Owen Jones and Banks

 

          Owen Jones is a passionately left-wing journalist, chiefly for the Guardian newspaper, who campaigns eloquently and honestly for the just causes, of which there are rather too many under this miserable Tory government, or excuse for a government. True, Owen was a little wobbly over Jeremy Corbyn at one time, but Jeremy’s success in getting votes for Labour has brought Owen into line, along with various erstwhile Blairites  who smell power in following Jeremy these days, together with increasing numbers of business interests gravitating towards Labour if only because they don’t hold out much hope of Tories winning the next election, whenever that may be. So Owen Jones is essentially a camp-follower, but a nice one.

          Owen writes, with his usual persuasiveness (Guardian 20^th October 2017) on the urgent necessity of nationalising the UK’s banking industry. According to a recent poll half of the electorate are in favour of this. The idea is that banks, ‘an essential public utility’, are doing much less for the economy and much more for their own shareholders than even a number of responsible economists would like to see. According to a think tank called the New Economics Foundation, the troubled Royal Bank of Scotland could be run by a management board, with ‘a board of trustees [to] ensure the bank was accountable to the broader economy and customers, not shareholders.’  Meanwhile, according to Owen, ‘Labour is right to call for a German-style public investment bank, backed up by similar publicly run local banks.’  In Germany, KFW, the government-owned development bank, ‘is crucial in developing national infrastructure as well as the renewable energy revolution.’

          I would sound a note or two of caution here. Britain is not Germany, which is already – and has been for a long time – an industrial powerhouse compared to Britain with the latter’s reliance on ‘invisible earnings’: i.e. FIRE – finance, insurance and real estate. In Germany, too, there persists a long-time economic ideology entirely different from the traditionally British laissez-faire approach: ordoliberalism, a theory and tradition of state management and promotion of private (and public) enterprise for the good of the nation. In the 19^th century Germany – in the earlier decades – was woefully backward compared to ‘the workshop of the world’ Great Britain and, as in France, the gradual consolidation of the state and state power both protected and promoted the rapid development of German (and French) industry and railways. By just past mid-century Germany had overtaken Britain in the production of chemicals, an overtaking industrial process that was to continue, indeed up to the present time.

          With help from the largest (poorly-paid) Turkish population outside Turkey, Germany continues to dominate the continent industrially and in general economically, though France is rapidly catching up.

          Meanwhile what do we have in Britain? The most spectacular failure of a bank in recent times was, in fact, the Co-operative Bank, which ended up on its knees after years of incompetent (or confused) management and is now in the hands of American financial interests who are running it like any other commercial bank – that is, not according to ‘co-operative’ principles and practices. This example shows in part that co-operative financial organisations are not easily able to compete and survive against a brace of aggressively capitalist ones.

          A bank is predicated on borrowing cheap and lending dear. That is its basis in profitmaking, its raison d’etre, in fact. Banks must be profitable, as embodied in returns to shareholders, so that others might also profit. And when they aren’t profitable, governments must step in to shore them up. It is a sound principle that one never goes to a bank to borrow money if one cannot afford to. Banks are the antithesis of charitable or non-profit organisations. You can be sure that the German banks are doing well enough out of their strategic lending, itself based on a situation much more favourable to ‘ordoliberal’ industry in the first instance than exists in Britain or is likely to for a long time to come, if ever.

          Owen Jones is quite accurate and right in his broad estimation of the economic basket case that is Britain today. But this is a process of decline that has been going on for more than a hundred years. It is not about to be positively transformed by benevolent and ‘co-operative’ banking: that is, in a situation where our financiers dominate the landscape anyhow whatever their involvement in a long death struggle. You don’t set up capital to run without a healthy profit, let alone at a loss: capital must always make a (good) profit or it is not capital at all. Banks, whoever runs them, must make a healthy profit or go under in time; banks are ‘capital’ organisations in the strict sense that ‘capital’ itself is their stock-in-trade. Only the abolition of the built-in contradiction of capital will render us the world we need, but I doubt if Owen Jones has the stomach for what that takes.

         

Look Familiar?

 

Paris, 1830 to 1848:

 

Under [King] Louis Philippe it was not the French bourgeoisie as a whole which ruled but only one fraction of it – bankers, stock market barons, railway barons, owners of coal and iron mines and forests, a section of landed proprietors who had joined their ranks – the so-called financial aristocracy.  It sat on the throne, it dictated laws in parliament and made official appointments from the ministries to the tobacco bureaux…

*

 

          As a result of its financial difficulties the July monarchy was from the very beginning dependent upon the big bourgeoisie, and this dependence became the inexhaustible source of increasing financial difficulties. It was impossible to subordinate the state administration to the interests of national production without balancing the budget, without balancing state expenditure and state revenue. And how was it to establish this balance without damaging interests which were, every one of them, pillars of the ruling system, and without organizing the redistribution of taxes, which meant shifting a considerable part of the tax burden on to the shoulders of the big bourgeoisie?...

 

*

 

…The fact that the state deficit served the direct interests of the ruling fraction of the bourgeoisie explains why the extraordinary state expenditure in the last years of Louis Philippe’s reign was more than double the extraordinary state expenditure under Napoleon [I], indeed almost reaching the annual sum of 400 million francs, while France’s total average exports rarely reached 750 million francs. The enormous sums of money which thus flowed through the hands of the state gave rise, moreover, to crooked delivery contracts, bribery, embezzlement and roguery of all kinds. The wholesale swindling of the state through loans was repeated on a retail basis in public works. The relationship between parliament and government was reproduced in the relationship between individual administrative departments and individual entrepreneurs.

          In the same way that it exploited government spending in general and government loans in particular, the ruling class exploited the construction of railways. Parliament heaped the main burdens on the state and secured the golden fruit for the speculating financial aristocracy. We recall the scandals in the Chamber of Deputies when by chance it came to light that all members of the majority, including a number of ministers, were stockholders in the same railway projects which, as legislators, they subsequently had carried out at state expense. ..

*

The July monarchy was nothing more than a joint-stock company for the exploitation of France’s national wealth, whose dividends were divided among ministers, parliament, 240,000 voters and their adherents…

*

          While the financial aristocracy made the laws, controlled the state administration, exercised authority in all public institutions and controlled public opinion by actual events and through the press, the same blatant swindling, the same mania for self-enrichment – not from production but by sleight-of-hand with other people’s wealth – was to be found in all spheres of society, from the Court to the Café Borgne [a synonym for the low dives of Paris]. The same unbridled assertion of unhealthy and vicious appetites broke forth, appetites which were in permanent conflict with the bourgeois law itself, and which were to be found particularly in the upper reaches of society, appetites in which the wealth created by financial gambles seeks its natural fulfilment, in which pleasure becomes crapuleux [debauched], in which money, filth and blood commingle. In the way it acquires wealth and enjoys it the financial aristocracy is nothing but the lumpenproletariat reborn at the pinnacle of bourgeois society.

 

Drawn from Karl Marx: The Class Struggles in France: 1848 to 1850

(Surveys from Exile: Political Writings vol. 2, Penguin 1973.)

Louis Philippe (1773-1850) was King of France from the July Revolution of 1830 to the February Revolution of 1848. His reign, succeeding the last Bourbon monarchy, of Charles X, ushered in the rule of France by the haute bourgeoisie, marking the emergence of capital as the dominant power for good and all.

Any resemblance between that reign and modern Great Britain in the 21^st century is purely coincidental…

 

 

 

• FICTITIOUS CAPITAL –
  How finance is appropriating our future
  by Cedric Durand  Transl. David Broder
  (Verso, London 2017)
   
   
            In a previous blog I quoted the Daily Telegraph’s Jeremy Warner as intimating that crisis may well be international finance’s permanent state. However, we got little in the way of explanatory analysis of this and needless to say any Marxian approach would have been shoved aside. You should read this book by Cedric Durand because it puts meat on the bones of the chaotic state of things without requiring any moralising on human greed. And, just as importantly, it is crucial to Marxists brought up on the fundamental Marxian view that profit derives from unpaid labour power worked on commodities that are sold in the marketplace. But how can this be so when we see gigantic profits being made by the so-called 1% from derivatives and all other sorts of fancy financial packages? What does this have to do with unpaid labour time?
            Reading this book we will soon learn that both have to do with what Durand has identified as fictitious capital: ‘Fictitious capital is an incarnation of that which tends to free itself from the process of valorisation-through-production.’
            Marxists have long suspected that capitalists would much rather simply turn money into more money, like the old usurers (M-M’) instead of going through the tedious and risky business of routing profit-making through commodity production as well (M-C-M’). With the ascendancy of fictitious capital this dream is being realised, on a grand scale. If once upon a time in capitalism the real money was in textiles, or railways, or (more recently) oil, today the ‘real’ money is in money.
            After World War II, the Bretton Woods agreement pegged the US dollar at $35 per gold ounce. As even then the dollar was the dominant world currency this continuance of the gold standard anchored all money to a universally-recognised value – that of gold. By the early 1970s the Americans, now horrified by the extent of the amount of US dollars held abroad (due, amongst other things, to the huge expenditures during the Vietnam War) were fearful that if other countries demanded gold for their dollars, the American gold reserves would soon drain away. President Nixon accordingly took the dollar off the gold standard, which meant that money no longer had any anchorage except in what Durand calls social acceptability, that is, with the breakdown of the Bretton Woods system. Other countries took this to mean that money could be printed willy-nilly, and in a short time, what with the early ‘70s oil crises as well, inflation went through the roof – as those of us who lived through the 1970s will recall. (See George Cooper: The Origin of Financial Crises, 2008.) This was only finally quelled by crushingly high interest rates imposed by the Federal Reserve Board until inflation was brought more or less under control by the mid-1980s. This freeing-up of money has over time ballooned one aspect of fictitious capital: ‘total credits to the non-financial sector,’ according to Durand.
            Another aspect of fictitious capital lies in the prodigious sale of derivatives which make claims on commodities that have not yet been produced. Thus the tenuous link with unpaid labour time, only the unpaid labour time has not yet come about. Since it may never come about in many cases, this form of investment is a major source of instability. But it makes claims on the future long before the future arrives. The future of the economy, in other words, is already mortgaged in advance. At least ten times’ more world capital is tied up in derivatives than in production.
            Economic reliance on both insurance and real estate is also a source of fictitious capital. While it may be a form of protection, insurance sells nothing at all. Housebuilding and property speculation may make fortunes for some, but houses and indeed skyscrapers (not to speak of land apart from its yield) can’t be exported - and so when financialised become a big drag on a nation’s ability to invest in the production of goods and services for sale including foreign sale. Houses belong – as they are a necessity – to the public sphere whether under socialism or capitalism.
            Another form of fictitious capital, already identified by Marx in Grundrisse (Penguin, p. 853) as worker ‘exploitation by capital without the mode of production of capital’ is debt interest. That is, profits upon alienation which now burden so many in our working populations as they seek credit – at ridiculous interest – to pay for necessities in lieu of adequate wages. This form is of course usurer’s capital, which pre-dates industrial capital by a long way and has once more become dominant in the formation of fictitious capital.
            Then there is interest drawn from surplus value – that is, dividends as deductions from surplus value.
            What with (a) the lowering of taxes on the rich, (b) the ‘tax-efficient’ convenience of low-tax ‘havens’ around the world, and (c) the enormous bailing-out of banking and other institutions by governments in the 2007-08 financial crisis (and is this to be repeated in the not-too-distant future?) public debt and the private claims upon it has spiralled upwards and is a fundamental aspect of fictitious capital. Its existence is why we shall not be saying goodbye to Austerity any time soon, since governments will continue in various ways to prioritise the shoring-up of the banking system. It might be worth noting in passing that the Fed is not a public institution but a private consortium of the leading US banks.
            Share price on the stock market is calculated on the basis of anticipated profits, and securities will be sold at a higher price than they cost to buy, in other words, capital gains, which are another aspect of fictitious capital. Durand adds that ‘quantitative easing’ by central banks pushes up the prices of asset purchases and – in addition – prompts investors to go for riskier and more remunerative asset classes. ‘This,’ says Durand, ‘allows the realisation of fictitious-capital gains that would otherwise not have existed.’
            Another aspect of fictitious capital is the profit made by financial institutions in the heavy fees charged (for example) on arranging mergers and company buy-outs.
            Meanwhile, prodded by ‘shareholder value’, companies buy back their own shares in the billions to up their share-value on the stock exchange, thus removing or scaling-down the funding that might otherwise have been available for productive development through structural investment.
            While salaries as such might not be considered capital, the size of the salaries of top executives works its way into the fictitious capital complex, though, as Durand says, this aspect is less easily documented than the others. I would say that as non-financial corporations become dominated by their own financial (as opposed to commercial and manufacturing) activities, this in effect turns their CEOs into financiers with a greater involvement in the financial running of the company than over what the company actually makes and sells. In my view this is a factor that has led over the years to the widening of the gap between the salaries of top executives of non-financial companies, so called, and the wages of their ordinary employees. The top men and women are essentially bankers in another guise. We will not see the lowering of their salaries, stock options and pension rights any time soon, either.
            Durand notes the payment of hugely remunerative legal fees for the protection of corporate ‘intellectual property rights’ which itself can stymie independent research and development. There is nothing productive in paying lawyers though the outcome be profitable when lawyers win cases in court (or reach out-of-court settlements).
            ‘The mass of accumulated fictitious capital can, then, assume proportions incompatible with the real potential of economies.’
            And so into a world dominated by state-dependent ‘phoney capitalism’, where productivity (the basis of real wealth) continues to wither – see recent reports. And in which ‘unemployment’ translates into zero-hour contracts, families living on ‘in-work benefits’ while the term ‘self-employment’ comes to mask de facto unemployment or certainly underemployment.
            Durand is clear that the much-vaunted ‘technological revolution’ by itself is not going to change all this for the better. In relation to the dominance today of fictitious capital advanced technology is something of an irrelevance. Irrelevant also are the arguments of neoliberals against Keynesians and bourgeois politicking generally.
            There is bound to be a reckoning sometime in the not-too-distant future, but whether it takes the form of a financial crash of incredible proportions, or the mass immiseration of most of us when governments have to step in to bail out the whole banking and financial system all over again, it is we who will be the real losers. That is, unless we seize the political initiative of expropriation – and seize it globally.  For, as Durand emphasises, fictitious capital must be seen in the context of globalisation.
            Durand presents his case clearly and with irrefutable statistical evidence. Readers may well find him a bit formidable in the magnitude of his scholarship, but bear with him: it is worth it. Reading it twice would not go amiss (it is only 164 pages). Read him, and prepare, as best you might.
   
   
   
   

PANGLOSS IS BACK – BLACK IS WHITE AND WHITE IS BLACK

 

          On the same morning I hear on the BBC from Theresa May that her internal struggle over Boris Johnson, her erstwhile Foreign Secretary, is an example of teamwork at its most successful and democratic, I read the following by Matthew Lynn in the Daily Telegraph (‘”Creative destruction” of Monarch shows that the system is working’, October 3^rd 2017) – re the collapse of Monarch Airlines this week:

The important point is this, however: companies get into trouble, and their fortunes rise and fall. They often go bust. It is a messy process. But that is not an argument against free markets. It is an illustration of why they work so well…

Sure, there will be some short-term disruption when any company goes bust. Customers will inevitably lose out, suppliers will suddenly find themselves in trouble, and staff will have to look for a new job.

But it is always important to remember that is how the system renews itself, and why it works so well. True, it might not be much of a consolation to a couple with a pair of toddlers stranded at an airport to know that they are taking part in a process by which the economy moves forward. But it happens to be true.

Dry your eyes, kids. No holiday now, but don’t you see that you are taking part in a process by which the economy moves forward? … Come off it, Spartacus! Don’t you realise how vital slavery is to the Roman economy?  … Bad luck they’ve decided to frack in your back yard, Jim, but remember that the compulsory purchase order was necessary if we are to keep up the momentum of a vibrant economy! … Come on, workers! Stagnating wages for thirty years shows how well the system works!

          On the same page the day before, chief investment booster Roger Bootle wrote of ‘Labour twaddle’. If twaddle, it gets a fair amount of competition from Matthew Lynn.

          ‘All is for the best in the best of all possible worlds!’ – As Dr Pangloss kept reminding Candide.

 

A Marxist will return to the movies further on…

 

CRISIS? WHAT CRISIS?

 

          Although there is not a lot of competition, one must treat Jeremy Warner with respect as a Daily Telegraph financial commentator. He has both an authoritative portrait on display in the paper as well as years of experience in the defence of capitalism from within that mighty citadel. Nor does he gloss over unpalatable prospects, as in the headline for his Telegraph article of 20^th September 2017: ‘Another financial crisis is certain. The only question is when and how.’ This is hardly likely to soothe potential investors.

          But is capitalism itself in crisis? That depends on your context. In one sense all of capitalism is in crisis all the time, not merely on the economic front but on all fronts of world society. In another sense it is not, so I believe, as a Marxist, in terminal economic crisis just now. Perhaps not until the expropriators get a move on. Meanwhile, let’s have a bit of Shock Doctrine (Naomi Klein, in the sense of a capitalist pick-me-up). As Warner says: ‘Like flowing water, finance finds a way around whatever obstructions may be put in place, and creating new hazards,’ suggesting that whatever the hazards, finance will find a way out of new ones as well. There have been many crises in finance and Warner enumerates them punctiliously:

1. The breakdown of the Bretton Woods fixed exchange regime in 1973
2. The UK secondary banking crisis of 1975
3. The two oil price shocks of the 1970s
4. The UK fiscal crisis of 1976, culminating in an IMF bailout
5. Numerous emerging market defaults in the mid-1980s
6. Mass failures in the US savings and loan sector, late 1980s/early 1990s
7. Various Nordic  financial crises, late 1980s
8. The bursting of the Japanese stock and property bubbles, 1990
9. Various emerging market shocks/devaluations, 1992
10. The Mexican tequila crisis, 1994
11.           The Asian crisis, 1997
12. The Russian and LTCM crisis, 1998
13. The dot.com crash, 2000

‘Nor did it end with the Global Financial Crisis of 2008-09. This was quickly followed by the Eurozone sovereign debt and banking crisis. It is almost as if financial crisis is now the world’s more natural state.’ Warner has been drawing from ‘a new analysis by the markets team at Deutsche Bank…’ which received extensive coverage in the self-same Telegraph Business Section in the same week. Calling it ‘an old-fashioned view of the underlying causes of this rising tide of financial instability’, Warner indicates a scintilla of scepticism  over all this gloom-and-doom. But the list by itself makes fairly sobering or joyful reading depending on your point of view, and it does not seem that Warner is disputing the facts. Perhaps he is dissatisfied with it because absolutely none of these crises was the doing of workers, unions or Marxist organisations. They were capitalism feeding on itself.

          To a Marxist, Warner/Deutsche provides a convincing portrayal of an undead system in crisis that thrives on crisis. Derivatives, after all, make it possible to hedge against almost anything: the steeper the risk, the greater the profit. We can invest our way through crisis and out the other side becoming ever richer in the process – as seems to have been the case with the escalating fortunes of the ‘1%’ since 2008-09. The only problem may be when the lower-downs become fed up, but presumably they can be relied upon for internecine war amongst themselves (fascists-versus-reds, Blairites against Corbynistas, natives against migrants). These battles might even be able to get out of control if we can continue cutting down on police force numbers. A lawless state is a rich one. For some – think ‘oligarchs’, ‘drug barons’, the Koch brothers: the USA is making progress here.

          Deutsche is worried that spiralling debt levels, by being nourished through ‘stimulus’ ( quantitative easing and low interest rates encouraging borrowing) is putting off the ‘creative destruction’ – a term coined by the great Austrian Joseph Schumpeter – that purges the weaker capitals and cleanses the system by leaving only the stronger ones standing. And thus able to continue pursuing ‘destructive creation’ – I borrow here from Istvan Meszaros. Perhaps this is the ‘old-fashioned’ element Warner refers to: it is more fashionable to believe these days that massive crises of a destructive nature overall are a thing of the past.

          Warner, seeking an authority other than fuddy-duddy Deutsche, then cites the Governor of the Bank of England Mark Carney (who could be more modern and sleek?) who refers to Brexit as an example of ‘de-globalisation’. Carney acknowledges that Brexit for its supporters is seen as ‘an opportunity to enhance trade with the rest of the world’. There are bound to be hiccups before we reach the sunlit uplands, and ‘for a while, Britain will become a somewhat more closed economy’. Thus, for Warner, Carney’s cautious words offer a new hope for Britain through Brexit (the Telegraph is, of course, a vigorous Brexit supporter).

          Now, Labour sees Brexit as an opportunity to introduce legislation, currently difficult under neoliberal EU law, to re-build the nation’s crumbling infrastructure and bring about something more like economic equality in a country presently weighed down by an ever-growing gap between the richest and the poorest. It is here that the sharp-eyed Warner sees the danger ahead: ‘In itself, the sort of Brexit-inspired deglobalisation Carney talks of would be very unlikely to trigger a financial crisis.’ (Three cheers for Brexit!) ‘But mix it with the hard left policies of Jeremy Corbyn’s Labour, and all the ingredients for a catastrophic loss of international confidence in the UK economy would be in place. Brexit and Corbyn together would be a particularly toxic combination.’

          In other words, Brexit will only work if worker exploitation is maintained, intensified and prolonged while social services, public health and the like go down the drain. Small prices to pay for profit!

          And finally, in Warner’s words, ‘All Labour governments are eventually destroyed by fiscal and financial crisis. With Mr Corbyn, it would at least be swift.’  (‘Fiscal and financial crisis’ are code-words for capital flight in the event of a Labour election victory. Recall Wilson’s complaints about ‘the gnomes of Zurich.’) So at last we can get a 'Marxist' thing into a discussion of financial crises!

          Never mind that Tony Blair’s New Labour (elected 1997, 2001 and 2005) did not fall through fiscal and financial crisis by being ‘hard left’. New Labour reached an accommodation with capital, convincing large sections in it that they would flourish better with ‘moderate’ New Labour than with the socially-divisive Conservatives. Latterly – when prime minister – Gordon Brown worked with some success on the international scene to contain the Great Crisis of 2008-09 – a crisis spawned by reckless lending on a grand scale that had nothing to do with Labour being in power at the time, since it originated within banking and other forms of finance in the USA. Unfortunately through the years when New Labour was courting the City it lost 5 million Labour voters (and Scotland in 2015). This is a more accurate picture of the last fall of Labour.

          This blog has previously stated that the plans of Corbyn and McDonnell are no ‘harder’ left than was Clement Attlee now frequently cited as the most effective prime minister after World War II. The NHS was created, along with new social services provisions, public housing and nationalisation, and the stars did not fall from the sky. All these, presumably, Mr Warner hates and loathes like the plague.

          Alas, however, Mr Warner is probably right. These days a British Brexit fatally compromised over the limitless expansion of world capital promises domestic hardship, though those now dependent on food banks and desperate for shelter (where they are not already spending two-thirds of their income on accommodation alone, as in London) won’t notice the difference. Those who will notice the difference are those presently coining it, but numerally more significantly, also those in the ‘squeezed’ middle classes who fear for their small businesses and mortgages in the likelihood of even gentle rises in prices, taxes and interest rates. Say that Jeremy Corbyn is as ‘moderate’ as Attlee: the world system is so steeped in crisis that even modest reforms are seen by such as Warner to be dangerous. These days David Lloyd George would be too radical to vote for. Did I not say that undead capitalism thrives on crisis? That is, by vanquishing opposition through fear?

          Only via expropriation will capital ever get a stake through its heart. Until then it can stagger on, spreading dread within everyone within reach.

          More and more people, however, are becoming politically radicalised, which makes things difficult. Crises for the 1% will become less fun. Brecht may have been right in saying that what those in power really need are a new people. Perhaps Mr Warner agrees.

 

         

         

         

A Marxist at the Movies (3):

 

THE HOLLYWOOD EYE by JON BOORSTIN – A Critique Interlude

 

          In the main bulk of film watching and moviegoing, the fundamental bond between viewer and film is: money. Without money to spend we could not go to the cinema or buy box-sets. Otherwise we have download, and Pay TV which is a surcharge on top of the licence fee. Not forgetting that the often-lavish TV adverts on commercial stations add cost to the many advertised products and services we consume.

          I am of course writing of films that are considered going commercial concerns, not those pictures favoured especially by cineastes that stopped being ‘commercial’ a long time ago, except in commercial DVD form. The cheapest deals money-wise are films on BBC channels and borrowing DVDs from the public library – whatever the TV licence fee and Council Tax to pay for each. Of course the proportion of Council Tax for libraries is small but you still have to pay the whole tax! Anyhow libraries are disappearing at a rate of knots.

          The only one who gets truly free viewing of commercial films, where this is allowed, may be the prison convict who – along with minimal purchasing power – pays no fees or taxes at all.

          There is another category of free-viewers, so to speak: those in the upper reaches of film making and teaching/learning who can request viewings for purposes of research and appreciation. Film journalists go to previews or obtain free tickets and might at the very least offset research costs against tax. But all these don’t count because – whether this is enjoyed or not – it is ‘work’. But I sometimes wonder whether the prolonged and habitual obtaining of films without paying for them comes to insulate film makers and critics from the fact that others (or their parents) have to pay for them in one form or another. Somebody has to pay or the films don’t get made.

          All this is why I say that the almost invariable bond between films and their audiences is money. Invariable and invisible.

          Invisible, that is, until the experience of seeing the film – if a letdown – causes the viewer to feel somehow cheated out of the money paid for a ticket or download or DVD, causing much grumbling. Cinema tickets are not cheap and certainly not for a family of (say) four. Partly the cost of seeing a film makes one determined to enjoy it, or at least determined that one’s children will enjoy it. But equally it can cause dismay and even anger if the enjoyment proved elusive.

          Car-leasing is now the most affordable way of ‘owning’ a car – until the subprime car bubble bursts – but for most people it remains our most expensive commodity after a house or flat. It is also the most underutilised. Allowing for use for certain business purposes (like commercial travelling or farming) the car will likely be parked on average for 22-23 hours out of the 24. Except for car holidays and most definitely not for airborne ones or cruises.

          Underutilisation is the likely fate also for the rather more (!) modestly-priced DVD. DVDs at home end up on a shelf with dozens of others many of which will either never be viewed again after the first time, or only a few times’ each in the remaining lifetime of the purchaser. This will be true of those films labelled – and there is an irony here – as ‘straight to DVD’, which usually means they are of such low quality that they will hardly be viewed again after the once. By contrast, your refrigerator (say) functions – and not on mere ‘standby’ - 24 hours a day.

          Indeed home viewing taken as a whole may be more needlessly expensive than the cinema ticket, dear as that may seem at the time. You don’t ‘buy’ or ‘lease’ a film at the cinema but at least you aren’t lumbered with it afterwards. With download you may be stuck with ‘the 1000 Movies’ offer of many films you would not watch more than once if at all.         There is a particular financial emphasis on filmic experience: films in general, that is, feature-films, are far more expensive to make than, say, paintings and books, and sometimes even more expensive to hype than to make. The cost of film promotion frequently exceeds that of film production – I suspect this is even truer now than in 1991 and before. Boorstin does not mention the promotions executives – now brought in for their say-so at ever earlier stages in development. This hyping leads to occasional mismatch between the publicity and the actual film, resulting in viewers’ confusion of expectations. Unknown, it seems, to the Boorstin of 1991, advance publicity – grown into a huge and intrusive industry of its own (to reduce market risk on ever-higher budgets) – inserts itself between the viewer and the picture, manipulating a particular expectancy at the outset. Boorstin’s Voyeuristic, Vicarious and Visceral – if these separate aspects exist – do not come to the picture out of a socio-economic void. And the cost of film publicity has become an ever bigger factor in the price of viewing.

          Financial considerations are bound to impinge to one degree or another on the film viewing experience. And so films have to be made that appease the purse or wallet as well as the ‘mind’ and ‘emotions’, not to speak of the ‘visceral’. The wallet, indeed, may be the most ‘visceral  element of all.

          Boorstin doesn’t say so, but the viewing of commercially-viable films is first and foremost a financial transaction. As with cars, such transactions  have become fancier, that’s all.

A Marxist at the Movies (2):

 

The Hollywood Eye – What Makes Movies Work

 

          As the title of this series suggests, my concern as a Marxist is not merely a detailed account of making films; I am not a film maker myself nor even a seasoned cineaste. My principal interest lies in examining the ethos behind the enterprise.

          I want to focus initially on the first three chapters, which reach beyond film making as such. These are: (1) the Voyeur’s Eye, (2) the Vicarious Eye and (3) the Visceral Eye. Boorstin’s book on film commences with an anatomy – not of film – but of the audience.

          Simultaneously, Boorstin says, we watch movies in three distinct ways:

• The Voyeur’s way
• The Vicarious Way
• The Visceral Way

Let me give shorthand definitions of Boorstin’s three terms.

          The Voyeur represents the curious – a curiosity that must be satisfied by answers. This is the rational, ‘intellectual’ side of the viewer.

          Voyeuristic reactions:  Wow! Look at that view! / What happens next? / It’s not very realistic. / I tend to use the loo during the boring bits.

This is about storytelling and continuity – and plausibility, focused on the reality of the world we live in. The bedrock of a movie is its plausibility.

          The Vicarious represents the emotional involvement, the viewer’s psychological stake in the action (as in our experiencing emotions ‘vicariously’.)  It’s more concerned with the emotionally gripping than just the plausible. ('The heart has its reasons, which reason does not know.')

          Vicarious reactions: What she must be going through! / What a cute little kid. / He’s a real shit. / I know just how Jack feels. / I was so involved. / I like a good weepy.  This is about the emotional pull of a movie. There must be empathy with /antipathy towards / the human characters and their situations.

          Visceral reactions come from the gut, from the so-called ‘lizard’  or primitive brain. They represent our physical and basest instincts.

          Visceral reactions:  Makes me heave. / Makes my mouth water. / Ow! That punch hurt! / Made my hair stand on end. / I got a hard-on just looking at her. / I hate spiders!  The Visceral demands of the film that it engage on the most basic physical level. It should not just interest us or move us, but also ‘get’ to us. It adds ‘touch’ to the film in addition to vision, sound and story.

          Common negative reactions to a particular film:

Voyeuristic: It wasn’t realistic and the ending fell flat.

Vicarious: I never felt anything for the people, positively or negatively.

Visceral: It didn’t get to me. All a bit bloodless.

Boorstin:

Each demands a different set of film techniques, often in contradiction with the others: each has its own sort of content, its own rules of time and space, its own way of judging reality. The three compete within us as we watch. Each movie is three movies running at once.

          Much of this looks convincing but I have my doubts.

          I wouldn’t encourage film students to start off by rationalising audiences. Art students are not taught what prospective viewers want. Of course Hollywood film is an industry from the ground up. So perhaps film students should be taught like apprentices in advertising. (Some of our top directors make more money doing TV adverts.) So the book betrays its assumption that the first imperative for a movie is to get those butts on seats. First and last.

          Thus we have the ‘three V’s’ approach, redolent of a whiteboard lecture at a sales conference. Are we supposed to be examining reality here or are we taking in a sales pitch?

          In any case Boorstin is rationalising why movies work – that is, after they’ve been made and distributed. It may or may not be an effective way of teaching film craft but all the same it puts the cart before the horse. And it starts with the most notoriously nebulous factor. By contrast, Boorstin’s book is absolutely concrete about how complicated it is to put a feature film together. He stresses further on the seemingly endless re-writes and re-edits required; in some instances the makers didn’t know what the film was really about until after the first preview. Shouldn’t the ‘three Vs’ make all this easier? Not if the recipients are to be treated in a formally simplistic manner, which reminds one of Pavlov’s experiments on salivating dogs. The irony here is that the audience make-up is even more complex than the processes through which films are made.

          A principal hazard of the marketplace is that sellers don’t know for sure in advance what the buyers want or will pay for, and at what price. Peddling films – which are commodities like any other – is plagued by the same uncertainty, made hazardous by the sheer scale of investment being made in (a) creating a film and (b) devising its promotion campaign. The concept of the ‘public’ doesn’t help here, because ‘the general public’ is itself a fiction. It washes over such concrete realities as classes, education, gender experience and generations. There is the difference between watching a picture in a theatre, influenced by the reactions of others, and watching it at  home, possibly alone; there is a difference between watching a film all in one go and seeing it broken up by TV adverts (all too frequently). My entire childhood filmgoing experience consisted in arriving roughly midway through the feature, sitting through everything and then leaving when we’d reached that midway point again!  All this is not to speak of facing the vagaries of individual taste and proclivity. We only know ‘what the public wants’ when people flock to one picture and steer clear of another (after having been told not to bother by those who went).

          The ‘three ’V’s’ concept is made obsolete by – amongst other things – advances in modern neurology. We do not have one order of the ‘higher’ intellectual and moral faculties set above the other, ‘base’ order of the physical needs and primitive instincts, as was taught by Ancient Greek philosophers, the moral being that we would lead the good life by the ‘higher’ dominating or suppressing the ‘lower’. By the 17^th century we had mind-body dualism: the ‘mind’ – a spiritual entity – being one thing and the body – a corporeal one – being the other. Quite how these two are supposed to interrelate was never satisfactorily explained by the dualists, a problem that remains philosophically insoluble. Modern neurology has made great strides in showing how intimately interrelated that astonishing organ the brain is with every facet and feature of our life, body, being and thought. All are energised by need, intent and purpose, some of these in the area of consciousness. Nothing is truly separate from anything else. We contain multitudes (Whitman) which is what Boorstin intimates in the above quote.  So he is on to something here. But the packaging is outdated, and so he seems to modify his trinity when he says that we experience the ‘three V’s simultaneously. It’s a vague idea made harder to understand by the positing of three discrete ’V’s’ to begin with.

          I might put it another way: that we are creatures of purpose, and we pursue a film much as we pursue a career or a love relationship (if not on the same level of seriousness). In other words, we are an audience of purpose-driven individuals, not a bunch of reified fragments.

          In which case is it not better to commence with ‘purpose’ and the finding of purpose by a screenwriter, a director, a composer, a designer, a cinematographer, an editor and so on? If their drive is penetrating and powerful enough, is it not this that powers us in our pursuit of mastering their film? Not that it happens invariably what with so many mediocre films. Nor need it be restricted to high or intellectual art, for purpose, like all the many films – is pursued at all levels and varieties of a human life.

          In fact much of what Boorstin says in these sections is convincing and rings true about cinematic experience. Needless to say it’s based on a wealth of observing audience reactions. But for me it is hobbled by an overly abstract and ideologically dubious restricting of the richness and potential of human response and reaction. Alas such restricting may be accurate. As was once said: no one ever lost money by underestimating the public’s intelligence. Humans – treated indeed as ‘the public’ – can live down as well as up to expectations. The human individual is the social being. But ‘where there is no vision, the people perish’ (Proverbs 29:18 AV). A dysfunctional society taken as a whole can degrade individuals, when is why the point of socialism is common self-creation of a society that brings out the best in each of us, by means of our politically active determination of it.

          But wait and see. Boorstein has much to offer, and God may be in the details. We will look further in the next blog at the Voyeuristic Eye.