Abstract Recessionism

I recently had a conversation with a new acquaintance who works at a hedge fund. Excited by the opportunity to talk to someone on the “inside” of the crisis, I peppered him with questions, trying to avoid any particulars about what happened to him on the frontlines of the financial meltdown. Admittedly, beneath my mostly innocent intentions was a thin layer of schadenfreude.

The question that yielded the most illuminating response was the simplest. I wanted to know what someone working at a hedge fund actually did. Deflating my working theory of hedge fund research involving ceiling-high stacks of reports on companies, he explained that his job was mostly mathematics. “It’s pure numbers—I look for patterns and write computer programs to pick investments that resemble those patterns.” He added a bizarre analogy: “Basically, it’s my job to predict who will be the next Oprah. I don’t need to interview every little girl; I look at Oprah’s demographic profile and bet on all the little girls that have similar profiles.”

Envisioning legions of pixelated proto-Oprahs marching across hedge fund computer monitors, I thought about the virtual economy of unrestrained speculation and hallucinatory leveraging that helped bring about this crisis-cum-catastrophe. The irony is that these sophisticated economic video games brought real devastation when the big game was over.

It is now clear that we need to get back to reality. A Marxist would say the problem is capitalism itself: with commodity fetishism and the triumph of exchange value over use value, our economic system is predicated on abstraction.

But one does not have to be a radical anti-capitalist to see the tendency of unfettered markets to subordinate real needs to abstractions. Writing in The Great Transformation, Karl Polanyi relates how throughout much of history the economy was embedded in social and political institutions. With the rise of capitalist societies, the economic sphere became an autonomous force with its own internal logic, wreaking havoc on society and the natural world. Reversing this process does not require revolution, but it does call for a deep transformation: we have to make the economic system serve social needs through a politics of democratic control, rather than letting the “laws” of markets dictate our every priority.

Though the crisis has been in many ways a sobering wake-up call, we still find ourselves drifting in a sea of abstractions and symbols, “pure numbers” and graphs. For many of us, knowledge of the worst aspects of the crisis is still indirect, often read on a computer screen. Numbers can be effective in rallying support for new ways of thinking about how our economy should be regulated, but we must not forget to hold our abstractions up to the light of real circumstances.

When we do so, we realize this crisis didn’t begin in 2008. For millions of Americans, and for countles...