What Happens When People Become Assets
Our economy has become so abstract that real people can’t afford houses because wealth funds use them as investments
If central currency can be thought of as the operating system of our economy, corporations are the software that runs on top of it. They are the true natives of capitalism, which is why they are so much more at home in this environment than we humans. In perhaps the most spectacular reversal of figure and ground we’ve yet witnessed, corporations have been winning court cases that give them the rights of human beings — from personhood and property to free speech and religious convictions — while human beings now strive to brand themselves in the style of corporations. But corporations are not people. They are abstract, and can scale-up infinitely to meet the demands of the debt-based economy. People can only work so hard or consume so much before we reach our limits. We are still part of the organic world, and subject to the laws of nature. Corporations know no such bounds, making them an awful lot like the digital technologies they are developing and inhabiting.
The pioneering philosopher of the political economy, Adam Smith, was well aware of the abstract nature of corporations — particularly large ones — and stressed that regulations would be necessary to keep them from destroying the marketplace. He argued that there are three factors of production, which must all be recognized as equally important: the land, on which we grow the crops or extract the resources; the labor, who till the soil or manufacture the goods; and, finally, the capital — either the money invested or the tools and machines purchased. He saw that in an abstract, growth-based economy, the priorities of the capital could quickly overtake the other two and that this, in turn, would begin to favor the largest corporate players over the local, human-scaled enterprises that fuel any real economy. Unlike land and humans, which are fixed, capital can keep growing. It has to because a growth-based economy always requires more money. And capital accomplishes this miracle growth by continually abstracting itself. Investors who don’t want to wait three months for a stock to increase in value can use a derivative — an abstraction — to purchase the future stock now. If that’s not enough temporal compression, they can purchase a derivative of that derivative, and so on. Today, derivatives trading far outpaces trading of real stocks — so much so that the New York Stock Exchange was actually purchased by its derivatives exchange in 2013. The stock exchange, itself an abstraction of the real marketplace of goods and services, was purchased by its own abstraction.
As more of the real world becomes subjected to the logic of capital, the things, people, and places on which we depend become asset classes. Homes become too expensive for people to buy because they’re a real estate investment for sovereign wealth funds and other nonhumans. Those who do manage to purchase homes soon realize that they’re only providing fodder for the mortgage industry, whose mortgages, in turn, are bundled into a yet more abstracted asset class of their own.
People are at best an asset to be exploited, and at worst a cost to be endured. Everything is optimized for capital until it runs out of world to consume.