Category: Finance and Fiction

This video is published as part of the b2o review‘s “Finance and Fiction” dossier. The dossier also includes a text by Ryan S. Jeffery that can be read as an accompaniment to the video.

Since 1982, the financial data vendor Bloomberg L.P. has provided real-time financial market data accessible only through an interface called the Bloomberg Terminal. For an annual fee of $20,000 you can buy and sell financial assets on Bloomberg’s secure proprietary network with 325,000 other subscribers throughout the world. Since 2012, the user account u/OPINION_IS_UNPOPULAR has moderated the subreddit page r/Wallstreetbets accessible on the public internet forum Reddit, which can be interfaced by web browsing software on most any computer or smartphone. For a zero annual fee you can exchange information, financial trading strategies, videos and memes with 12.9 million other subscribers throughout the world. What would happen if r/Wallstreetbets found a Bloomberg terminal? The interface is where the two systems, subjects, organizations meet and interact.

This response was published as part of the b2o review‘s “Finance and Fiction” dossier.

In “Learning from Madoff: On Fiction and Finance in 21st Century,” Frederik Tygstrup describes Bernie Madoff and his famous financial scam as an allegory for the 2008 crisis and the rise in speculative capital at the turn of the 21^st century. Madoff’s split-strike conversion strategy (as he called it) was pure fiction.^[1] Tygstrup positions the story of Madoff’s fictional trades in an age of enormous growth in fictitious assets.

Madoff took money from investors and claimed to be trading it, but he was just parking the money in a bank account. When clients wanted to withdraw their funds, he pulled money out of the bank account and called it return on investment. Then he went looking for more clients whose new deposits would cover the gap. This is a classic Ponzi scheme. Madoff, the investor with two sons and a blonde wife and a home in the Hamptons, was arrested a couple of months after Lehman Brothers went bankrupt, just as the scale of the global crisis was coming into focus. The man’s entire financial career was a lie. Unlike the derivatives traders who built a house of cards on mortgage-backed securities, Madoff had no financial cover story. He was faking it one hundred percent. But the size and timing of his fraud raised a question: Is the entire economy a scam?

The Madoff case engendered a number of documentaries and book-length investigations into what the scheme did and did not mean. Tygstrup quotes Colleen Eren’s book, whose very title calls the case “the public trial of capitalism.” Tygstrup describes the affect swirling around Madoff as excessive, then offers an “allegorical reading” of this fascination. He finds that “the case becomes a kind of a slightly convex mirror in which we not only see his (devious) deviation from normal market behaviour, but also a replication of it, only in a slightly distorted fashion.” The judge who sentenced Madoff to 150 years in prison had a “striking” tone of indignation, and the conviction was “quite exuberant,” Tygstrup writes, for “what was, after all, a fairly trivial white-collar crime, the big numbers notwithstanding.” The level of affect, for Tygstrup, was extra, given the big but humdrum crime.

The amount of emotion that Madoff provoked was “remarkable,” for Tygstrup, given “the very normalcy of what he was doing.” Based on trades he was not in fact making, Madoff kept promising money managers that he could bring in high returns forever. But of course, at some point, the debt would have to be called in. For Tygstrup, only the size of the heist was “sublime,” and Madoff got away with it for so long in part because he was reflecting the market back to itself: “Madoff’s fictitious investment fund also tells us something about the nature of fictitious capital in an age of accumulation by financialization: precisely not as an anomaly, but as an allegory of unsustainable credit-based and highly leveraged capital accumulation.”

Tygstrup’s argument thus relies on setting Madoff’s normalcy off against a historically specific change in the overall level of financialization. It relies on a relatively common claim about a quantitative increase in the fictitiousness of capital at a particular moment in time. The idea is that Madoff might have been easier to clock, he would have stuck out more, if not for a quantitative growth in fictitious capital. Later, Tygstrup summarizes financial history by saying that after 1929, “certain limits were set for how much banks should be allowed to leverage.” After the run on the banks that triggered the Depression, in other words, the regulators put some limits on fictitious assets. Speculation was kept in check by reserve ratios, where those reserves served as a foundation or referent for financial activity. After the 1980s, according to Tygstrup, deregulation allowed the degree of leverage to rise, and it “skyrocketed.” He cites Martijn Konings’s Capital and Time for a description of “inflated positions” that “performatively built up supplementary market value.”

There’s no question that the fascination with Bernie Madoff, an ideal Jewish scapegoat and record-breaking Ponzi builder, emerged out of both a desire to punish the entire rentier class and a desire to excise a bad apple. His normal qualities made him a good stand-in for finance generally. And at the same time, if Madoff was an unusual criminal, then getting rid of him might allow finance to get back to the status quo. In this way, punishing Madoff served both a desire to see and not to see systemic problems. And Tygstrup is correct in pointing out that the financier who was called a monster exhibited a real lack of monstrosity. The scale of his crimes may have been monstrous, but he didn’t seem particularly devious and the money wasn’t spent on cocaine and hookers and yachts–just one mistress and a second home. The fear that Madoff provoked came from the subtlety of the distortion. If, generically, Madoff served as an allegory for the events of his era, perhaps affectively he entered the category of the uncanny. Madoff was so familiar that he was eerie, unheimlich.

So Madoff’s performance was uncannily successful at a historically specific moment, granted. But Konings’s point, in Capital and Time, is precisely not that 2008 indicated that capitalism had breached some kind of objective boundary. Tygstrup almost seems to accept the reasoning that Konings is pushing against. Konings critiques argumentation that relies on a distinction between “real and fictitious forms of value and sees the tendency of finance to exceed its natural limits” (Konings 2018: 36) His point is precisely to critique the critiques that see limits and foundations, or that rest on the idea that something has objectively “skyrocketed,” leading to a quantitative imbalance.

For Konings the temporal dynamics of speculation and austerity are themselves fundamental to an inherently self-referential system:

If a kind of double movement is at work in capitalist life, this involves not a periodic oscillation between foundational values and speculative impulses but, instead, the constant need to respond productively to speculative provocations, to reconstruct reality around a new connection that cannot be undone and has irrevocably altered how things work. (Konings 2018: 12)

Meanwhile for Tygstrup, the emotional excess in the fascination with Madoff depends on something being “conspicuously bloated” within capitalism itself. That bloat implies something swollen beyond its normal size, where normal is defined in reference to a real or a more real type of value, and where the idea of real value usually involves some nostalgia for Fordist production. But Konings wants us to see a system defined by its self-referentiality, with no outside to the logic, and no ultimate ground. The historically specific detail that makes Madoff’s case fascinating is only the crisis itself, which of course differs from the last crisis, but not because the quantitative growth creates a qualitative difference. Any implication that reserve ratios or Glass-Steagall-style regulations might let the air out of finance’s bloated core is a fool’s errand, a path to further complicity. When there’s a run on the bank, everyone gets swept up looking for the monster. Before that, the monster always appears as an innovator. But it’s important to remember that the finance sector has no path to a healthy flat stomach.

Perhaps Madoff should be considered in conjunction with another allegorical figure, Jordan Belfort, the inspiration for the movies Boiler Room and The Wolf of Wall Street. Belfort ran penny stock scams for years. He spent 22 months in prison and then went on to sell his memoirs and become a kind of self-help guru who gives workshops on investing. He too was emblematic of the 2008 crisis. He was first indicted in 1999, the first movie came out in 2000, and the second, directed by Martin Scorcese, followed in 2013. Madoff was the subject of a number documentaries, but never got quite the auteur treatment that Belfort did. In a performative economy, Belfort was the better performer.

In 2014, a former enforcement attorney for the SEC wrote an article for The Wall Street Journal entitled, “How ‘the Wolf of Wall Street’ Really Did It: The stock scam wasn’t emblematic of greed in the Financial District. These guys were just shrewd crooks working out of Long Island.” In the body of the article, former prosecutor Ronald L. Rubin insisted that the offending firm depicted in the Wolf movie “was not a real Wall Street firm, either literally or figuratively. Its offices were in Long Island…” The fraudulent acts, the cocaine and the strippers and the toxic masculinity that became Hollywood’s inspiration? These were not emblematic of Wall Street. These guys weren’t even from Manhattan.

In 2014, Rubin was concerned with defending the legitimate men of finance from the figurative implications of The Wolf. Belfort’s scam depended on high-pressure sales and stock IPOs. Rubin wanted it to be clear that Belfort was “just a thief.” But Belfort’s methods were remarkably close to the standard practices of the industry. He told stories about investments in particular companies, built trust, and then suggested that if his marks balked, they were leaving money on the table. If this is highway robbery, the highway is still the stock market. Both in real life and in fiction, Belfort fit the archetype of the hard-charging, hard-partying, hypermasculine Wall Street trader. Belfort could have been a Master of the Universe straight out of the The Bonfire of the Vanities, or a Gordon Gekko-type from the movie Wall Street, or one of Liar’s Poker’s big swinging dicks.^[2]

For Rubin’s way of thinking, Madoff was monstrous because he seemed so normal, and the toxic masculine archive was exaggerated in order to sell spicy stories about bad apples. The real Bear Stearns just wasn’t like that. As a prosecutor, he wrote that he had learned: “[E]very business, especially those involving large sums of money, attracts criminals. For example, after the real-estate market collapsed in 2008, scammers began peddling worthless loan-modification products to impoverished homeowners facing foreclosure. Such predators were no more characteristic of the mortgage industry than Jordan Belfort was of Wall Street.”^[3]

Rubin directed attention to the figure of the criminal precisely in order to exonerate the industry. So for Rubin, the mortgage originators peddling NINJA loans (No Income No Job or Assets to back them) on the way up, then packaging those NINJA loans into tranched securities in special purpose investment vehicles, passing them off their books, and privatizing enormous profits on commissions and sales? Those were real, regular, businessmen.

When those businessmen socialized the losses after the crash, people like Rubin relied on the idea that the crisis was a kind of organic natural disaster, an objective reality that made victims of regular people, including mortgage originators and securities brokers.

Rubin understood that the market, writ large, needed public trust, and so he was concerned with appearances, with the problem of representation. In order to make Belfort seem abnormal, Rubin aligned him with criminal others. “Scammers” preyed on homeowners who needed help modifying their loans. In search of fakes to stand in contrast with the real, Rubin bemoaned fraudsters who were taking advantage of vulnerable people. Madoff had pretended to be a normal trader before the crisis. Scammers pretended to be helpful bankers after the bailout. But all of these symbolic negotiations, of masculinity and emblems and fakes, were part of the creation of value within the system.

Arguably, homeowners were vulnerable to fake bankers because the state wasn’t forcing the bailed-out banks to provide help, for real. In courts across the nation, creditors who had profited from the securities on the way up were trying to claim assets they no longer owned. When it wasn’t convenient to own the assets, they had passed on the responsibility, but now they wanted money from foreclosures. The creditors were abusing the bankruptcy process to such a degree that a US Senator had to pass a law to try to get them to stop.^[4] Everyone, in other words, had to work hard to distinguish the mortgage industry from the criminals. Rubin needed fictional representations of criminals to do so.

Rubin’s interpretive work distinguishing the real from the fake, the allegory, and the morality tale, was part of the work of reconstructing capitalist realities. Distinguishing the monsters from the scammers from the innovators is part of the performance that creates value forms. Money refers only to itself. Thus in a capitalist context, the relationship between referent and representation, between productive labor and fictitious asset, creates a gap. In that gap, we find both the creation of value forms and constant analysis, in a dance that often imagines that the next round of speculation will find a way to keep us safe from its ravages, that the next round will respect some objective limit or fundamental economic reality (Konings 13-19). Rubin wanted to distinguish “real” trades from “fake” money, and real creditors from fake bankers. He wanted to retroactively validate past investments in mortgages, precisely as a means of getting financiers back to the business of creating new and better speculative positions—this time, they promise!

Tygstrup seems correct to the extent that the fascination with Madoff revealed a productive ambivalence. Madoff was both a bad apple and a stand-in for the whole rotten mess. But that ambivalence isn’t peculiar to Madoff, and it doesn’t herald a quantitative level, in relation to the ever-receding bottom line, at which finance will finally topple over.

The promise that if we validate this round, or rein something in, the solution to the mystery of real value will be just around the bend—that is a seduction inherent to neoliberal reason. In a discussion of The Sopranos as something of an allegory, Matt Seybold put it this way:

Neoliberalism is a regime that governs by fiscal arbitrage, and laws exist only to establish a baseline against which we can measure financial risk. The question then becomes, what can you get away with: “Can you make more money breaking the law than is required to mount a successful legal defense…? Is the grift worth more than the graft it takes to pull it off?” (Seybold)

This makes it seem that, yes, the entire economy is a bit of a scam, and Madoff and Belfort were both looking for an answer to the same question. Madoff moved more money than Belfort, he just managed to pull off less and fell harder. It then struck everyone as truly weird, almost uncanny, that Madoff never had a plan.

When the creation of value forms shifts, and alters how things work, it’s a worthwhile exercise to understand who is being served up as a bad apple, and why. It’s worthwhile keeping an eye on where neoliberal reason is directing our attention—perhaps especially in moments of crisis. But if these crooks are representative of anything, it was of their provincial specificity, of the last gasp of Wall Street, before the apotheosis of global dark money. And of course, the film of The Wolf of Wall Street, which narrated the rise and fall of a powerful American trader, couldn’t get funded until its backers found a kleptocratic Malaysian financier.[5] The Wolf of Wall Street, in that sense, is both meta-allegory and big, fat, bloated symptom. But the ground, the material referent to keep in mind, is not some elusive final limit but the suffering of the Malaysian people, when the theft of their sovereign fund was made real by the markets. The system isn’t getting more objectively fictional, it’s getting more unequal.

Michelle Chihara is currently on book leave as Associate Professor of English at Whittier College, where she teaches contemporary American literature, media studies, and creative writing. She has also served as Associate Dean and Director of the Whittier Scholars Program for individualized curricular design. Recent publications include an entry on “Men” in Finance Aesthetics: A Critical Glossary (forthcoming 2024 from Goldsmiths Press); a chapter in New Directions in Print Culture Studies from Bloomsbury Press (eds. Daniel Worden and Jesse Schwarz); articles in Distinktion: A Journal of Social Theory, American Literary History and Postmodern Culture. She co-edited The Routledge Companion to Literature and Economics (2018). From 2016-2022 she was Economics & Finance editor at Los Angeles Review of Books, before serving as Editor-in-Chief through 2023. Before academia, she worked as a reporter and has published reportage and essays in a variety of publications, including Mother Jones, n+1, Post45: Contemporaries, Bloomberg and Avidly.org.

References

Bernard, Carole, and Phelim P. Boyle. 2009. “Mr. Madoff’s amazing returns: An analysis of the split-strike conversion strategy.” The Journal of Derivatives 17, no. 1: 62-76.

Chihara, Michelle. 2020. “The Rise of Behavioral Economic Masculinity.” American Literary History 32, no. 1: 77-110.

Konings, Martijn. 2018. Capital and Time: For a New Critique of Neoliberal Reason. Stanford, California: Stanford University Press.

La Berge, Leigh Claire. 2015. Scandals and Abstraction: Financial Fiction of the Long 1980s. Oxford: Oxford University Press.

Morath, Eric. 2011. “Bill Strengthens Trustee’s Power to Protect Homeowners.” Wall Street Journal, May 27.

Rugin, Ronald L. 2014. “How the ‘Wolf of Wall Street’ Really Did It.” Wall Street Journal, January 3.

Seybold, Matthew. 2022. Podcast episode: “The Sopranos Revival (Remember the End of the End of History?)” with Peter Coviello and Xine Yao. The American Vandal, September 29. The Center for Mark Twain Studies.

Hope, Bradley; John R. Emshwiller and Ben Fritz. 2016. “The Secret Money Behind ‘The Wolf of Wall Street.’” Wall Street Journal, April 1.

^[1] See: Bernard 2009, which makes clear that it was relatively obvious that Madoff’s returns could not come from the strategy he claimed to be using.

^[2] See: La Berge 2015 for a discussion of hypermasculinity, scandals, and abstraction. I also discuss masculinity and epistemic authority in economics in Chihara 2020.

^[3] See: Rubin 2014. Rubin had initially helped Elizabeth Warren set up the Consumer Financial Protection Bureau. Later, according to his own website, as an attorney in private practice he “defended clients against CFPB enforcement attorneys he had trained,” and still later he wrote an article for the conservative magazine The National Review about the CFPB’s “Tragic Downfall.” Rubin felt the CFPB had become too politicized. (The CFPB still exists, so this is a metaphoric downfall.)

^[4] See: Morath 2011. Sen. Patrick Leahy (D-VT) was one of three senators who recognized that the actions of creditors in the bankruptcy process rose to the level of abuse and fraud, and so the politicians introduced legislation to curb the behavior.

[5] See: Hope 2016 for one example of the many articles and books written about the 1MDB scheme.

This article was published as part of the b2o review‘s “Finance and Fiction” dossier. The dossier includes a response to this article by Michelle Chihara.

It’s just money! It’s made up! Pieces of paper with pictures on it so we don’t need to kill each other just to have something to eat. It’s not wrong. And it is certainly not different today than it has ever been.

John Tuld (played by Jeremy Irons), in J. C. Chandor: Margin Call

The idea of fiction and the use of paper money came into being more or less at the same time: in the mid-18^th century, at a time when Western modernity developed its characteristic propensity for speculation. Fictions were understood then as imaginary tales that had no real referent in the world, but that nonetheless retained interest by presenting something that could arguably have been, once one had willingly suspended one’s disbelief. Paper money, meanwhile, was acknowledged to have no intrinsic value whatsoever, but to nonetheless possess the very practical quality of being a measure of comparative value, if backed by a belief in its ultimate convertibility by the state. In both instances, we see on the one hand a speculative leap into a universe of conjecture–the plausibility of a given event, or the compatibility and eventual exchangeability of different goods–; and, on the other, a self-conscious caveat that this leap is only warranted if, in the first case, we don’t take the speculative face of fiction for something real, and, in the second, we don’t take the speculative face of money as something unreal. As long as we believe firmly enough in fiction not having an actual referent, and in money having an actual value, we are able to manoeuvre these otherwise slippery media. But, every so often, these intricately balanced equilibria tend to falter and we discover that what we took for fiction should really be understood at face value, or that what we took for good money is really nothing but fictitious assets.

Much more can be said about this peculiar kinship between fiction and money, their long common history, and the many ways in which they have shown proclivity to forage into the domain of the other, often with strange and disquieting consequences. In the following, I will examine a recent case where the domains of fiction and of money intertwine and eventually demonstrate the contemporary (although long-standing) fragility of their twin orders.

*

In June 2009, Bernard Madoff was sentenced to 150 years of incarceration for a fraud of more than 65 billion dollars. Through the golden years of financial accumulation, spanning from the abolition of the Bretton-Woods agreement in 1973 to the crash of 2008, Madoff worked his way up to become one of the most prominent fund managers on Wall Street, a pioneer of digital trading, co-founder of the NASDAQ, and at a certain time owner of one of the five biggest trading agencies on Wall Street with a net credit of more than 150 billion dollars. It was only after the crisis of 2008, when liquidity froze and capital was suddenly withdrawn from the markets, that the Madoff fund was revealed to be thoroughly insolvent: the generous returns were not the outcome of felicitous investment strategies but were simply paid from the steadily incoming deposits to the fund. A Ponzi scheme, in other words, where no investments were taking place, and where returns were paid for by taking on more credit, demanding more returns, and so on. For a certain period of time, anyway. In Madoff’s case, for probably more than 20 years.

For those 20 years, Madoff was considered a wizard, a genius in the creation of more money out of money. And then he turned out to be just another crook. A crook whose trick was to feign, to all the investors he ruined, that he could do precisely what the rest of Wall Street was doing too, transforming money into more money—although he, of course, could do it just a little better. There were no investments taking place in the firm. Madoff simply deposited the incoming funds to his account in Chase Manhattan Bank and withdrew what was needed to pay returns and eventual repayments to investors who wanted out (which was rare), all the while producing neat and reassuring statements that itemized the alleged buying and selling of assets, citing their real market values at the time, and vaunting the merits of his unfailing “split-strike conversion strategy”. An elaborate fiction, in other words.

The Madoff case has drawn huge amounts of media attention, much more than other Ponzi schemes that have blown up both before and after Madoff. This is not least—according to the sociologist Coleen P. Eren, who has mapped the media turmoil—because of the sheer size of the amounts involved and the duration of the scheme. The international press of course covered the unravelling of Madoff’s scheme and the 6 month-process from indictment to conviction. The case also provided, however, a fecund “human interest” angle that allowed the media to delve into the auctioning of the family’s houses and yachts, Ruth Madoff’s wardrobes and jewelleries, the painful conflict between Madoff and his sons, as well as with the victims that lost their fortunes. Since the case blew up, there has been a steady flow of books and articles; a film, The Wizard of Lies (2017), based on a book by New York Times journalist Diana Henriques, featuring Michelle Pfeiffer and Robert de Niro as Ruth and Bernie Madoff; and the 2023 Netflix show Madoff: The Monster of Wall Street. The Madoff case clearly provided a veritable drama of dethronement, as if it was tailored for public attention.

This flood of cultural production testifies to a distinct combination of fascination and outrage. On the one hand, one easily recognizes the default fascination with the rich, the case offering a peep into the life in the upper echelons of banking and brokerage, mobilizing sentiments of admiration and awe. And Madoff’s life did indeed have, in every detail, the appearance of the successful modern financial entrepreneur: penthouse, villas, private jets, charity galas, board meetings, conspicuous parties. It’s a lifestyle that is admired and desired by many, and a profession that many believe in—that of making money out of money. The intensity of this belief, desire, and admiration also explains, then, the concomitant feeling of outrage when it was revealed that the wizard was a crook, who took investments from family, friends, philanthropists, pension funds, reassuring them all that their money was safe and thriving with “uncle Bernie”, all the while funnelling them into a scheme that would definitely—and fatally—prove unsustainable in the long run.

It is tempting, of course, to speculate on the close relations between these expressions of fascination and outrage and the mixed feelings they display, involving disappointment (what we admired was not admirable after all), frustration (what we believed in is not to be believed), Schadenfreude (let the mighty fall), and class anger (the superrich are getting richer all the time, time to call it out). Whatever the exact case may be, the vilification of Madoff did seem to have a particularly affective tension to it, as when the cover of New York Magazine portrayed him as a “monster”, diligently photoshopped. One of the books about Madoff’s Ponzi scheme, Brian Ross’s The Madoff Chronicle, has Madoff’s personality laid out by an ancient FBI criminal profiler who casuistically portrays him as a typical “sociopath” and “cold-blooded” narcissist. Others have called him a crook, a liar, a schemer, a seducer, and much more (all these reactions are richly documented in Eren’s book mentioned above). Even one of the more sober renditions of the Madoff story, Diana Henriques’s The Wizard of Lies, cannot resist succumbing to indignation when glossing Madoff’s crimes (“only a soulless, heartless monster could have inflicted such pain on those he knew and supposedly cared about,” and “no human being could construct a life of such brazen, destructive lies” (346)).

The tonality of indignation is in fact striking, as is the, by all standards, quite exuberant conviction for what was, after all, a fairly trivial white-collar crime, the big numbers notwithstanding. What did Madoff do? He swindled rich people and money managers who found themselves entitled to have a 20 percent annual gain on their fortune, and who believed that the well-dressed and soft-spoken Madoff in his sleek office could deliver this.

In this sense, the remarkable affect sparked by the Madoff case might not even be his criminal acts, but the very normalcy of what he was doing. Coleen Eren points to what she calls the metaphoric nature of the trial: “Talking about the trial became a way of talking about punishment not only for Madoff but for those responsible for the financial crisis […] He offered a “fix” for all the other improprieties and crimes that went unpunished, including the class inequalities and greed and the ressentiment” (Eren 120).

The Madoff case, pace Eren, can thus come to represent what is flawed in contemporary financialized capitalism. This representative identification of Madoff with something bigger might indeed be metaphorical (or even metonymical: representing a totality by one part of it); I would like, however, to suggest an allegorical reading, by which the case becomes a kind of a slightly convex mirror in which we not only see his (devious) deviation from normal market behaviour, but also a replication of it, only in a slightly distorted fashion.

One of the big issues that keeps coming up in the reactions to the case is not only the magnitude of the fraud—the unimaginable, sublime number of 65 billion dollars–but also its longevity: how on earth, everybody exclaimed, could Madoff keep his fraud running for several decades? One answer to this is evidently that he was hedged by a financial market that expanded in volume with the same pace as his need for supplementary capital deposits to cover the interests he paid to his creditors. For twenty years, the amount of idle capital in the financial markets kept growing at a rate that matched the Madoff fund’s need to take on credit. Nobody wanted their money back for any purposes (of course some did make withdrawals and made a lot of profit by exiting the Ponzi scheme in time; however, the net growth of the fund sufficed to keep the pyramidal expansion of the business going for an exceptionally—and uniquely–long period of time). In other words, Madoff’s business didn’t stand out as an anomaly, but the exponential growth requirement of his Ponzi scheme was underwritten by the market at large. In this sense, Madoff’s fictitious investment fund also tells us something about the nature of fictitious capital in an age of accumulation by financialization: precisely not as an anomaly, but as an allegory of unsustainable credit-based and highly leveraged capital accumulation.

*

In the third volume of Capital, Marx discusses an array of different forms of so-called interest-bearing capital (credit, bonds, and shares) and the idea that comes with them, as he puts it, that it is “the property of money to create value, to yield interest, as it is the property of pear-trees to bear pears” (Marx 516). The sweet dream, in other words, shared by Madoff’s investors and the rest of us, that money has its own particular fertility. Marx’s analysis of interest-bearing capital highlights two particularly noteworthy features: first, that its value is essentially promissory. If money, after all, does not procreate all by itself, interest refers to a value yet to be produced, that is, an anticipation of a valorising process that is expected to take place in the future. If liquid capital results from previous valorising processes (at some point Marx calls it “frozen labour”), fictitious capital—in all its forms—is a promise of value to be produced at some point in the future, a “frozen future”, if you like. Secondly, fictitious capital has the particular feature that it can, by way of its promissory nature, be promised more than once. One given asset—or one specific claim on the future—can be counted, for instance, both as somebody’s fortune and as a security for a credit, or for a second or third credit, for that matter. “Everything in this credit system appears in duplicate and triplicate, and is transformed into a mere phantom of the mind” (603). Capital here retains its fictitiousness in that promises can be stacked up, to an amount where the aggregated claims cannot be honoured. Due to these two features, the trader in credit appears, with Marx’s characteristic penchant for one-liners “as a prophet and a swindler at the same time” (573).

Marx’s concept of fictitious capital is itself almost prophetic. In Capital, it was an addendum to the primary analysis of valorisation of labour, just as in his time speculation was a marginal source of valorisation in comparison with the decisive means of valorisation, that of production. Today’s financialization has turned the hierarchy between the two upside-down, and the twin mechanisms of fictitious capital—claiming a value in the present that is only to be produced in the future, and using credit to obtain more credit—are now ubiquitous and central to the economy. Where the role of finance has generally been considered, by modern economists as well as by Marx in his time, as a means to create liquidity, that is, to move capital to wherever it is needed, the combination of the deregulation of financial markets, the stagnation of production, and advanced technologies of finance, has created a situation where financial transactions, rather than production proper, have become the main means of capital accumulation. Credit is by now—as Michel Feher has argued in Rated Agency—the most yielding commodity of all, and consequently the wave of financialization has amassed an immense volume of credit by securitizing still more assets. Real estate, infrastructure, health, education, and everyday consumption have all been turned from dormant values into assets that, when securitized with the tools of finance, can provide immediate access to liquid capital. Credit, then, however, of course also entails debt. And the massive securitization of almost everything has built up momentous positions of debt: commercial debt, private debt, national debt. This is the contemporary version of the “prophetic” side of fictitious capital: there are more outstanding claims on values to be produced in the future than ever before. Or, put differently, the return on capital assets remains high as long as more debt is heaped up in in the future—precisely the mechanism that allowed Madoff’s Ponzi scheme to remain hedged by the rising market.

There is more to financialization, however, than this heaping up of obligations that by now weigh down so heavily on the future. To properly gain profit from possessing credit, the finance markets moreover accommodate different ways of gearing up credit. One of them is to systematically leverage any given credit position, that is, to use credit to buy more credit. After the 1929 crisis, certain limits were set for how much banks should be allowed to leverage, but since the 1980s, these precautions have been gradually suspended and the degree of leverage of banks, financial institutions and corporations has skyrocketed, using existing claims to issue more claims, and indeed using these inflated positions to performatively build up supplementary market value, as Martijn Koonings has compellingly shown in Capital and Time. When banks (in the recently broadening sense of the word, now covering all kinds of financial institutions and agents) are allowed to lower the reserves ratio, and when the economy is at the same time “eased” with generous issuing of public debt—that is, when there are both ways and means for leverage at hand—claims on future production of value are multiplied over and over again. Banks, as pointed out by Stefano Sgambati, “are impelled to come up with financial innovations that, besides enhancing their leverage, propel an ever growing marketization of other people’s debts” (Sgambati 309). This is also the point at which fictitious capital comes to refer not only to the “prophet”, but also to the “swindler”: where the same promise pertaining to the future is given more than once for every given asset.

And we can go even further. One thing is to obtain more credit with the credit already at hand; yet another—and this is a second defining feature of financialization—is to constantly re-mediate credit in order to create more liquid capital. This is the business of derivatives, contracts betting on the future value of credit positions, contracts that can again be bought and sold and eventually exchanged again to liquid capital. Derivatives can price risk, or put differently, they are a means of packaging risk as a commodity that can be bought and sold on a new and lucrative market—a market presently estimated to an outstanding gross value of some 500 trillion dollars. Derivatives are what Cédric Durand has called a “second generation fictitious capital” (Durand 148), and the surge in issuing derivatives (following another set of de-regulations) has led to the invention of a brand-new commodity: a piece of securitized contingency. Practical as they might be, derivatives in their present, rogue form have produced another layer of outstanding claims on the future: not only multiple claims on every asset, as in the case of the present leveraging techniques, but now also factoring in the price of the risks inherent in the contingencies of the future, to be paid by the very same future.

When finance is no longer a supplement to the traditional mode of capitalist valorisation, that is, buying labour and collecting a surplus value by selling the products of this labour, but a primary means of accumulation in itself, it appears to have found potential surplus value in new places, beyond the “secret abode of production” analysed by Marx. Throughout the last four decades, where the increase in production has stagnated, the returns on capital to be obtained in the financial markets have nonetheless increased handsomely. And if we do stick to Marx’s insight that money does not yield interest like pear-trees bear pears, we should look somewhere else to gauge the source of this abundant creation of wealth. Saskia Sassen has observed that financialization has by now become “a capability to securitise just about everything in an economy and, in doing so, subject economies and governments to its own criteria for success” (Sassen 118). To pinpoint this new mode of subjection, she picks up another concept heralded by Marx, namely that of “enclosure”, given that today financial firms, as she puts it, “enclose a country’s resources and its citizens’ taxes” (15). And more specifically, the resource being enclosed comes down to being the future itself, the future in which the momentous debts incurred by the credits produced by way of financial instruments eventually reach maturity.

Looking at contemporary financialization this way, the allegorical nature of Madoff’s scheme becomes immediately apparent. The market in its totality and Madoff shared the inability to honor the outstanding debt positions, and the coy expectation that in the future somehow this gap will be filled. In Madoff’s case this would happen by multiplying depositions (which again had worked for decades); in the financial markets at large, it would happen by the belief in a steep increase in productivity to cover the enormous heaps of debt. The latter is an expectation with no historical evidence to back it up—one that is unsustainable to boot.

This structural homology between the Madoff case and the larger case of 21^st century financialization becomes even more blatant if viewed through the lens of Hyman Minsky’s 1992 “financial instability hypothesis”. According to Minsky, historical periods where accumulation is based on debt expansion rather than increase in production will move through stages of hedged finance (where interest on debt is paid and capital preserved), speculative finance (where interest can still be paid, but the invested capital needs to be “rolled over”), and finally Ponzi finance (where the cash flow no longer suffices to cover neither repayment nor interest, and where credits might eventually need to be depreciated). This is what has become known as the “Minsky moment”, the cusp of a crisis of speculation with insufficient growth to sustain the demand for valorisation. That Minsky moment occurred, one could say, both to Madoff and to the rest of the financial world in 2008. It occurred on different scales, one where the Ponzi fiction did violate legislation and restrictions, and one where the Ponzi-version of fictitious capital, providing the conditions of possibility for the credibility of the former, did not. There is a similarity here that has even made economic sociologists suggest we don’t talk about different magnitudes of Ponzi schemes, but simply about financialization as a “Madoffisation” of the economy (Monaghan and O’Flynn 2017)—a process through which were issued cascades of deferred claims that can be immediately monetized–or, put differently: an enrichment in the present to the detriment of the future.

*

The allegorical relation between the Madoff case and the crisis of financialized capitalism that co-occurred in 2008 sheds an interesting light on the present relationship between fiction and finance. If our everyday understanding of the two rests, as I claimed at the beginning, on our creed that fiction does not represent actual beings, and that money does represent an actual value, our two cases testify to all kinds of transgressions of this understanding. Madoff’s meticulously crafted fictitious fund was taken to have a referent, and as long as it functioned, it thrived because it was hedged by growth in financialized accumulation, the lies and subterfuge notwithstanding. The break-down of the financial market—when the inflated edifice of assiduously fashioned varieties of fictitious capital fell apart and left the world economy and the livelihood of millions and millions of people in deep crisis—similarly established that the nominal value of most of the circulating assets was eventually non-founded. Or, to put the conundrum differently: when the fictitious character of money was being exacerbated by financialized capitalism and conspicuously bloated itself, we at the same time learned that fictions, even if they are un-founded, still have the power of world-making on even the largest scales.

This disquieting muddle, where the epistemic designs of fiction and of finance lose their neat contours, is at the heart of the scandal that broke out when the Madoff fund bankrupted. Madoff’s fiction, eventually avowed, was telling the truth about a bigger but stubbornly non-avowed fiction, like a distorted mirror reflecting the state of things at the onset of the financial crisis. This perplexity can be read in the conviction of Madoff, which of course enumerated all the infringements on current laws and regulations the Madoff fund had perpetrated. However, it also went quite a bit further in the statement of the honourable judge Chin:

In a society governed by rule of law, Mr. Madoff will get what he deserves and will be punished by his moral culpability… Trust was broken in a way that has left many—victims as well as many others—doubting our financial institutions, our financial systems, our government’s ability to regulate and protect. (qtd. Eren 125)

The judge is impeccably blunt: Madoff is morally condemned for discrediting our financial system. The exorbitant sentence is bestowed on Madoff to establish a distinction between his fiction and the bigger fiction of financial engineering and in order to reassure us all that we, and the frenzy of financialization that we cannot imagine escaping, are still situated in an orderly reality. That we are not just the secondary characters in somebody else’s fiction, in which they are about to seize what we believed was our future, appropriating that future and whichever aspirations we might have for it, for their own immediate gain.

There is no doubt that judge Chen’s sentencing “sent a message,” as the saying goes—the message being that there are beliefs that should not be tinkered with. But still, Madoff and his crimes were not solely placeholders for potential misconduct in the finance sector at large. I would suggest that his true moral crime—the one that might instigate doubts about the financial system—was revealed in the sentencing to be not his fraudulent fictions, but the way his business came to act as a displaced representation of the mundane, all-too-common practices of the contemporary financial sector that had set off the crisis. As an allegorical demonstration, the Madoff case could harbinger an undesired insight into the state of things. A play in the play, a fiction within a larger fiction, like the famous allegory devised by Hamlet:

Is it not monstrous that this player here,

But in a fiction, in a dream of passion,

Could force his [the King’s] soul so to his own conceit

(Shakespeare 270)

The allegory is, of course, educational; but just as the ancient king of Denmark in Shakespeare’s drama eventually proved unfit to read the allegorical message of the embedded play, so our present, more than ten years after the sentencing of Bernard Madoff—and ourselves as spectators to the unravelling of his Ponzi scheme—have been equally deaf to the message.

This deafness is undoubtedly a structural one, supported by a disposition to uphold a strict distinction between what morally suspect financiers do and what is the logic of the financial system at large, even to the detriment of a foreboding but better sense that these two are actually quite in synch. A mixed feeling, in other words, like the one encompassing both admiration for the financial wizard and the incipient suspicion that the system itself is somehow rigged. Psychoanalysis has taught us that the force of a rejection mirrors an affective investment. When rejecting the insight provided by the allegory—the formal homology as well as the practical metabolism between Madoff’s scheme and the logic of financialized capitalism—, our present might somehow obliquely be recognizing this lesson. At the same time, however, it must determinedly disregard it because it is strictly non-admissible within the present world-image.

This mixed feeling is probably nowhere more tangible than in the rapidity and vehemence with which Madoff’s crime was identified and denounced as a Ponzi scheme. Such a swift identification and denunciation are manageable for the cultural imagination, because they leave the actual interdependence between Madoff’s Ponzi scheme and the larger economical (and political) context of the fund’s activities in the shadows. Instead of taking in the allegorical lesson and recognizing the Ponzi-like character of financialized capitalism at the cusp of the 2008-bubble, the public eye on Madoff—again, ranging from yellow press to the New York Southern District Court—focused on Madoff’s fraud as “one of the most egregious financial crimes of our time” and as “extraordinarily evil,” as reiterated in 2020 by Judge Chun when rejecting Madoff’s bid for compassionate release. (New York Law Journal, June 4, 2020). Keep the focus on the man, we are told, and on the 11 counts to which he pleaded guilty. Let Madoff remain a metaphor of dishonest financiers—by all means, do not allow him to become an allegory of the financialized economy itself. Condemn the man, exonerate the system. Could we do otherwise?

Frederik Tygstrup is Professor of Comparative Literature at the University of Copenhagen and PI of the research project “Finance Fiction. Financialization and Culture in Early 21^st Century,” funded by the Independent Research Fund Denmark 2018-22.

References

Chandor, J. C. Margin Call. 2011.

Eren, Colleen P. Bernie Madoff and the Crisis: The Public Trial of Capitalism. Stanford: Stanford University Press 2017.

Durand, Cédric. Fictitious Capital. How Finance is Appropriating Our Future. Trans. David Broder. London: Verso 2017.

Feher, Michel. Rated Agency. New York: Zone Books 2019.

Henriques, Diana B. The Wizard of Lies: Bernie Madoff and the Death of Trust. New York: St. Martin’s Press 2011.

Koonings, Martijn. Capital and Time. For a New Critique of Neoliberal Reason. Stanford: Stanford University Press 2018.

Marx, Karl. Capital. Vol. 3. London: Pelican Books 1981.

Minsky, Hyman P. The Financial Instability Hypothesis. New York: Levy Economics Institute of Bard College 1992.

Monaghan, Lee F. and Micheal O’Flynn. “The Madoffization of Irish Society: from Ponzi Finance to Sociological Critique.” The British Journal of Sociology 68/4, 2017.

Ross, Brian. The Madoff Chronicle. New York: Hyperion Books 2009

Sassen, Saskia. Expulsions: Brutality and Complexity in the Global Economy. Massachusetts: Harvard University Press 2014.

Sgambati, Stefano. ”The Art of Leverage: A Study of Bank Power, Money-making and Debt Finance.” Review of International Political Economy 26/ 2, 2019.

Shakespeare, William. Hamlet. Ed. Harold Jenkins. Arden Shakespeare. London: Methuen 1982.

This response was published as part of the b2o review‘s “Finance and Fiction” dossier. 

In the text “Wu Wei (無爲) on Wall Street,” Arne De Boever notes the curious ubiquity in finance fiction of references to the ancient Chinese war general Sun Tzi, author of the perennial bestseller The Art of War. De Boever ponders why ancient Chinese theories of war crop on Wall Street (in fiction as well as in reality) and whether there might be a deeper relation between Sun Tzi’s doctrine of “wu wei” and neoliberal ideology more generally.[i]

To get at the question of the “content” of the neoliberal “parallelism” between war, finance, and management, De Boever returns to the French sinologist François Jullien’s tri-partite work on “efficacy” written over the last two decades before the turn-of-the millennium. According to De Boever, Jullien’s thought—at the center of which stands the Chinese notion of “wu wei” or, in French, “laissez faire”—facilitates a particularly easy exchange between discourses of war and management and thus provides an intellectual template for neoliberal thought.

De Boever is thus suggesting how Jullien might have assisted—in a much more direct way than someone like Foucault, who has often been accused of intellectual alignment with neoliberalism (Zamora and Behrent 2016)—in the historical transformation of ancient Chinese military thought (broadly informed by Daoist principles of “action through non-action”) into neoliberal management theory:

China’s non-Western model of warfare as it is exposed in Jullien’s Treatise becomes highly productive both within Jullien’s work (where it leads to his Lecture) but also outside of it, in its reception in management studies, as part of the development of contemporary management strategies not just for China but at large.

This is a compelling argument, particularly so since Jullien, as De Boever notes, did not merely theorize “efficacy” in management but actively participated in shaping new management doctrines for the neoliberal era through his work as a prominent international business consultant. By zooming in on the “unexceptional” thought of Jullien, and on the doctrine of “wu wei” in particular, De Boever thus offers a fresh perspective on the genealogy of neoliberal thought.

In what follows, I will respond to this argument by taking a slightly different but, I hope, complementary approach to understanding why Sun Tzi became a reference for Wall Street stock traders as well as a stable of new management theory.

Let me begin with a recent remark by Junius Frey, who in the foreword to Yuk Hui’s The Question Concerning Technology in China: An Essay in Cosmotechnics touches briefly upon the topic of Chinese Daoism and notes, à propos the doctrine of “wu wei”:

The idea that to govern is to follow the vagaries of Nature, and that power ideally merges with the order of things, already captivated Quesnay in the 18th century in his eulogy of China’s despotism. The fascination with Chinese politics during this whole episode went hand in hand with consternation over American politics. One can maintain, along with the Marxists of Chuang, that “     the Chinese Communist Party functions as a vanguard for the global capitalist class” and that “its experiments are important precisely because they are situated on the first line of expansion of capital today, in both its industrial and financial dimensions, and are suited to the confrontation with the very limits of accumulation on its largest scales (Chuang, Social Contagion).” (Frey 2021)

Though the consequences that Frey draws from this observation are to my mind rather obscure (in short, Frey claims that today’s “imperial domination” is essentially “Chinese”), the embedded quote by the Chinese anti-authoritarian communist collective Chuang usefully shifts the focus away from the terrain of competing “ideas” to the real terrain of the material struggle between classes or class war.

*

One of the most incisive strategists of class war is the French situationist Guy Debord. Debord’s thinking on war in the expanded social setting of late capitalist society not only prefigures key insights in so called “French theory” but also points to the transformation of war theory, via François Jullien, into management theory.

While it is well known that Debord and the situationists played a key role in the (failed) revolutionary events of May ’68, it is less well known that after the dissolution of the Situationist International (SI) in 1972 Debord (re)focused his attention to the study of the history of war, military theory and the question of strategy (Guy 2018). Debord believed that late modern warfare was no longer isolated to the battlefield, with two opposing armies confronting each other. Instead, Debord believed that war had transformed itself into a form of generalized class war that “should be understood in its social omnipresence.” (Debord 2018, 449). For Debord, the study of war was more than simply an intellectual pastime: it implied the question of strategy—when, how, and where to fight—for those who, like Debord himself, actively sought to overthrow capitalist society’s class-rule.

During the 1960s and early 1970s, against the backdrop of anti-colonial wars and uprisings in Algeria, Congo, Vietnam, and many other places, Debord studied, excerpted, and commented on a number of historical strategists from Sun Tse (the spelling Debord preferred to distinguish from the French Maoist spelling then in vogue, as noted by Laurence Le Bras) to Machiavelli, Jomini and Clausewitz (who appears in De Boever’s text), to mention just a few of the most well-known (Debord 2018).

Read in the light of the voluminous dossier on strategy that Debord left behind, his entire late oeuvre comes across as a sustained strategic study of the dynamics of “the social war” as a continuation of traditional warfare with other more “spectacular” means (Debord 2018, 111: Debord uses the term “la guerre sociale sous le spectacle”). Debord was not alone in turning to military theory to understand society. Debord’s interest in military theory may be seen as continuous with a broader intellectual turn in France where “from the mid-1970s to the early 1980s, with the Vietnam War also in recent memory, the topic of war began to attract the attention of a number of leading French thinkers” (Engberg-Pedersen 2022, ?).  A key figure in this context is André Glucksmann whose Discours de la guerre from 1967 took up aspects of Mao Tsé-Toung’s writings on Chinese guerilla warfare and became an intellectual touchstone for the French rethinking of strategy and war (Glucksmann 1979).

However, by contrast to Foucault or Deleuze & Guattari, who would become well-known for their repurposing of Clausewitz, Debord’s key role in the rediscovery of the “classics” of war, and hence his influence on French radical thought, remains partly obscured. Debord himself contributed to the obfuscation of his role in reconfiguring war theory for revolutionaries by withdrawing into the shadows of French public intellectual life, publishing scarcely, and conspiring with a still smaller circle of trusted comrades and friends. Debord’s correspondence with one of these comrades, Jaime Semprún, provides an interesting view into French (post)war thought.

Believing that Debord had recommended to the prestigious French publishing house Champ Libre to reject his manuscript, Semprún accused Debord of being a kind of literary puppet master working behind the scenes to actively curate the available body of knowledge to fit his particular ideas of social revolution. Debord vehemently refused to have played any such role. Interestingly, however, Debord admits in his letter to Semprún to have had a certain influence on the resurgence of classical war theory, the perspectives of which he felt had been intellectually compromised:

Concerning the majority of the re-published ‘classics’—Clausewitz, Gracian, etc.—I absolutely do not see what my revolutionary reputation might add to them and still less what they might add to my revolutionary reputation (or even to my not-too-spectacular personal notoriety), since I have kept myself far from consecrating scholarly prefaces to them or adding to them my name as the person responsible for the collection or any other affair. Moreover, I find that all this—for the happy few who know that I recommended these books (in any case, my name is not used to recommend these books to the public)—is only testimony to a certain general culture, about which I have never sought to brag, but I do not dream of being embarrassed about it due to Vincenno-cadrist illiteracy (Debord 1976).[ii]

Though he preferred to take no credit for it, Debord was in fact, indirectly, responsible for the republishing of major works of strategy by Clausewitz and others during the 1970s. But his interest in war theory reaches much further back, to the 1950s if not before. In fact, by 1965 Debord devised his own wargame, called Kriegsspiel; a ludic device to aid strategic thinking that Debord and the Chinese born situationist Alice Becker-Ho, later Alice Debord, would play together and about which they would co-author an entire book (Becker-Ho and Debord 2006). The literature on Debord’s wargame is vast, and growing, and for the tech savvy there’s even a digital version of the game available (Guy 2020; A. Galloway 2022; A. R. Galloway 2021).

One little-noted fact in the history of Debord’s war game, however, is that the 1963 “prototype” for this game was produced by fellow situationist René Viénet (Guy 2018, 466). This is an  interesting detail in the context of De Boever’s thinking about Jullien as Viénet was, incidentally, a sinologist like Jullien, and a quite influential sinologist at that. Viénet, then, was perhaps not only “the main person responsible for informing the Situationist understanding of Maoist China” but also in all likelihood one of the main avenues through which the stream from French radical thought flew back to inform, and shape, the ideas and intellectual problematics of someone like Jullien (Zacarias 2020, 224).[iii] Whether or not Jullien’s conception of Chinese strategy as starting from “the potential inherent in the situation” [Jullien qtd. De Boever     ] was shaped by situationist thought is less important than the fact that certain ancient Chinese ideas about the “vagaries of Nature” clearly resonated in French postwar thought. Debord, for one, seems to latch on to the Daoist elements in Sun Tse’s Art of War, noting how “an army’s form resembles water” and “an army is exactly comparable to water because in the same way as a stream flows around peaks and throws itself down slopes, an army avoids strength and strikes weakness” (Debord 2018, 317–18).

Interesting as it would be to trace the connection between Debord, Viénet, and Jullien in more detail, I want to end by shifting the methodological lens from the study of the historical transmission and evolution of ideas to the material and social conditions that produced these ideas in the first place. As already suggested, Debord’s interest in war did not arise in a vacuum but was defined by the backdrop of decolonization struggles, colonial violence and anti-colonialist liberation wars. If one studies Debord’s work there is frequent reference to anti-colonial struggles abroad in for instance Algeria, or in Congo, where the spontaneous revolts led by Patrice Lumumba was hailed as the only ‘worthy sequel’ to the interwar periods revolutionary avantgarde movements (Smith 2013, 70; Yoon 2013; Routhier 2023, 205–6). Within the constraints of this brief response, let me just gesture towards some of the existing literature on the situationists’ internationalist anti-colonialism (Dolto and Moussa 2020; Corrêra 2023). But even gesturing points us further in the right direction, I think, and helps shift the perspective from the history of ideas à la Foucault to the Marxist viewpoint of social antagonism and class war à la Debord. Method, in short, is also always a question of strategy.

From the viewpoint of social antagonism the question is perhaps not so much whether Jullien’s reconfiguring of Sun Tzi and the “wu wei” doctrine impacted or influenced neoliberal management theory. I think De Boever very convincingly shows that he probably did. What seems more urgent to ask, pace De Boever, is why a French sinologist like Jullien comes to ventriloquize Capital? Why is the reemergence of Sun Tzi’s theory of war conspicuously coterminous with the rise of neoliberalism? To what extent do the changes in the organic composition of capital during the postwar decades change the terms and conditions (literally and figuratively) of class war? And, most importantly: what is the proper strategic response for those happy few of us who would like to think, in the stinging words of Junius Frey, “that the encounter between traditional Chinese thought and the European tradition can be something more than a spiritual supplement for functionaries on the rise, à la François Jullien” (Frey 2021).[iv]

Dominique Routhier is a researcher, writer, and critic based in Copenhagen, Denmark. He has most recently published the book With and Against: the Situationist International in the Age of Automation (Verso, 2023).

References

Becker-Ho, Alice, and Guy Debord. 2006. Le jeu de la guerre: relevé des positions successives de toutes les forces au cours d’une partie. Paris: Gallimard.

Corrêra, Erick. 2023. “The Internationalist Anti-Colonialism of the Situationists.” Brooklyn Rail, February 2023. https://brooklynrail.org/2023/02/.

Debord, Guy. 1976. “Letter to Jaime Semprún,” September 26, 1976. https://www.notbored.org/debord-26December1976.html.

———. 2018. Stratégie. La librairie de Guy Debord. Paris: Éditions L’Échappée.

Dolto, Sophie, and Nedjib Sidi Moussa. 2020. “The Situationists’ Anti-Colonialism: An Internationalist Perspective.” In The Situationist International: A Critical Handbook, edited by Alastair Hemmens and Gabriel Zacarias, 103–17. London: Pluto Press.

Engberg-Pedersen, Anders. 2022. “War and French Theory.” In War and Literary Studies, edited by Anders Engberg-Pedersen and Neil Ramsey, 85–101. New York: Cambridge University Press.

Frey, Junius. 2021. “Sketch of a Communist Political Doctrine.” Ill Will, September. https://illwill.com/sketch-of-a-communist-political-doctrine.

Galloway, Alexander. 2022. “How I Modeled Guy Debord’s Brain in Software.” ROM Chip: A Journal of Game Histories 4 (1). https://romchip.org/index.php/romchip-journal/article/view/162#fn-d0da464098a70e702cbc1660bb575977.

Galloway, Alexander R. 2021. Uncomputable: Play and Politics in the Long Digital Age. Brooklyn, NY: Verso.

Glucksmann, André. 1979. Le discours de la guerre. Paris: Grasset.

Guy, Emmanuel. 2018. “Postface.” In Stratégie, by Guy Debord. La librairie de Guy Debord. Paris: Éditions L’Échappée.

———. 2020. Le Jeu de La Guerre de Guy Debord: L’émancipation Comme Projet. Paris: B42.

Routhier, Dominique. 2023. With and against: The Situationist International in the Age of Automation. London ; New York: Verso.

Smith, Jason E. 2013. “Missed Encounters: Critique de La Séparation between the Riot and the ‘Young Girl.’” Grey Room (July): 62–81. https://doi.org/10.1162/GREY_a_00116.

Yoon, Soyoung. 2013. “Cinema against the Permanent Curfew of Geometry: Guy Debord’s Sur Le Passage de Quelques Personnes à Travers Une Assez Courte Unité de Temps (1959).” Grey Room (July): 38–61. https://doi.org/10.1162/GREY_a_00115.

Zacarias, Gabriel. 2020. “Détournement in Language and the Visual Arts.” In The Situationist International: A Critical Handbook, edited by Alastair Hemmens and Gabriel Zacarias, 214–35. London: Pluto Press.

Zamora, Daniel, and Michael C. Behrent, eds. 2016. Foucault and Neoliberalism. Malden (Mass.): Polity press.

[i] I would like to thank Jason Smith for insights and improvements on a draft version of this text.

[ii] The term Vincenno-cadrist refers to those employed at the Centre universitaires de Vincennes, which was established in 1968 as a response to the Parisian student protests of May ’68. In the early 1970s, Vincennes was a maoist hotbed for much of what would become known as “French Theory.”

[iii] Worth mentioning here is also Simon Leys’ (the pen name of Pierre Ryckmans) important anti-maoist book Les Habits neufs du président Mao (Paris: Champ libre, 1971).

[iv] For a more nuanced assessment of François Jullien’s thought and its critical relevance, see Arne De Boever’s François Jullien’s Unexceptional Thought: A Critical Introduction (London: Rowman & Littlefield, 2020).

This article was published as part of the b2o review‘s “Finance and Fiction” dossier. The dossier includes a response to this article by Dominique Routhier.

“Read Sun Zi”

I want to begin with a bit of locker-room talk I came across when I was doing the primary research for my book Finance Fictions (Boever 2018).[1] It’s a scene from Oliver Stone’s film Wall Street (Fox, 1987). The scene shows the by now infamous trader Gordon Gekko (memorably portrayed by Michael Douglas), quoting Sun Zi, the ancient Chinese military general and strategist of war,[2] to explain his trading strategy. “Every battle is won before it’s ever fought”, Gekko tells Buddy Fox (played by Charlie Sheen). “Think about it”. The question I want to ask is simple: why is Gekko, a trader, quoting Sun Zi’s The Art of War? Why is Gekko telling us to place our bets on Sun Zi? Let’s think about it, as Gekko suggests.

I’ve started doing this in a roundabout way, through a reading of the French philosopher—Hellenist and sinologist—François Jullien (see Boever 2020).[3] Jullien is a controversial figure, and you’ll probably gather from what follows why that is so; but his work can also be helpful, I want to show, in understanding the appearance of Sun Zi in Stone’s Wall Street. Ultimately, I will also expand my frame of reference beyond finance and think about Sun Zi’s relation to theories of neoliberal government. In fact, if you’ve read some of the literature on finance and neoliberalism, chances are that you’ve come across references to Sun Zi.

Consider another example from a very different but, I would argue, related context: in To Our Friends, The Invisible Committee references Sun Zi multiple times—including, by the way, the quote “to ‘win the battle before the battle’” (Invisible Committee 2015, 137)—to theorize what earlier in the book they understand to be (silently echoing the work of Michel Foucault) neoliberal governance. When they list a range of adjectives to characterize this type of governance, they use “flexible, plastic, informal” and “Taoist” (68). Why “Taoist”?

And to return to finance, and financial fiction: when in Tash Aw’s finance novel Five Star Billionaire, the Shanghai businesswoman (and former left-wing activist) Yinghui Leong attends an event where she is nominated for the “Businesswoman of the Year awards”, Aw lets us know that “the ceremony was held in the ballroom of a hotel … decorated with huge bouquets of pink flowers and banners bearing quotes from Sunzi’s The Art of War: OPPORTUNITIES MULTIPLY AS THEY ARE SEIZED. A LEADER LEADS BY EXAMPLE, NOT FORCE” (Aw 53). Why Sun Zi at this awards ceremony? That is what I propose to think about.

In Management as in War

So, first: Jullien. In an interview with Richard Piorunski that was published in the journal Ebisu in 1998, Jullien states the following (the translation here is mine as in almost all of the other quotations that I’ll be using): “I’ve accompanied French businesses in China to help them negotiate. There are strategies, ancient, classical Chinese strategies, to which the Chinese will stick” (Piorunski 1998, 173). How did Jullien, a sinologist and philosopher, end up accompanying French businesses in China? As Jullien himself indicates in the interview, his presence in China at the side of French businesses is due to his work on efficacy. This work extends over three volumes. There was, first, the book The Propensity of Things, which (as per its subtitle) proposed to work “Toward a History of Efficacy in China” (Jullien 1995). This was followed by the much shorter A Treatise on Efficacy: Between Western and Chinese Thinking (Jullien 2004), which explicitly continued the thinking of the earlier book. (Both of those titles have been translated into English.) Finally, there is Jullien’s still untranslated Conférence sur l’efficacité [Lecture on Efficacy] (Jullien 2005), which is even shorter and also more informal in tone, closer to the mode of oral delivery. The title of the book’s German translation is more revealing about the origin of this particular work: Vortrag vor Managern über Wirksamkeit und Effizienz in China und im Westen (Jullien 2006)—in other words: Lecture for Managers on Efficacy and Efficiency in China and the West.

What began as a historical, and densely academic project in Propensity of Things about the notion of potentiality in Chinese thinking evidently morphed over time into a much less dense, much less formal lecture for managers about efficacy and efficiency. The book in the middle, Treatise on Efficacy, is about “warfare, power, and speech” (Jullien 2004, ix). But its opening question already anticipates the later Lecture for Managers: “What do we mean”, Jullien asks there, “when we say that something has ‘potential’—not ‘a potential for’ but an absolute potential—for example [he writes] a market with a potential, a developing business with a potential?” (vii) Treatise might be a book about war, but the theory of war it develops is framed as an inquiry into economic potential, into the potential of a business. Clearly, whatever Jullien will have to say in the book about war is presented as applying to business as well. In management as in war, one might say—a parallelism that I’ll want to extend here to “In finance as in war” and also to “In neoliberalism as in war”. But what would be the content of such a parallel construction? Everything depends here on one’s theory and practice of war.

To give some substance to the parallelism “In management as in war”, I am going to look primarily at the relatively unknown (and untranslated) Lecture for Managers. Lecture reads like an informal summary of Treatise, in other words it’s very much a lecture on war. But this is perhaps not its key concern. If it comes to naming the precise connection between military theory and management theory, it is not so much the notion of “war” as that of “strategy” that is most relevant. Indeed, at its most philosophical, the Lecture seeks to open a divergence between Western and Chinese strategies for bringing something about—strategies for efficacy, as the title of both Treatise and Lecture suggest. At this level, the central question of both the Treatise and the Lecture is not essentially related to war at all; rather, it’s because theories of efficacy have been developed mostly in theories of war that Jullien turns to those to lay out his thinking about efficacy.

After some preliminary remarks that lay out his method and address, indirectly, criticisms that have been levelled at his work, Jullien arrives in his Lecture at what he understands to be the Western approach to efficacy, which constructs a model, plan, or ideal form (eidos, to use the Platonic term) to achieve a goal (telos). Once that’s done, the subject acts according to this plan, seeking to achieve the set goal. He argues that the Western thought of war demonstrates this logic, all the way up to Carl von Clausewitz, who appears in both the Lecture and Treatise as a kind of hinge figure. This is because the late 18^th-, early 19^th-century Prussian general and military theorist both presents us with Western warfare-by-modelization, if you will, and realizes its limits, namely the fact that no war will match the model, plan, or ideal form—the geometry—that has been set for it. Jullien points out that this kind of objection to Plato already starts with Aristotle, who is much more attuned to what escapes the model (Jullien 2005, 17).

Already with Aristotle then, but this becomes particularly visible in Clausewitz, there is a gap that opens up between the theory and the practice of warfare—“[t]o think about warfare is to think about the extent to which it is bound to betray the ideal concept of it” (Jullien 2004, 11)–and it’s this gap that opens up a point of contact with the Chinese theory of warfare. Clausewitz is particularly attuned to the gap between theoretical and practical war, and theorizes what he calls the “friction” (26) between the model and the reality of it. This is the cross that the Western theory of war has to bear. But Jullien uses this realization, which comes from a gap within the Western theory of war, to jump to Chinese theories of war by Sun Zi (and Sun Bin).

Jullien points out, when he begins to discuss these authors, that “today many managers take inspiration from these authors without understanding them well, both in Europe and in Japan. Those are managers ‘à la Sun Zi’” (Jullien 2005, 29). Chinese strategy, Jullien explains, starts from the potential of a situation (30), from the shi of a situation as he discussed it in Propensity. “[I]nstead of imposing our plan upon the world, we could rely on the potential inherent in the situation” (Jullien 2004, 16). What happens in war—the efficacy achieved in war—needs to be understood as the actualization of that potential, as the natural outcome of the situation (Jullien 2005, 32). Most important when going to war is not to make a model, plan, or ideal Form, but to evaluate the situation and its potential (33): a good general will understand the potential of a situation to such an extent that, when they engage in war, the outcome of the war is entirely predetermined—the situation could not allow it develop otherwise (35). As Jullien explains, because the Chinese theory of warfare focuses on evaluating the potential of the situation rather than making a model, there is zero uncertainty about the outcome it anticipates (the outcome is “unswerving, “inevitable”, determined before the battle, etc. [42]). Whereas in the West, war is haunted by the language of chance, necessitating a plea to the gods through sacrifice for example to try to obtain a desirable outcome, Jullien points out that Sun Zi’s Art of War explicitly forbids this, because nothing in warfare should be exterior to the logic of a situation (35). It’s about a certain kind of attunement with reality that enables one to allow reality to follow its path, its course, its dao, but to one’s advantage in war. Chinese warfare is not warfare-by-modelization but warfare-by-regulation, and the dao is what regulates all things. (The model for this is in fact respiration, breathing in and out.)

If the Western model (and in the opposition that’s developed here you can of course see some of what critics like Edward Slingerland deem to be Jullien’s orientalism at work[4]) is telos-oriented and governed by a means-ends logic, Jullien points out that such an architecture cannot be found on the Chinese side (where we have “set-up” and “efficacy” instead), even if that does not mean it is illogical. Rather, efficacy is achieved by allowing the consequences of a situation to come to fruition or maturation. There is no heroism associated with generals, there is no glory in managing a business. It has nothing sensationalist to it: effective victories remain unseen[5] and they ought, in fact, to be easy: indeed, they merely realize to a business’ advantage the logic that already lay contained in nature. A manager does not so much “do” or “act”, they don’t “force”.[6]

To overstate the case somewhat, one might describe this as a theory of “non-action”,[7] as Jullien does in both the Lecture and the Treatise (Jullien 2004, 84-103). (It’s worth pointing out that this term “non-action” translates the key daoist notion of “wu wei” that you find in my title, and to which I’ll return later.) It would be more precise, however, to substitute “non-action” by “action through non-action” or “transformation” in this context: the Chinese general—like the Chinese sage, in fact–does not so much do nothing but seeks to discreetly “transform” their adversary rather than confront them head-on. After all, the Chinese model, as Jullien points out, still “leaves plenty of room for human initiative” (Jullien 1995, 203). Nevertheless, if “action” in Jullien’s summary is “of the moment”, “local”, and “subject-related”, “transformation” is “global”, “durational” and “discreet”—it does not necessarily refer back to a subject.[8] While such transformation is efficacious, it takes place “silently” (58), unnoticed. The strategy of transformation breaks with the Western mythology of “the event” (58-62), which is closely related to Christianity in Jullien’s analysis. It’s the Vietnam war, and specifically the strategy of the Vietnamese, that illustrates this best. To win without battle (an overstatement, surely?): instead, there is “a process of progressive erosion, of making the adversary lose countenance” (61), which Jullien associates with “psychological warfare” (61). In the West, warfare amounts to destruction. But in the Chinese theory of warfare, losses ought to be avoided, and on both sides: in war, it’s preferable to leave the troops intact (62; Jullien 2004, 47). He associates this with deconstruction rather than destruction (Jullien 2004, 48).[9] As Jullien also puts it in Treatise: “nothing could be more economical” (48). And indeed, we should not forget that Jullien is offering all of this theory of Chinese warfare in the context of a Lecture for Managers. Management is a little like psychological warfare, he appears to be saying; you’re trying to de-countenance your adversary not through action but silent transformation. That’s what management is all about.

Path into China

Given the above overview, I suppose it should come as no surprise that research on Jullien will turn up articles written by military officers and business leaders.[10] Of Jullien’s reception in management theory, I’ll discuss just one example, Dominique Poiroux’s “En quête de la voie en Chine” (“In search of the path in/into China”), published in the Journal de l’école de Paris du management. Poiroux is credited simply by the name of the business for whom at the end of 2002, he left to China: “Danone” (Poiroux 2007, 8). The article summarizes his experiences in 8 sections whose titles operate as statements summarizing their main advice. Let me list them to give an idea of their range:

• “Cent jours pour écouter” (“One hundred days for listening”)
• “Prendre du recul” (“Taking a step back”)
• “Gagner du temps” (“Gaining time”)
• “Si l’ennemi ne peut être arrêté, préparer une alliance” (“If the enemy can’t be stopped, prepare an alliance”)
• “Rester humble au quotidien” (“Stay modest in relation to the everyday Chinese person”)
• “Un demi-effort, cent succès; cent efforts, un demi-succès” (the Chinese proverb is included in transcribed Chinese as well: “shi ban gong bei; shi bei gong ban”; “half an effort, one hundred successes; one hundred efforts, half a success”)
• “Se séparer d’un collaborateur, mais rester bons amis” (“Separating oneself from a collaborator, while staying good friends”)
• and finally “Savoir se laisser mener en bateau” (here too, in the transcribed Chinese: “man tian guo hai”; “letting oneself be guided in a boat”).

Rather than explain all of these, I want to note that the first section of Poiroux’s article explicitly credits a lot of these wisdoms to Jullien, with Poiroux writing that Jullien’s book Treatise on Efficacy will often be quoted in the sections that follow. He does not clarify what Jullien’s book is about—war–, only that while he will be applying it to management, “it was not at all written in that context” (Poiroux 2007, 9). It’s worth noting that this is in fact an overstatement: as I’ve discussed, Jullien’s book is explicitly framed through a question about the potential of a business and it includes several references to the economic realm and management strategy. That Jullien’s book is a work of military theory certainly becomes visible in the short section titles that I’ve listed: suddenly, the Danone business leader can use the military language of “enmity” and “alliance” to summarize his management advice. It’s remarkable, I think, that there is no reflection on this shift in the article: it shows to what extent the presence of military language is simply accepted in this context as the language of management. “Strategy” seamlessly crosses here from military into management theory, anecdotes from military history are without any friction applied in the context of management and as part of the broader project of explaining to Western business leaders how to find a “path” in or into China, as the article title puts it. The use of the term “path” by the way is itself significant: it is a rather obvious pun on the Chinese notion of the dao, the path or way that is the flow of all things; but it is repurposed here as part of a Western business strategy for gaining an economic foothold in China.

Many other articles can be found to illustrate the easy exchange between military theory and management theory, which revolves around the term “strategy”. While those never demonstrate any deep engagement with Jullien’s work (often they aren’t even context-specific), the casual references to his thought are many and contribute to the development not only of business strategies in China specifically but—and this is worth emphasizing–of management theory in general. This is different from Poiroux’s use of Jullien in a specifically Chinese situation. China’s non-Western model of warfare as it is exposed in Jullien’s Treatise becomes highly productive both within Jullien’s work (where it leads to his Lecture) but also outside of it, in its reception in management studies, as part of the development of contemporary management strategies not just for China but at large.

Wu Wei and Laissez-Faire

This is where I want to expand the frame of reference beyond management to theories of neoliberal government. For there are elements in the Chinese theory of war that resonate with what one might call today’s neoliberal government. I can argue this theoretically, but I want to do so historically as well in order to give some factual, non-speculative grounding to this proposition.

Consider for example the chapter “Do Nothing (With Nothing Left Undone)” in Jullien’s Treatise, where Jullien as elsewhere in his work suggests that one of the models for efficacy (both in war and elsewhere) is “the growth of plants” (you will find this model discussed in the work of the later Confucian Mong Zi or Mencius, by the way) (Jullien 2004, 90). This is because

one must neither pull on plants to hasten their growth (an image of direct action), nor must one fail to hoe the earth around them so as to encourage their growth (by creating favorable conditions for it). You cannot force a plant to grow, but neither should you neglect it. What you should do is liberate it from whatever might impede its development. You must allow it to grow. Such tactics are equally effective at the level of politics. A good prince … is a ruler who, by eliminating constraints and exclusions, makes it possible for all that exists to develop as suits it. His acting-without-action amounts to a kind of laisser-faire [my emphasis, ADB] but not to a policy of doing nothing at all. (91)

The idea is repeated in explicitly political terms later on, in the chapter “Allow Effects to Come About”. With respect to political reality, Jullien writes:

The excessive fullness that burdens it is, as we have seen, that of regulations and prohibitions that, as they multiply, end up weighing society down so that it is impossible for it to evolve as it should. An emptiness needs to be created, those regulations must be evacuated, to allow reality the space in which it can take off. For as soon as nothing is codified any more (codification being nothing but a reification of fullness), because nothing any longer bars the way to initiative, this can deploy itself sponte sua. In the emptiness created by the removal of prohibitions and regulations, all that is necessary is to allow things to happen, to allow them to pass through, so that action now occurs without activity. (112)

Even if both of these quotes seem to include an idea of freedom (with the verb “liberate” being used explicitly in the first), one should not get the wrong idea here: it is by allowing the plant to grow, and to develop sponte sua, that the Chinese politician exercises control. So you get a strange situation where the notion of action through non-action, or wu wei, becomes a model for the control exercised by a laisser-faire government. This is the particular exercise of sovereign power that the ancient Chinese sages recommend.

With respect to this phrase laisser faire/ laissez-faire, I have to include here a brief historical note about its origins.[11] I do so specifically because of laissez-faire’s importance in contemporary analyses of neoliberalism. It is worth noting that the phrase laissez-faire originates in the 18^th-century French economist François Quesnay’s writings on Chinese despotism. Indeed, “laissez faire” is a French translation of the Chinese notion of “wu wei”, which means—as I’ve already discussed–“without exertion” and is closely associated with the Chinese understanding of effective government. Certainly when the phrase laisser faire appears in Jullien, in a chapter titled “Do Nothing (With Nothing Left Undone)”, that is where we should situate its origins. But as such, the notion’s appearance in Jullien can of course not be disentangled from its translation into the work of Quesnay, and by extension the work of the French physiocrats, whose ideas about the “natural”, “spontaneously” self-regulating market producing the natural “true price” of a good, so interested Michel Foucault in both Security, Territory, Population [1977-1978] (Foucault 2007) (which dedicates a lecture to the physiocrats [Foucault 2007, 55-86]) as well as The Birth of Biopolitics [1978-1979] (Foucault 2008) (which recalls Foucault’s earlier discussion of the physiocrats [Foucault 2008, 30-37]). (As far as I know, Foucault does not mention the phrase’s origins in wu wei; Roland Barthes’ course on The Neutral, however, from 1977-1978 (Barthes 2005) [in other words, at the same as the lectures by Foucault just mentioned] does include a [superficial—as far as I can tell, Barthes relies on a single, secondary source] engagement with Daoism and a discussion of wu wei.) It is this idea of wu wei or laisser faire/ laissez-faire that according to many would later on lead to Adam Smith’s notion of the invisible hand (liberalism/ neoliberalism); at the same time, one might find it present in Jeremy Bentham’s notion of the panopticon as well (sovereignty). These are by no means the only political interpretations that have been given of wu wei: it’s most commonly been associated with political anarchism.

There are at least two things we learn from this genealogy. First of all, wu wei/ laisser faire—and by extension neoliberalism–is a practice of power. Second, it does not mean doing nothing: whatever you understand by “let it be” needs to add up to a practice of acting otherwise, of acting through not-acting (enlarging what’s already happening in nature rather than forcefully going against it). Putting one and two together, we can say that wu wei/ laisser faire names a practice of power that self-occludes. This explains the references to Sun Zi and to Daoism in The Invisible Committee’s To Our Friends, when a theory of neoliberal government is laid out.

At this point we are also in a position to understand why Lao Zi, whose Dao De Jing is in spite of its mere few thousand words the foundational text of Daoism, can be appreciatively quoted in Ronald Reagan’s “State of the Union” address from 1988. The line Reagan quotes about 5 minutes into the address is: “Govern a great nation like you would cook a small fish; do not overdo it”. One year before, Gekko had already quoted Sun Zi, and specifically the idea of wu wei in Sun Zi, in Stone’s Wall Street. Applying wu wei to trading, Gekko appears to place himself precisely within the understanding of neoliberal laissez-faire that I am uncovering here. “I don’t throw darts at a board. I bet on sure things. Read Sun Zi, The Art of War: ‘Every battle is won before it’s ever fought’. Think about it”. If “probability theory” in Jullien’s view is one of the ways in which the West dealt with the tension, central to Clausewitz’ thought, between absolute and real war (Jullien 2004, 42)—and there is a great book on this by the Danish scholar Anders Engberg-Pedersen (Engberg-Pederson 2015)–, Chinese strategy by contrast “has always avoided” “the kind of gamble accompanied by risk and danger” (Jullien 2004, 82).

In today’s situation of neoliberal government, in which the overlap of finance and politics has only intensified, references to Sun Zi have also abounded, and much remains to be explored. In the Introduction to her recent new translation of The Art of War, Michael Nylan points out that “[e]ven before becoming president, Donald Trump tweeted Sunzi wisdom to his followers” (Nylan 2020, 18). Nylan continues:

            Trump, unlikely to have read The Art of War, included enthusiasts in his administration. Steve Bannon was a missionary for Sunzi. Sebastian Gorka, former deputy assistant to the president, sported a vanity license plate: “Art War”. (18)

Nylan also quotes James Mattis’ comment that while “the Army was always big on Clausewitz … the Marine Corps has always been more Eastern-oriented” (18). Semper Sun Zi.

Is Wu Wei Neoliberal?

There is a whole other discussion that I’m not completely ready to engage with about whether wu wei is indeed neoliberal—about whether wu wei’s translation into laissez faire and laissez faire’s translation into neoliberalism does indeed hold water. The issue is, perhaps unsurprisingly in the case of a translation like this across time and space, complicated. Although wu wei is typically considered to be a daoist notion (you’ll find both verbal and nominal wu-forms throughout the daoist corpus), it also explicitly appears once in Confucius’ Analects, which in fact mobilizes the notion of wu wei to capture a model of government where the people are not so much guided through “coercive regulations” and “punishments” but by “virtue” (Confucius 2003, 175)—by the ruler projecting virtuous behavior that would then trickle down to their subjects (what one might call today “trickle-down morality”). “Ritual”, not law, is in Confucius’ book, what keeps the people in line. At first sight, this emphasis on virtue may not sound very neoliberal, but that could only be a provisional conclusion: scholars like Melinda Cooper and Wendy Brown have shown, in their books Family Values and In the Ruins of Neoliberalism, how crucial conservative morality is to neoliberal government (Cooper 2017; Brown 2019). Today, of course, this insistence on morality has become hollowed out: Brown writes of a merely “contractual use” of morality by today’s neoliberalism, and this is certainly one of the meanings her book’s title (that we are living in the ruins of the neoliberalism).

Interestingly, the Confucians were precisely accused of such a hollowing out of morality—of morality becoming pure form, devoid of content—by the daoists, who ridiculed what they understood to be the performance of empty ritual. They have been associated, rather, with political anarchism (Ames and Hall 2003, 14; 102), an association that I think moves too far in the other direction since it does not capture the ways in which wu wei’s action through non-action is actually a hierarchical practice of power. (On this count, however, we would need a more extensive discussion of anarchism and its meanings. But it seems this is the obvious reason why The Invisible Committee uses “Taoist” as an adjective to characterize neoliberal government, and not their own anarchist practice.)

The later Confucian Mong Zi or Mencius famously opens his book with a rejection of those who put profit over righteousness: “Why must your majesty speak of profit [he asks King Hui of Liang]? Let there simply be benevolence and righteousness” (Mengzi 2008, 1). Importantly, however, this is not a rejection of those who seek profit as such—only of those who place that pursuit over being benevolent and righteous. Mong Zi’s English translator, the eminent sinologist Bryan Van Norden, summarizes Mong Zi’s position as follows:

Mencius taught that those who are talented have an obligation to use their skills for the betterment of society and not merely their own self-aggrandizement. He said that we must look without ourselves to find our best inclinations and develop them. He argued that loving families with good values produce caring adults who have integrity. He asserted that government must aim at the well-being of all the people not just the well-off. He declared that rulers who punish those who steal because they live in poverty and lack education are merely setting traps for the people. He claimed that war is a final resort that usually causes more troubles than it solves. (Mengzi 2008, 197)

As I’ve already said, the emphasis on “loving families” and “good values” does not necessarily take us out of neoliberalism. But perhaps the focus on “the betterment of society” and the positioning against “self-aggrandizement” do; perhaps the focus on “integrity” (the position against “corruption”) does, too. Most striking here I find the proposition that government must aim at the well-being of all, not just the well-off, and should not punish those who steal because they are poor or uneducated: instead, the implication goes, the government should make sure everyone is educated and lives a good life.

It seems then, that wu wei is not quite comfortably at home on Wall Street, even if (as I’ve shown) it contains quite a few elements that have enabled many to situate it there.

Arne De Boever teaches American Studies in the School of Critical Studies at the California Institute of the Arts (USA), where for over a decade he also directed the MA Aesthetics and Politics program. He is the author of numerous articles, reviews, and translations, as well as several books on contemporary comparative fiction and political and aesthetic philosophy. His most recent books are Against Aesthetic Exceptionalism (University of Minnesota Press, 2019), François Jullien’s Unexceptional Thought: A Critical Introduction (Rowman & Littlefield, 2020), and Being Vulnerable: Contemporary Political Thought (McGill-Queen’s University Press, 2023).

References

Ames, Roger and David Hall, eds. Dao De Jing: “Making This Life Significant” (A Philosophical Translation). Trans. Roger Ames and David Hall. New York: Ballantine Books, 2003.

Aw, Tash. Five Star Billionaire. New York: Spiegel and Grau, 2014.

Barthes, Roland. The Neutral: Lecture Course at the Collège de France, 1977-1978. Trans. Rosalind Krauss and Denis Hollier. New York: Columbia University Press, 2005.

Boever, Arne De. Finance Fictions: Realism and Psychosis in a Time of Economic Crisis. New York: Fordham University Press, 2018.

—. François Jullien’s Unexceptional Thought: A Critical Introduction. New York: Rowman & Littlefield, 2020.

Brown, Wendy. In the Ruins of Neoliberalism: The Rise of Antidemocratic Politics in the West. New York: Columbia University Press, 2019.

Confucius. Analects. Trans. Edward Slingerland. Indianapolis: Hackett, 2003.

Cooper, Melinda. Family Values: Between Neoliberalism and the New Social Conservatism. New York: Zone Books, 2017.

Engberg-Pederson, Anders. Empire of Chance: The Napoleonic Wars and the Disorder of Things. Cambridge: Harvard University Press, 2015.

Foucault, Michel. Security, Territory, Population: Lectures at the Collège de France, 1977-1978. Trans. Graham Burchell. New York: Picador, 2007.

—. The Birth of Biopolitics: Lectures at the Collège de France, 1978-1979. Trans. Graham Burchell. New York: Picador, 2008.

The Invisible Committee. To Our Friends. Trans. Robert Hurley. Los Angeles: Semiotext(e), 2015.

Jullien, François. The Propensity of Things: Toward a History of Efficacy in China. Trans. Janet Lloyd. New York: Zone Books, 1995.

—. A Treatise on Efficacy: Between Western and Chinese Thinking. Trans. Janet Lloyd. Honolulu: University of Hawai’i Press, 2004.

—. Conférence sur l’efficacité. Paris: PUF, 2005.

—. Vortrag vor Managern über Wirksamkeit und Effizienz in China und im Westen. Trans. Ronald Vouillé. Leipzig:  Merve, 2006.

Mengzi. Mengzi. With Selections From Traditional Commentaries. Trans. Bryan W. Van Norden. Indianapolis: Hackett, 2008.

Nylan, Michael. “Introduction”. In: Sun Tzu, The Art of War. Trans. Michael Nylan. New York: Norton, 2020. 9-34.

Piorunski, Richard. “Le détour d’un grec par la Chine. Entretien avec François Jullien.” Ebisu 18 (1998): 147-185.

Poiroux, Dominique. “En quête de la voie en Chine”. Journal de l’école de Paris du management 2: 64 (2007): 8-15.

[1] This text was first presented at a boundary 2 conference at the University of Pittsburgh in Fall 2019 (thank you Paul Bové for the invitation). I later presented revised versions of it at the “Finance and Fictions” event at the California Institute of the Arts in January 2020, and at Syddansk Universitet in Fall 2022 (thank you Anders Engberg-Pederson for the invitation). I would like to express my gratitude to the audiences at those various occasions—which included, in Denmark, my respondent in this forum, Dominique Routhier–for their comments and questions.

[2] The authorship of The Art of War is uncertain as in the case of many ancient texts.

[3] See: Boever 2020. Most of this text is based on what was later published as chapter three of this book, titled “In Management as in War”.

[4] I have commented on this at length in: Boever 2020, Chapter 1.

[5] Ibid., 42.

[6] Ibid., 45.

[7] Ibid., 53.

[8] Jullien, Conférence, 56.

[9] Ibid., 48.

[10] I don’t have time to discuss to military uses of his thought here (on this, see: Boever 2020), but based on articles that I’ve found I conclude that his Treatise is frequently assigned as reading at military academies.

[11] I want to thank Andrew Culp for initially guiding me in this direction.