Individualized Discourse in a Systemic Problem

     In her article "Regulating Credit" Deborah James discusses the cycle of debt experienced by South Africans. She details the effects and causes of the extremely high level of personal debt in South Africa as well as analyzing the debtors and lenders in relation to race. Of all the concepts in this article I will focus on the idea of the individual responsibility that is assumed in the cases of the debtors loans and repayment. 
     On page five James begins to detail the history of liberalization South Africa. This is the background to the view of individual being a matter of personal responsibility and not a group problem. The individual is seen to be the one taking on loans and therefore the responsibility of repayment is their responsibility as well. This trend continues into the relatively new practice of credit counseling where by an individual will pay a debt counselor to aid them in repaying their dent and the contractual agreements involved. 
     Another layer is added to the debt issue when the reader is able to see that the loans offered by most lenders were often unfair or even illegal in such large amounts that the borrower would almost certainly be unable to pay back with interest. Again, the problem is not seen as a systemic problem however with this argument of illegality not being successful in court. James records a debt counselor explaining this practice saying 

"The person must pay back, and must make an effort to do so. Don’t look at it as ‘They had no right to extend the loan’ – this is beside the point. Instead, I try to encourage people to pay back. Make an effort – it has to be a painful process. Otherwise they won’t learn the lesson. You need to make sacrifices. Forget about movies, eating out 3 times a week. The only way is to pay in as much as I can. This way I get a lot of acceptance from creditors (in court). I try to practice a system that makes sense" (James, 17).

This quote summarizes the problem of a systemic failure being placed on the shoulders of the victims. Reform is seen to be needed on the debtors behalf; they need to learn the lesson. How can financial literacy be learned by a person who is being penalized so harshly for past debts? The issue of debt and financials in general needs to be viewed as a systemic issue but in order to do so the discourse used to describe finances in a neo-liberal world needs to become caught up with the times. Instead of discussing debt as one would have two hundred years ago in an economy without modern "finance" the discussion of debt needs to look at individuals as part of a greater problem. A failure of financial education and awareness to all. Only then will the system be reformed. 

Regulating credit: tackling the redistributiveness of neoliberalism - DEBORAH JAMES

Runaway liberalization and belated regulation

"Ostensibly ‘to open up the market for small borrowers’, previously excluded from opportunities to start small enterprises because of their inability to borrow money from the big banks, existing legislation restricting the interest rate was removed in 1992. Removing the restriction would enable lenders – in theory equally small – to run viable businesses catering to the needs of such borrowers, thus creating opportunities for both." (James, 2013)


I think that the article, staring by its title, is a very good review and critique, through the South African case of how microfinance has become an extended neoliberal practice that intentionally targets the working class and the poor with the objective of bringing them into the financial market and creating channels for earning profit from them, even though it is with the rhetorical construction of providing them with tools for improving their lives.

With that said I think that James provides a very interesting and telling insight into the mechanics of these microfinance endeavours. First she describes the historical development of this institutions in a society deeply shaped by the Apartheid system and its racial and ethnic discriminatory organization and how sometimes the unexpected consequences of good-intentioned policies can be worst than the problem they are trying to fix. Second, the description and analysis of the both sides of the struggle when came to new regulation painted a very good picture of the scenario that in my opinion repeats itself everywhere when the public-private happens; and finally third, the author humanizes both those historical moments and the public debate through testimonies and quotes from people involved in the microfinance arena and by doing so she comes full circle in her analysis that began in the state sanctioned assassination of workers protesting predatory lending.

The Practice of Arbitrage

While most of the language in the article written by Hirokazu Miyazaki was difficult to understand, it was an intriguing article to follow since she looked at specific traders who lost their jobs due to the Japanese economic disaster in 1996, which was perpetrated by the government. This was a period called the "Big Bang" for the Japanese economy due to the formation of banks within the country. The selling of private Japanese trading firms and replacing them with American trading firms resulted in the loss of many jobs in Japan.

The leading term throughout the entire article was the word "arbitrage." While the article doesn't fully explain what the term actually means, it describes instances of taking advantage of the differences in prices in two or more markets. This concept was used by all of the traders throughout the article and some of the experience it more than others. One of the traders, Taka, explained that golf courses were extremely expensive and exclusive, meaning that it was mostly the rich that could enjoy the golf courses. He suggested that someone buy the golf courses, sell the membership to everyone, and turn it around and make a profit. This was a great example of using arbitrage because it helped me to understand the term a little better.

All in all, the article was hard to read for someone that has never taken an economics class. I found myself turning to Google to find out what words or phrases meant. But Miyazaki did help everyone to understand the collapse of the economy in Japan using these specific traders' lives to tell this story.

Privatization in China

While reading some of the articles on Generating Capitalism, I would continuously read articles that made little to no sense to me at all. The authors would drone on using text that could only be understood by individuals fluent in "economics." However, I finally read an article that I could easily understand, and one that interested me a lot. This article discussed the differences between a company being private and public in China.

When we think of privatization in the United States, we think of companies that have no ties to the government and are not ran by the government. They are completely ran by individuals that are out for their own interests, or are supposed to be seeking the interests of their clients. This is not so in China, and purportedly in other cultures throughout the world. In China, the privatization of a company does not mean that they are completely independent of the government. In fact, they still have close ties to the government and have bureaus or departments that oversee the company. Yet the owners of these companies don't seem to mind this as much as we would here in the US. This shows a major difference between our cultures and our economies because US business owners don't want government oversight but Chinese business owners don't find it bothersome.

Another point that drove home to me was the fact that individuals who buy stock in the company, don't really have a say in the running of the company. In effect, they only own part of the company on the side, but don't have voting rights for the way that the company acts. This is different in the way American stocks are sometimes used. If an individual owns a large portion of a company's stock, they would have voting rights and a say in how the company is ran because the company fears losing money (the stock) if they upset a stockholder. The use of stock in the US as a way of keeping people happy contrasts greatly to the Chinese stock, but it seems that both cultures are relatively happy with their arrangements.

Overall, this article did teach me to not think that all economic terms used in the US are universal. It is easy to see that these terms can be used in a variety of ways depending on the cultural implications for each individual country.

Salvage as Capital

In Salvage Accumulation Anna Tsing starts by asking how it is that "capitalism is at once so generative, flexible, and creative, and, simultaneously, so effective at doing certain things, such as making rich people richer." This question made me think of the early days of capitalism when supply chains offered capitalists the opportunity to take advantage of work done outside the "factory" and "translate" non-capitalist processes into profit. The spice trade was one such instance where a "salvage" good was traded as capital and used to make even more capital in the form of actual wealth. Even factories, as Tsing notes, were basically using "salvage" capital to create real wealth for labor "could not be made by capitalists." Agriculture and other natural resources are examples of non capitalistic processes turned into capital but what separates these from capitalist processes. If you think in terms of one definition that capitalism is making money from money then a woman's assumed knowledge of sewing or mushrooms picked in the American Northwest are certainly not capitalist processes. The women and pickers do not seek to create value with their actions, nor does the dinosaur that dies and becomes coal but the rich individual who seeks to become richer will take these processes and quickly convert them into value to become richer. How capitalism can be both "generative, flexible, and creative, and, simultaneously, so effective at doing certain things, such as [make] rich people richer" is because the generatively, flexibility, and creativity of capitalism only cater to those who have the means of turning"salvage" into capital. The factory worker and the sewer can only create "salvage" and have no way of converting it without previously converting the "salvage" of others for in capitalism it takes money to make money. 

Digesting Neo-Liberalism and Capitalism

            Truth be told, I had some difficulty in following the introduction to the readings for today. I felt somewhat lost in ascertaining what the true "focus” was. This may have been in part the writing style. However, what was clear, was the level of “totality” with which the authors wish to examine the issues, though I found it written in a bit of a convoluted manner. The two pieces I selected to read, in no particular order other than their titles caught my eye and sounded interesting, were “Your Family and Friends are Collateral: Micro finance and the Social”, as well as the “Tales of Physics and Cosmographies of Capitalism”.

            I was particularly curious about the title of the first piece by Caroline Shuster. I couldn’t really fathom what she meant by family and friends as “collateral”. I was familiar with the concept of collateral, similar to what she describes for conventional debt, and the class had briefly touched on the idea of individuals having nothing with which to establish credit for loans. However, I had never head of loans, even small ones of $100 being lent to groups, such as the ones described. In some ways, it almost seemed like an ingenious solution, and allowed for women’s empowerment. However, I agree with the author that, this commoditization of even social ties and family members seems incredibly dangerous, and clearly puts the organizer of the loan in a precarious situation. My question to the class for this piece is if they believe that such a system could work in the United States, or is it a system which could be easily taken advantage of?

Concerning the second piece by Mai Zhan, I once again found myself struggling to extrapolate the focus of the writing. I feel that it may be a critique about the western interpretation of capitalism being applied to everything, and in this case, China’s capitalistic economy. I did like, and find rather clever, the analogy to the ambiguous zodiac. In this case, I would appreciate a class discussion to clarify, which is an ironic request, what the author was truly getting at. 

Exploration of Gens

    “Gens: A Feminist Manifesto for the Study of Capitalism” explores how the ancient Roman concept of Gens influences our modern understanding and application of gender, class, and capitalism. The authors chose a feminist school of thought to approach capitalism because feminism challenges representation of normalcy in the economic domain. They explore how the economy and capitalism is taken for granted as it as viewed as an inherent truth of the universe:

“The economic is repeatedly and relentlessly imagined as a singular logic that is derived from a pre-made domain and expresses itself in historical and cultural realities. That “the economy” is an accepted and relatively bounded focus of study demonstrates the taken-for-grantedness of such already made worlds, characterized by practices and standardizing logics that are assumed to cohere in them.”

I am of the opinion that societal structures arise from material conditions rather than idealism. Assuming this to be the case, how did capitalism come to be synonymous with environmental destruction, racism and sexism?

    The authors argue that capitalism employs conversion devices in order to achieve the global scale:

“We also argue that formal models emerge from diverse lifeworlds and are not simply manifestations of singular core logics. Instead, they are generated by particular social and historical experiences, and, through laborious translation and conversion work, they often become “global.” In so doing, they mediate objects that come to appear abstracted and cut off from their origins. The key power of these models in contemporary capitalism comes from their ability to erase particularity and sever objects, people, and resources from their contexts (Tsing forthcoming; Bear 2013).”

I find this to be a super interesting concept. According to this idea, conversion devices indirectly disconnect commodities from their origins, thus exploiting women, the impoverished, and workers in newly-industrial nations. If conversion devices were not employed and consumers had better knowledge of the origins of their commodities, might they consume differently?