The Last Business Section

Frank Pasquale

The New Museum of Contemporary Art has hosted an exhibit called "The Last Newspaper" the past few months. Part of the exhibit centers around newspaper-based art. Another focus has been a "hybrid of journalism and performance art," as groups of editors and writers developed "last newspaper sections" in areas ranging from real estate to sports to leisure. I co-edited the business section, which is available here in a low-res copy. I'm posting our editorial statement below.

I like how the various articles (contributed by entrepreneurs, theorists, designers, and others) hang together. The terrific design work is a refreshing change from the barren pages of business blogs, law reviews, and academic books (though it looks like some legal scholars are renewing interest in visual aspects of justice). I think programs like "The Last Newspaper" help respond to the all-too-valid critiques of contemporary art offered by Hito Steyerl and others in a recent issue of e-flux.



Virtual Values
(Editorial Statement for the Business Section of the New City Reader, Dec., 2010)

Ours has been called a “weightless economy.” Once gold served as money; then paper became our currency; now the Federal Reserve can create $600 billion with a few keystrokes at a Washington, D.C. computer terminal. We increasingly value “intellectual property” over the materials it shapes. Leading companies seek to hold only brands, patents and trade secrets, contracting out nonessential activities. Even the state has been encouraged to become “virtual,” hosting only the “highest value” activities and outsourcing mundane tasks like security.

Yet even digitized flows of electrons must zip along real cables, appear on real computer screens and be interpreted by real people. When disputes arise, litigants appeal to the slow machinery of justice. Even in the foreclosure mills of America’s foremost Ponzi State, Florida, “robo-signed” documents must be presented to real judges in person at actual desks.

In the business section of the New City Reader, we explore the intersections of the virtual economy with the material world. We examine how electronic flows of wealth and debt shape—-if not actually comprise-—the global economy. Near-instantaneous “flash trading” dominates some stock exchanges. Originally justified as a way of achieving price discovery more quickly, the technology now appears to be driving, rather than serving, trading strategies. Traders are building parallel network connections and reshaping the urban environment by creating “data districts” to gain a competitive edge; Kazys Varnelis examines how these developments are reshaping Manhattan and the entire tri-state region.

As we examine the physical basis of this high-frequency trading, we ask a few related questions: why should the evanescent flickers of numbers on a computer screen determine the price of cooking oil in Borneo or a mortgage in Brooklyn? If it’s good for traders to reduce inter-regional price differences in an hour, is it better to do so in 30 minutes? One minute? One millisecond? Are there diminishing returns for the strategy? And might the effort to encourage rapid arbitrage ultimately encourage the very distortions it was meant to reduce—just as tranched mortgage-backed securities, advertised as a new risk management technology, ended up exacerbating and spreading the very risks they were supposed to ameliorate and contain?

The mainstream media has rarely asked these questions. When they are addressed, pat answers abound about “liquidity” and the inexorable march of technology in markets. Satirizing this uncritical, near-automated journalism—still all too evident ten years after publication of Doug Henwood’s “After the New Economy” and Thomas Frank’s collection “Boob Jubilee”—Ray Cha fancifully assembles a decade of press clippings of business journal darlings gone bust into coverage for the new new thing online: a fake—but perhaps frighteningly plausible—Web 2.0 conglomerate called Lorem Ipsum. Twisting the knife a bit more, Cha also offers the end-point of the atomization of journalism and information: a roster of business best-sellers distilled into 140 characters.

It’s easy to just try to ignore all these trends, retreating into the narcotic comforts of the latest gadgets. In a rare turn as social critic, Heraclitus diagnosed that, "For the waking there is one world, and it is common; but sleepers turn aside each one into a world of his own." John Cantwell slips into the world of local business and investigates how the new locative services we carry with us on our personal iDevices instead may have a totalizing effect on Main Street.

Stock markets on autopilot; consumption trapped in closed circuits of favors and baubles; a navel-gazing press unmoored from reality and a phantom public in turn unmoored from it: you’d be excused for finding our business section a bleak mirror of Great Recession. But the remnant of hope at the bottom of our Pandoran black box of perpetual financial crisis is fresh new thought about the foundations of economic life.

Check out Daniel Payne’s reflections on trust, the ultimate foundation of economy and society. If people lose trust in the value of products and services, deflation can set in; if they lose faith in the value of money, a flight to cash in on its current value can lead to inflation. In Brazil, a virtual currency called the Unit of Real Value helped save the country from runaway inflation when citizens came to trust a government plan to reset prices in “reals.” Local currencies may now offer a small scale exit from the ever less stable value of our skills and assets—yet as Karli Scott recounts in a firsthand account of Ithaca, New York’s HOURS currency, they too are entirely beholden to continuing confidence in their use.

Perhaps an American reset is in order. As John Maynard Keynes once put it, in times similar to our own, “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.” Perhaps we fear this section resembles a terminal status update because so few of our contemporaries keep that insight in mind.

X-Posted: Concurring Opinions.
Posted 10:20 PM by Frank Pasquale [link]