Fictional Capital

Jonathan Dee. The Privileges. Random House, January 2010.

Sebastian Faulks. A Week in December. Doubleday, March 2010.

Adam Haslett. Union Atlantic. Nan A. Talese, February 2010.

Eric Puchner. Model Home. Scribner, February 2010.

Jess Walter. The Financial Lives of the Poets. Harper, September 2009.

 “With the development of interest-bearing capital and the credit system,” Marx wrote in Capital, “all capital seems to double itself, and sometimes treble itself, by the various modes in which the same capital, or perhaps even the same claim on a debt, appears in different forms in different hands. The greater portion of this ‘money-capital’ is purely fictitious. All the deposits . . . are merely claims on the banker, which, however, never exist as deposits.” The financial crisis, in other words, was a crisis of fictitious capital, whose movements make up an increasingly large portion of the American economy. In these terms, mortgage-backed securities are highly fictionalized: bonds of bonds, bonds of parts of other bonds, bonds made up of insurance bought against these bonds, bonds ever more distant from the things in the physical world to which they refer.

This fictitiousness is the subject of several works of fiction that have followed the crisis, the most explicit of which is Sebastian Faulks’s A Week in December. At the beginning of the novel, which is set in 2007, hedge fund manager John Veals describes the mortgage market to one of his traders; incredulous, the trader replies that “it sounds like this fantasy football game my son plays.” Yes, Veals agrees. This is “Fantasy Finance.” Veals will cash in on this fantasy — specifically, by betting that one of the banks heavily invested in the real estate market will be bailed out by the government — “at the invitation of the banks.” Bankers play Fantasy Finance because the government encourages it; as long as the fantasy lasts it pays, and when the bill comes due it will be sent to the taxpayers. Faulks’s novel includes lengthy technical descriptions of collateralized debt obligations and commodities markets and regulatory procedures, which have been cause for complaint for some critics. When they wonder if the world of high finance is too abstruse to make good fiction, what they are really wondering is: Is it possible for novelists to write about the times in which they live? What happens when fictitious capital is converted into fiction — and how valuable are these new instruments?

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