This one is my favorite but the whole series is well worth it.
Via Chris Uggen, every dot is a new prison. Pay also attention to the music and the visual, they are beautifully woven together:
One can nitpick, of course. It’s a bit longish and a timeline would have been nice but it makes a strong point.
In Econned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism, Yves Smith, of Naked Capitalism, issues bills of indictment against the economic profession, the financial class and their accomplices in government and regulatory agencies. It is them who caused the financial crisis of 2008 and the book goes into much detail as to how it happened.
The bottom line is that the crisis is not the product of a few greedy individuals (e.g. Madoff) nor is it the product of social policy (CRA) or the poor taking out loans they could not afford (blaming social problems on the bottom of the social ladder is such a common trope that it can be dismissed every time it is invoked) or the supposed global savings glut.
Rather, the causes are cultural and structural.
The first culprit, according to Smith, is what she calls the “mathization” of economics, that is, how the discipline got historically taken over by proponents of abstract mathematical models as opposed to research dealing with the much less clean social reality of economic life (something that has made a comeback with behavioral economic).
The problems related to what Bourdieu used to call “taking the reality of the model for the model of reality” are well-known and Smith goes over them quite extensively. The flip side of this overreliance on mathematical models is the quasi-religious beliefs in the idea that markets are always right and good. So, the starting point is this double intellectual failure: statistical models are scientific and therefore always reliable / markets are always right.
Smith demonstrates that, at some point, in the financial world, the statistical models got so elaborate that (1) few people actually understood what they were representing and (2) the more complex they got, the more prone to error and manipulation they were. And yet, most financial forms relied on them to evaluate risk.
Add to this the securitization (and resecuritization) of everything and you end up with a self-contained universe, closed off to social reality, populated by highly paid individuals, convinced of their brilliance, supervised by managers who did not understand the models their traders are using but who benefited from the supposed profits they were making. That sense of entitlement has contributed to the demonization of the financial class in the wake of economic collapse.
Add to this the triumph of neoliberal economics (based on a completely imaginary vision of economic exchange) in the 1980s and the deregulation of financial products (CDOs, CDSs, SVIs, etc.) and you have a lot of elements in place for catastrophic results (how many financial and economic crises, worldwide, in the past, say 20 years?). It looks very much, from the outside, that the financial world had found illusory ways of generating illusory profits, unconnected to the real economy, by selling pieces of paper back and forth among financial actors, pieces of paper whose value was just just as disconnected from reality.
But Smith also examines the politically-central idea of “cognitive regulatory capture”, that is, when judges and regulators come to think the same way as the financial class, end up believing in the imaginary “free markets”, neoliberalism and the goodness of markets.
‘The widespread acceptance of the notion of ‘free markets’ is not the result of an organic shift in social attitudes, but of a clever, persistent, well-funded marketing plan by business interests that had much to gain from its adoption. The tireless and often faceless promoters of this ideology would have us believe that government is the source of all evil, and that any act to cut it down is a form of patriotism and an obvious win for the collective good. Yet, in Chile and Russia, we have seen the polar opposite: tearing down the state’s restraints on commerce produced a scramble by the wealthy and the well-connected to seize what they could. The result was not trickle-down prosperity, but dislocation, instability and a lower quality of life save for those at the very top. And in America’s ‘free market’ experiment, we have seen a slower but equally relentless devolution.” (126)
The bottom line, for Smith: looting and predation are the logical conclusion of all these developments leading to the economic collapse that resulted from all this financial “innovation” especially on unregulated products that could be conveniently hidden from regulators and auditors thanks to creative and innovative accounting.
More specifically, Smith explains somewhat at length the three financial products that turbocharged the system and primed it for disaster: securitization, repurchase and reserve repurchase agreements (repos), and the now-infamous credit default swaps. She provides one of the clearest explanations I have read. One wonder how anyone could believe in the soundness of these.
Smith concludes her book by a critical examination of TARP (a good example of cognitive regulatory capture) and a list of necessary reforms, although she is skeptical that significant reform will be passed. And Smith offers no real solution to the problem of ideological straitjacket in the economic profession (which has too much power, according to her).
This book is not the easiest read as all this financial wheeling and dealing is deliberately confusing and obscure. But it is a very useful “big picture” explanation of how we got here, politically, ideologically and structurally.
As part of my review of Loïc Wacquant’s Prisons of Poverty, I mentioned that Wacquant devoted some space to debunking what he considers to be a myth: the theory of the prison-industrial complex. I thought I’d mention a bit more about it.
For Wacquant, there are four main reasons the expression “prison-industrial complex” does not provide an accurate explanatory frame:
1. It focuses exclusively on the “prisonfare” part of the dual approach that the neoliberal state uses against “problem populations”, completely missing the “workfare” part of the disciplining of such populations and the necessary counterpart to mass incarceration.
2. The idea of prison-industrial complex emphasizes privatization and the rise of the private prison sector with corporations such CCA or Wackenhut. In other words, the logic of such privatization is profits, along with the use of inmates by other corporations, such as Microsoft. But imprisonment, in the US and other countries, is still mostly a public affair. Privatization is not a necessary condition of mass incarceration but a side effect of it. As Wacquant notes, “banning adult imprisonment for profit did not prevent California from becoming a leader in the drive to mass incarceration” (85). Similarly, the exploitation of inmates by corporation affects only about 1% of inmates.
3. The expression “prison-industrial complex” is, of course, reminiscent of another industrial complex: the military-industrial complex. This is not random, but for Wacquant, this parallel obscures major differences. The American military is highly centralized whereas the whole incarceration system is more of a capillary nature (to use Foucault’s expression). The US penal system is widely dispersed and decentralized, and therefore less subject to uniform policy.
4. The framing of prison-industrial complex also tends to hide from view the major transformations that have taken place regarding prisons and the oversight that courts have exercises, sometimes forcefully regarding the issue of overcrowding, for instance. It also obscures the work of the prison reform movement to introduce, albeit in a limited fashion, a welfarist logic to the carceral world.
In other words, when I mentioned that Wacquant debunks the idea of a prison-industrial complex, I did not mean that he denies the existence of mass incarceration, but rather that he finds the framing misguided as explanatory construct.
Loïc Wacquant‘s Prisons of Poverty is the shorter, more reader-friendly and activist-oriented version of Punishing The Poor. It touches upon the same topics: the double-pronged way in which the neo-liberal state disciplines the poor: workfare and prisonfare. One cannot be understood without the other.
Contrary to Punishing The Poor, clearly directed at an academic audience, the audience for Prisons of Poverty (PoP) is the general public. In other words, PoP is more an exercise is public sociology.
On a symbolic level, it is the way in which the neo-liberal state, having divested itself of significant power in economic and social matters through privatization, for instance, reasserts its power against the powerless.
Social disinvestment → Carceral reinvestment
The book also deals with the spread of the ideologies that support this double-pronged approach to public policy directed at the poor from the United States, to Western Europe and to some semi-peripheral countries such as Brazil through the popularization of unfounded ideologies and phony criminology such as “the broken windows” theory promoted by the likes of Rudy Giuliani and his entourage.
In other words, having created conditions of precarization and of what Ulrich Beck has called the risk society, the neoliberal state makes a comeback against the poor by forcing them into the lower layers of the workforce through “welfare reform” and through mass incarceration through the criminalization of pretty much everything. As Wacquant puts it, it is the “new government of social insecurity” (1). This took place through five trends:
- Vertical expansion or carceral hyperinflation
- Horizontal expansion of the penal dragnet
- Onset of carceral “big government”
- Resurgence and prosperity of private incarceration
- Carceral affirmative action
But contrary to the “prison-industrial complex” theory (thoroughly debunked in this book), mass incarceration is only one side of new government of poverty. For Wacquant, mass incarceration contributes to the regulation of the bottom layers of the labor market in three ways:
- “Discipline the reticent fractions of the working class by raising the cost of strategies of resistance to desocialized wage labor via “exit” into the informal economy” (79-80).
- “Help to “fluidify” the low-wage sector and artificially depresses the unemployment rate by forcibly subtracting millions of unskilled men from the labor force” (80).
- “Facilitate the development of subpoverty jobs and the informal economy by continually (re)generating a large volume of marginal laborers who can be superexploited at will” (81).
At the same time, whatever is left of social service programs are turned into massive mechanisms of surveillance where the poor have to abdicate their privacy in order to receive services, making the process as stigmatizing as possible.
As a sociologist, PoP is less satisfying than Punishing The Poor. And I certainly wish Wacquant would contrast this work to the treatment of corporate and financial criminality that has been unveiled in the context of the global recession where every possible rationalization has been offered to avoid the idea of systemic failure and class analysis. The only time where class has factored into the discussion of the recession, it is as potential culprit (all these poor people taking out mortgages that they could not afford). Thankfully, that argument has been thoroughly debunked.
In any event, it seems the US government found its economic power again to bailout the financial system without criminalization or stigmatization of an entire class. Compare and contrast.
However, after years of Bush / Obama administration systematic torture and rendition, torture porn from the 24 TV show, in other words, after the banalization and acceptance of torture in the name of fighting terrorism, I fail to see why this seems so shocking.
The great Yves Smith (have you gotten a copy of her book yet?) over at Naked Capitalism (which should be in everyone’s newsreader) has posted a great demonstration of the ways in which financial class behaves in a fashion very similar to cults and very class conscious. The post is a bit longish but worth everybody’s time if one wants a greater understanding of our overlords.
Smith does not go into the gender aspects of this but there is certainly no doubt that hypermasculinity plays a major part in what she discusses. Combined with the cultish and class-conscious, quasi-Randian aspects, this makes for a very dangerous mix, obviously.
That’s the US’s world ranking on maternal mortality:
“Mothers die not because the United States can’t provide good care, but because it lacks the political will to make sure good care is available to all women…
Whatever form they finally take, President Obama’s healthcare reforms will not resolve the crisis of unavailable and unaffordable maternal care, says Amnesty.”
The whole article is pretty devastating.