The New Media of Exchange: Dialogues on Internet, Monetization and Finance

By Geert Lovink and Nathaniel Tkacz (written in December 2012)

Concept for a series of conferences, workshops and (online) publications.

Critical responses to the ongoing financial crises have taken several forms. One trajectory has oriented itself largely around negating the present. “Occupy Wall Street, forgive the debt, end austerity, down with the 1%”, are some the refrains of this critical trajectory. Another is “shit’s fucked up and bullshit”. While some in this camp seek revisionist and policy-driven reform, they co-exist with a more critical and radical current, which stands against the churn of monetization and the continued intensification of capitalism, and draws from a long (and diverse) history of critical perspectives now directed towards the system of Global Finance. A second trajectory has focused on the development of alternative forms of money and finance outside of the mainstream banking system. Micro-credits and barter, crowdfunding, p2p banking, mobile money and the crypto-currency Bitcoin are examples of these pragmatic counter-strategies. How is the production of financial alternatives positioned in relation to the broader critique of global finance? What ideas underpin these alternatives? Conversely, what concrete strategies are in place for those who have thus far dedicated themselves to the negation of monetization? This two-day event seeks to facilitate a stronger dialogue and exchange of ideas between these two sets of developments, identify common energies, points of ambiguity and tension and fostering lively debate.

The concrete context in which this event is taking place is the budget cuts in culture in the Netherlands, the UK and elsewhere. The creative industries meme is not offering concrete revenue models for artists besides corporate sponsorship and the (morally) bankrupt model of intellectual property. In this time of economic crisis we can no longer only criticize financial capitalism but need to imagine, and practice alternatives. What are the prospects of crowdfunding platforms such as Kickstarter? Is there a way out for the precarious cultural workers to earn money directly, cutting out the intermediates, through a peer-2-peer economy, using bitcoins? Free and open as facilitating ideologies of the 1990s no longer appeal as quasi-subversive business models. When Google and Facebook are champions of the free and open, does the production of alternatives play out at the level of specificity – that is, with specific projects directed at specific problems – without any guiding lights or utopian horizons?

We propose the following six themes:

1. General Theory of Finance, Software and Networks

Media have always provided the conditions of possibility of finance. Today’s real time flows of global finance reflect the technical infrastructure they are conducted on. Screen interfaces, information visualizations, financial models and trading algorithms comprise the media ecology of financial practice, organising routine operations and guiding decision making process in a probabilistic fashion. To note the complexity of the situation has become a common trope of government regulators seeking to ‘simplify the system’. But the unknowability of finance runs deep. Competitive advantage increasingly lies with the ability to generate the best predictive models, coupled with the capacity to act on these models using financial-algorithms or “algos”. This form of competitive advantage is derived from patented secrets. With these technical and legal barriers – ‘barriers to entry’ – it is not possible for ordinary citizens to properly the contemporary state of the arts in the world of finance (other than reading piles of books on what went wrong in the lead-up of the 2008 meltdown, now five years ago). How can we, in a situation like this, come with a contemporary and critical theory of finance?

Computerised, high frequency trading also brings along with it a distinct form of technical accident. The so-called ‘flash crash’ of May 2010, which reportedly wiped one trillion US dollars of wealth, was the catastrophic result of algorithms working as designed but in conditions unforeseen. As a ‘flash crash’, the computational glitch takes on decidedly financial traits. To be clear, it’s not a matter of cleaning (or regulating) a few bugs in the system. Such investigation must combine the kinds of technical knowledge found in Social Studies of Finance and elsewhere in Software Studies, but imbue (the former) with a greater spirit of critique.

2. Crowdfunding the Creatives

Many creative workers are still caught in a precarity-idealism nexus, holding on to the dream of permanent, well-paying, creativity-quenching work, but sustaining this dream through a patchwork of one-off projects, forced voluntarism, underpaid and supplementary work. In 2006-2008 the MyCreativity network of the Institute of Network Cultures worked on these issues. Since then emerging forms of networked funding such as Kickstarter have been embraced by creative workers. Seeking to bypass government patronage, the Venturists and other intermediaries, crowdfunding has become a boutique industry. However, project success remains as unpredictable as the internet meme business. Crowdfunding has its own logics that are currently not well understood. What is the effect of turning funding into an act of web-browsing, for example? Is crowdfunding better understood as an intensification of finance, as the ‘democratic distribution’ of the mindset of the financier? Kickstarter is the most visible crowdfunding site thus far, but what are the alternatives and local analogues and how do they differ in terms of design? Could crowdfunding become a machine for producing the commons, where private inputs are translated into common outputs? What is to be learned from ongoing projects such as Flattr (initiated by The Pirate Bay) and the German proposal of the ‘culture flatrate’?

3. The Anti-Debt Movement: Theory into Action

One of the political outcomes of the Occupy Wall Street movement of late 2011 has been the emergence of the student debt topic in the USA and outside. In this movement we see different (activist) research strands of recent years coming together: from the critique of the edu factory to the growing dependency of credit cards and real estate loans and ‘generation debt’ (Anya Kamenetz), we can see that debt as a life style is no longer a possibility for those who are caught in endless economic crisis. At the same time debt has become the unavoidable, default mode of learning and living. Is the radical gesture of debt cancelling on both the global and personal level the way out? What is to be learned from the ‘rolling jubilee’ initiative and the larger Strike Debt movement?

4. Alternative Currencies: Bitcoins and Beyond

Bitcoin makes possible the crypto-libertarian dream of the global private market: that is, a market beyond the regulation of States. Through the use of public key encryption technologies, Bitcoin enables semi-anonymous transferal of funds between users (without recognising borders). The most antagonistic outcome of these capacities is the possibility for illegal markets (the sale of illegal goods), which can be “seen” but not easily regulated, but even more damaging for States is the possibility of masses of people operating in this private economy and thus not paying taxes. But isn’t it a 90s dream to see cyberspace as a separate cosmos with its own laws? Is there something to learn from earlier attempts such as the (Amsterdam-based) firm Digicash twenty years ago? Why do we make the case that internet needs its own currency? Bitcoin has a range of pragmatic functions that are less controversial, but are commonly overlooked. It could be used, for example, as a default currency for remittances, greatly reducing if not eliminating the fees associated with sending money across borders. Bitcoin stands as an real attempted to radically redesign global finance. Like the current order, Bitcoin privileges specific forms of exchange, and of relating to people. It is currency as Weltanschauung. And like all systems, it will produce its own animal spirits. Will it be possible for Bitcoin to scale up beyond the geek economy? What are the technical and economic criticisms of Bitcoin and how can they be fed back into the currency or be used to create others? Is Bitcoin the “make or or break it” for alternative crypto-currencies or is it possible to imagine a future currency market?

5. Mobile Money in Africa

Whereas in the West US-American credit card companies remain in control when it comes to internet payments, elsewhere in the world things look different. Over the past few years the alternative payment methods using mobile devices have grown at exponential rates across many parts of the so-called developing worlds. In a time when traditional banks were not interested to service the poor, telecoms took over this job, expanding their initial monetary system to purchase airtime and SMS credit to an expanding range of services from P2P payments to water and electricity bills, school fees and transportation. Today, Mobile Money is front and centre in development discourses. It is tied to a new understanding of development, one which eschews outdated notions like charity and instead seeks to foster the entrepreneurial spirit of the poor, while making a buck along the way. Mobile Money is positioned as a way to ‘solve the unbanked problem’ and to foster new financial literacies and the responsible management of money. Meanwhile, many at the other end of the financial spectrum are looking for a way out. As the Mobile Money industry matures, new teleco-banking arrangements are being forged and local regulation is being rewritten. Underpinned by the new narrative of development, these processes are further legitimised by the eager participation of NGOs, who have equally bought in to the idea that ‘there is a fortune at the bottom of the pyramid’. In this session we will discuss strategic questions about who will come to dominate the Mobile Money space (banks or telcos) and consider the wider position of Mobile Money in relation to the new media of exchange unfolding ‘at the top’.

6. Visions and prototypes of alternative futures

It has been famously remarked that “it is easier to imagine the end of the world than to imagine the end of capitalism”. But is it the very level of abstraction, the totality of Capitalism, that induces thought-paralysis – something akin to writer’s block? Leaving the question of capitalism in toto to others, it is obviously the case that other ways of relating to money, debt and exchange are readily imaginable. Indeed, while artist and activists do it one way, policy-makers and bankers are being paid to do it in another. The ‘crisis’ presses upon us the demand for a new imaginary, even for those whose ultimate task it is to re-imagine ‘business as usual’. In this concluding session we explore the seeing and doing of alternative futures. The session will bring together the critical and productive threads of the event to assess points of tension and common ground. What is the strategic outlook for the new media of exchange? What are the points in common between critics of the current system and creators of new alternatives?