<nettime> A Lament for the Precariat

[temp <voyd@voyd.com>]

>
>A Lament of the Precariat:
>an anecdotal narrative
>Patrick Lichty
> 
>Capitalism is an acquisitive strategy based on the
>proposition that all assets within its field of discourse are evaluated,
>accounted, and extracted of value, then discarded.  Upon the time of
>exhaustion of values
>(symbolic or material value) of elements in the system, wither new
>reservoirs
>of value must be located, the frame of valuation shifted, or the modality
>of
>exchange must be changed.  This includes
>people.  All bodies trapped within this
>recursive squeezing of value and subsequent accumulation of profit from
>the
>system of exchange either inordinately accumulate the profitability of the
>unsustainable system or they progressively enter into increasing states of
>precarity.  The construction of precarity
>through the credit-state is a tool of mass control that effectively
>prevents
>revolts through debt-indenture, causing the precariat to fear the loss of
>what
>little they have before they are consigned to the street.  However, it is
>exactly where capitalism would
>have them, as those bodies have become so devalued as to be equivalent to
>worthless as labor, and have been drained of capital so that they are
>questionable as consumers, and likewise valueless.
> 
>This is a process, at least in terms of the United States,
>this devaluation of the masses and the creation of the precariat as
>subject of
>hegemonic control, that has been unfolding for the past forty years.  As
>a Youtube video featuring the words of
>former US Labor Secretary Robert Reich states, ?Inequality is personal,
>it?s expensive,
>and it?s created.?  In this video, he eloquently
>discusses the inevitable concentration of wealth through downsizing,
>outsourcing, offshoring (free-trade capitalism such as NAFTA, CAFTA, et
>al) and
>the systematic de-industrialization/ephemeralization of the United States
>into
>a service and consumer economy.  This was
>no more evident than during the Second Gulf War when President George W
>Bush
>assured the masses to not worry about the war(s) and continue to drive the
>economy through robust spending.  The
>fact that much of this spending was based on the lure of easy personal
>credit
>is another issue.
> 
>When I entered the workforce in 1985, the (in contrast to
>2008) minor recession of the early 80?s was receding, and from my
>standpoint,
>things were fairly good. I worked for a then-major computer corporation,
>sales
>were brisk, and our engineering division was strong.  At that time, three
>things had not happened ?
>computer installation was skilled labor and not service, the computer
>itself
>had not become a commodity appliance, and the market had not flooded.  Of
>course all these things changed ? with
>economies of scale, the personal computer, despite planned obsolescence,
>became
>commodified.  The machines themselves
>with their increased complexity, became machines that could no longer be
>repaired in the field, and operations contracted into more remote regional
>centers.  And, with the promise of
>well-paying jobs in the computer field, universities (institutions which
>are
>often complicit on the capitalist cycle of valuation and extraction of
>desire)
>pumped out electronic technicians and engineers, driving wages down.
>
>
>My anecdotal counterpoint anecdote is only part of the story
>relating the shape of capitalist oppression in the 2010?s that have given
>rise
>to reactions such as the Occupy Movement.
>It is, however, a metaphor for the overall gestures taken in the North
>American continent, and to some extent, the First World through
>strategies like
>European austerity ? the decrease of flow into the ecology of capital
>through
>commodification, increases in productivity, and devaluation of workforce
>skill.
> 
>Two other events built the foundations for the society of
>the precariat in 1994 and 1997 (surprisingly, under the Democratic US
>President
>Bill Clinton). These would be the passage of the North American Free Trade
>Agreement (NAFTA) and the decrease in capital gains (the tax paid on
>gains made
>from holdings like stocks or real estate) from 35% to 14% in 1997.  The
>first would enable Adam Smith?s
>prediction of redistribution of wealth through free trade, as money flowed
>through the US border into areas with cheap labor, foregrounding a new
>form of
>precariat, the maquiladora in towns such as Cuidad Juarez.  This has a
>double gesture, of breaking unions
>in the US and creating a lure for subsistence farmers in the South to
>come to
>the border to be subjected to substandard working conditions on the
>border.  The reduction in capital gains
>in the US created the ability for the upper, and especially Wark?s
>Vectoral
>Class, the one that extracts value most vociferously from symbolic
>exchange, to
>increase their concentration of wealth.
>Conversely, the lower classes are less likely to invest in the Market,
>and thus become excluded from the market-centric view of Late Capitalism.
> 
>Seen through the anecdotal, the latter half of the 90?s was
>the rise of the Web, and as the computer industry has long fallen into the
>genre of consumer electronics, I had gone into Web Design, and also
>Internet
>activism.  As with other sites of early
>techno-adoption like the personal computer before it, the emergent
>Vectoral
>Class was hard at work evaluating this new milieu of information for the
>extraction of wealth.  Companies like
>Accenture, Allstate, and many other Fortune 500 companies were creating
>their
>infostructures, and web design was still skilled labor.  However, the
>labor pool for that mode of
>exchange would be changed forever.
> 
>One key flaw in a majority of programs created in the
>previous thirty years was that is had not allowed for years above 1999 ?
>the
>Y2K Bug.  This event created a major
>upheaval in the cyber-economy.  First,
>with the sheer magnitude of the problem, there were not enough programmers
>available in North America to solve the problem, and India became the
>solution
>to the issue through outsourcing.  With
>sheer numbers of technically literate individuals and a devalued
>currency, the
>market for infoworkers in the United Stated collapsed along with a market
>realization that many of the tech start-ups that were lavishly funded in
>the
>90?s ? were simply not going to turn a profit.
>This created the Y2K/Dot.Com Crash of the early 2000s.  it also opened
>the doors to offshoring in
>Asia, as tariffs relaxed for hungry Chinese manufacturers as well.
> 
>Anecdote. Back in my hometown of North Canton, Ohio, The
>Hoover Vacuum Cleaner company became consolidated onto Maytag, and then
>outsourced to Mexico and China.  The
>companies I had designed for dumped their web personnel, and ads for web
>design
>from India for $15/hr (I used to charge $75/hr) emerged.  Wark?s Hacker
>class (the shapers of
>information), if for a time, became a prime target of precarity as
>practices
>changed to higher degrees of skill, and necessities of locality for
>valuation.
>As a critical gesture, I even began to outsource my oil painting to
>Chinese
>ateliers on the grounds that Gainsborough had inexpensive assistants.
>Globalist Realism, I called it.
> 
>This whole period of neo-liberalism and free market trade
>also had a parallel discourse in the realm of debt-based securities.  The
>roots of the housing bubble caused by the
>progressive trading of conglomerates of housing based speculation based
>off of
>derivative securities consisting of sub-prime housing loans begins in
>1938.  That year, so-called ?Fannie Mae? federal
>loan corporation is signed into being as Franklin Delano Roosevelt?s ?New
>Deal?
>(1934) agendas continue to unfold.
>Fannie Mae would be converted into a government-sponsored entity (GSE)
>linked to the private sector in 1968 as part of the Housing and Home
>Development Act, signaling early beginnings of privatization.
> 
>The groundwork for the housing speculation bubble would be
>implemented in 1970, as Freddie-Mac, another GSE that buys mortgages on
>the
>secondary market to create derivative securities made of conglomerates of
>these
>mortgages.  This legislation created the
>first major step towards incentivizing the leverage of sub-prime loans as
>speculative securities.  Subsequent
>policies such as the elimination of tax credits for credit card interest
>(1986,
>pushing individuals towards home equity loans) and deregulation of
>securities
>practices (1985-1991) would open the door for a downward spiral of greed.
> This would occur as higher-risk in the
>sub-prime market which have higher interest rates, would be folded into
>securities until the Market would ?suddenly realize? that rising defaults
>in
>housing loans would cascade as the Housing Crisis of 2008, which would
>create a
>worldwide recession.
> 
>Anecdote. After the dot-com crash, instability seemed to
>become manifest.  My wife at the time
>became concerned for her employment as the academic sector came under
>siege in
>Louisiana, and I went to graduate school, for better or worse.  At best,
>I thought it would make my prospects
>better if the worst were to happen.  One
>of the great mantras of capital is that of retraining?  I got a 4.0 GPA,
>and immediately moved to
>Chicago for my first academic job.  I was
>above the media line, and things seemed bright.
> 
>The result of this crisis would be the pouring of billions
>of dollars into collapsed industries and financial institutions like
>Goldman-Sachs as institutions deemed ?too big to fail?.  However, another
>function of the general
>trope of financial crisis as factor in precarity through redistribution of
>wealth has been aptly described by Brian Holmes on the Nettime list and
>in his
>seminar on the New Economy at Mess Hall in Chicago.  What Holmes has
>noticed is the draining of
>capital by margins traders that make split-second trades on the
>fluctuations of
>the market.  In short, crisis, however
>short, create radical fluctuations of stock prices, allowing for the
>siphoning
>off of capital injected by world governments, exacerbating wealth
>disparity and
>the state of precarity.  Also, it
>reestablishes instability in the market, encouraging the next crisis and
>next
>iteration of wealth extraction, wage deflation, inequality, and precarity.
> 
>As an intermezzo to this rather depressing decades-long
>cycle, it is worthy to note that these socio-economic desiring-machines
>have
>not gone without notice for any number of decades.  Effects of the
>expansion of late capitalism?s
>exponential expansion have been documented in media such as The People
>Bomb (population), Rachel
>Carson?s Silent Spring (environment),
>and many others.  In fact, a recent ICCC
>study has shown that because of the global effects of capitalism,
>capitalism,
>and carbon emission, even under best-case circumstances of carbon
>limiting,
>humanity is likely going to create an environment incapable of sustaining
>a
>northern polar icecap by 2050.
> 
>Although my conflation of population, ecology, economy and
>the housing bubble may seem disparate, they are all facets of the original
>argument that capitalism by definition consumes all in its path,
>morphologically changing until all possible assets and resources are
>accounted,
>valuated, leveraged and converted to money, creating a global ecosystem of
>wealth concentration in the planet?s rich, and an expansion of precarity
>throughout the planet.  My example of the
>housing bubble, is merely a metaphor of one facet of the global
>neo-liberal
>systems concentration of wealth and propagation of precarity;
>economically,
>ecologically, socially, and so on.
> 
>What, you may ask, is my terminal strategy to this
>tightening web of accounting, acquisition, and extraction of value?  One
>American example comes from the late
>1800?s in the Deep South.  After the
>abolition of slavery in 1865, about 40,000 Blacks and Creoles found
>themselves
>suddenly free of indenture.  However, as
>a visit to historical Louisiana plantations revealed, the former slave,
>now
>free to exercise the holy Capitalist communion of ?choice?, was offered
>employment for the plantation, now as a worker.
>However, to the surprise of the newly emancipated worker, they were
>often beholden to the plantation?s company store through specious credit
>practices and inflated prices.  This
>would create a situation in which the already precarious worker would
>quickly
>be debt-indentured, merely remediating the situation from slave labor to
>slave
>wages and debt.  This would be reiterated
>later in Appalachia through the coal mining industry, as heralded by
>Tennessee
>Ernie Ford?s classic song, Sixteen Tons,
>in which he sings:
> 
>Sixteen Tons, and what
>to you get?
>Another day older,
>And deeper in debt.
>Saint Peter, don?t you
>call me, cause I Can?t go,
>I owe my Soul to the company store.
>
>Much can be said today for the crisis of debt in the American economy. As
>of
>September 2013, current US credit card debt averages over $15,000 per
>capita
>for a total of $11.5 Trillion dollars, which nears the $15.82 Trillion
>dollars
>of the US Gross Domestic Product in 2012, and the October 2013 US debt of
>$16.7
>Trillion dollars according to the website usnationadebtclock.us.
>Contrasted
>with the median per capita income of $39,000, it would take the average
>American until May, with no other expenses or accounting for frequent
>24-29%
>interest rates to pay off this debt.  However,
>as one might expect, personal debt and interest rates skew toward the
>bottom
>demographics.  Furthermore, the San
>Francisco Department of Public Health has released statistics that on
>average,
>it takes 5.5 full-time minimum wage jobs just to have a subsistence living
>inside the city.   This is a spurious
>fact, but is important to consider when thinking that San Francisco was
>once
>the haven of free love and bohemian living.
>
>Is the system of debt indenture under the current global neoliberal
>capitalist
>system surprising?  Hardly.  In The
>Making of the Indebted Man, Maurizio Lazzarato reveals the weaving of debt
>as a fundamental machine of control under the project of neoliberal
>capitalism.  I want to emphasize that
>this is not just the individual, but also the state to itself and to
>corporate
>power.  The attention to the core problem
>in indenture itself is redirected through rhetorics of productivity,
>innovation, and entrepreneurism through the creation of small business,
>when
>the income creation of said small business is a small fraction of the
>GDP.  The masses are fed stories like those in popular
>intellectual talks, Richard Florida?s The
>Rise of the Creative Class, and pundits, like Napoleon Hill?s
>Depression-era classic, Think and Grow
>Rich. However, as a 2013 Salon essay, by Thomas Frank states, the myth of
>the creative, the entrepreneur, is dangled out as an imaginary before the
>desperate precariat who are holding to the shreds of the American Dream.
>According to Frank, the truth is that the exemplars held forth again and
>again
>are the same ones lionized in the cultural canon, and anaesthetize the
>masses
>as they are held ?guilty and responsible in the eyes of Capital? before
>the
>Great, the Universal, Creditor? as Lazzarato states.
> 
>The bleakness of this situation is obvious and appears to be
>a terminal strategy of eventual collapse, which is the unspoken taboo of
>speaking that Capitalism itself is beholden to Malthusian limits in a
>finite
>milieu.  The individual is merely a site
>of leverage in the capitalist scheme of value extraction, and reversing
>this
>progression requires strategies of resistance.
>There are a multitude of sites rising forth in solidarity against debt
>indenture, including the Debt Jubilee movement (which buys personal
>defaulted
>debt for pennies and erases it), strikedebt.org, All in the Red, and the
>Occupy
>Student Debt campaign.  Lazzarato
>advocates these resistive strategies, and suggests that the indentured
>even
>taking more extreme measures, such as the use of personal bankruptcy as
>anti-corporate
>social tactic.  
> 
>What is clear is that clearly America, much of Europe and
>significant elements of the First World are locked in a systematic
>enforcement
>of precarity that is both the product of late capitalism?s early stages of
>exhaustion and mass control.  The general
>result of these states of symbolic and material exhaustion have been
>revolutions and depressions, from the October Revolution to the American
>collapse of the trusts with the rise of labor in the late 1800?s.  With
>the failure of austerity in the Eurozone
>and the rapid expansion of precarity in the United States with the
>unraveling
>of regulations, checks, and balances under neoliberalism, the world as a
>whole,
>and not just the First World, is faced with social pressures that
>threaten to
>rend the fabric of modern society.
>
>Ending Anecdote: As of 2013, academia is riddled with outcomes-based
>evaluation,
>massive online courses, and University of Texas just laid off 20% of their
>administrative staff.  My old college
>underwent a massive reorganization, and I found a better position, but
>with
>greater precarity as the worker structure takes on a Metropolis-esque
>scene of
>a highly-paid administrators, vanishing hopes for tenure, and a seething
>sea of
>contingent educators.  It just seems that
>this story has merely been a mirror of the macroscopic predicament.  


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