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Debt
Derrida's
to Milton
Friedman
Tratner
Michael
In
important
economic
a
lis?of
history:
that
literature,
trace
to
state
the
consequences
literary
is, contemporaneous
a state of
with
and
capital,
coded
and
signature,
in
in so-called modern
metropo
capital?city,
polis,
the transformation
of money
bank
scriptural?the
in cash, the recourse to credit
(metallic, fiduciary?the
check), a certain Tarification of payments
the
says it is
events
certain
note?or
bank
forms
cards,
of
so forth,
a certain
in short,
dematerial
ization of money, and therefore of all the scenes that depend on it."1
The transformation Derrida describes is part of the development of late
capitalism; though his essay analyzes a short story by the nineteenth
century
writer
the
Baudelaire,
transformation
away
from
"metallic"
to
tual
of
product
follow-up
to
war
cold
'60s
suspiciousness;
and
radicalism;
Raman
Barbara
Seiden,
Foley,
as a
as
the
intellec
development
of
exchange
Friedman
became
dropped
describes
fiduciary
monies
as
the mechanisms
of
international
792
NEW
LITERARY
HISTORY
from an international
at least
standard,
departures
specie
by major
took place
and only at times of crisis. Fisher
concluded
in
infrequently
1911
that "irredeemable
has almost
a curse
to
paper money
invariably
proved
the country
of the international
it,". . . The
employing
declining
importance
its
final
standard
in
and
termination
1971
have
the situation
specie
changed
Until
1971,
countries,
an
is no
at in
money"
longer
expedient
grasped
state of affairs
in countries
at peace,
no
facing
and with governments
of
economic,
fully capable
"Irredeemable
paper
drastically.
times of crisis; it is the normal
domestic
crises,
obtaining
situation.
massive
or
political
resources
are
We
in unexplored
through
explicit
terrain.4
taxes.
is an
This
unprecedented
The economic
transformation of money in 1971 is in peculiar ways
tied to the radical politics of the 1960s, as we can see by noting that in
France an important suspension of convertibility of the franc occurred
certain
abstraction,
point
...
in
to
history,
the power
production
of a code,
was
...
to a
even
risks
"elevat[ed]
which
no
longer
total
being
of floating
capital.
Once
currencies
are
extracted
from
all
produc
tion cautions, and even from all reference to the gold standard, general
the strategic place of manipulation.
Real produc
equivalence becomes
to it. This apogee
tion is everywhere subordinated
of the system
n. 9).
corresponds to the triumph of the code" (129
a
comments
Baudrillard's
between
suggest
peculiar
relationship
new
sixties'
and
the
definitions
of
deconstruction,
radicalism,
money.
The end of the gold standard results in uncontrollable
play of capital,
793
FRIEDMAN
TO MILTON
DEBT
DERRIDA'S
which sounds like the freeplay that Derrida finds in language. In fact, if
we read the new "definition" of a currency, it seems very much like a
Derridean
of
description
the
of
return"
without
"dissemination
endless
the
that
sign
money
represents
that
represents
actually
one
has
"s.d.r.'s,"
drawing
they
rights";
defined
so
pounds,
of
"basket"
many
of
every
so
are
basket
currencies
does
rather
so
plus
similarly
currency?and
to borrow,
rights
Internationally, a dollar
marks
many
granted
seem
is now
so
yen,
many
many
a mark
is so many
a currency in terms of a
like
system
of
freeplay
of
economic
meaning
from
system
of economic
has
made
such
deferrals
The
permanent.
a code.
Such changes in economics do not happen all at once and are never
complete and uniform across the entire field of economic activity.New
economic concepts emerge long before they become orthodoxy, and
sometimes
such
concepts
appear
first
in non-economic
texts,
as
ironic
794
NEW
LITERARY
HISTORY
his
about
story
counterfeit
there
money,
was
interna
considerable
dematerialization
international
Derrida
wants
to
trace
was
the
of
undoing
this
treaty.
Baudelaire
may not have paid much attention to international fi
nance, but he was peculiarly sensitive to the issue of spending beyond
and going into debt, because
one's means
early in his life he went
so
came together in
that
his
fortune
his
relatives
family
rapidly
though
1844 and put his inheritance under their legal control so he could not
wrote the story
spend himself into serious debt.6 In effect, when he
Derrida cites, Baudelaire was suffering under a personal version of the
international law in 1881: a legal restriction
policy that would become
on the ability to spend beyond one's means.
Derrida
reads into
comments about the possibility of wealth emerging from
Baudelaire's
of
the circulation of counterfeits a step towards the dematerialization
was
that would emerge in the twentieth century. Baudelaire
to
to
his
under
his
but
reserves,
inability
spend beyond
certainly chafing
a
new
to
is
economic
idea
the
he
is
that
say
ignore
simply exploring
on the reader's
familiarity with the
irony of the story,which depends
nineteenth-century morality of spending only what one had earned.
Indeed, Baudelaire's
pleasure in telling the tale depends on the sense
that circulating a false coin would be considered an evil act, so that the
an act
contemplation of the apparently lovely temporary results of such
in the
interest
could come under the rubric of Baudelaire's
general
money
"flowers
of
The
evil."
story
an
adopts
ironic
stance
towards
circulating
projects
quite
a bit
of
later
economic
history
onto
back
that
this
luxurious
and
produces
pleasure
consumption
. . . tobacco
...
seems
an
to
expenditure
onto
the
open
at
scene
loss
that
of desire
beyond
need"
DEBT
DERRIDA'S
TO MILTON
795
FRIEDMAN
discussion
in
early
the
twentieth,
as
precisely
consumerism
to
spreads
similar
this
desire
is
transformation
as
need
replaces
the move
not
of economics.7
the basis
some
to
But
realm
mysterious
of
production
demand,
hoped
with
desires.
cars
on
time.
To
give
sense
of
this
the
transformation,
to
economic
historian Martha Olney notes that before 1920, the average American
had twice as much in savings as in debt; by 1925, this ratio had been
In other
reversed.8
began
was
all
occurring
1925
words,
spending more
over
marks
the year
when
average
Americans
to consumer economics
in the 1920s became eco
happened
nomic orthodoxy in government policy in the 1930s when the Depres
sion led to the worldwide acceptance
of Keynesian policy. It was the
revolution that eventually made
the new
Keynesian
"consumption
to economic historian Geoffrey Barraclough,
watchword," according
and itwas Keynes who finally normalized
the role of spending more
than earnings?deficit
in
spending
governmental policy.9
What
Derrida
economic
presents
length a passage
new
Mauss's
transformations
governmental
fromMauss
policies,
gift
of
economy
the
in terms
Keynesian
inwhich Mauss
such
as Social
he advocates.
The
era.
that
connect
it to the
Derrida
quotes
seems to recognize
Security,
are
steps
at
that the
towards
the
796
NEW
LITERARY
HISTORY
says, is that "we will rediscover motives for living and acting that are still
prevalent in many societies and classes: the joy of public giving; the
delight in generous expenditure on the arts; the pleasure in hospitality
and in private and public festival. Social security, the solicitude of the
mutuality, of the cooperative, of the professional group, of all those legal
entities upon which English law bestows the name of 'Friendly Societ
are . . .better than themean life afforded by the
ies'?all
daily wage set
and even better than capitalist saving" (quoted in GT
by management,
65). Mauss
implies here that the gift economy which he found in
social
in the early twentieth
systems was also emerging
"primitive"
within
Derrida
describes
Mauss as searching
century
capitalist society.
for an alternative economics that is neither "capitalist mercantilism" nor
"Marxist communism"
(GT44).
a
were searching in the 1920s and 30s for such
economists
few
Quite
an alternative, including Keynes, John Hobson,
and one C. H. Douglas,
who proposed what could be called an entirely "gift-based" economy.
called his system "Social Credit," because he advocated replac
Douglas
ing money entirely with credit given out by the government, but an
to pay it back. He
unusual kind of credit, because nobody needed
to be recognized as a free gift from the government,
wanted money
adjusted each year to keep ahead of production so that depressions could
not happen. Keynes acknowledged
thatDouglas was a major influence on
his deficit economics, and all the governmental programs such as Social
Security and WPA projects which followed upon Keynesian influences in
effect were modified versions of themove toward a gift economy.
highlights the centrality of credit in Mauss's
gift economy,
statement that "the gift necessarily entails the
italics Mauss's
in
putting
notion of credit" (GT45). Derrida then goes on tomake the remarkable
claim that credit has the same position in the economic
system that
an
in
has
this
in
account
He
of
says
differ?nce
linguistic systems.
Derrida
writes
this
sentence:
"As
soon
as
there
is monetary
sign?and
first
of all sign?that
is, differ?nceand credit, the oikos is opened and cannot
dominate
its limit." Differ?nce and credit are presented here as two
essential features of signs that have the same result: they make
it
or
a
to
to
maintain
limits
move
have
closed
any
system; they
impossible
one from an economics ruled by needs to one ruled by desires. Derrida's
TO MILTON
DEBT
DERRIDA'S
797
FRIEDMAN
a part of the
phrasing and his turn toAristotle imply that credit has been
economic system about as long as there has been money, but I am tryingto
show
part
regular
oikos, home
of
credit
nations
inWestern
in fact
that
or
consumer
only
a normal
becomes
from
economics,
the
and
1920s
on,
as
such
structures,
turn:
he
goes
Derrida's
differ?nce,
on
to argue
that
argument
a
gift
a rather
takes
economy
surpris
never
could
exist,
to counter
Keynesian
spending
policies of increasing government
downturns in the economy are impossible because
"countercyclical
. . .while at the
by private agents
policy must itself be unforeseeable
same time be systematically related to the state of the economy.
Effectiveness, then, rests on the inability of private agents to recognize
time,
itmust
cannily
be
in other
"systematic,"
returns,
calculating
and
at
the
words,
calculated
carefully
by government
same
time
appear
to be
a monk,
giving money away beyond all reason. Lucas and Sargent argue that
private agents would always see through the image of monkish generos
ityto the Shylockian calculation, and so would plan forwhat is supposed
to be unforeseeable
generosity, destroying the gift-effect of deficit
Derrida's
denial
of the possibility of the gift economy parallels
spending.
of the 1970s, which characterizes
economics
deficit
anti-Keynesian
a
as
an
form
of
(GT42).
usury
merely
illusory gift hiding
spending
Derrida's argument against the possibility of a gift also ends up partly
narrator says in his story: the man giving
repeating what Baudelaire's
away a counterfeit coin to a beggar is trying to please both God and his
pocketbook,
to
give
charity
and
calculate
returns
at
the
same
time.
798
NEW
LITERARY
HISTORY
most
of
determinants
important
economic
events.
the appearance
thatmonetary
States, maintained
realities
by holding large quantities of gold to
signs represented physical
back up monetary reference. Pictures of Fort Knox were circulated as
of the backing of the dollar. After the 1970s, the U.S.
evidence
eliminated its rigid gold price and eliminated itsnational stockpile. The
an important economic
tenet of all
became
fictionality of money
a
and
of
headlines
newspaper
governments
commonplace
declaring the
that
latest inflation figures. I suggest that the economic developments
made inflation a powerful political buzzword contributed to the plausi
bility
of
theories
such
as Derrida's.
Derrida.
which
Derrida
interprets
the
counterfeit
coin
in Baudelaire's
story
as
an
of
insertion
the
excess
to
in a
capital
capital
the
into
sign
799
FRIEDMAN
TO MILTON
DEBT
DERRIDA'S
...
economic
to a beggar
in the
He
system.
as
of value
age
that
says
of "what can
is emblematic
monetary
sign:
The circulation of the counterfeit money can engender, even for a 'little
a true wealth" (GT 124).
speculator,' the real interest of
does
Friedman
not,
of
of
circulation
advocate
course,
counterfeit
money, but he does argue vehemently for the government taking very
the role of the man giving away the counterfeit coin: the
much
government should keep expanding themoney supply. The government
must keep creating fictions, money outside the system of exchange, in
to
order
cause
real
to
objects
appear.
Monetarist
uses
economics
the
one
bank
an
receives
additional
to
accession
assets
noncash
equal
it can
its cash,
at most
to that
therewith
. ..
accession.
yet
ifall banks together receive an accession to cash, the banking system can
therewith acquire additional assets equal to a multiple of that acces
sion."14Adding to the total supply has effects greater than the apparent
amount
added
A
crucial
of
part
cash:
an
excess
of Friedman's
theory
completely
automatic,
never
as an
emerges
is the
tenet
effect
of
that no
code.
the
person
can
or
added
in reaction
adjusted
to economic
events,
one
can
have
an
automatic
excess
that
keeps
changing
the money
(he says)
supply inways that produce a pressure to increase production
and therefore allows growth and keeps the economic engine running.
Derrida describes similarly the necessity of acts outside the circle of
exchange?those
seemingly impossible gifts?as crucial to keeping the
engine?is
precisely
what
constantly
expanding
money
800
LITERARY
NEW
HISTORY
system runs automatically, with no individuals shaping it.We can see the
literary transformation particularly well by examining writers who repre
issues or practices in their aesthetic works. In the 1920s,
sent economic
Ezra Pound and William Carlos Williams were followers of C. H. Douglas's
Social Credit movement, and wrote long poems, The Cantos and Paterson,
thatmeditate on the notion of sovereignty, a notion thatmerges economic
and artistic authority.15 Pound's Cantos trace a whole series of powerful
leaders (Malatesta, John Adams, various Chinese emper
governmental
ors) who are evaluated in terms of their ability to control the system of
finance in their eras; as Pound puts it, "Sovereignty is in the right over
The
coinage."16
in ways
spending
must
sovereign
that no
one
be
genius
can
else
can
who
government
adjust
so can counter
the
and
anticipate,
(and mental)
cycles that threaten to lead to depressions. The
in Pound's poem appear strangely amoral?powerful,
glorious,
and yet generous;
they are the combinations of Shylocks
manipulative,
and monks that Derrida says are necessary to run gift economies.
In Paterson, Williams repeats Pound's credo that "sovereignty inheres
to issue money."17 His poem also investigates sovereignty
in the POWER
on
by creating enigmatic images of larger-than-life persons: it is based
economic
leaders
that
conceit
the
the
town
is somehow
of Paterson
the
same
as
giant
of
followers
from
Credit
Social
Douglas's
and
movement,
reaches
a climactic demand
that the government "[l]et credit / out" from its
in
bad
fiscal
policies because credit is the '"radiant gist,'
entrapment
our lives" (P183, 186). When credit is "stalled in
scants
all
that
against
money,"
credit
Williams
as
it "conceals
writes,
is thus
"gist"
the
energy,
repressed
and
generative"
"thwarts
and
sexual,
economic,
art";
artistic,
which could erupt if only there were the right sovereign figures (P18).
also brings himself into the poem: he includes letters that
Williams
describe (and condemn) his treatment of lovers; and he repeatedly asks
or
in many
early
ics
requires:
chaos.
literary
twentieth-century
someone
to everyone
In T.
solve
S. Eliot's
the
can
anyone
of themodern
problems
as
he
how
himself
artist inWilliams's
stands
works,
can
else
in order
perform
acts
which
remain
uses
art as a
of modern
"of
way
the
econom
incompre
the modernist
poem,
from
apart
who
terms,
economic?
poetic?and
ordering,
chaotic
to everyone
else,
the artist
enacts
a model
of
sovereignty.
DEBT
DERRIDA'S
counter
chaos
the
history.
TO MILTON
of
Anti-Keynesian
and
of Lucas
writings
801
FRIEDMAN
economic
or
cycles
economists
that
Sargent,
argue,
no one
to
as
create
we
can
new
shape
earlier
in
saw
act
in a
for
the
countercyclical
manner, because the system of cycles will always already have taken into
account any leaders' efforts to counter the cycles. The only way that an
can
excess
be
found,
Friedman
is
argues,
as
to make
that
excess
as
individual
seem
that
the
"once-existing
centered
that
remained,
however
dissolved."19
bureaucracy
organizational
subject"
in postmodern
To give one striking example of the role of economics
literature, consider The Crying ofLot 49, a novel about mysterious signs
appearing everywhere and the search for themeaning of them. No one
in the novel finds any understandable
system of meaning; nonetheless,
to end, and what allows the search to end is one final
the book manages
act: the signs are put on themarket. The book ends with its title,with the
crying of a lot, the call for bids at an auction, and what is being put on
the auction block at the end is a collection of objects marked with the
signs everyone has been trying to understand. The novel thus finally
turns to the market in order to end its fiction: what stands outside
fictional signs and allows them to operate as signs is not reference or
but a market for those signs. This is Friedman economics
exactly, letting the "meaning" of the most important signs derive from
the market, not from any conscious plans of supposedly sovereign
meaning
governments,
corporations,
or
individuals.
from
this
essay
to earlier
ones,
we
can
see
that
economics
has
always
802
NEW
LITERARY
HISTORY
(S 9). Signs are then "the nonpresent remainder of a differential mark cut
off from its putative 'production' or origin" (S 10). This denial of the
importance of production as the source of "meaning" of signs may be a
position, but it seems also to be a corollary to the
philosophical
of
transformation
the
economic
system
from
to consumer
productivist
ist, that transformation which brought credit to seem the basis of the
economy. In his critique of Condillac, Derrida brings in several terms to
as the source of
of production
describe what replaces the moment
meaning, but in his follow-up article, "Limited, Inc.," he says that there
is really just one structure, the "parasitic structure," which he has "tried
to
the names
under
everywhere,
analyze
of
mark,
writing,
step, margin,
parallel
source
of
of
meaning
transformation: production
attacks
Rather,
signs.
on
meanings
the
code
produces
is no
meaning
longer the
without
connection
of
meaning
to
intention
or
as one
he presents
signatures:
of
the new
forms
his deconstruction
"to be
readable,
of money.
In
"Signature,
of the notion
signature
must
have
Event,
Context,"
of the uniqueness
a
repeatable,
of
iterable,
DEBT
DERRIDA'S
TO MILTON
803
FRIEDMAN
there is no "producer"
Without a fundamental concept of production,
of signs, and hence writers lose their sovereignty over meaning. Nations
their
lost
similarly
over
"sovereignty"
as
money
result
of
1970s
which
nationally
it is clearly
more
and more
[there
interdependent,
nature
with
of the problem
supranational
the multiplicity
of national
with
currencies,
coupled
are often
Yet
which
internationally
policies
incompatible.
countries
where
enormous
is an]
gap
and
dealt
have
become
between
determined
the
to
these tribal or national
systems with
change
overnight
a
are
countries
system in which
living into
supranational
to surrender
we can
their precious
called
is a
This
upon
sovereignty.
problem
not
decisions.
What
international,
only solve gradually?through
supranational
I would
insist upon,
is that in doing
this we should not forget that the
however,
one:
it is an international
itself is not a national
problem
problem.22
which
we
impossible
have been
The
the
of
person
it, but
using
to use
a word
in a certain
differently. Linguistic
that words
meanings
individuals build
"intentions"
what
that
a person
way,
only
of
to discover
carry,
and
into
further
exchange?a
that
their utterances.
go
system
The
shaping
take
the word
partly determining
the models
upon
results of utterances
utterances;
people
market?
can "intend"
such
that supposedly
shape
even
results
the
shape
preceded
the
which
an
804
NEW
LITERARY
HISTORY
the notion that the sign system operates separate from any individual
agency. Historians of theory would probably prefer to cite Marcel Mauss
and George Bataille as the ones who led Derrida to the concepts of gifts
economic
structures. It is probably
and of mysterious, uncontrollable
more
in
true that theyfigure
Derrida's own thinking than do
consciously
Keynes
rapid
events
on
going
in mainstream
economics.
be
considered
deconstructive
given
to
inherently
theorists need
Derridean
challenge
as
production
or
anti-capitalist
even
anti-authoritarian.
the
source
of economic
value
and
the
source
of
to authority in other
carries with it a challenge
linguistic meaning)
realms, or even a challenge to the very idea of authority entirely. Derrida
makes such an unwarranted
leap when he argues in his essay that the
of
power
...
of
to
of patriarchy:
story, Derrida
Baudelaire's
power
coin
counterfeit
radical disruption
producing,
claims,
of
generate
real
the power
reveals
engendering,
wealth
is
equivalent
of the counterfeit
that
giving,
"the
phantasm"
rather
than
to a
coin
has
the
in
"the
'True
Father'"
that
the
phantasm,
the
sign,
the
code,
has more
power
of
"engendering"
and of "giving" than the True Father, Derrida might be tracing not the
demise of patriarchy but simply the demise of Keynesian economics and
DEBT
DERRIDA'S
805
FRIEDMAN
TO MILTON
of the liberalism of the 1960s, the demise of the notion that the
government can wrap itself in the guise of the True Father and maintain
the
economic
system
by
appearing
to
give
gifts
whenever
recession
threatens.
transformations he has
By describing the results of the economic
traced as the end of patriarchy, Derrida's
theory implies much more
than has happened. The deconstructive revision of money into a system
of signifiers in endless freeplay may be a modification of capitalism, one
that capitalists and patriarchs opposed for centuries, but it turns out that
it is possible to perform such a deconstruction without undoing much of
Friedman did just that. Twentieth
capitalism or patriarchy at all?and
century
economics
reveals
that
non-logocentric
sign
systems
can
coexist
College
NOTES
tr. Peggy Kamuf
1992), p.
(Chicago,
Jacques Derrida, Given Time: I. Counterf?t Money,
110; hereafter cited in text as GT.
Randall Hinshaw,
2
ed., Monetary Reform and thePrice of Gold (Baltimore,
1967), p. 51.
3
Tobin Siebers, Cold War Critidsm and thePolitics ofSkeptidsm (New York, 1993), pp. 46
to The Cambridge History of Literary Criticism, vol. 8, ed.
introduction
Seiden,
56; Raman
1
Raman
Seiden
1995),
(Cambridge,
in Rhetoric and Form: Deconstruction
Lawrence
Abundance,
8
Martha
Birken,
1871-1914
distinction
between
oikos
to twentieth-century economic
and literary issues, see a pair of articles in
The
New Literary History, 31(2000):
in Economics:
Scott Meikle,
"Quality and Quantity
of the Economic
and Richard
Construction
Seaford,
Realm,"
247-68;
Metaphysical
and chrematistics
The
Parisian
Prowler
(Athens, Ga.,
1990),
p. 109.
account
of the economics
in Pound
see
detailed
14 For a much more
and Williams,
5 of my book, Defidts and Desires: Economics and Sexuality in Twentieth-Century
chapter
Literature (Stanford, 1995), pp. 121-72.
15 Ezra Pound, The Cantos ofEzra Pound
(New York, 1972), p. 610.
16 William Carlos Williams, Paterson (New York, 1958), p. 218; hereafter cited in text as P.
T. S. Eliot, Selected Prose ofT.S. Eliot, ed. Frank Kermode
(New York, 1975), p. 177.
Fredric Jameson, Postmodernism, or, theCultural Logic ofLate Capitalism (Durham, N.C.,
1992), pp. 9, 15.
17
18
22
Jacques
Derrida,
Of Grammatology,
tr. Gayatri
Chakravorty
Spivak
(Baltimore,
and
1976).