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Theory, Culture & Society

2015, Vol. 32(78) 5165

! The Author(s) 2015

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DOI: 10.1177/0263276415597771tcs.sagepub.com

Special Section: Eurocrisis, Neoliberalism and the Common

Finance, Austerity and

CommonfareAndrea FumagalliUniversity of Pavia and Effimera Network

Stefano LucarelliUniversity of Bergamo and CES CNRS Universite Paris 1

Abstract

The links between the crisis of subprime mortgages and the so-called crisis ofEuropean sovereign debt are sometimes concealed, so as to create a veritablesense of shared guilt meant to sanction the legitimacy of the austerity policies thathave been imposed by virtuous Northern European countries on the undeservingcountries of Southern Europe. We will analyse three main aspects of the currentcrisis: (1) we will interpret the austerity policies that today characterize the euro-zone as the result of financialization; (2) we will define the state of permanent crisis

as an instrument of governance characterized by specific economic policies; (3) wewill show how all this unfolds at a stage of capitalist development wherein a newconstituent process begins to take shape in a fragmented but nonetheless significantmanner, and how this process is reclaimed by the very subjectivities upon which theaccumulation of cognitive and relational skills depends in order to reproduce itself:the Welfare of the Common.

Keywords

austerity, cognitive capitalism, Commonfare, European crisis, financialization

Introduction

The crisis continues and is becoming the pretext for a large redistributionof wealth from the debtors to the creditors. The links between the crisisof subprime mortgages and the so-called crisis of European sovereigndebt are sometimes concealed, so as to create a veritable sense of sharedguilt meant to sanction the legitimacy of the austerity policies that havebeen imposed by virtuous Northern European countries on the undeserv-

ing countries of Southern Europe. Those who have accumulated toomany debts must pay, that is, they must submit to constraints imposedfrom the outside. This might even mean including a balanced budget

Corresponding author:Andrea Fumagalli. Email: [email protected]

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amendment in their constitution, thus setting into motion an explosiveprocess meant to reinterpret and limit those parts of the constitution thatsanctioned the rights upon which the so-called Fordist compromise

between capital and labour was established. After all, the Germanword for debt is Schuld, which means, first and foremost, guilt.The critique of the ideology that regards public debt as a form of sin

has been articulated in many quarters, and it has drawn together anunusual group of economists, ranging from those who espouse theNew Keynesian Synthesis (such as Nobel Prize winners Stiglitz andKrugman, and academics from the London School one of the shrinesof economic orthodoxy such as Paul de Grauwe) to heterodox econo-mists (such as the post-Keynesians who work at the Levy Institute of

Bard College, the so-called Economistes Atterre s in France, and someMarxists who interpret this crisis in terms of the tendency of the rate of

profit to fall) (see Askenazy et al., 2010; Bibow, 2012; De Grauwe, 2011;Dumenil and Levy, 2011; Krugman, 2011; Stiglitz, 2012).

Ever since 2007, the neo-workerist interpretation has attempted to goeven further. While remaining focused on the relation between capitaland labour, the mechanisms for the extraction of surplus value, and theemancipatory potential of living labour, it has proposed that the crisisshould be viewed as involving the redefinition of the sovereign practiceson which the process of valorization is organized in contemporary cap-italism (see Fumagalli, 2011b; Fumagalli and Lucarelli, 2007; Fumagalliand Mezzadra, 2010; Lucarelli, 2010; Marazzi, 2010; Vercellone, 2008).

We will analyse three main aspects of the current crisis. First of all, wewill interpret the austerity policies that today characterize the eurozone asthe result of financialization. Since 2007, the redefinition of the measure,creation and capture of value, which characterizes the new regime ofgrowth, has become more prominent. The process of financializationappears in fact as a practice of social control that subsumes life itselfinto the process of valorization. There are two basic reasons for this: onthe one hand, the debt that weighs on families appears as the exact oppos-ite of social ownership founded on welfare institutions; on the other hand,this phenomenon has been supported by the ideology of wealth effects,through the spread of conventions meant to eradicate the conflicts overboth wages and the contents and modes of production and reproduction.The core contradictions underlying the current crisis can be understoodonly within the context of the structural changes that have accompaniedthe crisis of the Fordist paradigm (see Fumagalli and Lucarelli, 2011a).

Second, we will define the state of permanent crisis as an instrument of

governance characterized by specific economic policies. We will see howausterity represents a new phase in the exercise of power, necessary torevive financialization.

Finally, we will show how all this unfolds at a stage of capitalist devel-opment wherein a new constituent process begins to take shape in a

52 Theory, Culture & Society 32(78)



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fragmented but nonetheless significant manner, and how this process isreclaimed by the very subjectivities upon which the accumulation ofcognitive and relational skills depends in order to reproduce itself: the

Welfare of the Common. Despite the numerous attempts to turn humanlife into an economic value (through flattery, imaginaries, blackmail,violence and total commodification), life invariably produces an excessthat escapes capitalist control and cannot be measured in capitalist terms.

Austerity as the Consequence of Financial Command

Retracing the phases that have led politicians to abandon the forms ofpublic intervention sustaining employment and the production of goods,

and to favour instead interventions intended to direct liquidity towardsfinancial markets, amounts to unveiling the political structures that sus-tain financial operators. We would like to do so starting from an analysisof financial behaviour, shunning all conspiracy theories. Great financialsocieties operate according to modalities that can be explained with ref-erence to the concept of collusive oligopoly: operators implicitly agree onselling and purchasing strategies so as to maximize their joint profits.These implicit agreements rest on conventions, that is to say, on cognitiveconstraints. We put forward two theses in order to describe the two main

properties of financial conventions:

First thesis: the more concentrated the management of the savings

invested in the financial markets, the more likely it is that a

long-lasting convention will emerge, and that expectations willprove self-fulfilling.

As far as the banking sector is concerned, the data from the FederalReserve show that in the US alone, from 1980 to 2005, there have been

11,500 mergers (around 440 per year on average), which have reduced thenumber of banks to less than 7500. By 2011, five BFs (brokerage firmsand banking divisions: J.P Morgan, Bank of America, Citybank,Goldman Sachs, HSBC USA) and five banks (Deutsche Bank, UBS,Credit Suisse, Citycorp-Merrill Lynch, BNP-Paribas) gained controlover more than 90% of all the derivatives. In the stock market, mergingand takeover strategies have drastically reduced the number of publiclytraded companies.1

In this process of concentration, institutional investors (which includeall those financial operators BFs, banks, insurance companies thatmanage financial investments on behalf of third parties, and that Keynes,in the 1930s, labelled professional speculators) play the main part.2

Second thesis: The larger the resources traded on the stock markets

that is, the greater the savings directed towards them the more

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these conventions influence the behaviour of non-professional

financial operators, giving rise to a mimetic rationality.

Stock markets, in other words, are places in which a new rule ofvaluation is established, one that is founded on the collective judgementof financial operators. As Andre Orle an (1999) has noted, finance is atransgression; it is an artificial world in which are instituted temporalitiesand forms of valuation that break with the productive times and con-straints typical of traditional management of companies and we mustadd of society as a whole. The recent history of financialization istightly interlaced with the emergence of a new technological paradigm,and with the cycle of struggles starting in 1968. It is possible to identify a

perverse relation between the reinforcement of financial command andthe emancipation of living labour from the forms of command charac-teristic of Fordism. In this sense, on the basis of these two theses, we canarticulate the following corollary.

Corollary. Financial conventions become all the more stable the

more they subsume desires and perspectives linked to the emanci-

pation of heterogeneous subjectivities from capitalist relations.

The calls for emancipation from the command over the rhythm ofproduction that have contributed to breaking the so-called Fordistcompromise and were claimed by the working class have at thesame time contributed to a crisis of working time, which has beenfurther exacerbated by the spread of ICTs. The recourse to financialmarkets represents first of all an attempt to assign a new measure of or, to be more precise, a new perspective on the organization ofproductive processes and, at the same time, a promise of profit towhich reality must adjust. In order to impose this form of commandon reality, it is necessary to share the accompanying risks with asmany subjects as possible. In this respect, there is nothing betterthan to subsume needs and desires, and to incorporate into financialvaluation the main items of social expenditure (pensions, health,public utilities), in addition to all the intangibles, the potentialitiesexpressed by new sciences and technologies.

Since 1984 when the National Association of Security Dealers intro-duced the possibility of evaluating intellectual property rights financially,and pension funds were allowed to invest in high-risk shares (see Orsi andCoriat, 2003) and up to the present, the evolution of financial markets

has been characterized by many events (see Fumagalli and Lucarelli,2011a). And yet it is possible to identify one recurrent feature: wheneverthe risk of collapse is realized, national economic policies always turn outto be a useful source of the liquidity necessary to set transactions in thefinancial markets back into motion.




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The effect of the subprime crisis was not the collapse of financial mar-kets. Instead, public interventions, requested above all by institutionalinvestors, reduced private debt and increased the public one.3

Starting from 2008, the highest capital gains made by institutionalinvestors have originated from the exchange of CDS (Credit DefaultSwaps) derivatives and, in particular, from those derivatives related tothe risk of public default, through the following mechanism: a few bigfinancial firms begin to sell the government bonds of those countrieswhose chances of financing, in their opinion an opinion which is sanc-tioned by the credit rating agencies might be difficult. What follows isthe depreciation of the bonds, which creates negative expectations as totheir value in the future. The interest rates on the newly issued bondsbegin to rise, widening the spread between these rates and those on thegovernment bonds of countries deemed more secure (such as the Germanones). This tendency feeds on itself, up to the point where the growingcrisis forces the European Central Bank (ECB) to intervene and to buybonds in exchange for new liquidity, while demanding that national gov-ernments adopt drastic economic measures to reduce the public deficit.At the same time, the value of the derivatives related to governmentbonds (CDS) grows exponentially, in proportion to the widening of thespread on interest rates. This allows the owner of CDS to make largecapital gains.4

Note how, among the European countries, those with the largestpublic debts are also those in which the rates of family savings are thehighest and private debts the lowest. If, indeed, we were to consider theoverall situation of debt (public debt + private debt), Great Britain andDenmark would be the most indebted nations, followed by Germany andFrance. According to this ranking, Italy and Greece would be among themost virtuous countries.

Austerity is therefore the consequence of the logic of finance.These speculative manoeuvres, in passing, have not hit the countries

with the highest risk of default such as Great Britain and Denmark(where savings are low and the overall amount of debt is over 400% ofthe GDP [gross domestic product]) but those which, within the prevail-ing technological and valorization paradigm, are strategically lessrelevant, as reflected by their balance of trade, which is negative (seeLucarelli et al., 2013).

The policies imposed at the European level are meant to achieve threeinterconnected objectives:

1. to create non-reimbursable liquidity for the financial system, in order to avoid

the domino effect of private bankruptcies;2. to privatize public debt and bring it under the aegis of financial markets, while

at the same time increasing private debt;

3. once the liquidity has been provided first by increasing public debt to cover

the costs of the subprime crisis, then by privatizing the debt by means of




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austerity policies to define, within Europe, a new division of the debt in

line with the evolution of the cognitive division of labour.

Economists who are critical of austerity policies have rightly stressed

how these policies will not succeed in achieving their set objectives, that isto say, a reduction of the ratio between public debt and GDP. Theargument is totally understandable: by adopting draconian measures toreduce public expense and increase taxation, the almost immediate con-sequence is by virtue of the negative income multiplier effects acontraction of GDP (the denominator of the relation), which also risksnullifying the efforts to reduce the public debt (the numerator of therelation). The end result is that, instead of decreasing, the ratio mayincrease, or, in the best case scenario, may remain unchanged.5

According to Eurostat, the debt/GDP ratio across Europe (27 memberstates) has risen from 83.5% in the first trimester of 2012 to 84.9% in thethird, while if we only consider the 15 states of the eurozone, debt nowrepresents 90% of the GDP.

We are not witnessing the triumph of irrationality. The reasons behindausterity policies are understandable if we put aside the ideology thatanimates politicians statements and accept instead that these policies donot aim to renew economic growth. They aim instead to feed a process ofaccumulation and expropriation that is centred upon financial markets.

The State of Permanent Crisis

Austerity appears therefore as a response to the crisis of capitalist gov-ernance that is centred on financialization. The instability of a regime ofaccumulation founded on financial markets has become especially evi-dent after the bursting of the subprime bubble at the end of 2007, eventhough, as already noticed, the profound reorganization of the modalitiesof valorization and the new forms of command and hierarchy typical of

contemporary capitalism resist it. This is a capitalism in which theexploitation of knowledge of both the knowledge set in motion byliving labour, and the knowledge incorporated in constant capital,computers, software, investments in research and development, patents,etc. is central. The expression cognitive bio-capitalism may appear ver-bose, but it has the advantage of focusing attention on the variables thatreally explain the role of financial markets. In relation to the structuralchanges brought about by the increasing importance of knowledge,financial markets:

1. continuously redefine the unit of measurement of value and financing ofinvestment activities;

2. seek to displace the welfare state as the insurer against collective risks, while

spreading a worldview in which the capacity to manage risk is dependent on

the capacity to manage savings with financial instruments;




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3. promote the privatization of welfare systems and delegitimize expansive fiscal

policies, thus imposing themselves as the only instrument for the regulation of

economic growth and the distribution of income. This is made possible by the

processes of expropriation of social cooperation, which, in the case of anoptimistic outlook on the future value of financial activities, activate a finan-

cial multiplier with expansive effects on the final demand (Fumagalli and

Lucarelli, 2011b: 322).

And yet the system of political and economic governance that has thusbeen established has not been able to ensure even the lowest degree ofstability. This, effectively, was impossible, because the arrangement thatwas to ensure such stability was an unlimited expansion of financialmarkets sufficient to produce the (surplus) value necessary to overcome

the negative and distorting effects on the demand resulting from theincreased concentration of revenues and the expropriation of socialwealth (see Fumagalli and Lucarelli, 2011b: 3245).

The set of norms which have been imposed which either directly orindirectly impose constraints on support for any expansive economicpolicies or any experimentation with social policies that do not entailthe management of resources by means of financial markets articulatea governance which finds its justification in the publicly proclaimed stateof emergency: from the war on terrorism in the first decade of the new

millennium up to the financial crisis itself.The state of permanent crisis has become an instrument of governance

(Fumagalli, 2013), a reason for the establishment of norms that entrencha rigidly univocal worldview (there is no alternative). In Europe, eco-nomic policy decisions are enframed by two principles.

The first of these has to do with the institutional constraints whichprevent the ECB from operating as the lender of last resort, that is to say,as the unfettered purchaser of public bonds on the primary markets.If this were not the case, the possibility of realizing capital gains by

means of the speculative operations described above would, de facto,disappear. The ECB can only intervene on the interbank and secondarymarkets, in order to guarantee the provision of liquidity, which is thelifeblood sustaining financial speculation. The ECBs monetary policymanoeuvres thus appear to be conditioned first of all by the need tosustain exchange in the financial markets and, consequently, by the poten-tial for speculative pressure on public debt bonds. Even when the ECBintervenes in order to restructure public debt (as in the Greek case), itsmain preoccupation is, above all, to guarantee the resolution of debt in

favour of the creditor banks, either through direct injection of liquidityinto the banks involved or through the obligation to guarantee (thanks toforms of political-fiscal receivership) the payment of interest rates so high(around 30% in the Greek case) as to repay the creditors in the space offour to five years, and in a more than generous way. All this is




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undertaken with no regard for the socio-economic situation of the coun-try or for any form of democracy.

The second principle has to do with the decision to implement restrict-

ive fiscal policies, as the only measure capable of coping with financialspeculation, by means of reduction of public spending. As alreadyevidenced, this economic policy, sometimes imposed on some countriesby institutional coups de tat (golpi bianchi), has no chance of achievingthe objectives set to justify its implementation. We are witnessing thebeginning of a vicious circle, in which even the strongest countrieseconomically (such as Germany) risk falling into a recessive spiral thatconstantly feeds on itself. After having withstood the crisis of Europeandebt for two years, taking advantage of a weak euro and the resultant

increased competitivity of exports outside the eurozone, Germany too isnow showing the first signs of a possible crisis. The German governmenthas now modified its forecasts of growth.6

This situation also reverberates on the credit and financial markets,within which the divisions between the great BFs and banks that operatepredominantly at the national level are progressively widening. Theformer do not seem to have been overly affected by the crisis.7 The situ-ation of smaller banks, especially those based in the peripheral countriesof the eurozone, is much worse, because, despite the significant injectionsof liquidity by both the Federal Reserve and the ECB, they are facingreductions of assets and therefore profits, sudden drops of ROE (returnon equity), and increasing percentages of bad debt relative to the totalamount of credit. The crisis of financial and credit markets takes onmany different forms, according the dimensions and the type of activityof each individual financial institution. In this respect, the crisis acceler-ates the financialization of the credit market and the creation of revenuesand speculative bubbles, at the expense of investments and the creationof jobs, through a constant process of concentration and through theselection and marginalization of the banks that do not hold the financialportfolios necessary to influence the dynamics of speculative conven-tions. The end result is the creation of a financial economy of production(see Fumagalli and Lucarelli, 2011a), revolving around the becoming-rent of profit (see Vercellone, 2010).

De facto, the ECB has supported an expansive monetary policy, butwithout the traditional effects. The reduction of the interlending rateimplemented by central banks has not corresponded to a reduction ofthe interest rates on commercial credit. The latter, in fact, are increas-ingly dependent on the speculative dynamics of financial markets and are

becoming less and less controllable by monetary authorities. Given thenegative prospects for profit and the excessively high interest rates, theliquidity released to the credit market has not increased the offer ofcommercial credit and, rather than becoming a driving force for invest-ments and growth, it has been used to buy the government bonds of




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indebted states. We are thus witnessing a sort of privatization of publicdebts at the hands of the banking sector. Banks are becoming the cred-itors of states, thus taking the place of families, whose savings are pro-

gressively shrinking due to the reduction of incomes (see Marazzi, 2013).In other words, the growing liquidity of the central banks has beenhoarded by financial markets and used for speculative and/or precau-tionary aims (in order to profit from the high interest rates).

This shows the real function of expansive monetary policies in aregime of accumulation controlled by finance, where central banks areautonomous and therefore operate only in the interests of financial oper-ators. The crisis cannot be solved because the institutional architecture inwhich it unfolds is devised in order to preserve the state of crisis.The proof of this is the failure of the first attempt to come to the BaselIII Accord, which aimed to reduce the leverage ratio and increase theamount of real capital of financial institutions, so as to ensure greaterstability at the expense of financial speculations. The agreement reachedwas a race to the bottom that left the potential for speculation completelyunaltered. This means that, while the economic and credit crises last,finances strategy is to continue to feed speculative bubbles, as the onlysource of profit, in the form of financial revenues.

The Neo-workerist Perspective: For a Commonfare

On closer inspection, what we have analysed so far is above all a crisis ofcapitalist valorization. Valorization is founded on the replacement ofmodalities of socialization independent of capitalist and financial logic(like some aspects of the system of production and the distribution ofwelfare) with the new forms of socialization imposed by financialconventions. This expropriation of the Common, however, points to adestructive and idiotic horizon of disintegration. Despite the profound

processes of organizational and technological renewal, which haveenlarged the base of accumulation by imposing through the black-mail of need (income slavery) the valorization of social and humancooperation, this process cannot bring about a long-lasting growth of thecapital gains hoarded in the financial markets, other than in an extremelypartial way.

While confronting the perverse effects produced by the state of per-manent crisis, which has become the mode of governance across Europe,the ongoing discussion in the neo-workerist area has not limited itself toobserving the possibility of the eurozones institutional collapse, as a

consequence of the unsustainability of the gap between the balance oftrade of creditor countries (with a permanent surplus) and that of debtorcountries (with a permanent deficit). By focusing on the capitallabourrelation and living labours potential for emancipation, neo-workerismhas rather drawn attention to the possibility of a radical restructuring of




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debts, which is capable of limiting the influence of financial speculation,and to interventions that aim to redefine the policies of welfare, incomedistribution, reappropriation of the surplus value produced by social

cooperation, and, ultimately, to acknowledge that excess of valuewhich escapes capitalist accumulation.

In this article, we have argued that the weaknesses of the ECB and,implicitly, of the euro, can be explained by centring the analysis on therole of financial markets as the locus of governance in modern cognitivebio-capitalism. The issue at stake is the definition of a counter-powercapable of imposing new forms of valorization that are opposed to thelogic of finance. On what foundations could it be instituted?

A first point for discussion is the proposal to restructure that part of

the debt which is kept in the portfolios of big financial multinationals andwhich has been the object of financial speculations.8 This perspectivepresupposes a mobilization at the European level, as will become clearin the following considerations. As far as the Italian case is concerned,the restructuring would concern a percentage of the public debt thatfluctuates between 20% and 30% (data from J.P. Morgan). In practice,it would be a question of starting a controlled default, as happens inbankruptcy law, when one modifies the condition of a debtcreditcontract along the way. To this end, one might imagine freezing this

part of government debt until its expiration date, thus shielding it fromthe speculations of big financial firms, while replacing it with Europeangovernment bonds (on the model of Eurobonds) outside the free circu-lation of capital, with an official interest rate, which might be fixed,for example, at 23%.

This operation is technically feasible, but it is a politically complexone: in fact, it would be necessary to set limits to circulation in capitalmarkets and to create a European agency owning these bonds, as guar-antor. This new European agency could not and should not be the ECB,

but rather a piece of a new European institutional architecture that aimsto establish a common fiscal policy capable of dethroning national sov-ereignty over taxes and public spending. Note that in Greece this processof restructuring has been implemented twice over the course of 2012 according to different modalities, but with similar aims (see Fumagalli,2012). The public debt has been reduced by more than 30% throughthe devaluation (of more than 60%) of the government bondsowned by European banks. In order to compensate for these losses incapital account, creditor banks have been granted the payment of inter-

est of around 30% and an injection of liquidity by the ECB. Hence,we are dealing with a default controlled from the top down. Whatshould be imposed, instead, is a default controlled from the bottomup, where there is no compensation for the devaluation of government




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bonds other than the payment of interest rates in line with those ofthe market.

However, it would be necessary to take one more fundamental step:

the resources freed by the reduction of the public debt must be used tofinance and institute a Welfare of the Common capable of valorizingwhat today is devalued. The notion ofCommonfare starts from the pre-supposition that social cooperation is the production of the Common.Throughout the evolution of capitalism, common goods have modifiedtheir structure many times. Common goods related to earthly survivaland primary consumption (air, water, food, shelters, spaces of socializa-tion, etc.), which are inherent to human action, have been complementedby new common goods that affect not only the composition of consump-

tion and the meaning of subsistence levels, but also the composition ofthe inputs and, therefore, the process of valorization and the logic ofaccumulation: above all, knowledge (i saperi). We define the Commonasthe potential to expand social cooperation that attends the paradigmatictransformation of productive forces and the prominence of new forms oflabour in contemporary capitalism, such as the increasingly socializedproduction of knowledge. Consequently the Common is not relegatedto specific common goods such as water, for example.9

To struggle in order to institute a Welfare of the Common

(Commonfare) would therefore mean devising a politics that overcomesthe current crisis and is capable of:

. subverting the hierarchies imposed by free trade and reappropriating primary

and public goods, material and immaterial, which, in the last 15 years, have

undergone extensive processes of privatization, enclosure and

financialization;

. guaranteeing an unconditional basic income as the primary income, that is to

say, as the remuneration of productive life, as an instrument of distribution

and not redistribution;

. thinking up alternative financial and credit circuits in which money wouldbecome an instrument of the common, in favour of practices of self-manage-

ment of social wealth, which today have been expropriated by processes of

indebtedness and by financial speculation (see Baronian and Vercellone, 2013;

Lucarelli, 2012; Marazzi, 2012).

As you can see, these proposals presuppose the de facto overcoming ofthe foundations underpinning exploitation in cognitive bio-capitalism: pri-vate property and, in particular, the privatization to which access tomoney is subjected, and the blackmail of need as an instrument of controland governance of women and men, who are forced to restrain the formsof their socialization within increasingly individualized and precarious jobrelationships. It is a matter of devising an alternative here and now, as apossible response to the permanent state of crisis in which we live.




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Acknowledgements

We are indebted to several people for discussion of these issues over the years, most

notably the comrades of the UniNomade network, which ended in 2013, particularly

Christian Marazzi and Carlo Vercellone. We would like also to thank TizianaTerranova. But overall were indebted to the psychedelic support by the Grateful

Dead, Jimi Hendrix and The Phish music. The usual caveats apply. The TCSeditors

would like to acknowledge the help of Paolo Palladino in the general editorial process for

the section and improving the translations.

Notes

1. The first ten companies with the highest capitalization in the stock market,which represent 0.12% of the total 7800 publicly traded companies, own 41%

of the total value, 47% of total profits and 55% of all registered capital gains.For a deeper analysis, see Caiani et al. (2014).

2. According to data from the Federal Reserve, the shares managed by institu-tional investors have a nominal value of US$39 billion, that is, 68.4% of thetotal, and they have increased 20 times in the last 20 years. Starting from2012, this share has further increased thanks to the spread of sovereign debtbonds.

3. In the eurozone, during the period 20079, the accumulated (i.e. public +private) gross national debt increased from 382% to 443% of GDP (+8%per year), as opposed to a yearly increase of 5% during the period 19952007.

While private debt increased by 8% per year, public debt increased by 14%per year, after having actually decreased during the previous decade.

4. The Italian case is exemplary. At the beginning of 2102, Deutsche Bank, oneof the five banks that control the market of CDS, began to sell Italian gov-ernment bonds (BTPs) amounting to E7 billion. As a consequence, the valueof BTPs began to decrease, while the spread with respect to German bondsbegan to increase, rising above 300 points first, and above 600 points by mid-November. In the space of a few months, interest rates rose from 3% to 7%,which made the interest costs increase by around E89 billion. At the sametime, the value of CDS increased almost fivefold, allowing enormous profits

in terms of potential capital gains.5. Istat data (April 2013; see: http://www.istat.it/it/archivio/debito+pubblico)show that the public debt in Italy has risen to 127% of GDP, increasing bymore than 3% in comparison to the previous trimester (123.7%), which wasthe highest since 1995, when it was at 120.9%. According to the DEF(Documento di Economia e Finanza), published in April 2013, Italianpublic debt will set a new record in 2013 (Ministero dellEconomia e delleFinanze, 2013). In fact, precisely because of the contraction of GDP (-2.4%in 2014), the Italian government has reviewed its forecast on the debt/GDPratio, which has risen from 127% to 130.4% (including the financial support

to the eurozone).6. The forecasts for 2013 have been lowered from 1.6% to 1%.7. Goldman Sachs quarterly profits are more than gratifying, and amount to

$1.51 billion in the business branch (read: financial speculation) in the thirdquarter of 2012. This result has exceeded by far the analysts forecasts,while marking an inversion of the previous years trend, when in the


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same period it lost $393 billion. After dropping in the first semester, profitsat Deutsche Bank the architect of the speculation on the derivatives(futures) on Italian government bonds have increased by 3% (E747 million)in the third trimester. The analysts had forecast E564 million. Between Julyand September 2012, UBS, the largest Swiss bank, made a net profit of 1.02billion Swiss francs, but it had negative prospects, to the point that it decidedto cut 10,000 jobs from its global workforce by the end of 2012 2500 ofwhom were based in Switzerland. The first data published in 2013 on theprofits of the largest multinational companies indicate a growth of 2.5% forthe firms listed in the Standard & Poors 500. This level, however, is stilldeemed insufficient in order to ensure stability.

8. This discussion was triggered by the reflections that accompanied the dem-onstrations of the Indignados of 15 October 2011 (see Fumagalli, 2011a).

9. Conversely, thenaturalisticapproach leads to a subordinate position that is

not able to overcome the publicprivate dichotomy. In Toni Negris recentwritings, theCommonrefers to a form of socialization that breaks down theformer divisions between work and life, between production and reproduc-tion, and between material and immaterial (see Curcio and Ozselcuk, 2010and Vercellone et al., 2015).

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Andrea Fumagalli is Professor in Political Economy at the University ofPavia and in Theory of Firms at the University of Bologna. His researchinterests are in the monetary theory of production, the theory of firms,

income distribution (especially the basic income proposal) and cognitivecapitalism. He has published in, among others, the European Journalof Economic and Social Systems, the International Journal of PoliticalEconomy, Multitudes, and the Review of Social Economy and SmallBusiness Economics. He notably co-edited Crisis in the GlobalEconomy: Financial Markets, Social Struggles, and New PoliticalScenarios (MIT Press/Semiotext(e), 2010) and Cognitive Capitalism andits Reflections in South-Eastern Europe (Peter Lang, 2011). He has beenvice-president of BIN-Italia (Basic Income Network) and is a member of

the executive committee of BIEN (Basic Income Earth Network). He wasone of the organizers of the Mayday Parade in Milan and is also active inthe Effimera Network. He is involved in the Managing Committee of theEuropean COST project on Dynamics of Virtual Work (http://www.cost.eu/COST_Actions/isch/Actions/IS1202).

Stefano Lucarelli is Assistant Professor in Political Economy at theUniversity of Bergamo and Membre Associe at CNRS, Universite du

Paris 1 Panthe on-Sorbonne. His interests include the monetary theoryof production, financialization, complementary currencies and cognitivecapitalism. He has published in a wide variety of journals including theReview of Social Economy, theInternational Journal of Political Economyand the Journal of Evolutionary Economics. Together with GiorgioLunghini, he has written The Resistible Rise of Mainstream Economics:The Dominant Theory and the Alternative Economic Theories (BergamoUniversity Press, 2012). Together with Marco Veronese Passarella, heedited New Research Perspectives in the Monetary Theory of Production

(Bergamo University Press, 2012). He is involved as senior researcher inthe D-CENT project (dcentproject.eu).

This article is part of the Theory, Culture & Society special section,Eurocrisis, Neoliberalism and the Common, edited by Tiziana Terranova,Adalgiso Amendola and Sandro Mezzadra.


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