Democracy for Everyone!

Good news, everyone: finance is getting more democratic, because technology.

You know how democracy works, right? It means that a service that was previously only sold to some people gets sold to everyone now. It used to be that only finance dudes got to have finance, but now everyone does. Hooray! Let’s watch a video of democracy happening.

What were we talking about? Oh yeah: today’s breathlessness about the democratizing potential of financial institutions comes from Mohammed Al-Erian, who, as “Chair of Barack Obama’s Global Development Council,” apparently has a job whose sole requirement is an uncriticial embrace of the Silicon Valley doctrine of social policy, i.e. the best way to deal with the social problems caused by deterministic technological change and inevitable laissez-faire economic governance is just let them keep happening.

He assures us that this creeping expansion of financial logic into all areas of our lives isn’t just democratic, it’s also disruptive. I mean, what could be more disruptive than just letting faceless, inevitable social processes (“innovations suddenly appear…mechanisms emerge… business models face challenges”) proceed without any attempt to manage their social consequences at all?

Tackling these claims to disruption, democratic potential and to brand-new, never before-seen processes can get pretty tiring. Jill Lepore at The New Yorker has done a pretty devestating take-down of the disruption discourse, attacking head-on the idea that economic change proceeds in big leaps rather than incremental steps. Peter Frase at Jacobin points out that those most committed to “disruption” get cold feet when the disruptions aren’t derived from a tech-enabled business model. Evgeny Morozov has made his career skewering those with a growing religious faith that “more tech means everything is better for everyone” and, if he can be accused of throwing out the baby with the bathwater, part of the reason is that there is just so, so much dirty bathwater.

There are lots of reasons to be happy about increased access to certain financial services. Bringing down the prices of life insurance and small business loans could put them within the reach of people who didn’t otherwise have access to them. That could make their lives better. Al-Erian may be right that technological change will “reduce the cost of financial intermediation while providing for fairer risk-pooling outcomes and better credit underwriting.”

But here’s the thing: cell phones are now within the reach of almost everyone, and it hasn’t made society more democratic. Buzzfeed may have displaced community newspapers, but I can’t see how that makes things more democratic. The last 40 years of financial innovation brought us near-unprecedented levels of wealth inequality and the largest economic crisis since the 1930s. Why would anyone believe that the next 40 years of financial innovation are going to automatically create a utopia of equal democratic citizenship? How can Al-Erian keep using this word “empowerment”  to describe things like kickstarter, Kiva and bitcoin? It’s inconceivable.

Dear Professor Johnson

I hope that you won’t mind too dreadfully me searching for your contact information online beyond the bounds of the forum where I found this piece to which I have a quick response. The thing is, one thing that is often missed by Zizek’s critics is that he makes otherwise difficult theory lucid, which is at least in part why he is so adored by undergraduates; that he also makes otherwise lucid theory difficult is perhaps why he is less appreciated in other circles. As someone on the left who believes that changing the world also requires really seeing it, the thrill in reading his work is that seldom do I find myself disagreeing with what seem to be quite astute characterizations of numerous situations (Berlusconi as clown, Paris riots checking the connection, financial crisis as yet indeterminate). Yet, overall, I share some anxiety that someone whose orientation toward Stalinism seems so…hazy, is more dangerous than he is worth. Bravo for taking his work seriously enough to critique it. I’ve signed up for the Dissent blog just for a chance to read your ongoing posts on the matter. But I have a question; hence the email.

At the core of your most recent post, you quote, from Did Somebody say Totalitarianism? an excerpt which ends with the following:

“So what if one is accused of being “anti-democratic,” “totalitarian…“.

I recently framed an essay, after laying out a troubling picture of the relationship currently existing between reporters and politicians, with a similar, apparently glib “so what?” Yet my intention was not to dismiss the problem out of hand, but (while obviously being a bit provocative) to suggest that solutions to the problem lay in better understanding the nature of our anxiety. That is, I intended that the question be read in the register not of ‘we should not be worried about it’ but in the register of ‘what exactly is it, as a matter of principle, that we are worried about?’ Your latest piece depends on an interpretation in the former register, and I am not sure it provides enough evidence to justify that interpretation. Can you say more about why you think that Zizek is being glib? Does his argument in the book, following this quote, support your reading?

This is especially important, given that there is evidence that this wasn’t his intention. First, he doesn’t say ‘so what if we return to totalitarianism'; he says “so what if one is accused of being anti-democratic and totalitarian.” Neither the accusation, nor even a personal orientation, would necessarily imply endorsement of a totalitarian politics. The second, though you have dismissed it out of hand, is the use of ‘inverted commas’ which suggest that it is only “democracy” as defined under liberal democratic coordinates ( an orientation to question of democracy you clearly don’t endorse) not democracy in the ideal, which he is attempting to muddle.

There is further support for this more generous reading; one could look outside the book to sources in which Zizek has unequivocally criticized the authoritarian tyranny of Socialist Bloc policies: here in his review of The Lives of Others (in which he suggests that western leftists could be easily be misled by the film about how bad the system was) and here (a video, in which he says at 2:25 “Let me make one point extremely clearly. I think that the Communism of the 20th century – more specifically, all the network of phenomena we refer to as Stalinsim, are maybe the worst, ideological, political, ethical, social (and so on) catastrophe in the history of humanity.”) But it is perhaps fair to respond to such outside sources with an observation that Zizek is wont to hedge his bets.

I would have put these remarks in the comments, but that doesn’t seem to be possible on the Dissent website.

Looking forward to your next critique, and if you find time, some further thoughts on this specific example.