An electronic allegory of Casino Capitalism
No one is free. The winners must compete, the losers must be exploited
An electronic allegory of Casino Capitalism
Created as an allegory of socioeconomic system, the Value Quest Bourse refers to current economic and moral crises driven by mechanisms of the Greed Economy. It is depicted as a roulette--chaotic nonlinear game--whose ultimate goal is the high Index of Fortune. The bourse’s light motif is a poem The Indices of Fortune inspired by a popular medieval concept The Wheel of Fortune, i.e., Rota Fortunae illumination from Carmina Burana manuscript (1230) showing the wheel with four human figures labelled as: “I shall reign,” “I reign,” “I have reigned,” and “I have no kingdom.” In our interpretation The Wheel of Fortune reflects stages of contemporary socioeconomic cycle: Expectation, Success, Bankruptcy, Reform. On a personal level, those are equivalent to the stages of life: Yearning, Satisfaction, Detachment, Recovery.
When we exhibited the Value Quest Bourse we were asked: “Is it art or life?” Through the activation of analytic and representational forms characteristic for practical economy, we epitomized similarities between art-simulacrum and market-simulacrum. The resemblance is specially characteristic for financial market which does not react upon objective reality but upon current views of how others perceived future behavior of the market. The value of asset, e.g., a capital asset or an artwork, depends on psychological trust in authority that stands behind it and the expectation of future profits flows. The confidence of other agents in the market enables assets to circulate and serve as a security of value. “More than most businesses, the survival of a securities firm depends on the confidence of investors and other dealers; without that confidence, the business unravels quickly,” stated an executive of an investment house that symbolized the fast-money era on Wall Street.*01
The globalization*02 and free trade ideology brought unrestricted deregulation of the global financial system and trade, caused turbulence in labour markets and displacement of industry, and imposed privatization which was often recklessly done. Susan Strange underlined the impact of technological change which reshaped financial structures and put focus on the neglected role of credit and finance in the international political economy.*03 In the past technological development was run by states, but from 1990 onward technological change shifted power over trade and production from governments to firms. She also emphasized the penetration of dirty money (wrapped in untraceable legitimate investment funds) in the international financial system. The transborder production and ICT accelerated economic/financial transactions and globalized fragmented markets. That eroded the control of central banks and the national states which could not regulate the flow of international money. Liberalization of financial markets heated up competition between the banks and forced them to take bigger risks in order to maintain their earnings and bonuses.
An explosion of the derivatives market begun! The Banks’ Self-Dealing*04 whirl wild speculation-chain with mortgage bonds known as Collateralized Debt Obligations (CDO). The weak points of some financial instruments, like Credit Default Swaps (CDS) which inclines in favor of negative outcome, encouraged speculators to urge bets against losers*05 and further decline of currencies and economies. These resulted in the US 2008 meltdown of financial market and crisis of confidence that spread globally. The governments were forced to react promptly by massive bank bailouts which increased governments’ deficits and debt levels, and on a long run resulted in downgrading of countries’ credit ratings and a treat from bankruptcy. The economic interdependencies of countries generated new systemic risks: the worldwide panic herd effect in financial markets and contagious recession on global level. There are two main reasons to regulate the conduct of international financial markets, stated Strange, “one is to moderate and restrain greed, the other, to moderate and restrain fear.”