Special Section: Eurocrisis, Neoliberalism and the Common

Finance, Austerity and

Commonfare

Theory, Culture & Society

2015, Vol. 32(78) 5165
! The Author(s) 2015
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DOI: 10.1177/0263276415597771
tcs.sagepub.com

Andrea Fumagalli
University of Pavia and Effimera Network

Stefano Lucarelli
University of Bergamo and CES CNRS Universite Paris 1

Abstract
The links between the crisis of subprime mortgages and the so-called crisis of
European sovereign debt are sometimes concealed, so as to create a veritable
sense of shared guilt meant to sanction the legitimacy of the austerity policies that
have been imposed by virtuous Northern European countries on the undeserving
countries of Southern Europe. We will analyse three main aspects of the current
crisis: (1) we will interpret the austerity policies that today characterize the eurozone as the result of financialization; (2) we will define the state of permanent crisis
as an instrument of governance characterized by specific economic policies; (3) we
will show how all this unfolds at a stage of capitalist development wherein a new
constituent process begins to take shape in a fragmented but nonetheless significant
manner, and how this process is reclaimed by the very subjectivities upon which the
accumulation of cognitive and relational skills depends in order to reproduce itself:
the Welfare of the Common.
Keywords
austerity, cognitive capitalism, Commonfare, European crisis, financialization

Introduction
The crisis continues and is becoming the pretext for a large redistribution
of wealth from the debtors to the creditors. The links between the crisis
of subprime mortgages and the so-called crisis of European sovereign
debt are sometimes concealed, so as to create a veritable sense of shared
guilt meant to sanction the legitimacy of the austerity policies that have
been imposed by virtuous Northern European countries on the undeserving countries of Southern Europe. Those who have accumulated too
many debts must pay, that is, they must submit to constraints imposed
from the outside. This might even mean including a balanced budget
Corresponding author: Andrea Fumagalli. Email: afuma@eco.unipv.it
Extra material: http://theoryculturesociety.org/
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Theory, Culture & Society 32(78)

amendment in their constitution, thus setting into motion an explosive

process meant to reinterpret and limit those parts of the constitution that
sanctioned the rights upon which the so-called Fordist compromise
between capital and labour was established. After all, the German
word for debt is Schuld, which means, rst and foremost, guilt.
The critique of the ideology that regards public debt as a form of sin
has been articulated in many quarters, and it has drawn together an
unusual group of economists, ranging from those who espouse the
New Keynesian Synthesis (such as Nobel Prize winners Stiglitz and
Krugman, and academics from the London School one of the shrines
of economic orthodoxy such as Paul de Grauwe) to heterodox economists (such as the post-Keynesians who work at the Levy Institute of
Bard College, the so-called Economistes Atterres in France, and some
Marxists who interpret this crisis in terms of the tendency of the rate of
prot to fall) (see Askenazy et al., 2010; Bibow, 2012; De Grauwe, 2011;
Dumenil and Levy, 2011; Krugman, 2011; Stiglitz, 2012).
Ever since 2007, the neo-workerist interpretation has attempted to go
even further. While remaining focused on the relation between capital
and labour, the mechanisms for the extraction of surplus value, and the
emancipatory potential of living labour, it has proposed that the crisis
should be viewed as involving the redenition of the sovereign practices
on which the process of valorization is organized in contemporary capitalism (see Fumagalli, 2011b; Fumagalli and Lucarelli, 2007; Fumagalli
and Mezzadra, 2010; Lucarelli, 2010; Marazzi, 2010; Vercellone, 2008).
We will analyse three main aspects of the current crisis. First of all, we
will interpret the austerity policies that today characterize the eurozone as
the result of nancialization. Since 2007, the redenition of the measure,
creation and capture of value, which characterizes the new regime of
growth, has become more prominent. The process of nancialization
appears in fact as a practice of social control that subsumes life itself
into the process of valorization. There are two basic reasons for this: on
the one hand, the debt that weighs on families appears as the exact opposite of social ownership founded on welfare institutions; on the other hand,
this phenomenon has been supported by the ideology of wealth eects,
through the spread of conventions meant to eradicate the conicts over
both wages and the contents and modes of production and reproduction.
The core contradictions underlying the current crisis can be understood
only within the context of the structural changes that have accompanied
the crisis of the Fordist paradigm (see Fumagalli and Lucarelli, 2011a).
Second, we will dene the state of permanent crisis as an instrument of
governance characterized by specic economic policies. We will see how
austerity represents a new phase in the exercise of power, necessary to
revive nancialization.
Finally, we will show how all this unfolds at a stage of capitalist development wherein a new constituent process begins to take shape in a
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53

fragmented but nonetheless signicant manner, and how this process is

reclaimed by the very subjectivities upon which the accumulation of
cognitive and relational skills depends in order to reproduce itself: the
Welfare of the Common. Despite the numerous attempts to turn human
life into an economic value (through attery, imaginaries, blackmail,
violence and total commodication), life invariably produces an excess
that escapes capitalist control and cannot be measured in capitalist terms.

Austerity as the Consequence of Financial Command

Retracing the phases that have led politicians to abandon the forms of
public intervention sustaining employment and the production of goods,
and to favour instead interventions intended to direct liquidity towards
nancial markets, amounts to unveiling the political structures that sustain nancial operators. We would like to do so starting from an analysis
of nancial behaviour, shunning all conspiracy theories. Great nancial
societies operate according to modalities that can be explained with reference to the concept of collusive oligopoly: operators implicitly agree on
selling and purchasing strategies so as to maximize their joint prots.
These implicit agreements rest on conventions, that is to say, on cognitive
constraints. We put forward two theses in order to describe the two main
properties of nancial conventions:
First thesis: the more concentrated the management of the savings
invested in the nancial markets, the more likely it is that a
long-lasting convention will emerge, and that expectations will
prove self-fullling.
As far as the banking sector is concerned, the data from the Federal
Reserve show that in the US alone, from 1980 to 2005, there have been
11,500 mergers (around 440 per year on average), which have reduced the
number of banks to less than 7500. By 2011, ve BFs (brokerage rms
and banking divisions: J.P Morgan, Bank of America, Citybank,
Goldman Sachs, HSBC USA) and ve banks (Deutsche Bank, UBS,
Credit Suisse, Citycorp-Merrill Lynch, BNP-Paribas) gained control
over more than 90% of all the derivatives. In the stock market, merging
and takeover strategies have drastically reduced the number of publicly
traded companies.1
In this process of concentration, institutional investors (which include
all those nancial operators BFs, banks, insurance companies that
manage nancial investments on behalf of third parties, and that Keynes,
in the 1930s, labelled professional speculators) play the main part.2
Second thesis: The larger the resources traded on the stock markets
that is, the greater the savings directed towards them the more
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these conventions inuence the behaviour of non-professional

nancial operators, giving rise to a mimetic rationality.
Stock markets, in other words, are places in which a new rule of
valuation is established, one that is founded on the collective judgement
of nancial operators. As Andre Orlean (1999) has noted, nance is a
transgression; it is an articial world in which are instituted temporalities
and forms of valuation that break with the productive times and constraints typical of traditional management of companies and we must
add of society as a whole. The recent history of nancialization is
tightly interlaced with the emergence of a new technological paradigm,
and with the cycle of struggles starting in 1968. It is possible to identify a
perverse relation between the reinforcement of nancial command and
the emancipation of living labour from the forms of command characteristic of Fordism. In this sense, on the basis of these two theses, we can
articulate the following corollary.
Corollary. Financial conventions become all the more stable the
more they subsume desires and perspectives linked to the emancipation of heterogeneous subjectivities from capitalist relations.
The calls for emancipation from the command over the rhythm of
production that have contributed to breaking the so-called Fordist
compromise and were claimed by the working class have at the
same time contributed to a crisis of working time, which has been
further exacerbated by the spread of ICTs. The recourse to nancial
markets represents rst of all an attempt to assign a new measure of
or, to be more precise, a new perspective on the organization of
productive processes and, at the same time, a promise of prot to
which reality must adjust. In order to impose this form of command
on reality, it is necessary to share the accompanying risks with as
many subjects as possible. In this respect, there is nothing better
than to subsume needs and desires, and to incorporate into nancial
valuation the main items of social expenditure (pensions, health,
public utilities), in addition to all the intangibles, the potentialities
expressed by new sciences and technologies.
Since 1984 when the National Association of Security Dealers introduced the possibility of evaluating intellectual property rights nancially,
and pension funds were allowed to invest in high-risk shares (see Orsi and
Coriat, 2003) and up to the present, the evolution of nancial markets
has been characterized by many events (see Fumagalli and Lucarelli,
2011a). And yet it is possible to identify one recurrent feature: whenever
the risk of collapse is realized, national economic policies always turn out
to be a useful source of the liquidity necessary to set transactions in the
nancial markets back into motion.
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55

The eect of the subprime crisis was not the collapse of nancial markets. Instead, public interventions, requested above all by institutional
investors, reduced private debt and increased the public one.3
Starting from 2008, the highest capital gains made by institutional
investors have originated from the exchange of CDS (Credit Default
Swaps) derivatives and, in particular, from those derivatives related to
the risk of public default, through the following mechanism: a few big
nancial rms begin to sell the government bonds of those countries
whose chances of nancing, in their opinion an opinion which is sanctioned by the credit rating agencies might be dicult. What follows is
the depreciation of the bonds, which creates negative expectations as to
their value in the future. The interest rates on the newly issued bonds
begin to rise, widening the spread between these rates and those on the
government bonds of countries deemed more secure (such as the German
ones). This tendency feeds on itself, up to the point where the growing
crisis forces the European Central Bank (ECB) to intervene and to buy
bonds in exchange for new liquidity, while demanding that national governments adopt drastic economic measures to reduce the public decit.
At the same time, the value of the derivatives related to government
bonds (CDS) grows exponentially, in proportion to the widening of the
spread on interest rates. This allows the owner of CDS to make large
capital gains.4
Note how, among the European countries, those with the largest
public debts are also those in which the rates of family savings are the
highest and private debts the lowest. If, indeed, we were to consider the
overall situation of debt (public debt + private debt), Great Britain and
Denmark would be the most indebted nations, followed by Germany and
France. According to this ranking, Italy and Greece would be among the
most virtuous countries.
Austerity is therefore the consequence of the logic of nance.
These speculative manoeuvres, in passing, have not hit the countries
with the highest risk of default such as Great Britain and Denmark
(where savings are low and the overall amount of debt is over 400% of
the GDP [gross domestic product]) but those which, within the prevailing technological and valorization paradigm, are strategically less
relevant, as reected by their balance of trade, which is negative (see
Lucarelli et al., 2013).
The policies imposed at the European level are meant to achieve three
interconnected objectives:
1. to create non-reimbursable liquidity for the nancial system, in order to avoid
the domino eect of private bankruptcies;
2. to privatize public debt and bring it under the aegis of nancial markets, while
at the same time increasing private debt;
3. once the liquidity has been provided rst by increasing public debt to cover
the costs of the subprime crisis, then by privatizing the debt by means of
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austerity policies to dene, within Europe, a new division of the debt in
line with the evolution of the cognitive division of labour.

Economists who are critical of austerity policies have rightly stressed

how these policies will not succeed in achieving their set objectives, that is
to say, a reduction of the ratio between public debt and GDP. The
argument is totally understandable: by adopting draconian measures to
reduce public expense and increase taxation, the almost immediate consequence is by virtue of the negative income multiplier eects a
contraction of GDP (the denominator of the relation), which also risks
nullifying the eorts to reduce the public debt (the numerator of the
relation). The end result is that, instead of decreasing, the ratio may
increase, or, in the best case scenario, may remain unchanged.5
According to Eurostat, the debt/GDP ratio across Europe (27 member
states) has risen from 83.5% in the rst trimester of 2012 to 84.9% in the
third, while if we only consider the 15 states of the eurozone, debt now
represents 90% of the GDP.
We are not witnessing the triumph of irrationality. The reasons behind
austerity policies are understandable if we put aside the ideology that
animates politicians statements and accept instead that these policies do
not aim to renew economic growth. They aim instead to feed a process of
accumulation and expropriation that is centred upon nancial markets.

The State of Permanent Crisis

Austerity appears therefore as a response to the crisis of capitalist governance that is centred on nancialization. The instability of a regime of
accumulation founded on nancial markets has become especially evident after the bursting of the subprime bubble at the end of 2007, even
though, as already noticed, the profound reorganization of the modalities
of valorization and the new forms of command and hierarchy typical of
contemporary capitalism resist it. This is a capitalism in which the
exploitation of knowledge of both the knowledge set in motion by
living labour, and the knowledge incorporated in constant capital,
computers, software, investments in research and development, patents,
etc. is central. The expression cognitive bio-capitalism may appear verbose, but it has the advantage of focusing attention on the variables that
really explain the role of nancial markets. In relation to the structural
changes brought about by the increasing importance of knowledge,
nancial markets:
1. continuously redene the unit of measurement of value and nancing of
investment activities;
2. seek to displace the welfare state as the insurer against collective risks, while
spreading a worldview in which the capacity to manage risk is dependent on
the capacity to manage savings with nancial instruments;
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57

3. promote the privatization of welfare systems and delegitimize expansive scal

policies, thus imposing themselves as the only instrument for the regulation of
economic growth and the distribution of income. This is made possible by the
processes of expropriation of social cooperation, which, in the case of an
optimistic outlook on the future value of nancial activities, activate a nancial multiplier with expansive eects on the nal demand (Fumagalli and
Lucarelli, 2011b: 322).

And yet the system of political and economic governance that has thus
been established has not been able to ensure even the lowest degree of
stability. This, eectively, was impossible, because the arrangement that
was to ensure such stability was an unlimited expansion of nancial
markets sucient to produce the (surplus) value necessary to overcome
the negative and distorting eects on the demand resulting from the
increased concentration of revenues and the expropriation of social
wealth (see Fumagalli and Lucarelli, 2011b: 3245).
The set of norms which have been imposed which either directly or
indirectly impose constraints on support for any expansive economic
policies or any experimentation with social policies that do not entail
the management of resources by means of nancial markets articulate
a governance which nds its justication in the publicly proclaimed state
of emergency: from the war on terrorism in the rst decade of the new
millennium up to the nancial crisis itself.
The state of permanent crisis has become an instrument of governance
(Fumagalli, 2013), a reason for the establishment of norms that entrench
a rigidly univocal worldview (there is no alternative). In Europe, economic policy decisions are enframed by two principles.
The rst of these has to do with the institutional constraints which
prevent the ECB from operating as the lender of last resort, that is to say,
as the unfettered purchaser of public bonds on the primary markets.
If this were not the case, the possibility of realizing capital gains by
means of the speculative operations described above would, de facto,
disappear. The ECB can only intervene on the interbank and secondary
markets, in order to guarantee the provision of liquidity, which is the
lifeblood sustaining nancial speculation. The ECBs monetary policy
manoeuvres thus appear to be conditioned rst of all by the need to
sustain exchange in the nancial markets and, consequently, by the potential for speculative pressure on public debt bonds. Even when the ECB
intervenes in order to restructure public debt (as in the Greek case), its
main preoccupation is, above all, to guarantee the resolution of debt in
favour of the creditor banks, either through direct injection of liquidity
into the banks involved or through the obligation to guarantee (thanks to
forms of political-scal receivership) the payment of interest rates so high
(around 30% in the Greek case) as to repay the creditors in the space of
four to ve years, and in a more than generous way. All this is
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undertaken with no regard for the socio-economic situation of the country or for any form of democracy.
The second principle has to do with the decision to implement restrictive scal policies, as the only measure capable of coping with nancial
speculation, by means of reduction of public spending. As already
evidenced, this economic policy, sometimes imposed on some countries
by institutional coups detat (golpi bianchi), has no chance of achieving
the objectives set to justify its implementation. We are witnessing the
beginning of a vicious circle, in which even the strongest countries
economically (such as Germany) risk falling into a recessive spiral that
constantly feeds on itself. After having withstood the crisis of European
debt for two years, taking advantage of a weak euro and the resultant
increased competitivity of exports outside the eurozone, Germany too is
now showing the rst signs of a possible crisis. The German government
has now modied its forecasts of growth.6
This situation also reverberates on the credit and nancial markets,
within which the divisions between the great BFs and banks that operate
predominantly at the national level are progressively widening. The
former do not seem to have been overly aected by the crisis.7 The situation of smaller banks, especially those based in the peripheral countries
of the eurozone, is much worse, because, despite the signicant injections
of liquidity by both the Federal Reserve and the ECB, they are facing
reductions of assets and therefore prots, sudden drops of ROE (return
on equity), and increasing percentages of bad debt relative to the total
amount of credit. The crisis of nancial and credit markets takes on
many dierent forms, according the dimensions and the type of activity
of each individual nancial institution. In this respect, the crisis accelerates the nancialization of the credit market and the creation of revenues
and speculative bubbles, at the expense of investments and the creation
of jobs, through a constant process of concentration and through the
selection and marginalization of the banks that do not hold the nancial
portfolios necessary to inuence the dynamics of speculative conventions. The end result is the creation of a nancial economy of production
(see Fumagalli and Lucarelli, 2011a), revolving around the becomingrent of prot (see Vercellone, 2010).
De facto, the ECB has supported an expansive monetary policy, but
without the traditional eects. The reduction of the interlending rate
implemented by central banks has not corresponded to a reduction of
the interest rates on commercial credit. The latter, in fact, are increasingly dependent on the speculative dynamics of nancial markets and are
becoming less and less controllable by monetary authorities. Given the
negative prospects for prot and the excessively high interest rates, the
liquidity released to the credit market has not increased the oer of
commercial credit and, rather than becoming a driving force for investments and growth, it has been used to buy the government bonds of
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59

indebted states. We are thus witnessing a sort of privatization of public

debts at the hands of the banking sector. Banks are becoming the creditors of states, thus taking the place of families, whose savings are progressively shrinking due to the reduction of incomes (see Marazzi, 2013).
In other words, the growing liquidity of the central banks has been
hoarded by nancial markets and used for speculative and/or precautionary aims (in order to prot from the high interest rates).
This shows the real function of expansive monetary policies in a
regime of accumulation controlled by nance, where central banks are
autonomous and therefore operate only in the interests of nancial operators. The crisis cannot be solved because the institutional architecture in
which it unfolds is devised in order to preserve the state of crisis.
The proof of this is the failure of the rst attempt to come to the Basel
III Accord, which aimed to reduce the leverage ratio and increase the
amount of real capital of nancial institutions, so as to ensure greater
stability at the expense of nancial speculations. The agreement reached
was a race to the bottom that left the potential for speculation completely
unaltered. This means that, while the economic and credit crises last,
nances strategy is to continue to feed speculative bubbles, as the only
source of prot, in the form of nancial revenues.

The Neo-workerist Perspective: For a Commonfare

On closer inspection, what we have analysed so far is above all a crisis of
capitalist valorization. Valorization is founded on the replacement of
modalities of socialization independent of capitalist and nancial logic
(like some aspects of the system of production and the distribution of
welfare) with the new forms of socialization imposed by nancial
conventions. This expropriation of the Common, however, points to a
destructive and idiotic horizon of disintegration. Despite the profound
processes of organizational and technological renewal, which have
enlarged the base of accumulation by imposing through the blackmail of need (income slavery) the valorization of social and human
cooperation, this process cannot bring about a long-lasting growth of the
capital gains hoarded in the nancial markets, other than in an extremely
partial way.
While confronting the perverse eects produced by the state of permanent crisis, which has become the mode of governance across Europe,
the ongoing discussion in the neo-workerist area has not limited itself to
observing the possibility of the eurozones institutional collapse, as a
consequence of the unsustainability of the gap between the balance of
trade of creditor countries (with a permanent surplus) and that of debtor
countries (with a permanent decit). By focusing on the capitallabour
relation and living labours potential for emancipation, neo-workerism
has rather drawn attention to the possibility of a radical restructuring of
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debts, which is capable of limiting the inuence of nancial speculation,

and to interventions that aim to redene the policies of welfare, income
distribution, reappropriation of the surplus value produced by social
cooperation, and, ultimately, to acknowledge that excess of value
which escapes capitalist accumulation.
In this article, we have argued that the weaknesses of the ECB and,
implicitly, of the euro, can be explained by centring the analysis on the
role of nancial markets as the locus of governance in modern cognitive
bio-capitalism. The issue at stake is the denition of a counter-power
capable of imposing new forms of valorization that are opposed to the
logic of nance. On what foundations could it be instituted?
A rst point for discussion is the proposal to restructure that part of
the debt which is kept in the portfolios of big nancial multinationals and
which has been the object of nancial speculations.8 This perspective
presupposes a mobilization at the European level, as will become clear
in the following considerations. As far as the Italian case is concerned,
the restructuring would concern a percentage of the public debt that
uctuates between 20% and 30% (data from J.P. Morgan). In practice,
it would be a question of starting a controlled default, as happens in
bankruptcy law, when one modies the condition of a debtcredit
contract along the way. To this end, one might imagine freezing this
part of government debt until its expiration date, thus shielding it from
the speculations of big nancial rms, while replacing it with European
government bonds (on the model of Eurobonds) outside the free circulation of capital, with an ocial interest rate, which might be xed,
for example, at 23%.
This operation is technically feasible, but it is a politically complex
one: in fact, it would be necessary to set limits to circulation in capital
markets and to create a European agency owning these bonds, as guarantor. This new European agency could not and should not be the ECB,
but rather a piece of a new European institutional architecture that aims
to establish a common scal policy capable of dethroning national sovereignty over taxes and public spending. Note that in Greece this process
of restructuring has been implemented twice over the course of 2012
according to dierent modalities, but with similar aims (see Fumagalli,
2012). The public debt has been reduced by more than 30% through
the devaluation (of more than 60%) of the government bonds
owned by European banks. In order to compensate for these losses in
capital account, creditor banks have been granted the payment of interest of around 30% and an injection of liquidity by the ECB. Hence,
we are dealing with a default controlled from the top down. What
should be imposed, instead, is a default controlled from the bottom
up, where there is no compensation for the devaluation of government

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61

bonds other than the payment of interest rates in line with those of
the market.
However, it would be necessary to take one more fundamental step:
the resources freed by the reduction of the public debt must be used to
nance and institute a Welfare of the Common capable of valorizing
what today is devalued. The notion of Commonfare starts from the presupposition that social cooperation is the production of the Common.
Throughout the evolution of capitalism, common goods have modied
their structure many times. Common goods related to earthly survival
and primary consumption (air, water, food, shelters, spaces of socialization, etc.), which are inherent to human action, have been complemented
by new common goods that aect not only the composition of consumption and the meaning of subsistence levels, but also the composition of
the inputs and, therefore, the process of valorization and the logic of
accumulation: above all, knowledge (i saperi). We dene the Common as
the potential to expand social cooperation that attends the paradigmatic
transformation of productive forces and the prominence of new forms of
labour in contemporary capitalism, such as the increasingly socialized
production of knowledge. Consequently the Common is not relegated
to specic common goods such as water, for example.9
To struggle in order to institute a Welfare of the Common
(Commonfare) would therefore mean devising a politics that overcomes
the current crisis and is capable of:
. subverting the hierarchies imposed by free trade and reappropriating primary
and public goods, material and immaterial, which, in the last 15 years, have
undergone extensive processes of privatization, enclosure and
nancialization;
. guaranteeing an unconditional basic income as the primary income, that is to
say, as the remuneration of productive life, as an instrument of distribution
and not redistribution;
. thinking up alternative nancial and credit circuits in which money would
become an instrument of the common, in favour of practices of self-management of social wealth, which today have been expropriated by processes of
indebtedness and by nancial speculation (see Baronian and Vercellone, 2013;
Lucarelli, 2012; Marazzi, 2012).

As you can see, these proposals presuppose the de facto overcoming of

the foundations underpinning exploitation in cognitive bio-capitalism: private property and, in particular, the privatization to which access to
money is subjected, and the blackmail of need as an instrument of control
and governance of women and men, who are forced to restrain the forms
of their socialization within increasingly individualized and precarious job
relationships. It is a matter of devising an alternative here and now, as a
possible response to the permanent state of crisis in which we live.

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Acknowledgements
We are indebted to several people for discussion of these issues over the years, most
notably the comrades of the UniNomade network, which ended in 2013, particularly
Christian Marazzi and Carlo Vercellone. We would like also to thank Tiziana
Terranova. But overall were indebted to the psychedelic support by the Grateful
Dead, Jimi Hendrix and The Phish music. The usual caveats apply. The TCS editors
would like to acknowledge the help of Paolo Palladino in the general editorial process for
the section and improving the translations.

Notes
1. The first ten companies with the highest capitalization in the stock market,
which represent 0.12% of the total 7800 publicly traded companies, own 41%
of the total value, 47% of total profits and 55% of all registered capital gains.
For a deeper analysis, see Caiani et al. (2014).
2. According to data from the Federal Reserve, the shares managed by institutional investors have a nominal value of US$39 billion, that is, 68.4% of the
total, and they have increased 20 times in the last 20 years. Starting from
2012, this share has further increased thanks to the spread of sovereign debt
bonds.
3. In the eurozone, during the period 20079, the accumulated (i.e. public +
private) gross national debt increased from 382% to 443% of GDP (+8%
per year), as opposed to a yearly increase of 5% during the period 19952007.
While private debt increased by 8% per year, public debt increased by 14%
per year, after having actually decreased during the previous decade.
4. The Italian case is exemplary. At the beginning of 2102, Deutsche Bank, one
of the five banks that control the market of CDS, began to sell Italian government bonds (BTPs) amounting to E7 billion. As a consequence, the value
of BTPs began to decrease, while the spread with respect to German bonds
began to increase, rising above 300 points first, and above 600 points by midNovember. In the space of a few months, interest rates rose from 3% to 7%,
which made the interest costs increase by around E89 billion. At the same
time, the value of CDS increased almost fivefold, allowing enormous profits
in terms of potential capital gains.
5. Istat data (April 2013; see: http://www.istat.it/it/archivio/debito+pubblico)
show that the public debt in Italy has risen to 127% of GDP, increasing by
more than 3% in comparison to the previous trimester (123.7%), which was
the highest since 1995, when it was at 120.9%. According to the DEF
(Documento di Economia e Finanza), published in April 2013, Italian
public debt will set a new record in 2013 (Ministero dellEconomia e delle
Finanze, 2013). In fact, precisely because of the contraction of GDP (-2.4%
in 2014), the Italian government has reviewed its forecast on the debt/GDP
ratio, which has risen from 127% to 130.4% (including the financial support
to the eurozone).
6. The forecasts for 2013 have been lowered from 1.6% to 1%.
7. Goldman Sachs quarterly profits are more than gratifying, and amount to
$1.51 billion in the business branch (read: financial speculation) in the third
quarter of 2012. This result has exceeded by far the analysts forecasts,
while marking an inversion of the previous years trend, when in the
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63

same period it lost $393 billion. After dropping in the first semester, profits
at Deutsche Bank the architect of the speculation on the derivatives
(futures) on Italian government bonds have increased by 3% (E747 million)
in the third trimester. The analysts had forecast E564 million. Between July
and September 2012, UBS, the largest Swiss bank, made a net profit of 1.02
billion Swiss francs, but it had negative prospects, to the point that it decided
to cut 10,000 jobs from its global workforce by the end of 2012 2500 of
whom were based in Switzerland. The first data published in 2013 on the
profits of the largest multinational companies indicate a growth of 2.5% for
the firms listed in the Standard & Poors 500. This level, however, is still
deemed insufficient in order to ensure stability.
8. This discussion was triggered by the reflections that accompanied the demonstrations of the Indignados of 15 October 2011 (see Fumagalli, 2011a).
9. Conversely, the naturalistic approach leads to a subordinate position that is
not able to overcome the publicprivate dichotomy. In Toni Negris recent
writings, the Common refers to a form of socialization that breaks down the
former divisions between work and life, between production and reproduction, and between material and immaterial (see Curcio and Ozselcuk, 2010
and Vercellone et al., 2015).

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Andrea Fumagalli is Professor in Political Economy at the University of

Pavia and in Theory of Firms at the University of Bologna. His research
interests are in the monetary theory of production, the theory of rms,
income distribution (especially the basic income proposal) and cognitive
capitalism. He has published in, among others, the European Journal
of Economic and Social Systems, the International Journal of Political
Economy, Multitudes, and the Review of Social Economy and Small
Business Economics. He notably co-edited Crisis in the Global
Economy: Financial Markets, Social Struggles, and New Political
Scenarios (MIT Press/Semiotext(e), 2010) and Cognitive Capitalism and
its Reections in South-Eastern Europe (Peter Lang, 2011). He has been
vice-president of BIN-Italia (Basic Income Network) and is a member of
the executive committee of BIEN (Basic Income Earth Network). He was
one of the organizers of the Mayday Parade in Milan and is also active in
the Emera Network. He is involved in the Managing Committee of the
European COST project on Dynamics of Virtual Work (http://
www.cost.eu/COST_Actions/isch/Actions/IS1202).
Stefano Lucarelli is Assistant Professor in Political Economy at the
University of Bergamo and Membre Associe at CNRS, Universite du
Paris 1 Pantheon-Sorbonne. His interests include the monetary theory
of production, nancialization, complementary currencies and cognitive
capitalism. He has published in a wide variety of journals including the
Review of Social Economy, the International Journal of Political Economy
and the Journal of Evolutionary Economics. Together with Giorgio
Lunghini, he has written The Resistible Rise of Mainstream Economics:
The Dominant Theory and the Alternative Economic Theories (Bergamo
University Press, 2012). Together with Marco Veronese Passarella, he
edited New Research Perspectives in the Monetary Theory of Production
(Bergamo University Press, 2012). He is involved as senior researcher in
the D-CENT project (dcentproject.eu).
This article is part of the Theory, Culture & Society special section,
Eurocrisis, Neoliberalism and the Common, edited by Tiziana Terranova,
Adalgiso Amendola and Sandro Mezzadra.

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