Monthly Archives: December 2009

Manufacturing confidence

From this post by Arnold Kling:

For a while, the postponed adjustments and maladjustments are papered over by financial enthusiasm. Financial euphoria allows profits and wealth to seemingly persist in spite of accumulating underlying imbalances. When the euphoria breaks, the imbalances are exposed, and it takes a long time to Recalculate.

I’m still thinking about the recalculation question in terms of information distortions. How ideology is loosed in the economy deliberately, to produce the “financial euphoria” that allows bubbles to grow. Sometimes there is a tendency in the financial press to reduce “confidence” to a matter of interest rates — rates down, confidence up, and vice versa. Or there is an over-reliance on confidence surveys, as if confidence is unaffected by the very reports in the press about confidence.

Since the manufacture of confidence prolongs profits, the press is under pressure to do its part to prolong the euphoria, and a counter-discourse explaining the “underlying imbalances” tends to be suppressed, marginalized, ignored. If we are serious about preventing bubbles, regulating finance, it’s important to identify the tactics by which this marginalization occurs and develop ways to counteract it.

The underlying issue is to minimize distortions in the messages financial markets communicate, an intrinsically difficult problem — at the macro level we want everyone to be honest; at the micro level we are all trying to screw others over and leave them holding the bag of bad investments we’re at some fundamental level trying to pump and dump. At the micro level, we all have incentive to distort information about our investments if we are trying to realize cash profits. But the question of whether we want to be in cash is determined by the macro picture, which are own disinformation is muddying.

So how does skeptical, nuanced information get conveyed in markets, which can only send one-dimensional signals through price? How does the press convey that nuance when it is beholden to interests demanding it help maximize asset values, despite the social interest in achieving “true asset values” to forestall the need for drastic recalculation?

Manufacturing confidence seems like a problem that standard mathematical economic tools can’t capture; it’s a sociological question. I think this is what Brooks was getting at in his review of Kling’s book — that equations and their implications still need to be mediated, tempered by a sociological discourse surrounding them. The point is that structural adjustments occur according to the information available to entrepreneurs, but the information by which to make such plans is now corrupted by several factors — purposeful distortions by interested parties, the sheer volume of information now available to individuals, the free-floating ideological imperative to be “confident” in capitalism and stoke “animal spirits”. After all, the animal spirits thesis seems to suggest that entrepreneurs must already be misinformed in order to risk investing at all. How to integrate that with a macro story that says entrrepreneurs are using information to make for a more sustainable economy, with fewer inbalances.

Isolation and technology

From an NYT magazine article, “The Price of Free” by Nicholas Carr:

The communal mode of TV viewing isn’t gone, but it’s becoming less common. As screens proliferate and shrink, and as the Web allows us to view whatever we want whenever we want, we spend more time watching video alone. That’s one funny thing about the Internet: it’s an extraordinarily rich communications system, but as an information and entertainment medium, it encourages private consumption. The pictures and sounds served up through our PCs, iPods and smart phones absorb us deeply but in isolation. Even when we’re together today, we’re often apart, peering into our own screens.

Communication as a business, an industry, depends on isolation, not on bringing people together. The technology it researches and produces and disseminates all will serve that purpose as well. The industry wants us to be incapable of creating community outside of its confines.

Carr seems to believe that a media industry is ultimately necessary to guarantee quality control on content. If there is no capital (collected, presumably, in big firms) for expensive programming, then the market will be flooded with amateur productions and their reality-TV equivalents.

The smartest, most creative TV shows, from “Deadwood” to “Mad Men” to NBC’s own “30 Rock,” tend to be the most expensive to produce. They have large, talented casts, top-notch writers and directors, elaborate sets and generally high production values. If the changes in our viewing habits stanch the flow of money back to studios, producing those kinds of programs may no longer be possible. In their place, we’ll get more junk: dopey reality shows, cookie-cutter police dramas, inane gab fests. The vast wasteland will become even vaster.

The alternative vision is that production will shift outside the commercial media industry and be taken up by nonmarket players with a peer-production sort of model. It’s cheap to make and distribute content, and talent comes for free, since there are so many talented people willing to volunteer there services in exchange for public recognition.

Production costs will drop to the point that capital accumulation in big firms will become unnecessary. We will all be our own media companies, if we have the time and desire to make our own content, program our own channels.
Unlike Carr, who in this case seems worried about the fate of big media companies, I think that the individual being able to find that time and desire is the real problem. An attention deficit, not a capital deficit. Another way of putting it: There is not enough social recognition to go around. The media decays into a series of tubes all jammed with pleas of “notice me!”

Baudrillard’s "Requiem for the Media"

This essay (pdf) has helped me clarify (in my own mind, at least) some the questions I’ve been trying to explore lately about the effects of the mediatization of everyday life via Web 2.0 applications.

In the essay Baudrillard argues against the idea that mass media can be liberated from the capitalists who control them and be used to build the socialist utopia — the same idea that technophiles often claim for the interactive internet. The problem with the old mass media was that they were not reciprocal, and the messages in them were controlled by the powers that be who owned the means of media production. Now, with those means democratized, media can now serve revolutionary, subversive aims. Hans Enzensberger, a Marxist media theorist who stands in as Baudrillard’s punching bag throughout, made the case in “Constituents of a Theory of the Media” that if we all become productive consumers of media and take advantage of the form, it can become the infrastructure for a broader democratic order. Baudrillard sardonically sums up his views this way:

The media are monopolized by the dominant classes, which divert them to their own advantage. But the structure of the media remains “fundamentally egalitarian,” and it is up to the revolutionary praxis to disengage this potentiality inscribed in the media, but perverted by the capitalist order. Let us say the word: to liberate the media, to return them to their social vocation of open communication and unlimited democratic exchange, their true socialist destiny.

Baudrillard regards the “medium as the message,” but finds a much different message — that of the reproduction of the “code.” Mass media’s form allows for everything to be reduced to the code, to signs or models. In this way “they fabricate noncommunication — this is what characterizes them,” as Baudrillard says. The form is the ideology; ideological notions are not in the messages the media carries, but in the way messages are carried:

ideology does not exist in some place apart, as the discourse of the dominant class, before it is channeled through the media. The same applies to the sphere of commodities: nowhere do the latter possess ontological status independently of the form they take in the operation of the exchange value system. Nor is ideology some Imaginary floating in the wake of exchange value: it is the very operation of the exchange value itself.

But in developing this idea he seems to be describing the need for what the Internet now provides.

The same goes for the media: they speak, or something is spoken there, but in such a way as to exclude any response anywhere. This is why the only revolution in this domain—indeed, the revolution everywhere: the revolution tout court—lies in restoring this possibility of response. But such a simple possibility presupposes an upheaval in the entire existing structure of the media.

Why doesn’t Web 2.0 allow for the “response”?

The question is whether new online media forms — social networks, blogs, etc. — do anything to change the ideology built into mass media. I think the new media are merely the extension of the ideology and form of the mass media into personal relations, into more intimate spheres, so that the private is turned inside out and made vulnerable to the consumerist ideology. They turn our everyday lives into the “code” so that our practices are always signifying something in that one dimension, in that language of social practices and objects that denotes status hierarchies. Once personal relations stood in opposition to the “generality of media messages,” and the opposition helped define the private/public dichotomy. Now, Web 2.0 has allowed the media to assimilate personal relations.

In the process, it denies the possibility for a “response” in the way Baudrillard is imagining, and instead turns us all into broadcasters of the personal, rendering friendship into the mode of media consumption — we can consume it passively on a screen, with no obligation to reciprocate or uphold the responsibilities of personal connection, even though the ghost of those ideals are preserved. We can pretend we are being even better friends, since we are so much more “connected” online. But by giving us tools to automate those gestures of responsibility to the relationship, social networks, etc., prevent us from carrying out those friendship responsibilities. They become hollow, instrumentalized, too easy — the equivalent of pressing buttons on a TV remote to make different things happen on the screen.

As Web 2.0 naturalizes itself in our everyday lives, communication becomes even harder, as the form of mass media is co-opting more and more of the occasions for speech. Baudrillard makes the point that what is broadcast on TV is ideologically irrelevant because its very form assures that “people are no longer speaking to each other.” With the Web, TV’s logical extension, we can give up talking to one another in favor of broadcasting at one another. This transforms the meaning of “sharing,” which is depersonalized and becomes instead mediatized.

Baudrillard has a good explanation of what that means: “broadcasting the events in the abstract universality of public opinion.” The events he’s talking about are thee student uprisings of May 1968, but it applies equally to the material of our private lives. The end result of the process is the same: the material is deprived “of its own rhythm and of its meaning” and is “short-circuited,” “neutralized into signs.” Hence, a “mortal dose of publicity” is the best way to quash a fomenting revolution. It appears as a parody of itself in the media, becomes a sign, a pose, a posture.

Thus mere interactivity is insufficient. Baudrillard dismisses the idea of “proposing, as a revolutionary solution, that everyone become a manipulator, in the sense of active operator, producer, etc., in brief, move from receiver status to that of producer-transmitter.” Such a “critical reversal of the
ideological concept of manipulation” still “conserves the category of transmitter,
which it is content to generalize as separated, transforming everyone into his own transmitter.” The consequence, Baudrillard predicted, would be “a kind of personalized amateurism, the equivalent of Sunday tinkering on the periphery of the system.” Some would probably dismiss the blogosphere as precisely that. But that misses the point, I think, and is blinkered snobbishness. Blogging and so on are forms of immaterial labor that complement the mass media rather than competing or subverting them. The distinction between amateur and professional in the field of media is becoming nonoperational. An amateur discourse that could disrupt the flow of mass media spectacle, stand apart from it and call it into question, is no longer possible — it’s just reality TV, or “lo-fi” music, or “remix” culture, all of which are tolerated and assimilated as genres. Mass media has become decentralized, but the ideology inherent in its form transcends the need for a central bureau of conspirators guaranteeing its efficacy. Instead, mass media, as Baudrillard concludes in a characteristic understatement, “realize the ideal one might refer to as decentralized totalitarianism.” We are all now contributing to sustain their form, the ideological “promise” of mass media.

What is that promise? The reduction of communication to flattened sign exchange. “The absolutization of speech under the formal guise of exchange is the definition of power,” he declares. He’s thinking of the referendum as the purest expression of this reduction — it translates, I think, into the way social networks now permit us to signal “I like it” with a click, encouraging the notion that registering naked approval and nothing more should be the horizon for communicative action. Isn’t that really all that matters? Others in the network are gesturing away, seeking approval, as are we ourselves; shouldn’t we merely exchange that appreciation as straightforwardly possible, so as to not to clutter the field and obscure the approval-seeking performances, the feints at identity?

Sign exchange at the homogenized level is the province of the consumer:

The generalized order of consumption is nothing other than that sphere where it is no longer permitted to give, to reimburse, or to exchange, but only to take and to make use of (appropriation, individualized use value). In this case,
consumption goods also constitute a mass medium: they answer to the general state of affairs we have described. Their specific function is of little import: the consumption of products and messages is the abstract social relation that they establish, the ban raised against all forms of response and reciprocity.

In other words, an exchange of “look at me” communication gestures, or of online broadcasts, do not constitute reciprocity; that’s just consumerism conducting itself as a communication system through us, with our serving as the labor to sustain it (the quasi-voluntary “immaterial labor” so-called post-Fordist firms have learned to exploit). We get to feel produced within the system as a person with an identity that can grow and respond in accordance with the objects and consumer practices the code systematizes and whose meaning we help shape. All communication is reduced to consumerism, which can be defines as leveraging the social code to enhance our personal brand.

Marcuse and the ideological genesis of needs

From the first chapter of Marcuse’s One-Dimensional Man, in which he argues that subjective “needs” are forms of social control, chains that we come to bind ourselves in voluntarily.

He makes several utopian claims that sounds a lot like the positive vision of the “networked information economy” — the idea that we can self-select our tasks and produce outside of the market/wage system autonomously, free of coercion and with a greater sense of satisfaction.

The technological processes of mechanization and standardization might release individual energy into a yet uncharted realm of freedom beyond necessity. The very structure of human existence would be altered; the individual would be liberated from the work world’s imposing upon him alien needs and alien possibilities. The individual would be free to exert autonomy over a life that would be his own. If the productive apparatus could be organized and directed toward the satisfaction of the vital needs, its control might well be centralized; such control would not prevent individual autonomy, but render it possible.

Built into that is an apology for the Soviet-style command economy, but the larger point is that “true” needs could be fulfilled without economic exploitation, leaving us to work at whatever we wanted, not “alien” tasks required by power or society. But what has happened instead is that capitalism has taken a “totalitarian” turn, a “non-terroristic political coordination of society” and also “a non-terroristic economic-technical coordination which operates through the manipulation of needs by vested interests.” I would modify that to mean that social control is maintained by the elaboration of what Baudrillard calls the “code” — by which our consumption serves signifying purposes (making use of the language of objects and services and public practices) that place ourselves within social hierarchies and constitute us socially.

These consumption gestures are prompted by what Marcuse labels “false” needs — “obsolete forms of the struggle for existence,” the main one, I would argue, is that of consumerist subjectivity, individuation in terms of gratifying precisely personalized consumption wishes, staying “cool” or belonging to a group defined by consumption practices (“keeping up with Joneses”). Marcuse:

Their satisfaction might be most gratifying to the individual, but this happiness is not a condition which has to be maintained and protected if it serves to arrest the development of the ability (his own and others) to recognize the disease of the whole and grasp the chances of curing the disease. The result then is euphoria in unhappiness. Most of the prevailing needs to relax, to have fun, to behave and consume in accordance with the advertisements, to love and hate what others love and hate, belong to this category of false needs.

This passage grasps the hedonic treadmill aspect of consumerism, the anxiety involved in needing to keep up to preserve the status and identity one has worked to establish through previous consumption gestures, and the dizzy weightlessness of perpetual innovation of the self. Knowing what to buy requires constant work, and this work helps reinforce or redistribute the meanings in the “code.” We believe that we must be “cool” in some way, and the grounds of that “cool” are always shifting beneath our feet. Marcuse is claiming that social participation on consumerist terms is “false” but what is the alternative in society as we find it, as we are born into it? Do we live in a jelly jar, as Stoney would say?

Echoing a tried-and-true Frankfurt school theme, Marcuse argues that we adopt the needs imposed on us by society as our own.

All liberation depends on the consciousness of servitude, and the emergence of this consciousness is always hampered by the predominance of needs and satisfactions which, to a great extent, have become the individual’s own. The process always replaces one system of pre- conditioning by another; the optimal goal is the replacement of false needs by true ones, the abandonment of repressive satisfaction.

“Repressive satisfaction” is the key phrase, an apparently oxymoronic concept that skeptics refuse to accept on the basis of common sense. It relies on the idea of a repressive totality that uses a phony freedom within it as a tool of domination. In everyday life we don’t bother with the totality, only our sliver of subjective reality, which affords much opportunity for apparent autonomous choice, for fleeting stabs at satisfaction of needs we can invest ourselves in and accept as our own. We may even generate these needs ourselves, but Marcuse warns that “the spontaneous reproduction of superimposed needs by the individual does not establish autonomy; it only testifies to the efficacy of the controls.” Such declarations invite accusations of elitism — no one accepts the assertion that “your needs are false and inauthentic.” The only recourse is to point to a person’s discontent, restlessness, dissatisfaction, depression as proof of a “false consciousness.”

“Alienation becomes questionable,” as Marcuse admits here, in a passage that synchs with much of the early Baudrillard:

We are again confronted with one of the most vexing aspects of advanced industrial civilization: the rational character of its irrationality. Its productivity and efficiency, its capacity to increase and spread comforts, to turn waste into need, and destruction into construction, the extent to which this civilization transforms the object world into an extension of man’s mind and body makes the very notion of alienation questionable. The people recognize themselves in their commodities; they find their soul in their automobile, hi-fi set, split-level home, kitchen equipment. The very mechanism which ties the individual to his society has changed, and social control is anchored in the new needs which it has produced.

Social control is rooted in our identification with objects, in our social production of making objects meaningful by using them for our identity-making.

Pleasure as productive force

From Jean Baudrillard, “Beyond Use Value”:

In the process of satisfaction, he valorizes and makes fruitful his own potentialities for pleasure; he “realizes” and manages, to the best of his ability, his own “faculty” of pleasure, treated literally like a productive force. Isn’t this what all of humanist ethics is based on — the “proper use” of oneself?

Our assumption of the market-based ethics of turning things to account, of consuming efficiently, means we want to make our enjoyment of goods count, or matter, beyond the pleasure itself — we experience the productivity of it as pleasure, and without that sense that our enjoyment will be in some larger sense useful ,setting an example, reinforcing cool, etc., we no longer actually enjoy things.

Costs of consuming information goods

From Yoachai Benkler’s The Wealth of Networks, chapter 4:

The efficient allocation of two scarce resources and one public good are at stake in the choice between social production — whether it is peer production or independent nonmarket production — and market-based production. Because most of the outputs of these processes are nonrival goods — information, knowledge, and culture — the fact that the social production system releases them freely, without extracting a price for using them, means that it would, all other things being equal, be more efficient for information to be produced on a nonproprietary social model, rather than on a proprietary market model.

Benkler is arguing that intellectual property regimes make for deadweight loss. Agreed. But the “release” of informational goods produced and distributed in social networks is not free; there is a cost to the user in stress, in insecurity, in the fear of exclusion, of not knowing, not keeping up, being hopelessly out of style, being obscure. The self — the individual subject — within systems of social production is fundamentally insecure and unstable, and is compelled to continue to produce information by consuming other information and goods in a social forum under conditions the require the consumption to be competitive, signifying. It can not be internal to the individual or merely gratify the individual’s needs or desires. The individual’s consumption is compelled by ontological insecurity; he must reproduce himself through information consumption, thereby establishing a public self that registers and temporarily eases the insecurity while at the same time contributing more information goods to the system. The system itself, as a whole, is a capital good for the industries (media and communications, etc.) that control the infrastructure of the social networks.

The value of social production is that can exploit that source of emotional motivation without having to provide any wage compensation.