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Interview with Lapo Berti
economist, writer for the
magazine “Primo Maggio”
PAOLO DAVOLI
E LETIZIA RUSTICHELLI
RZN001 eng
Editor: Rizosfera
Series of Books: Rhizonomics
Translated by Ettore Lancellotti
Revised by Letizia Rustichelli
Anti-copyright, December 2016 Obsolete Capitalism
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http://obsoletecapitalism.blogspot.it
ISBN: 9788875591007 - 4
Marx, money
and capital
in the debate that animated the Italian
and French Marxist Left at the time of
the Anti-Œdipus
Interview with Lapo Berti,
economist, writer for the magazine “Primo Maggio”
Authors: Paolo Davoli e Letizia Rustichelli
The book series entitled «Rhizonomics» deals with accelerationist
philosophy, in particular with the generalized economic perspective based
on Nietzsche, Klossowski and Acéphale magazine, Deleuze and Guattari,
Foucault, Lyotard and contemporary accelerationism.
Issues:
RZN001 :: PAOLO DAVOLI E LETIZIA RUSTICHELLI, Marx, Money, Capital.
Interview with Lapo Berti (december 2016)
Index
Preface by Obsolete Capitalism
11
Interview: Marx, money and capital
13
Biography
44
Preface by Obsolete Capitalism
The interview with Lapo Berti that follows is part of
the collective volume Money, Revolution and Philosophy
of the Future. Nietzsche and the Accelerationist politics in Deleuze, Foucault, Guattari and Klossowski that will be published by Obsolete Capitalism Free Press in 2017.
Monetary research has represented in many different ways a common ground for many French Rhizospheric intellectuals throughout the 60s and 70s. They
conceived money as the core instrument employed by
advanced capitalist market economies to trigger the
rapid and profound transformation which turned the
Fordist industrial system into a new hi-tech financial
global and delocalized form of production. The French Rhizosphere was not only able to understand the
mutation of economic paradigm while this was still in
progress, but it also conducted original and persuasive
analyses of money starting from its early invention in
Anatolia in the VIII century B.C. and in Ancient Greece in the VII and VI century B.C. Hence, according to
Rhizospheric thinkers, money is the chief accelerationist device deployed in the context «rapid domination» strategies conducted by modern global and financial market economies.
The reason of this interview lies here: Lapo Berti has been a
leading figure in the context of Italian post-workerist monetary
research. Thus, he experienced as an insider the movements,
the crisis of Marxism in the 60s and 70s, as well as the lack within the Communist and Marxist cultural context of adequate
analyses and agendas on “money”, and finally he lived through
the years of monetarism.
For the purpose of our research on the birth of «Rhizonomics», it is important to reconstruct the cultural common ground
– i.e. historical, economic, philosophical and political – of the
60s and 70s, which hosted the development of that critique of
money, in its forms and functions, which marked the work of
Michel Foucault (The Order of Things, The Will to Knowledge),
Gilles Deleuze and Félix Guattari (The Anti-Œdipus) and Pierre
Klossowski (Living Currency).
Interview with Lapo Berti
Authors: Paolo Davoli e Letizia Rustichelli
1. Could you describe for the contemporary public the intellectual and
political context of the seventies, which constituted the framework
of the debate on “money and capital” conducted by the Italian and
French Marxist Left?
The early seventies resulted to be an unstable period, socially,
economically and politically. New protest movements were formed, on the one hand, by generations of students raised in the
wealth of the economic miracle, and, on the other hand, by the
working class who demanded greater access to that prosperity.
On 15 August 1971, Nixon unilaterally ended the “gold standard”, the international monetary system established at Bretton
Woods in July 1944 that had upheld the US global supremacy
and had facilitated the development of international trade as
well as global economic growth. In 1974, the first great oil shock
hit, and capitalism faced the fact that it did not have direct control on the price of oil anymore, which was, and still is, the fuel
of development. All these events naturally triggered a series of
monetary disorders, namely the upsurge of inflation, the struggle in managing international trade, and the need to rethink
national and global monetary policies.
13
With regard to social movements, there was an abundance
of attempts to shape new organizational solutions capable of
projecting them into the contest for power. However, they all
either replicated past experiences buried in history, or ventured
in proactive forward evasions directed towards an unknown future. Especially in Italy, the atmosphere within extra-parliamentary movements was unusual, or at least that is what I perceived. The workerist, or early workerist, period had ended. After
the shockingly premeditated closure of Classe Operaia in 1966,
those who had taken part in that experience fruitfully pursued
different paths and gave birth to the first organizational experiments. Historical circumstances unfolded differently from
those that favored the development of early workerism. Some
of us, both inside and outside these organisations, were confused when faced with the collapse of the innovative analytical
and theoretical activism that counterbalanced blind and violent
extremism. The kind of activism practiced by the movements
necessarily implied a simplification of concepts and, partly, the
restoration of attitudes and labels belonging to the Communist
political culture, which we believed had to be overcome. The
topic of the organisation of movements was at the center of the
debate. And proactive straining did not go missing.
In such context, the project of a new magazine was conceived,
mainly thanks to the input of Sergio Bologna. It was titled “Primo Maggio”, and its aim was to anchor the political debate to
the material experience of working-class struggle, while trying
14
to identify throughout history expressions of that working-class
independence inherited from early workerism. Additionally, the
magazine had a radical and innovative scientific agenda, whose
main goal was to evoke past experiences of struggle in the most
authentic way, that is, without any ideological filter and with
the help of the testimonies of those who lived through them.
Finally, the magazine was inspired to innovate methodologies
in various fields, from economic history to politics. At that time,
many, myself included, were worried that a proactive radicalization of social struggle could dangerously go out of control.
So, for those, the magazine constituted an important anchor,
a space of freedom shielded from the excessive pressures exercised by the surrounding context. It represented an attempt to
escape unpersuasive, simplistic and perilous choices, and to create a forum where to elaborate autonomously topics that were
completely foreign to the elemental and improvised movement
culture. The boundaries of Marxist orthodoxy and its refusal to
measure itself with any other perspective or analysis had imposed a shortsighted view of reality. Such awareness was deep and,
I believe, it caused great concern among those who took part
more actively in the preliminary theoretical conception of the
magazine – it certainly did in myself. Militants were culturally
formed on the sacred volumes of Marxism, which were consulted compulsively despite the poor theoretical quality of many of
them, except obviously from Lenin’s and Marx’s ones. Hence,
an inclination towards orthodoxy was inevitable, because those
15
texts were the only benchmark they had. This condition generated in some a sense of suffocation, which, at least in my case, was
alleviated only by the innovative experience of the early workerism. We felt a pressing need to measure ourselves with other
streams of thought and even to snoop in the opposing field.
For example, in those years I started an intense study of the monetarist literature and I found it much more stimulating than
the dull repetition of Marxist formulas. The experiences of the
“Quaderni Rossi” and “Classe Operaia” all contributed to create
the right circumstances for this change, thanks to their propensity to analyze the present and to their attempt to revitalize the
reading of Marxist texts by blowing up the sclerotic orthodoxy.
In “Primo Maggio” the debate around money was started
again by Sergio Bologna. With the aim of providing a powerful
stimulus to rethink the relationship between money and capitalist crises, he had the clever idea to propose again the almost-unknown texts that Marx wrote on the 1858 crisis. At the time I believed that the theoretical instruments that the Left was using to
examine the crisis underway were completely insufficient and
obsolete. Additionally, I was persuaded that the key to elaborate
a new approach to capitalist crises was precisely a more realistic
analysis of the mechanisms of the monetary system and of its
role within the capitalist system. Hence, when I was asked to
participate in a collective work aimed at examining in greater
depth these topics, I accepted enthusiastically. So, within “Primo Maggio”, we gave birth to a very creative and open “group
16
on money” where research projects met with political frustrations. Everyone was trying to gather and present to the group
what seemed the most innovative and promising perspectives,
which often were nothing more than raw hints and intuitions
that, nonetheless, had the advantage of being the product of
a disillusioned observation of social reality and struggle dynamics. The benchmark we kept in mind was the one of a more
effective representation of the economic processes underway,
conceived as a manifestation of the crisis that was shaking the
capitalist cosmos and whose fault line coincided with the comparison between the crisis itself and the social struggle of the
previous years.
To focus on monetary dynamics and on monetary politics
represented a significant shift because the official Marxist perspective had taught us, firstly, to observe only the production
sphere and, secondly, to analyze the relationship between production forces, the conflicts inherent to these relationships, in
other words the subordination of labour to capital. We were not
abandoning that ground but it was becoming clear that social
struggle went beyond those boundaries, although such ground
still constituted the epicenter of social conflict. It was necessary
to look beyond towards the conglomerate of factors and practices that Foucault (1978) would later call ‘governmentality’, because we were realizing that there were other instruments and
powers outside workerist and student struggles. It was, thus, important and urgent to understand their mechanisms in order
17
to reach a more efficient representation of the crisis and of its
dynamics.
2. What was your role inside “Primo Maggio”? How did the debate with
Suzanne de Brunhoff start and develop?
It is not up to me to define the role I had in “Primo Maggio”.
Analyses and judgments on that experience have already been
gathered (Bologna 1993; Bermani 2010; Karl Heinz Roth and
Stefano Lucarelli ibid.; Steve Wright 2013; Lucarelli 2013). Since I was already conducting research in the field of monetary
economics, I was entrusted with the task of stimulate and coordinate the work of the group, but the actual effort was very
collective. I was responsible, in particular, for drafting an early summary of the results of such work, clarifying also the perspective which the group was taking and arguing from.
Denaro come capitale (“Primo Maggio”, 3-4 1974), conscious of
the limits of its theoretical elaboration, represented a kind of
agenda, if not a manifesto, which was built on two main perspectives that were to become the pillars of our work. On the
one hand, the effort and the commitment to restart from reality, from an analysis of the processes underway free from preconceptions. On the other hand, the ambition of testing the
validity of the Marxian approach by remaining anchored to the
facts and not by bending them in favour of a certain perspective – as the Marxist orthodoxy had often done. Naturally, these
18
two pillars were closely connected to each other. The new representation of the capitalist crisis was emerging from a close
confrontation between Marxian standpoints and real processes,
as well as, as far as I am concerned, instruments of analysis that
belonged to the opposing field, that is, monetarism. We trusted,
first, that the function and the modus operandi of money had
changed deeply, particularly as the international monetary system of pegged rates collapsed. Second, we thought that the
boundaries of monetary policy had expanded enormously, that
is, there was much more space to maneuver and manipulate
money for political ends. More precisely, since money was then
free from any direct or indirect conversion to a physically definite value, we believed that it had become a completely maneuverable variable and that such maneuverability was used as
one of the main instruments of governance of the capitalist economy. Money had become an institution with a high political
value. After effectively being transformed into an instrument of
government, it was thus inevitable for monetary policy to directly intervene in the power struggle between social classes. This
was the new reality of conflict that was waiting to be unveiled,
and this was the project where we placed our efforts. We focused our attention on the political governance of money, which
was regarded as the main tool of capitalist control over the economy as well as over those social conflicts capable of affecting
negatively the process of industrial production and the trends
of profit. In other words, monetary policy as an instrument of
19
control over the distribution of wealth capable of protecting the
different degrees of profit in favor of firms. This was the intellectual adventure that we felt part of.
Denaro come capitale (“Money as capital”) constituted an attempt to build the foundations of this theoretical perspective;
the following issue, which I wrote – Inflazione e recessione: la politica della Banca d’Italia (1969-1974) (“Inflation and recession: the
policies of Banca d’Italia 1969-1974”) – tried to apply this theoretical framework to the Italian case. Apparently, this last essay
raised surprise and bewilderment inside Banca d’Italia among
those who paid attention to the debate within the Left, up to the
point that some thought that the text came in fact from inside
the central bank. That was a clear sign that we had hit the mark
and had stung! Actually, the article had a really ambitious goal,
it intended to show with a relevant case study that the governance of monetary flows was not a technical task at all, but rather it
had profound political significance. Such analytical standpoint
was made possible by the fact that we had understood, first of
all, that money was not neutral with respect to the economic
production processes, as mainstream economics argued. Instead, money was maneuverable and maneuvered as an instrument
for intervening in the repartition of revenue between wages and
profits, which at that time represented the core of social conflict. We had understood that central banks had the power to
determine how and how much money would enter the system.
Thanks to this leverage it was able to interfere in the level of
20
relative prices of, for example, goods and labor, and so it could
shift social balances and alleviate the pressure of wage claims.
Such was the news we wanted to bring in the consideration of
monetary phenomena, but it bore explosive theoretical and political implications that remained mostly at an embryonic stage
and were left unspoken.
In the following issues, more articles by the group on money
were published, in particular one written by Franco Gori on public expenditure and another by Mario Zanzani on inflation.
They both represented probing in fields that had remained
unexplored by the group. They accounted for the significant
amount of theories available at the time, but they were not yet
the chapters of an organic and methodical representation of
the economic environment that we were facing. That was a finish line which we were far away from, and in the following years
for many reasons nobody resumed and continued such work.
The opportunity to bring to the next stage the development
of a Marxian-based theory of capitalism was left in swaddling
clothes. Later, there have been sporadic attempts to resume it
but the work was at that point buried inside academic lecture
halls. The biting air of social movements that inspired it had
passed.
The short argument with Suzanne de Brunhoff began after
a seminar on “The Marxist discourse on money in light of the
monetary crisis” held at the Feltrinelli Foundation between 11
and 13 April 1975. I could not attend (I lived in Florence at
21
the time); but there was Jochen Reiche, a German economist
who was in contact with Sergio Bologna. De Brunhoff was an
orthodox Marxist, though not dogmatic. She was developing
and enriching the Marxian theory of money, applying it to the
analysis of monetary policy but maintaining a rigorously Marxian stance. She was not blind to change nor was she avoiding
innovation, but all her work was aimed at defending the theory
of value as stronghold of the Marxian analysis of capitalism. In
an article published on the May-June 1975 issue of “Politique
aujourd’hui”, De Brunhoff targeted pitilessly the weaknesses
and the omissions of Denaro come capitale and critiqued a standpoint that, despite its shortcomings, she still considered evidently interesting, stimulating and worth critiquing. However,
De Brunhoff did not tackle the core of our argument, that is,
the maneuverability and political value of money. She addressed to us two main points of criticism. On the one hand, she
reproached us for not elaborating sufficiently the notion of money that we employed in our argument. On the other hand, she
accused us of being more or less conscious victims of a Keynesian or monetarist conception, which was an insult for us. With
our young self-confidence, we replied to her that the color of
the cat was not important as far as it was able to catch the rats. In
other words, our chief concern was not to defend the Marxian
orthodoxy and to remain untarnished by any bourgeois contaminations. We felt free to use the most appropriate tools wherever we found them, because the main goal was to have access
22
to a set of instruments which could grasp reality and to provide
the protagonists of the social struggle with ideas capable of generating action. It was an attempt to link theory and practice, as
many 1968 movements had tried to do, which would later draw
significant criticism from intellectuals who rejected practice.
For what concerns the notion of money, it is true that we had
not elaborated a complete and original definition. However, we
felt that we had isolated what really mattered and what did not
figure in any contemporary theory of money, that is, that money
is an institution which is part of the governance of society. And,
at that moment, this intuition was enough for us.
3. Which limits did you identify in Marx and in his theory of money?
Which were, instead, the official positions of the European Marxist
movement? How could it happen that nobody noticed that capitalism was crucially switching from production to finance, and from
human to machinic surplus value?
The condition of Marxism at that time was averagely miserable. A boundless and suffocating pedantry made of repetitive
and self-referential remarks and comments. Correctness was the
premise of any analysis, and not its result. Facts were supposed
to adapt themselves to theory. And this situation was common
to France, Germany and Italy, except for the moderately heretical experience of the first workerism. Even when there were
intellectuals attempting to renew the Marxist perspective, such
23
as Della Volpe in Italy and Althusser in France, the discourse
would remain confined locally and would not be relayed to the
external world, incapable of measuring itself with the debates
that happened outside the Marxist perimeter. Such orientation,
which rejected any kind of interaction, meant an explicit or implicit presumption of scientific superiority by the Marxist stance.
As far as I was concerned, after spending three years reading
again and again in Italian, German and French the sacred texts
of Marxism from the first two volumes of Maximilien Rubel’s
notorious edition, Marxist clothes had become too tight and
I kept trying to free myself from them. I believed that I had
learnt all that mattered of Marxism, and all that was still alive,
and I was ready to embark myself onto more uncertain and less
reassuring intellectual endeavors. More specifically, I thought
that I had developed a method of economic analysis that could
not be secluded inside imposed boundaries and that could not
renounce to consider economic facts within their political context, identifying their implications for the government of society. The trigger was pulled by the social movements of the late
sixties together with the following crisis.
I was persuaded that orthodox Marxism was not able anymore
to grasp and theoretically elaborate the mutations of capitalism.
The peak in inflation of the early seventies and the end of the
Bretton Woods system inevitably drew a great deal of attention
onto monetary processes in general, and, in particular, onto
the evolution of the repayment system as well as onto the cen24
tralization of monetary governance, both nationally and internationally. Nowadays it is difficult to understand the shocking
effect that those events had on the Glorious Thirty and on the
incredible post-war development and which seemed to open a
new volatile capitalist cycle, and thus new hope for those who
believed in a possible overcoming of that capitalist system. We
had assisted to widespread struggles and wage claims, and it was
easy to recognize a link between the two. However, this sparked questions that at the time remained unanswered. Marxism,
even in its most recent developments, did not seem able to provide useful interpretations nor useful instruments of analysis.
We had furiously perused the pages of the Grundrisse dedicated
to money, and in particular money as capital (35-162), as well as
the drafts of section V book III on credit, monetary capital and
interest rate. But, even there, we found more questions than
answers. If we wanted to fully understand the transformations
underway, we had to escape past intellectual cages, even those
built by Karl Marx.
At the time, that is, more than forty years ago, perhaps it was
not possible to foresee the developments that fiat money would
trigger. How it would lead towards a progressive increase in the
space occupied by finance and, in particular, towards a growing
leverage of finance on economics. At the time, it was impossible
to envisage the birth of a global financial oligarchy as the one
we are facing today. Nonetheless we started to lay the foundations for a theoretical framework that could allow us to analyze
25
and understand these developments. Its point of strength was
an interdisciplinary analysis, which did not include only economics but also politics, reinstating the original concept of “political economy” that had been clouded by the technocratic excess
of contemporary economics. The majority of intellectuals of
the Left, who measured themselves on Marxian texts, dedicated itself to defending the theory of labor-value. In fact, they
rightly believed that, if the validity of that theory had fallen, the
whole Marxian theoretical architecture would have collapsed
since it was founded on the denunciation of pillaging by the
capitalist class of surplus, which corresponded in fact to unpaid
work. However, according to us, the conservation of the theory
of labor-value as the core of the Marxian interpretation of the
capitalist system prevents us from grasp the essence and the function of money in modern capitalism. The Marxian standpoint,
despite some brilliant intuitions, still remained anchored to the
concept of money as a good, which was tightly linked to the
theory of labor-value. We did not hesitate to elaborate a broader
and more advanced view suited for drawing together the critical
instance of the theory of labor-value and the modern, though
embryonic, interpretation of monetary factors, which we deemed an integral and crucial part of the capitalist system. There
was a compelling need to find adequate instruments of analysis in order to penetrate the new capitalist reality and provide
social movements with a kind of knowledge able to generate
action.
26
The analysis of monetary phenomena conducted inside “Primo Maggio” represented an entirely Italian experience. The
reason lay probably in the strength reached by social movements and in pressing demand for a new theory, for a fresh idea,
which could tackle facts and make them understandable to a
wider public not accustomed to theoretical speculations. I do
not hold account of a similar vivacity in research anywhere else.
This, probably, was still part of what we had inherited from the
first workerism, not to fear to be heretic, to always look away
from the orthodox view with an eye close to the dynamics of
social conflict. In those years, in those countries, where there
were powerful communist parties, Marxism was a suffocating
orthodoxy, whose ministers were entangled in contorted discussions on irrelevant matters. Interpretation prevailed on analysis.
Neither the emerging movements were free from the attraction
of orthodoxy, behind which they hid their inability to elaborate
issues beyond the daily dimension.
4. From today’s perspective, how would you evaluate the debate of those
years? Did it help the Left to make its critique of capitalism more
accurate, or do you deem it a missed opportunity? Isn’t money, and
finance in particular, still today the “bête noir” of the Left?
Honestly, I would argue that it was nothing but an overture. It
was the right direction, but we moved only the first few steps,
uncertain and confused. We understood two basic facts, which
27
were far from being shared within the Left, neither in Italy nor
anywhere else. On the one hand, we understood that the nature
of money had definitely changed and that such transformation
had introduced new and previously unthinkable tools to intervene in the economy. Powerful instruments which could act upon
the distribution of wealth, one of the most delicate aspects of
society, and therefore had significant political leverage. Facts
widely demonstrated that we were right. Monetary policy, tied
to the formal and substantial independence of central banks,
would become the cornerstone of a new way of government.
On the other hand, by studying the modus operandi of money, we
understood that it manifested one the many unresolved issues
of modern societies, that is, economic power. In fact, this kind
of influence was free to act boundlessly, without having to respect any regulation nor limit to which, instead, modern constitutions have subjected other fundamental powers of society. In
the architecture of equilibrium and separation of powers that,
despite its shortcomings, has made possible to build democratic societies, economic power was absent. If we had gone further down that path, if we had elaborated further that analysis,
perhaps we would not have been caught unarmed by the rapid
spread of economic influence on global scale. We could have
built embankments of full awareness capable of containing the
colonization of politics operated by a deeply oligarchic power,
as the economic and, in particular, the financial and banking
ones are. Perhaps, we would have noticed earlier that, deprived
28
of all powers, our democracies would have soon gone adrift together with the intermediate institutions that constituted their
flesh and blood. Perhaps, we would not have been surprised
and defeated by the spread of Reaganism and Thatcherism.
But none of this happened. The orthodox Left was only slightly touched by these themes, and, when it faced them, it did
so inside the tight boundaries of academic doctrine. It did not
face the challenge to create a theory that could substantially
turn the attention towards real economic processes, welcoming
that interdisciplinary approach which the most important economists of the century, Keynes and Schumpeter, together with
some anthropologists, like Polanyi, had hinted at.
As we said, we had made an attempt to analyze monetary phenomena from a new theoretical perspective capable of accounting for the centrality that the monetary dimension was assuming in the metamorphosis of capitalism underway since the
early seventies. Such attempt was then independently resumed
by a group of discussion created and conducted by one of the
most original Italian economists, Augusto Graziani. He invited
me to join the group during a tumultuous movement convention in Naples, where people (me included) rambled on money
showing appreciation for the intuitions that had emerged from
the “group on money” of “Primo Maggio”. Another exponent of
the group, author of important elaborations in the field of monetary theory, was Marcello Messori, who was also invited by Graziani. So in the end I was the only non-academic member, but I
29
still joined the prestigious group, which produced a significant
amount of work in its attempt to formulate a monetary theory
of production and to revamp more or less known authors, who
had contributed importantly and originally to the construction
of monetary theory (cf. the series “Economia Monetaria”, edited by Garzanti and published by Edizioni Scientifiche Italiane between 1987 and 1999). However, in that group, given the
prevalent academic imprint, there was not the same political
aspiration that had animated the work of “Primo Maggio”. That
ambition had been crucial in the research of a link between
the management of monetary policy and the dynamics of power
relations, which in the economic field project themselves on all
movements and conflicts of society. This area, despite some rare
intrusions, remained mostly unexplored, even though most recently it has been populated by wizards and charlatans, who are
manifestations of monetary populism, a particularly insidious
species of this cancer of democracy.
Nowadays, the perspective that we envisaged in the early seventies has been fully realized. The dominance of money as an
instrument of government of economic life has reached an unbelievable and unthinkable level and dimension. But now that
world is present and, once again, we ought to understand it, unveil its features, functions, and modus operandi. At the beginning
we can stay simple, and even sound banal.
The mechanism that moves the evolution of the monetary
30
cosmos and dictates its passages lies, I believe, in the constant
need of capitalism to expand the set of payment methods in order to generate new productive combinations. Its ideal form is
the one we face today: a system able to produce a virtually unlimited amount of means of payment in various forms (different
and not exchangeable). It seems like the capitalist Eldorado is
at hand. Central banks can issue liquidity at no significant costs. The banking system does the rest with its financial leverage.
The expansion of the financial system attempts to deal with the
increasing amount of risk connected to this way of creating means of payment. But here is where things get more complicated.
The system of means of payment has mutated in a way that old
analytical instruments are not able to comprehend. The amount
of means of payment available today is increasingly in the form
of debit. This is not itself a new phenomenon, though rarely observed, but today it assumes completely new forms and triggers
unpredictable consequences. Money, the means of payment, is
generated today as a debit with a public or private subject. Every
time that new means of payment enter the system, a new subject
is in debt. However, monetary flows hide this characteristic, which seems to obliterate itself. Means of payment take on a life of
their own. Debts, which constitutionally always bear a due date
that defines the duration of the contract, tend to become permanent and mutate their nature. They appear to imitate certain
social entities which after long evolutions and transformations
return to their origin, manifesting their true essence cleared
31
from any unnecessary element. In fact, they seem to regain the
layout that, according to anthropologists, they had in prehistoric societies when they represented the outline of individual existence itself, because life was perceived as a debt taken with the
divinity which had to be periodically renewed through the institution of animal or human sacrifice. Equivalently, nowadays a
debt with an earthly institution becomes permanent and could
be regarded as the general condition of social reproduction,
with the periodic payment of a tribute, i.e. an interest, that keeps the debt alive. Nobody will ever repay it, but its continuity
imposes the conditions to which all members of society, bound
by such absolute relationship of subjection, must conform. This
is the true enigma that hides behind money, and that today for
the first time manifests itself in all its brutal power.
The systems of payment in force today, both nationally and
internationally, descend from two fundamental circumstances
shaped by history. On the one hand, the unpegging of what today is the international currency, the dollar, from any material
value determined by a condition of paucity – gold. This had the
effect of transforming means of payment (money) in an institution completely founded on conventionality and faith, whose
value derived from the fact of being monopolistically administered by one or few institutions delegated by the state. We passed
from money as a good to money as debt. On the other hand, the
separation of the activities of issuing money and of government,
with the former being exclusively assigned to an autonomous
32
and independent entity – central banks – completely relieved
from the political pressure exercised by government, at least
in theory. It follows that, today, means of payment are entirely
produced by the banking system, and they formally represent a
debt that ought to be repaid to the lender. We must not forget
that historically the development of a monetary system and of
a system of payments has always been emanated from the top,
from the state or from important merchants or capitalists.
It is renown ever since the twenties of the last century that
central banks create money from nothing and that money represents the offset of a debt. For example, it was proclaimed
in a US Congress Commission by a notorious governor of the
Federal Reserve, Marriner Eccles, in September 1941. In order
to answer a request to explain where the bank found the money
to buy state bonds, Eccles affirmed: “We created it … out of the
right to issue credit money … That is what our money system is.
If there were no debts in our money system, there wouldn’t be
any money” (translated from the Italian, Griffin 2010, 187-88).
However, at the time the dollar was still pegged to gold, even
after the 40% devaluation operated by Roosevelt in 1934. The
target of 35$ per ounce of gold constituted a tie that prevented the American central bank from using indiscriminately and
boundlessly the power of creating and issuing money.
As I said, the main characteristic of the present state of things,
which lasts ever since that decisive 15 August 1971, is that even
the last tie to the issuing of money, i.e. creating means of pay33
ment, has fallen. Central banks are virtually able to issue on the
market all the liquidity they want. Quantitative Easing is the tool
that they currently use to do so. Markets are flooded with cash
at extremely low costs for the beneficiaries, mostly commercial
banks. This unnecessary expansion in the offer of means of payment embodies the conceptual origin of the wide and dangerous gap that exists between the world of firms producing goods
and services, and the world of banks and finance. The device
that regulates the issue of means of payment according to the
needs of production and investment was not in place anymore.
The banking system generated flows of means of payment that
the production sphere had not required and could not utilize.
These were redirected towards financial purposes and inflated
excessively the financial space multiplying infinitely the tools
able to absorb, at least in theory, the risks related to such an
expansion of financial leverage.
Meanwhile, the landscape of means of payment has been
greatly enriched and articulated. Local currencies, parallel
currencies and telephonic currencies (as the Kenyan M-Pesa)
have proliferated. The IT revolution has brought new technologies that, when applied to the system of payments, produced
highly innovative means of payment, such as digital currencies
and crypto-currencies, which have opened scenarios where it is
still difficult and dangerous to guess future developments. The
most notorious is Bitcoin, an instrument that presents unusual
features. First of all, it is a private means of payment, which does
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not envisage any intervention by the state. It does not have any
commercial bank behind it, and, most importantly, it does not
have a centralized compensation system, which is the most common characteristic of modern payment systems. It is generated
by a network of participants that has access to a peer-to-peer system built on complex algorithms and that employs an equally
complex technology called ‘blockchain’ or ‘distributed ledger
technology’. It does not have its own accounting unit, and it
does not make any reference to a legal currency, although it is
convertible to it. Finally, together with gold, it is the only means of payment that does not embody the offset of a debt. It
exists per se and has a value that rests on its assumed universal
acceptance. It appears to be the quintessence of the means of
payment. Someone dares to argue or to wish that it will replace
the present top-down system of payments based on central banks. However, at the moment, it covers a very restricted area and
even has a cap for the creation of means of payment (bitcoins),
imitating the gold monetary system. It is more likely that it will
live beside the traditional payment system according to an old
logic of integration. At present, many banks are considering
the possibility of adopting the ‘distributed ledger’ technology
in order to make their payment system and, in particular, their
financial transactions more efficient and less costly. In reality,
nobody at the moment is able to foresee how the ‘blockchain’
technology will evolve in the monetary domain and how it will
interact with the contemporary monetary and financial system.
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The most probable outcome is ‘blockchain’ technology, which
supports bitcoin and other digital currencies, will be employed
separately from the traditional banking system with the aim of
introducing a new and more efficient system of management of
financial and banking transactions.
In order to fully understand the capacity of the payment system management in our society, we should consider that in
a developed monetary economy, as the capitalist one, it is not
possible to access any good or service unless we possess a certain
amount of means of payment. Indeed, we should always remember that an economic system entirely founded on the circulation of cash, as the one we live in, is oriented towards the spread
of capitalism, and capitalism itself has shaped it based on its
expansionary needs. The diaphragm that money places between human needs and goods constitutes a fundamental premise
to the development of a capitalist economy. In other words, the
requirement to use means of payment to satisfy our necessities
embodies the bedrock of capitalist social relations. In fact, it
compels the majority of individuals to pawn the most distinctive
and fundamental aspect of their individual personality, i.e. their
working capacity, in order to obtain access to the domain of goods and services, that is, to the means of payment necessary to
live. From the perspective of a capitalist entrepreneur, money
means capital, that is, the necessary condition for maintaining
its status of capitalist, which in the domain of means of production is expressed as “purchasing power”. Instead, from the
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perspective of all other individuals, money is the necessary condition to live, i.e. to exist as consumers able to purchase those
goods and services necessary to survive. In this sense, money is
the pillar of the capitalist order, the objectifying and coercive
factor that forces society as a whole to be subjected to capitalist
production relations.
The institutional framework of the economy and of society responds to the need to regulate the ways in which means of payment are acquired. As any domain of social life, the economy too
functions based on demands, impulses, incentives and disincentives. The way in which these factors are governed determines
the prevailing economic style. Indeed, even within capitalism
there are several different economic styles. Nonetheless, capitalism is generally shaped by individualistic impulses generated by
secular processes that have formed the individual as bearer of
subjective freedoms, liberated from the medieval hierarchical
order. At present, our society has historically evolved up to the
point where the existence of a formally free individual appears
to be inseparable from the capitalist context within which the
anthropological transformation has happened.
As in all periods of crisis – in particular, of financial crisis – money returns to fascinate minds and stimulate imagination, like
all incomprehensible phenomena. Nowadays, the Left would be
theoretically better equipped, because, after the crisis of the seventies, several fine and detailed theories have been elaborated
on finance’s and money’s role in triggering capitalist crises. One
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exemplary name is Hyman Minsky, who, nevertheless, did not
get the universal recognition that he should have received, and
he is known only by a limited circle of leftist economists. In Italy,
we must recall once again Augusto Graziani, who attempted to
elaborate a monetary theory of production. But this stimulus
rapidly exhausted its innovative impulse and was soon abandoned. It seems to me that generally what we regard as leftist culture lacks a vision capable of sustaining a thorough analysis of the
present, and not just in Italy. This is particularly evident in the
deep understanding of capitalist monetary economics and of its
financial core. After the crisis of Keynesianism in the seventies,
the intellectual environment lacked, for reasons that remain
unexplored, the capacity to progress. It failed to measure itself
with the issues of a society surrounded by independent global
markets, where finance has acquired a dominant position reshaping the system of governance worldwide. The proof is that
today nothing has been done other than resuming the old and
rusty Keynesian tools in front of a crisis that sets new tough challenges.
More than forty years have passed since the rudimentary and
basic elaborations of the “group on money” of “Primo Maggio”,
but I believe that those demands have not lost their strength
and their significance. We still necessitate an analysis capable
of distinguishing among the economic monetary and financial
processes of capitalism the traces of what, at the time, we named
“capitalist control”, which today would probably fall under the
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Foucaultian name of ‘neoliberal governmentality’. In the contemporary global economy, money and finance are much more
complex and articulated than in the past. In order to grasp
their trends, outcomes and critical factors we ought to employ
analytical instruments equally articulated. But it will be difficult,
if not impossible, to reach our target without a socially oriented
research, able to guide us interpreting political premises, models of government and underlying power networks. It comes
to my mind the motto of the notorious film All the President’s
Men: “Follow the money”. We should say: “Follow the power”.
However, today more than ever, these two elements are tightly
connected, causing issues which democracies are not equipped
to tackle, and to which they risk to yield. The plot of finance
and political power has generated a new form of governmentality which we ought to analyze without abandoning ourselves to
the rhetoric of the offended, hurt and abandoned democracy.
Nowadays, we are facing private financial institutions which
globally govern monetary flows comparable to the entire revenue of several countries. We know, even though we do not see it,
that a shadow banking system exists, which operates worldwide
and which has overcome the official banking system. We know
that these two systems are closely linked, as public and private
finance across the world. At the core of such system of systems
there are the most developed global economies and their central banks, which operate with complete independence and are
able to issue any amount of cash, contributing to influence and
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determine government policies. The private banking and financial system can do the same. Additionally, above all, we are aware that all the decisions taken inside these circles and emanated
from them are absolutely isolated from any kind of democratic
influence. This is the true issue. This is the hydra that we must
try to kill before its hundred heads and its hundred mouths
swallow the whole world, as they have already partially done.
The competition of parallel and alternative currencies as well
as, to a smaller extent, of digital and crypto-currencies is useful
but it will not be enough. In other words, innovation in payment
technologies will not kill the hydra. It is certainly important because it reduces the gap between concrete means of payment
and the essence of money, that is, unit of measurement of social
accounting. Some advancements, such as digital currencies, can
facilitate the evolution process towards a system of payments
more independent from central banks. Parallel currencies can
create space for systems of payment territorially limited, which
would favour and strengthen cooperation between individuals.
Nevertheless, these innovations alone will not suffice to subdue
or eliminate the capitalist core of contemporary systems of payment. Only a boost in democracies’ awareness, as it is happening for the environment, can guide towards a reformulation
of basic laws that may regulate the separation and the conduct
of those powers governing society, including this time the economic power too, which at the moment is free from any bound
or regulation. The solution can only be political. I believe that
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we need a new social contract, perhaps even a new fundamental law, which can establish the boundaries within which wealth
and economic power are compatible with society’s stability and
cohesion. No country can do this alone, it must be done globally. If we are unable to tackle the issue under such terms, we will
assist to the downfall that has been threatening us for past few
years, and financial oligarchies will determine future possible
developments through the military branches of governments
and politics.
Crowds of charlatans rumble that money is simply representation, at most a digital representation, and that it can be created
theoretically free of charge. They proclaim that everyone could
and should issue himself the amount of money he needs, but
they demonstrate that they have understood nothing of monetary phenomena. In particular, they have not appreciated that
money is not simply a material instrument to operate exchanges
and that it reflects a specific configuration in social relations.
Hence, to change monetary regime means to transform the way
in which the socio-economic system functions. Money is an institution that makes sense and that has its own function only within a determined social arrangement, which, in turn, requires
its existence and employs it to guarantee the reproduction of
society. We should always remember that, if money and means
of payment have truly always existed, then a system entirely based on and depending from monetary flows can only be formed
with the rise of capitalism. The system of payments that allows
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for the acquisition of goods and services is consubstantial with
capitalism. The former entails the latter, and presumably simul
stabunt vel simul cadent1.
The perspective of establishing parallel monetary regimes in
economic spaces independent from capitalist logics is, at the
moment, completely deceptive. The same is true for the aspiration to overcome the system of payments organised around central banks through peer-to-peer systems, such as bitcoin, whose
most recent development should make us think.
1 “hey will either stand together, or fall together” (attributed to Pope Pius XI).
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Biographies
Lapo Berti
He’s an Italian economist. Former member of the Italian
Antitrust Authority (1993—2010). He has been Professor of
Economic and Financial Politics. His practice looked at problems
of monetary theory and the history of economic thought, as
well as economic politics. Most recently he published Il mercato
oltre le ideologie (Università Bocconi Editore, 2006), Le stagioni
dell’antitrust (with Andrea Pezzoli,Università Bocconi Editore,
2010), Trattatello sulla felicità (LUISS University Press, 2013)
and, with others, Birth of Digital Populism (Obsolete Capitalism,
2014) and Moneta, rivoluzione e filosofia dell’avvenire (Obsolete
Capitalism, 2016).
Letizia Rustichelli
She’s an independent researcher at Rizosfera and Obsolete
Capitalism collective.
Paolo Davoli
He’s an independent researcher at Rizosfera and Obsolete
Capitalism collective.
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