Zizek: First as Tragedy, Then as Farce Part II: It's Ideology Stupid!

So here's the part where I hash out Zizek's notion of the tragedy that we find ourselves in.  There are a ton of ideas in this chapter that all warrant some thought, but I tried to stick to his thoughts on the economic crisis and modern capitalism.

Zizek argues that the events of 9/11 symbolized the end of the Clintonite period and marked the beginning of a new era of walls, both outside and within the nation-state.  This highly symbolic and violent act, literally ripping down the two most emblematic buildings in the heart of Manhattan, and taking the lives of American civilians on American soil, ripped a hole in the notion of peaceful capitalist globalization cultivated by Clinton.  A politics of vengeance and division followed, both at the populist, blue-collar, “These Colors Don’t Run” bumper-sticker sporting level, but also among the elites at the highest echelons of society, in America and abroad.  9/11 affected almost everyone in the world, regardless of class or nationality.  The common feature that Zizek points out is fear.

He gives an example from a Newsweek article that describes a “members-only phenomenon ... those with money are increasingly locking their entire lives behind closed doors…” Focusing on elites, Zizek states that, “one cannot help but note that one feature basic to the attitude of these gated superrich is fear: fear of external social life itself.  The highest priorities of the ‘ultrahigh-net-worth individuals’ are thus how to minimize security risks—diseases, exposure to threats of violent crime, and so forth.” Obviously, the phenomenon of class imbalance and the rich excluding themselves is not some new aspect of the 21st Century. However, on 9/11, the lives of accountants, lawyers, bankers, were targeted; the “masters of the universe” were violently intruded on (along with thousands of others) and their separateness (in all aspects) from the average citizen only increased after 9/11.

 

On the other side of this same coin there continues to be extreme poverty, people living in slums, foreclosure, and homelessness.  Zizek gives the example of Sao Paolo, which boasts 250 heliports in its central downtown so that the rich will not have to mingle with ordinary people, giving the city the feel of a movie like Blade Runner or the Fifth Element. Considering how out of touch with an average person’s life one must be, living behind such walls, is it any surprise that bankers felt they deserved sympathy instead of blame and animosity when the financial markets collapsed in 2008?

In his first chaper entitled “It’s Ideology, Stupid!” (a little jab at our buddy Bill’s famous quotation), Zizek’s stated goal is to “offer a diagnosis of our predicament, outlining the utopian core of the capitalist ideology which determined both the [financial] crisis itself and our perceptions of and reactions to it.” Scholar Francis Fukuyama declared this “utopia” with his “end of history” argument in the 90s after the fall of Communism, essentially ordaining western liberal democracy and free-market capitalism as the winning world order, which would almost certainly lead to prosperity and peace for all.  Zizek sees this utopia dying twice with the collapse of the democratic political utopia on 9/11 and the economic utopia of global market capitalism, which finally croaked in the summer of 2008.

Unlike most of us naïve Americans (myself included) who were caught totally off guard by the collapse of Bear Stearns and then Lehman Brothers and the ensuing chaos two summers ago, Zizek was not surprised. Indeed, he opens his chapter with the statement that “[t]he only truly surprising thing about the 2008 financial meltdown is how easily the idea was accepted that its happening was an unpredictable surprise which hit the markets out of the blue.” Zizek thinks that it took a “sustained effort of willful ignorance,” to not see the trouble brewing. Wait a second Zizek!  Even the legendary and oracular Alan Greenspan, someone who presumably did his homework, was shocked at what happened!  A quote from a Congressional Oversight Committee hearing that took place after the crisis hit witnesses Greenspan basically renouncing his most fundamental belief about the market:

Henry Waxman: This is your statement. ‘I do have an ideology. My judgment is that free competitive markets are by far the unrivalled way to organize economies. We have tried regulation, none meaningfully worked.” . . . Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Alan Greenspan: “I found a flaw in the model that I perceived as the critical functioning structure that defines how the world works . . . Those of us who have looked to the self-interest of lending institutions to protect shareholder equity, myself included, are in a state of shocked disbelief.” 

Zizek takes this further, arguing, “Greenspan’s mistake was to expect that the lending institutions’ enlightened self-interest would make them act more responsibly, more ethically, in order to avoid short-term self-propelling cycles of wild speculation, which, sooner or later, burst like a bubble. … What he forgot to include in the equation was the financial speculators’ quite rational expectation that the risks would be worth taking, since, in the event of a financial collapse, they could count on the state to cover their losses.”

Indeed, he argues that the “economic meltdown is a result of state intervention: when in 2001, the dotcom bubble burst (intellectual property), it was decided to make credit easier in order to redirect growth into housing.” This explosion of credit led to a booming mortgage market where banks sliced and diced the debt this market was creating (much of it “subprime”) into complex derivatives, sold them to investors, and hedged their bets with credit-default swaps. As soon as people started defaulting on their mortgages en masse, everyone was caught in the web, and we were fucked.  This was not the work of a few bad lenders and greedy bankers, but a systemic move of political economy with thousands of players. The take-away here is that there’s absolutely no such thing as a neutral, “free” market. In every particular situation, market configurations are regulated by political decisions. 

Zizek takes an example from the international “free market.”  In Mali, the two pillars of the economy are cotton in the south and cattle in the north. Both are in trouble because Western powers violate the very rules they try to impose on impoverished Third World nations. Mali produces top quality cotton, but the US government gives its own cotton farmers subsidies that amount to more than the entire state budget of Mali, so its no surprise that they can’t compete.  Malian beef can’t compete with heavily subsidized EU milk and beef.  In the words of the Malian economic minister: “we don’t need your help or advice or lectures on the beneficial effects of abolishing excessive state regulation; please, just stick to your own rules about the free market and our troubles will basically be over.”

The cracks in the façade of liberalism created by this financial crisis reveal that the free market is not some natural or universal system that always tends toward the best outcome for society, but rather a politically manipulated system that benefits the few at the expense of the rest. The market is ideology. But, even if this is true, isn’t it the best economic system, the best ideology we’ve got? Wasn’t the bailout necessary to keep us from plunging off the deep end? And isn’t everything better now that government bailed out AIG and all the big banks? Yeah! What about that bailout?

Zizek tells us that while oftentimes we talk in order to avoid doing anything, “[s]ometimes we do things in order to avoid talking or thinking about them . . .  such as throwing $700 billion at a problem instead of reflecting on how it arose in the first place.” The bailout was necessary, insofar as it was needed to create the impression that those in power had a plan and were doing something (they tried to give it the innocuous name “TARP,” but bailout has stuck), but also because markets have to do with perception.  Zizek points out that “[m]arkets are based on beliefs (actually beliefs about other people’s beliefs) so the bailout really only had to do with how the markets would react, not with the efficacy of the solution.” In the end, this strategy worked.

However, the fact that taxpayer money plugged the gaping hole in our economy spawned outrage on both “sides of the aisle.” The government’s rescue of the banking sector was seen as the government taking the side of Wall Street at the expense of Main Street. Republicans, in a precursor to the “Tea Parties” they fomented against the reform of healthcare, started calling the bailout “socialist,” as government interfering in capitalism, something supposedly highly “un-American.” Zizek points out that this is total rubbish, what he describes as “pure ideology.” The primary aim of the bailout was to rescue the rich and the lenders. As he points out, “[i]n a supreme irony, ‘socializing’ the banking system is acceptable when it serves to save capitalism.” Now that utter collapse has been averted (for now), calling it socialism is effective populist theater, but at the time, Democrats and Republicans were on board.

Interestingly, Republican Jim Bunning was right on the money when he remarked that bailout or no bailout, “someone must take these losses”.  Those who were screaming about the “moral hazard” inherent in our economic system, where banks are protected against losses, and get to keep their profits and bonuses, refuse to see the bigger picture. People buying up copies of Ayn Rand’s Atlas Shrugged, the “greed is good” crowd who complain that if you are incompetent in business you’ll just be given a handout by the government, are, as usual, drinking the Kool-Aid of capitalist ideology. Zizek tells us that “[i]t is not the great creative geniuses who are now helping out lazy ordinary people, it is rather the ordinary taxpayers who are helping out the failed ‘creative geniuses.’”

For example, contrast the big bank bailout with the allowed bankruptcy of GM. Zizek points out that “[i]n the case of GM, where the survival of tens of thousands of active and retired workers is at stake, there is, of course, no emergency, but, on the contrary, an opportunity to allow the free market to operate with brutal force.” The unfortunate truth is that “welfare on Main Street depends on a thriving Wall Street.” This is what Zizek calls a “non-transitive relationship: while what is good for Wall Street is not necessarily good for Main Street, Main Street cannot thrive if Wall Street is feeling sickly, and this asymmetry gives an a priori advantage to Wall Street.”  The crowd who hold placards saying, “Save Main Street not Wall Street!,” unfortunately don’t realize that we’re in too deep.  If we tear down Wall Street, Main Street will be flooded with panic and inflation.

This phenomenon is what Zizek refers to as a “risk society,” where, for most, risk appears as blind fate.  In his words, “[i]t is indeed true that we live in a society of risky choices, but it is one in which only some do the choosing, while others do the risking.” To go back to something touched on earlier, we have arrived at a status quo where financiers are paid extraordinary sums to find new “exotic” ways to gamble with ordinary people’s money, or at least convince ordinary people (through pension funds and the like) that the gambling that they are doing is risk free.  The vast scale of this operation makes it so dangerous, that the state, as the citizens “protector,” must step in and cover the losses and cannot fully punish the “house” (financiers) or hold it accountable because they’re the only ones who control the game and know its rules, not to mention the fact that they give a hefty portion of their winnings to the politicians being asked to do the punishing.

So as we angrily watch our savings disappear after we’ve been “let go” from work, while savvy bankers float away on their golden parachutes riding the updrafts of bailout money into the sunset, Zizek reminds us that “we should bear in mind that since this is actually a form of blackmail we must resist the populist temptation to act out our anger and thus wound ourselves. Instead of such impotent acting-out, we should control our fury and transform it into an icy determination to think—to think things through in a really radical way, and to ask what kind of a society it is that renders such blackmail possible.” We must do this because the “central task of the ruling ideology in the present crisis is to impose a narrative which will place the blame for the meltdown not on the global capitalist system as such, but on secondary and contingent deviations (overly lax legal regulations, the corruption of big financial institutions etc.) Thus, the danger is that the predominant narrative of the meltdown will be the one which, instead of awakening us from a dream, will enable us to continue dreaming.”

Of course, the social and economic system in which we live, capitalism, has been preparing for this very task (propaganda or PR) for a long, long time, and it excels at it.  As Zizek points out, capitalism has been evolving and adapting like everything else from the model of central bureaucratic control to the network model.  The start of this adaptive shift began around the time of the riots of May ’68 in Paris and the counterculture movement here in the States, and has since become subtly all encompassing. In Zizek’s words:

The new spirit of capitalism triumphantly recuperated the egalitarian and anti-hierarchical rhetoric of 1968, presenting itself as a successful libertarian revolt against the oppressive social organizations characteristic of both corporate capitalism and Really Existing Socialism—a new libertarian spirit epitomized by dressed-down “cool” capitalists such as Bill Gates and the founders of Ben and Jerry’s ice cream.

The struggles of the 60s did have an effect on society, but their radical power was co-opted into marketing schemes, which sold the masses a more toned down version of revolution.  Zizek remarks that the “demands for new rights (which would have meant a true redistribution of power) were granted, but merely in the guise of ‘permissions’—the ‘permissive society’ being precisely one which broadens the scope of what subjects are allowed to do without actually giving them any additional power.” This is a key point, because a crisis has just unfurled on the world stage and there is a serious potential for change. People are confused, outraged, and suffering, but the hushed voice in the background continues to whisper: “yes, yes, let’s change things, but slowly…one step at a time…we need to make sure we get our economy back on track, growing again, happy again…in total control…”

Of course, today we have corporations “with a conscience” like Whole Foods, or “hip” tech companies like Google whose motto is: “don’t be evil.”  Aren’t they our shining hope for a better tomorrow? Nope! Not according to Zizek anyways. He scrubs away this feel-good veneer, reminding us that “[c]apitalism is a system which has no philosophical pretensions, which is not in search of happiness.” It has no worldview, no civilization.  Instead it can accommodate itself to all civilizations, from Christian to Hindu to Buddhist, from America to China to Dubai.  The only thing capitalism says is,  “Well, this functions . . . if people want to live better, it is preferable to use this mechanism, because it functions.” Its simple criterion is efficiency. 

Zizek asks us to think about “all the features we today identify with freedom and liberal democracy (trade unions, the universal vote, free universal education, freedom of the press, etc.)”  These, he argues, “were won through a long and difficult struggle on the part of the lower classes throughout the nineteenth and twentieth centuries—in other words, they were anything but the ‘natural’ consequences of capitalist relations.” Anyone who says differently, who thinks that capitalism and freedom are synonymous, that there is a natural link between capitalism and democracy, is cheating with the facts.

So if capitalism is bankrupt, democracy is gridlocked, injustice is as rampant as ever, and the populists flinging tea bags are on the lookout for a new fascist who will tell them what they want to hear, where can we turn? To the Democrats? Is it their shining hour? Obama is president! But as one homeless man's handmade sign put it so perfectly, "I still need change!"  To the radical Left? Well, you'll have to wait until next week because these fingers are tired. Next week I will tackle Zizek's "Communist Hypothesis."