Raising Hell

by Norman Spinrad

  In absolute terms the prime directive of a market economy approaches a singularity in the mathematics of the Bottom Line itself, an economic black hole. If there are no labor costs, and unemployment is total, there is no demand for what is produced.

  To work in the long run even for the rich and super-rich, a market economy must have a large and relatively prosperous middle class. That’s what the New Deal created, or arguably rescued, from the ruins of the Great Depression. The vast majority of people must have enough money to consume the goods and services that they produce, or the economy will slide down the black hole.

  That in essence is the unwritten social contract of the American Dream, and what made it economically viable. That is the real economy. That is what made America great. But that balance is what the New Normal is threatening. The real economy that supports a prosperous middle class and thereby creates demand for the goods and services that it produces has become overshadowed and disrupted by a virtual economy, a casino economy, that produces nothing of real economic and social value, an economic vampire bat that produces nothing but profit for itself.

  Time was, banks made money by getting deposits and making loans; the spread between the interest they paid on deposits and the interest they charged on loans was their profit. Time was, companies issued stocks to raise capital in order to create or expand businesses, and stock exchanges existed so that people could buy and sell these certificates of partial ownership. Stockbrokers made their money by agenting this necessary commerce.

  Obviously, banks, stock exchanges, and stockbrokers performed services that were essential to the functioning of the real economy, which could hardly exist without them. Commodities future exchanges also served the real economy by allowing farmers to get advances on crops not yet harvested in order to finance the planting and harvesting. This virtual economy, virtual because it did not actually produce goods or crops or provide direct services to consumers, was necessary to the real economy—but did not dominate it and was not really parasitic upon it.

  No longer. Not in the era of the New Normal.

  Time was, not that long ago, when the business sections of major newspapers like the New York Times and the Los Angeles Times carried pages and pages of direct stock quotes. No longer. Time was, even more recently, namely before the Clinton administration, savings and commercial banks that lived off deposits and loans were separated from trading banks that lived off trading stocks, bonds, and derivatives. No longer.

  The virtual economy began innocently enough to service the real economy, but then began to spread and grow like a tumor metastasizing out of control.

  Mutual funds seemed innocent enough. Instead of investing in individual stocks, you could buy and sell stocks in mutual funds which bought and sold large baskets of stocks for you. Thus were born the first primitive derivatives.

  But now business sections of newspapers devote more space to mutual fund prices than they do to the prices of the underlying stocks. Now there are funds that don’t even buy underlying stocks but in effect place bets on their movements. Fortunes are made by funds, investment banks, hedge funds, and more shadowy nameless entities, that don’t invest in stocks or bonds, but in complex derivatives of derivatives, like well, uh, collateralized debt obligations and even basketed derivatives thereof.

  Welcome to the derivative economy.

  Welcome to the casino economy.

  Welcome to the virtual economy.

  A virtual economy so complex that 40% of its trades are now made in nanoseconds by computers not only buying and selling but placing and withdrawing orders to manipulate prices. A virtual economy so vast that its daily worldwide trade total dollar value is greater than the GDP of the whole planet!

  How can this be possible?

  Perhaps at least in part because the New Normal makes it necessary.

  When millions of people are out of work and millions more are being squeezed out of the middle class by declining wages, salaries, and real estate values, and climbing student loan and credit card debt, thus depressing consumer demand, which in turn depresses production, which in turn depresses business investment in increased productive capacity, what is the top 1% or even the top 10% going to do with all that money?

  Well, what else can you do with what’s left over after you’ve bought your fourth mansion, third yacht, second private jet, and lifetime stash of caviar, champagne, and cocaine, but invest it in making more money?

  In a healthy economy, that would mean investing in manufacturing, agriculture, or consumer services, which in turn either increased employment if that were possible, or empowered a tight labor market to command higher wages and salaries, thus increasing demand, and so forth in an upward spiral.

  But in the New Normal economy all that excess moola which the rich, filthy and otherwise, can’t dispose of buying goodies, and can’t rationally invest in meeting a demand that isn’t there, ends up funneled into the virtual economy of derivatives, derivatives of derivatives—a casino economy, where the “house” is swiftly devolving into a literally a mindless cabal of artificial intelligences gambling against one another.

  What I have just described is an economic singularity, an ever widening black hole that will sooner or later gobble up the capitalist market economy in its entirety. It’s not science fiction, nor is it Marxist dogma; it’s game theory run through the simple mathematics of the sacred Bottom Line.

  Say hello to the Abnormal New Normal.

  Sooner or later, one way or another, you’re going to get to wave it goodbye.

  “It’s better to light a single candle than to curse the darkness.”

  Since I don’t see anyone in Congress or the White House, or even in the mainstream pundit parlor, suggesting a way out of this Abnormal New Normal, this black hole of a bummer, it seems I ought to at least give it the old college try.

  Not so difficult in theory, but could it be done in political practice?

  Not so easy, because, like the New Deal, it wouldn’t just require a revolution; it would have to be a revolution, because one way or another, democratic or not, peaceful or violent, there’s no way out without one. Because the Abnormal New Normal is a singularity, an economic system that isn’t merely not working, but can’t work; a logical black hole that can’t just be modified but must be replaced.

  Just what do I mean by a revolution? Any revolution is a paradigm shift, a discontinuity between one political, social, and economic order and another that supersedes it. It can be, and perhaps most often is, a violent discontinuity like the American Revolution or the Russian Revolution; but it doesn’t have to be. It can be accomplished at the ballot box within the context of an existing order, like the New Deal, or for that matter, in negative terms, the Abnormal New Normal itself.

  But you can’t have a revolution without winners and losers, at least in the short run. And that is what has to happen to rescue the American economy from the Abnormal New Normal.

  So-called monetarism, the economic dogma that small changes in inflation rates, interests and debt figures can leverage large changes in the real economy may be true; but if it is, the reverse has to be true also, namely that you have to screw up the real economy big time in order to effect small changes in the virtual economy, as the globalized version of the Abnormal New Normal has disastrously done.

  Tinkering with fiscal austerity, inflation and interest rates, government spending, and so forth may ameliorate transitory economic recessions, but cannot resolve the existential flaw in the system itself.

  Which is that the income and wealth of the dwindling middle class, which uses most of its income to buy goods and services, has been shrinking, which reduces demand, which reduces investment in increasing production, which reduces employment, and channels the surplus income of the already rich and super-rich into the virtual casino economy, where all it does is make the rich richer.

  So what a revolution must accomplish is to shift income and wealth not so much from the greedy to th
e needy but from the greedy to a demographically and economically dominant middle class. Which will increase demand. Which will increase production. Which will increase employment. Which will further increase demand. Which will grow the overall economy and therefore in the end even rescue the rentier class from its own self-destructive excessive greed.

  In theory, doing this does not exactly require Nobel-level economic rocket science.

  Raise and extend the scope of the federal minimum wage so that any regular full-time employment will raise income to, say, 20% above the poverty level—and index it to keep it that way.

  Eliminate the favorable tax rate for capital gains; tax all income equally but allow income averaging. Raise the upper income tax rates a bit and lower the rates on the middle class modestly.

  Make it illegal for an entity loaning funds to sell the debt to any other entity without the expressed written consent of the debtor. Make nanosecond computerized trading in stocks, bonds, derivatives, and anything else illegal.

  Reinstate the separation between banks that make their profits on the spread between loan interest rates and deposit interest rates, and “investment banks” that play in the virtual casino markets.

  Appoint a secretary of labor who actually comes from the labor movement, thus supporting the health of unions and encouraging the unionization of low-wage jobs.

  Replace unemployment insurance and welfare with a guaranteed minimum income for all Americans (as once suggested with the moniker of a “negative income tax” by that notorious pinko Richard M. Nixon). This would not only save a lot of money by simplifying the machinery, but no one’s unemployment insurance would ever run out and part-time work would be subsidized.

  These glaringly just and glaringly obvious steps would not turn the Abnormal New Normal into a utopian Big Rock Candy Mountain. They would not eliminate the economic stratification of American society and turn it into a “classless society,” which would probably not be such a good idea anyway. But they would turn the downward economic spiral that the Abnormal New Normal has created into an upward one.

  Politically impossible, you say?

  Well, given current politics, maybe it is. But sooner or later either a revolution like it is going to happen within the current democratic system, flawed and corrupted as it may be, or the singularity toward which the Abnormal New Normal is careening will be reached, the shit will hit the fan big time, and there will be a paradigm shift without any guarantee that the result will be anyone’s idea of a Rose Garden.

  The failed Weimar Republic, after all, was not replaced by an enlightened free market utopia or worker’s paradise, but by the Third Reich.

  The perfect is the enemy of the good.

  And the only justice there is, economic or otherwise, is the justice that we make.

  “NO REGRETS, NO RETREAT, NO SURRENDER”

  NORMAN SPINRAD INTERVIEWED BY TERRY BISSON

  You were a key member of SF’s legendary New Wave in the Sixties. Did you just stumble into that, or was it a destination?

  I was there in Los Angeles when Harlan Ellison cooked up the idea of the Dangerous Visions anthology, and after we talked about it and what it might include, my “Carcinoma Angels” was the first story bought for the book. Published in ’67, it marked the birth of the “American New Wave.” But I knew nothing of the British New Wave, led by Michael Moorcock and New Worlds magazine (named by Judith Merril), and I don’t think Harlan really did either.

  When Bug Jack Barron was rejected by Doubleday (which had had it under contract) and was bouncing around New York without finding a publisher, I took the manuscript to the Milford SF Conference, a sort of pro workshop in the wilds of Pennsylvania. There I met Mike for the first time and learned about the British New Wave, which was something rather different and more stylistically complex than our version. Mike got enthusiastic about Bug Jack Barron and decided to serialize it in New Worlds.

  That’s when all hell broke loose.

  I believe it was actually denounced in the British Parliament. How come?

  They were pissed because the magazine was financed partly by the British Arts Council, and it was publishing this deliberately impolite novel about uncomfortable stuff like racism, sex, celebrity, and immortality, not to mention politics.

  Soon after the brouhaha over Bug Jack Barron, I decided to move to London (the “Swinging London” of the time) to be where the action was.

  Those must have been heady days for a young writer from the Bronx.

  It was wild enough. And I wasn’t the only American writer on the scene. Tom Disch was there, and John Sladek. And William Burroughs, too. I spent some time with him at a conference in Harrogate, way up in Yorkshire. On the way back to London, we had to change trains, and Burroughs bought a bunch of those sleazy British tabloids, which he loved. I remember him cackling at the lurid lead story— which was the Manson murders.

  Life imitating fiction?

  That appealed to Burroughs. A few months later, I was in Los Angeles writing for the Los Angeles Free Press, and Manson family members and wannabes were hanging all over us because the paper had said some nice things about Charlie. And even after we found out how guilty he was, we had to keep making nice because we didn’t want his minions to dislike or discorporate us. But that’s another long story …

  And a particularly American one.

  Yes, but the Brits had their own tough customers. At the Harrogate event a Communist minor guru interrupted a panel discussion to denounce the “elitism” of the conference and demand that the seating be altered into a more “egalitarian” (round table) configuration. But when I looked down, I saw that all the chairs were nailed to the floor. When I pointed this out, I was told that it didn’t matter. Chaos ensued at the conference. John Calder, the honcho, and Nigel Calder, running the panel, were stymied. Shouts and threats were traded. On and on it went. I knew that the seats were immovable. I realized that the idea was just to create such a scene and disrupt the event. So I stood up and pointed out that the chairs were nailed to the floor.

  “You, sir, are a fascist and a bastard!” the commissar roared at me. Then he turned on his heels, led his posse out, and the panel continued. The next day the story was in most of the British papers and I had my fifteen minutes of fame, albeit as a fascist and a bastard. In that order. My name was even misspelled “Norman Spinard.”

  I guess it could have been worse.

  Things can always get worse. One New Worlds fringie in those days was Sonny Mehta, a lowly genre paperback editor then, who would fuck up my career at Knopf many decades later when he had become the most powerful publishing executive in New York. “Please don’t let on that you knew me when,” as Bob Dylan has put it.

  But that too is another out-of-sequence long story …

  Was it easier to get published in those days, or harder? Or should I say, to make a living in SF?

  It was easier to get short stories published—there were more magazines. About the same as today for genre novels, but the money was less. I mean, there was a kind of half-assed auction for The Iron Dream, and the winner was $3,000. I remember Larry Niven was over the moon when Ballantine raised the advance for his next novel from $1,500 to $1,750! And Niven was a Doheny heir.

  You have certainly stuck it out. Would you be drawn to the field as it is today?

  Early on, Harlan Ellison gave me some good advice. “You’re a writer,” he said, “and some of what you write is going to be SF, but write all sorts of things, whatever you can—science fiction, mainstream fiction, journalism, scripts, whatever may present itself.” So for most of my career, I haven’t relied totally on SF to make a living. I’ve written TV scripts (Star Trek, as everyone knows), feature films, all sorts of journalism. I wrote a monthly column for Knight magazine, a Playboy knock-off, which covered my rent. I was a regular weekly film critic and political columnist for the Los Angeles Free Press, which paid very little, but more or less covered the rest of my monthly nut at the time.
More recently, I’ve written the prose in art show catalogs. Still write regular literary criticism. Just finished a stage play adaptation of Greenhouse Summer, first such thing I’ve ever tried.

  I guess Harlan knows whereof he speaks, although I doubt he could match you in eclecticity. Is that a word?

  I guess now it is. That’s something I also learned from my dad’s stories about finding work in the Great Depression. If there was a job of any kind open, he’d go for it. He’d tell ’em, Yeah, sure, I know how to do that. If he’d been offered a gig as a brain surgeon he’d probably have bought Brain Surgery for Dummies and given it a try if he could bullshit them into hiring him.

  I’ve also written a number of so-called mainstream novels that were published as such—Passing Through the Flame, The Mind Game, Pictures at 11. And two historical novels, The Druid King and Mexica. Songs, too, which haven’t earned me much money. All sorts of things except rubber checks. Never bounced a check and “eclecticity” is probably a big reason why.

  But what about SF itself? Would you be drawn to the field as it is today, if you were just starting out?

  The “field” as it is today—I assume by that you mean the SF publishing situation. Which sucks, literarily and economically too. SF probably wouldn’t attract me as strongly as it did in the Sixties. Besides, these days, if I was writing the same kind of fiction and had never been pigeonholed as an “SF writer,” I’d have a much better chance of getting my work published as general fiction. In France, that’s how my more recent novels are being published.

  But in an alternate universe where I was starting all over again, I’d still be writing more speculative fiction than anything else. I’d have written and would continue to write the same things that I’ve written, am writing, and will continue to write. Literarily, politically, no regrets. No retreat, baby, no surrender.