Kapital As Kapalit
by Takuan Seiyo (Feb. 2008)
A boutique In Tokyo called Kapital sells new, 19th century workers' clothes that have been meticulously copied from old photographs of cloth-capped strikers, overall-wearing steam-lathe operators, or coal miners in heavy, torn boots shuffling to work in
The detailing is pure Japanese copying genius: the rough cloth, drab colors, fraying edges and mended holes look more real than the real thing. All is real except the prices: a coarse work shirt will set you back $250; a tattered clone of a 1920s railroad engineer's cap goes for $100; worker's pants from the serge de Nîmes ancestor of denim are $350. There is no shortage of buyers, and no one entering this store seems older than 25.
The spoiled brats of
Kapalit is a Tagalog word that means "substitute," but one might as well use another alliteration of kapital, palatik, that means "dead drunk" or "shit faced" in the dialect of Northeastern England. When Karl Marx published Das Kapital in 1867, little did he know how much surplus capital there would be, and how pathological consumption would make of kapital kapalit, finally vindicating his term, "commodity fetishism," if not its original meaning.
The basic necessities of life are now so easily obtained in the affluent West and East, that a €25,000-a-year, twentyish secretary in Hong Kong or Vienna would not think of appearing in public without the obligatory €3,000 Louis Vuitton handbag. In
But all that is a substitute too; wasting capital to plug the void within. It's Affluenza, an addiction to having rather than being; the epidemic of "selfish capitalism" described by Oliver James in his book about depression and addiction among the affluent (1).
Japanese women who spend cash capital on Cartier collars for coiffed
At the top, it's the same, just bigger price tags. The wily watchmakers of Genève always think up new ways to sop up excess global capital. Andy Warhol's assembly line kitsch that sold for $70,000 in 1978, resold for $71.7 million in 2007. Last year, a Willem de Kooning sold for $142.5 million, and a Jackson Pollock sold for $140 million. In both cases, the buyers were hedge-fund managers. There is a $155 million house in
The stock market is reaching a new peak every other day. The flood of import goodies from Asia is such that the line of ships queuing to unload in
But it's a giant food fight; an Animal House (2) cafeteria with money flung about instead of custard pies. Governments print money on such a scale that the M3 money supply is growing at over 10% a year in Europe, to catch up with the over-12% Weimarfest in the
As if a hugely inflated money supply were not enough, finance people with lots of smarts and no wisdom have commoditized and leveraged debt via $415 trillion in derivatives, which is 789% of global GDP and tethered to unpayable mortgages for real estate dropping in value. When "investment" funds bear names like Bear Stearns' High Grade Structured Strategies Enhanced Leverage Fund, it's time to notice that we live in a house of cards.
It's a house of credit cards, too. For the Japanese or Bavarian consumer, frenzied though she is, at least spends money she has. But the American or British consumer, in an adolescent frenzy of I want it all now, satisfies his heart's desires with zero savings and plastic card money borrowed at 18%. And the new rules of capital propel professional moneylenders to lend money to people who cannot possibly pay it back.
19th century robber barons, rapacious though they were, brought through their initiative and risked capital major benefits to others: railroads, telegraph, radio broadcasting, commoditized petroleum, skyscrapers, not to mention their massive philanthropy. But the name of the game now is Buy It, Strip It, Then Flip It (3).
In December 2005, three private-equity firms bought Hertz Co. from the ailing Ford Motor Co. for $15 billion, putting up $2.3 billion of their own money and loading $12.7 billion of debt onto their new acquisition. 11 months later, the raiders turned around and sold Hertz back to the public. (4)
The money shufflers have benefited nobody but themselves and their deal-vetting lawyers. They did not sell a better or more profitable company than the one they had just bought. Hertz is now a debt-puffed balloon. Still, their rewards were extraordinary. By the time they had sold Hertz back to the public, the Kapalit Kapitalists had gotten $1.3 billion of their money back, and held shares -- which they would get rid of as soon as gullible buyers could be found -- valued at another $3.5 billion. In less than a year, they had netted a $2.5 billion profit. Cerberus Capital is now playing the same gambit with Chrysler.
As of 2007,
So these are two more instances of capital's substitution, or kapital as kapalit. In the private sector, capital and credit have been transformed from productive assets to speculative commodities. And in the public capital sphere, the high taxes and money-printing presses working 24/7 are hardly deployed for productive purposes either. Instead, the capital they generate is used primarily for income redistribution from the productive to the unproductive, buying off the votes of vocal constituencies, and feel-good money-spraying abroad. It's capital as tool of social engineering and bribery, rather than as a means for growing the common good.
Not so in the East, where public capital finances improvements in public infrastructure on a scale unknown in the West in quantity or quality. In the East, one works or one dies. And the East is running circles around the West in trade surplus, technology application, and development. It may not last, though, as its young are sick now from gargantuan gorging on the sweet fruits of misapplied capital.
Global economy has done wonders for the East, and it has many vociferous defenders in the West. But it's also the vehicle by which kapital is transformed into the fourth instance of kapalit. Capital, the ultimate medium of fungibility, has rendered labor entirely fungible too. The global streaming of capital substitutes now for real labor -- the labor of making things.
The offshoring of labor has gutted the heavy industries of the West, and is increasingly eliminating all other industries as well. The giant steel mill in
Even such work as is not exportable is increasingly performed by imported labor. Plasterers from
London is becoming a Capitalopolis – an extraterritorial hub of the global megadeal, where the world's sharpest financial brains gorge on so much profit that the droppings from this horse, augmenting the oil stream from Scotland, are sufficient to feed the idle birds in the rest of the British Isles. Already, the collection and disbursement of said oats afterproduct feeds the largest government bureaucracy the Anglosphere has ever known, at least on a per-capita basis.
What remains to the natives is panem et circenses.
If there are differences in this between Western countries, they are differences in degree, not in kind. The capital explosion has created a large, distributable surplus. People who don't want to work don't have to. Equality-pushing, nonequal elites have found new ways to collect and redistribute this surplus in ways that satisfy their moral vanity while perpetuating their hold on power. When you rob Peter to pay Paul, Peter may successfully resist. But when you rob Peter to pay Paul, Pablo, Pavel, Panya, Bakhta and Boumedienne, the mobocratic features of democracy work decidedly for them and for the income redistributor, and against Peter.
Thus we arrive at the fifth and most awful instance of kapital as kapalit: the rise of global financial capital and its sway over labor, harnessed to nihilistic multiculturalism run amok, bringing about a catastrophic depletion of social capital.
Social capital may be defined as the trust among citizens, and the trust between citizens and the state. This trust is highly valuable. It accounts for up to a quarter of society's wealth. The countries that score highest for social capital, also score highest for happiness of the population. (5)
The postmodern, Western elites, though uniformly left-liberal, have been friendly to capital, as they depend on its droppings for campaign donations and payoffs to their state-dependent constituencies. When capital decided that Mexican labor was the answer to a shortage of Americans willing to work at manual labor for low wages, or that imported Pakistanis held a similar answer for
Daily life in a Western European or American city is a lesson in the severe depletion of social capital caused by the ruling elites' dumping of millions of Third World immigrants onto their subjects, allegedly for economic reasons. If the 30-year nonstop brainwashing administered by the elites flings such direct perceptions against implanted taboos, there is always scientific research:
Harvard social scientist Robert Putnam has now concluded a large U.S.-wide survey correlating social capital and diversity. He has found an inversely proportional correlation, i.e. more diversity, less social capital. Putnam's five-year study shows that nondiscriminatory immigration and ethnic diversity have a devastating influence on social capital, i.e. sense of common interest, common citizenship, fabric of civic engagement and association, trust, and neighborliness that create and sustain communities. (6)
The capital fetishists of the U.S. Chamber of Commerce are as much the agents of this anomie as are the tolerance fetishists of Gordon Brown's cabinet. Capital is fungible, but people are not interchangeable economic units, and cultures are not equal, interchangeable or even compatible, either. To put it in a bite sound enough to penetrate even the skulls of reality-averse intelligentsia, more colors, more dolors.
The goodies that the global economy showers onto Western consumers have become a substitute for the vanished social capital. The pervasive addiction to consumption embodies two more dysfunctions of modern capital. For capital, unmoored and on autopilot to maximum profits in minimum time, subverts the salutary functions of capitalism and substitutes the lower for the higher, and quantity for quality.
It's true that everybody now has digital gadgets that were science fiction a generation ago, and global strawberries are available year round, and cheap Chinese imports make the workingman's salary stretch that much farther. Free-traders call it "improved standard of living."
But it's also true that the digital gadgets are Trojan horses of planned obsolescence, and the avalanche of silly software sliding down the mountain of clever hardware is burying society in breakdown, depravity, and stupidity. And there is antifreeze in the imported toothpaste, e-coli in the all-seasons lettuce, lead paint on the cheap toys, and poison in the cheap pet food from
That the mass market tends to cater to the lowest tastes and impulses is not the fault of capitalism. It's modern liberal democracy, with its emphasis on egalitarianism and "nonjudgmentalism," that leaves it to the marketplace to define all norms and values. And these are shaped by man's eternal psychic diseases of greed, envy, lust, and sloth, and by those modern afflictions that Solzhenitsyn has noted: hastiness and superficiality.
But the role of financial capital in fermenting dystopia cannot be denied. Capital unmoored from all notions of morality, responsibility and loyalty has enabled the hollowing out of the American and British economies and cultures. It has elevated the standards of living everywhere – but in the West such elevation has been linked to a lowering of the culture as though by a reverse countershaft.
In the American and global capitalist view, growth is always progress, and progress is desirable, inevitable, unstoppable, and always benign. Democratic capitalism has internalized this view, adding tolerance, nonjudgmentalism and multiculturalism to the list of progress whose growth is eternally desirable.
Such growth and progress has pumped the world up in the last 25 years. Never have things gone better, except once, a hundred years ago. That ended on 28 June 1914 in that most multicultural of cities,
An old fanatical creed is once again taxing the peace and prosperity of the West, after a hiatus of 300 years. Western societies are plagued by nihilism, moral libertinism, escapism, cultural decay, and dissipation of social capital. Europe has become Eurabia, Great Britain is being eaten alive by a fifth column it refuses to identify, and Los Angeles is becoming, socially at least, Blade Runner Los Angeles. (7)
Prosperity's thirst for energy has turned the tables on liberal democracy's infatuation with "progress," for it has placed the most illiberal regimes – in the Middle East, Russia, Venezuela – in the driver's seat. Democratic capitalism's equation of prosperity with universally available, cheap consumer goods has put another illiberal regime --
The short attention span, the inability to focus on anything but satisfaction of current desires, also blinds consumer society to the sediment of expensive future pain borne on the tide of cheap present credit and imports. Huge risks with contagious multipliers have sprung up in global capital and credit systems, exceeding anything the economy, or economics, have known and tested before. It is as though capitalists have already woven the silk rope with which Lenin once promised to hang them, but since Lenin is gone, they are tying the knot themselves.
Global capitalism may be hoist with its own petard either through the blow up of the credit derivatives bubble or through the blow out of carbon-based energy supplies, predicted as of the next decade. And blown away may be global egalitarian fantasies and the broad denial of the distinctions of race, gender, culture, nationality, religion, and individual merit. It's brown Western jihadis who may sink, perhaps literally, the white West's progressive progress, perhaps to much wailing and gnashing of the teeth, for the wrong reasons, by the vast cohorts of Western utopians.
Halting in time and rechanneling the ugly features of global financial capitalism and empty consumerism may go a long way to saving the West's vitality and saving capitalism itself. Right now, the capitalist amen corner is so clueless that an important figure on the American Right can write:
"The culture wars are over, and capitalism won. [T]he logic of social development under capitalism seems to tend toward an exuberantly pluralistic pursuit of personal fulfillment through an ever-expanding division of labor. [T]hat logic [operates] now with unprecedented freedom of action." (8)
This neocap cock-a-doodle-doo reminds one of the neocon Francis Fukuyama's boasting in 1989 about the end of history, just as history was about to reassert itself through jihad.
When the blow up and blow out happen, perhaps simultaneously, a global depression will ensue and much accumulated anger will be unleashed against the private pashas of the leveraged buyout and the public emirs who have gutted national immunity for the sake of global virality. Socialism will again be pulled from its tattered case, and paraded as a holy relic. Jacobin "social justice" will balloon on the steroids of demagogues' oratory, in a pendulum reaction to the present orgy of capital gone kapalit.
For those who believe in capitalism, these are no times for complacency.
(1) Oliver James, Affluenza, Vermilion, 2007.
(2) National Lampoon's Animal House, directed by Harold Ramis, Universal Pictures, 1978.
(3) "Buy It, Strip It, Then Flip it," Business Week, 7 August 2006.
(4) "An IPO in Overdrive,"
(5) Gert Tinggaard Svendsen and Gunnar Lind Haase Svendsen, Social Kapital, Hans Reitzels Forlag, 2006.
(6) John Leo, "Bowling With Our Own; Robert Putnam’s sobering new diversity research scares its author," City Journal, 25 June 2007.
(7) Blade Runner, directed by Ridley Scott, Warner Brothers, 1982.
(8) Brink Lindsey, "A Farewell to Culture Wars," National Review, June 25, 2007.
Takuan Seiyo is a multiethnic, naturalized American writer and ex-international media executive whose Japanese nickname means 'Western pickled radish.' English, now first, was his fourth language. This essay, written in the summer of 2007, just as the first domino pieces began to teeter, appeared in print in the Fall 2007 issue of the Quarterly Review in the