Speculation, Social Conflict, and the Ethics of Untrammeled Accumulation in the American Neoliberal Financier Novel

Abstract

Financialization — an increasing economic shift away from the production of goods to speculative investment in commodity markets, currency exchange rates, financial derivatives, and so forth¹ — is not an essential element of neoliberal free-marketism, but it is a sort of logical concomitant or handmaid to it. Both arose in part, as Fredric Jameson argues in ‘Culture and Financial Capital,’ as responses to the historical ‘closing of the productive moment,’ during which capital fled from saturated markets, abandoning productive industry and its labor force to create an economy of circulating ‘specters of value […] vying against each other in a vast, worldwide, disembodied phantasmagoria’ (250–251). But there is also a causal relationship between the two: the economic deregulation that is a core tenet of Chicago School economics opened the door to all manner of financial speculation, leading to the flourishing of this sector, sometimes at the direct expense of manufacturing. In the US, from the Nixon Administration’s removal of fixed currency exchange rates to the repeal of the Glass-Steagall Act that allowed banks to engage in both commercial and investment banking, thus paving the way for the 2008 financial collapse, ‘small government’ deregulation has opened the door to the vast proliferation of the financial industry.