The days drifted along, and the bills of future squandering rose higher and higher, wilder and wilder, more and more foolish and reckless.
Mark Twain, The Man That Corrupted Hadleyburg, 1899.
Well, you know we can lecture our children about extravagance until we run out of voice and breath. Or we can cure their extravagance by simply reducing their allowance.
Ronald Reagan, Address to the Nation on the Economy, 1981.
One of the crucial features of the current Right is its tendency to view social apocalypse as the necessary prelude to the establishment of a new order. The many analyses documenting the Right’s politics and the rise of neoreactionary strands within it—books such as John Ganz’s The Year the Clock Broke (2018) and Quinn Slobodian’s Crack-Up Capitalism (2024)—seem to be an expression of centrist liberal despair caught up in salacious personal details, outré schemes and talk of class dealignment and realignment. Having gained a degree of institutional power over recent decades, the self-righteous managerial Left has found itself repeatedly defending the status quo against an ascendant new Right. The exclusion of left-wing populism and class politics leaves the advantage to the Right. Its self-confidence, theoretical swagger and sophisticated media strategies make it a source of both envy and outrage.
The stunned response of the mainstream US Left to the Trump revolution shows the dangers of relying on moralistic indignation when assessing right-wing ideas. It means avoiding the temptation to claim the new Right as a novel, unprecedented phenomenon. Two important new books attempt to map the changed circumstances of the present more dispassionately. Their breaking-free from orthodox analysis challenges the stable ground of political response, forcing us to rethink finance as a social and political factor. Melinda Cooper’s Counterrevolution: Extravagance and Austerity in Public Finance (2024) extensively details the ideological intricacies and political manoeuvring of newly dominant right-wing formations. Cooper’s focus is fiscal politics, and she joins Liliana Duganova’s Discounting the Future: The Ascendancy of a Political Technology (2024) in describing the present through an unhysterical accounting of the economic and political ideas that have decisively shaped the present.
Melinda Cooper, Counterrevolution: Extravagance and Austerity in Public Finance (Zone Books, 2024).
Liliana Duganova, Discounting the Future: The Ascendancy of a Political Technology (Zone Books, 2024).
The challenge confronted by these and other accounts of the increasingly hegemonic global Right is to show how a movement was able to synthesise what are ultimately contradictory strands of thought. What precludes a truly systematic analysis is the fact that right-wing governments seem to govern by contradiction. For example, despite an obsessive focus on budget balance and fiscal discipline, right-wing governments comfortably preside over astronomical levels of government debt, predicted to rise by $5.8 trillion in the US with Trump’s second term according to budget modelling. Deep social conservatism and communitarianism and neotraditionalist-cum-authoritarian ideas about order and discipline vie with radicalised economic libertarianism, with unfettering private property the raw justification for power in defined market spheres. Further, the debt-encumbered welfare state is viciously maligned but the Leviathan state guaranteeing civic order, discipline and security is increasingly relied upon to provide the conditions for market configurations that more or less directly benefit an elect few.
Crisis and decline
For both Cooper and Duganova, the arcane processes of contemporary accounting and finance, far from being minor technical matters, are core features of capitalism’s reconstruction of time and being. For Duganova, this is particularly true of the concept of ‘discounting’, which, by assuming that it is a universal preference to realise value in the present rather than save it for the future, defends de-valuing future actions and assets. As Geoff Mann puts it in an essay on climate accounting, ‘the higher the discount rate, the less weight is placed on the future, or on the future impact of current activity, in our decision-making’. Discounting has been an axiomatic tenet of economic theory since the early twentieth century that has served the needs of financial calculation, and as a kind of heuristic has defined the way financial managers and bureaucrats approach the future. It claims to use a rational calculus based on expected returns and future growth to assess the present value for asset owners, shareholders and investors, who are then empowered to claim returns on asset ownership. For Duganova, the economic theory of discounting is about managing and controlling the future, but at its heart is
a theory of value that simultaneously and paradoxically both values and devalues the future. It both claims that the future is the source of value (rather than the past, which is the temporality of production) and that the future is less valuable (than the present, which is ‘preferred’ by the community).
The period of economic growth in which it was formulated, however, can no longer be taken for granted. Instead, as Cooper outlines, in the 1980s the Reagan administration ushered in ‘a new organisation of economic life in which asset price appreciation through debt leverage came to replace growth in the national product as the catalyst of wealth creation’. Its approach was propelled by an increasingly dominant strand of economic and political theory formulated by James M. Buchanan and others, who, according to Cooper, ‘ventriloquise the American tradition of populist and progressive reform’ while uniting libertarian and conservative factions. These factions, and the economic thought outlined by Duganova, sought to consolidate the legitimacy of property ownership and economic freedom. In this assessment, discounting is a small but representative component of the financial rationality guiding this system, reorienting economic decision-making around investors’ expectations, ‘which were granted the rare privilege to be met, no matter what the future might turn out to be’. This logic provides a key component of the kind of financial de-risking that supply-side government policies have used to incentivise private investment at the cost of paying out exorbitant returns.
Policies like negative gearing, depreciation allowance, superannuation and student loans are inflected by the rationality of discounting and the political valorisation of fiscal austerity that produces a new financial market serving hefty returns to asset owners. Thus asset managers continually advocate for deregulating real estate investment in Australia, as if financialised ownership would alter housing affordability. In Our Lives in Their Portfolios (2024), Brett Christophers has shown that while asset managers claim to invest for the long term, they subject residential real estate to the same ‘churn’ as any other investment, leveraging and packing investments towards a ‘fiscal extractivism’ backed by generous government subsidy. The problem with the act of discounting, like the problem with debt financing under conditions of fiscal austerity, is that it erodes the very future relied on in the calculation of value. Supply-side debt financing and tax expenditures—namely, cuts and exemptions—aim to stimulate growth without prompting wage inflation. In achieving the latter, growth is confined to protected private assets, producing massive gains for investors. While manufacturing more than halved its share of the economy, between 1980 and 2017 capital gains comprised a third of total capital income according to Cooper. By 1981, financial returns had already overtaken profits.
Uprooting markets
The situation is stark in the case of climate change and green investment, which form the motivation for Duganova’s investigation of discounting. Through discounting, the value of the future is diminished even as the method pretends to tell us how much to spend on averting the apocalypse. For example, the 2006 Stern Review used a discount rate of 1.4 per cent to recommend a price of $85 per ton of carbon, while neoclassical economist William Nordhaus discounted at 4 per cent and proposed only $20 per ton. In a sense, discounting originates in the capitalist market’s intersection with nature, in the management of forests in nineteenth-century Germany. As Jean-Baptiste Fressoz and Fabien Locher highlight in Chaos in the Heavens: The Forgotten History of Climate Change (2024), forests played a central role in nineteenth-century state finances, servicing post-revolutionary French debt and establishing a pattern of managing natural assets through markets—detaching, as it were, the wood from the trees. By valuing a coppice in the present according to the value of the timber it will produce in the future, investors can claim a return based on the time it takes to grow the trees. However, if the value of the coppice is based on the future value, then any time the land is valued and exchanged, the investor realises the total future value. As Duganova writes, this is on the logic that ‘the value of things … comes from the flows of costs and revenues or benefits that they are likely to generate in the future. As future flows are brought into the present, they are devalued due to their distance in time and their uncertainty’. The investor claims the value in the present because—so the theory goes—they are deprived of their assets in the present by the wait for the investment to mature. Further, the assumption is made that an investor can always achieve ‘the most favourable future profit … by selecting among the best investment alternatives currently available’.
In terms of the economic theory which promulgated it, discounting seeks to enable investor confidence by valuing assets according to best available returns. In a growth economy, no matter where an investor puts money, they expect a return above inflation. As growth stagnated during the 1970s slump, investors retained their expectation of a return without this economy-wide confidence. Deregulation produced the added threat of capital flight, disciplining governments (and firms) into serving shareholders and asset owners in the short term. This stripped public investment and diverted the burden of funding basic government services, from which everyone benefits, to the poorest through user fees and the like. The austerity regime intended to boost growth but did nothing of the sort. As Cooper writes, ‘In a self-defeating attempt to ensure their future growth prospects through tax cuts, states have overseen a steady decline in revenues from corporate income and a corresponding rise in sales and consumption taxes’.
In the context of public asset management—say in the realm of natural resources—there has been a rush to exploit and extract whatever value they hold that recalls Duganova’s example of forestry in the nineteenth century. With the temporal contraction in investors’ expectations, the trees simply don’t have enough time to grow. This metaphor aptly captures the paradoxical effects of discounting that Duganova details. It extends to climate action, where investment has failed to achieve the short-term gains sought by asset owners, and so has flagged compared to more attractive, and more destructive, classes of investment. Climate action is simply not justified by today’s market rates, as Nordhaus asserts—or, as he writes, ‘Good policies must lie somewhere between wrecking the economy and wrecking the world’. Duganova subtly avoids the diagnosis that discounting produces distortions in the market and instead analyses the way the ‘capitalist future’ requires ‘putting [things] to work, unleashing the flows they could yield—that is, transforming them into capital’.
Transforming values
The old Keynesian fiscal regime was characterised, according to Geoff Mann, by ‘the relation between bliss and disaster’. Emerging to stabilise a crisis-ridden inter-war period, Keynesianism oscillated between the dialectical poles of ‘existential terror’ and ‘boundless optimism’. In contrast, the post-Keynesian order is described by Cooper as one of austerity for the workers and welfare recipients and extravagance for asset owners. For the coterie of right-wing ideologues Cooper cites, the Keynesian fiscal regime appeared as a ‘moral and fiscal “sickness”’ creating an existential threat to civilisation.
Duganova and Cooper outline the emergence in the twentieth century of economic theory that sought to defend and justify in moral terms the return on investment specific to asset ownership. Duganova demonstrates how for economic theorists like Frank Knight and Irving Fisher (in his 1906 The Nature of Capital and Income), capital was uniquely ‘oriented toward the future’ in a way that produced an income. By contrast, the poor are unable to save for the future, having nothing to save, and so fail to employ proper discounting; they discount too highly, meaning they are forced to realise too much value in the present. Like the moralisation of savings identified by Weber’s classic analysis of the Protestant work ethic and spirit of capitalism, the poor are unable to invest in the future and so are undeserving of rewards in the present. Instead of redistributive state assistance, the poor can be economically disciplined at the level of psychology or behaviour.
Meanwhile, Cooper adds the array of social and economic policies targeting the nuclear, heterosexual family as the site of reproduction and stability. Policies range from tax concessions favouring ‘pass-through entities’ that enable dynastic businesses to be inherited with minimal cost to fiscal measures like de-funding federal programs, and a series of measures which culminate in the effort to repeal access to abortion. According to Cooper, in the 1970s increasingly extreme Christian factions adopted esoteric readings of the Old Testament to rail against state fiscal power as ‘treacherous’, corrupt, and ‘dangerous’ to the moral order. Debt is more than guilt, it is sin. By pairing economic libertarianism with social policy, religious conservatives have developed what Cooper describes in The Nation as ‘a direct line to the sexual unconscious of economic life’. Cooper’s account provides the exhaustive detail necessary to explain how a disparate coalition of conservative, reactionary and libertarian strands of the Right can share policies, if not principles. Despite such a movement’s increasing efforts to appeal across classes, in simple terms the politics espoused is clearly elite-led.
What made this possible? Cooper and Duganova propose as the key culprit transformations in the conception of value, linked to working conditions, economic theory and what is broadly termed financialisation. They both provide accounts of the shift in the form of value, which Cooper describes as changing ‘the profit form itself, reorienting corporations away from industrial profits (derived from retained earnings) toward capital gains (asset price appreciation) and dividends (income from assets)’. For Duganova, all firms become like banks, and managers acting under shareholder value theory are divested of expertise in whatever industry they operate in and become financial and legal experts whose principles of decision are determined by financial incentives. This hollows out whatever sources of real value were fulfilled by firms and turns them into asset managers. Under conditions legally and politically favourable to asset price appreciation—specifically deregulated financial markets and tax policies that funnel money into finance—asset owners could hardly lose, and gained in proportion to existing wealth.
This undermines older ideas of class struggle and conceptions of value linked to labour. Labour was redefined as an asset that should be invested, and waged work was undermined with deunionisation and independent contractors. Cooper writes, ‘In this brave new world of exuberant asset owners and traumatized workers, it seemed that capital gains could replace wage gains as the motor of economic growth, thus consigning the labour question to the dustbin of history’. Moreover, aligning the worker with asset price growth through the ‘ideology of shareholder value could only work against them in the long run, since it leveraged workers’ savings to finance their own obsolescence’. With privatised pensions and financial assets (such as the ‘assetised’ house) providing the bulk of workers’ wealth, the reign of finance over labour sought to eliminate categories like exploitation and sanctify deserving returns.
Foreclosing the future
The future is increasingly bleak for disinvested communities and non-asset owners. The paradoxical effect of discounting emphasised by Duganova illustrates this temporal closure by highlighting how it simultaneously relies on the future as the measure of value and devalues the future by collapsing value into the present. The expected value of an investment is made to count only in the present, so that the investor can realise the value of their investment whenever they like. This, according to the theory, incentivises investment, or gives investors confidence. In fact, not only does ‘the theoretical apparatus of discounting’ turn out to be ‘nonfactual’, it renders the expected value of the investment less likely to occur, since the future is constantly ‘commensurated’ to the present. In order to realise the value of the forest at any moment in terms of the expected growth of the trees, that very value would be negated—the trees chopped down before they could grow. Herman Mark Schwartz, following Cory Doctorow, has described the result as economy-wide ‘enshittification’.
The economic and political theory of the ruling class validates the regime of asset price welfarism, protecting the future of asset owners who have the ability to rely on existing assets as collateral and leverage while also relying on fiscal policy that is hell-bent on inflating asset prices ‘while exposing mere wage earners to the full violence of the free market’. The sharp divide between home owners and renters, or between those who can afford higher education and those who cannot, has become an ineradicable political conflict. The extravagance for the wealthy has been so generous at times that real estate moguls like Trump are able as a matter of business style to make ‘profits from losses’. The inversion of public value into private value has created a spillway, pouring public money into private hands through derisking, bailouts and tax expenditure.
And so, while increasing government debt to service private loans made out on the hope of realising public good in the future, reactionary libertarians insist that debt must be ‘reined in’, in order to avoid burdening future generations with ‘a debt they have never consented to’. By using hypothetical consent, Buchanan creates the justification for no investment in the future. Buchanan’s sober academic theorising is given biblical proportions by religious conservatives, adding catastrophic urgency to the need to control government debt. Duganova warns:
Finance theory was not even debatable because it presented itself with the kind of evidence that commands adherence and exempts it from the need of proof. ‘It is unlikely’” [Robert Kaplan] wrote, ‘that the theory of discounting future cash flow is either faulty or unimportant: receiving $1 in the future is worth less than receiving $1 today’.
This theory, like many of the economic theories examined by Cooper, is based on assumptions that cannot be proven or disproven, and yet become moral axioms justifying sweeping social policies.
Formulating monetary politics
Like Michel Feher arguing for seizing the means of asset valuation in his Rated Agency (2018), Cooper asks how labour unions might ‘intervene at the scene of the crime’ in blocking stock buybacks and bailouts. She laments that unions embraced ‘pension-fund capitalism’ as a ‘fatal error’. As an error, it is characteristic of the conflation and elision of the public into private value. Having identified the enormous redistributive power of the fiscal state, when governed by an enfranchised democratic majority, conservatives sought to make institutions like the central bank safe for capital. They have been wildly successful. The ship of state was turned on its axis, from moderately redistributive welfare systems to extravagant support for asset price inflation. In the post-2008 context, Cooper, along with Lisa Adkins and Martin Konings in The Asset Economy (2020), described quantitative easing as ‘only a more explicit version of financial policies that have been pursued since the 1980s that aim to make asset ownership profitable’. In both the introduction and the conclusion of Counterrevolution, Cooper wonders whether there are possibilities for a more democratic use of fiscal power, even unto what in an interview with Daniel Steinmetz-Jenkins in The Nation she calls ‘the communist organisation of money’.
One wager Cooper and her fellow ‘Near Futures’ authors are interested in pursuing is promoting the capacity of central banks and other modes of financial intervention to turn capital back into something else. Central bank policy might have easily served more redistributive aims given the banks’ role as a creator of money. Similarly, Duganova argues that discounting’s specific attention to the future can be wielded against the short-term priorities of investors and in favour of climate action. Cooper and Duganova add to a field that includes recent entries such as Leah Downey’s Our Money: Monetary Policy as if Democracy Matters (2024), Manuela Moschella’s Unexpected Revolutionaries: How Central Banks Made and Unmade Economic Orthodoxy (2024) and several others. It is a historicising moment for monetary and fiscal politics, and a transition away from hand-wringing about financialisation and towards heterodox reassessments of how finance might be wielded for progressive ends.
Cooper is concerned to denaturalise the ‘pseudoscientific laws of price stability and balanced budgets’. Yet she is cautious about movements like Modern Monetary Theory, since, she argues, it is in agreement with neoliberal monetary orthodoxy on the need to curtail wage inflation. The project is limited because it targets the technical rather than the political limitations of money creation. Similarly, for Duganova, the future is a political domain that discounting turns into a technical question. She identifies the state as the key agent capable of protecting the future as a horizon of possibility. Duganova proposes that the state enforce ‘a monopoly on the control of the future by suppressing apocalyptic and astrological readings of the future’. Neither Cooper nor Duganova offer detailed prescriptions for how we might appropriate the tools of the fiscal state and financial calculation.
The risk of such deeply descriptive analyses is that they appear to accept the situation they describe, implying that rather than overthrow the reign of finance, we should re-imagine its uses. This seems to push us further from questions of labour, class and production, and towards technocratic expertise. Is finance made democratic if it is redistributive? What has happened to labour and class politics under the effect of the comprehensive shift in conceptions of value that treat everything as an asset for investment? If Cooper and Duganova re-imagine value and politics, they do so under the shadow of financial capitalism. The ‘Near Futures’ series specialises in plumbing this uncomfortable territory, insisting that there is no going back to left-wing orthodoxy. For Cooper, we must thread a path between the ‘despairing’ leftism that resorts to ‘the consolations of eschatology’ and the apocalyptic postmillennial eschatology of the Christian Reconstructionist right. For both, it is state power which has the capacity to manage common resources. We know, historically, what is possible. The challenge is to imagine politically how to accomplish it.