Liquidity Incorporated

Economic Tides and Fluid Data in Hito Steyerl's Liquidity Inc.

Christina Gerhardt and Jaimey Hamilton Faris
in Make Waves (ed. Paula Farca) U of Nevada Press, 2019


INTRODUCTION (for full essay go to academia.edu)
You must be shapeless, formless, like water.
When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle. When you pour water in a teapot, it becomes the teapot. Water can drip and it can crash. Become like water my friend.
--Bruce Lee

There are reasons to consider “fluidity” or “liquidity” as fitting metaphors when we wish to grasp the nature of the present, in many ways novel, phase in the history of modernity.
--Bauman (2)

Water is the lifeblood of human survival, liquidity is fundamental to corporate vitality.
--J. P. Morgan


Liquidity connects to and expresses our most cataclysmic contem- porary crises: be they financial asset fluctuations or climate-change- induced sea level rises. Through metaphors of water, filmmaker, artist, and essayist Hito Steyerl’s large-scale 30-minute video installation Liquidity Inc. (2014) connects topics such as late capitalism, precarious labor, climate change, and data circulation. In particular, Liquidity Inc. thematizes the economic tides after the financial crisis of 2008. The first epigraph above, quoting Bruce Lee on water, opens the video and appears as a refrain throughout the installation. Spoken over recurring images of waves, diagrams of liquid assets, storm systems, and other idiosyncratic visuals of water, the video offers a renewed engagement with Lee’s statement. What does it mean to be water, especially in the twenty-first century?

This essay examines the literal and metaphorical use of the concept of water in Steyerl’s Liquidity Inc., focusing on the following four concerns. First, water, like the installation’s very title, obviously puts forward the economic notion of liquidity, that is, the degree to which a financial asset can be accessed or brought onto the market; and the fluidity associated with financial transactions. Second, in the contem- porary economic world of fluid and ever-changing labor conditions, individuals swim in the fluctuating waters of economic tides and need to be flexible to flow in the river of capital. Thus, the video engages liquidity as an articulation of precarious labor. Third, the video considers water as weather. It discusses water as climate change–induced tsu- namis, as clouds, as torrents, as rain, as storm, and as flood. Reporters in balaclavas, invoking the Weather Underground but with a contem- porary climate change and computer cloud referencing twist, also ap- pear.1 Fourth, Steyerl attempts to engage the liquid circulation of data, of information production and dissemination, of computer-generated imagery (CGI) and of animation.

These four concerns are clear in retrospect, but the rhythm and sequencing of the video itself mixes them all together like a brewing storm in the ocean: segments are intercut in faster and faster waves, crashing down on other segments; frames generate within frames. By the video’s end, the viewer is awash in sounds and images of water, building the perception that a particular message does not need to be understood by the viewer, but rather a virtual superstorm of clichés about liquidity needs to be felt and absorbed. Steyerl’s work, here and elsewhere, is intentionally nonlinear and playful in her engagement of key issues in contemporary politics, economics, environmental stud- ies and informatics. Her keen attention to recurring deployments of water aims to expose how the poetic coincidence of “liquidity” across domains might actually operate as a veil for the integration, implementation, and catastrophic consequences of neoliberal power. Ultimately, this essay seeks to articulate the video’s claims that politics, economics, environment, and informatics now flow through each other and thus must be read together.

Liquidity Inc. opens with what seems at first to be fairly straight- forward exploration of economic liquidity learned through the lessons of the Lehman Brothers bankruptcy. Its first main sequence features a TV magazine–style story about Jacob Wood, a Vietnamese American stockbroker-cum-martial-artist. Wood is an empathetic protagonist who had been working for Lehman Brothers at the time of the stock market crash of 2008. For the camera, he retraces the day he lost his job, how he felt, as well as his efforts to rebound by making a living as a mixed martial arts (MMA) fighter and announcer. Wood’s explanation, replete with Bruce Lee’s watery metaphors about learning to adapt gracefully, seems to minimize and naturalize Lehman Brothers’ role in the financial crisis. In the video, Wood looks to the camera and says:

There were purges every year because of the economy. Especially large financial companies have had a lot of pressure, for more earnings, for their stock price to increase, and so it’s normal, kind of purging every year to lay off a certain amount of people. That’s why you’ve got to position yourself to be defensive, to be ready for those shocks . . . to have a shockproof portfolio. You’ve got to adapt to whatever is happening in the market . . . You’ve got to adapt to your situation. It’s very fluid. It’s kind of like fighting.

As Wood describes the pressuring and purging forces of the economy, questions arise for the viewer. How is it that Wood (despite hard-hitting exposés like Inside Job, 2010) does not blame particular people, corpo- rations, or governments for his financial straits? How is it that Wood even empathizes with Lehman Brothers because it was under “pressure” to perform? As the video repeats his words along with pictures of storms and water, it cultivates sensitivity toward and curiosity about how the economy is naturalized through water metaphors.

To understand the context for Wood’s point of view, it is instructive to review how watery metaphors emerged in economic thinking in the first place. The notion of the economy acting like a liquid “under pressure” has its origins in the seventeenth century, when new discoveries of hydraulic power and blood circulation were at the forefront of technological, political, and economic thought. Blaise Pascal and others described how the pneumatic properties of water multiply force and William Harvey revolutionized medicine when he described the human pulmonary system as hydraulic--blood pumping both away from and back to the heart in a ceaseless and elegant cycle (Harvey 48). Economic and political thinkers of the day quickly seized upon these paradigms. Thomas Hobbes, for ex- ample, made it a key theme of his 1651 treatise Leviathan:

Money . . . goes round about, nourishing, as it passeth, every part thereof; in so much as this concoction is, as it were, the sanguification of the Commonwealth: for natural blood is in like manner made of the fruits of the earth; and, circulating, nourisheth by the way every member of the body of man. (118)

As scholar Kath Weston argues in “Lifeblood, Liquidity, and Cash Transfusions,” metaphors of circulation and flow gained momentum when Adam Smith wrote in his 1776 The Wealth of Nations about “the free circulation of labor and stock, both from employment to employ- ment and from place to place” (57). Indeed, the concept of circulation undergirded the whole of Smith’s argument--that the natural and auto- matic forces of the free market should be able to self-regulate.

Recurring motifs of economic circulation were broadened by the literal link between water and wealth in the Age of Empire. The health of nation-states depended not only on rain, irrigation, and riverside mills but also on rivers, canals, ports, and transoceanic crossings of a far-flung trade system. Water became a primary metaphor for the “natural” state of the economy. Yet, despite the seeming fluidity of the world trade system represented by Smith, a need already existed in the early years of the stock market to establish mechanisms by which money could be shifted from one account to another and hence used to hide and absorb over-extended investment and debt.2 Two centuries later, John Maynard Keynes was the first to use the term “liquidity” in a scathing critique of such practices. In his 1936 The General Theory of Employment, Interest, and Money, Keynes argued:

Of the maxims of orthodox finance none, surely, is more anti-social than the fetish of liquidity, the doctrine that it is a positive vir- tue on the part of investment institutions to concentrate their resources upon the holding of “liquid” securities. It forgets that there is no such thing as liquidity of investment for the commu- nity as a whole . . . The actual, private object of the most skilled investment today is “to beat the gun,” as the Americans so well express it, to outwit the crowd, and to pass the bad, or depreci- ating, half-crown to the other fellow. (155)

Reflecting on the lessons of the Great Depression, Keynes insisted that liquidity was really a shell game played by investment institutions and that ultimately, it was usually the citizen and community who bore the brunt of speculation. Yet over the course of the twentieth century, the orthodoxies of liquidity have come to dominate the computerized probability-driven system of futures trading and hedge funds. As J. P. Morgan asserts in its marketing brochures, “Water is the lifeblood of human survival, liquidity is fundamental to corporate vitality.” It celebrates the power of the corporation to concentrate global cash flow and further claims that “web technology enables active, automated liquidity and investment management.”3 Yet the average consumer’s confidence in these seemingly fluid and automated systems, as many have argued, actually hid the calculated activities of firms like Lehman Brothers, who knowingly bundled subprime mortgages that led to the 2008 crash (Langley; Pasanek and Polillo). As this brief overview shows, the laws of hydro-physics do not govern economics: economics has simply drawn on its language.

Steyerl’s Liquidity Inc. emphasizes the confusing build up of liquid and water metaphors in Wood’s language by pairing them with visual montages of CGI waves, water drops, texts referencing water, clouds, tsunamis, and more. As these images begin to break up the narrative, they also challenge the viewer’s understanding of the 2008 financial crisis and of Wood’s interpretation of it. The video’s approach is both radical and subtle in that it eschews an exploration of the cause and effect of the crisis (as other documentaries have done) for an exploration of the persistent metaphoric and affective use of “liquidity.” This visual strategy of exaggerating the simple juxtaposition of economic operations to the natural pressure systems of waves comments on how the notion of the economy as a “natural” ecology of water is instrumentalized throughout the cultural sphere, used, in effect, to displace and disguise the human forces at work.

Steyerl also brings home this point narratively at the very end of the opening documentary sequence by also inserting some found foot- age of a folksy-looking nineties financial advisor wearing a cream col- ored turtleneck who explains the virtues of liquidity for the individual investor. This short clip plays in a box at the upper right corner of a larger screen in which Wood spars with another fighter. The expert investor’s voice is privileged while Wood fights silently. In the clip, the investor explains how simple it is to convert certain assets (a home mortgage or stocks) quickly into cash before, as he puts it, “financial disaster strikes.” This scene within a scene brings the contradictions of Wood’s situation to the fore. Even Wood, himself a stockbroker, did not have enough economic liquidity to avoid the market “shocks” of 2008. This reminds us of Keynes’s comment on “liquidity”--that there really is no such thing at the individual or community level. Even at the corporate level, Lehman Brothers did not escape bankruptcy. Still, if the construct has any applicability, it is for corporations who are “too big to fail” (like J. P. Morgan and Bear Stearns) and can rely either on huge global networks of cash flow or government tax-payer “bail outs.” Lacking financial liquidity, Wood’s only option is to “be fluid” in his changing work situation. ........ (see link above for full text)