This is Not Normal. William Davies
are the credit derivative and the digital platform. Credit derivatives are financial instruments, first developed in the 1970s, which allow a stream of future debt repayments to be converted into an asset (that is, securitised), which can then be sold to a third party. This is supported by increasingly sophisticated credit ratings, based on surveillance and quantitative analysis of a potential borrower’s behaviour. Securitisation turns the relationship between a creditor and a debtor into a commodity that can be owned by someone else altogether, who can then bundle it up with other derivatives, sell it on again and so on.
Digital platforms, such as Facebook, Uber and YouTube, are a more recent and familiar invention. The defining feature of these platforms is that they provide a social utility, which connects users to one another, and then exploits these connections for profit in a range of ways.5 Either they exploit their users’ attention to sell advertising space (as Facebook does), or they control a whole marketplace and charge sellers for using it (as Uber does). But all platforms have two features in common. Firstly, they tend towards monopolisation, seeing as users have an interest in being where all the others are. Secondly, they have vast surveillance opportunities, which they exploit for further profit. Crucially, platforms have achieved a public status that is closer to telecom companies than to publishers, meaning that they hold minimal responsibility for how their technology is used.
The chaos unleashed by these inventions is legion, and central to the story recounted in this book. The securitisation of US mortgages, plus a lucrative underestimation of the risks attached to them, triggered the ‘credit crunch’ of summer 2007, leading up to the crisis of 2008, bank bailouts and nationalisations, then a decade of exceptional monetary policies, austerity and wage stagnation. In the UK, the national debt doubled as a result of the bailouts and economic shock. The political response, following the election of the Coalition Government in May 2010, was to pursue aggressive cuts to welfare, local government and higher education spending.
There is compelling evidence that the cuts hit hardest in those households and parts of the country which then became most supportive of Nigel Farage and Brexit.6 The state rescue of banks, and the abandoning of the vulnerable, made an undeniable contribution to the sense that the ‘elites’ look after one another, rather than acting on behalf of the public. The sentiment that society is ‘broken’ and that the guilty go unpunished, which is so eagerly encouraged and exploited by nationalists, received no greater endorsement than during 2008–9. Plenty of lines can be drawn between 2008 and the political upheavals of 2016.7 The financial crisis also played a decisive role in politicising a younger generation on the left, who made an important contribution to Jeremy Corbyn’s unexpected electoral surge in 2017.8
The effect of tech platforms on liberal democracies has been feverishly discussed. Following Britain’s 2016 referendum and Trump’s election victory, liberals fixated on the malign power of Facebook, Cambridge Analytica, Russian ‘troll farms’ and Vladimir Putin to sway election outcomes by planting ‘fake news’ in front of the eyeballs of easily persuaded swing voters. The lack of any editorial bottlenecks or regulation meant that a kind of information anarchy had broken out, heralding a ‘post-truth’ world in which nobody could tell truth from lies any longer. The fine-grained psychographic profiling techniques facilitated by Facebook meant that democracy could now be ‘hacked’ by targeting critical voters with precisely the right message to influence their vote.
Others are more sceptical about this narrative, asking instead why so many voters were sufficiently angry and alienated from the liberal mainstream in the first place. But regardless of one’s explanation for the vote results, one thing is clearly true: the sheer quantity of content that now circulates publicly, combined with the greater difficulty of validating it, has produced new forms of political engagement and disengagement. Political passions – fandom, anti-fandom, rage, devotion – have risen, but so has a new political sensibility that treats all political and public discourse with scepticism, abandoning any effort to distinguish fact from lies. Political campaigns and the media have been sucked into this vortex.
The long-term outcome of the coronavirus crisis remains unclear. But one of the few certainties of this political and economic emergency is that digital platforms have been strengthened by it. At the same time that small businesses were disappearing at a terrifying speed, Amazon took on tens of thousands of new workers. Social life became even more dependent on the social infrastructure of platform capitalism. The same platforms that were destabilising social and political life prior to the appearance of COVID-19 became virtually preconditions of society, placing a kind of wide-ranging constitutional power in the hands of private corporations.
These are just some of the ways in which the credit derivative and the platform have transformed our political world in the twenty-first century. But there is more to it than this: they share a common logic, which eats away at integrity of public institutions. The function of both credit derivatives and of platforms is to take existing relationships built around mutuality and trust and then exploit them for profit. A loan, originally, was something that concerned two parties: the lender and the borrower. In its purest form, it depended on moral evaluations of character and honesty (judgements which were inevitably polluted by cultural, racial and gendered prejudice). Securitisation takes the debt relation that exists between two parties and turns it into an asset that yields a return. It turns a moral norm (in this case, a duty of repayment) into a commodity.
The underlying logic of a platform is the same. Facebook, YouTube and Uber take forms of mutual dependence that already exist in society, and find a way of extracting a revenue from them. These companies didn’t invent friendship, cultural creation or municipal transport, but found a way to intervene in existing networks of these things in pursuit of profit. As with mortgage securitisation, they take two-way relations and insert themselves as an unnecessary third party. Along the way, they introduce scoring and ranking systems, quantifying the quality of social activity in terms of ‘likes’, ‘shares’ and stars out of five. A relationship based around trust is disrupted, and turned into one of instrumentality, strategy and self-interest.
The effect of these technologies is to drive a wedge between the ‘front stage’ and the ‘back stage’ of social and public life. The view of the world available to the general public becomes separated from that available to elites of one kind or another, breeding a disconnect between the rules, rituals and culture of everyday life and the mentality of financiers and digital technocrats. In place of the ‘social contract’ that was liberalism’s founding article of faith, there is surveillance. The descent of the public into cynicism, mistrust and conspiracy theory, in a political system that does not make the logic and purpose of power visible, is inevitable.
This brings us face to face with the ideology and rationality of neoliberalism. Since the 1950s, American neoliberal thinkers have sought to expand the reach of economics into areas of human life that were otherwise governed by social and political norms.9 Gary Becker’s theory of ‘human capital’ represented education and child-rearing in terms of their future financial returns. The public choice theory of the Virginia School aimed to represent democracy and public office in terms of the calculated self-interest of those involved.10 The Chicago School did the same in relation to law and economics. This amounts to what I’ve termed the ‘disenchantment of politics by economics’.11 It also generates an attitude in which the purpose of social relations is to provide data and revenue to some third party. Threaded through the technologies of the credit derivative and the platform is a neoliberal rationality which expands the reach of financial calculation into areas previously governed by social norms. The rise of so-called surveillance capital in the twenty-first century was preordained by an economic and political rationality that dates back to the mid-twentieth century.12
This is disastrous for political liberalism. Dating back to the mid-seventeenth century, and the work of Thomas Hobbes in particular, liberalism’s key concern has been how to artificially manufacture trust. Hobbes saw the sovereign state as an artificial entity, whose capacity to create and enforce laws was the precondition of all peaceful, prosperous and reasonable social life. Mercantile communities, together with the nascent financial sector of merchant banks and coffee houses, invented their own trust devices in the form of book-keeping techniques, on which insurance and bond markets were based. Liberalism