The Emperor’s “Newest” Clothes

The Greed Creed in the Age of Ghost-Modernism

An introduction into the spectral modernity context

There is plenty of evidence suggesting that the neoliberal master-narrative’s under-pinning is less reliable than its supporters would have us believe. Before justifying this claim, it is worth pausing to consider how far the superficiality of social networking is currently diverting attention from the rather more serious business of political engagement that would be needed to unmask the trickery on which corporate power structures depend.

Surely, now, is this not the time to ask just how many Twittering-Fakebook “friends” take time away from these autistic, time-wasting, zest-squeezing infotainment search engines to question the automatic/Pavlovian responses that such ‘instant’ communication mechanisms encourage and the real dangers inherent in conforming to their peers’ lack of critical thinking?

I, for one, do it quite often fearing that the claustrophobia surrounding The End of my very own and personal History may eventually frighten me to the point where I might begin staring at the half-full side of the glass… Such catchy clichés as uttered by the Emperor’s New Clothes’ globalization agents – conducting a well-choreographed chorus of wanton, socially irresponsible anthems – have been recycled during the past forty-odd years of neoliberal “free marketing” and corporate PR posturing to add a “live now and think later” refrain to the pursuit of untenable economic growth. It is becoming increasingly clear that the neoliberal anthems have reached a juncture at which capitalism itself is facing the real danger of losing its main stakeholders in the status quo: the middle-class bourgeoisie.

To fully understand this (tunnel-) vision of our fast-forwarding present (lacking any real future to… look forward to!), think post-impressionism. Then, consider the capitalist social classes’ structure as if this were an hour glass, painted by van Gogh. As unusual visual angles go, you may now envisage this hour glass as starting to resemble a Boxbeutel bottle that can no longer sieve the passing of time. The hour glass’ former design, ensuring that the (“bourgeois”) middle classes-filled bottleneck was preventing subaltern social classes from wreaking revolutionary havoc hence preserving the status quo, has currently been turned into a gluttonous contraption where increasing numbers of former “residents” (that can no longer “keep up with the Beckhams”) have been evicted and squeezed alongside a glut of impoverished hopefuls, capped by a small elite of nouveau super-riche technocrats.

Conceptual overview and discussion

According to Schumpeter’s classification, this age of commoditised, non-reflective and “eternal now” that we keep traversing at ever-increasing speed represents the fourth (and final) Kondratieff long-wave capitalist cycle. After the trinity of the Industrial Revolution (1780s-1842), the “Railroad-ization” (1842-1897) and the “Innovative Revolution” (1898-end of the 1930s)1 we are now traversing another trinity: Modernity – Post-Modernity – Ghost-Modernity (an aptly described type of late-modernity spanning the two Great Depressions since it is, arguably, the most revered trinity since the advent of the cult of Christianity: privatisation, de-regulation & global economic “liberalization”).

Starting in the early eighties, this voyage towards the much-delayed Marxist prevision, which finally took shape in the current financial meltdown, had been hijacked by “couturiers” of the Milton Friedman brand. Designing humanity’s aspirations for progress as an ideologically-modified version of Keynesianism, according to which “The Social Responsibility of Business is to Increase Its Profits”2 has proved to be little else but money printing and deficit financing.3

Advancing at full speed through the Cold War’s troubled waters, this Titanic narrative was hailed to be Noah’s “End-of-History” Ark – one that would save believers in its anti-communist religion as long as they continued spending money they didn’t have like there was no tomorrow. Its sheer tonnage was supposed to confirm the capitalist tenets according to whom increased labour productivity and its associated investment costs’ reduction could symmetrically compensate for the rise in real wages and physical capital, thus allowing its indeterminate evolution.

Using cultist, “proof by assertion” logical fallacies,4 this Cold (and calculated) War on Critical Thinking deploys, alongside this most primitive urge to acquire,5 a host of empty signifiers, such as the motivational cult of “positive thinking”, gunboat diplomacy, perception management techniques and/or psychological operations of deception and/or distraction – including subliminal advertising, infotainment and addictive social networking, leading to compulsive, “variable interval reinforcement schedules”6 )) – in a simultaneous, multi-pronged – political,7 economic, cultural, anthropological (i.e. the so-called Human Terrain Systems8 ) religious and legalistic – penetration.

Dressing up Nixon, in 1971, in a see-through paper dollar outfit, no longer redeemable in gold, was but the first trick towards imbuing the second and third class passengers on this Titanic narrative with the “positive thinking” of trickle-down economics. Anticipating that power rests not so much with the electronic herds controlling the extravagant flows of the Fed’s printing presses as it rests with those controlling the message,9 the agents of globalization embark on a wishful-thinking fantasy that has been going on ever-since.


Several epistemic sources were used to track people’s anticipated choices while herding them towards these planners’ preferred options. Using Schumpeter’s decrees (advising against viewing economic inequality as capitalism’s fundamental flaw!) ample opportunities were provided for greedy, selfish individuals to capitalize on their societies. “Wealth-creating” bankers were to be trusted and allowed self-regulation for the greater good of a society modelled as a pyramid (Maslow) whilst guided by wanton “values”.

Reagan’s “voodoo economics” or Bush’s aggressive calls for deregulation and privatisation – via the fraudulent use of the word “freedom” – just two of the ideological engines powering this boat against the ominous iceberg of the state – portrayed as a rigidified yet wasteful tax collector, appropriating an excessive share of the GDP – was posited as infringing the “freedom” of the ship’s first class passengers to become ever-richer.

As in the American political system’s “left-right” divide (a simplistic translation of the commercial duopoly into politics: Coca-Cola vs. Pepsi, McDonald’s vs. Burger King), the global propaganda machine pursues varied “mental colonisation”10 psychological operations which pervert “free will” and “self-knowledge”11 by creating an illusion of competition and choice through its local/national mouthpieces. Across the Atlantic, the wilful process of educational degradation (culminating in the readers’ digest conveyor belt, called the “Bologna process”) was underway via the “choice” discourse.

Whilst decreeing the primacy of speculative skills over intellectual knowledge, it pursues unsustainable growth via shock therapies and social dumping. An alienating “new language of self-deception (Rorty, 1985)”12 takes hold, packaged in the idea that tax cuts were necessary to boost the economy in order to create prosperous societies and ever-expanding, stake-holding middle classes. Meanwhile, this globalised propaganda war adds to the Western intelligence communities’ anti-Soviet operations in Poland and Afghanistan, its hi-tech soft- and hardware embargo, the “Star Wars” Strategic Defense Initiative (SDI) and a dramatic fall in oil prices.

With the USSR’s economy exhausted, humanity’s hopes for equality of opportunity and justice are left hanging on the promises of voluntary corporate charity.13 Yet, the dotcom crash or the “sub-prime” mortgage meltdown and the subsequent bailout of Wall Street’s financial elites prove otherwise. The globalization process has concentrated capital (in the financial gold-rush for easy profits, diverting productive investments towards lax-crediting without boosting accumulation sufficiently to absorb the system’s over-capacity) to the point where too many “too big to fail” multinationals have saturated a system where its components are too intertwined to allow Schumpeter’s “gale of creative destruction” to wither away unprofitable ventures for fear of damaging rather than helping existing ones.

Moreover, “the effect of increased productivity in reducing the cost of future investment does not help individual capitalists profit from existing investment.”14 Increasing pressures on productivity derive from the rapid devaluation of the investment made for ever-higher profits. The downward trend in accumulation, at a time of increasing rates of profit, alienates the system’s production capacities from the market’s ability to absorb them. Thus, the resulting over-production/under-consumption appears to be but the consequence of a long-term slow-down in the productive accumulation rate, even after the accumulation taking place in China (where hundreds of millions of Chinese people toiled on near-subsistence wages to fund the West’s unsustainable and environmentally damaging over-consumption!) is considered.

Critical summary

All of the above proves capitalism’s End-of-History Titanic narrative – powered by this two-stroke (Boom-Bust), planned obsolescence economic engine – to be, like the infamous Trabant before, polluting as much as it is redundant.

The end of the manufacturing industries adds weight to the social dumping practices of outsourcing production to low wage economies in that it gravely undermines the working classes’ self-esteem and incomes.15 Beyond the dire implications of a bankrupt economic system, which is globalising its inequitable development policies responsible for rising unemployment and the irreversible environmental damage that future generations will be laden with represents an unconscionable burden for all responsible people.

Whilst this realisation may aid somewhat the focus needed to revolutionise this fascistic paradigm with a neoliberal face, current civic apathy levels suggest an imminent rush to the barricades remains unlikely. Still, the realisation that capitalism’s inequality paradigm has long passed its sell-by-date may help to strengthen people’s resolve. Revisiting and adapting Gramsci’s “passive revolution” to our “fast capitalist”16 times means that as the recession cycles get shorter and more people lose their middle class status, the more likely becomes the occurrence of a renewed class war.

This could mean a first step in reconfiguring the Capitalist Manifesto towards redistribution. Turning this gentrification tanker around seems to be the only remedy that could eventually allow the restoration of ethical meaning to people’s standardized, alienated and ontologically insecure individualities. Yet, before that happens, the weaponry of such a renewed class war may vary from civil disobedience or covering in graffiti the symbols of wealth and status (such as with the gas-guzzling tractors roaming the public roads!) to the mass-movements of outright revolutionary intent.

Amongst the agents of change that might help to avoid the inequities which necessarily accompany such shake-ups to reality and achieve the laudable aims of building a better society without incurring irreparable damage to its social cohesion, the European Union is one of the bureaucratic entities that is already working towards regulating hedge funds, private equity groups and banning other purely speculative gambling activities, such as the “naked selling” practices, involving Credit Default Swaps (CDS) of sovereign debt, despite strong US opposition to the move.17

Also, since we already have a minimum wage as well as a living wage standard, they should also start considering a maximum wage, such as Sweden had in the 1960s, alongside an upper rate of tax of 90%. Neal Lawson supports this idea by giving examples as far apart as UEFA’s proposal to cap footballers’ wages or JP Morgan’s advice, given over a century ago, that “no company should have a differential between the highest paid and [the] lowest paid greater than 10. He thought that enough to create motivation.”18

While subsequently proposing a “voluntary system based on full transparency of company pay structures” where “bonuses could be linked to social and environmental performance”, Lawson goes on to say: “The Royal Navy, for example, has had a de facto differential of 8. Even if the ratio was 50 times an average salary of £20,000, that’s still £1 million. Who needs more and what does more do to our society and planet?”18

Isn’t it time more people were asking these very same questions?

  1. Elliott, John E., Introduction to the Transaction Edition, Schumpeter, Joseph A., The Theory of Economic Development, translated from German by Opie, Redvers, (Transaction Publishers, New Brunswick & London , 1996), xxix. []
  2. Friedman, Milton, The Social Responsibility of Business is to Increase its Profits, New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. []
  3. Stockman David, Four Deformations of the Apocalypse, New York Times, 31.08.2010. []
  4. Downes, Stephen, Stephen Downe’s Guide to the Logical Fallacies, May 1995, quoted in Minnesotans for Sustainability, 2002. []
  5. Lawrence, Paul R., Driven to Lead: Good, Bad, and Misguided Leadership, published by Jossey-Bass, a Wiley Imprint, 2010; excerpt reproduced in Harvard Business School Working Knowledge, accessed at 03.09.2010. []
  6. The schedules of reinforcement are “the precise rules used to present (or remove) reinforcers (or punishers) following a specified operant behaviour. These rules are defined in terms of the time and/or number of responses required to present (or remove) a reinforcer (or a punisher). Different schedules of reinforcement produce distinctive effects on operant behaviour.” see Barker, Britann, Kreider, Joy, Peissig, Jessie, Sokoloff, Greta, Stansfiel, Maura, Glossary of Terms for the Experimental Analysis of Behaviour. []
  7. “Foreign intervention is not only executed through military force. The funding of “civil society” groups and media outlets to promote political agendas and influence the “hearts and minds” of the people is one of the more widely used mechanisms by the US government to achieve its strategic objectives”, see Golinger, Eva, The Chávez Code, Broken Promises. US Interference in Venezuela Keeps Growing, Axis of Logic, 05.08.2010. []
  8. Whitehead, Neil L., Ethography, Torture and the Human Terrain / Terror Systems, Fast Capitalism 5.2, (2009). []
  9. “In an age dominated by ‘communication’ the post-modern constitution of identity in discourse has particular importance, for if we constitute and express our ‘selves’ through language then it is clear that political power exists with those who control language.” Angela Lait, The Politics of Corporate Literature: Writing the Self in a Flexible Work Culture, paper presented at the 10th Essex Conference in Critical Political Theory, 16-18th of June, 2010. []
  10. Koensler, Alexander, “Il Beduino e la Tenda: Un’Associazione Fatale. Dinamiche di Protesta e Potere Intorno ad un Nouvo Insediamente in Israele”, ACHAB, No. 8, July (2006), 32-36. []
  11. Drawing from Dworkin, Harris, Johnson and Ouroussoff, Young sees this as “the capacity to reflect upon and to attempt to put into action one’s desires, preferences and intentions”, Young, Allan, 4. []
  12. See Rorty Amélie O., Self-Deception, Akrasia and Irrationality, in The Multiple Self, ed. John Elster, 115-131, (Cambridge, Cambridge University Press, 1985). []
  13. Žižek, Slavoj, First as Tragedy, Then as Farce, The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), 24.11.2009. []
  14. Harman, Chris, Not all Marxism is Dogmatism: A Reply to Michael Husson, International Socialism . In his latest book, Zombie Capitalism, Global Crisis and the Relevance of Marx, he argues: “investment take(s) place at one point in time. The cheapening of further investment as a result of improved production techniques occurs at a later point in time. […] When capitalists measure their rates of profit they are comparing the surplus value they get from running plant and machinery with what they spent on acquiring it at some point in the past – not what it would cost to replace it today… [The rate of profit] necessarily implies a comparison of current surplus value with the prior capitalist investment from which it flows. The very notion of “self-expanding values” is incoherent without it.” [p.74-75] []
  15. Rutherford, John, An Economy without Ethics, Social Europe Journal vol.4, no.3, 2009, p.13-17. []
  16. The syntagm traces back to Ben Agger’s books, Fast Capitalism: A Critical Theory of Significance, University of Illinois Press, 1989 and its sequel, Speeding Up Fast Capitalism: Internet Culture, Work, Families, Food, Bodies, (Paradigm Publishers Inc.), 2004. []
  17. “Naked selling” practices means insuring bonds or other types of debt without actually owning them – a purely speculative gamble accounting for the majority of Credit Default Swaps (CDS) trading. CDS are derivative products, aimed at covering the risk of a debtor defaulting. The derivatives’ market has been thrown into the spotlight by reports of coordinated market attack by multi-billion-dollar hedge funds to bring down the value of the euro, in the wake of the Greek crisis. 80% of a US$600 trillion market in derivatives occurs in behind-the-counter exchanges. See, Lepadatu, Bogdan, Coordinated EU and US Action on Derivatives Markets. []
  18. Lawson, Neal, An Idea Whose Time Has Come, Social Europe Journal, Columns: economic policy, 03.02.2010. [] []
Bogdan V. Lepadatu is a BA Hons, CELTA Hons, PhD (candidate) National School for Political and Administrative Studies. Read other articles by Bogdan.

6 comments on this article so far ...

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  1. MichaelKenny said on September 10th, 2010 at 7:47am #

    Basics: the National School for Political and Administrative Studies seems to be part of the University of Bucharest and CELTA is the Certificate in English Language Teaching to Adults. Specifically, it’s nice to see the EU being praised for once instead of the usual censorship lockdown and I think the author is using “bureaucracy” as a synonym for “administration” and not in any pejorative sense. And it’s nice to see someone accept that the US and the EU are on opposite sides of the financial crisis! And that Michael Hudson and, indeed, the other neo-liberal gurus, do not become “progressives” merely by dressing up their writings in leftish-sounding jargon. Small clarification, though, on the Council of Europe’s Bologna Process. It is not “educational degradation”, it is simply a system for harmonization, and thereby, mutual recognition, of university-level qualifications and thus corresponds to the American universities course credit system. That the Romanian university system might have been quite shaken up by it wouldn’t surprise me but the mobility (and the author seems himself to be a beneficiary of the system) it brings is part of Europe’s road out from under the American jackboot.

  2. bozh said on September 10th, 2010 at 9:48am #

    Bogdan [godgiven] also takes a swipe against chinese gov’t. However, he omits to posit why china allows american corporations to bring their plants into china and why chinese govt permits, what he calls, near-substinent wage for chinese workers in these plants.

    Cld he not at least have said that these chinese workers get paid like any other chinese workers and that most, say earn $2- 3 an hour?

    And isn’t china, like SU used to be, in mortal fear of nato lands? Thus forced into useless indutrialization; contributing much to global warming because of constant threat against it?

    I prefer for russia, china, cuba, venezuella, korea, vietnam to remain much pastoral. And i think bns of people want that, too! tnx

  3. Cameron said on September 10th, 2010 at 10:50am #

    Phew, lots of good points but EU bureaucracy being an agent of change???
    I’d just quote what Andrew Kilman says about the role of regulations in capitalism in “On the Roots of the Current Economic Crisis and Some Proposed Solutions”

    He says:
    “But consider the savings and loan crisis of two decades ago. Thousands of S&Ls collapsed; the government eventually had to spend hundreds of billions of dollars to repay depositors. This crisis was a failure precisely of regulated capitalism. The S&Ls were very heavily regulated; both the interest rates that they paid on deposits and the rates they charged for mortgage loans were fixed by the government. The S&Ls were known as a 3-6-3 industry: bring in funds by paying 3% on deposits, lend them out at 6%, and be on the golf course by 3 in the afternoon. Very boring, but very safe and stable.

    But one thing that Keynesian policies and regulations didn’t regulate, and which they weren’t able to prevent, was the spiraling-upward inflation of the mid- and late-1970s. When inflation took off, the 6% they were getting on mortgage loans didn’t come close to the rate of inflation, which averaged 9.4% from 1974 through 1981. So in “real,” or inflation-adjusted, terms, the S&Ls were losing money hand over fist. Also, the measly 3% interest that S&Ls were allowed to offer depositors was even further below the rate of inflation, so in “real” terms, depositors were losing tons of money by keeping their deposits in the S&Ls. But this latter situation led to the rapid growth of an unregulated alternative: money market mutual funds, which were paying interest rates that more than made up for inflation. Depositors were very happy to have this alternative to the regulated S&Ls. They fled the S&Ls and put their money in the money market mutual funds.

    Now Congress eventually lifted the ceiling on the rates that S&Ls could offer depositors, and the ceiling on the rates they could charge for their loans. But the S&Ls were still losing massive amounts of money on the mortgages they had made in the 1950s and 1960s, which were still bringing in 6% interest. The only way they could stay afloat was to make new loans that were riskier than home mortgage loans and which therefore paid higher interest. So Congress eventually undid a Depression-era law which stipulated that the S&Ls were to make home mortgage loans only. The S&Ls began to make very risky real estate and business loans in order to make up for their losses on old loans and cover their costs of borrowing depositors’ funds. A lot of these loans never paid off, and in the end the industry essentially collapsed.

    The basic problem with the notion that regulated capitalism is somehow better than free-market capitalism is the simple fact that, in the end, capitalism can’t be regulated.”

  4. teafoe2 said on September 10th, 2010 at 6:46pm #

    only a very few are going to be asking these questions in the kind of language employed by this terminally sesquipedalian academic, who seems unaware of the absurdity effect created by his monotonous rhythmic latinate syllable flow.

    there is no mention here of the rise of the Zionist internal carcinoma on the capitalist body politic. So this analysis is inadequate from before the jump.

    However given enough patience to endure the writer’s lexigraphic compulsive syndrome, display of sources etc,
    I won’t rule out that some of it might be helpful to some people in reaching a partial understanding of what’s going on.

    But who were the main beneficiaries of the S&L scam? Was it not the same Zionist Jewish wallstreet Masters of the Universe who made out like bandits with the Junk Bond scam?And are making out like Godfathers from TARP & the rest of the “bailouts”?

    This writer clothes some simple and fairly reasonable thoughts in a mystic nuage of esoteric language and references. It’s a fun game, but has little to do with changing anything.

  5. EssexGirl said on September 26th, 2010 at 4:05am #

    I agree with the sentiments the author expresses above, particularly in the matter of the global marketing machine being a powerful tool for controlling the thought and behaviour of people in support of a flawed economic model. The pernicious effect of the systems he describes make their way into the everyday lives of us all through national economic policies founded on the mistaken idea that affluence will make us all happy. That patently has failed and it is now time to look at what systemic adjustments need making in order to bring us all back from fast paced consumerist lifestyles in which we live to buy rather than buy to live. Greater, and perhaps more intensive wealth generation is going to be needed in a world of increasing population. What we need now is a more equitable way of distributing that wealth – an old-fashioned idea maybe but what will it take to make that a reality?

    The other comment I would make concerns the implication that the middle-class is homogenous. In theories of the British middle class the ‘bourgeoisie’ is a specific sub-division. The author may indeed mean this particular social segment of the middle-class. However, many commentators think the whole middle class is in danger for a number of reasons – because living ‘now’ has forced them into debt from which they can’t recover; in acts of mindlessness and lack of prescience they have failed either to plan for the future or notice their pensions are worthless and because the forty years of economic growth on which their affluence/identity is founded has now been shown as not tied to any concrete realisable value; that the middle ground has been vacated now those once defined by their social conscience have ‘fallen’ (Ehrenreich) or been seduced by the corporate consulting route into grabbing as much for themselves while they still can. Or maybe, as BL says, the aforementioned social networking craze has diverted proper attention away from the faltering economic mechanisms.

    I appreciate others’ contribution that illuminate and clarify or critique any article and give useful context to its ideas (always a benefit to the short article writer) but while I partly agree with teafoe2 that the author’s message (at times) gets a little lost in the medium, I take issue with her/his own comments put in the abstruse language s/he wishes to criticise without any apparent hint of irony (which even with irony would hardly be the best way to make the point). This is merely a form of ridicule which is unnecessarily disrespectful of another’s style when contributor etiquette requires more sensitive and constructive criticism of ideas not personal jibes like this which are neither witty nor clever.

  6. Bogdan V. Lepadatu said on September 26th, 2010 at 2:40pm #

    I thank everyone for their learned comments… including here the angry and impatient yet, rather contrived “Tea Foe”. Whilst this was, admittedly, a largely subjective, op-ed style piece of writing, it could never fulfil all the expectations raised, judging by your comments. Whereas it may seem self-defeating to admit to it, the style was deliberate in so much as it wished to emphasize the very points raised by the Devil’s Advocate from Essex. For some, the bargain didn’t pay off. For most, it may have struck the right chord, given the generous additions to the points I was alluding to. I’m grateful for the useful quote offered by Cameron and, much as I agree with everything he and Bozh are saying, though it does strike me too as being rather odd, in this particular instance, the EU bureaucracy may be the most realistic agent for change that one can hope for. Last, but not least, I confirm to Michael Kenny that his observations are correct. Still, the commercialised, mass-education conveyor belt called the Bologna Process – primarily concerned with profitability, performance and efficiency – is one which is turning students into consumers rather than participants by replacing critical thought with a marketing newspeak, in the guise of age-discriminating, learning-on-the-job schemata, which are supposed to account for the critical reduction in the academic cycles. I beg everyone’s forgiveness for my curt reply yet, for reasons which are beyond my control and much as I’d wish to, I cannot add anymore to the aforesaid at this particular moment in time.