect becomes itself a mode of imprisonment, a site of incipient negative consequences one must choose between and actively endorse. Rather than resulting in static time, this experience of closure generates a form of temporality that we might describe as punitive futurity. Instead of preventing subjects from creating chosen effect over time, punitive futurity turns the act of preserving and shaping one’s future into a form of self-chosen torment. (Elliott, this issue, 156).
Elliott concludes on a pessimistic note: her analysis pushes back against the totalizing thrust of static time, but the room for agency permitted by punitive futurity is folded into a new, more terrifying totalizing process, one that perversely thrives on rather than pre-empts choice. Elliott thus presents a startlingly novel account of a commonly observed feature of neoliberal life, i.e. the uncanny way in which it seems to be able to absorb any and all impulses for self-preservation. Exploring similar conceptual terrain as Elliott’s article, Samman’s article (‘Eternal return on capital: nihilistic repetition in the asset economy’) more explicitly raises the question of what we might do with this sense that there is no way out. He considers the temporality of the asset economy by examining it through the lens of the idea of the ‘eternal return’. Nietzsche’s enigmatic idea is notoriously ambivalent, and Samman argues that this can be usefully mapped on to two distinctively different aspects of the temporality of the asset economy. In Samman’s words, ‘the centrality of the asset form to everyday life has produced two seemingly distinct outlooks on the prospect of eternal return – one based on the thrill of endless turnover and return on capital, the other on the drudgery of recurring payment schedules and debt rollovers.’ (Samman, this issue 166).
In this way, Samman usefully highlights the temporality of the asset economy as a kind of difference-in-unity. Although actors relate to the asset economy in very different ways, there is nonetheless a binding force at work that gives this formation some temporal consistency and duration at a society-wide level. One might potentially also have framed this in terms of neurotic attachment or the death drive. But to think about this in terms of ‘the eternal return’ allows one to underscore the element of expectation and anticipation that so persistently attend our engagement with the asset economy. The prospect of the eternal return can be terrifying or exhilarating, and many of us spend our lives being thrown back and forth between these emotions in ways that elaborate rather than attenuate our attachment to the temporal logics of contemporary capital. In this way, Samman’s article returns to some version of the idea of blocked futurity but does so in a way that transforms it from an ontological condition into an outlook that we constantly reproduce. Struggling to stand still and the thrill of speculative appreciation are the flipsides of the asset society’s same coin.
sagepub.org 4-2021 The institutional logic of property inflation – by Martijn Konings, Lisa Adkins, Dallas Rogers
This special issue aims to shed light on the causes and consequences of several decades of property price inflation. That trend has certainly not gone unnoticed or escaped commentary. Indeed, there is a certain ‘Sydney sensibility’ to the origins of this special issue (where the editors of this special issue live and where the conference on which it was based was held),1 reflecting the degree to which house prices are a topic of constant commentary and endless media attention. An alarming number of casual social conversations include registration of the fact that even a decent middle-class wage no longer translates into an ability to purchase a home, and that for those who have not been able to square this circle at some point in time, the impossibility of purchasing a home only recedes further, with high rents eating up more and more disposable income. Many overseas academics find themselves a little surprised that so many local students like to live at home ‘because it is convenient’, but they quickly learn that it is code for not being able to afford to live independently.
Yet while property prices are a topic of constant discussion in Sydney, and elsewhere in Australia, much of this commentary has remained at the level of watercooler conversation and media reporting, inevitably attracted to the more spectacular manifestation of the phenomenon, as when uninhabitable houses sell for record prices. Such discourses are (understandably) oriented to the idea that property prices are ‘unsustainable’ – that at some point the bubble will have to burst and prices return to real values commensurate with the world of work and wages. Ironically, that conversational style of commentary, which depicts out-of-control property prices as a massive speculative bubble, closely mirrors a great deal of critical commentary on property inflation, which has sought to counter official assertions about the salutary effect of capital gains by pointing to the irrationality of believing in the indefinite growth of paper wealth (e.g. Gomez-Gonzalez et al., 2018; Keen, 2017; Teng et al., 2017). But such a vantage point cannot account for either the causes or the consequences of what we now have to acknowledge has been several decades of – precisely – ‘sustained’ asset inflation.
The aim of this Special Issue is therefore not simply to fill a gap in the literature, but rather to reframe the issue of property inflation, away from the ‘speculative bubble’ framing toward a perspective that is more alert to the social, financial, and urban policies that sustain it and the way these policies both reflect and maintain particular political constituencies and cultural priorities. In other words, this Special Issue positions property inflation not simply as a result of under-regulation that permits mindless speculation (as left-wing critics tends to argue) nor of overregulation resulting in low supply (as a mainstream economist might argue), but as a result of institutional strategies that have entailed particular kinds of policies and constellations of actors. To achieve the requisite level of institutional contextualization, we have brought together political economists, sociologists, and urban studies scholars along with a diverse suite of case studies spanning housing, finance, and urban development.
Even though this Special Issue aims to provide a critical reframing of the ‘speculative bubble’ perspective, it is of course important to acknowledge that this take is itself already a critical response to official and orthodox legitimations of the logic of the property market. That is to say, in mainstream economic accounts, one often looks in vain for any institutional factors and policy shifts that might be held responsible for several decades of steady increases of property prices, and official policy discourses often reproduce such accounts. This, however, is often not because policy makers literally believe in some version of the efficient market hypothesis but rather because citing such narratives allows them to stick with particular practices for more complex, often unacknowledged reasons. It is this configuration of forces that the critique of the housing bubble seeks to puncture by emphasizing the neoliberal deregulation of credit markets and the way this has engendered upwards pressure on housing prices. If we are engaging critically with that perspective in this Special Issue, it is not because the authors want to endorse existing policy frameworks or to suggest that there is a wholesome market logic at work here. Instead, we want to draw attention to the broader array of institutional factors and forces that sustain asset inflation, acknowledging the role of credit liberalization while also taking into account a wider range of factors.
In this sense, the approach adopted in this Special Issue can be seen as following the broad thrust of ‘neoliberalism’ studies, which evolved from an emphasis on deregulation and state retreat to more subtle interrogations of how market-driven logics of governance were constructed through a range of public policies (see e.g. Cahill and Konings, 2017; Peck and Tickell, 2002). These more subtle interrogations suggest that any assessment of property price inflation should situate credit liberalization as just one element within a policy configuration, that is, as one component within a complex institutional formation. The authors in this Special Issue contribute to this project by analyzing house price inflation in relation to fiscal policy (Ryan-Collins, 2021); shifting methods of urban planning (Weber, 2021); neoliberal narratives focused on supply shortages (Phibbs and Gurran, 2021); the ways in which new elite alliances have gained hold of urban policy and development (Rogers and Gibson, 2021); cultures and policies of tenure (Christophers, 2021); and the growth of specific constituencies that tend to lock in patterns of policy making (Adkins et al., 2021).
The papers by Phibbs and Gurran and by Ryan-Collins pick up most directly on the themes and concerns that dominate the established critical view on property inflation. The paper by Phibbs and Gurran, ‘The role and significance of planning in the determination of house prices in Australia: recent policy debates’, offers an analysis of how policy makers and politicians understand the housing problem and the official rationales that they cite in support of their decisions. It examines the extent to which urban policy making in Australia rationalizes its persistence with policies that have the predictable effect of pushing up home prices by repeatedly drawing attention to supply-side questions, implying that market inefficiencies in the production of housing are to blame for high property prices and that solving these is key to solving the housing problem. It is this kind of unprovable assertion about the efficiency of markets that diverts attention from the wide range of policies and institutions that support asset prices on an ongoing basis. The tight focus on supply-side analytics renders invisible the complex suite of factors that work to make housing unaffordable. The analysis offered by Phibbs and Gurran remains purposely ambivalent on whether this belief in a basic supply-and-demand explanation of the problem is born of naivety or represents a more strategic form of ignorance. In this way, their concern is not merely with disproving the relevance of such orthodox economic notions (although they do that too) but equally with what these mainstream economic notions are doing and how they work performatively as discursive elements in a broader regime of institutional narratives.
As mentioned, the concern with the liberalization of mortgage credit features centrally in the established critique of the property bubble. The paper by Ryan-Collins, ‘Breaking the housing-finance cycle: macroeconomic policy reforms for more affordable homes’, takes that focus as its point of departure and fleshes out a number of the institutional mechanisms through which it operates. In particular, he identifies a mutually reinforcing feedback loop between the extension of credit and asset values. The procyclical nature of financial leverage is a theme that has received considerable attention since the onset of the global financial crisis (GFC), especially among economists who have examined the logics of the shadow banking system that financed the expansion of mortgage credit during the early 2000s (see e.g. Adrian and Shin, 2014). As we saw in the GFC, this logic can flip over into its opposite, that is, a logic of financial deleveraging whereby credit volume and asset values decline in tandem. By looking at the broader policy regime of subsidies and tax incentives in which asset inflation operates, Ryan-Collins makes comprehensible why we should not expect to find a neat law of symmetry here, according to which each period of property inflation would be followed by a commensurate period of asset deflation to bring asset values back to a baseline level. Property inflation is a complex institutional construction that is maintained by a multifaceted configuration of policies, norms, and practices, and Ryan-Collins examines various elements of this configuration.
One way of summarizing the points of the two opening papers is to say that the ‘fictitious’ dimension of the property economy is socially and institutionally embedded (Beckert, 2016). Expectations of future capital gains are not simply irrational ideas about the value of land, that is, imaginary and speculative in the pejorative senses of these words. Instead, they are anchored in public policies and social norms that make some bets on the future far more viable than others (Adkins, 2018; Konings, 2018). The medium-term sustainability of asset inflation is not just an economic question related to fundamental values, but also a political question that revolves around constituencies and the way these are interpellated and translated into political coalitions, policies, and priorities. There is of course something obvious about the idea that there are social and political interests at play here (rather than just choices between rational and irrational policies); but that is nonetheless precisely what a ‘property bubble’ perspective makes so hard to conceptualize in a compelling way. Too often this perspective defaults to the idea that neoliberal policies remain in place because of the hold that economic elites have on politicians and policy makers. Yet it is not clear that such notions of ‘institutional capture’ can stand on their own as explanations: economic elites have always had privileged influence on public institutions and policymaking, and if there is something particularly unique about that in the present situation, that requires explanation before it can itself serve as an explanation. In other words, while at any time we are bound to find various patterns whereby capitalist elites shape public policy, the institutional logics that maintain such influence are far more complex and work in less mono-causal ways than suggested by the idea of ‘capture’.
To be sure, in recent years this way of thinking has been given a new lease of life as well as mainstream respectability with the impact of Piketty’s (2014) discussion of asset-driven wealth concentration at the very top, driven by growing returns from assets. This has been accompanied by a political theory of sorts, which essentially sees the growth of a plutocracy and explains the persistence with policies facilitating ongoing wealth concentration as a function of the authority and influence wielded by the ultra-wealthy in the public policy arena (Rehm and Schnetzer, 2015). This is premised on the argument that the asset inflation stressed by Piketty’s analysis works to divide society into two key constituencies: an elite (‘the 1%’) comprised of the super-rich living off returns from assets and a majority (‘the 99%’) who live off stagnant and diminishing returns from labour or on no income from labour at all.
The concentration of wealth at the very top has similarly led to a fascination with the lives and lifeworlds of the super-rich across the social sciences (e.g. Burrows and Knowles, 2019; Dorling, 2014; Harrington, 2016). This has included work on how the super-rich have captured global cities, transforming them into what Atkinson (2020) has termed ‘alpha cities’, that is, cities that revolve around and are shaped by the super-rich and their enablers: political, corporate, property and planning systems, and wealth management elites. Alpha cities privilege and support the accumulation of wealth and property while doing little to support those dependent on (increasingly precarious) wage labour to survive and/or those in need, even as these segments of urban populations are likely to service the lives of the super-rich. Indeed, the flip side of alpha cities is in-work poverty, expulsions, evictions, displacements, austerity, neglect, disinvestment, and the collapse of public infrastructures (see also Soederberg, 2021; Wigger, 2020).
The concentration of private wealth at the very top is a very real phenomenon. That the Grenfell Tower disaster could take place in one of the wealthiest cities in the world should not be seen as an aberration or anomaly but as in line with the logics and dynamics of the alpha city. But we may well wonder whether the scholarly airtime devoted to the lifestyles of urban billionaires might not be driven primarily by the same kind of fascination that leads us to be far more interested in Leonardo DiCaprio’s performance of a coke-snorting trader than the history of the mass misery experienced in the wake of the savings and loan disaster of the same decade. In the same way that celebrity culture is not best understood by studying the attributes of the celebrity her/himself but requires a wider lens on the society that makes such adulation possible in the first place, we need to adopt a wider perspective. As Rogers and Koh (2017) put it, a binary approach here may not be all that helpful, and it is more productive to think in terms of a spectrum of inequality. This is again of course not to say that the very wealthy have not benefited especially from these policies – it is entirely obvious that they have. Rather, it is to say that asset inflation is characterized by a degree of institutional complexity that is not captured by notions of policy and institutional capture.
The influence of elites on policy making has long figured as a central element in a variety of more sociologically oriented theory and analysis (Bourdieu, 1996; Mills, 1956; Scott, 2008). Such literatures have been less given to determinist understandings of the power of elites. Instead, straddling (even if avant la lettre) the divide between state theory and social network theory, they foreground how elective affinities and alliances across and between the economically powerful and the professional classes who occupy key strategic positions within institutions of public authority enable contingent alignments with regard to public policy to emerge. More recently, and fittingly in terms of the concerns of this special issue, Özgöde (2021) has suggested that it is not primarily ‘capture’ that can explain the apparent alignment of central bank policy with the interests of finance capital, including its elites, beneficiaries, and architects. Instead, at issue are the very logics of policy itself. Central bank policy makers subscribe to or promote certain policies not because they have been captured by external interests either in their totality or partially but because they subscribe to certain policy programmes and their paradigms. In the contemporary era this paradigm, Özgöde, suggests, is one of systemic risk: a conception of the financial system as a critical and yet simultaneously vulnerable economic system which central banks must work to protect. This paradigm has enabled and put in play many of the policies – the bailout of private banks, quantitative easing – that are routinely called up as evidence of ‘capture’. Other authors working in the political economy of financial markets have similarly stressed the infrastructural power of finance capital, which should be conceived not in a structural-functionalist sense as causally determining what the state does, but should rather be seen as operating through the way its rationality has penetrated into the logistics and pragmatics of governance (Braun, 2020; Walter and Wansleben, 2020).
The next two papers in this Special Issue show precisely how notions of capture cannot do justice to the logics of policy programmes and their paradigms and do so via a focus on urban governance and urban politics. Weber (‘Embedding futurity in governance: redevelopment schemes and the time value of money’) and Rogers and Gibson (‘Unsolicited urbanism: development monopolies, regulatory-technical fixes and planning-as-deal-making’) place emphasis on epistemic and institutional embeddedness, emphasizing the way in which the era of property inflation has been accompanied by a reformatting of temporalities in urban governance. Several decades ago, Agnew (1994) showed how a ‘territorial trap’ was constraining the way nation states were studied (Billé, 2020: 3). A similar bounded mode of territorial thinking had long constrained the way cities were studied too: a key limitation was the conceptualization of the city as a flat territorial plan. Ideas associated with ‘volumetric urbanism’, as recently formulated in this journal (McNeill, 2019: 850), have argued that ‘territoriality can be understood as being about the arrangement of more than just surface land plots, and the repertoire of state technologies that work to measure the qualities of land in a multidimensional way’. The papers by Weber and Rogers and Gibson bring an additional dimension to this theorization of the governance of land, real estate, and property: increasingly the entrepreneurial governance of the city takes place not only spatially but also temporally, backwards and forwards in the socially constructed times of history and the future. Thus, these papers identify, to extend Agnew’s framing, a ‘temporal trap’ at the heart of our thinking about property. They argue for the need to take seriously the imperative to locate both where in time and where in space (imagined or actual) events and actors are located. In this way, they show how future, hypothetical asset values, customers, investors, and capital are key to the calculative practices that underwrite urban governance in Australia and the United States.
The temporal claims and representations of governments, developers and other urban actors, and the calculative techniques and practices they use to make these claims, have material effects. Pinnegar et al. (2020: 323), writing about the role of calculative devices and techniques with specific reference to the case of Sydney, have offered an insightful formulation of how we might locate such techniques theoretically: ‘If financialisation is the fuel of the housing densification process, “value-switching” – enabled through the planning system – [is] the trigger’. Government and developer calculations about the city, and capital lending and borrowing for urban development more generally, depend on land and real estate values. Growth coalitions and alliances are constantly seeking to raise the ‘value bar’, pushing up land and real estate values. These growth coalitions use urban site amalgamations, multi-sectorial partnerships, ‘and necessary sophistry associated with negotiating inclusionary zoning and other forms of value capture’ (Pinnegar et al., 2020: 323). There is increasing pressure to drive up land and real estate prices, to expand the number of customers on each new development or infrastructure project, or to increase the density profile of the next high-rise development (Troy et al., 2020). This pressure stems from not only real estate elites alone, but also from the fact that such developments increasingly feature as the condition of possibility for a whole range of public projects.
Imagining and marketing futures is key to this urban politics. It is through mobilizing particular images of the futures that a new suite of urban governance instruments can be organized. Urban governance in the neoliberal era is distinctive for the way in which it engages with, and is grounded in, the logics of uncertainty and speculation. Weber understands the time value of money as ‘a market device that allows professionals to telescope the future down to the present and project current values outwards toward the beacon on the horizon’. Building on her long-standing interest in the financial instruments underwriting urban development (Weber, 2002), she analyzes the logic of tax increment financing, a ‘variation of “land value capture” or “value uplift” strategies used across the globe’, showing how it allows for the performative conjuring of ‘future cash flows’ that can be discounted as present value. In other words, hypothetical future cash is drawn down into the present and mobilized through physical urban objects in the city such as land and real estate. Rogers and Gibson turn to a different planning instrument, the ‘unsolicited proposal’. They show how future casino customers and future cash flows were conjured up through the calculative practices in the unsolicited proposal process, and how these were ‘telescoped’ down into the present to justify the construction of a six-star casino on some of the most valuable land in Sydney, adjacent to Sydney Harbour. That the projected cash and customers never materialized, as predicted only serves to underline the general point that strategies of imagining particular futures can be highly profitable even when their predictions in fact fail.
The calculative practices discussed in these papers deal with how governments, consultants, and the private sector ‘come to know the future and render it actionable’, as Weber puts it. Here we find again that the link between asset-driven wealth and policy making is shaped primarily by the way in which policy proactively incorporates logics, rationalities, and imaginaries. There is of course nothing egalitarian or neutral about either the causes or consequences of that process, but, nevertheless, we cannot hope to grasp the role of the rationalities at work if we reduce them to the interests of those benefitting from them in the most visible ways. As Weber shows, governments actively use the forecasting tools of the private sector, relying on ‘financial feasibility modelling techniques borrowed from the private sector to speculate on the direction and degree to which property values will change over time’. In some cases, they outsource the forecasting process to private consultants who are connected to the industries that benefit from these calculations. In Rogers and Gibson’s unsolicited proposal case, the government hired a consultancy firm, directed by a former corporate infrastructure financier and banker, to write their unsolicited proposal policy. This consultancy firm then pitched their services to would-be private sector unsolicited proposal bidders by offering to assist in the writing of unsolicited proposal bids.
If the papers by Weber and Rogers and by Gibson emphasize epistemic and institutional embeddedness, the next paper, by Adkins, Cooper, and Konings, ‘Class in the 21st century: asset inflation and the new logic of inequality’, highlights the social embeddedness of housing inflation. It considers the issue of property inflation in relation to questions of class, arguing that existing perspectives tend to obscure the extent to which property inflation has worked to shift the social logics of inequality production and to recompose class structures at large. Whereas work in the social sciences has tended to confirm Piketty’s two societies model, Adkins, Cooper, and Konings instead highlight how asset appreciation has benefited large parts of populations through participation in residential property ownership. Focusing on the case of Australia, and especially property prices in Sydney, they track how a range of households have seen major gains in their wealth portfolios and argue that the ability of households to access capital gains has become so central to the logic of stratification that we now live in an asset-driven society (or, ‘asset economy’ (Adkins et al., 2020)), where people’s relationship to assets is often more important than employment in determining life chances. Asset appreciation operating in tandem with wage depreciation has entailed a thoroughgoing transformation of the social structure such that class and stratification now increasingly follow asset-based logics. Although the downsides of this process are increasingly clear (for an ever-larger group, it is impossible to save for a down payment on the basis of income from work alone), the reluctance of politicians and policy makers to break with policies that fuel property inflation should be understood with reference to the sizeable constituency of homeowners who have a vested interest in the continuation of that trend.
Adkins, Cooper, and Konings’ paper, especially in their emphasis on the stratifying effects of asset-based wealth, is complemented by Christophers’, ‘A tale of two inequalities: housing-wealth inequality and tenure inequality’, which analyzes the way tenure policy works to prop up asset values. Focusing on the cases of the UK and Sweden, Christophers shows how through various measures, home ownership has been supported and subsidized, both directly and indirectly. Simultaneously, rental (both public and private) has been denigrated culturally, which has served as an additional force in bolstering the demand for owner occupancy. The effects of this should be understood as operating in a context where leveraged property ownership has become concentrated, and where it is consequently more normal than ever for renters to be the ones who effectively maintain the servicing of a mortgage on a property. According to Christophers, the dynamic of ownership and rent, and especially the inequalities that inhere between the two tenure types, should be recognized as one of the factors that has led to increasing inequalities of housing wealth.
Taken together, the contributions to this Special Issue take us beyond the idea that it has simply been the deregulation and liberalization of credit that unleashed house price inflation. They identify various elements of a complex, multifaceted institutional configuration that supports it – fiscal policy, monetary policy, supply-side policy narratives, housing tenure policies, the role of specific popular constituencies, elite strategies, urban planning techniques, and new temporal imaginaries. We hope that in this way, this Special Issue will make the ‘property bubble’ narrative less tempting and invite more complex, institution-focused perspectives on the persistent reality of property inflation in large urban centres. At least in Australia, just how crucial this phenomenon is to an understanding of social, economic, and political dynamics has been made abundantly clear by the COVID-19 crisis. During the pandemic, the relief and bailout packages were heavily oriented toward the financial pressures on middle-class homeowners. If renters were also given some temporary relief, this was largely according to a trickle-down logic. Even as the crisis has unfolded, property prices across major cities in Australia (especially in Sydney and Melbourne) continued to rise, returning yet further capital gains to the household wealth portfolios of residential property owners. And as Australia emerges from the lockdown, the wealth effect of property inflation is predictably proving to be the most readily available lever to rekindle economic growth.
tandfonline 4-2021 The asset economy: conceptualizing new logics of inequality – by Lisa Adkins,Melinda Cooper, Martijn Konings
ABSTRACT – This paper argues that asset ownership is becoming more important than employment as a determinant of class position. The introduction considers this claim with respect to Piketty’s contribution, arguing that the latter is too focused on the growth of wealth at the very top. The first section draws on the work of Hyman Minsky to outline the logic of assets. We differentiate our approach from competing perspectives that tend to overemphasize the orthodox image of the market and in particular the idea that liquidity is an inherent aspect of financialization. Such perspectives neglect that participation in the asset economy often involves (and regularly necessitates) making highly illiquid investments. The subsequent section advances a new analytic of class and inequality, and the last section develops this further in a more philosophical register to consider how the temporal logic of the asset economy is shaping new life-times. The conclusion reflects on the political implications and prospects of the asset economy.
guardian.com 11-2020 Inheritance, not work, has become the main route to middle-class home ownership – The cost of housing is rising so much faster than wages that buyers increasingly rely on family wealth – by Lisa Adkins, Martijn Konings
DESCRIPTION – Rising inequality is the defining feature of our age. With the lion’s share of wealth growth going to the top, for a growing percentage of society a middle-class existence is out of reach. What exactly are the economic shifts that have driven the social transformations taking place in Anglo-capitalist societies?
In this timely book, Lisa Adkins, Melinda Cooper and Martijn Konings argue that the rise of the asset economy has produced a new logic of inequality. Several decades of property inflation have seen asset ownership overshadow employment as a determinant of class position. Exploring the impact of generational dynamics in this new class landscape, the book advances an original perspective on a range of phenomena that are widely debated but poorly understood – including the growth of wealth inequalities and precarity, the dynamics of urban property inflation, changes in fiscal and monetary policy and the predicament of the “millennial” generation. Despite widespread awareness of the harmful effects of Quantitative Easing and similar asset-supporting measures, we appear to have entered an era of policy “lock-in” that is responsible for a growing disconnect between popular expectations and institutional priorities. The resulting polarization underlies many of the volatile dynamics and rapidly shifting alliances that dominate today’s headlines.
lareviewofbooks.org/ 2020 The Asset Economy – essay by Lisa Adkins, Melinda Cooper, Martijn Konings
theconversation.com 2020 HomeBuilder only makes sense as a nod to Morrison’s home-owning base – by Lisa Adkins, Gareth Bryant, Martijn Konings
“HomeBuilder grants of A$25,000 are being offered to build or renovate a home as part of the Australian government’s emergency economic response to the coronavirus pandemic. Critics note that the program, framed as stimulus for residential construction, benefits already well-off households. It ignores the realities of the housing market, especially the affordability crisis, with housing stress affecting precarious renters, the homeless and those struggling with bloated mortgage payments. Homebuilder appears to be a bewildering policy. It’s likely to support construction work that would have occurred anyway while failing to meet real housing needs. However, to criticise HomeBuilder simply as bad policy made on the run is to miss a broader picture. HomeBuilder begins to make a lot more sense when understood as a response to the role of housing assets in shaping both economic inequality and electoral politics…”…
blogs.lse.ac.uk 2021 The Asset Economy Review by Nils Peters
In The Asset Economy, Lisa Adkins, Melinda Cooper and Martijn Konings retell the story of neoliberalism through the lens of assets, showing how asset ownership and asset inflation have been driving forces behind inequality and new class divides. This book is a highly readable and timely intervention in the burgeoning debate on rentiership and will inspire future research in showing the importance of putting assets at the centre of analysis, finds Nils Peters
marxandphil 2021 The Asset Economy Review by Sinéad Petrasek
In The Asset Economy, Lisa Adkins, Melinda Cooper and Martijn Konings evaluate the entrenchment of inequality in Anglo-capitalist societies through the mechanism of asset acquisition. Building on their various studies of political economy, neoliberalism and the family unit, the authors collaborate here to provide a fresh perspective on contemporary class stratification. They do so by examining the asset, the cornerstone from which their appraisal of the social totality is modelled, similar to Marx’s treatment of the commodity as the building block of capitalist society.
An asset, however, is not the same as a commodity. Adkins, Cooper and Konings describe the asset as ‘a property title that must be constantly valued as a balance sheet item but often precisely cannot be readily traded’ (16-17). A significant characteristic of the asset is its temporality: ‘it requires an upfront investment of (often borrowed) funds and it is meant to generate returns over a particular future timeframe’ (17). Herein lies the particular ideological valence of an asset-based economy – investment in assets (such as a house) expresses optimism for the future.
What could be more optimistic than buying a house? Home ownership signifies stability, financial security and individual maturity. For Adkins, Cooper and Konings, it is paramount: ‘Although housing is by no means the only asset that plays an important role in the contemporary political economy, it plays a central role in the story that we tell in the following pages. Property inflation in large urban centres is the linchpin of a new logic of inequality’ (3).
The central argument presented here is that the employment relationship is no longer the core element shaping inequality. Instead, it is the acquisition of assets that will determine class position, as assets appreciate at rates much faster than wages.
Readers will find this book highly accessible and duly attentive to the current conjuncture; the reverberations of the 2007-8 financial crisis may have provided the initial catalyst for increased asset inflation, but the preface acknowledges that the effects of the Covid-19 pandemic may even further exacerbate such asset-based socioeconomic inequality. Indeed, anyone who has read recent news headlines announcing record-high home prices and pondered how to reconcile this with the reality of a global pandemic will appreciate the authors’ efforts to explain the trajectory of this phenomenon.
The first chapter provides a framework for interpreting our contemporary economic system as one that is dominated by the logic of assets. In order for an individual to participate in such a system, they must often take on considerable debt and pay it down over a period of time, during which income from employment typically diminishes and the speculative value of the asset increases. It is in this first chapter that the authors place their work in conversation with Thomas Piketty’s Capital in the Twenty-first Century (2014), a reference that reappears throughout the book. While the overview of Piketty’s approach and arguments is sufficient, those who have not read Piketty’s monumental work in full may find themselves lacking context. The second chapter provides historical background for the contemporary asset economy, examining shifting monetary policy in the 1970s and the availability of cheap credit in the 1980s as two key drivers. The third and final chapter examines the ‘new class realities’ engendered by the logic of asset appreciation, focusing on intergenerational wealth transfers and their cultural and affective impacts. According to the authors, paid work and higher education, dual guarantors of class position in the twentieth century, have since faded in importance compared to the relationship to assets. While compelling and intuitive, this comparison is rather rudimentary; The Asset Economy is convincing in advancing its main proposition, but specific case studies and a lengthier, robustly historicized evaluation would have made it stronger.
One might find themself asking whether this intergenerational wealth transfer is truly new, or merely replicates previous historical modes of class reproduction? Piketty, for example, understands the rentier fortunes of the twenty-first century as a kind of return to the rentierism of previous centuries, whereas the authors of The Asset Economy argue that the present-day trends are qualitatively different. As they explain, the new logic of inequality can be understood as a combination of hypercapitalist financialization and feudal inheritance (6). They draw a comparison between the so-called Keynesian household, which assumed a stable wage and a male breadwinner, and the Minskyan household, after economist Hyman Minsky, where the wage is viewed as unstable relative to the expectation that the home as asset will increase in value, such that the purchase of a home is made with an explicit understanding of future capital gain (21).
Thus, the book locates the origins of the contemporary asset economy in the post-war expansion of home ownership and concomitant creation of a broad middle class, a legacy that propped up successive neoliberal policies. Whereas Piketty’s focus is on the wealth of the 1%, Adkins, Cooper and Konings promote a more heterodox approach that acknowledges the relatively widespread accumulation of housing-as-asset. They present their approach as a challenge to Marxist and neo-Marxist analyses of class as understood primarily in terms of work and employment (55). The authors review some recent heterodox economist approaches before proposing their own schema, analogous to Marxist and Weberian schemes, positioning asset ownership as the distributive class mechanism in capitalist society. With it, they seek to demonstrate that regardless of where one falls within the classification, the population as a whole may be categorized in relation to asset ownership.
Politically, this poses a seemingly intractable issue: ‘Key here is an appreciation of the role that housing has played in the creation of a middle class that is often seen as the backbone of social stability and that politicians and policymakers are reluctant to alienate’ (31). This observation rings true in Canada, especially in the largest city, Toronto, where I live. Municipal property taxes are set to increase by a mere $22.00, regardless of the fact that the average home price in the city has now reportedly reached $1 million. What this demonstrates, in line with the proposition of The Asset Economy, is that despite extreme asset inflation (prices that are attributed to homes), the beneficiaries of this asset logic can still expect that they will be sheltered from more aggressive redistributive measures such as augmented taxation.
Of course, certain individuals/groups are more systematically exposed to the devaluation and appreciation of assets like housing. The lack of adequate attention to race, gender, sexual politics or immigration is conspicuous. This is not a complaint made to inspire mere recognition, but rather to point out that historical accounts of asset acquisition and generational wealth in North America, the UK and Australia that do not acknowledge systemic oppression are incomplete. Melinda Cooper’s 2017 book, Family Values: Between Neoliberalism and the New Social Conservatism, ‘proceeds from the assumption that the history of economic formations cannot be prized apart from the operations of gender, race and sexuality without obscuring the politics of wealth and income distribution itself’ (24). Yet, when discussing the expansion of home ownership in the post-war period in The Asset Economy (52-53), there is no mention of redlining or other methods of racial exclusion, though perhaps this is implicit.
Additionally, while the authors deliberately do not focus on jobs, it would be helpful to know which occupations are held by those presently able to purchase assets, such as homes, and contrast this with the wage-based middle class occupations of the previous century, in order to more fully illustrate the disconnection between wages, occupation and asset acquisition in the present.
In conclusion, it is social relations that take the foreground in The Asset Economy, and particularly intergenerational relations as a factor of class society. As the authors rightly point out, this has serious implications for politics. The book concludes with millennials, the generation wherein ‘the economic fault-lines produced by several decades of neoliberal policies are becoming visible, and where we find an increasingly intense dependence on family wealth as a determinant of whether one will flourish or languish in the asset economy’ (91). In order to avoid a repetition of the cycle whereby home ownership simply becomes democratized once again, the relationship to assets must change. The desire for a socialist alternative is growing. With millennials facing a ‘cancellation of the future’, what hopeful version of the future might the left provide? Perhaps, as Marx and Engels envisioned with their call for the ‘abolition of all rights of inheritance’ in The Communist Manifesto, it must begin with decentering the family as the primary economic unit.
benisonkilby.com/podcastm 2019 Social Reproduction in the Neoliberal Era: Payments, Leverage and the Minskian Household – A talk presented by Professor Lisa Adkins
Abstract – This chapter is concerned with issues of temporality and the programme of pragmatic sociology. It outlines a problem of time operating within this programme. This problem is identified as concerning the location of social change and the new as external to situations and events, a positioning which, I will argue, eschews the indeterminacy and openness of the contemporary world. I suggest further that such a positioning of the new also cannot come to grips with forms of critique that have no time, or, better said, forms of critique that have run out of time or are dispossessed of time and, in addition, make demands for time itself. In identifying the latter form of critique, I contend that the logic of change elaborated in The New Spirit of Capitalism – namely, the incorporation of the dynamic of external critique into capitalism – has reached its limit, a limit which in turn demands that sociologists address questions of change and time anew. To this end, in this chapter I outline some of the axes along which a pragmatic sociology of change, innovation, and the new may be elaborated. Yet, to grasp fully how and why the issues of change and the new require attention, I will also propose that it is crucial to register that the significance of the programme of pragmatic sociology lies not only in a post-Bourdieusian renewal of social science, as is often assumed, but also in its relevance for and in an increasingly pragmatic world. To begin to unfold these lines of intervention, I turn first to the issue of the development of pragmatic sociology and the renewal of the social sciences.