Suspended Animation (Part 3)

The dead hand of the state

I wish I was saying it’s going to happen soon… this is the longest running crisis in which people have been giving false dates, people turning up for summits saying it has to be resolved, nothing happens and people go away and the sky doesn’t fall in… sooner or later the sky will fall in, I’m just not clever enough to know when it’s going to be.
— Anthony Fry, UK Chairman of Espirito Santo Investment Bank (to CNBC)

Europe will adopt the American solution. The ECB will not allow large banks to default. It will inflate to buy the bad assets or else buy the bonds of the governments, so they can make payments. Then the bankers will put this money into excess reserves. New lending to businesses will cease. The West will go into permanent recession or no-growth stasis. The governments will absorb an ever-larger percentage of the region’s capital: bond sales. Private firms will not be able to borrow at low rates. Capital development will crease.
— Gary North (here)

The new millennium is teaching us vastly more about zombies than anybody could have anticipated. Long gone are the virile, predatory vampires that once populated horror stories about capitalism, sucking out the vital essence of the proletariat in gothic fortresses of ‘dead labor’. Instead, shambling worm-eaten wrecks mill about aimlessly, whilst augmenting their numbers in obscure cannibalistic circuits that defy rational comprehension and which are, in any case, too hideous to steadily contemplate. Fiends have degenerated into ghouls, who do not hunt and feed to strengthen themselves, but only to carry on, prolonging their putrescent decrepitude.

A 2002 Guardian story about “Japan’s zombie economy” prefigures a number of later, and more general, revelations. In particular, it identifies the spreading zombie apocalypse with the slow-motion collapse of Keynesianism, as ‘stimulative’ monetary and fiscal policies (zero interest rates combined with massive government deficit spending) lose their magical powers of revitalization, and instead merely perpetuate an interminable state of undeath. Hyper-stimulation is required just to hang on to the flatline.

Of course, being the Guardian, the solution is obvious: “what the economy needs now is a good dose of inflation.” For undead Keynesians, there’s no malaise too deep for an invigorating wave of currency destruction to solve. This is where the zombie metabolism really gets interesting. By the end of the decade, America had gone full zombie itself, and begun to realize that this wasn’t just some weird Japanese thing it didn’t understand, but an altogether more general and radically mysterious phenomenon. Ben Bernanke’s Federal Reserve pushed US interest rates to the floor (ZIRP) and began to incontinently monetize public debt (QE) whilst nationalizing private debt (TARP), using every available policy instrument to direct the economy in an inflationary direction, at maximum velocity. Nothing much happened. Zombies don’t do fever.

At this point, the questions come flooding in. For instance: why is anybody still buying Japanese or American government bonds? Isn’t it obvious that this paper represents nothing except a slice of unredeemable debt, promising an insulting return, ‘guaranteed’ by a structurally insolvent entity, and associated with policies more-or-less explicitly oriented towards deliberate currency destruction? What are people thinking? To answer that, it’s necessary to venture a little deeper into the zombie world.

The idea of the US Dollar (or Japanese Yen) as a ‘safe haven’ might sound like a joke, and you’ve probably heard it before:

Joe Dollar and Jacques Euro are camping in the woods, when they suddenly hear the terrifying snuffles of a famished carnivore, getting closer. Joe begins hastily pulling on his running shoes. “What are you doing?” asks Jacques. “You can’t out-run a bear market.”

“I don’t need to outrun the market,” Joe replies. “I just need to outrun you.”

At Asia Times Online, Martin Hutchinson envisages a financial crisis endgame that “eliminat[es] the government debt markets that have formed the centerpiece of the last three centuries,” returning the world to the market-based money and free banking regime of 1693, before the creation of the Bank of England. Paradoxically, however, the prospect of collapse raises the financial potency of the state to an unprecedented level, as the ‘safety’ it promises disconnects from questions of economic competence and reverts to something far more atavistic and Hobbesian. Once everything starts to buckle, credibility attaches to the biggest, meanest, and most ruthless provider of mafia-style ‘protection’. Relativistic (zero- or negative-sum) power politics takes center stage.

A pedestrian but informative financial report from Bloomberg sets it out clearly:

Jim Chanos, founder of the Kynikos Associates Ltd. hedge fund, said that while the chances of a recession may be increasing, the U.S. economy is the “best house in a bad neighborhood”

The US Dollar might be nothing more than the “best looking horse in the glue factory,” but once the financial logic of zombie apocalypse takes over, the implications can be far-reaching. Bloomberg continues:

Ten-year Treasuries erased losses after the U.S. sold $29 billion of seven-year securities at a record low yield of 1.415 percent, wrapping up $99 billion of note sales this week. Ten- year yields fell four basis points to 1.88 percent after climbing as much as four points earlier. The rate is up from a record low of 1.67 percent on Sept. 23.

U.S. Treasuries maturing in seven to 10-years have returned 14 percent this year, outperforming a 9.3 percent return for the broader Treasury market, according to Bank of America Merrill Lynch indexes, as of yesterday [Nov. 23]. 

It’s worth taking a moment to digest these numbers. Nobody expects average US inflation over the next seven years to come in under 1.415% p.a., or under 1.88% over the next ten, so the yield is sheer racketeering. Yet this blatant assault on the lower colon of savers has been compatible with a one-year return of 14% (!) — they’re begging for it. Seriously, who cares if Bernanke is lighting up a fat Cuban with a large bill lifted straight out of their pocket? It just makes him look badder, and that’s what they’re paying for. Gold sounds good in theory, but it doesn’t come with its own attached gangster organization, so hanging onto it through the zombie interlude could be difficult. It’s safer, by far, to invest in the alpha state.

Because this Hobbesian zombinomics is political and relativisitic, there are epsilon states at the other end of the trade, as well as a beta state caught in the middle. Europe isn’t a state at all, of course, which is how the (interminable) final phase of zombinomics got started. Before it changed, however, the EU conjuring act seemed to be going pretty well. Every Eurozone member state issuing government debt in the common currency paid yields that were broadly harmonized, as if Europe was a financially sovereign entity, standing united behind its paper. The realization that economic sovereignty remained national, even after the alienation of monetary sovereignty to the European Central Bank, came as something of a shock, and bond spreads gaped accordingly.

The hallucination of ‘Europe’ as a united, honorary alpha state, rapidly degenerated to reality, recoding government bonds as zombie apocalypse security scrip. Suddenly, Greek bonds stopped having anything much to do with the ECB, and started to mumble promises in Greek – ultimately, that the Greek state would do whatever it took to secure redemption, whilst mobilizing its Olympian powers to maintain social discipline if necessary. A flight for the exits immediately ensued. Ditto, with variations of speed and intensity, for all the epsilons (= PIIGS).

Where to flee? That’s the zombinomic question par excellence (searching for the best looking horse in the glue factory). First choice, for the keenest Hobbes readers, was to head straight to Mr. Big, a.k.a. Benny the Yank, wait politely whilst he finished smoking a mirved nuke, and then beg for protection (that’s your 14% one year jump in the value of a 10-year US Treasury bond, right there). The second choice — more appealing to old-fashioned types who thought economics still counted for something – was to look for comparative financial responsibility closer to home.

Briefly, this route led to genuine quality, but zombinomics quickly resumed its grip:

Switzerland sparked fears of a new currency war on Tuesday [Sept. 6] after it pegged the Swiss franc against the euro in an attempt to protect its economy from the European debt crisis.

The Swiss National Bank in effect devalued the franc, pledging to buy “unlimited quantities” of foreign currencies to force down its value. The SNB warned that it would no longer allow one Swiss franc to be worth more than €0.83 – equivalent to SFr1.20 to the euro – having watched the two currencies move closer to parity as Switzerland became a “safe haven” from the ravages of the eurozone crisis.

… which brings us to Germany, and the latest chapter in the zombie saga — comic or tragic, and probably both, ironic to the point of absurdity in any case. Ruined, shrunken, divided, and traumatized by guilt, post-war Germany sought above all to bury its nationalistic aspirations in Europe. What became the EU was for Germany – as Algeria was for the French foreign legionnaires – a place in which to forget. Now the bond ‘market’, in its increasingly desperate search for a big, tough, disciplinary state (a global beta will do fine), is determined to dig the Teutonic Leviathan from its grave.

With twin memories of Weimar hyper-inflation and statist hyper-assertion still vivid, Germany is stubbornly holding out against the full-zombie option of (monetary and fiscal) financial debauchery counter-balanced by Hobbesian security politics. This reluctance to throw itself into the spirit of the age has, naturally enough, exposed it to relentless international vilification, and the pressure will only increase. It could all get unpleasantly interesting.


Calendric Dominion (Part 6)


At the beginning of the 21st century, global cultural hegemony is on the move. For roughly 500 years, Western — and later more specifically Anglophone — societies and agencies have predominantly guided the development of the current world system. As their economic pre-eminence wanes, their cultural and political influence can be expected to undergo a comparable decline. In the early stages of the coming transition, however, the terminal form of active Western cultural hegemony – multicultural political correctness (MPC) – is well-positioned to manage the terms of the retreat. By reconfiguring basic Western religious and political themes as a systematic sensitization to unwarranted privilege, MPC is able to distance itself from its own heritage and to live on, in the resentment of ‘the other’, as if it were the neutral adjudicator of disputes it had no part in.

When MPC turns its attention to the Gregorian (or Western Christian) Calendar it is, of course, appalled. But it is also stuck. What could be more insensitive to cultural diversity than an ecumenical date-counting system, rooted in the ethnic peculiarities of Greek-phase Abrahamic religion, which unapologetically celebrates its triumph in the uncompromising words Anno Domini? Yet global convergence demands a standard, no alternative calendar has superior claims to neutrality, and, in any case, the inertial juggernaut of large-scale complex systems – ‘lock-in’ or ‘path-dependency’ – pose barriers to switching that seem effectively insuperable. The solution proposed by MPC to this conundrum is so feeble that it amounts to the completion of Gregorian Calendric Dominion, which is to be simultaneously rephrased (politely) and acknowledged in its irresistible universality as the articulation of a ‘Common Era’.

MPC supplants problems of cultural power with obfuscatory etiquette, and in absolute terms, its smug dishonesty is difficult to like. As a relative phenomenon, however, its appeal is more obvious, since radical ‘solutions’ to Gregorian Calendric Dominion, re-beginning at Year Zero, have generally reverted to mass murder. Lacking persuasive claims to a new, fundamental, and universally acknowledged historical break, they have substituted terror for true global singularity, as if fate could be blotted out in blood.

Since resentment gets nowhere, whether in its mild (MPC) or harsh (killing fields) variants, it is worth entertaining alternative possibilities. These begin with attention to real cultural differences, rather than mere ‘cultural diversity’ as it presents itself to the vacuously MPC-processed mind. Soon after Shanghai had been selected as host city for World Expo 2010 (in December 2002), countdowns started. For Westerners, these probably had space-age associations, triggering memories of the countdowns to ‘blast off’ that were popularized by the Apollo Program, and subsequent science fiction media. It is far from impossible that Chinese shared in these evocations, although they were also able to access a far deeper – which is to say civilizationally fundamental – reservoir of reference. That is because Chinese time typically counts down, modeled, as it is, on the workings of water clocks. The Chinese language systematically describes previous as ‘above’ (shang) and next as ‘beneath’ (xia), conforming to an intuition of time as descent. Time is counted down as it runs out, from an elevated hydraulic body into the sunken future that receives it.

Duration not only flows, it drips. Perhaps, then, an ‘orientalization’ of calendric perception and organization is something that significantly exceeds a simple (or even exceedingly difficult) renegotiation of beginnings. Re-beginning might be considered largely irrelevant to the problem, at least when compared to the re-orientation from an original to a terminal Year Zero. Whilst not exactly a transition in the direction of time, such a change would involve a transition in the direction of time intuition, simultaneously surpassing the wildest ambitions of calendrical re-origination and subtly organizing itself ‘within the pores’ of the established order of time. As modeled by the 2010 Expo, and previously by Y2K, the switch to countdown time does not frontally challenge, or seek to straightforwardly replace, the calendric order in being. Rather than counting in the same way, from a different place, it counts in a different way, within the framework of time already in place. It is a revolution with ‘Chinese characteristics’, which is to say: a surreptitious insurgency, changing what something already was, rather than replacing it with something else.

Both the 2010 Expo and Y2K also reveal the extreme difficulty of any such transition, since a futural Year Zero, or countdown calendar, must navigate the arrow of time and its cognitive asymmetry (between knowledge of the past and of the future), presupposing exact, confident, and consensual prediction.

That is why it approximates so closely to conservative acceptance. If the countdown is to be sure of arriving at the scheduled terminus, the destination ‘event’ must already be a date (rather than an empirical ‘happening’). Nothing will suffice except a strictly arithmetical, rigorously certain inevitability, as inescapably pre-destined as the year 2000, or 2010, which cannot but come. From the perspective of the countdown calendar, that is what (Gregorian) Calendric Dominion will have been for. It is an opportunity to program an inevitable arrival.

But when? The sheer passage (fall) of time has assured that the opportunity for calendric revolution presented by the Y2K ‘millennium bug’ has been irretrievably missed (so that AD 1900 ≠ 0). The same is true of World Expo 2010, an event without pretense to be anything beyond a miniature ‘practice’ model of global-temporal singularity. As for the real (techno-commercial) Singularity – that is an imprecise historical prediction, at once controversial and incapable of supporting exact prediction.

A more appropriate prospect is suggested by the science fiction writer Greg Bear, in his novel Queen of Angels, set in anticipation of the mid-21st century ‘binary millennium’ (2048 = 2¹¹). This is a formally suitable, purely calendric ‘event’, deriving its significance from arithmetic rather than ideology or uncertain prophecy. He even envisages it as a moment of insurgent revolution, when artificial intelligence arises surreptitiously, and unnoticed. Yet arbitrariness impairs this date (why the 11th power of 2?), and no serious attempt is made to explain its rise to exceptional cultural prominence.

If an adjusted global culture is to converge upon a countdown date, it must be obvious, intrinsically compelling, and ideologically uncontroversial, in other words, spontaneously plausible. The target that World Expo 2010 suggests (anagrammatically) is AD 2100, a date that performs the final stages of a countdown (2, 1, 0 …). Reinforcing this indication, the Y2K ‘millennium bug’ threatened to re-set the date of AD 2000 to AD 1900, which would have tacitly reiterated itself at the exact end of the 21st century. If it continues to chatter about the calendar, perhaps this is how.

The impending Mayan Apocalypse, scheduled for 21 / 12 / 2012, offers a preliminary chance to indulge in a festival of countdown numbers – like 2010, it looks a lot like another digital singularity simulation. If the morning of December 22nd, 2012, leaves the world with nothing worse than a hangover, it could gradually settle into a new sense of the Years Remaining (to the end of all the time that counts, or the 21st century).

AD 2100 = 0 YR

AD 2099 = 1 YR

AD 2098 = 2 YR

AD 2096 = 4 YR

AD 2092 = 8 YR

AD 2084 = 16 YR

AD 2068 = 32 YR

AD 2036 = 64 YR

AD 1972 = 128 YR

AD 1844 = 256 YR

AD 1588 = 512 YR

AD 1076 = 1024 YR

AD 52 = 2048 YR

It’s difficult to anticipate what it looks like from the other side.

[No actual tomb, but retrieved from this]

Calendric Dominion (Part 5)

From Crimson Paradise to Soft Apocalypse

Despite its modernity and decimalism, the French calendrier républicain or révolutionnaire had no Year Zero, but it re-set the terms of understanding. A topic that had been conceived as an intersection of religious commemoration with astronomical fact became overtly ideological, and dominated by considerations of secular politics. The new calendar, which replaced AD 1792 with the first year of the new ‘Era of Liberty’, lasted for less than 14 years. It was formally abolished by Napoléon, effective from 1 January 1806 (the day after 10 Nivôse an XIV), although it was briefly revived during the Paris Commune (in AD 1871, or Année 79 de la République), when the country’s revolutionary enthusiasm was momentarily re-ignited.

For the left, the calendric re-set meant radical re-foundation, and symbolic extirpation of the Ancien Régime. For the right, it meant immanentization of the eschaton, and the origination of totalitarian terror. Both definitions were confirmed in 1975, when Year Zero was finally reached in the killing fields of the Kampuchean Khmer Rouge, where over quarter of the country’s population perished during efforts to blank-out the social slate and start over. Khmer Rouge leader Saloth Sar (better known by his nom de guerre Pol Pot) had made ‘Year Zero’ his own forever, re-branded as a South-east Asian final solution.

Year Zero was henceforth far too corpse-flavored to retain propaganda value, but that does not render the calendric equation 1975 = 0 insignificant (rather the opposite). Irrespective of its parochialism in time and space, corresponding quite strictly to a re-incarnation of (xenophobic-suicidal) ‘national socialism’, it defines a meaningful epoch, as the high-water mark of utopian overreach, and the complementary re-valorization of conservative pragmatism. Appropriately enough, Year Zero describes an instant without duration, in which the age of utopian time is terminated in exact coincidence with its inauguration. The era it opens is characterized, almost perfectly, by its renunciation, as fantasy social programming extinguishes itself in blood and collapse. The immanent eschaton immediately damns itself.

Historical irony makes this excursion purely (sub-) academic, because the new era is essentially disinclined to conceive itself as such. What begins from this Year Zero is a global culture of ideological exhaustion, or of ‘common sense’, acutely sensitive to the grinning death’s head hidden in beautiful dreams, and reconciled to compromise with the non-ideal. From the perspective of fantastic revolutionary expectation, the high-tide of perfectionist vision ebbs into disillusionment and tolerable dissatisfaction – but at least it doesn’t eat our children. The new era’s structural modesty of ambition has no time for a radical re-beginning or crimson paradise, even when it is historically defined by one.

Pol Pot’s Year Zero is sandwiched between the publication of Eric Voegelin’s The Ecumenic Age (1974), and the first spontaneous Chinese mass protests against the Great Proletarian Cultural Revolution (over the months following the death of Zhou Enlai, in January 1976). It is noteworthy in this regard that Deng Xiaoping eulogized Zhou at his memorial ceremony for being “modest and prudent” (thus the New Aeon speaks).

In the Anglo-American world, the politics of ideological exhaustion were about to take an explicitly conservative form, positively expressed as ‘market realism’ (and in this sense deeply resonant with, as well as synchronized to, Chinese developments). Margaret Thatcher assumed leadership of the British Conservative Party in February 1975, and Ronald Reagan declared his presidential candidacy in November of the same year. The English-speaking left would soon be traumatized by a paradoxical ‘conservative revolution’ that extracted relentless energy from the very constriction of political possibility. What could not happen quickly became the primary social dynamo, as articulated by the Thatcherite maxim: “There is no alternative” (= option zero). The auto-immolation of utopia had transmuted into a new beginning.

Whilst the era of not restarting from zero can be dated to approximate accuracy (from AD n – 1975), and had thus in fact restarted from zero, in profoundly surreptitious fashion, its broad consequence was to spread and entrench (Gregorian) Calendric Dominion ever more widely and deeply. The prevailing combination of radically innovative globalization (both economic and technological) with prudential social conservatism made such an outcome inevitable. Symbolic re-commencement wasn’t on anybody’s agenda, and even as the postmodernists declared the end of ‘grand narratives’, the first planetary-hegemonic narrative structure in history was consolidating its position of uncontested monopoly. Globalization was the story of the world, with Gregorian dating as its grammar.

Orphaned by ideological exhaustion, stigmatized beyond recovery by its association with the Khmer Rouge, and radically maladapted to the reigning spirit of incremental pragmatism, by the late 20th century Year Zero was seemingly off the agenda, unscheduled, and on its own. Time, then, for something truly insidious.

On January 18, 1985, Usenet poster Spencer L. Bolles called attention to a disturbing prospect that had driven a friend into insomnia:

I have a friend that raised an interesting question that I immediately tried to prove wrong. He is a programmer and has this notion that when we reach the year 2000, computers will not accept the new date. Will the computers assume that it is 1900, or will it even cause a problem? I violently opposed this because it seemed so meaningless. Computers have entered into existence during this century, and has software, specifically accounting software, been prepared for this turnover? If this really comes to pass and my friend is correct, what will happen? Is it anything to be concerned about?

Bolles’ anonymous friend was losing sleep over what would come to be known as the ‘Y2K problem’. In order to economize on memory in primitive early-generation computers, a widely-adopted convention recorded dates by two digits. The millennium and century were ignored, since it was assumed that software upgrades would have made the problem moot by the time it became imminent, close to the ‘rollover’ (of century and millennium) in the year AD 2000. Few had anticipated that the comparative conservatism of software legacies (relative to hardware development) would leave the problem entirely unaddressed even as the crisis date approached.

In the end, Y2K was a non-event that counted for nothing, although its preparation costs, stimulus effects (especially on outsourcing to the emerging Indian software industry), and panic potential were all considerable. Its importance to the history of the calendar – whilst still almost entirely virtual – is extremely far-reaching.

Y2K resulted from the accidental — or ‘spontaneous’ — emergence of a new calendrical order within the globalized technosphere. Its Year Zero, 0K (= 1900), was devoid of all parochial commemoration or ideological intention, even as it was propagated through increasingly computerized communication channels to a point of ubiquity that converged, asymptotically, with that attained by Western Calendric Dominion over the complete sweep of world history. The 20th century had been recoded, automatically, as the 1st century of the Cybernetic Continuum. If Y2K had completed its reformatting of the planetary sphere-drive in the way some (few deluded hysterics) had expected, the world would now be approaching the end of the year 0K+111, settled securely in its first arithmetically-competent universal calendar, and historically oriented by the same system of electronic computation that had unconsciously decided upon the origin of positive time. Instead, the ‘millennium bug’ was fixed, and theological date-counting prolonged its dominance, uninterrupted (after much ado about nothing). Most probably, the hegemonic cultural complex encrusted in Calendric Dominion never even noticed the cybernetic insurrection it had crushed.

Between 0K and Y2K, the alpha and omega of soft apocalypse, there is not only a century of historical time, but also an inversion of attitude. Time departs 0K, as from any point of origin, accumulating elapsed duration through its count. Y2K, in contrast, was a destination, which time approached, as if to an apocalyptic horizon. Whilst not registered as a countdown, it might easily have been. The terminus was precisely determined (no less than the origin), and the strictest formulation of the millennium bug construed the rollover point as an absolute limit to recordable time, beyond which no future was even imaginable. For any hypothetical Y2K-constrained computer intelligence, denied access to dating procedures that over-spilled its two-digit year registry, residual time shrank towards zero as the millennium event loomed. Once all the nines are reached, time is finished, at the threshold of eternity, where beginning and end are indistinguishable (in 0).

“0K, it’s time to wrap this puppy up.” – Revelation 6:14

(next, and last, the end (at last))


Re-Animator (Part 3)

What makes a great city?

By far the most interesting element of World Expo 2010: Shanghai, was Shanghai. Whilst deeply-rooted regional traditions of courtesy sustained the fiction that this World Fair was about the world, it really wasn’t. Whatever the diplomatic benefits of the almost universally convenient internationalist pretense, to China and Expo’s foreign participants alike, Expo 2010 was about Shanghai, and for Shanghai. The Expo was global because Shanghai is, it was about China because Shanghai is China’s gateway to the world, it was about cities in order to be even more about Shanghai, nobody uninterested in Shanghai paid it the slightest attention, and Shanghai used it to restructure, intensify, and promote itself.

Expo as an institution was in decline before 2010, and continues to decline. Shanghai was rising before 2010, and continues to rise, but now infrastructurally upgraded, thoroughly renovated, and decorated with the historical merit-badge of Expo hospitality. Better City, Better Life, a typically airy and aspirational Expo theme, is a cold-sober description of the Expo-effect in Shanghai.

Cities are, in certain important respects, generic. There is such a thing as ‘the city in general’ as the work of Geoffrey West, in particular, has demonstrated. We know, thanks to West, that cities are negative organisms, with consistent scaling characteristics that structurally differentiate them from animals and corporations. As they grow they accelerate and intensify at a quantifiable and predictable rate, exhibiting increasing returns to scale (in sharp contrast to animals and businesses, which slow down in proportion to their size). Organisms and firms die normally and by necessity, cities only rarely and by accident.

Cities belong to a real genre, but they are also singularities, undergoing spontaneous individuation. In fact, they are generically singular – singular without exception – like black holes. It is not only that no city is like another, no city can be like another, and this is a feature that all cities share, arguably more than any other.

Beyond such generic singularity, there is an additional level of enhanced differentiation that emerges from the position cities occupy within larger systems. These systems are not only internally specialized, but also hierarchical, dividing core from periphery, and distributing influence unevenly between them. Ultimately, within the fully global incarnation of the ‘world system’, cities acquire secondary metropolitan characteristics, to very different degrees, in accordance with their geographical and functional proximity to the center of the world. They transcend their local histories, to become hubs or nodes in a global network that re-characterizes them as parts of a whole rather than wholes made of parts, as metropolis-versus-periphery rather than (or on top of) metropolis-versus-town.

The geographical structure and historical instability of modernity’s core-periphery architecture has been the focus of the ‘world system theory’ developed from the Annales School of Fernand Braudel (1902-85) by Immanuel Wallerstein (1930-) and – most impressively — Giovanni Arrighi (1937-2009). According to the world system theorists, the revolutions that matter most are not national regime changes, such as those in France (1789) and Russia (1917), but rather global re-organizations that mark out the basic phases of modern history, jolting the world into new core-periphery structures. Modernity has undergone four of these shifts up to the present, with each phase lasting for a ‘long century’, introducing a new core state, or hegemon, with enhanced capabilities, and a new urban center – successively, Venice, Amsterdam, London, and New York – that operate as an effective capital of the world.

As the example of New York attests, this status is not primarily political. Nor does prominence in manufacturing seem to be a relevant factor (the ‘world capital’ has never been the dominant industrial center of its respective region or state). Over the course of modern history to date, the crucial features of the world capital seem to be that it is the largest urban agglomeration in the leading (‘hegemonic’) region or state; that it is an established financial center that quite rapidly attains a position of global pre-eminence in this respect; that it is an open port city with clear maritime orientation; and that it has an exceptionally internationalized demographic profile, with a large segment of internationally-mobile, opportunistic residents. A significant period of leadership in the creative arts might plausibly be added to this list. Functionally, the world capital serves as the supreme nerve-center of the global economy, specialized nationally, and then super-specialized internationally, as the financial, logistics, and business services hub of a system whose global integrity is reflected in the city’s privileged singularity.

The exceptional drama of our age lies in its nature as a time of transition between phases of modernity, somewhere in the winter of a long century, when an epoch of hegemony is exhausted. More specifically, the walls are closing in on the American Age, as commentators of almost every intellectual and ideological stripe are increasingly aware. Overstretched, essentially bankrupted, politically paralyzed and disillusioned, America sinks into self-conscious crisis, its mood dark and clouded. It would be a mistake to limit attention to America, however, because the crisis is world-systemic, heralding the end of an international order that arose among the chaos of the world wars and achieved definition in the post-WWII United Nations and Bretton Woods institutions (IMF, World Bank, and the descendent of GATT, now the WTO). It affects not only the role of the US dollar as international reserve currency, an Atlantic-centered NATO and an Occidentally-skewed UN apparatus, but also the European Union, the post-colonial Middle Eastern state-system and (very) much else besides.

Over the next two decades, under the impact of economic forces of extreme profundity (far exceeding the responsive capacity of existing institutions), a revolutionary re-ordering of the world can be expected to unfold. If America succeeds in maintaining its position of leadership within the global system for a period that significantly exceeds the long 20th century (which began no earlier than 1914, and thus might be expected to persist for some additional years), it will have broken a pattern that has remained consistent throughout a half-millennium of history. Whilst not strictly impossible, perpetuation of the present hegemonic order would be, quite literally, a stretch.

Another vision of a break from historical precedent, this time transparently utopian, envisages – rather than the continuation of US pre-eminence — the obsolescence of the core-periphery global structure in its entirety, ending hierarchical geography and hegemony in general. Even If such a vision truly rises to the level of a definite expectation (rather than a nebulous exercise in wishful thinking), it remains ungrounded in reliable historical and theoretical foundations. Altruistic political intentions – were such ever credible – would still be quite insufficient to overcome the spontaneous, dynamic trend to approximate world systemic equilibrium, in which a core zone, and its metropolitan capital, are automatically nominated, by diffuse economic currents searching for a central clearing house.

Whilst no doubt deeply disappointing to utopian eschatology, and to all dreams of historical conclusion (or passage to the promised land), phase-shifts in the world-system are less ominous than they are often depicted as being. Among Arrighi’s most important insights is the reminder that whenever an attempted reconstruction of the world order has been based upon a frontal military and geo-strategic challenge to the hegemon, it has failed. This is exemplified, above all, by the German and Russian histories of the 19th and 20th centuries, in which repeated direct confrontations with the established Anglophone-dominated international system led only to frustration, regime collapse, and subaltern re-integration.

Perhaps ironically, a marked subjective aversion to hard power assertion and the assumption of hegemony can be quite reliably taken as a positive indicator for the objective emergence of hegemonic status. Holland, Great Britain, and the United States of America were all, in certain crucial respects, accidental imperialists, whose successive ascents to world dominance shared a prioritization of commercial motives, retarded state involvement, strong ‘isolationist’ and ‘anti-imperialist’ cultural currents, and a determined avoidance of ‘Clauswitzean’ decisive collision (especially with the prior hegemon). The British and American ways of war, in particular, are notable for their common emphasis upon hedging and triangulation, such as the exploitation of offshore position and maritime supremacy to avoid premature entanglement in high intensity ‘continental’ conflicts, the usage of financial and logistic capability to manipulate conflicts at a distance, and the diplomatic inclusion of defeated adversaries in reconstructed, poly-centric, ‘balanced’ systems of power. Hegemony was, in each case, peacefully inherited, even when it was cemented by war (in partnership with the previous hegemon) and later gave rise to opportunities for increasingly aggressive imperialistic adventurism.

Given this broadly uncontroversial historical pattern, it is all the more surprising that the German example is so widely invoked in discussions of China’s ‘peaceful rise’. In fact, China’s ascent has stuck far closer to the model of hegemonic hand-overs than to that of confrontational challenges, as indicated by the prioritization of commercial development, the highly cooperative (even synergistic or ‘Chimerican’) relationship with the prevailing hegemon, the gradual accumulation of financial power by way of spontaneous, systemic re-distribution, and the equally gradual consolidation of maritime interests, emerging out of the global trading system, which draw the focus of government strategic policy – perhaps reluctantly – from domestic concerns out into the high-seas.

Historically, China has been far more a continental than a maritime power, and this fact provides the single most persuasive objection to the assumption of an impending Chinese (Long) Century. The emergence of a continental world system core would be as decisive a departure from precedent as any yet discussed, and if such a possibility is entertained, disciplined prediction falters. If inverted, however, this problem becomes a forecast in itself: the trajectory of China’s rise necessarily implies its transformation into a maritime power (an insight already tacit in the controversial 1988 Chinese TV series River Elegy).

A vague intuition, partially but elusively crystallized by Expo 2010, is now precipitated by sheer historical pattern-recognition into the form of an explicit question:

Is Shanghai destined to become the capital of the world?
(Part 4 to come)


Time in Transition

There has to be a hexagram for this

Isaac Newton’s Philosophae Naturalis Principia Mathematica abstracted time from events, establishing its tractability to scientific calculation. Conceived as pure, absolute duration, without qualities, it conforms perfectly to its mathematical idealization (as the real number line). Since time is already pure, its reality indistinguishable from its formalization, a pure mathematics of change – the calculus – can be applied to physical reality without obstruction. The calculus can exactly describe things as they occur in themselves, without straying, even infinitesimally, from the rigorous dictates of formal intelligence. In this way natural philosophy becomes modern science.

(It is perhaps ironic that the Newtonian formulation of non-qualitative time coincides with a revolutionary break – or qualitative transition – that is perhaps unmatched in history. That, however, is a matter for another time.)

Modern science did not end with Newton. Time has since been relativized to velocity (Einstein) and punctured with catastrophes (Thom). Yet the qualities of time, once evacuated, cannot readily be restored.

Clock technology suffices to tell this story, on its own. Time ‘keeping’ devices produce a measure of duration, according to general principles of standardized mechanical production, so that a clock-marked minute is stripped of qualitative distinctness automatically. Chronometrically, any difference between one minute and another is a mechanical discrepancy, strictly analogous to a production line malfunction.

Time modernization culminates in an inversion of definition, eventually standardizing from a precisely reproducible building block (the atomic second), rather than accommodating itself to a large-scale natural cycle – qualified by variations of luminosity – which generates sub-units through division. Once the second has becomes entirely synthetic, all reference to a qualitative ‘when’ has been effaced. All that remains is quantitative comparison, timing, and synchronization, as if the time-piece was modeled upon the stop-watch. Calendars have become an anachronism.

Modern time intuitions would find plenty of support, even in the absence of mechanical chronometry. Every quantifiable trend, from a stock movement or an unemployment problem to a demographic pattern or an ecological disaster, can be communicated through charts that assume a popular facility at graphic intuition, and thus, implicitly, at algebraic geometry and even calculus. Time is so widely and easily identified with the x-axis of such charts that the principle of representation can be left unexplained, however strange this might have seemed to pre-moderns. Clearly, if time can be read-off from an axis – quickly and intuitively — it is being conceived, generally, as if it were a number line (‘Newtonian’).

Qualitative time, by now, is a scarcely-accessible exoticism. Nowhere is this more obvious that in the case of China’s ancient Classic of Change, the Yijing, a work that is today no less hermetic to Chinese than it is to foreigners.

The Yijing is a book of numbers as much as a book on time, but its numbers are combinatorial rather than metric, exhausting a space of possibilities, and constructing a typology of times. The Yijing speaks often of quantities, but it does not measure them. Instead, it typologizes them, as processes of increase or decrease, rise and fall, lassitude and acceleration, typical of qualitative phases of recurrent cycles, with identifiable character and reliable practical implication.

The point of all this (just in case you were wondering)?

The current time is a period of transition, with a distinctive quality, characterizing the end of an epoch. Something – some age – is coming quite rapidly to an end.

This is not a situation that the modern mentality is well-adapted to, since it violates certain essential structures of our time-consciousness. It eludes our intuitions and our clocks. Our charts register it only as a break-down, as they terminate the x-axis at a point of senseless infinity (hyperinflation, bubble stock p/e ratios, global derivatives exposure, urban intensity, technological intelligence explosion) or in a collapse to zero (marginal productivity of debt, fiat currency credibility, unit costs of self-replicating capital goods). The can clatters off the end of the road. Things cannot go on as they have, and they won’t.

Given the heated political climate surrounding the impending transition of the global economic system, a non-controversial diagnosis is almost certainly unobtainable. Niall Ferguson describes an Age of Global Indignation, or Global Temper Tantrum, in which the objectively unsustainable nature of the established order, whilst widely if vaguely perceived, still eludes sober recognition. Riots, Molotov cocktails, and fabulous conspiracy theorizing are the result.

“What all the Indignant have in common is the refusal to address squarely the problem that nearly all Western countries face. That problem is that the welfare systems that evolved in the mid-20th century are unaffordable under the demographic and economic circumstances of the 21st century. The financial crisis has merely exacerbated what was already a severe structural crisis of public finance, boosting deficits while slowing growth.”

In all probability, Ferguson’s blunt analysis will provoke further paroxysms of indignation. Yet, as the world’s most pampered societies slide ever further into insolvency, such undiplomatic assessments will become ever more common, and the rage they inspire will become ever more unhinged.

John B Taylor emphasizes the senescence and death of Keynesian macroeconomics (drawing on the earlier work of Robert E Lucas and Thomas J Sargent). His research concludes that “the Keynsian multiplier for transfer payments or temporary tax rebates was not significantly different from zero for the kind of stimulus programs enacted in the 2000s.” In other words, stimulus is ceasing to stimulate, and gargantuan public debts have been accumulated for no rational purpose. This is the ‘debt saturation’ that Joe Weisenthal describes as “a phase transition with our debt relationship” graphically portrayed in “the scariest [chart] of all time.”

Between financial stimulus and chemical stimulus, there is no distinction of practical significance. Keynesianism and cocaine are both initially invigorating, before stabilizing into expensive habits that steadily lose effectiveness as addiction deepens. By the time bankruptcy and mortality beckons, getting off the stimulus seems to be near-impossible. Better to crash and burn – or hope that something ‘turns up’ — than to suffer the agonies of withdrawal, which will feel like hell, and promises nothing more seductive than bare normality at the end of a dark road. Character decays into chronic deceit, intermittent rage, and maudlin self-pity. Nobody likes a junky, still less a junky civilization.

Keynesianism was born in deception – the deliberate exploitation of ‘money illusion’ for the purposes of economic management. Its effect on a political culture is deeply corrosive. Illusionism spreads throughout the social body, until the very ideas of hard currency (honest money) or balanced budgets (honest spending) are marginalized to a ‘crankish’ fringe and being ‘politically realistic’ has become synonymous with a more-or-less total denial of reality. To expect a Keynesian economic establishment to honestly confront its own failings is to laughably misunderstand the syndrome under discussion. A reign of lies is structurally incapable of ‘coming clean’ before it goes over the cliff (someone needs to do another Downfall-parody, on macroeconomics in the Fuehrer Bunker).

The long Keynesian coke-binge was what the West did with its side of globalization, and as it all comes apart — amidst political procrastination and furious street protests – a planetary reset of some kind is inevitable. The ‘Chimerican’ engine of post-colonial globalization requires a fundamental overhaul, if not a complete replacement. The immense dynamism of the Chimerican Age, as well as its enduring achievements, have depended on systematic imbalances that have become patently unsustainable, and it is highly unlikely that all the negative consequences will have been confined to just one side of the world ledger.

For instance, China’s soaring investment rate, estimated to have reached 70% of GDP, seems to have disconnected from any prospect of reasonable economic returns. Pivot Capital Management concludes: “credit growth in China has reached critical levels and its effectiveness at boosting growth is falling.” For the PRC’s fifth-generation leadership, scheduled to adopt responsibility for China’s political management from 2012, inertia will not be an option. By then, a half-decade of global stimulus saturation, cascading macroeconomic malfunction and serial ‘black swans’ (the new millennium ‘clusterflock’) will have reshaped the world’s financial architecture, trade patterns, and policy debates. Whatever comes next has to be something new, accompanied – at least momentarily – by genuine apprehension of economic reality.

For post-Expo Shanghai, a city stunningly rebuilt in the age of Chimerica, the time of transition is a matter of especially acute concern. This is a metropolis that waxes and wanes to the pulse of the world, rigidly tide-locked to the great surges and recessions of globalization. Will the next phase of world history treat it as well as the last?