Fire and Spark

Throughout the 2010s, Larry Summers repeatedly insisted that the laws of technological progress had defanged the problem of overinvestment. As his putative inspiration, he cited Hansen’s idea that firms were saddled with huge fixed investments, unable to pull up stakes and therefore stuck in the mire of the long haul. Now, Summers’s fairytale went, smart phones and apps and Zoom calls and office space rented by the hour had changed the equation, such that a law firm could be run out of one’s basement. In this perfect and paradoxical inversion of Hansen’s original formula, the secular stagnation of the contemporary period was due to the fact that starting an enterprise was so easy, and required so little capital. Capital was not stuck; it had just become unnecessary.

Oh, what a difference a few years make. When DeepSeek wiped $600 billion off the market capitalization of Nvidia, it signalled that the massive investments of the AI giants – all those data centres and chips purchased at great cost – were liable to lose their value. If only the lords of Silicon Valley had read their Aftalion, who had compared the rhythm of investment to people stacking logs on a fire in a cold room until all at once they turned it into a sweltering sauna. The only solution? Run for the exits – that is, cut back on their investments and defend the value of what they have.

But no, they had never come across, or understood, or if they had understood then they had forgotten, the Frenchman’s metaphor. So they simply defaulted to xenophobic bigotry. The Chinese, they insisted, could not possibly be as ‘creative’ as the Californians. Their technology was bogus; the tests were fake; they had been given a leg up by their government, whose propaganda they were helping to diffuse. (Presumably they hoped that no one looked too deeply into their own compromised position in this regard).

One of the small dialectical pleasures still left to whatever intelligences remain unincorporated is to observe, in this moment, how deeply capitalists hate capitalism, with all its inviolable laws and contradictions. And so, in yet another demonstration of the non-linearity of relevance we turn once again to Mr. Ulyanov with his talk about highest stages and the transmutation of the economic struggle into a directly political one; we await the spark dear comrade, we await the spark!

Read on: Cédric Durand, ‘Fragile Leviathan?’, Sidecar.