Rising East Essays

Introduction: Great Expectations

‘The culture society’, ‘culture industry’, ‘cultural economy’, ‘creative industries’, ‘the creative company’: a decade ago there was a legion of terms to describe the widespread expectations of what should have been built in East London by now.

Despite the legionnaires of creative-speak and cultural policy, and even in spite of Olympics-oriented inward investment, there is still no there, there. Recession is here in East London instead, and rising unemployment along with it; but of dynamic growth in ‘creative industries’, there is regrettably little sign.

Does this mean that the always imminent arrival of the ‘creative industries’, and the much-vaunted transformation of routine existence into the continuous carnival of ‘the culture society’, were never more than managed impressions? In the September 2007 issue of Rising East Online, entitled ‘Creative London – is it?’, various commentators (James Heartfield, Larry Elliott and Dan Atkinson ) lined up to affirm that this was indeed the case. Even Alan Freeman, who as principal economist at the Greater London Authority was more or less obliged to boost London’s fortunes, conceded that the creative sector was not independently dynamic, but largely dependent upon financial services.

And we all know what’s been happening to them over the last two years.

But what if the ‘culture society’ really did emerge in the London region during the previous decade? Just not in the form which it was expected to take, hence it has gone largely unrecognised. This is the thesis which I have formulated in the following essay. It follows on from the thesis previously presented in Rising East Essays by Gavin Poynter and Sean Bell, namely, that Western societies, especially in finance-oriented regions like London, have become increasingly estranged from production, which has undertaken a long march East.

Poynter and Bell advanced a theory of growing geographical separation between finance and production; they sought not only to conceptualise this, but also to address it and offer ways of offsetting it. My contribution, in line with their thesis but also in addition to it, is to suggest that the geographical distance between production and finance, each of them increasingly external to the other, is also represented internally, in the cell-form of capitalist economy and society.

Thus the propulsion of finance from production is matched by the implosion of the commodity form. The result, in regions like London, is a non-commodity producing ‘culture society’, in which economic associations have become cultural, and associated cultural activity is tending to become uneconomic.

It’s the culture society, Jim, but not as we imagined it.

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What Didn’t Happen

As envisaged in the 1990s, the (1) culture society was to be driven by (2) creative industries organised along (3) Post-Fordist lines. Each of these terms was inherently problematic: (1) ‘culture society’ blurred the distinction between culture and society created by capitalist economy; (2) most people’s experience of working in ‘industry’ was more like drudgery than ‘creativity’; (3) ‘Post-Fordism’ suggested the possibility of arriving somewhere else after mass production and massive alienation, but the continuing reference to Fordism also indicated the relentless discipline of profitability over human labour.

Nonetheless there were high hopes that creative industries would flourish in clusters in and around Soho, Hoxton, and ‘the Stratford Quarter’; and great expectations that these industries would operate through small-scale companies staffed by tech-savvy, culturally advanced young people producing bespoke cultural commodities for local and global markets. There was some concern that the celebrated coupling of professional autonomy with personal creativity was really an ideological construct which served primarily to casualise the workforce; and for those voicing such concerns, Post-Fordism was a critical concept, not an apologetic one. But theirs was a minor refrain. The dominant impression, c. 1999, was of cultural commodities being produced in creative clusters which would eventually aggregate themselves into the culture society.

Having one big Hollywood is so vulgar, we said to ourselves (nearly as crude as making pig iron). So we’ll have lots of little ones instead: more civilised; more creative; more British; and, as it turned out, very Nathan Barley.

It was a pie-in-the-sky idea of having our cake and eating it, too. It would have meant UK Plc keeping the most interesting aspects of production to itself, while outsourcing the boring bits. It would only have worked if the rest of the world had remained respectfully silent, not moving a muscle while Britannia took up her preferred position as global creative director.

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All That Is Solid…

Britain might have willed it still, but the world turned nonetheless. Since 1999, the most obvious turn has been the rise of China and India. This is a momentous development which calls for detailed study and the closest scrutiny. But for the purposes of this essay I shall refer to it only insofar as it is pertinent to the reorganisation of capitalist social relations in their cell-form, and in order to bring out the impact of this re-organisation on the London region.

The development of capitalist production in the East owes something to the recent political climate in the West. From the collapse of the Berlin Wall arose a new context in which capital enjoyed far greater freedom of movement. In the domestic setting of advanced capitalist nations, the movement of capital was no longer restricted by the existence of labour as an organised political force. In the international arena, the ‘international working class’ was no longer represented, even rhetorically, by the Soviet Union; neither was any one of the most powerful capitalist nations ready to challenge the political hegemony of the USA. In this atmosphere, freer from political friction than any previous period in modern history, labour movements (and some of the freedoms they had fought for) largely disappeared, superseded by the free movement of capital.

This was not the ‘new economy’ as proclaimed in the dot.com boom, but it was a new economic context in which capital was free to go where labour costs less and rates of exploitation are highest – hence the wholesale transfer of production from West to East. Speculative capital was also free to fly higher above production than ever before. In the West, this was its preferred direction of travel. In the extension of financial markets, and in the hollowing out of manufacturing firms to the extent that many of them moved much of their operations into finance and retained only a marginal stake in manufacturing, Western capitalism soared above commodity production, operating in the rarefied, increasingly febrile atmosphere of financial ‘products’.

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Breaking the Law of Value

The value of these ‘products’ was not derived from any combination of labour, raw materials and fixed capital investment. Instead they were disembodied from the labour process, hollow containers capable of rising as high (and falling as low) as the confidence invested in them by sellers and buyers.

In reaching giddy, new heights of speculative activity, not only was Western capital increasingly estranged from production in the East, it seemed to be enjoying a new level of independence from the law of value. Of course, speculative markets will always have been somewhat out of step with ‘the real economy’, or else there would be nothing to gain (and lose) from speculation. But two new phenomena emerged in the period immediately before the current recession: the degree to which the financial economy became almost a law unto itself (at least until its autonomy was checked by the ‘credit crunch’); and the extent to which, in regions such as London, finance and associated services became the real drivers of the economy; hence in these localities it was finance which became the new economic reality, and production which took on the semblance of being unreal.

The congruence of a specific global context with particular local factors meant that London experienced not the culturisation of its economy but its financialisation. (The attempt, following the failure of social democratic politics, to continue society by cultural means, hence the culturisation of politics, is a different trend which I have discussed elsewhere.)

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Standpoint Theory Goes To Market

London’s financialised economy is also a relativised economy, in which particular actors operate by relating directly to each other in a continuous chain of personal exchanges (I sell, you buy; you sell, I buy), with only minimal connection to the general reference points of global production and the value of labour contained within its myriad outputs.

In the standard form of capitalist markets, all commodities stand equal before the law of value, which determines their worth according to the quantity of abstract human labour they contain. But in the form of economic activity which became characteristic of the London region, the universal truth of the law of value was largely, if perhaps only temporarily, suspended. Here the value of any product was true enough if enough people believed it was true; similarly, the product could be anything that the backroom boys dreamed up, so long as it was credible to the markets.

In economic terms, this was equivalent to the anti-epistemology known as ‘standpoint theory’ in which all statements are reducible to the person making them and their interests in doing so. Just as in standpoint theory it is not possible to refer truth claims to an objective standard, for there is allegedly no such standard to refer to, so in the financial economy of the early 21st century it was hardly necessary to refer the value of products to its standard measure, namely, the amount of labour contained in them.

Capital was leveraging, levitating itself, without having to go near the labour process. In this context, not only derivatives but even original commodities came to be valued only according to the standpoint of market players, i.e. their value was reducible and at the same time expandable to the persons making a valuation and their interests in doing so. Value was, as ever, relative; but on these markets the value of commodities and financial products alike was related not to the universal truth that production originates in human labour, but only to the relative standing, individually and collectively, of the legal subjects who owned the right to dispose of them.

In referring almost exclusively to itself, finance came to exist largely in its own relative terms, without obligation to the law of value and the universality of labour as ratified in that law.

If the Eastwards movement of production had been facilitated by the end of the politics of left and right, which effectively handed capital the whole world as its room to manoeuvre, the financial economies of the West may have been equally informed by the local influence of relativism as an ideological current. In any case, the kind of finance capital which emerged from the 1990s onwards was unusually estranged from capitalist production and the general nature of its historically specific laws. Like the intellectual climate of the day, the new financial economy operated largely through a process of relativisation.

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Singular Commodities

Marx identified the commodity as the cell-form of capitalism; and in his account, the commodity is as restless as the society characterised by its production. That aspect of the commodity which was made to satisfy a particular human want, its use value, is in constant contradiction with that other aspect which relates each commodity to all the others, namely its exchange value. Commodities are defined by this duality; conversely, that which does not lead a double life, is by definition not a commodity.

By this definition, London’s financial markets are now stocked with non-commodities: singular things which are often called ‘commodities’; yet they are too one-sided to qualify as such.

Thus the only human want satisfied by the proliferation of arcane financial products, is the desire to make money. In other words, financial products are exchange value in pursuit of more exchange value, with little reference to other human appetites, and without having first to be made tangible before being entered into exchange.

Though the possibility of money making money is at least as old as Venice, the new generation of financial products has moved further away from production than ever before. In London the effects of this estrangement were compounded by the inverted relationship between ‘real’ and ‘fictitious’ economies, such that the latter became the reality, at least in the London region. Taken together, these two developments meant that, for a time at least, London has managed to flout the law of value and float above production as if exchange value were not ultimately derived from it.

Furthermore, whereas the exchange value of commodities consists of abstract human labour, the exchange value of newly devised financial products consists of the further abstraction from labour (as also from production and from the law of value). Similarly, the use value side of these products has been rarefied almost (not quite) out of existence. It transpires that the City of London has grown fat on the thinnest of abstractions. The outcome of its quasi-autonomous operations was not ‘one dimensional man’, as some had feared, but one-dimensional products which lack the essential duality of commodities.

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Culture and Economy

The financial economy is an extension of one aspect of capitalism, namely, that aspect which in its cell-form is represented as exchange value. In the distended representation of this one aspect, finance is a further addition to the complexities of capitalism. Yet in supplanting the duality of commodities with the singularity of financial products, it is simpler and even primitive compared to the contradictory capitalism of modern times. Similarly, the financial economy tends to counteract the modern distinction between culture, economy and society. Instead, wherever it is financialised, the economy has begun to operate simply as culture.

Pre-modern societies were no more and no less than their culture; and their culture also contained their economy. These were culture-societies. In capitalism, by contrast, the increasing division of labour also prompted the relative separation of culture from economy, which in turn prompted the emergence of ‘society’ as both the idea of culture and economy re-combined, and the place (civil society) where decisions would be made about each of them. In the UK today, both versions of ‘society’ are in doubt. As far as the majority of the population is concerned, civil society has fallen into disuse, while ‘society’ is taken to be the sum of local cultures.

Capitalist economy distinguished itself from earlier cultures, and from its cultural contemporaries, not simply by its orientation to value, but by its configuration of value as the general relation between all commodities and their producers. In this historically specific form, value is a social relation expressed as an economic one. This is also to express the dominance of economy over culture, such that modern ‘society’ (the totality encompassing both) has been justly characterised as ‘capitalist’.

Here ‘capitalist’ is more than a secondary characteristic – an adjective applied latterly to a society already in existence. Instead it means that in current circumstances value as configured in capitalist production is the thing which connects us all: the basis for society as a whole; also that even the distinction between culture and economy depends on the underlying reality of value as a social relation.

For all the turns it has recently taken, the defining characteristics of capitalism remain pertinent to the world as a whole. Of course there always were local variations. Today, however, some localities no longer appear to be defined by ‘defining characteristics’, such is the exceptional degree of variation that they have reached. The culture society of London is a case in point.

While finance has dominated London in the recent period, in contrast to the wider economy of capitalist production, the financial economy has not been operating according to the law of value, or even according to prices derived from it. Instead, as described above, the content of financial value is little else than the standpoint of market players, established in the course of their particular interactions. With hardly any recourse to value as a general relation configured in production, their version of value rises or falls according to their day-to-day experience of trading. The only relations in operation here are interpersonal ones, between one trader and another.

This narrower field of operations is distinct from the wider relations of capitalist production, in which all commodities and all producers are implicated in value as a general, social relation; and in this diminished aspect the new financial economy is partly reminiscent of trade in a pre-capitalist society, in the days before commodity production was generalised; and culture, economy and society were barely distinguishable.

In keeping with this observation, it is notable that perhaps the most astute observer of the recent workings of the financial economy, author and Financial Times columnist Gillian Tett, started out as an anthropologist (Tett 2009). Her frame of reference as an anthropologist is well-suited to the framework of London’s financial economy. By approaching this economy as culture, she is also able to make out the true character of London’s culture society.

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Labour and Nature

Though it has been flouting the law of value, and circumventing the source of value in labour, London’s very existence remains predicated on labour expended elsewhere in the production of commodities and the accumulation of capital. Yet in London’s culture society, neither the existence nor the significance of productive labour is represented. All the goods made in China might as well fall out of the sky, like an act of god or a freak of nature.

Although once the first city of the ‘first world’, London has now become a secondary city, dependent on those other conurbations (and even their hinterlands) which undertake the production of goods and the reproduction of value as the general relation throughout society. In this particular respect, London’s position is not unlike that of pre-modern cities, which could only respond to pre-existing forces. Those were the forces of nature, then dominating humanity, whereas London today is dependent on the faraway expenditure of the independent variable in capitalist production, namely, human labour. Yet in the semi-detached setting of the financial economy, labour has become as strange to humanity as nature once was. In its particular estrangement from the general relation in modern society (the value of labour), the London economy again recalls something of earlier culture societies: both are essentially subservient to something external (nature, labour) that is more dynamic than they are.

In the financial economy, exchange value has come even more into its own, but in the same process it also becomes less like itself, since its existence as such is equally dependent on the parallel existence of use value, its antithesis. Exchange value estranged from use value, as in the financial economy, has been like a disembodied spectre in search of a body for it to animate, a form that would allow it to take some tangible shape. Hence the attractions of culture to finance; culture, in its characteristic orientation to form, offered finance a place to live.

Though finance haunting culture has often been trite – from the preoccupation with brands to the proliferation of unmistakably corporate art – London’s economy, already a culture in its own right, has paid handsomely for the opportunity to occupy further cultural forms, which in turn has prompted the further development of London as a culture society.

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Culture Without Commodities

If finance fuelled the separation of exchange value from use value, perhaps London’s culture society contains another place in which use value has alienated itself from exchange. Mounting concern about the dearth of business models for interactive content, would seem to suggest that digital media may have been moving into this position.

Those who predicted a culture society based on creative industries, were expecting to see rapid growth in the production and consumption of cultural commodities. They were wrong-footed by the extent of financialisation; equally, their faith in the expansion of cultural commodities has been confounded by the growth of cultural activity which so far defies commodification.

In the widespread take-up of social media, and in the confident expectation that online media content should be free to users (some of whom may even have generated it without being paid for doing so), use value has been spirited far away from exchange value – just as the financial economy abstracted exchange value from use value and sent it into its own orbit.

The possibility that use value will find its own circuit, hardly overlapping with exchange value, is now a matter of enormous concern to captains of media industries, especially those whose recent priority has been to find the golden key to monetising user generated content. Revenue sources for new media have remained peripheral so far, e.g. retail opportunities tied in with online media brands; and the longer that profit margins remain marginal, the more management is left wondering whether business will ever make it to the core of new media.

Though probably exaggerated, these worries are not entirely misplaced. In the estranged world of the culture society, divorced from the law of value as from the contradiction between use and exchange value, the separation of one from another can commence at either of these opposite ends.

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Conclusion: Decree Nisi

As their estrangement is writ small in the microcosm of London’s culture society, so it is at large in the geographical distance between use and exchange, production and finance, East and West.

It would be premature, however, to announce the absolute separation of London’s culture from wider society; of finance from global production. As they have become more distant from one another, by this same distance they are also related. Latterly, their relation has been reinforced by recession; indeed, recession is best understood as confirmation that their relation has by no means gone into abeyance.

Instead of proceeding to complete the divorce, the decree nisi has been partly rescinded. Thus the very difficulties which London currently faces are also testament to the possibility of re-integrating this city into the worldwide economy of production, and the universal relations associated with it. But not without a concerted effort to see beyond the parochial simplicities of the culture society: this essay is intended as a small contribution to that important task.

Andrew Calcutt is editor of Rising East.

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Reference

• Tett, G (2009) Fool’s Gold London: Little, Brown.

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