The Perspective of the World, 2008

The recent, dramatic drops in the Dow Jones Industrial Average command attention, but they are foam. The real currents of the current crisis are mostly hidden from public view. Some journalists are burning a lot of shoe leather to bring that story to light, but I imagine that much of it will remain obscured from history to all but the actors themselves.

And so Fernand Braudel in Civilization and Capitalism, 15th-18th Century, Volume I: The Structures of Everyday Life: The Limits of the Possible (trans. Siân Reynolds, New York: Harper & Row Publishers, 1981):

On the other hand, looking up instead of down from the vast plane of the market economy, one finds that active social hierarchies were constructed on top of it: they could manipulate exchange to their advantage and disturb the established order. In their desire to do so — which was not always consciously expressed — they created anomalies, ‘zones of turbulence’ and conducted their affairs in a very individual way. At this exalted level, a few wealthy merchants in eighteenth-century Amsterdam or sixteenth-century Genoa could throw whole sectors of the European or even world economy into confusion, from a distance. Certain groups of privileged actors were engaged in circuits and calculations that ordinary people knew nothing of. Foreign exchange for example, which was tied to distant trade movements and to the complicated arrangements for credit, was a sophisticated art, open only to a few initiates at most. To me, this second shadowy zone, hovering above the sunlit world of the market economy and constituting its upper limit so to speak, represents the favored domain of capitalism, as we shall see. Without this zone, capitalism is unthinkable: this is where it takes up residence and prospers. (p. 24)

The New York Times last Thursday (Nocera, Joe, et. al., “As Credit Crisis Spiraled, Alarm Led to Action,” 2 October 2008, p. A1):

This is what a credit crisis looks like. It’s not like a stock market crisis, where the scary plunge of stocks is obvious to all. The credit crisis has played out in places most people can’t see. It’s banks refusing to lend to other banks — even though that is one of the most essential functions of the banking system. It’s a loss of confidence in seemingly healthy institutions like Morgan Stanley and Goldman — both of which reported profits even as the pressure was mounting. It is panicked hedge funds pulling out cash. It is frightened investors protecting themselves by buying credit-default swaps — a financial insurance policy against potential bankruptcy — at prices 30 times what they normally would pay.

It was this 36-hour period two weeks ago — from the morning of Wednesday, Sept. 17, to the afternoon of Thursday, Sept. 18 — that spooked policy makers by opening fissures in the worldwide financial system.

Anomalies, zones of turbulence, fissures: call them what you will.

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The Day I Became a Hegelian

I remember distinctly 14 April 2000, the day the Dow Jones Industrial Average dropped 617.78 points, or 5.7 percent, to 10,305.77 (Fuerbringer, Jonathan and Alex Berenson, “Stock Market in Steep Drop as Worried Investors Flee; NASDAQ Has Its Worst Week,” The New York Times, 15 April 2000, p. A1). The company where I worked offered options and stock purchase plan heavy compensation packages and it was the first really precipitous drop in the stock market since the online discount stock brokers like E-Trade went really big. At the office where I worked nothing got done that day: no one could do anything but watch their portfolios plummet. I remember a group of us going out for lunch. This was in Seattle and the Harbor Steps II was still under construction. At that time it was just a reinforced concrete skeleton and a kangaroo crane. As the group of us walked down — I don’t know — probably University Street, I looked up at the concrete stack of Harbor Steps II and the bustle in and around it and it occurred to me that if the stock market were to continue to fall like it was, the development company might halt construction — that building would cease its coming into being. At that moment, I saw that it was primarily a blueprint, an architect’s vision, a developer’s profit and loss projections, investor expectations. It was less matter and more idea and at that moment I first thought that maybe there was something to this Hegel fellow.

Abandoned construction, Bangkok, Thailand, approximately Sukhumvit and Soi 8, 2 December 2006

Similarly, when S. and I were in Thailand, we stayed in a neighborhood a few blocks from an abandoned, half finished concrete skeleton of a building. They were actually fairly common in Bangkok. So quickly had this construction project been abandoned that there were places where the rebar had been put in place and half the concrete had been poured when work had stopped. A pillar ended in a jagged mound of concrete with the remaining half of the uncovered rebar simply jutting skyward. I took one look at that building and said to S., “That’s probably left over from the Asian financial crisis.” That’s how suddenly and ferociously the Asian financial crisis struck: people simply walked away from multi-million dollar building projects. When the beliefs don’t pan out, the rock and the steel cease to fill out their imagined dimensions.

Ten thousand years ago ideas played almost no role in human affairs or history. Today they play a significant role, perhaps already the better part of every artifact and interaction. The Pattern On The Stone as Daniel Hillis called it. The stone is inconsequential: the pattern is everything. It is a part of the direction of history that ideas gradually at first, but with accelerating speed, displace matter as the primary constituent of the human environment.

And that, as I read it, is Hegel’s Absolute