The financial passage à l’acte

Zizek has often said that the truly ethical act is one that changes the standards by which ethical acts are judged. On the face of it, it appears that the actions of the Too Big To Fail firms in the mortgage markets qualify — in the normal run of events, fraud on this scale should obviously be punished, but it has reached a point where applying the rules could trigger another financial crisis, thus causing massive human suffering. By flouting the law in such a systematic way, the banks have de facto rewritten the law for what counts as a valid transfer of a mortgage and put the public at large into a situation where we basically have to hope and pray they don’t get fully called out on it, since that would lead to another systemic collapse.

At the same time, Zizek would doubtless point out that this is the seemingly radical change that ensures that nothing changes — a pseudo-radical gesture that makes sure that society still is working to the advantage of the capitalist class, within which the financial sector now plays a hegemonic role in basically all developed nations.

14 thoughts on “The financial passage à l’acte

  1. I hate to disagree with Zizek on this one, but by that standard, I mean, we would have to say that those who both permitted the Shoah during world war II to happen as well as those in charge of it as doing “truly ethical acts” that changed the way in which ethical acts are judged? Am I wrong? Especially in today’s world where theodicy takes a large role in theological and political circles, which in turns has the impact on our day to day decision making (primarily based out of fear-mongering).

    And I do not believe the bail-outs were all that fundamentally different from what the federal government has always done, select one or two industries it sees as too big to fail and then invest tax payer dollar in it. It’s called the military-industrial complex (as an example).

  2. @Adam

    I think Ben has the idea I was trying to get at. But the Shoah is one of the major focal points that persons compare ethical actions and political policy by. It changed the rules of how we judge governments, thus the United Nations as well as the concepts of racism and genocide all appearing by the late 1940s. It is radical in the sense that it changed the way people thought about their militaries and politicians, as well as their neighbors.

  3. “I guess I get that, but it does seem to me that mass murder was always considered a bad thing.”

    Well yeah, and fraud is still considered a bad thing. Just because there’s continuity doesn’t mean there wasn’t radical change.

  4. My sense of what Zizek’s saying is that the most truly ethical act changes the sense of what’s possible in a good way, by itself being good. The reason that the financial crisis aspect initially fits is because everyone is (hypothetically at least) rushing to cover for the banks and making their fraudulent method retroactively okay — whereas with the Shoah, the reaction is the exact opposite. I don’t recall anyone saying, “Man, this Holocaust thing is pretty terrible, but now that they’ve gotten this far, we’d better make damn sure they finish the job.”

  5. In other words, the TBTF banks’ fraud is so massive that it might retroactively be declared the right way to do things. No one is arguing that after the Holocaust, mass murder is no longer mass murder.

  6. Okay, Adam I think you clarified in the comments what Zizek meant, about changing the sense in which something is possible in a good way. I guess I have not really heard anyone discussing the possibility that the bailouts of the banks was something that sets a precedent for good, radical ethical behavior. I have only heard arguments such as “never again” or “no more bailouts,” especially in these parts of Texas.

  7. No, it’s not your fault. You’ve said the same thing clearly three times. People are reading too fast, and not thinking this through. Dialectical thought does not lend itself easily to typical blog consumption behavior.

  8. Adam, if I am not reading you too fast, I take you to be saying that ‘too big to fail’ could become received wisdom and prescription. I can imagine this happening, but the rhetoric (and I want to believe it is not just rhetoric) has thus far been in the other direction– calls for resolutely making sure that “from now on” there won’t be any forms that are TBTF. If what you say comes to pass it will be because the foes of all that pesky government regulation get their way.

    I am more immediately with you on your second point, that a Zizekian would say plus ça change, plus c’est la même chose.

  9. How many times do I have to say this? The banks have transferred ownership of mortgages in a fraudulent and illegal way. Yet this has happened on such a large scale that to hold the banks accountable for it would mean risking another major financial collapse. So their fraudulent method could be retroactively recognized as valid. They’ve potentially acted in such a way as to change the rules, de facto.

  10. And if the TBTF banks are on the verge of collapse again, they will be bailed out. That is not a question. The fact that there might be a handful of Tea Partiers in Conress won’t tip the balance on that — TARP was a 100% bipartisan program. If Congress somehow fails to pass another bailout, either the Federal Reserve or the Treasury will find a loophole and do it themselves. The rhetoric is just that: rhetoric.

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