Issue 01 / Notes on the Recursive Art of Capturing Value

Notes on the Recursive
Art of Capturing Value

Erik Bordeleau

1. In Dark Ecology (2016), Timothy Morton explains that the word “weird” comes from the Old Norse urth, meaning twisted, in a loop. He argues for a new kind of ecological awareness - something he calls an ecognosis - that challenges linear causality and opens up the aesthetic dimension, orienting us toward a “dark” and resonant place where myriad things loop themselves into existence:

“Ecological awareness is weird: it has a twisted, looping form. (…) Ecological awareness is a loop because human interference has a loop form, because ecological and biological systems are loops. And ultimately this is because to exist at all is to assume the form of a loop.

[T]here are layers of attunement to ecological reality more accurate than what is habitual in the media, in the academy, and in society at large. These attunement structures are necessarily weird.“1

Morton’s ecological rendition of the looping form is paradigmatic of object-oriented-ontologies’ way of describing the withdrawal of objects away from cognition. This mode of philosophical dramatization, however contested it might be, proves to be useful when it comes to foregrounding the operational closure of systems and things. By highlighting paradoxes of self-referentiality, especially in what he calls hyperobjects, i.e. entities so massively distributed in time and space that they challenge the very idea of what a thing is in the first place (think of global warming, or plutonium radioactivity), Morton’s conception of ecognosis overlaps in different ways with Douglas Hofstadter’s “strange loops”2 or what Gregory Bateson called recursive or ecological epistemology.

2. Moderns have been so successful in drawing the line between what matters economically and what doesn’t that we are now on the verge of civilizational collapse. As a mode of existence, economic recursivity is a carefully cultivated insensibility to the local and always transversal conditions of value production. From the weirding perspective of ecognosis, the economy appears as the place where different types of organizations and business models self-referentially loop themselves into existence. Business models weirdly capture value. They presuppose something like a planned return on investment – something that loops back unto itself for an in-come, for a profit (in French, the word for income is revenu, literally something that returned). Often, these self-enclosing operations are, as Deleuze and Guattari rightfully pointed out in Anti-Oedipus (1972), intrinsically unavowable.3  They happen in the shadows. They take part in the formation of the positive unconscious structuring social life under algorithmic or cyber-capitalism.4

3. “Capitalism only hangs on because it is the most secure way of securing value inside a container. So whatever comes “after” capitalism would simply be more of that: the only thing that can defeat capitalism is an even more secure way of securing value inside a container. i.e., even more capitalist.”5

4. Financialized capitalism uses monetization as a speculative looping mechanism by which social, cultural and ecological values are flattened out and made economically equivalent with one another. Obviously, its architecture is inherently hierarchical; the privileged few are allowed to issue money, while everyone else can only issue promises to pay money. As the political economist Perry Merhling reminds us, “the most real thing is money, but money is nothing more than a form of debt, which is to say a commitment to pay money at some time in the future. The whole system is therefore fundamentally circular and self-referential. There is nothing underneath, as it were, holding it up.”6

5. 20th-century sociologist Robert K. Merton is credited with coining the expression “self-fulfilling prophecy” and formalizing its structure and consequences. In his 1948 article Self-Fulfilling Prophecy, Merton defines it as a false definition of the situation evoking a new behavior which makes the original false conception come true. Fake it until you make it: Merton was basically defining the (American) capitalist subjective regime of self-confidence as all-terrain technique of psycho-affective capture.
   About 20 years later, his son, the duly and self-fulfillingly named Robert C. Merton, published a paper expanding the mathematical understanding of the options pricing model, and coined the term “Black–Scholes options pricing model.” The Black-Scholes (and Merton) probabilistic formula is like a navigational device to cruise through the sea of derivatives. It provides a rational way to price a financial contract when it still has time to run. “It was like buying or selling a bet on a horse, halfway through the race.”7 The financial sector called it the Midas Formula as it turned derivative time into gold. The probabilistic model coincided almost perfectly with the course of the market until the Real kicked back in full contingent mode with the October 1987 crash.

6. If we want to turn the world into a swarm of living commons rather than self-abstracting, devouring corporate entities, we need to engage further into how monetary systems, financial apparatuses and business models actually work. We need to make our economies weird again. We need to design otherwise types of feedback loops and imagine other modes of capture that escape the tight grip of reductive economic abstractions and anti-social storing of value.    
Considering the inherently speculative nature of economic value, the financial art of harnessing future value flows and derivatively looping them back into the present is probably a good place to start. Armed with complex derivatives, finance makes the future actionable in the present. It is, in many ways, a form of extractive and self-fulfilling planning that dispossesses us from a lived and vibrant access to futurity. How can we shift from the individual precarity predatorial finance generates to new forms of transindividual metastability and collective emergent attunements?

7. Many thinkers and activists have recently taken up the challenge of re-thinking the value form from the perspective of the financial, or more specifically, from the perspective of that which exceeds and overflows. In close dialogue with Economic Space Agency (ECSA), Brian Massumi argues in his 99 thesis on the Reevaluation of Value (2018) that as a self-abstracting and intensifying force, financial derivatives offer a privileged access to a post-capitalist and alter-economic future. For Massumi, derivatives run on affective intensities just as much or even more so than on economic “fundamentals”; the economy then appears as “the precarious art of snatching emergent order out of affect.”8 It would therefore be short-sighted to simply advocate for a return to the “real” economy. Rather, he writes, “it is in the speculative sphere of the financial markets that the processual engine of the capitalist economy shows its true processual quality (its ultimately unsustainable running after surplus-value fueling endless growth and uncurbed accumulation).”9 The invention of post-capitalist alternatives thus depends for Massumi on how we conceive of the processual logic of what he calls surplus-value of life: “How can a creative process engine that stays true to its mission of producing surplus-value of life for its own sake at the same time style itself an economization process capable of interfacing with the dominant economy in self-sustaining ways?”10
Massumi’s problematization of surplus-value production is original and compelling in many ways and would definitely deserve a much deeper analysis. The problem I see here, for now, is that if we follow Massumi too closely in pitting the qualitative life forces against their quantitative capturing, it becomes difficult to actually address the problem of interfacing with the “real” economy, that is, to take full account of the market as medium of contingency.11 At contact with a future said to be radically uncertain, the market informs and determines, it contingentializes and monetizes states of fact - it produces forms-of-value that integrate a series of calculations and approximations to modulate exposure to risk and maximize profits. All this work of semiotic slicing and splitting, of collective anticipation and performative evaluation tensed on the tip of a present that is both intuitive and algorithmic; all this ends up taking the apparently unified and intelligible, i.e. rendered legible, shape of an “economy.” Perhaps Gabriel Tarde’s notion of “social quantity” could be of some help here, or even Klossowski’s rendering of libidinal economy in terms of “living currency,” as they both suggest procedures of contingentialization that precede monetization per se, eventually leading toward an updated, big data informed version of an insight allegedly from Stalin-as-Gesamtkunstwerk: quantity has a quality all of its own.

8. In Capital and Time (2018), Martijn Konings embraces a pragmatics of valuation that foregrounds the speculative powers of finance. He highlights the role of anticipation and expectation in value formation and how value capturing is always entangled with an active process of prospecting for potentialities. Capital isn’t simply a passive appropriator of what has already been produced, as we often imagine it a bit too hastily. Rather, argues Konings, “capital’s measures and calculations are performative devices” that “play an active, constructive role in generating the very surplus value it is after.”12
As it prospects for ways of generating surplus-value, the virtual body of capital generates a highly qualified relation to futurity that effectively structures contemporary societies – something often referred to as risk management. We live in what Ulrich Beck has famously called “risk societies.” Risk is a guiding epistemological principle of modernity, around which articulates something like a financial art of (non)knowledge. Inherent to the venture-form, risk is the measurable expectation about the unexpected. Derivatives, for instance, are essentially contracts that price risk. The financial world can be conceived of as being shaped by those who “believe in their capacity to channel the workings of uncertainty to be winners in the game of risk.”13 But the reigning financial class certainly doesn’t have the monopoly on risk-generating practices. How we leverage our own capacities to take risks and enter into metastable collective compositions, beyond what is deemed “possible” - or insurable? -, will be a determining element of any successful post-capitalist politics to come.
What if finance wouldn’t primarily be about monetary value, but rather a mode of coordinating the future and its emerging possibilities, through the collective design of attractors and the distribution of flows of desire? Finance would then present itself as an expressive medium, that is: a practice of opening shared temporal intervals by risking and speculating together, in a spirit of deep mutualism and speculative generosity that redefines the neoliberal subject of self-interest and open up unto renewed practices of co-immunity.    
This financial art of setting and designing attractors for shaping futurity, Konings describes it in terms of leveraging:

“Leverage is the way we aim to give our fictitious projections a self fulfilling, performative quality (…) leverage involves the effort to position oneself as the focal point of the interactive logic of speculation, as an attractor in the social field."14

I believe this understanding of the performative and speculative aspect of value capturing and the pragmatic logic of leveraging is crucial if we want to approach financial matters with a weirding poetics of experimentation. How can we transform the traditional modes of value capture – and exposure – embedded in the current economic infrastructures and re-engineer them for the benefit of the community? How can we convert economic loops into social and artistic flows (and vice versa)? Could the emerging field of blockchain-based cryptoeconomics lead to the invention of new worlding and leveraging practices, that is, cooperative and implicated ways of world-making by which different species, technologies and forms of knowledge generate their own loci of intensive commingling?15

9. Blockchains or distributed ledgers technologies (DLT) are most often associated with cryptocurrencies. But I believe it is more interesting to first conceive of them as constitutional or institutional orders, that is: a set of protocols by which individuals, firms or algorithms can make economic and political exchanges. Blockchains are scalable governance-making machines – the protocol is the institution. As such, they allow for the formation of all sorts of digital membranes, economic enclosures or digital commons yet to be invented. Thus, with cryptoeconomics, or so is the hope entertained by many collectives operating in this rapidly evolving space, the economy becomes a design question. What type of futures can be called into being through a reprogramming of social and financial protocols for interaction? What are the different techno-social components defining these new organizational forms that combine the immutability of a shared past with the programmability of a freely commonized future? In a world moving toward accrued social fragmentation, the way we generate scalable techno-social modes of coordination has become crucial. Could cryptoeconomics facilitate the formation of what Geert Lovink and Ned Rossiter have dubbed “organized networks” or “networks with consequences”?

What is at play here, from a crypto-financial point of view, is the process of incorporation of forms-of-value as such, i.e. the legal or digital codification whereby an economic asset is enclosed, securitized and monetized. An economy founded on a blockchain makes it possible to issue tokens in which various governance and property rights, various pre-established circulation and transmission rules would be programmed - a new form of network-based value. These techno-social formations or legal and digital incorporations constitute what Economic Space Agency (ECSA) calls “economic spaces,” meaning spaces within which it is the very organization of our ways of “risking and speculating together” that becomes the main vector of valorization. (Note that at this point, the very notion of risk becomes somewhat problematic and would require a decolonizing and ecologizing treatment in due form – something that, unfortunately or rather tenaciously so, ECSA has proven to be unable to provide.)

10. Engaging with the enabling constraints of derivative finance and cryptoeconomics is tricky and potentially problematic. At best, it can act as a neganthropic pharmakon as Bernard Stiegler puts it, that is: a perspective in which the economy works as a “general therapy for the biosphere,” reversing the destructive course of the Anthropocene by favoring the always localizing slowing down generated by negentropic processes.16 At worst, the proliferation of cryptoeconomics’ modes of organization and its associated fantasy of automation, as well as the acritical use of risk management’s conceptual framework might actually signify the destruction – the economic reduction that is – of countless other types of worlding practices, more subtle, more improbable, less calculable too. The quest for scalability, Anna Tsing reminds us, tends to banish meaningful diversity, that is, diversity that might make a difference.17 Indeed, just as more traditional capitalist formations, cryptoeconomically-enabled modes of governance might be predating upon forms of transindividual sociality that have been militantly preserved away from for-profit capitalist computability. As of now, the jury is still out on determining whether blockchain-based initiatives will amount to anything other than the reinforcement of governance as “the extension of whiteness on a global scale” (and judging by the references mobilized in this essay, there is still some significant work to do…)18

Erik Bordeleau is a philosopher and media theorist. He is affiliated researcher at the Art, Business and Culture Center of Stockholm School of Economics (SSE), working at the intersection of political philosophy, contemporary art, finance and new media. He has published and co-edited several books and articles in different languages, and is the author of Foucault anonymat (Le Quartanier, 2012, Spirale Eva-Legrand 2013 award) and Comment sauver le commun du communisme? (Le Quartanier, 2014), both recently translated to Spanish (the latter will also be published in German in January 2021 at Büchner Verlag). In recent years, he has collaborated as a fugitive planner with the Economic Space Agency (ECSA) and as a free radical with the SenseLab (Montreal, Concordia University). At the School of Disobedience (Berlin), he has been teaching a series of seminars in critical crypto-economics.  In collaboration with Saloranta & De Vylder, he is developing The Sphere; a web 3.0 community platform for the performing arts. Bordeleau is based in Berlin and enjoys, from time to time, the discreet charm of the precariat.