A use for deconstructionism, finally

It may be useless in literature, but it is a fairly good guide to what has been happening in the world of finance. John Lanchester explains in the latest issue of the New Yorker.

For anyone who studied literature in college in the past few decades, there is a weird familiarity about the current crisis: value, in the realm of finance capital, evokes the elusive nature of meaning in deconstructionism. According to Jacques Derrida, the doyen of the school, meaning can never be precisely located; instead, it is always "deferred," moved elsewhere, located in other meanings, which refer and defer to other meanings--a snake permanently and necessarily eating its own tail. This process is fluid and constant, but at moments the perpetual process of deferral stalls and collapses in on itself. Derrida called this moment an "aporia," from a Greek term meaning "impasse."  There is something both amusing and appalling about his theories acted out in the world markets to such cataclysmic effect.

Lanchester's depiction of the Black-Scholes formula as the high point of modernism in finance, akin to "The Waste Land" in poetry or "The Rite of Spring" in classical music is pretty hilarious too.

Lanchester's essay ends thus:

When it comes to the free global movement of capital, there is no plan B.  Are there any unreconstructed Marxists left, anywhere in the wild? ... If there are, now would be a good moment for one of them to publish a book saying that the man in the beard would regard himself as having been proved right.

Lanchester should be invoking the man with the moustache (Keynes) instead, and yes, I do have it on good authority that such a book is in the making.

Comments

[undeconstructed Marxist]

Stop hatin' on Marx.

[Nathan Smith]

This is related to a question that has intermittently fascinated me:

Is money a language?

Like language, money is a man-made system of arbitrary symbols that is used to convey information and coordinate action.

I see two differences: (a) money is quantitative, and (b) money is scarce.

The quantitative nature of money makes the messages that can be expressed with it far simpler/cruder than what can be expressed with words -- though also more precise. But the *scarcity* of money can, in some cases, make money peculiarly truthful. The marginal cost of words is near zero, so people blather and prevaricate and deceive themselves. But when someone offers you $10,000 for your car, it's a pretty reliable signal about how much (at minimum) they value your car.

For example, the stockmarket's reaction (apparently) to Obama's victory makes a striking contrast to the enthusiasm in the media.

[Saku]

Rodrik, that do you think of Phelps thoughts on the relevance of "the man with the moustache", in FT recently?

[Sean]

Maybe more specific: The man with the moustache has the right solution for the man with the beard's analysis of concentration.

Out of curiosity, who's writing the book?

I know Walden Bello has been wandering around giving (persuasive) talks on how Mr. Marx had a point. Somehow I doubt he's who you're talking about.

[passers-by]

Joan Robinson once said to talkative Marxists...

What I mean is that I have Marx in my bones and you (Marxist) have him in your mouth.

To take an example--the idea that constant capital is an embodiment of labour power expended in the past. To you this is something that has to be proved with a lot of Hegelian stuff and nonsense. Whereas I say (though I do not use such pompous terminology): "Naturally--what else did you think it could be?"