Reading Baudrillard’s (2001/1999) “Impossible Exchange” in the midst of 2009’s international liquidity crisis, a reader experiences an unexpected form of déjà-vu in response to Baudrillard’s description of the hyperreal and, in particular, his description of the “Great Game of Exchange” (p. 7), a game grounded in an endless exchange of nothing; a game that leads in the end to the liquidation of everything and “passing around the debt, the unreal unnameable thing you cannot get rid of” (p. 7). The déjà-vu stems from having read of the international financial crisis in the contemporary press, where it and its causes are described in language that could easily have been written by Baudrillard’s simulacrum (were it not dead).

            Consider a paragraph from a special issue on liquidity published by the Banque de France in 2008 written by two American economists:

The heart of the recent crisis is a rise in uncertainty – that is, a rise in unknown and immeasurable risk rather than the measurable risk that the financial sector specializes in managing. The financial instruments and derivative structures underpinning the recent growth in credit markets are complex. Indeed, perhaps the single largest change in the financial landscape over the last 5 years has been in complex credit products: collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), and the like. Because of the rapid proliferation of these instruments, market participants cannot refer to a historical record to measure how these financial structures will behave during a time of stress. These two factors, complexity and lack of history, are the preconditions for rampant uncertainty.

Driven in large part by the creation and hyperactive circulation of highly abstract (complex) credit instruments, financial markets are paralyzed by uncertainty, by the inability to forge meaningful relationships between a real estate and debt, between the real and a sign that stands in for the real (in order to be circulated within sphere of financial markets).   They can no longer test or trust the value of signs; the value of signs no longer rings true in relation to the real assets they were intended to guarantee.

            Baudrillard saw this coming.  He would not depend upon the safety of his investments in retirement savings within this indeterminate market (if he had invested at all) knowing that: “When there is no longer any internal reference system within which exchange can take place (between production and social wealth, for example, or between news coverage and real events), you get into an exponential phase, a phase of speculative disorder” (p. 6).  He would also find it ironic that the American banking system (recently nationalized without reference to that word) was now developing out a new complex means to wrap up toxic debt so as to allow, once more the free flow of credit.  That such a move is necessary to allow for the impossible exchanges that need to take place to support the international finance system provides empirical proof for Baudrillard’s take on the system: 

Behind the exchange of value and, in a sense, serving as an invisible counterpart to it, behind this mad speculation, which reaches a peak in the virtual economy, behind the exchange of Something, we have, then, always, the exchange of Nothing.

It is likely that Baudrillard would be quite entertained by the sight of so many financiers nervously peering into the chasm, the void that has opened beneath the market like a sinkhole for a sign of a bottom.

References

 Baudrillard, J. (2001). Impossible Exchanges. (C. Turner, Trans.). London: Verso. (Original work published 1999)

 Cabellero, R., Krishnamurthy, A. (2008) Musical Chairs: A Comment on the Credit Crisis. Banque de France, Financial Stability Review, 11, 9-11.  Retrieved March 30, 2009 from http://www.banque-france.fr/banque_de_france/gb/publications/rsf/rsf_022008.htm

Production is dead, long live reproduction.
Baudrillard

 Just what kind of environmental suit does one need to survive in Baudrillard’s stark and parched “desert of the real”?  In a world no longer enveloped by the imaginary production of natural relations or comforting similarities based upon our belief in a system of reference to an actual reality, Baudrillard suggests we are left in the blasted zone of the hyperreal: “the product of an irradiating synthesis of combinatory models in a hyperspace without atmosphere” (p. 167).  Gasp! 

In this vacuum, exposed to the fatal radiation of endless recombinatory excesses, certainty dissolves with the “liquidation of all referentials” (p. 167), and those who placed wagers that our skills in producing representation would secure the real within discursive and representational practices through art, politics and religion no longer have tokens with any value outside of the system itself.  As such, no further bets can be taken using the collateral of real-estate. In any case, reference to the real is no longer the point.

“It is no longer a question of imitation, nor of reduplication, nor even of parody.  It is rather a question of substituting signs of the real for the real itself; that is an operation to deter every real process by its operational double, a metastable, programmatic, perfect descriptive machine which provides all the signs of the real and short-circuits all its vicissitudes.” (p. 167)

Mimetically capacious machines deter any reference to the real, and it is sufficient for us to substitute a Main street model in Disneyland as a means of reaffirming, of feeding our belief in the values associated with such a mocked-up representation of the real.

            For Augustine, “God is an intelligible sphere, whose centre is everyone, and whose circumference is nowhere” and within the atmosphere of this “intelligible sphere” Augustine and those who followed his philosophy had a referent that guaranteed all meanings.  For Baudrillard, such a belief is possible in an economy of the sign that sees representation as a reflection of reality (and guaranteed by the presence of “Nature” of “God”).  Such certainty is not to be found in the world of simulacrum where the model precedes the real, and where the real is produced not by reference to some mirror (or conceptual image), but from “miniaturized units, from matrices, memory banks and command models” (p. 167), from the code.  Baudrillard inverts Augustine’s “intelligible sphere” so as to reproduce the atmosphere of the hyperreal:

What if God himself can be simulated, that is to say, reduced to the signs which attest his existence?  Then the whole system becomes weightless; it is no longer anything but a gigantic simulacrum: not unreal, but a simulacrum, never again exchanging for what is real, but exchanging in itself, in an uninterrupted circuit without reference or circumference, and within this atmosphere” (p. 170).

Caught in this feedback loop, our critical tools are at risk as interpretation is endlessly recursive, unavoidably indeterminate, short-circuited by what Baudrillard the  “precession of models” (p. 175).  Attempts to critique power or to counter ideology have no purchase in the world of the hyperreal; worse such actions are merely part of the deterrence machine that Baudrillard sees as “set up in order to rejuvenate in reverse the fiction of the real” (p. 172). 

One can only hope that there are sufficient reserves of oxygen and water in our environmental suits to allow us to survive in Baudrillard’s hyperreal.