The links between financialization and relativism…

As one of my New Year resolutions that I actually hope to keep, I am aiming to increase the frequency and regularity of my blogging!

In the 1940s, the Bretton Woods system developed as countries attempted to regulate international finance after the problems the Great Depression and laissez-faire economics had caused the international system. However, since the 1970s after the Nixon Shock, there was the growth of high risk finance and deregulated markets that coincided with the rise of neoliberal ideology that has the strategic aim of furthering the capitalist project.

Free-flowing capital gained dominance as capital controls were reduced and removed, deregulation accelerated, and profit for the rich increased as social welfare and safety nets were removed, debt – especially private debt (including financial debt and household debt) – and credit cards grew so that capitalism and the markets could expand more and more. The system has grown increasingly more unsustainable as the bailouts of the financial sector rose in the 1980s onwards, especially, alongside getting bigger and bigger with the recent crisis resulting in a £1.5 trillion bank bailout in the UK alone!

This expansion of capitalism relates to the growth of an individualism logic that emphasises consumption, consumerism and false needs where people are told they ‘need’ things for their identity to be complete. They ‘need’ to consume things to feel ‘whole’. This is especially key for the rise of private debt to be enough to sustain the high leveraged finance sector. What develops is a culture of disposability, where part-time flexible, low-paid, long hour jobs increase – with the promotion of a ‘dog eat dog’ world where everyone is out for themselves and anyone on benefits is deemed a ‘scrounger’. This climate of fear is responsible for approximately 1.8 million not applying for benefits when they are entitled to.

The growth of individualism relates to the increasing primacy of individual ‘freedom’ over equality, something I discussed in my dissertation with reference to the work of John Rawls:

In trying to construct a morally just social order Rawls advocates a ‘justice of fairness’, where operating behind a ‘veil of ignorance’, representatives of citizens take part in an ‘original position’ (thought experiment) to construct a social contract where fairness/equality prevails as the representatives are unaware of the specific characteristics of those they represent. Two essential principles guide Rawls’s theory; firstly, the principle that everyone should have maximum liberty without impeding upon others; and secondly, social and economic goods are easily accessed and to the advantage of everyone. However, Rawls puts the first before the second.

For me, these sociopolitical and related ideational changes relate to the development of post modernist and relativist views that argue everyone is right and wrong, just with different starting points. This argument relates to this conception of letting everyone do what they want because everyone’s argument is right and wrong and so respect for absolutes are diluted. I faced this argument a lot recently in regards to my support and commitment to veganism, where absolute truths of respect for life, fairness, compassion and morality are diluted and people use the argument “live and let live” to ironically justify the murder of approximately 58 billion animals a year through meat, egg and dairy production. Jay Baker will be challenging some of these issues soon in a vlog, and Jay and I will be tackling them again in a vegan focused podcast for the Break-In Project.

For me, there are some things that are just wrong. Torturing, murdering and eating dead animals and their produce, for me, is wrong. Creating a culture of stigma where people don’t want to claim for benefits because they feel that they are a ‘scrounger’, is wrong. Promoting individual freedom over respect for equality, for me is, wrong. The finance market expanding more and more, as the system grows through indebtedness whilst people lose their jobs, have their wages cut and can’t afford to meet basic needs whilst the 1% get richer, is wrong. There is no relativist get out of jail card here. It’s wrong. calvin-and-hobbes-on-postmodernism

The relativist argument is a capitalist dream. There is nothing wrong with other people having different opinions, I have argued in favour of providing groups and parties such as the BNP a platform to show the real ignorance underlying their political views. But, using the relativist argument of ‘everyone is entitled to do what they want’ without defending your position is an easy way out of saying I am not prepared to let my views and values be challenged by any new information. That’s why the vegan argument gets so many people’s back up. It is a question of lifestyle, people often don’t want to think about this too much and cast any evidence to the contra as ‘biased’ or ‘unscientific’.

Whatever your opinion on veganism is, the point is relativism has no place in progressive politics that strives for real change. It’s a nice academic tool, but not one based in a political project that has fundamental truths about what is right and wrong and what needs to change.


14 thoughts on “The links between financialization and relativism…

  1. A few observations

    US left the Gold Std in order to pay for its debt incurred for bailing out Europe after WW2, Vietnam and its space program. (winning the cold war) It was done to avoid another depression. The super cycle of money creation which has now ended started there at the behest of Govts, not banks. Govts wanted more money creation and they got it.

    Financialisation did not really kick off until the early 80s. mainly as a result in the communication revolution thru infotech. Govts are usually behind the curve when it comes to tech.

    Glass-steagall did not end until 1999.

    In 1974 to set up a bank you had to comply with around 4k pages of regulation, Today its closer to 15k. What this does is create room for arbitrage thru different interpretations and lack off thereof of the rules. Its not lack of rules that are the problem, complexity is the problem.

    1.5 trillion debt did not come about from the bank bailout. They came about from the bubble in last decade. A recession is basically a giant re pricing of the economy. The bubble inflated prices over and about what was reality. In short we now have to pay for the unreality of those prices in the boom.

    Markets are about price signals, capitalism is about property rights you are confusing the two.

    There is lots more, but I have not time to deconstruct.

    1. Thanks for your comment.

      What did I say in the post that would go against your correct point re US leaving the gold standard?

      Yes, Financalisation did really take off in the 1980s hence why I said “The system has grown increasingly more unsustainable as the bailouts of the financial sector rose in the 1980s onwards, especially”. But the conditions were especially encouraged after the 1970s. The financial sector also grew a great deal with events such as the Big Bang.

      I don’t know what your point is re glass steagall?

      I agree with your point re regulation being too complex.

      Re 1.5 trillion bank bailout read this link – of course, you’re also correct in stating that such debt relates to the asset bubble in housing, especially, from the decade before.

      Markets are heavily related to capitalism. Political economy is key here. You can’t ignore the effect markets have when it comes to exploitation being central to making suprlus value (profit), the idea of exchange and use values.

      I welcome any more comments.

  2. This is a good quote re what I am saying in terms of the links between the Nixon shock and financialisation:

    ” the end of the Bretton Woods system unleashed two decades of financial globalisation, encouraged by the deregulation not just of currency markets, but also of rules about banking and investment.

    This led to increased flows of private money to rich and poor countries alike, which helped boost growth but also created greater instability.

    The rapid reversal of such private sector flows when currencies were threatened with devaluation was the central cause of the Asian financial crisis in 1997-98, which spread to Russia and eventually Argentina.

    The resources of the IMF proved inadequate to compensate for the run on their currencies, and the adjustment proved painful, with sharp falls in GDP.

    Since then, many Asian countries, including China, have accumulated large currency reserves to insulate themselves against future crises, avoiding the need to call on the IMF. ”

  3. Of course its a problem of the political economy. Your point is that is a problem of capitalism. where capitalism and Markets meet power and politics is the Political economy.The Crash came about thru the movement of goods and capital wealth it created, Markets was the mechanism that alerted us to the problem, not politicians or their supporters.

    The system became unsustainable because of 1 billion people becoming productive in the the world economy, adding to its overall wealth and that wealth moved around the planet looking for a home or place of safety. When you create too much of something quickly it tends to devalue its self. Money is not different to any other commodity, too much and the value goes down.

    I am not sure you understand what the FIAT means in Fiat currency. It mean by our will/order its a mark of power All that supports the Fiat is the measure of money in circulation against our credibility to paying the bearer of our money or bond. Our money is trust that makes us a capitalist economy opposed to the socialist model of (and the Aztec one) money as blood, seat and labour.

    What you seem to be looking for is a risk free version of capitalism, a pure version of markets and a holy version of democracy. Its not its always unstable, like nature itself.

    All the ism stuff, neo, capitalism ect ect is nonsense. You are confusing causes with symptoms.

    Your philosophical point is also wrong. I am sure you have done Berger/Luckmanns social construction of Knowledge in Social Science.

    Relativism and Absolutism are exactly the same thing, you too are going from one extreme to the next >>>>my support and commitment to veganism, where absolute truths of respect for life, fairness, compassion and morality….<<>fairness, compassion and morality<< are totally meaning less without context. without any context they are just relative statements. Fairness is a word that only exists in English, it is certainly not found in nature.

    I see from your links you are not very open minded. All your links are Left wing in someway. If you oppose something you have to at least understand what you are opposing. Like a pilot you need all the instruments working to fly the plane.

    I admire the fact you are trying to grapple with these issues, but the future is unknowable it appears and acts at times in a deterministic manner, but its not. Welcome to the age of uncertainty of that I can be certain.

    1. Firstly, of course context is important when defining values such as compassion; would you like me to sit here and write detailed explanations of all those terms for you? Would that satisfy your demands? This is my point altogether, you start de-constructing the very meaning of words to the point where it means nothing. In fact, I placed my statement in context referring to “people use the argument “live and let live” to ironically justify the murder of approximately 58 billion animals a year through meat, egg and dairy production”. But if people have to define every term they use we would be going on forever in meaningless dialogue about knowledge and deconstruction, not getting anything done – this is exactly my point. It’s fairly obvious from my post that for me the murder of animals is not compassionate, moral or fair. Do I have to do a separate post to explain why this is? Or can I state such terms without having to de-construct their meaning? Or shall we just sit here and act as though nothing other than the deconstruction of meaning is important. Of course, doing sociology i know the importance of this, but when it comes to real here and now political change with ordinary people there is only so far you can go with this. But if you want more context, please let me know.

      Secondly, yes, it is a problem of a specific type of capitalism: financial capitalism. It became unsustainable because of the ever growing need for people to spend, get in debt to support the asset bubbles whilst the financial sector becomes increasingly leveraged at an unsustainable rate, alongside the falling rate of profit hitting as to make more profit, companies have to increase prices, reduce wages in order to deal with the increasing need of capital costs (such as technology). Then there is less consumer demand as people have less disposable income, hence the profit actually goes down. This is one of the many contradictions within this current financial capitalism. Other ones include austerity measures that actually cut GDP growth, ignore the massive role of private sector debt whilst public sector debt is around 70-80% of GDP when it was around 250% after WW2.

      Thirdly, stop with the inaccurately assumptions. I would be the last to believe in an ‘ideal’ ‘wholly’ market or system of democracy – I wouldn’t be in the Labour Party if I did.

      Fourth, to say ideologies such as neoliberaalism are nonsense is bizarre. If you’re into deconstruction of knowledge then you should know about discourse, and ignoring the dialectal relationship discourses such as those that relate to neoliberalism have on the policies and structure and operations of political economy is naive.

      And lastly, I know a lot about other opinions than my own, I wouldn’t have got through university without evaluating other arguments.

      1. My point is not about ignoring context, it is about the problem of this extreme form of relativism that has taken hold in society that justifies people doing what they want. It feeds into this idea of individual liberty over anything else, and I find it corrosive.

  4. Hi Jane, nice blog – here’s some questions for you mainly around the connection you raise between relativism and world outlook;

    You state that killing and eating animals is fundamentally wrong – but would you extend this universal rule to the Inuit inhabitants of the Arctic circle? These people of course rely on the killing and consumption of animals for a huge percentage of their diets whilst they also use animal products for the production of clothing and shelter.

    Your ability to decide to not eat meat is of course relative to the world that you inhabit. Some people do not have this choice and for them the consumption of animals is an integral part of being, not simply serving as a means of survival but as an important aspect of their identity.

    In my own opinion it is not the killing of animals that is fundamentally wrong or even the problem, rather it is the inhumane and brutal conditions that they are kept in prior to this. I would speculate these conditions have arisen in the developed world largely as a result of a deregulated free markets and perceptions of animals as ‘lesser beings’ (spread in some cases by religious teachings).

    Can relativism be used to justify any course of action, however greedy, brutal or immoral? Not in my opinion; surely this is akin to ignoring everything we do know on the basis that it may all be wrong, at the end of the day what we do know is all we have.

    1. Thanks for your comment, Beeman.

      For most people on this planet, they do not need to eat meat. As I have said above, I am not denying the importance of context. What I am criticising is the idea that everyone can do what they want without thinking about the consequences of their actions. I am not denying the importance of relativism as an academic tool, as I mentioned in the blog post, but for me only in very extreme conditions would eating meat be acceptable. It isn’t about the inhumane conditions, it is about the fact that killing a living thing against its will when there is no need to do so is a basic truth that should not be broken; only in very rare circumstances should that ever happen, if at all.

      So my argument isn’t to deny context, and I am sorry if that is what i appear to have done. It is rather to argue that some things are wrong and should be avoided at all costs. There are some things that should just be basic human values, and not killing other living beings for me is one of them.

      1. Hey again,
        I think its right to appreciate the infinite number of contexts that exist when coming to firm, moralistic and universal decisions; for me this kind of plurality means being able to assign complicated actions as either ultimately ‘right’ or ‘wrong’ is misguided and doomed to failure from the start. Is there any need for things to have to fall into one of two categories? Again, we can see modern roots of this binary view of the world within the bible and other religious texts.

        As in the case of the animal killing and eating scenario, what starts as a relatively straight forward assertion; ‘killing animals is wrong’ immediately becomes more complicated as we start to add exceptions for certain people like the Inuit who need to kill animals to avoid certain starvation. To further complicate matters, for us in the UK it is very easy to live our lives without eating animals, but what about other developing countries where refraining from eating animals may not be impossible but much more practically difficult, expensive or socially unacceptable? At what point is it acceptable for someone to draw the line and eat a plate of meat and – with all due respect – what exactly is it that gives you (or I) the knowledge or standing to pass such a judgement on them having never met them or been to place where they live?

        Acting without considering the consequences is exactly that; irresponsible. Relativism simply refers to the fact that we can never be sure of absolute knowledge because all our knowledge is based on some form of subjective experience. But this is no license to act irresponsibly. What we do have is multiple currencies of social norms and all we can do is act within these whilst appreciating they will vary from place to place and from person to person.

  5. I never argued I had an absolutist, universal perspective either – both extremes are wrong:

    “If relativism is true, why should we care about anyone else’s opinion about anything?
    • If relativism is true, what would motivate us to pursue truth or science or beauty or achievement of any kind?
    • If absolutism is true, what makes it true? Isn’t the human mind the only place where goodness, beauty and truth can exist?
    • If absolutism is true, doesn’t this lead to arrogance and intolerance, from people who claim to be experts in the truth?”

    I repeat, I was criticising the growth of the argument used against people that have opinions that everyone should be able to do what they want, because everyone is right in their own way.

  6. A good example would be homophobia.

    For me, and for a growing number of people in society, homophobia is never right. Yes, I can understand why it happens through context and history, but this is not the same as it being right. So people who hold homophobic views should not be seen as being right in their own moral universe, rather they should be understood. If we have no conception of what we think is right, how do we change things?

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