From 2011 to 2014, Akademie Schloss Solitude devoted a major part of its program to the research topic Chronicles of Work, which is documented in the form of the online-publication www.chronicles-of-work.de. The point of departure for the project was the presumption that in today’s western societies the notion of work has been too often reduced to its purely economic dimension. This economic view on work and labor ignores its social and individual dimensions, abstracts biographical elements, personal ambition, desires or memory.
The following interview was held as a dialogue between Akseli Virtanen, cofounder and chairman of the board of Robin Hood Minor Asset Management and former juror in the field of Economics at Akademie Schloss Solitude, and Marcell Mars, former fellow in the art, science & business program at Akademie Schloss Solitude, free software advocate, cultural explorer, and social instigator. The conversation about the work of Robin Hood Minor Asset Management, a counter-investment cooperative that functions as an autonomous unit of artistic research, social innovation, and political interventions, took place at the Akademie under the auspices of the workshop »Chronicles of Work. The Dissensual Awareness of Labor,« held November 13–15, 2014.
Robin Hood Minor Asset Management is a cooperative, based in Finland and Silicon Valley, and owned by its members. It was established in 2012 in the middle of the Eurozone Crisis, with the goal of rethinking financial services and means of finance. Robin Hood uses the same methods as its »Wall Street enemies«; its weapon is an algorithm called »parasite,« which imitates their behavior. The intention behind the project, however, is not driven by hubris or greed. Robin Hood is a counter-investment bank for the precariat. It invests in the protection and production of the common. It aims to share and democratize the power of finance.
Originally, Robin Hood was a project of Future Art Base, an autonomous unit of artistic research, social innovation, and political interventions, initiated at Aalto University in Helsinki, Finland, approaching everything from the perspective of art. The project was presented as the flagship of innovation, but when higher management became aware of the initiative’s full dimensions, its members cut off the money supply. Nevertheless, Robin Hood continues its work. It is growing rapidly and preparing the next phase of its operations in Silicon Valley: the creation of an army of parasites and the launch of a Hood Note, a blockchain-based smart contract that merges the monstrous power of financial derivatives to the creation of common equity.
Marcell Mars & Akseli Virtanen
How do you do that?
Akseli Virtanen: Two years ago, in June 2012, we established our own hedge fund. We call it a counter-investment bank of the precariat. We established this bank, because the message from our background analysis was clear. The financialization of capital is a fact. The precarization of the labor market is not some kind of temporal phenomenon. It is going to be the permanent way the labor market is organized. These two things are connected. If we want to put the connection into monetary terms, we can call it disinflation. Something we know very well in Europe at the moment. So let me ask: how are such big deficits possible right now with no inflation? Where does the disinflation come from? Why the insecurization of labor market and social rights, the decreasing price of labor and downsizing of the welfare state, the austerity measures? Why do governments everywhere cut costs and spend less? Because they want to borrow more. Because the deficits are never meant to be paid back, but financed. And because derivatives now provide a means to manufacture liquidity, which does not devalue the base currency. The continuous supply of government bonds, which are a necessity for any finance and the safe means for capital preservation, is possible only through deficit cuts and excluding all inflationary spending. This supply is like the financial equivalent of raw material for industrial production. It means that our collective capacity to assume debt and pay taxes and be the direct bearer of austerity measures creates direct vehicles for financial asset accumulation. In a financial economy, the surplus is extracted more directly from this collective capacity to become more indebted and pay taxes than from the stagnating number of people employed to goods and services production. Today the growth in the forms of indebtedness is the condition for capital accumulation, just like expansion of labor force participation was for expanding commodity production. So let me give you some facts.
Akseli Virtanen stands up, goes straight to the flipchart behind him, and draws two rectangles. Pointing at the smaller one, he explains:
AV: This small square is the value of all the products and services in the entire world. Value of all products. Value of all services. Maybe you don’t see it, because the square is so small?
He points to the bigger rectangle that includes the small one.
AV: This is the size of the derivatives market at the moment. Nobody knows exactly how big it is, but it is estimated to be around 1,200 to 1,400 million billion dollars. Hold on, did I get the number right? It is so big that my head hurts. It is about 20 to 25 times bigger than the entire world gross national product. The value is not created in the commodity and service production (he points to the little square).
At the same time that the capital has become financial, the number of banks in the world has decreased by 40 percent. Basically, the entire derivatives market for example is controlled by nine big investment banks. There is no free competition or »may the best win.« It’s a total monopoly or at best an oligopoly. In the first three months of 2013, Goldman Sachs made a net profit of 2.3 billion US dollars. JP Morgan 5.4 billion US dollars and HSBC 6.3 billion US dollars profit – I repeat: in three months. It is a very lucrative business. That is why we wanted a piece of the action too.
We need to also understand that there are no financial virgins. We’re all already in the game. Our money is already there. As soon as your money hits your account, the banks start using it to expand credit. Every time you use your credit card, you take part in the creation of finance. Your retirement money is working days and nights at the market. We just never see the profits. We just carry the risks. And more fundamentally, our individual and collective capability to assume debt, pay taxes, and bear the austerity measures is used directly as raw material for making these profits.
And you do know that of all the wealth produced in the world 2009–2012, so after the financial crises of 2008, the wealthiest top ten percent has taken 116 percent, while the bottom 90 percent has seen a 16 percent decline. And that the wealthiest one percent got 95 percent of all income growth. In the United States, the wealthiest ten percent owns more than 70 percent of all capital. The situation is very close to monarchial Europe in 1911. This is the meaning of financialization and connection between financialization and precarization.
There is a new asymmetry between those who are able to turn their money into financial capital, who have access to money that is not tied to the necessity of work, and those whose only access to money is through work – or who first take debt, and then work. And furthermore, these two forms of money, the money you get for doing work (money as means of payment, money as means of exchange),
and money as capital, have very different powers. Or more precisely, the former has no power at all, it is money castrated of any power, while the latter has a power to organize and command the future, to reduce and submit what will be (all potentiality, change) into what is now (existing power relationship). It represents nothing; it has no equivalent, except in the future exploitation of labor, nature, and society.
This is why we started to think … would it be possible to turn the financialization of capital into something that would benefit precarious workers? Would it be possible to share the means of production that the financial capital has in its use? Would it be possible to appropriate the power of money? Would it be possible to create a relationship with money that works as a means of independence and freedom? Would it be possible to give this other group of people access to money that is not tied to the necessity to work?
And we think it is.
Marcell Mars: It would now be good to hear: how do you do that?
Audience: And how much money do you have?
AV: Like all the interesting start-up companies, we do »big data.« We operate a massive, dynamic data-mining algorithm that we call the »parasite.« To get an idea of the dimensions – in the New York Stock Exchange alone, there are about 2.5 billion transactions a day. And we are not only following New York, but all the stock exchanges. Or to be more precise, at the moment we follow only stakes that are 100 million dollars or more; you know, big money, which does not take extra risks.
From this data the »parasite« starts to identify critical patterns and relationships of intensities and tendencies. To put it very simply, it is able to identify the players who for some reason are constantly able to make money with certain instruments. They simply are able to buy and sell at the right time, it seems. So after we identify the best players of the world with each instrument, we start to follow them, becoming a swarm – is there an emerging consensus action among the financial oligarchy? Last year, for example, we noticed that the best investors of Nokia stock in the world practically all started to buy Nokia. So what should we do? Yes, you are right, we should buy Nokia, too. And that is what we did. And it was an extremely profitable investment. So this is what we do – we just imitate. We let the bankers do all the work and we just imitate. Why? Because, as Michel Serres writes, the one who plays the position will always beat the one who does the content. The latter is simple and naïve, the former complex and intelligent. By playing the position we dominate the relationship. It means that we have a relationship with the relationship itself. It is the meaning of the prefix »para« in the word »parasite«: to be on the side, not on the thing, but on the relationship. A parasite has relationships; it makes a system out of them.
Like Serres’s parasites, we hook to the brains of the financial elite on Wall Street, and they don’t even know it. We appropriate the most important knowledge and capabilities of financial capital and its representatives and put them to work for us – just like capital normally puts to work our abilities and knowledge for the increase of its own value. This is minor asset management. Another way to occupy Wall Street.
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The entire interview can be read on: http://www.chronicles-of-work.de/CoW5/mars_virtanen.html