The State as Ultimate Insurer of Value

Bernard Stiegler argues that economy is always about protension. That is, the tendency that most characterizes a given economic system is one based on speculation and trust. This is the system of credit that undergirds economic relations. 

Something that my current work has been developing relates to this general logic in relation to the State as ultimate insurer of risk. In a concrete example, we saw this tendency in the bailouts of the financial markets after the GFC of '07/'08. But even more foundational than this, in a sense, the very system of economy itself is propped up by the State's insurance of value per se. This makes most sense in economies that are based on fiat currency, with the State being the consolidator and distributer of credited value. What does this mean? Well, take a look at those dollars in your pocket. They are promises to pay. They are IOUs. It's written on the face of them that this note is a promise to pay the value of $X. But where does this value ultimately rest? How is this IOU insured? Upon what does this credit system base itself? 

There is a lot of recent discussion in Modern Monetary Theory (MMT) regarding this very issue. One thing that it continues to teach us is that in a system with a sovereign currency, money is really nothing other than a system of IOUs. This means that there is nothing "solid" to which it refers. What this means is that such an economy is a circulating networking of relational powers that is insured by, what Stiegler refers to as, mnemotechnics, or what Sartre would call practico-inert objects. These are externalizations (grammatizations, storehouses, memory banks) of affective and cognitive labor. Ultimately, the practico-inert object that insures the value of the economic system (with all its securities, financial instruments, relations of credit/debt, currencies, risk appraisals, credit scores, portfolios, etc.) is the State (with banks being smaller instantiations of this logic, granted power by the State and literally ensured by it – ex. FDIC regulations).

If you have been following along with our book club here on OaD, the State is the contingent institution of serial indexing that manages identities within a given 'world'. This world, as practico-inert object of the insurance of value, is that which insures speculative viability for a given economy. So, really, when financial speculation occurs, or when risk is evaluated, ultimately these are analyses of modes within this larger world; they are evaluations of the value of instantiations of the State as insurer of value. 

What does this mean? In a way, it gives us insight into a particular mechanism of how value is derived. But even more than this, it requires a robust analysis of what the State actually is. If the State is not some concrete referent upon which value is based, but rather a totality of shifting, contingent serial indexes, how are we to understand how this network insures economic protensions? From where does its power to insure derive? Is it based on the trust given to it by the people who infuse their piety into it (similar to the way Mauss refers to gods being sustained through the prayer of the practitioners)? And how does its capacity for insurance work within a global network of other States? This is something that I'll be working through in the coming months.