Nihilism and Globalization
What a week it has been in the world of corporate criminality and governmental spinelessness!
On Monday, the British Bank HSBC agreed to pay a fine for $1.92 billion for repeated and systematic violations of two U.S. laws to prevent money laundering. The bank transferred hundreds of billions of dollars for its clients, likely enabling crimes ranging from tax evasion to terrorism. Once again, no one will be indicted, let alone found guilty. The reason: concern that criminal charges would hurt the bank’s business and, because it is so big, destabilize the financial system. The story is too familiar: A bank that is too big to fail gets away with criminal activity with simply a fine. While $2 billions sounds big, it is less than one quarter’s profit for HSBC. Oh, and the banks said it was sorry, sort of: “We accept responsibility for our past mistakes,’’ HSBC’s chief executive said in the statement. Mistakes are not crimes.
Meanwhile, on Tuesday in London, British authorities did make some arrests, something U.S. authorities still seem unwilling or unable to do.
In a predawn raid, police took three men into custody at their homes on the outskirts of London. One of the men is Thomas Hayes, 33, a former trader at UBS and Citigroup, according to people briefed on the matter who spoke on condition of anonymity. The other two men arrested worked for the British brokerage firm R P Martin, said another person briefed on the matter.
These arrests come in the LIBOR rate-fixing scandal, one of the biggest financial scandals ever uncovered. By colluding to fix interest rates that banks use to lend to other banks, banks ensured that they would make more money on their own student loans, mortgages, and municipal financings and consumer loans. The suits by injured parties will be keeping lawyers well paid for a decade.
On Wednesday, Bill Hwang, a high-flying hedge fund Director, pled guilty of wire fraud on behalf of his now defunct hedge fund Tiger Asia and admitted to improper trading by the firm. But Hwang himself walked out of court an innocent man, as the NY Times reports:
Federal prosecutors did not bring charges against Mr. Hwang himself. But he and his head trader, Ray Park, settled a parallel lawsuit brought against them by the Securities and Exchange Commission. Mr. Hwang and his fund will pay $44 million in fines, and he agreed to a five-year ban from the securities industry.
Once again, no one in the United States is being indicted or going to jail. And yet the federal prosecutor claimed victory for the investing public, seemingly unworried about the law-abiding public:
This criminal activity by a hedge fund operator, one of the biggest in the world, is unacceptable,” Paul J. Fishman, the United States attorney in New Jersey, said in a statement. “The investing public must be reassured that they are investing in markets that are operated fairly.
Also on Wednesday Deutsche Bank, the largest German banking behemoth, announced that its offices were raided by German investigators as part of an investigation into tax evasion by two of its top executives. Deutsche Bank has many problems, including a continued investigation to its role in the LIBOR rate fixing scandal that has already claimed settlements from Barclays in England and UBS in Switzerland (see Tuesday and Thursday).
On Thursday, the Swiss financial giant UBS announced that it was close to agreeing upon a $1 billion settlement with regulators in the U.S., Britain, Switzerland and Canada around the LIBOR rate fixing scandal (see Tuesday above).
While some minor players are being charged, once again there seems to be no interest in holding any major players at the bank responsible. As the NY Times writes,
The Swiss bank has reached a conditional immunity deal with the antitrust arm of the Justice Department, which may protect the bank from criminal prosecution under certain conditions The Justice Department’s criminal division, however, could still take action against the bank. UBS also has said it is working with Canadian antitrust authorities by handing over e-mails and other documents implicating other banks.
Over the weekend, hundreds of demonstrators around England protested against Starbucks for its tax minimization strategy. Starbucks capitulated, in part, agreeing to pay a one-time voluntary tax payment to England, something that sets the dangerous precedent of tax blackmail and does nothing to address the underlying problem. Let’s be clear. Starbucks broke no laws. But it did use creative accounting to minimize its taxes. For example, the profitable Starbucks franchises in England paid large fees to Starbucks’ subsidiary firms in low-tax countries for use of Starbucks branding, logos, and for the use of the firms’ coffee recipes. In effect, Starbucks laundered its corporate profits in high-tax England by transferring its profits to lower-cost jurisdictions. This is legal. The business community mysteriously finds it ethical. The protesters are rightly incensed. The real question is why, after hearing about such shenanigans for years, do legislatures continue to refuse to pass basic legislation making such tax minimization standards illegal.
The big story of the week remains the ever-growing insider-trading scandal that has been revolving around the Greenwich hedge fund SAC Capital run by Steven Cohen. Now 12 employees and alumni of Cohen’s firm have been indicted for insider trading (six while working for SAC and six for misdeeds after they left to start their own firms). Cohen himself has not been accused of wrongdoing, but the latest of his allegedly criminal underlings, Matthew Martoma, was Cohen’s right hand man for two years. And the prosecutors know that SAC sold its large positions in two drug-development companies and then shorted the stocks in those companies based on inside information from a trial of those drugs. And they know that Martoma and Cohen had a 20 minute phone conversation discussing their investment in those companies over the weekend before they sold their shares the following week. There is no clear evidence that Martoma told Cohen about his illegally obtained information. While both men remain innocent until proven guilty, Cohen’s firm SAC Capital is clearly a place that intentionally or not encourages illegal activities. Cohen points to his large compliance office of 30 legal and support officers, but one has to wonder about the priorities at the fund.
Actually, not much wonder is necessary. As Jesse Eisinger writes in an excellent essay in Thursday’s New York Times, few of SAC’s investors seem to care about the apparent ethical culture of laxity that surrounds his firm.
Astonishingly, investors don’t seem to mind terribly. They added as much as $1.6 billion in new capital to SAC’s flagship fund from 2010 to the end of 2011, when the insider trading investigation was in full bloom, according to Absolute Return, an industry trade publication.
At least some big institutions have begun to contemplate thinking about perhaps withdrawing money from Mr. Cohen. Congratulations. What took them so long? Citigroup’s private bank has told its clients not to put in new money, according to Bloomberg. What about getting their clients out? Why hasn’t bank given that advice before this?
The biggest, most sophisticated investors certainly put an enormous amount of pressure on hedge funds. But almost none of it is about ethics and clean culture. It’s about performance. A fund that runs a few ticks lower than its peers for several months running can get put out of business.
Many institutional investors have so perfected the art of looking the other way that they make bystanders on a New York City subway platform look like models of social responsibility.
The operating standard is to allow fund managers — or affiliated businesses or employees — to go as far as they can until the moment they are caught doing something wrong. Through their actions, Citigroup, Blackstone and the others are sending a message that they will forgive rotten ethics for great returns.
Eisinger asks the right question: At what point does “willful blindness turn to complicity”? It is hard to resist that basic conclusion.
While all these scandals were unfolding, I led a discussion on Monday evening about The Intellectual Origins of the Global Financial Crisis at the last great bookstore in New York City, Book Culture, up near Columbia University. We had a standing room only crowd and ran out of chairs (thank you all). The discussion featured excellent panelists, all of whom are contributors to the new book of the same name published by Fordham University Press and edited by myself and my colleague Taun Toay. The other panelists were Robyn Marasco, Paul Levy, and Vincent Mai.
One of the main issues raised was the sea change in values. In his contribution to the volume, Vincent Mai, former Chairman of AEA Investors and now of Cranemere LLC, writes:
The first thing is just a complete change in the values of the people who are in the financial community in Wall Street, and in the culture. And, as I said, it’s not to say that the people in my era were all angels and that they’re all devils today. But, having said that, there has been a huge cultural shift.
Mai tells that when he began
there was a set of ground rules that governed the way you did business that imposed a discipline that was central to the way Wall Street worked. It was the same in all the firms. And I’ve watched with a combination of fascination and horror at the way the world has changed, turned upside down.
Paul Levy, Managing Director of JLL Partners, reminds us that good people work in business but he laments that these people are increasingly trained in narrow specialties and without the broad interests nurtured by excellent liberal arts educations. Levy writes,
I am no saint, but I can tell you that when I started my working careers as a corporate lawyer I wanted to be financially successful, although I did not have a firm view on how to get there.
Nowadays, Levy laments, college graduates make $150,000 per annum and quickly expect to make $300-$400,000 and soon more than $1 million. He writes: “Getting money has become the goal, instead of building the person.”
Robyn Marasco resisted the notion that greed is behind our current problems. Greed, she writes, is often good.
Moralizing against greed is no match for the realist recognition that what is often called greed—greed for life, greed for love, and greed for knowledge—is constitutive of human striving, what Spinoza called conatus, what Schopenhauer names the will to life, what Nietzsche terms the will to power. Greed is, indeed, good, if by it we mean a dynamic and energizing force that resists satisfaction in any particular object.
Our conversation touched on the moral hazard created by the lack of criminal sanctions on any of the main players in the financial crisis, something that the news summary from this week highlights. Above all, we spoke about the upending of values and the question of how to change or restore earlier values that have been lost. And, of course, we talked about Hannah Arendt.
Few thinkers saw more clearly than Arendt the connection between what Nietzsche called the devaluing of the highest values and what we today call global capitalism. Ethics requires setting limits to behavior and the political bodies that set such limits are the trustees of firms, city councils, state governments, and national legislatures. Whether these ethical limits are legal or moral, they establish common sense criteria about what is right and what is wrong.
Arendt sees that globalization—what she at the time understood as imperialism—is actually a political corollary of nihilism, the illegitimacy of all moral and political limits. If we as a people no longer feel sure that certain behavior is simply wrong, we will be willing increasingly to lower our ethical standards in order to compete with firms and nations that operate according to lower or different standards. There seems to be no ethical limits to the depths to which our companies will sink in the pursuit of profit; and profit becomes the only meaningful and objective criteria to judge success in a world in which all other values are relative and questionable.
Arendt’s insight into the intellectual origins of the rise of capitalist rationality is the impulse behind The Intellectual Origins of the Global Financial Crisis. The book grew out of the 2009 Hannah Arendt Center conference and its recent publication is as timely as ever. On this week of seemingly endless examples of corporate malfeasance, our new book is your weekend read.
--RB
Playafied: From Ritual to Ceremony
Nikita Nelin concludes his report of the Burning Man Festival in Nevada, 8/15/12-9/5/12. You can read his first post here, and his second post here.
Decompression: Before my hands heal I should sit down and find a way to wrap this up. I have been out of the desert (Black Rock City) for over a week now. I am back in the state of ‘normalcy,’ and yet I cannot help to feel that this ‘normal’ world is the exception. Have I been bedazzled, indoctrinated by some paganistic ritual? Did the “party” get me?
“Playa hands,” or feet, is the term used to describe what happens to ones hands, and feet, when they are overexposed to the conditions of the desert. They begin cracking -- “playafied” -- like the desert floor itself. Moisturizer helps, but the secret is to spray them down with vinegar every morning -- something about alkaline, acidity, etc...
I was out there for almost three weeks. Blood had begun to escape through some of the cracks. Yet, amid the sensory overload that is Burning Man -- coupled with the knowledge that whatever happens in the desert is hyper-transient -- your bodily concerns become secondary to the need to engage the world created for you. You celebrate despite the discomfort, or maybe even in part driven on by it. You don’t want to miss anything.
My hands have almost healed, new skin appearing underneath. I miss the damage. I miss what Burning Man proved.
I was moved towards Burning Man by the stories of others. What most attracted me to these stories were the themes of ritual, ceremony, and story telling. What I experienced, as a byproduct of being there, is the stuff I do not want to leave behind -- the concepts of ‘intent of environment’ (architecture and guiding principles), and ‘currency of gratitude.’ To feel complete, my new skin must now make space for these.
For this past week I have been needling my brain to pin down the difference between ritual and ceremony. I find it easy to mix them up. Why is there such confusion? Ultimately, I have come to see ritual as a loosely prescribed set of practices, or intentions, while ceremony is the celebration, or interpretation, of the prescribed by the practitioner. Certainly some anthropologists and theologists will find fault with my definitions. Well, I challenge you to bring me another set and if it reveals itself to be an exercise beyond semantics, I will be happy to sacrifice my hard won approximations. But that’s the catch, isn’t it? Definitions are the products of their society. They move, evolve... disappear. They are ‘approximate,’ in accordance to the pressure exercised upon them by what I call The Social Body -- our communal practices, beliefs and values, toys (inventions), cultural narratives, and the principles we deduce from the tangible matter of our environment.
Maybe what’s most worth exploring in the road towards a definition of ritual and ceremony is the location of the struggle itself: Why do we so struggle in defining them? What does this say about our society, and its practices? In the simplistic thinking somewhat necessary to engage such questions I had hoped to use my time at Burning Man as an aperture into the society at large. I brought my child brain, the one asks to see before judgement -- the one open to signs of proof.
What burning Man provides is a scaffolding of a society, a set of pillars (in its principles and architecture) to be built upon, and filled in by the participants. It is in this movement, from the scaffolding -- from the available structures -- towards the experience, that ‘ritual’ is made into ‘ceremony.’ It is where meaning is formed, and body is found. The concept of the ‘social body’ implies more then mere existence, or survival, more than just the fractals of society; it is a narrative, it is consciousness (a self-aware organism, capable of self correction), it is the accumulation of meaning.
The set of principles for this experimental society (Burning Man) are “Radical Inclusion, Gifting, Decommodification, Radical Self-reliance, Radical Self-expression, Communal Effort, Civic Responsibility, Leaving No Trace, Participation, Immediacy.” To survive, and thrive in the desert, and to feel a part of the experience, one must find their own relationship to these principles, otherwise the experience will be tedious and lonely.
The other part of the scaffolding is the architectural intent. There is the city (its streets), its coordinates measured in the units of time, and thus when you arrive at a place you arrive to a time -- time is appropriated into a location (brings us closer to the definition of ‘being here’ doesn’t it?); there is the Playa floor, a space for various art installations; the camp space, the themes to be supplied by each individual camp, each camp identifying its own purpose; the Man, to be empowered with whatever meaning one finds necessary to bring to it; and the Temple, a spiritual space to be used for remembering loved ones, the execution of weddings, and a creative space for communion. There is also Center Camp, where you will find lectures, performances, coffee (it is in fact the only place where you can “buy” something). A friend of mine described Center Camp as “the heart of Burning Man.” Maybe because this is where the exchange of stories, connectivity, takes place.
The scaffolding of ritual is provided (a labor intensive process on the levels of planning, recruiting, development, and construction). In my conversation with Larry Harvey, one of the founders of Burning Man, he summed up the intention behind this social scaffolding like this, “I am, we are, it is.” He was not pointing to himself, or to the structure of the Man, rather, the gesture was towards the “participant.” No further elaboration is given. Meaning is not handed out here, nor is it imposed. What is implied by this is that the highest level of “participation,” is to give meaning. This is “radical inclusivity.” No ones experience is void. You can come here for a great party, or to say goodbye to a passed parent. You can have your own vision quest after sunrise, way out in deep playa, or you can don the outfit of a renegade and strap yourself up in the Thunder-Dome, just to see how you feel in the costume of primal power. All experiences are affirmed, accepted. The forms are created for you, and you fill in the space. Two experiences may further elaborate on this.
One night I was warned to wear white. “The white procession,” is what I was told. After being out all night, meeting people, seeing art pieces on the playa and dancing, we made our way to the temple for sunrise. After a night of being engulfed in noise and neon lights, we arrived at the wooden, ornate temple. The quiet, a gesture of respect to the space, was hyper-pronounced all around us. People praying, crying, meditating, talking in the open space. There were pictures and poems and notes stapled to every reachable surface of the structure. As the sun began to rise a small ensemble of musicians began to play soft wooden instruments. More and more people showed up, wearing white. Some in intricate feather outfits, some on stilts, some in a simple white shirt and seersucker pants (well, me!) -- the playa was flooded in white. I have been to spiritual spaces from Eastern Europe, to Europe, to the U.S., but the power of that space, its sincerity, was unlike anything I have ever experienced (I have no elegant words for this -- it was really something “I have never experienced”).
I can tell you more of that morning, the conversations, the white anonymous mask I had carried with me, the umbrella we found, the way this umbrella became empowered through a dance, through the power of movement and intention, when an art-car showed up with a music group called the Human Experience, how that empowerment became an opportunity for someone to say goodbye to her mother who had passed two years ago. How the anonymous mask, as more people in white arrived, as people celebrated the space and the new day, was endowed with personality of the dancers behind it. But I will simply say that ‘we filled the space,’ and allow you to unpack this meaning. Did my scientifically educated mind attempt to balk at this scene? I am trained to bring skepticism, but skepticism is only useful in service to a greater goal -- to seek out what is true in the arena of living. Otherwise it becomes a defense against its initial intention. To be disarmed, to be taken-in by a communal experience, to sense the meaning of the practice, is to be a living part of the ‘social body.’
Another morning we had wondered out to deep playa, where the installations are few and far in between. There we stumbled upon a smaller temple (about 20 feet high) made of diamond shaped wooden pods -- a hive. Inside sat a man with a hot stove and four people joining him in a circle. On a low table before him were five glass ramekins filled with tea. As we approached he took two more out of his bag and added them to the already existing ones, making the pattern of a diamond on the table, now reflecting the shape of the pods. We accepted the invitation. On a cold desert morning a hot cup of tea is the power of the sunrise. Soon my partner took out a ceremonial orchid fragrance and offered it up to the others. We sat there in the quiet, warmed up and without hurry, without any knowledge of the time. Tea, orchid fragrances, tarot cards, all become an invitation to converse -- to join, to exchange, to fill-in the space. We sat for two hours and the tea master told us of his camp and how it was their mission to keep tea in this space, and his fiance and work with a non-profit music space on the West coast. There were individual pods about forty yards off to one side of the structure, the side that faced the central playa and the camp spaces. Later I found similar pods scattered throughout the playa, including inside the base of The Man. Call it metaphysics, call it the construction of myth, but after the tea experience, every time I saw one of the pods, I could not help but to feel the transmission of that experience. The space of ritual became empowered through the formation of our ceremony, and the experience felt transmitted through association from portal to portal. Is that not the fabric of culture and meaning? Is that not how we once created a society worth participating in? Practices, intention, invitation, and room for interpretation, is that not the scaffolding of purpose and faith?
If I had to mold that space into a single definition I would call it an ‘intentional space holder.’ The camp, committed to keep a tea going in that structure, held space for participants -- for the arrival of stories (the people that bring them, and the articles that facilitate them). And this is another crucial memento that I carry from Burning Man. How often do we sit down and create a story between us? How versed are we today in exchanging myth? We exchange information at a rapid pace, having now been conditioned to advertise ourselves at every opportunity. We lobby the enterprise of self, and self today is an entity that is simply trying to survive -- survive in a plethora of other voices. We seek “hits,” and, “tweets,” attention to a carefully crafted mask. With painful detail we foster an identify that can “sell” and we update its status in a witty, seemingly effortless, “I have nothing to hide” fashion, so that we become “liked,” so that our circle of “network connections” can explode. We, each, becoming conditioned to present a face on a book, but without dimensions to it. How are we known? Do we now even know what to be known is? How many, or how few, of our actions are intentioned with the creation of meaning? How much in our repertoire of communication comes from a departure from the the practice of being seen, a false conditioning to define ourselves through the limiting shapes of business, career, education, ‘appropriate‘ culture defined beliefs -- assimilation? Assimilation, but to what? Have we each become a corporation of isolated creatures -- human inc.? And have we fallen into the practice of survival (holding ground) rather then the practice of exploration (creating space)? These are lofty questions, I know. And yet, is not our struggle in defining “story telling” and “connectivity” similar to the struggle in defining “ritual” and “community?” Could this struggle of definitions point towards us having taken for granted the initial pillars of community forming? Having moved away from something essential, could we have paralyzed the ‘social body?’
I have no clear answers to these questions. Only the sense that some of what I experienced at Burning Man helps to redirect my personal exploration of these subjects back to an older mode, to a practice that I had already sensed absent, yet one which when I am faced with, I recognize as essential. In part, this rerouting is somehow centered in the principles behind the event.
For those looking for more tangible examples to the power of “participant,” consider this: Burning Man, for a week the third largest city in Nevada, has almost no crime rate. It is a city that literally leaves nothing behind in trash, or MOOP (Matter Out Of Place) as it is called here. Everyone brings their own trash bags and collects MOOP while on the playa. In fact, when a group of Nevada policy makers came to examine Burning Man their collective surprise was centered on the absence of both public trash receptacles, and trash. Participants take pride in their society -- there is ownership of the ‘social body.’
Finally, I move to “intent of environment” and “currency of gratitude.” Once I left Black Rock CIty, and drove back into “our” society, I experienced a sense of vertigo. At each new scene I encountered my mind worked to solve the riddle of intention. At a starbucks, I wanted to ask the barista, what is the theme of your camp? What experience are you charged to awake in me? When I order one of your “luxurious hot chocolate beverages for the sophisticated palate” what am I inviting? What are the articles of facilitation within this camp? At a strip-mall outside of Reno I asked, what is the purpose of this installation? What does this space inspire? What psychic and creative pressure does it exercise on me? I had become sensitive to these questions.
We float from one “must do” to another, from one operational space to the next. Our practice has become ‘to-accomplish,’ ‘to-get-done,’ a checklist of survival before we come back to the safety of homes and return to sleep. We know a thing by what it does, by what it does for us, but not what it does to us or what it ‘impresses’ upon us. We have become too busy in the ritual of ‘getting-by’ to examine this question. No wonder the irony of Frank Gehry having been tapped to design the new Facebook campus speaks so loudly to us (even if we’re not sure of the words): An abstractionist tapped to give tangible form to the institution that most clearly provides us with the venue through which we can best abstract the condition of being. The questions our our being are finally visible in the structures which surround us -- that’s the irony we now interact with. Arthur Koestler, Walter Benjamin, Hannah Arendt, and others, had predicted and observed this movement -- the emergence of space that comments on the loss of self. And now we live within this triangle -- self, our physical structures, our virtual structures -- uncertain which is the commentary, which is the creator, and which is in service of which.
Lastly I want to comment on the major form of currency at Burning Man. As mentioned earlier the exchange of money is extremely rare. Yet, there is exchange. Millions of dollars are spent yearly by individuals and groups, just to create an experience. I talked to a computer engineer who had been coming to Burning Man for five years. “It changed my life,” he said. “How?” “It made me want to give more, without asking for anything in return.” Such a cliche, right? You give without asking for anything in return, and you receive the gift of gratitude. Such a cliche, right..? And yet, this is the most obvious currency at Black Rock City. Each person is provided with an opportunity to form an experience for another. From the grand structures that hold space for everyone, to the theme camps that invite you to join them and pour gifts upon you -- from drinks to ice cream, to food, to conversation, to workshops, to tarot readings, to music, to showers and espresso, costumes, to confessionals, to the Thunder-Dome, to tea ceremonies, to trinkets and bracelets and other handcrafted articles of remembrance, to the extent of the human imagination. Such a cliche? Right? No competition, no “one-upmanship.” ‘You are invited,’ they say. You, are enough.
It is in the examination of such cliches that maybe we can begin a return to that place where we lost meaning. When did we decide that we are too busy, too smart, to be truly humanist? What made us this? The humanist tradition asks us to examine our being on every level -- the concentric circles of community (world, culture, self -- it, we, I). To use the full spectrum of our gifts in examining the state of being. To not hold “contempt prior to investigation” because such a state can lead one to loose the trail, and a skill once in service (skepticism) becomes a master -- a true state of purposelessness. Maybe it’s time to stop and reexamine our society, to allow for our deepest and most personal, and maybe most essential questions and concerns on the state of being, to catch up to the gifts of our inventions.
The creating of space: I cannot get away from this idea. This is what Burning Man does. It creates a space (a space for meeting, for discovery, serendipity, a space for creating) and I, pressurized (or inspired) by this space -- its subtle intentions, architecture and principles -- am left to empower this space with meaning, to fill in the forms. I am endowed with the magic of meaning making. From ritual to ceremony I make matter -- I make this time (this space) matter.
Left to my own devices I perform the rituals of living, but without the movements of meaning. I struggle to empower the mask.
We have passed to the end of the existential age. Someone declared God to be dead. Science, with all its promise and discovery, has too failed in filling in the shapes of existence. Consumerism, the god of the 20th century, has also, ultimately, failed to provide us with the kind of purpose that leads to a greater belonging, or safety. The internet age, having initially promised to connect us, is now making us even more isolated. The onus is placed on us. On the individual. In this age of the spectator (internet, TV, emotional removal from the immediacy of our world) we are left to create a ceremony of our existence, to question our rituals, to define the space of our community, and our coordinates within it -- to become participants. To bring the social body back to a state of being.
-Nikita Nelin
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