Der Souveränitätseffekt by Joseph Vogl (review)

In his newest book, Joseph Vogl continues his critical investigation of assumptions about the market in modern Western capitalism. Der Souveränitatseffekt extends on Das Gespenst des Kapitals (2010), and deepens critical reflections on the intermingling of economics and politics. In this work, Vogl unmasks the supposed juxtaposition between the market and the state as a fictitious idealization. While critiques of capitalism tend to stress how economic imperatives exert disproportionate influence over politics, these criticisms view the economy and politics as separate realms. It is the very idea of such a division which Vogl attacks. His criticism not only claims that political-economic dynamics currently cannot be neatly separated, but that these realms have been closely intertwined since early modernity. Der Soueränitätseffekt provides an intellectual history of political economy since the seventeenth century, particularly highlighting how state sovereignty has become both more autonomous and more restricted.

Vogl offers critical readings of political-economic theory of Hobbes, Amthor, Rousseau, Montchrétien, Locke, Hume, and Smith (chapter 2). He then summarizes early instantiations of public debt to private debtors (chapters 3 and 4), and portrays how the development of central banks has established a "fourth branch" of governing power (vierte Gewalt) that evades customary legitimation structures. Vogl suggests new terminology for critiquing the developments that have led to current debt and sovereignty crises. These include "seigniorial power" (seignioriale Macht), "fourth branch" (vierte Gewalt), and "sovereignty reserves" (Souveränitätsreserven). The terms initially come across as unwieldy, though potentially useful in bringing together fields of study such as philosophy, literary and cultural studies, and political and economic theory.

Vogl's concept of seigniorial power attempts to overcome shortcomings of political (and) economic theory from early modernity to the present. Vogl claims that political theory has relied too narrowly on either constructive or deconstructive engagement with concepts of political sovereignty, while economic theory has too heavily focused on autonomous economic systems (101–102). Seigniorial power, by contrast, is marked less by clear demarcations of kinds of power than by its "informal, diffuse, unstable" nature and its untranslatability into a concise system (102). He is careful to distinguish between seigniorial power and financial power, which he ascribes to modern high finance, big business, and their social influence (101). Seigniorial power refers more narrowly to the rise of sites of "politico-economic zones of indifference" (101). Vogl distances himself from more traditional terminology of Klassenkampf, Akkumulationsregime, and Überbau, but does so at the price of his term becoming too elusive. Though successful in highlighting the limits of traditional dichotomies, Vogl's insistence on the vacuous nature of seigniorial power leaves the concept itself too vacuous. The reader wonders how seigniorial power helps elucidate, critique, and amend its alleged problematic nature.

Vogl's assessment of reserve banks (particularly of the US Federal Reserve System) and his coining of the term "fourth branch" (vierte Gewalt) are more intuitive and clearly elucidated, thereby helping to illustrate how seigniorial power manifests itself. As a "public institution in private hands," the Fed enables a "two-fold porousness for fiscal and finance-economic, political and private sector ideas of intervention" (149–150). Especially as an "independent entity within the government" (151), the Fed appears problematic. It underlies operations and procedures with minimal legitimation and is marked by unclear location. Vogl rightly points out that the Fed brings about and fortifies a separation between a democratic voting public and a disproportionately influential investing public (158). Not only does the Fed enable financial interests to shape political decision making, it does so with alarming secrecy and excludes the democratic voting public. "Thus, behind the … Fed, there looms a new level of sovereignty for its actions and decision making procedures, which cannot be revised by any 'higher authority'" (159). What rightly troubles Vogl is the degree to which the establishment of such "fourth branches" betrays their own self-proclaimed neutrality. Central banks have become parademocratic, or "literally para-sitic" (198). Vogl highlights the interweaving of three processes in...