Options on Succession
One of the many interesting features of Colin Drumm’s doctoral dissertation, The Difference Money Makes, is an extended discussion of the interlocking of problems of monarchical succession with monetary policy in medieval England. In his discussion of more central and more peripheral names of English kings, Drumm speaks of potential but more distant successors in current financial terms, as “options on succession.” On the one hand, it’s good that, say, a grandson of a previous king is available as a backup in case the present king fails to produce an uncontested heir; on the other hand, since arguments for legitimacy based on lineage are always a bit sophistic, having such options raises the possibility of civil war if the king fails to maintain some concord or balance between the various social factions. And whether or not he does so depends heavily upon monetary policy—an “austere” policy, which insists that all currency be equivalent to its metallic content, satisfies the nobility because it ensures the dues they are owed by their peasants will retain its value; a “liberal” policy, on the other hand, which depends on the king declaring issued currency to have a certain value regardless of its metallic content, is necessary for merchants buying abroad and supplying the peasantry, which in turn enables them to keep up payments to the nobles. There is also a crucial question of national sovereignty here (even if that’s not the word that would have been used).
Part of Drumm’s project is to critique Modern Monetary Theory, which assumes the sovereign can just issue money as it likes with nothing but its own sovereignty backing it. Well, why can’t it? For the medieval monarch, at any rate (and we’ll have to consider if there is an equivalent today), the coins had to contain enough metallic content to provide the “outside option” of melting down the coins and having them reminted elsewhere to ensure the king will fulfill the promise he made in minting the coins in the first place. So, tilting toward austerity affirmed the king’s dependency upon the nobility, while tilting toward devaluation and liberality would be a move toward the centralization of power and greater reliance on the commercial classes and, at the same time, international trade (and currencies). The “outside option” on sovereignty, it seems, would have first of all have been possible but less direct heirs, while the outside option on coinage was international currency (keeping which out of the country would of course be critical to maintaining power). But, then, are not both options called in the “Glorious Revolution” of 1688, when a Dutch prince is called to depose and replace an English king (who pressed too hard on the merchant class), followed in 1694 by the establishment of the Bank of England making the king dependent on an independent source of money creation—which must in turn be closely linked to the real launch of the British Empire in the 18th century as it decisively outstrips its rivals (a more generative source of money for the state is necessary for wars and other overseas adventures). So, the British Empire completes the revolution in monetary policy, which during the Middle Ages had England leaning far closer toward austerity (and hence dependency on the nobility) than the more centralized European monarchies but now had it calling in and cancelling the outside option by, essentially, becoming the outside option, as England itself becomes subordinate to empire.
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Now, the “outside option” has another (actually the primary) meaning in Drumm’s discussion, one involved in the making of markets. This is the option provided by what ultimately became known as the lender of last resort—not exactly the purpose of the Bank of England at its founding but we could say it was always inscribed in its logic even if it took a couple of hundred years to be made explicit. People need to carry out exchanges before they can be certain they’ll be able to meet the terms of the exchange—a grocery store ordering a few thousand apples may not have the cash on hand and the apple dealer might not have the apples sitting in a warehouse (and rotting) but both know where they’ll be able to get it, more or less—usually. And when they don’t, they’ll need to have recourse to other lenders, who, if they are not sufficiently liquid (they don’t know if they’ll be able to count on their back-ups, ultimately because something owed to them is not coming through), until we get to the last resort, those who lend to those who lend. Markets cannot be sustained without this outside option, an outside option that itself, in the end, is a question of sovereignty, as we saw in 2008. Questions of money are ultimately questions of sovereignty—part of Drumm’s quarrel with the MMT fantasy that the sovereign can create money as it likes follows from the obvious observation that “sovereignty” is not itself a given, as MMT fantasizes. Those medieval kings had to decide, in determining how to value currency, whom they could most afford to make pay: the nobility or the merchants (and there were limits to pressing down upon the peasants as well). The problem of distributing costs among various constituencies is no less necessary today, and as long as sovereignty is bound up with central banks no decision regarding the creation or valuation of currency can go too far in constraining the power of banks to acquire assets in cases of default, or of corporations to maximize their profits.
Unless, as I have been hypothesizing in other posts, sufficient data security to ensure that options can be called in requires crossing the Rubicon of converting assets into data. Those hoping to retain some connection (some option) with the rhetoric of the left will be thinking in terms of counterpowers coming from labor, or anticolonial (no more “antiglobalist” movements, interestingly) or whatever rapidly fading agency can produce the aura of resistance. If we discard all that, we can simply say that power depends upon knowledge (even a rejuvenated labor movement would require massive data collection and analysis), and we want power to be informed by knowledge so that those in power can know whether and within what constraints their imperatives can be and are carried out. Current forms of sovereignty operate through increasing the centralization of power while keeping rotation of occupancy at the center at the pace needed for the best advantaged speculators to ensure their arbitrage. Enough data is required so as to know that a specific package of policies and “made” administrators can ensure the exploitation of that advantage as far into the future as one can see; but not too far into the future because past a certain point the option of transferring power to those with best access to the data would eliminate those advantages. So, the model of a “politics” here is the data security company which can impose reliance of sovereigns and the corporations and banks that enable the imperial center to be the outside option and eventually leverage this reliance into the creation of a new tributary order. In the meantime, though, the data security company must exist as a company, attracting (and making) investments, maintaining profit margins, coordinating with suppliers, meeting customer demands, and so on, making it vulnerable to the courses it has been constructed to counter. Resilience and ultimately conquest is possible insofar as the growing disorder increases the leverage of the data companies while, data being highly fungible given sufficiently powerful analytical tools, huge monopolies capable of taking over educational, health care and other industries required for team building will result in sovereignty being more or less indiscernibly transferred. And any one of us can equip ourselves to contribute in our own small way to this project by becoming samples of data abundance and scrupulousness, by marking what we say as it travels across the infrastructure until it arrives at a meaning that, if we have been sufficiently abundant and scrupulous, will be the same as the saying. And behaving in such a way will make you a preferred candidate for the model data security company.
So, whether we’re speaking of “economics” or “politics,” which is to say, distribution from the center, which is to say centered ordinality, we’re targeting what we can call the furtherest future perfect option. We want to be all hedged up and with a data hedge that allows for continual arbitrage regarding whether a particular scene will have been the same (i.e, could trammel up the consequence, and with its surcease, success). I’ve been speaking of singularized succession in perpetuity in terms of selecting your successor such that he will be best able to select his and so on, but I’ve also been making it explicit that this involves having a range of candidates, which is to say options, constantly generated by institutions which are designed, then, precisely to produce the options. The furtherest future perfect option, then, goes through the infrastructure, and it does so insofar as everything in the infrastructure can be assetized—and much, of course, already has been. We could say that “neo-liberalism” is continuous with capitalism but involves the breakdown of institutional layers that had previously been immune or resistant to assetization. Neo-liberalism has become a kind of curse word, but it was introduced precisely because the kinds of services that had been taken over by the state through the 20th century were in fact opaque and resistant to assessment—how, exactly, do we tell how a school system is performing; or a mass transit system, or a health care system, etc.? These systems set their own criteria and standards, but how do we assess those criteria and standards—they would have to be compared with radically different ways of organizing these activities, and this is unimaginable within the institution. Privatizing them, or subjecting them to the rigors of private measures, at least provides a measure: if an educational, health, transportation or other institution can’t attract investment or turn a profit or, the equivalent, being able to run at costs low enough so as to create a business-friendly environment, then we can at least insist they be organized in some way that they can. We can point to the intrinsically public or immeasurable dimensions of certain human activities, but that doesn’t change the fact that decisions need to be made regarding the amount and kind of resources to be allocated to them.
In the end, assetizing doesn’t improve things because what makes a set of assets a profitable investment (perhaps for a very short time) or reliable collateral has no necessary correlation with the effectiveness with which it serves its function. An idealized market in which parents pay tuition to schools of their choice rather than taxes that are then distributed through the educational bureaucracy may make sense; but once those private schools must take out loans, turn their property and expected tuition into collateral, agree to cost-cutting in exchange for lower interest rates, and the school becomes an asset bundled with millions of other assets for investment by pension funds subject to state regulation, etc., we are far from that idyllic model. Maybe a lousy school would hit its limits sooner or later, but plenty of good ones would be shut down. The same would go for more privatized doctors and hospitals, even if excellent ones for the wealthy could be created this way.
That doesn’t mean you don’t build an educational institution, just that if you do it has to be scalable, synced to existing infrastructures, and funded or fundable by sources with assets (otherwise, whence the funds?) but in dire need of data security and, especially, what we could call “anthropomorphic” data security in order to maintain those assets. Agents, in other words, who might have to choose between their governance position within the centered ordinality and the arbitrage position they’ve secured within it. Your educational institution, then, should be designed so as to help such agents make the right choice and see it through. And any institution is a kind of educational institution, or closely downstream of one, insofar as they all run on knowledge, i.e., data security, which someone will have an edge on. You are, then, taking out options on succession from the greatest height you can ascend to, producing knowledge that can only be handled by those who could provide an outside option when there is a great enough gap between the data provided by assets and data incommensurable to assets that enables the formation of teams that can divert revenue flows to themselves by providing indispensable sovereign services. This knowledge is also the transfer idiom, existing on the level of meaning—the very difference between what one says and what one means is itself an option on the sign being the same at some later point where it might be redeemed. Knowledge is only such if it can be redeemed in the long run, even if it must hedge, leverage and arbitrage along the way in order to make it to the long run.
The way we hedge, leverage and arbitrage along the way is by insisting and demonstrating that everyone else is doing what we are but in indirect, underhanded, unknowing and therefore destructive ways. No one does anything without trying to see it through and, seeing it through, seeing to the possibility of others seeing its consequences and implications. Everyone is selecting successors, and taking out options on the future and you in fact do them a favor by pointing out how. We work in the tradition of “modernist” aesthetic, linguistic and theoretical “options” of the 20th century by directly posing the question of the scenic terms of meaning. The purpose of a movement like cubism, or post-structuralism, was to force us off the small scenes, or pumped up Big Scene, upon which we imagine meaning to be produced analogously to on small scenes, and to address the circulations of meaning. It’s naïve for me to think of myself as “communicating” with you, the reader; rather, I must try and turn you into a carrier of the idiom, providing you with phrases you can repeat and revise so that others then might do the same—and this includes degrees of vagueness and layers of implication that might make it worthwhile to revisit this text and notice something you didn’t before. We should even be trying to insinuate our way into the databases from which the language AIs will draw for their answers to the search terms inserted by future inquirers. People already think along these lines when they, for example, decide on a title for a book or essay based on what will make it more likely it will come up in certain kinds of internet searches. This kind of inscripture is what will create the outside options that might crack open and exploit gaps between assets and data.
There is no distribution from the center without adjudication and the creation of the transfer idiom involves creating new forms of adjudication, which means new modes of authority. Distribution from the center, centered ordinality, involves allocation, property, or the equivalent (a sphere of control and responsibility), and this will always lead to boundary questions. Indeed, it is boundary questions that refer us back to the center and lead the center to refer back to previous instantiations of the center, which also means previous adjudications. Legal traditions are retrieved, remade, and rescaled as distribution takes place as and through the infrastructure, or stack (what Bratton calls the “accidental megastructure”). Capital, the securing of future flows of income by deploying power in the present, is to be brought within the scope of adjudication; adjudication is to be reset scenically and set off from what must condition and enable without being permitted to infringe upon the juridical; and spaces for teaching and learning how to reroute today’s forms of power to the furtherest future perfect options by bringing even the juridical to its limits on the boundary of knowing—this has us obeying the oldest sacral imperatives while disseminating as transfer idiom the program of the originary hypothesis.
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