China Study Group

Living in a Bubble: Credit, Debt and Crisis
by Josephine Slater, et al. | originally published in: Mute 3 sep 07

Panic in the credit markets! Sub-prime crash! The new issue of Mute, Living in a Bubble: Credit, Debt and Crisis looks at the social costs of an era of debt-backed boom now showing signs of busting.

Our contributors explore the links between a global glut of financial liquidity and the capitalist self-cannibalisation that sustains it. Tracing the impact of financialised and looted social existence from the micropolitics of student debt and lifelong labour, via the reign of fictitious capital, to the geopolitics of US militarism and reactionary anti-imperialism, this issue asks us to reimagine crisis as a political question with an open outcome:

Are we about to pick up the tab for the financial elite's decades long free lunch? And if total monetary collapse is a way off, is this because the social crisis and repression we already face are deepening? Whose crisis is it anyway, and if it comes, who is going to come out on top?

We also made an open call for artworks on the theme of Credit, Debt and Crisis, some of which are included in the print issue. To view the contributions online visit:


1. Editorial
2. Artwork for Mute's Living in a Bubble issue - by Matthew Hyland
3. The Magic of Debt, or, Amortise This!
4. Speculating on Student Debt
5. The 3 P's – PFI, Private Equity, and Pensions
6. Lunch Poems
7. Fictitious Capital For Beginners: Imperialism, 'Anti-Imperialism', and the Continuing Relevance of Rosa Luxemburg
8. Waiting For the End of the World
9. Risky Business
10. Falling in Love Cream Crab
11. New Iraq, New Orleans
12. Sung To Sleep
13. A Boom Without End? Liquidity, Critique and the Art Market
14. Crying Wolf Over Arts Funding?
15. Art v. Olympics
16. The Regeneration Games
17. Helium Keg

Editorial by Josephine Berry Slater

And here are the Fascist fortresses, made with the cement

of pissoirs, here the thousand identical

luxury buildings for executives

transubstantiated with marble pediments

hard status symbols, equivalent solidities.

- from The Search for a Home, Pier Paolo Pasolini

Inverse pyramids of debt' is a useful image to mentally paste over the 'hard status symbols' of a financialised reality. When you see new shiny PFI funded hospitals and city academies; whole regenerated city quarters; multi-trillion dollar annual figures given for global mergers and takeovers in 2006; multi-billion dollar figures for leveraged buy-outs in the same year; average house prices in the UK rising by £50 a day in June 2007; £9.3 billion worth of estimated costs for the 2012 Olympics in London – just think about the debt that underlies it all. What at face value looks like a booming global economy that has successfully deferred a major recession, let alone a crash, since the early '90s (Japan/Asia) or globally since 1929, is more like a house of cards that could fall at any time.

The economy is deferring its crisis by a wing, a prayer, and a lot of looting, cheap credit, and new financial instruments. Debt is at an all time high, with cheap, easily available credit propping up ailing economies and over-inflated assets such as housing, postponing any fundamental corrections. The relationship between prices and value has never held a stable, solid equivalence – but its present non-equivalence looks very much like an inverse pyramid, with a slim pinnacle of real value overburdened by a heavy tier of paper claims made upon it. There's a lot of dollars circulating, but not a lot to guarantee their value. Welcome to the perilous world of fictitious capital.

The common wisdom, famously espoused by the US's former Fed chief Alan Greenspan, that heavily inflated asset bubbles can always be 'mopped up', and that we've moved beyond the boom and bust cycles of classical economics, is sounding less and less convincing. With the bottom falling out of the US sub-prime (i.e. high risk) mortgage market last year, and lending tightening worldwide, the high levels of liquidity (easy money) that have flooded the economy since the '80s show signs of drying up. Today, predicting economic catastrophe has ceased to be the preserve of the ultra-left, and is now a position shared by a broad spectrum of analysts from neo-Keynesian economists such as Henry Liu, to the likes of The Daily Telegraph's Ambrose Evans-Pritchard. The mainstream financial press now speaks of 'meltdown' and 'global credit crunch'. Most commentators call for a variety of market reforms and regulations to limit the risks incurred through financial techniques such as the reselling of securitised debt, the heavy leveraging used by private equity companies, and the increased exposure generated when once relatively safe investment funds such as pensions now make significant allocations to hedge funds and risky futures markets.

Where Loren Goldner and Jeff Strahl, writing in this issue, fundamentally differ from these analysts is in their understanding of capitalism as fundamentally un-reformable. Although sharing some of the analysis of how the impending crash is being deferred (high levels of liquidity sustained by the non-replacement or looting of natural, social and economic resources) and how this very deferral is storing up an even worse disaster long-term, they nevertheless see this as an inherent tendency of the capitalist system. As Goldner argues, this stage of capitalist 'self-cannibalisation' is what happens when the looting or primitive accumulation outside the capitalist system (the dirty secret of its continual and necessary expansion) turns inward.

Moving from macro analyses of the geopolitical stakes of a deflation of the current bubble (the end of US hegemony?) our contributors also consider the effects of debt's structural necessity for life in general. Indebtedness, argues Brett Neilson, is no longer cause for shame but rather the entry price of citizenship. Ownership equals rights equals debt. The Committee for Radical Diplomacy consider, along related lines, how in borrowing money to pay for tuition fees students are also forced to foreclose on their dreams of the future and constrict their choices in the present. Poets in this issue explore the seep of exchange value into every pore of daily life – illustrated by what Howard Slater observes as a 'debt of sitting'. Dave Beech, James Heartfield and Suhail Malik examine culture's relationship to the economy, and question art's autonomy from the market and the state. However, the forthcoming cuts to Arts Council funding necessitated by overspend on the 2012 Olympics fail to cause a stir with our contributors. They may not affect the overall dynamism of the cultural sector immediately, but, if ideas really are our economic life-blood, these cuts arguably constitute another instance of self-cannibalisation. Maybe the Olympics will trigger a surge of national pride and enough irrational exuberance to offset any downturn, but, as Mark Saunders argues, it's certain to create a record-breaking debt.

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int'l observer

Breakdown of a relationship? Reflections on the crisis

Endnotes | 12 jan

Comparison of present financial crisis with previous crises & its significance for the relation between capital & labor



A reckoning of global shifts in political and economic relations, with China emerging as new workshop of the world and US power, rationally applied elsewhere, skewed by Israeli interests in the Middle East. Oppositions to it gauged, along with theoretical visions that offer exits from the perpetual free-market present.

The Asian Sixties

Christopher Connery, et al. | 30 jul 07

This collection grew out of a double-panel session at the Centennial Conference on “Asian Horizons: Cities, States and Societies” sponsored by the Faculty of Arts and Sciences and the Asia Research Institute at the National University of Singapore, held in Singapore in early August 2005.

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