Table of Contents

Short Circuits: Finance, Feedback and Culture

Short Circuits: Finance, Feedback and Culture

By Benedict Seymour
Thanks to the pervasive logic of cybernetics and the planetary roll-out of digital networks, feedback
has come to determine the behaviour of post-war capitalism and culture. Expanding on a talk given at
The Showroom gallerys Signal:Noise conference, Benedict Seymour considers the uncomfortable
parallels between the avant-garde and post-Fordist harnessing of free inputs within networks of
production

There is no such thing as an empty space or an empty time. There is always something to see,
something to hear. So said John Cage in his 1958 lecture, Experimental Music. This article argues
that the aesthetic or cultural transformation of absence into presence, the revelation, by subtraction, of
new raw materials or free inputs, bears a relation to the logic of accumulation in an era of financialised
capitalist self-cannibalisation. What Cage valorised in the aesthetic sphere, developing concepts of
feedback and self-regulation formulated in cybernetics, anticipated the innovations of modern finance
and the production - by subtraction - of empty/full spaces of accumulation.

[IMAGE]
Image: Hans Haacke, Condensation Cube, 1963

The term feedback originates from the inter-disciplinary science of cybernetics. Cybernetics is
concerned with regulation within closed systems. It looks for and exploits circular causal relationships,
feedback, within these systems. Negative feedback is a process in which action and its effects are fed
back to the actor in order to better coordinate aim and result. The loop proceeds from action (e.g. firing
a machine gun at an enemy plane in order to shoot it down), to sensing (how is the target affected?), to
comparison with the desired goal (has the plane been shot down?), to action (shoot again, a degree to
the right), and so on. The circle of action, monitoring, correction and further action, integrates error in
order to regulate and improve performance. Incorporating indeterminacy and recursive logic enables
an automation and expansion of control. On the other hand, as we will see, this virtuous circle of
negative feedback can also invert into its opposite. Positive feedback, from the perspective of
control, is not positive at all, but represents a spiralling disorder or perturbation of the system. A
vicious circle.

It is no accident that the circular causality of the feedback loop resembles the cycle of capital
accumulation described by Marx (Money - Commodity - more Money). Information feedback has
played an increasingly important role in the larger loop of capital accumulation for decades, if not

centuries. The cybernetic revolution simply radicalises solutions to capitalist crisis proposed by Ford,
Taylor and Keynes, expanding the ambit of control by flattening the world into a single dimension of
information. Tiqqun claim in their essay The Cybernetic Hypothesis, that the internet has become a
global cybernetic system, enabling capital to manipulate and monitor consumer preferences. Consumer
behaviour, for example, is subject to the management of financial markets: Each actor in capitalist
valorization is a real-time back-up of quasi-permanent feedback loops.

We may disagree that the information society has brought about a new form of value creation in which
information is wealth. Nevertheless the rise of the information society certainly coincides with the
installation everywhere of feedback loops which monitor and regulate consumption, production and
distribution. Capital strains to reduce its overheads by outsourcing labour to consumers - witness the
rise of social networking - and subjects all social processes to measurement and quantification.
Through privatisation, marketisation and the destruction of earlier modes of welfare, society is
subsumed under the commodity form. Like good students of cybernetics, New Labour set about
installing forms of performance measurement and modification across the public sector, primarily in
health and education, imposing value as a dominant metaphor on all areas of social reproduction. This
indexed a need to generate growth, no doubt, to find substitutes for industrial production and to
increase the pressure on workers of all kinds. The deepening penetration of informational feedback
loops contributes to an extension of the working day and a breakdown of limits to exploitation. The
efficiency of this process was predicated on another order of feedback, however: the continued rise
of the UK as a global centre for the creation and retail of fictitious capital. The production of a specific
form of information, credit and debt, is crucial. The UKs health and education sectors, not to
mention the UKs other unproductive services, could only deliver a facsimile of growth in relation
to the Citys siphoning off of the global value product.

To understand the larger feedback loop in which the circuits of information society function, then,
we need to look at the feedback loops of finance capital. An increasingly large proportion of this
information represents claims on non-existent value, i.e. credit and debt, as well as the plethora of
financial instruments - derivatives, Collateralised Debt Obligations, Credit Default Swaps, etc. - that
dominate the global finance market. In this process information does indeed become hegemonic - not
as value, but as fictitious capital. This does not amount to an actual process of valorisation, merely the
ever-increasing generation of claims on future, as yet non-existent (or no longer existent) value. In
order for these claims on value to be made good, supported and sustained, an anterior process of
valorisation and expropriation remains necessary. As in Marxs day, there remains no substitute for the
expenditure of human labour in the creation of value.

Fictitious capital comes to function as a kind of effective, but precarious, surrogate for value which
both depends on and is undone by the financial feedback loops that constitute it. In David McNallys
excellent 2008 essay, From Financial Crisis to World Slump, he describes how the
becoming-pervasive of value as the form of measurement of all social activity coincides precisely with

its becoming tenuous and volatile as a measure of... value. Its absolute triumph is predicated on its
increasing shakiness as a claim. McNally writes, With the end of dollar-gold convertibility in 1971
and the move to floating exchange rates (rates that literally fluctuate all day each and every day
according to values determined on world markets), currency values, especially for the dollar, became
much more volatile. As a result, the formation of values at the world level became much more
uncertain and less predictable.

The growth of finance is predicated on an actual decommodification of (world) money. To put it

another way, the commodification of everything else stems from the decommodification of the dollar
as global reserve currency: The measure of value property of money - the capacity of money to
express the socially necessary (abstract) labor times inherent in commodities - was rendered highly
unstable.

The suspension of value as measure is, paradoxically but logically, expressed in a new
over-accumulation of forms of measurement, beginning with those most influential forms of measure the financial instruments called derivatives.

In essence, derivatives set out to measure and price risk. As McNally says, the increased uncertainty of
value relations put an increased emphasis on risk assessment and monitoring for all capitalists, but
especially those who, in a globalised market, have to deploy multiple currencies. These currencies
themselves became more volatile because of the suspension of dollar-gold convertability. The basic
loop of financialisation is thus the movement from the suspension of dollar-gold convertability to the
increase in volatility of currencies to the proliferation of mechanisms (derivative contracts) for
monitoring and insuring against these fluctuations. But a further cybernetic spiral immediately arises
from the growth of derivatives as risk measure and hedge. Derivatives become themselves a source of
risk. Because one can buy insurance against risks to assets one doesnt actually own they can function
instead as forms of financial speculation. For instance, a Credit Default Swap [CDS] against the risk of
GM defaulting can be purchased even if one owns none of GMs stocks or bonds. Speculators can win
by shorting the circuits of value they feed on.

Whether gambling on currency movements or exploiting value gaps between markets (arbitrage), the
same logic applies. Tools originally conceived as a way to measure and so more precisely price risk,
and so master volatility, become themselves a source of fluctuations in prices as their use en masse
gives rise to new forms of financial feedback. As well as impacting on the material world immediately
through the devaluation of currencies and drastic price changes, the diffusion and networking of risk
enabled by derivatives displaces risk from the local to the systemic level. The virtuous circle

(negative feedback) of debt creation, becomes ever more likely to invert into a vicious circle
(positive feedback) of depreciation. Guaranteed returns based on risk-managed revenue streams
prove to be fictitious.

There isnt space here to properly go into the workings of Value at Risk (VaR) and other measures and
models of risk. It should be noted, though, that such forms represent the repetition at a higher power of
the basic reifications of capital. Homogenising and objectifying particular socially and politically
determined risks as abstract risk, they are the financial spheres cognate of abstract labour in the
sphere of production. Markowitzs Portfolio theory of risk management and the VaR measure
depend on this abstraction of risk to automate and autonomise the assessment of specific investments.
Once achieved this becomes an industrial process. Human oversight and investigation of particulars is
displaced by black boxes computing homogenised variables.

These phenomena are not alone sufficient to explain the systemic crisis of capital, however. The
growth of speculative finance is inseparable from the larger process of social reproduction and the
productivity of capital as a whole. To put it crudely, a crisis of over-production and
under-consumption arising from massively increasing technical productivity dictates the expanding
destruction of both exchange and use values in order to reproduce the conditions for capital
accumulation.

If information does not produce as much value as is claimed, then not only fictitious claims but also
productive assets must be cancelled for accumulation to continue. As fictitious values, previously
treated as if they were real assets, went into freefall during the credit crunch, real capital began to be
wiped out, too. McNally: factories are mothballed, corporations go bust and sell off their buildings,
machines, land, customers lists and so on at bargain basement prices. This process of destruction is
still in its early stages, with many more forms of financial feedback yet to begin unwinding.

Here we see the real signature of cybernetic capitalism: not infinite growth through deregulated
feedback but rather an intensified and expanding destruction of value. The zero growth ideology was
first enunciated in a report, The Limits to Growth, by a group of MIT cyberneticians commissioned
by the capitalist think-tank the Club of Rome in 1972. From this set of scenarios for capitalist
sustainability, published at the very moment the dollar was being decoupled from gold, to
Thatcher-era deindustrialisation and privatisation, the feedback loops of finance have been intimately
linked to the driving down of social reproduction (the sustenance of humans, infrastructure and
environment) at a global level. As McNally notes, the imposition of the value form - value logics across every sphere of social existence simultaneously reflects unprecedented financial volatility and
impels an epochal attack on proletarian reproduction through dismantling of subsidies to subsistence
goods, removal of wage protections, welfare and privatisation of public services, etc. All this

contributed to the further rise of financialisation, and such accelerated value destruction is visibly the
telos of cybernetic capital again now that the financial feedback loops have begun to unwind, in our
current phase of aggressive and open austerity.

Before and After Feedback: Culture, Politics and Finance

There is poetry as soon as we realize that we possess nothing.

- John Cage

What then of culture, not to mention politics, in this by no means completed era of financialisation and
cybernetic self-regulation? Long before the rise of derivatives, feedback was being explored as key to
new artistic forms and practices. If, as Tiqqun claim, network society is a kind of massive global
cybernetic system, and the social/cultural structures of feedback (internet, social networks, workplace
monitoring of performance, logistics, meta-finance, etc.) possess distinctive political and economic
characteristics, how does culture anticipate, reflect or resist these?

We can begin by considering how the cultural and social structures of feedback, like the financial
ones, today mesh with capitals major feedback loop. Capital is now compelled by its own logic to
destroy an increasing amount of the means of production it commands. It needs to devalue
labour-power and avoids paying for reproduction of other forms of capital. So today we see expanding
forms of non-reproduction, including: the annexation of labour-power outside the advanced capitalist
countries through globalisation; the bolstering of profits by paying workers less than the cost of their
reproduction; the non-maintenance of infrastructure; the non-replacement of natural resources, etc.

[IMAGE]

Image: The programme of the premire concert of John Cages 433", August 29, 1952

Considered from this perspective, feedback - both financial and cultural - is not just about abstraction.
Rather the growth of the network form, and the measuring and monitoring of all areas of social
existence, extends the scope of non-reproduction exponentially. The annexation of free inputs environmental, infrastructural, and re/productive - is enabled by the network. At the theoretical level
cybernetics collapse of the distinction between man and nature, between states (and between States)
subsumed under a universal set of feedback loops, anticipates the unified field of (self-)regulation and
self-reproduction to use editorial collective Midnight Notes term, imposed in neoliberal capitalism.

Cybernetics higher order of abstraction implies an expanded field of increasingly extractive

accumulation, in which both waged and unwaged labour are available. Mute readers will no doubt be
familiar with the idea of free labour as precondition of the social network. Both fictitious claims
(finance) and social networks (culture) require free inputs - unpaid labour and unpaid for assets - to
perform. Derivatives performativity as claims on value assumes and commands unpaid and
non-reproductive labour - for example, through their effect on the price of commodities and labour in
low GDP countries. Networked cultural production solicits plabour and prosumer activity and
individual capitals are able to reduce their overheads, if not increase their rate of exploitation, by the
outsourcing of content production to the end-user. Paying attention may not create value directly but
clearly the formerly passive consumer has been activated. Both terms - culture and finance - are
increasingly interchangeable; finance is aestheticised as it claims become absurdly fictitious, culture is
reduced to finance as its fictions become absurdly monetised.

I would like to suggest here that the rise of such a culture of free inputs and financial feedback is
anticipated and prepared - if not foreseen or desired - in the neo-avant-garde of the 50s and after.
Seeing feedback as a route to a more autonomous and egalitarian cultural and social existence, a way
of dissolving the hierarchical structures of a bureaucratised mass society, the pioneers of cybernetic
i
and network culture generally failed to target the Ur-form of feedback, that is, the value form per se.
Both counter- and corporate culture converged on a more liberated, technocratically enlightened,
form of circulation (and re/production), which, ironically, presupposed the deregulation of money and
the looting of those subject to the diktats of decommodified wealth.

John Cages ethos of impersonality in artistic production shares, by no means accidentally, something
ii
of cybernetics flattening of the man/nature (organism/environment) distinction. Conceived as an
aesthetics of Buddhist self-abdication, the shift from subjective intention to aleatory process has
structural similarities to the outsourcing of evaluation and decision later seen in black box trading and
other forms of financial feedback. Rather than creating finished works, the (post-)cybernetic artist or
composer becomes a programmer of cultural software, setting up self-regulating, ideally self-executing
systems or processes. From La Monte Young to Phillip Glass, Sol LeWitt to Hans Haacke, the
implications of processual feedback as form are manifold but an overall shift in orientation is apparent.
The Duchampian readymade, the ultimate, or rather foundational license to loot already implicit in
Fordist artistic production (and productivism), becomes for-itself with the post-Cageian

phenomenologists of feedback. iii Cage makes the audience into producers with 433", his own
production being confined to a minimal instructional score. La Monte Young seeks ways to let the
untreated raw sonic material resonate without intervention - we must let the sounds be what they are.
Rather than working on the world in instrumental fashion to shape it, we must find ways to give it
back its independence and listen to it better. This may be a higher-level reskilling of the deskilled
listener set free from their traditional interpretive duties, but it could also be read as a miniature
manifesto of non-reproduction.

The composers (non-)work shifts from the creation of teleological musical narrative to the
precipitation and harvesting of psycho-acoustic free inputs. These are catalysed by the creation
within interacting streams of sound-data, of virtual or gestalt musical lines (Youngs combination
tones, Steve Reichs resulting patterns, etc.). Phillip Glass, whose additive compositional process
eschews a goal-directed temporality or offers recombinant teleologies (in Robert Finks phrase)
discovered a similar unplanned qualitative plus while listening to a performance of one of his works
in a concert hall, deciding to consciously incorporate such psycho-acoustic effects in future works.
Unplanned outputs become new inputs within an infinite, responsive, musical feedback process.
Notoriously, musical Minimalism synced opposing temporalities to a single pulse, in the process
becoming crossover music. As in financial derivatives, which align existing revenue streams to
produce more than the sum of their parts, it is enough to bring two repeating musical patterns into
coordination to produce a virtual third. The temporality of the derivative is also anticipated in the split
or schizoid time of minimalist composition, in which ceaseless activity at the molecular level produces
stasis and stability on the macro scale, simultaneous acceleration and deceleration.

Both financialisation and Minimalism can be described as machines for the suppression of (historical)
time, and with some justice have been criticised as exhibiting the positivist/mystic drive to master and
suspend temporal succession, to preempt and overcome history by application of self-correcting
models. (Stockhausen is overtly anti-historical in his pronouncements, while Glass and Reich seem to
want to tap into a secular eternity that mirrors the reticulated flow of advertising and TV). Musical
feedback can signify as a dream of perpetual motion, as growth without excess, as a regained cosmic
balance. Whatever the ideological orientation or intentions of the individual composers, many aspects
of systems-influenced music seem to dream capitals subsequent involutions as a utopian exit from it.
The creation of musical feedback loops yields a form of sonic (sometimes spiritual) added value that
is attributable to neither composer nor performers, but depends on their environment (the concert hall
or studio) and the reverberations released, or captured, by the unfolding musical material. In this
magical aesthetic gift economy there is nevertheless an echo of the larger restructuring of production,
and contraction of social reproduction, in which such cultural forms were discovered and developed.
Call it unmediated adjacency, but Downtown New York Minimalism was certainly born somewhere
between Madison Avenue and Wall Street. The suspension of dollar-gold convertibility and of linear
musical development in Minimalism certainly occur at the same point on the historical score. As does
the bankruptcy, and then gentrification, of New York...

Whatever one makes of this brief exercise in cultural-economic isomorphism, it does seem worth
urgently asserting the currency (or rather, bankruptcy) of certain post-cybernetic conceptions of
culture. An ethos of self-limited and self-sustaining activity, freed from the hubris of modernist
telologies of growth, linked to a notion of generosity, gift economy and DIY emancipation may
(still) seem appealing. Yet, however militant the refusal of instrumental reason, linear time,
progression, etc., this ethos predominantly operates by bracketing out the dull compulsion of the value
form. This leaves it hostage to the kind of reappropriation now being conducted by the capitalism of
the Big Society. In many counter-cultural products and processes the commitment to dissolution of the
work into the flow of negative feedback and free-floating (non-consumerist) desire coexisted with a
project for the creation and replication of enclaves or islands outside the sphere of consumerism or
capitalism conceived as a bureaucratic regime of unfettered development. Today we see the reductio
ad immiseration of this larger trajectory into an ethics of doing more with less (famously dissected in
season 5 of The Wires extended montage of the restructured institutions of news and policing).
Architects and theorists such as Rem Koolhaas and artists such as Marjetica Porti? encourage us to
embrace the self-organising, self-regulating creativity and improvisation of the entrepreneurial
slum dweller, hymning the efficiencies of outsourcing former state services to the absolutely destitute.
Policy wonks such as Charles Leadbeater eulogise the mendicant refuse collectors of Recife Brazil,
with their supermarket trolleys and contract-free labour. Networked creativity can be read as a
euphemism for the harvesting of free inputs, which the eulogists assume will add up to sufficient
savings and value creation to keep the financialised system in motion.

All this is the consummation of the cybernetic capitalist tendency to activate potential by removing
means of support and subsistence, letting the raw (human) materials resonate to the newly opened up
environment of non-reproduction. The dead hand of the state or over-arching structure of welfare and
services is withdrawn to facilitate the free play of the systems molecular constituents. Capitalism as
open system is increasingly dependent on the annexation of the outside in all its forms, and where
this outside is definitively assimilated it must be recreated endogenously by the subtraction of existing
social reproduction.

Rather than recycling forms of cultural feedback developed more or less consciously as a subversion
of the (Fordist, statist and bureaucratic, etc.) social order - a project that was always, at best,
ambivalent in its implications for the majority of the population - perhaps we should shift our focus,
both culturally and politically, to the ways financial feedback has laid the ground for todays era of
struggles around subsistence in a society subsumed under an ever more volatile value form. As an
expanding global proletariat confronts contracting social reproduction, the question for cultural
producers is whether one (solely) serves an extended programme of value destruction or (at least)
contests it.

Revolts catalysed by Twitter and Facebook, alongside the offline networking of all those put into
contact with, and forced ever closer to slavery by, financialised systems are the positive feedback
loops beginning to resonate after years of controlled deregulations and informatisation. The
accelerating repetition of ineffective financial moves generates an ever greater financial contradiction
which is transposed across the social scale from banks to states to populations. As subsidies are
withdrawn and barriers to capital dismantled, this contradiction is translated into food and fuel price
inflation, in turn triggering riots and a proletarian music of revolt ripping through once stable states.
With the socialist - and now fundamentalist - control circuitry torn out or severely compromised by
financialised capital itself, perhaps an unregulatable feedback will ensue.

An unprecedented coordination of class decomposition and social non-reproduction has made systemic
risk, in every sense, far greater than it has been for decades, greater than in the entire history of
capitalism, perhaps. If the spiral of feedback leading from financial bubble to insurrectionary wave
that now seems possible is fulfilled, then we may yet have to revise our opinion of the long era of
financialisation. It will have been more than just a fiction of wealth - the imposition of the value form
as a volatile but empty claim to value creation. In a final spiral of cyber-capitalist feedback, finance
may prove to have been the amplifier par excellence of the noise that abolishes the capitalist signal,
that is of the signal which is value - the one, supremely abstract, supremely material thing it always
must communicate, send and receive. An exponential positive feedback in class struggle should not be
assumed, however, any more than the teleological projections of cybernetics (e.g. inevitable planetary
death by overpopulation, etc.). But one would have to be more myopic than a risk analyst, or
middle-eastern CIA operative, to miss the current potential for the destructive cycle of financial
feedback to invert into an unprecedented global cycle of struggles against capital per se.

Benedict Seymour <ben AT kein.org> is a contributing editor to Mute and is currently working
on a film treatment about a popstar who survives a serious car crash to discover that he can
suddenly see the price of everything he looks at

Thanks to Hannah Black for additional editorial assistance

Footnotes
iThere were important exceptions of course, such as Henry Flynt who has a strong sense of music as
class struggle, and a gift for mathematics. And La Monte Young remained immune to the allure of a
music industry undergoing its own immediate form of restructuring and non-production.

iiA recent article by John Brockman is suggestive about the influence of cybernetics on Cage. The
composer gave an ongoing seminar about media, communications, art, music, and philosophy that
focused on the ideas of Norbert Wiener, Claude Shannon, and Marshall McLuhan. Cage was aware of
research conducted in the late 1930s and 1940s by Wiener, Shannon, Vannevar Bush, Warren
McCulloch, and John von Neumann, who were all present at the creation of cybernetic theory. Cage
also appreciated McLuhans idea that, as a result of communications technology, "Theres only one
mind, the one we all share." We had to go beyond personal mind-sets: "Mind" had become
socialized.... a "collective consciousness" that we could tap into by creating "a global utilities
network." See, The Edge Annual Question 2010: How Is the Internet Changing the Way You
Think?, The Huffington Post, March 2011,
http://www.huffingtonpost.com/john-brockman/the-collective-conscious_b_418453.html
iiiOf course the readymade is not necessarily only this, but as an artistic technology it can be deployed
in different ways, one of which includes a kind of asocial, uncritical annexation of available resources;
much neo-conceptualism would hardly be possible without such a (mis)use of the readymade.

10