Monday, February 8, 2010

Žižek on the big picture and the bailouts

Before delving into the specifics of Žižek's argument, it's worth summarizing his analysis of the broad contours of the contemporary world and where he thinks it's going.

For Žižek, the 9/11/2001 terrorist attacks and the ongoing financial crisis that began in 2008 are signs that the liberal-democratic capitalist order thought to be eternal after the fall of the Soviet empire is slowly making its exit from the stage of history. This development, however, should not necessarily be interpreted as a positive development for the anti-capitalist left. The left itself will be the main victim of the crisis, as it has been exposed as incapable of presenting an alternative to the system in a moment in which it was highly vulnerable to a serious challenge. Instead, something like Naomi Klein’s shock doctrine will prevail, and the system will become stronger than ever while morphing gradually but unmistakably toward a form that combines China’s capitalist authoritarianism, Italian prime minister Silvio Berlusconi’s mediagenic populist buffoonery, and officially sanctioned libertarianism in private matters. Politics will be hollowed out and rendered meaningless. If we have any hope of avoiding such a bleak fate, we must drastically alter the ideological background of society so that the spirit that animated the emancipatory movements of the past can be revived in a new form suitable to the conditions of 21st century life. Considering the magnitude of the problems we face, if we fail to do so the train of history will drive us all off a cliff.

What do you make of this analysis? Is Žižek more or less on the mark, and if not, where does he go wrong?

Now that we have a better understanding of Žižek's ideological position, let's consider his analysis of the Obama administration's Wall Street bailout. Considering the fact that Žižek is a man of the radical left, his critical support of some sort of bailout might be a bit surprising. On pages 13 through 17, he differentiates himself from populists on both the left and the right who share a tendency to view the problems of capitalism itself as primarily financial in origin and try to separate the "real" economy (i.e. manufacturing and other tangible activities) from the supposedly parasitical and non-productive financial sector. According to Žižek, this supposedly radical stance misunderstands the nature of capitalism and is politically counterproductive:

But what if "moral hazard" is inscribed into the very structure of capitalism? That is to say, there is no way to separate the two: in the capitalist system, welfare on Main Street depends on a thriving Wall Street. So, while Republican populists who resist the bailout are doing the wrong thing for the right reasons, the proponents of the bailout are doing the right thing for the wrong reasons. To put it in more sophisiticated terms, the relationship is non-transitive: while what is good for Wall Street is not necessarily good for Main Street, Main Street cannot thrive if Wall Street is feeling sickly, and this asymmetry gives an a priori advantange to Wall Street...The paradox of capitalism is that you cannot throw out the dirty water of financial speculation while keeping the healthy baby of real economy. It is all too easy to dismiss this line of reasoning as a hypocritical defense of the rich. The problem is that, insofar as we remain in a capitalist order, there is a truth within it: namely, that kicking at Wall Street really will hit ordinary workers...When we are transfixed by events such as the bailout plan, we should bear in mind that since this is actually a form a blackmail we must resist the populist temptation to act out our anger and thus wound ourselves. Instead of such impotent acting out, we should control our fury and transform it into an icy determination to think - to think things through in a really radical way, and to ask what kind of a society it is that renders such blackmail possible.


Does Žižek have a point here, or is this little more than radical-sounding sophistry that actually encourages political passivity? If you disagree with him, what counterargument would you make to Žižek? Was there justification for some sort of Wall Street bailout, or should it have been completely rejected?

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