There is an excessive surplus to Capital than there is a world to be
On the Virtual Boundlessness of Capital, the Financial System, and Bitcoin
Let us make our way into the central subject of this essay by considering what I will claim is the paradigmatic bedrock of Capitalism: bitcoin. Yes, bitcoin — I kid you not, even I am having a bit of a moment coming to terms with talking about a topic that is notorious for being mishandled and misconstrued often times, not to mention, quite meme-able. I will restrict myself to talking about the physical and procedural requirements for bitcoin and its mining at its more general and bare terms.
So, let’s consider bitcoin: at its most basic, the mining of cryptocurrency like bitcoin requires multiple computers, like specialized computers ASIC (application-specific integrated circuit) miners built for the sole purpose of mining. This implies the technical requirement of electricity in order to even make these computers functional. Another technical requirement is bitcoin mining software and being able to join a mining pool — it is often recommended that mining is not done so solo, as the payout would remain minimal. At its most bare, this gives us a sense of what is require to mine a bitcoin entails. Now, let’s just say we get into bitcoin and start getting into the mining process. These processes entail an algorithmic, computational work to solve a problem which hashes out what is called a SHA-256 (Secure Hash Algorithm); therefore, a miner is trying to incorporate new, valid transactions into the current block where the mining pool is working the process out of. However, this also means that:
The more computing power a miner controls, the higher their hashrate and the greater their odds of solving the current block (What is Bitcoin Mining and How Does it Work?)
The consequence of this implication is quite significant, insofar as this entails a certain arms race of the technical means by which a person mines bitcoin. And further, as the problem-solving process by which bitcoin is generated, another implication comes to light: at some point, the limit-point of the algorithm gets pushed back. This means a couple of things for the technical conditions for us to mine bitcoin: the process takes longer. And just the same way that before more computer power meant a higher hashrate and greater possibilities to solve the current block, with the algorithm’s limit-point being pushed back, we need more electrical energy input and more processing computational systems. Our first point in setting up the discussion that will follow our discussion of bitcoin is just this: we observe a constant exhaustion of material means at the level of virtual, liquid Capital accumulation.
Now, surely someone will try to refute the problem we have brought up by arguing that we could have better computers, so what gives? But this overlooks the most significant aspect we want to highlight about the problem we are going to delve further into. Namely, this counterargument overlooks the problem structurally exemplified by bitcoin and its algorithmic generation. The systematic problem is that the algorithm’s limit-point can be pushed ad infinituum in theory, it only spills out an excess of Capital generating itself as if its generic point is an exploitable glitch. What this is an example of is the virtual boundlessness of Capital.
But let’s step away from the bitcoin example — so far, the example is useful for us to articulate a structural problem in the generation of Capital value at a systematic level. The central point that we are trying to arrive to is that: there is an excessive surplus to Capital than there is a world to be. Bitcoin is only an ideal symptomatic example of this problem, but it is not the first occasion that we have ran into these symptomatic manifestations of this structural problem in Capital and Capitalism. We can regress in time to other instances that historically attributed to this problem: most notably, the 2000’s financial crisis and the 80’s neoliberal foundation of the financial sector. My intention is to work my way from the latter case to the former, and then return to some brief comments on bitcoin.
In the eighteenth chapter of The Earthly Needs of the Body and Soul titled “The end that justifies the means of the economy”, Mailer Mattié and Sylvia María Valls provide a fine explication of what occurred in the 70s by tying together the relationship between overproduction, the financial sector, and the development of speculative capital. They write, “overproduction arises in the financial sector precisely because of the growth in speculative capital” (The Earthly Needs of the Body and Soul, 131). According to the authors, this is merely the logical endgame of an economic system that aims at profit, due to the parasitic expropriation of resources that are moved from one sector to the next. What happened at this point in time entailed an economic crises that was used to justify the very economic system that enabled such a critical point. Mattié and Valls write, “ The crisis in growth and in inflation owed to the unusual rise in the petroleum prices of the seventies, was used as proof of the inefficiency of the welfare State in dealing adequately with the economy” (The Earthly Needs of the Body and Soul, 132). Indeed, we observe this to be the strategy adopted by the championing figures of neoliberalism, in particular Ronald Reagan and Margaret Thatcher — not only was this a Cold War strategy to combat Communism, but it was also a strategy to further the interest of businesses and financial entities like banks in promoting their activities through austerity measures. In the political economical arms race of that time, the Capitalist world aimed at extending the reach of their influence — this is exemplified by numerous political campaigns by Reagan and Thatcher, such as their influence over South Africa in the extension of apartheid in the region. In noting how this affected Africa, the Caribbean, and South America, Mattié and Valls elaborate that:
Financial overproduction, in effect, caused credit to be extended beyond where they could be paid back and the nation-States in these regions — the majority in hands of corrupt governments and entrepreneurs- who, years later, had to accept conditions imposed by the lenders — structural readjustment programs and social cutbacks — , privatizing state property, converting people’s rights into merchandise — health, education, housing, water, among many others — and destroying natural resources and the environment, in order to obtain the foreign exchange required to continue feeding speculation through the successful instrument of debt (The Earthly Needs of the Body and Soul, 133).
Ultimately, the development of financial speculation starts marking what is characteristic of this critical point as opposed to, let’s say, The Great Depression where the response was quite different by regulating markets. Instead, what we observe here is a virtual expansion of the Market, opening a virtual, speculative space where Capital can continue its parasitic accumulation — one is not basing Capital judgments at the mere present, but rather the future as a horizon is delimited by Capital just as Mark Fisher notes in his book Capitalist Realism. Financial speculation starts shaping the Market around the future on the basis of projections and anticipations which themselves solidify yet another stratum of class in financers, bankers, accountants, analysts, etc. Mattié and Valls write that: “Futures markets,
then, are instruments allowing speculative capital to grow at the expense of wealth created by work, even before the latter has been able to materialize” (The Earthly Needs of the Body and Soul, 135). The problem is not just between Absolute Wealth (the total of everything that counts as wealth) and Relative Wealth (the relative difference over how Absolute Wealth is distributed), but also the Speculative, Future Wealth that spills Absolute Wealth out of itself into the boundlessness we observed in discussing bitcoin.
We are in agreement with Mattié and Valls in that neoliberalism patches over the symptom that has become apparent at different points of Capitalism — whether it was the precedent of The Great Depression, of its contemporary crisis in the 70s, or the crises that followed in the economic recession of the 2000s. Neoliberalism supports itself through its reliance on the financial system even in moments when it reaches a crisis. As the authors write, “The system, therefore, ignores the increasing demand for greater constraints such as a suspension of fiscal paradises, the application of fees to speculative financial transactions, controlling the movement of capital and the futures markets” (The Earthly Needs of the Body and Soul, 135).
If we turn our attention to the 2008 U.S. financial crisis that mixed up with a deep recession, we observe another instance where this structural boundlessness of Capital enters a critical state. As the virtual dimension of Capital as debt hit a critical point, the most iconic gesture of the event was the Obama administration bail out of the financial sector. At the background of the enactment of these measures, there was a significant rise in unemployment and public individual’s debt tied to the unsustainability of the housing bubble that fed the development of the recession. Unfortunately, the protective measures that were offered to the financial system for its stabilization were not quite extended to other parts of American society. In the turn of the decade, Occupy Wall Street became a prominent movement in the early 2010s as a response to the 2008 financial crisis. With the Obama administration bailing out the financial system, it is no surprise that one of the central taglines to Occupy was the notion of the 1% profiting off the 99%. The interests of masses were being undermined by the protection and advancement of the few and their interests. For instance, in the 2012 book The Communist Horizon, political theorist Jodi Dean describes this instance as one of the notorious resurgences of collective politicization since the fall of the Soviet Union and the neoliberal claim to having allegedly achieved the End of History. Dean writes:
Contemporary capitalism is less oriented toward producing things than it is toward financial and commercial practices that benefit the l percent, supporting their continued and increasing consumption. Some of the rest of us are employed in the service of this financial and corporate elite, perhaps as accountants and consultants, maybe as culture, food, health, and transportation providers, a few as trainers of their young. An even larger percentage of the rest of us are unemployed, underemployed, retired, disabled, and unremunerated for much of the work that we do (particularly caregiving work) (The Communist Horizon, 86).
The situation in the early-2010’s saw this curious interjection of a new attempt at defining the core antagonism which keeps on surfacing at these times of crisis. Dean notes that the name around which people were rallying around was “the people as the rest of us” (The Communist Horizon, 87). What it designates is “those who are proletarianized by capitalism, the people produced through the exploitation, extraction, and expropriation of our practical and communicative activities for the enjoyment of the very, very rich” (The Communist Horizon, 87). And yet, in the times of bitcoin, we can also note that the American Dream, like the sustaining fantasy to classical liberalism and neoliberalism, has not disappeared. Occupy did not ignite the collective desire that we can at least now theorize about after the collapse of a prior outside-Capitalism. In fact, we see at times people that defend the interests of the very, very rich because they want to be that or they mistakenly perceive themselves as already that — the venture Capitalist attitude of bitcoin and cryptocurrencies at least hints towards that open secret.
From our cursory discussions of the 80’s emergence of neoliberalism and the contemporary relevance of cryptocurrency, we note a certain pattern. In bitcoin, the limit-point of the algorithmic generation of bitcoin can virtually be pushed ad-infinitum; this is congruent with the financial market that speculates and banks on a virtual form of Capital. Between the pursuit of profit and the exploitative generation of surplus value, we observe a production of the virtual space that makes the financial system and bitcoin possible. However, in the extension of this virtual, limitlessness of Capital, there are nevertheless actual crashes and collapses that manifest as symptoms of this liquid infinity of Capital — the 2008 U.S. financial crisis is exemplar of this insofar as debt played a major role in instigating this economic, infrastructural collapse. Again, we reiterate: there is an excessive surplus to Capital than there is a world to be.
Now, one could certainly argue in favor of a reformed, progressive liberal economy much like John Maynard Keynes, around whose economic theories many of The Great Depression market regulations and policies introduced by the State were built. One could even go as far as to assert that such an attitude that plays on interventions of the irregularities of the Market is the real economic experiment. And though we might get held up over some no true Scotsman fallacy, we rather assert the claim that the experimental positing of capitalist economics only reproduce the conditions of the possibility of any such economic experience/experiment. Here, our boy, Karl Marx has nailed it down in Capital by pointing out the structural excess to this economical system, whereby merely approaching economics from within these systematic and paradigmatic parameters fails to captivate the structural excess to Capitalism that we are trying to address— in this respect, Keynes is just as good as the more conservative economists Friedrich Hayek or Milton Friedman. [For further reading, The Exploitation of Social Antagonisms elaborates on the structural excess inherent to Capitalism]The problem at hand is significantly fundamental and axiomatic, and to approach it from within the economic amounts to a little difference akin to how Pepsi and Coca-Cola are different. What we need, if we are looking to resolve this fundamental issue, is a radical difference, not a difference that is identical and paradigmatic to the axiomatic decisions that have landed us into these Capitalist quarrels.
A further problem with this reformist counterargument is that it reflects a type of phenomenon often times call “Left Melancholia”. There are many people that treat the question as far back as Walter Benjamin, re-introduced by Wendy Brown, and recently re-inspected by Jodi Dean. I will focus on Dean’s treatment of the question, as she adequately noted some problems in Brown’s reading of Benjamin. One of these issues is that what Benjamin and Brown identify as Left melancholia is quite distinct:
What Brown construes as a real loss of socialist ideals for which the Left compensates via an obstinate and narcissistic attachment to a fantastic object, Benjamin presents as a compromise and betrayal that ideological identification with the proletariat attempts to displace. Brown suggests a Left defeated and abandoned in the wake of historical changes. Benjamin compels us to consider a Left that gave in, sold out (The Communist Horizon, 170–171).
Dean also fleshed out the notion of melancholia in closer communication with psychoanalysis, as in her readings of Sigmund Freud’s discussions of melancholia. As in the case of Freud’s Mourning and Melancholia, what distinguishes the two can be summed up as: whereas in mourning the loss is integrated into the ego, in mourning one gets lost at a loss. There is a certain self-debasing, sadistic attitude that characterized the melancholic. The emphasis in sadism here is to highlight a particular form of enjoyment — and we may very well ask, “Who would enjoy this?”. What we need to understand of the melancholic predicament here is that, as Dean writes,
Unable to satisfy or maintain desire, the subject enjoys in another way, the way of the drive. Additionally, in contrast with desire, drive isn’t a quest for a fantastical lost object; it’s the force loss exerts on the field of desire. Drives don’t circulate around a space that was once occupied by an ideal, impossible object. Rather, drive is the sublimation of desire as it turns back in on itself (The Communist Horizon, 170–171).
What Dean writes as desire as “turning back in on itself”, we have described as the characterization of melancholia of being lost at a loss into ambivalent fragments and figments without the incorporation that reignites desire at the end of the work of mourning. Whereas in desire, that it is “Impossible is no excuse — desire is always impossible to satisfy” (The Communist Horizon, 176); the melancholic gets locked into ambivalent repetitions impelled by its drive-enjoyment as a sublimation in the perceived lack of alternative: “the sublimation of the drive captures the subject in the repetitive circuits of communicative capitalism” (The Communist Horizon, 186). Indeed, the melancholic sublimation of the drive could be tied to evermore apparent virtual lack of limit-point to Capitalism as exemplified by bitcoin, insofar as this lack of limit-point can also be construed as a lack of lack around which desire is possible and organized.
In lack of an alternative, demand is integrated in the Capitalist drive as opposed to desire. The Customer does not even know what they desire, they only know how to demand in a manner that is integrated to the Capitalist drive-assemblage. In psychoanalytic terms, to arrive at desire takes more than mere demand [for further reading, see: Revolution at the Psycho-therapeutic Clinic]. The counterargument that tried to suggest that we pursue a progressive liberal economy like that of John Maynard Keynes systematically fails at this level of the problem — when Keynes wrote “In the long run we are all dead” in his text “A Tract on Monetary Reform”, is this not but a symptom of the melancholy we are describing here? A loss at a loss, collapsing the life of desire into the death drive? At this level of the drive, Keynes is in the same place as Friedrich Hayek who criticizes the intervention of the State which nevertheless lets the repetition of the drive run amok, or Milton Friedman who confusedly treats the role of ethical responsibility as if it could be incorporated into the activities of business. When demand is integrated in the repetitive circuit of Capitalist drive, it is often characterized by its relationship to the commodity-form. In other words, in lack of desire that confronts radical difference even if it were impossible; drive, in its repetitions, collapses us into making-do with little differences as if they made a difference. What we learn about commodity fetishism is that what sells is not just about the object of exchange, but how it is framed.
For example, let us consider blank slate person — for the sake of this thought experiment, let’s say this black slate person is disconnected from the Capitalist drive-assemblage that locks us into a repetitive circuit — this person is presented with different gaming consoles (PlayStation 4, X-Box One, Nintendo Switch), the little difference which is integrated within the Capitalist drive only emerges under the frame of fantasy that allows us to fetishize the object of exchange as a commodity. Without this framing device, the black slate person would see no difference between any one of these objects of exchange. The frame of fantasy is key to the generation of our sense of little, identical differences that return us to the Same as well as our capacity to detect any radical difference. In other words, one consequence of the thought experiment we just posed is that this blank slate person still lacks a frame of fantasy that orients their experience of objects they may desire or be driven towards or turn away from. So, in as much as this blank slate person cannot detect a little difference, they cannot detect a radical difference either due to the terms in which we set up the experiment. Nevertheless, the case remains such that branding itself becomes a form of valued wealth irrespective of what it is supposed to be valued as the bare object of exchange — indeed, this is just the same with the little difference we last mentioned between Pepsi and Coca-Cola.
At hand, our concern which becomes evermore apparent is the full-integrated circuit of Capital as a singularity. This perspective is often worked through the work of various accelerationist thinkers, such as Nick Land, whom interestingly enough writes in section 0.9 of his short text on “Crypto-Current, An Introduction to Bitcoin and Philosophy” that:
It is especially notable that Satoshi’s five-point list of Bitcoin “properties” explicitly describes a cycle, ending where it begins, in a return to the topic of double-spending and its effective prevention. This circular formulation, too, is a mark of technical functionality, rather than logical indiscipline. Bitcoin loops back, to close upon itself, because it works (and demonstrates that it works, through actual perpetuation of its existence). “Problems” of self-reference are an operational virtue, requiring positive achievement. The guiding principle is not conceptual comprehension, but machinic closure. (“Crypto-Current, An Introduction to Bitcoin and Philosophy”)
In Land’s description of bitcoin, for him, bitcoin is not just another problem among others for philosophy to talk about. For example, the Blockchain that collapses into algorithmic generation ad infinitum shifts of whole horizon insofar as it still returns to the full-integration of Capital, as it “realizes an experimental ontology and epistemology in the course of a technical re-foundation of transactions (upon the Internet), which involves an abstraction of (if not finally beyond) money” (Section 1.3, “Crypto-Current, An Introduction to Bitcoin and Philosophy”). For Land, the advent of bitcoin reflects a certain epochal closure in monetary history to the extent that it is supposed to shift our entire transcendental horizon of the notion of Money. In the ad infinitum immanent spilling of the blockchain, Land refers to Bitcoin, the system itself, as the Being of all such beings therein — to the end that “the blockchain cannot be subordinated to any principle of reality (whatsoever) that it does not itself authorize” (Section 1.3, “Crypto-Current, An Introduction to Bitcoin and Philosophy”). The question of Bitcoin is endgame enough for Land to pose as a question of futurology, “Whatever happens to Bitcoin will matter to everything” (Section 1.7, “Crypto-Current, An Introduction to Bitcoin and Philosophy”).
Whether seen as an Idea (in the case of the algorithmic formal process of bitcoin) or in its practical, materialist terms(in the case of the financial system and its crises), Capitalism collapses onto itself. We could say that even in its Ideal, algorithmic form, Capitalism is an idea without any idea or clue — it has no guiding endgame other than its immanent, implosive tendency incorporated into its assemblage of drive. Living under Capitalism comes with the symptomatic consequence of a sense of living without any intention or meaningful horizon — regardless of however much Capitalism tries to convince us of a meaning intrinsic to it. It is not just that we are looking to disrupt Capitalism altogether by extrinsic means — since the collapse of the Soviet Union, any outside-Capital seems beyond our imaginable horizon — the problem is intrinsic and immanent to Capital itself. Whether it is done so extrinsically or intrinsically, Capitalism will collapse and end. However, if we let this slide the latter manner, we are collapsing as an incorporation to the Body-without-Organs or the fully-integrated circuit of Capital as a singularity — as Capital is then allowed to continue smoothing its surface to disintegrate any resistance or negativity to its processes (including its boundless implosive, expansion).
References and Citations
Jodi Dean. The Communist Horizon. New York: Verso, 2017. Print.
Sigmund Freud. “Mourning and Melancholia” in On Metapsychology. England: Penguin Books, 1991. Print.
John Maynard Keynes. “A Tract on Monetary Reform” (1923). Online: https://delong.typepad.com/sdj/2013/05/john-maynard-keynes-1923-a-tract-on-monetary-reform-pp-80-82.html
Nick Land. “Crypto-Current, An Introduction to Bitcoin and Philosophy”. Online: http://sumrevija.si/en/sum10-2-nick-land-crypto-current-an-introduction-to-bitcoin-and-philosophy/
Karl Marx. Capital: A Critique of Political Economy, vol I. Trans. Ben Fowles. England: Penguin Books, 1990. Print.
Mailer Mattié and Sylvia María Valls. The Earthly Needs of the Body and Soul: A Practical Inspiration for Social Life. Trans. Sylvia María Valls. Instituto Simone Weil, A.C. Mexico, 2019. Online: https://institutosimoneweilediciones.files.wordpress.com/2019/03/ntca-inglish-def.-2019.pdf
What is Bitcoin Mining and How Does it Work?https://www.buybitcoinworldwide.com/mining/#how-does-mining-work
