Peter Geoghegan

Journalist, author, broadcaster

Zizek, Bankers Bonuses and Capitalism after Industry

In 2010, it was politicians’ expenses. More recently public ire was – rather fairly – targeted at tabloid journalists and their nimble telecommunications skills. Now it’s bankers and their egregious bonuses. RBS and Stephen Hestor has dominated the news agenda for the last few days and, given State stakes in a number of high-street lenders and its public popularity, is unlikely to disappear any time soon.

Over at Slugger O’Toole, Mick Fealty makes the point that, ‘It’s hard to escape the idea that at their core, the banks have not yet tumbled to the fact that they are living in an unsustainable bubble.’ But what if bankers pay – and indeed pay across boardrooms – is less a bubble and more a shift in capitalism itself? It’s worth noting that real wages have decreased every year in the US since the 1970s and have been on the way down in the UK for a considerable length of time. Given this factoid, sky rocketing executive pay, tied to the rise of managerialism, seems lees an anachronistic outlier and more a shift in how rewards and wages are distributed in post-industrial capitalist economics.

Writing in London Review of Books before Hestor/RBS-gate went off, Slavoj Zizek has some interesting thoughts on why the boom in bankers pay is a function of the creation of an upper-class salariat charged with ‘managing’ the political economy, while the lower-middle classes find their own terms and conditions eroded to ever greater degrees.

If the old capitalism ideally involved an entrepreneur who invested (his own or borrowed) money into production that he organised and ran, and then reaped the profit from it, a new ideal type is emerging today: no longer the entrepreneur who owns his company, but the expert manager (or a managerial board presided over by a CEO) who runs a company owned by banks (also run by managers who don’t own the bank) or dispersed investors. In this new ideal type of capitalism, the old bourgeoisie, rendered non-functional, is refunctionalised as salaried management: the members of the new bourgeoisie get wages, and even if they own part of their company, earn stocks as part of their remuneration (‘bonuses’ for their ‘success’).

This new bourgeoisie still appropriates surplus value, but in the (mystified) form of what has been called ‘surplus wage’: they are paid rather more than the proletarian ‘minimum wage’ (an often mythic point of reference whose only real example in today’s global economy is the wage of a sweatshop worker in China or Indonesia), and it is this distinction from common proletarians which determines their status. The bourgeoisie in the classic sense thus tends to disappear: capitalists reappear as a subset of salaried workers, as managers who are qualified to earn more by virtue of their competence (which is why pseudo-scientific ‘evaluation’ is crucial: it legitimises disparities). Far from being limited to managers, the category of workers earning a surplus wage extends to all sorts of experts, administrators, public servants, doctors, lawyers, journalists, intellectuals and artists. The surplus takes two forms: more money (for managers etc), but also less work and more free time (for – some – intellectuals, but also for state administrators etc).

The evaluative procedure used to decide which workers receive a surplus wage is an arbitrary mechanism of power and ideology, with no serious link to actual competence; the surplus wage exists not for economic but for political reasons: to maintain a ‘middle class’ for the purpose of social stability. The arbitrariness of social hierarchy is not a mistake, but the whole point, with the arbitrariness of evaluation playing an analogous role to the arbitrariness of market success. Violence threatens to explode not when there is too much contingency in the social space, but when one tries to eliminate contingency.

Student and trade union protests in the UK, in this reading, are a reaction to a reduction (or, for many, ending) of this surplus wage. Hence protesters are more commonly unemployed graduates and teachers, not metal workers or ship builders (the latter, of course, almost impossible to find on these isles). If, as Zizek argues, ‘The proletarianisation of the lower salaried bourgeoisie is matched at the opposite extreme by the irrationally high remuneration of top managers and bankers’ then the wage inflation at the top of the tree (and not just in the banking sector) is likely to become a permanent feature of the economic landscape in post-industrial states.


Zizek, Bankers Bonuses and Capitalism after Industry
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