Heidi Hoechst, Life in and Against the Odds: Debts of Freedom and the Speculative Roots of U.S. Culture

(Philadelphia: Temple University Press, 2015), 284 pp., $34.95

When is a history not a history? When it drowns its story in a swamp of commentary. When is commentary not commentary? When it pretends to tell a story that it assumes everyone has already heard. Life in and against the Odds bets that it can tell a story through commentary, but loses the bet. It ends up at odds with itself. The point it does make is that history is speculative – which is no surprise, since all thinking speculates.

This book is about speculation, and the speculative. After noticing that the financial economy, having separated itself from the productive economy, has raised speculation (securities market operations) to a predominant economic level, it tries to link this to deep cultural aspects of US society. But it does so through commentary rather than by telling the story of the link. That is, the author posits a link between future-oriented speculation about what the US pretends to be, and a history of economic prosperity that can only occur through impoverishment (exploitation, indigenous dispossession, and enslavement).

We do indeed have to be reminded, every now and then, that history is not lived, but told. It doesn’t exist until what is lived is told (or written). And it speculates on the truth of what it tells. The danger here is in over-generalizing the subject of the speculative. By universalizing it, one drowns its history in an over-generalizing rhetoric. In her attempt to tell the story of “life in and against the odds,” which should be about the history of resistance against oppression and its dreams of a better future, Hoechst universalizes her discourse, dropping it into the abyss of the timeless. Epochs get bunched together, and story threads clump into knots.

We really do need to understand speculation. Economic speculation has been raised to its position of dominance by total corporatization. Over the course of the 19th century, finance shifted from purely banking operations to playing in the securities markets. It got to the point where productive enterprise would succeed or fail only secondarily on its own merits, but primarily on the success of its security market operations. The dominance of the financial economy was fully established by 1975. We now live in an economy in which causality and the law of supply and demand have been rendered obsolete.

Why has speculation become so central? The major reasons are that the corporate structure is based on the issuance of securities, which enables greater size and ease of raising capital. Size requires more complicated short-term debt, for which companies use their own stock as collateral. For this reason, the primary corporate concern becomes maintaining the price levels of its own stock on the securities markets. Should prices drop, collateral value drops, and the banks get on the phone.

But the maintenance of securities prices depends simply on maintaining demand for the security. Since securities are bought and sold through an auction process, a move to sell where there is no demand can result in lower prices fairly quickly. If demand falls too far, prices fall with it, and productive assets can end up in bankruptcy. Thus, day-to-day operations are all dependent on what happens in the securities markets. And the securities markets are a wholly speculative sphere of economics. One buys stock (or any security) in order to make a profit from its price fluctuations, regardless of what happens in the productive economy.

Now, because earnings accrue to speculative securities trading much faster than they do to productive capital and its circulation processes, profit rates are much higher. Money gravitates to the financial. In 2008, at the time of the last crash, the total value of money in derivatives was over ten times the GDP. It is so profitable that corporate capital no longer worries about the decline of profitability in production. Production is ancillary to what can be done in finance.

The truth of this notion is proven by the illogic of the contemporary corporate mantra: “we had to raise our prices in order to remain competitive.” Making no sense in 19th-century capitalist reasoning, this refers to the dual process of increasing immediate earnings, thus boosting stock desirability, and out-competing other securities for the available money on the securities markets looking to buy, thereby maintaining stock values and the company’s debt structure. The mantra sentence slips from the productive economy (first clause) to the financial (second clause) without signaling the shift.

The problem that the financial economy poses for traditional radicalism is not only the divergence of its forms of profitability, but the fact that it has no working class, and produces no social value. Yet it dominates the economy.

If speculation is so central to our contemporary world, a book like Heidi Hoechst’s, insofar as it promises a deep critique, would be immediately attractive. One would be wise, however, to hedge that bet. As Hoechst occupies herself with comprehending the speculative in as many aspects of society as she can, she loses specificity. So intent is she on its rhetorical aspect that the “speculative” becomes ubiquitous in her discourse, independent of topic. Applied to the economic, the cultural, the sociological, etc., her critique of speculation loses explanatory power. She saw something important, but in trying to grasp it with both hands, falls overboard.

It shouldn’t have happened. The book, as a critique of American Studies, should have distanced itself from that subtle academic narcissism. But she herself emerges from that domain. “The master’s tools will never dismantle the master’s house.” Whether she is looking at Constance Rourke, or at F.O. Matthiessen, Nathaniel Hawthorne or W.E.B. Du Bois, the story she tells gets lost in her riffing off the knowledge she already has. It remains untold because it is assumed. She ends up talking to herself. When she mentions the dimensions of the “American” space whose coordinates are economic exploitation, indigenous dispossession, and African enslavement, there is no existentiality there. These are left simply as categories to which she makes reference.

Still, she claims this to be a study of resistance against oppression. And the real history of resistance still lurks out there somewhere. But her historical references sound as if they were made in an echo chamber.

The world of financial abstraction effaces the racializing contours of fiscal practice. But the racialization of risk remains evident in the historical geography of “not yet” freedom that returned once again during the foreclosure crisis. Financialization of US home ownership – the bundling, repackaging, and speculative exchange of unaffordable predatory loans as securities – depended on the incorporative violence of nationalistic fantasy. (188)

I won’t go into the economics that gets token reference here, which she doesn’t provide. (Michael Lewis [The Big Short] might help.) The connection one would want would be the historical rather than speculative link between the racialization of “risk” (an economic category) and the endless deferment of “freedom” to an unspecified tradition.

As one can see, looking for a logic to each paragraph would be a mistake. Her writing is pointilist (though not quite pointless), while the picture it paints is abstract – not quite the point of pointilism. It evinces threadlessness, and a sodden quality that leads one to fear that she is not actually being metaphoric.

Let me simply say that she doesn’t understand the history of the relation between the corporate structure and racialization. She correctly thinks that everything in the US is racialized, but then leaves out how. For her, the incorporation of black people into US society (???) after the Civil War laid the basis for the corporate domination of the economy. But in reality, it was the other way around. The corporate nature of the Virginia colony produced the social parameters in which race, whiteness, and white supremacy could be invented (cf. Martinot, The Rule of Racialization, Chapter 1). The granting of corporate personhood in 1844 (the Letson case, not the 1886 Santa Clara case) used a logic that was then applied in 1857 to deny personhood to black people. And the author of both was Roger Taney. Remember him?1

There are other problems with Hoechst’s text. She constantly confuses her own voice with that of her subject. She totally leaves out of account the most horrendous moment of nationalist financial speculation (which is what she claims to be talking about), Alexander Hamilton’s audacious scooping up of all war debt, thereby inventing a debt structure for the nation. And it is never certain whom she is addressing. In arguing that democracy is still something to be accomplished in an uncertain future, could she be talking to those on the anti-corporate and anti-racist left, who already know this? Or to the prison or real estate industry or others that depend on its never coming to pass? One can only speculate.

Reviewed by Steve Martinot
San Francisco



1. [Ed. note: Taney was the Chief Justice who issued this denial in the 1857 Dred Scott decision.]

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