I’m going to follow up on this definition of the “market” that I offered in my “The Event of Technology” post: “what people without direct authority for maintaining the social center do with knowledge, information and skills when they are being protected and bounded but not directly supervised by such authorities.” The market, in its most abstract, praxeological terms, is understood as the interactions generated by the free choices of individuals. As an ontology, this is absurd, if for no other reason than that no one chooses the language in which these choices are made. But it makes good sense if we think about the market as those interactions that take place under the radar of some kind of direct supervision, especially if we consider that such “radar” is never absolutely comprehensive (we couldn’t even imagine what “absolutely comprehensive” supervision would mean, since each form of supervision would generate margins for decision making undetermined by the supervision itself). So, if I’m supervising a group of children, and I give them a strict schedule of activities and distribute roles in a hierarchical manner amongst them, and focus mostly on making sure they are doing what the schedule says they should be doing and receiving reports from the individuals in charge at certain points I leave open plenty of space for the children to exchange responsibilities and resources amongst themselves. So, one of the children’s duties is to sweep the classroom; another is to clean the dishes—one child who assigned sweeping duty asks some child who has playtime to sweep for him and, in exchange, the first child will do the dishes for the other later. We have the makings of a “market” here, and there’s not necessarily any reason for me to concern myself with it, as long as it doesn’t interfere with and perhaps even enhances the functioning of the institution. I can raise and lower the threshold of supervision depending on how beneficial the “market system” seems to be, and I can make sure the threshold doesn’t get high enough so that my own position gets implicated in the market.

The introduction of money into the system provides those engaged in market exchanges with more flexible means of establishing long-term interactions, while also ensuring the control of the central authority over this expanded process. Money is introduced as debt, debt which is ultimately owned by the central authority, whether or not finance is nominally controlled by privatized agencies. The more money in the system, the more the central authority is likely to be marketized as well. This is another way of saying that money is power, and this form of power competes with the form of power exercised by the central authority. The power of money is the power of abstraction—that is, the power to separate groups and individuals from the larger settings in which they are embedded. If you can separate groups and individuals from their settings you can mobilize them for your own projects. The power of money becomes the power of capital, which is the power to abstract not only individuals and groups but disciplines, which is to say knowledges, media and technologies, from the results of the abstractions those disciplines had helped to effect. The problem of containing the market system within the terms of central supervision is one, needless to say, that modern politics has not solved; indeed, the most cherished principles of the liberal social order make sacrosanct the primacy of market power over central authority—any reversal of this primacy is deemed “tyranny” or “totalitarianism.” And yet the market is still inconceivable without the central authority, reconceived as a political market, in which citizenship is defined as a certain quantity of tokens authorizing one to make withdrawals from the center.

The traditionalist opposes abstraction in the name of full embedment, but the possibility of rejecting abstraction disappeared with the rise of divine kingship a few millennia ago. By now, the forms of embedment defended against abstraction are the results of previous abstractions that have been re-embedded. The question is, in what form will abstraction proceed? Or, what kinds of mobilizations are necessary? If the market operates within the capillaries of the system of supervision, then abstractions should contribute to that system. The paradox of power is that the more central the authority, the more authority depends upon the widest distribution of the means to recognize authority; to put it in grammatical terms, the paradox of power is the paradox of the most unequivocal imperative leaving the largest scope of implementation of that imperative. To think about the scope of the market is to think about how to make this paradox more explicit. As I pointed out in “The Event of Technology” (and as Andrew Bartlett explains very thoroughly in his “Originary Science, Originary Memory: Frankenstein and the Problem of Modern Science”), abstraction always involves some desacralization or, to put it more provocatively, some sacrilege. Sacrilege can be justified on the grounds that the innovation it introduced will enable new forms of observance of the founding imperatives of the social order. So, the sacrilege should be, as Bartlett argues, “minimal,” while the new forms of observance (I depart from Bartlett’s formulation here) should be maximal. Abstraction creates new “elements,” and therefore new relations between elements. Monetary and capitalist abstractions are pulverizing, creating new elements that are identical to each other, and therefore most easily mobilized for any purpose. This is the process of “de-skilling,” with its ultimate telos being automation, that labor theorists have known of for a very long time. An absolutist mode of abstraction, meanwhile, would make ever finer distinctions between skills, competencies and forms of authority within disciplinary spaces. In this way, abstraction carries with it its own form of re-embedment.

The market economy, then, becomes a measure of fluctuations around the threshold at which the paradox of power is made explicit. All social conflicts can’t be reduced to this fluctuation, but all social conflicts are “processed” through it. This is most obviously the case for everything grouped under the concept of globalization, most especially movements of capital (at the “high” end) and migration (at the “low” end). Globalization represents a raising of the threshold at which the paradox of power is made explicit: global corporations have been released from obligations to any central authority and construct their own command chains, which include governments as subordinate partners; advocates of increased migration exercise power across borders that national states find it difficult to counter. In both cases, states are set up so that they must respond to the same “market” incentives as the corporations and migrants themselves. We could imagine a point at which the paradox of power would have to reach such a threshold to become explicit that central authorities would not be issuing “operational” commands at all—commands would just be one more incentive (or disincentive) agents further down in the chain of command would have to take into account by assessing the likelihood of any penalty for disobedience.

Within a market order, then, any action, event or relationship is characterized by a fundamental duality. On one side, however thinly, the paradox of power is in play: all actors recognize that their sphere of activity is protected by some more powerful agency and constrain and direct their activity accordingly. On the other side, to some extent, imperatives are converted into market signals—that is, a site of exchange where one person’s power to punish or reward you must be balanced against lots of other peoples’ power to do so. In both cases we find an interaction between center and periphery—in the first case, one acts in a way that redounds to the authority of the center, thereby creating space for the further replacement of external by auto-supervision; in the second case, one tries to subject the central authority to incentives and disincentives similar to the ones we are all subject to—this ranges from simple bribery and other forms of corruption to the vast avenues of influences made legal and even encouraged within a liberal social order, like lobbying, forming interest groups, political donations, think tanks, media propaganda and so on. We could locate anything anyone does, thinks or says somewhere along this continuum and study social dysfunctions accordingly.

Probably the most intuitively obvious argument in favor of the “free market” is the Hayekian claim that all the knowledge required to carry out production and cooperation at all the different social levels is far too distributed and complex to be centralized and subordinated to a single agent. This is of course true, but also a non-sequitur and a distraction. A general must provide some leeway to his subordinates, and they to theirs, and so on, and for the same reason—the general can’t know exactly what this specific platoon might have to do under unexpected circumstances, and he can’t even know all that one would need to in order to prepare them for those circumstances. There will therefore be “markets” all along the line, as people instructed to work together to address some exigency organize “exchanges” of knowledge, skills and actions amongst themselves in order to do so. The general doesn’t need to know 1/1,000 of all the specifics of these interactions to still be the general—that is, to issue commands that can be obeyed, and to place himself in a position to ensure that they will be. The same is true for those institutions charged with providing communications, health care, education, transportation, housing and so on. In each case, capillaries along the margins of these institutions can be adjusted in accord with the level of responsibility to be allowed consistent with meeting the purpose of the institution. The argument for markets is really saying no more than that you can’t do a very good job if you’re being micromanaged at every point along the way. It’s equally true that you can’t do a very good job if the terms of each move you make have to be “negotiated” with a constantly changing range of agents.

Liberalism has generated the illusion that what appears below the threshold of direct supervision is what, in fact, determines the form of supervision; even more, that the supervision is a servant of those actors which have merely been provided some leeway. This situation produces destructive delusions, because the presumably free agents are nevertheless aware of their utter dependence upon their “servants.” Is there any businessman who thinks he would be able to protect himself against violence, fraud, robbery and extortion by those readier than him to use violence and break laws without the force of the state? No businessman believes this, but in a way they all believe it, because their political theory leads them to assume that, first, there were a bunch of individuals engaged in peaceful exchange with each other and then, only when criminals and invaders, presumably attracted by the wealth thereby created, tried to take it using force, was the state “hired” as a kind of Pinkertons to maintain order. This makes it impossible to think coherently about the simplest things, such as how a policy everyone would recognize to be beneficial might be conceived and implemented in the best way. Someone should make a “this is your brain on liberalism” public service announcement.