Financial Literacy: A Panacea for Economic Crises and Economic Risk or a Technology of Domination and Alienation?

Chris Arthur

Economists and politicians speak of too much productive capacity while people go hungry, have no shelter or are thrown out of work. How can this state of affairs be rectified? In the aftermath of the 2008 economic crisis, financial literacy has gained increased prominence in policy discourse and is touted as a solution to individual and national economic well-being. Financial literacy is a Federal Government initiative currently being prepared by the Canadian National Task Force on Financial Literacy (Pinto 2009). The task force outlines how Canadians can improve their financial literacy through the dissemination and teaching of information provided by various government, private corporations and non-profit community organizations (Task Force on Financial Literacy 2010). In 2011, in an effort to increase the efficacy of financial literacy instruction, financial literacy will be taught in an obligatory, systematized and regulated manner to all Ontario public school students in grades four to twelve. The working group that is clarifying the meaning of financial literacy for Ontario and making recommendations is co-chaired by Leeanna Pendergast, Parliamentary Assistant to the Minister of Education and MPP for Kitchener-Conestoga, and Tom Hamza, President of the Investor Education Fund (IEF). The working group has defined financial literacy [as] having the knowledge, skills and abilities to undertake responsible economic and financial decisions and actions with a requisite level of competence" (Ontario Ministry of Education, 2010). This is almost identical to the Federal Governments definition of financial literacy as having the knowledge, skills and

confidence to make responsible financial decisions (Task Force on Financial Literacy, 2010). Further clarifying the aim of financial literacy Pendergast writes, students tell us they want to be able to make informed financial decisions, have the tools to plan for their financial future, and have financial independence to be responsible citizens. Our focus continues to be a made-in-Ontario solution to a global economic crisis (Pendergast, 2010). Canadian Federal Minister of Finance, Jim Flaherty, in the same vein opined that the financial turmoil was fuelled by a lack of financial literacy (Chevreau, 2009). Flaherty was not calling overconfident neoclassical economists (some of whom thought depressions a thing of the past) financially illiterate, nor was he alluding to executives of over-leveraged financial institutions; instead he was referring to the same citizens Pendergast hopes can be taught to make responsible financial decisions that will benefit both themselves, their national economy and eliminate economic crises. Literature from the National Task Force on Financial and the Ontario working group claims that financial literacy is justified on the basis that it will eliminate economic crises in the future (enhancing economic stability) or at least lessen their severity and prepare people to manage economic risk and use their money, regardless the economic situation, productively so as to minimize the need for collective outside-the-market insurance (promote self-sufficiency and financial independence and reduce the pressure on social programs) (Task Force on Financial Literacy, 2010). Financial literacy thus appears as a technology1 to empower people to make responsible decisions that will increase or maximize the possible rate of return on capital expenditure for

I use the term technology to denote a means of assistance in achieving a goal. The goal is financial stability and the means are correct individual actions informed by financial literacy.

individuals while increasing economic stability and the entrepreneurial or investment opportunities available within the borders of their nation. Financial literacy will supposedly aid financial stability by educating students on financial concepts (interest, risk, inflation, etc.), financial products (RRSPs, stocks, bonds, etc.), financial regulations (rules on mortgages, credit cards, savings accounts, fraud, securities, etc.) and other areas of financial knowledge that are of assistance in increasing or getting the most value out of ones stock of money or proposed future stock (in the case of borrowing to invest). It appears that much of this information will be provided or influenced by the IEF, which offers print materials and a website replete with resources that are of assistance in teaching financial concepts, learning about financial products and regulation in order to increase the utility of ones money (Investor Education Fund, 2010). 2 The belief that financial literacy will eliminate crises appears to rest on the belief that the market if working properly does not tend towards crisis and provides the correct data or signs on how one ought to act in investing ones money. However, because of an inability to read market signals properly or understand basic money management principles, people spend irrationally, save irrationally or invest irrationally (i.e. use their money in ways that are harmful to their own economic well being and the economic well being of their nation or the global economy). The assumption that capitalism is not inherently crisis prone is erroneous. It necessarily follows that the assumptions that discerning financial data better or learning
2

Increasing the IEFs influence is its partnerships with various institutions such as school boards, provincial securities commissions, church organizations, media outlets and the Ontario Institute for Studies in Education (OISE) in order to create effective classroom resources and social networks in order to disseminate its ideology and resources to support this ideology.

about how to manage ones money better will stave off crises are also erroneous. Utilizing insights from Marx and a number of Marxist theorists, including Wallerstein and Harvey, this paper first aims to explicate some of the inherent contradictions contained within capitalism that are responsible for capitalisms crisis tendencies. Following a brief explanation of how these factors have played out in the current crisis it will be demonstrated that financial literacy is also ineffective in supporting those individuals, who are rendered surplus or impoverished by the destructive effects of capitalisms creative destruction (Schumpeter 1987) and uneven development (Harvey 2006; Sewell 2008) during non-crisis phases of capitalist accumulation.3 Finally, this paper argues that financial literacy may prove effective in shifting responsibility for economic crises and creative destruction onto individuals qua entrepreneurs or investors and thus further capitalist alienation and oppression. The implementation of financial literacy should be seen as a further neoliberalization of society. Neoliberalism differs from the laissez-faire of neoclassical economics in that it is a constructivist political project. Neoliberals may publicly extol markets as natural and relies on neoclassical economics to demonstrate why this is the case but neoliberalism is not synonymous with laissez-faire neoclassical economics (Mirowski and Plehwe 2009). The neoliberal State does not merely construct markets and privatize public services, it also supports the creation of market actors that can and believe they ought to participate in the market. Despite some of the paternalist rhetoric surrounding its implementation, financial literacy should be seen as part of the

This is not to believe that debt counseling and other services do not assist some who cannot manage their resources properly. It is simply that improper debt management is not the cause of the majority of poverty and practices such as spending and saving are not so easily managed by exortions to school children using reason qua financial literacy (see Pinto 2009).

construction of market actors rather than a measure that attempts to protect individuals or society from the vicissitudes of the market. Under neoliberalism social policy is no longer a means for countering the economic, but a means for sustaining the logic of competition (Donzelot 2008: 124).

Inherent Crisis Tendencies of Capitalism Capitalism is first and foremost a system in which the surplus-value of the proletarian is appropriated by the bourgeois (Wallerstein 1991a:124). Marx regards surplus value as the excess value that is created through the labour of workers (proletarians) who do not own the means of production and therefore must work for a wage. Workers, through their labour, produce value in the form of commodities. Some of this replenishes their labour power4 (given to them in the form of a wage) and the cost of the means of production. Marx names value that is created above this amount, surplus value. The bourgeois or capitalist appropriates the surplus value created by the worker. Another characteristic of capitalism is competition and while capitalists carry out global and national intra class struggle to limit competition in their factions or blocs favour, competition is still a major characteristic of the capitalist system (Wallerstein 1991a). This competition drives capitalists to continually expand production in order to accumulate more capital and stave off their competitors. If capitalism is anything, it is a system based on the logic of the endless accumulation of capital (Wallerstein 1991c:145). This drive to accumulate creates the tendency for constant revolutionary movement within capitalism as production increases and becomes more efficient (uses
4

The amount that the worker requires is of course subject to struggle and is the historically sedimented result of myriad factors (unionization, scarcity of skills/knowledge, reserve army of the unemployed, etc.) not the least of which is abstract socially necessary labour time (Marx 1990).

less variable capital) and the need to realize the value embodied in commodities creates the impetus to expand the points of consumption (Marx 2009; Harvey 2006). This tendency is only exacerbated with the rise of the corporation whose legal existence its whole reason for existing as a fictitious person is to maximize surplus value for its shareholders (Rowland 2005). The capitalist is also not simply concerned with being bought out but with having his or her capital devalued. Given revolutions in production, commodities produced can, over time, be made more quickly and cheaply. This result in the capitalist with the more efficient production machinery and processes gaining more capital or a larger share of the market while at the same time devaluing the fixed capital and commodities already produced by his or her competitors (Harvey 2006). Capital, to ensure its value, must always remain in motion or risk being devalued (Harvey 2006). Marx uses the expression M-C-M to illustrate the basic structure of the capital accumulation process (Marx 1990: 257). It represents the initial expenditure of capital (M) being replaced through labour into a commodity (C), which is then sold and the greater amount of value of (C) is realized as the initial amount of capital plus the surplus value extracted from the workers labour (M). If in this process, the particular commodity produced (C) is not sold or not sold for a value5 that will allow the initial outlay of capital to increase in quantity there is a breakdown in the accumulation of

The price of a commodity can, of course, fluctuate above or below its value depending on a host of factors (scarcity, monopoly rights, trade agreements, technological innovation, State subsidies, etc.) but investigating these aspects will not assist us in elucidating the inherent crisis tendency of capitalism. Marx therefore does not focus on the buying and selling of commodities above or below their value but instead argues that the immanent laws of exchange of commodities are to be found in the dialectical unfolding of a situation in which the money-ownermust buy his commodities at their value, sell them at their value, and yet at the end of the process withdraw more value from circulation than he threw into it at the beginning Marx, Karl. (1990) Capital Volume 1. (London: Penguin Books). :268-269.

capital. While this is a normal part of capitalism, as not everything produced is desired or needed by consumers and so there will be numerous instances of such a breakdown, there is a tendency for the C-M process to breakdown on a national or global scale bringing about recession or depression as productive capacity is destroyed. The system requires perpetual motion but there are strong forces driving the system away from equilibrium(which necessitate crises) as the only effective means to counter disequilibrium, to restore balance between production and consumption (Harvey 2006:97). History is not of course determined and we cannot know exactly when or where a crisis will occur however certain strategies and warning signs that tend to arise in the accumulation of capital and realization of its value do allow us to notice certain uniformities in the booms and busts within capitalism. Successful accumulation or realization of surplus value is predicated on the sale of commodities (the C-M part of the cycle discussed above). In order to stave off competitors and increase the quantity of their capital, capitalists attempt to extract more surplus value from their workers through both a relative increase and an absolute increase in the rate of exploitation. It is the amount of surplus value that capital has managed to accumulate in an M-C-M cycle that translates into profit or the amount of capital accumulated. As we will see below however, increasing the rate of exploitation causes both more commodities to be produced and the purchasing power of the workers relative to the value of the commodities to decline, which increases the tendency for an overproduction crisis. Increasing surplus value absolutely requires the extension of the workday so that an increased amount of time is spent producing surplus value. The extension of the

workday in the developed world is made possible by means of electronic technology such as the computer, the Blackberry and the Internet, which impose seemingly less onerous constraints on ones time as they tend to seamlessly blend work and non-work time or work and entertainment. There is also the pressure, increased during economic crises, felt from the competition for employment from the global industrial reserve army or relative surplus population to accept extensions on the working day (Marx 1990). In the developing world the workday is increased to levels reminiscent of England during the Industrial revolution as proletarianization spreads following shifts in global production to take advantage of cheap labour (Davis 2007). The extension of the work day and the absolute increase in surplus value mean that more commodities can be produced and if sold the capitalist will have successfully extracted more surplus value than previously and will have therefore, in bourgeois terms, have made more profit. Increasing surplus value relatively requires that within the same amount of time in the workday more value is produced. This can be accomplished through various means including mechanization, moving production off-shore in order to take advantage of lower labour costs, using immigrants, women or children instead of native born men to keep wages lower, decreasing the use of skilled labour compared with unskilled labour, lowering the price of goods required to sustain workers, making the division of labour more efficient, etc. (Marx 1990). Looking more closely at the tendency to increase the use of mechanization illustrates how measures that increase value also decrease its ability to be realized. Marx describes the combination of fixed or constant capital (dead labour) and variable capital (workers or living labour) as the organic composition of capital (Marx 1990). In order to

increase surplus value there is a tendency for capitalists to employ more constant or fixed capital. While some new jobs can be created fixing these machines, producing them or in other spin-off industries there is a tendency, witnessed recently with regards to auto workers in the United States and Canada, for many not to find work or to find work that pays substantially less. As less and less living labour is used to create commodities, the commodities ability to realize their value (be sold) diminishes because of the diminishment in the value of the workers labour power. The underlying rationale that gives rise to crisis tendencies within capitalism is now somewhat clearer. The cycle M-C-M is continuous given the competitive pressure placed on individual capitalists. With the continuous build up of value or capital on a large scale as capitalists everywhere increase production of surplus value qua commodities there is now a concern that the value embodied in the commodities will not be realized on a large scale (a national or global scale) given that the measures undertaken to increase surplus value absolutely and relatively have undercut its ability to be realized. Overproduction, Marx commented, arises precisely because the consumption of workers does not grow correspondingly with the productivity of labour (Lebowitz 2002). At this point the case for crisis seems overstated and economic crises should be recurring even more rapidly than they do. Yet demand is never static but grows as capitalisms productive capacity grows6. To realize surplus value capitalism creates new

This is not to say that they grow in equilibrium and are in fact rarely in equilibrium necessitating numerous devaluations of value outside of a general crisis (Harvey 2006).

markets alongside increased production of commodities.7 New markets can be created through colonization or since this practice is less acceptable now, free trade agreements, which open up new markets for export. Opening up new markets through free trade agreements generally destroys less efficient production processes (or those less subsidized by their national governments), which can decrease temporarily global production capacity. It also has the effect of increasing the rate of proletarianization, a process of increasing dependence on wage-income, which can increase global purchasing power (Wallerstein 1991b:130-131) but not if it is offset by a drop in the value of labour power globally. Demand can also be increased through the production of needs or wants. Advertising appears singularly effective in accounting for the decreased level of savings in Canada and the United States over the last 20 years (Norris 2008).8 At the level of production, capitalists also use planned obsolescence and produce commodities that will wear out quicker and require replacement sooner. These measures can delay an economic crisis but do not eliminate the contradictions that give rise to the crisis.9 Workers of course cannot be the only source of demand10 but consumer spending

Financial literacy can also be seen as a new market replete with government and private capital support for the creation of jobs, books, procedures, conferences, etc. It is interesting to note how problems created by capitalism are also opportunities for capitalism to expand its markets. 8 Advertising is considered so effective that one would think that if there was any real concern over consumer debt advertising, which accelerates perspicuous consumption, would be cut or regulated so that students receiving lessons in financial prudence were not also inundated with messages to measure their and others worth through what they consume. 9 Moreover, the production of needs and planned obsolescence in order to keep pace with productive capacity must also speed up and continually grow, which places increasing strain on the planets ecological capacities. 10 Other sources of demand include capitalists who spend a portion of money extracted from the production process on commodities for personal consumption and the purchase of raw materials and constant capital (machines, factories, etc.) to make possible and/or increase the production of surplus value. Taxes paid to government are another source of demand as well as research and development expenses Resnick, Stephen, and Richard Wolff. (2010) "The Economic Crisis: A Marxian Interpretation," Rethinking Marxism , vol. 22, no. 2..

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by waged workers is a large part of surplus value realization. Therefore tendencies to increase their relative immiseration, which at the same time increase production of commodities that they are to purchase cannot but exacerbate economic crisis conditions. In support of this claim, I note that in the United States just prior to the recent economic crisis consumers accounted for about two-thirds of the total US economy (BBC in Norris 2008:17)11. Today, retailers in the United States are even lending customers money or giving away merchandise in order to try and boost spending (Clifford July 4, 2010). Looking at the 2008 economic crisis, we see that although the particular manifestation of the crisis is unique, its causes are influenced by the inherently unstable tendencies noted above. For example, taking into account the crisis tendencies inherent within capitalism enables us to notice that the recent economic crisis has its roots in the neoliberal regime of accumulation that restructured global production and consumption so as to overcome the profitability crisis that resulted from the Keynesian Welfare State (KWS) accumulation strategy in the 1970s (McNally 2008). Neoliberal policies increased profitability, though not at the rate achieved during the 1960s (McNally 2008:4), but did so through measures that raised the relative and absolute amount of surplus value extracted from labour while keeping real wages stagnant (Resnick and Wolff 2010). This was carried out through successful attacks on labour market rigidities such as unions, wage legislation, welfare, unemployment insurance, protectionist legislation; a shift of production to lower wage countries; technological improvements such as Just in Time Production; and privatization of public services (Harvey 2007).
11

Business media also routinely report on the Consumer Confidence Index as a marker that will indicate the economic prospects for surplus value realization.

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The result was an increase in production to the point that East Asia, the centre of the new wave of accumulation experienced a financial crisis which reflected the severe pressures of over-accumulation of capital in 1997 (McNally 2008:10). The crisis did not spread however as the East Asian economies cut exchange rates of local currencies, shed labor, reduced costs and dramatically restructured industry (McNally 2008:10). However, effective demand for the mass of commodities produced continued to be a concern. With workers wages stagnant in the United States (Resnick and Wolff 2010), the United States was only able to act as the consumer of last resort (McNally 2008) because of the massive debt (both credit card and housing) taken on by the US consumer. The US worker could not though, even taking on massive amounts of debt, realize all the surplus value being created. The only possible resolution to the effective demand problem is the further conversion of money into capital (Harvey 2006: 95). What this entailed was the creation and purchase by wealthy investors, banks and financial institutions awash in money of Collateralised Debt Obligations (CDOs) such as Mortgage Backed Securities (MBS) made famous by the recent economic crisis (McNally 2008). This money created what Marx calls fictitious capital- money that is thrown into circulation without any material basis in commodities or productive activity (Harvey 2006:95). CDOs are such a fictitious capital and were valued and traded as if they were capital but had no material basis in productive activity.12 They represent an MM cycle of accumulation based on interest. However, in order for M to be realized in

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The risk of the CDOs was assessed by a formula that assumed the last ten years of Credit Default Swap (CDS) data could provide the base from which to mathematically predict the next ten years (Salmon, Felix. (2009) "The Secret Formula That Destroyed Wall Street." Wired (San Francisco: The Conde Nast Publications).; an assumption, which was itself based on the belief that the problem of economic crises had been solved and the market would continue to rise.

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the M-M cycle, surplus value from the M-C-M cycle must provide the value or else the money lent cannot be repaid at the initial amount plus interest or possibly at all (Harvey 2006). This is what happened in 2008 when large numbers of MBS fictitious capital failed to realize the value they were assumed to be able to realize (i.e. when large numbers of people failed to make their mortgage payments). David Harvey is worth quoting at length here: The solution to the effective demand problem means the creation of new money capital [CDOs], which must now be realized in production. And so we come full circle. We are back in the sphere of production, which is, of course, where Marx insists we should be all along. The solution to the problems of realization in exchange is converted into the problem of realizing surplus value through the exploitation of labour power in production. We see, once more, the social necessity for perpetual accumulation (Harvey 2006:95).

While it makes little sense to say that financial literacy would have stopped the economic crisis when less spending on credit would have brought about an economic crisis sooner rather than later (McNally 2008), it is in a limited sense correct (though callous given those without the luxury of a house) to say that the economic crisis was caused by the overproduction of commodities such as houses (Bush 2008). However, analyses that focus on housing production, greed or regulatory or deregulatory mishaps are concerned with epiphenomenon rather than fundamental tendencies. They thus miss the fundamental crisis tendencies that are inherent within a system that allows, profits rather than the needs of people as socially developed human beings determine the nature and extent of production within capitalism (Lebowitz 2008).

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Financial Literacy, Economic Risk and Creative Destruction It is obvious that financial illiteracy was not the cause of the economic crisis and that financial literacy will not stop future capitalist crises from occurring. Additionally, financial literacy will not assist individuals impoverished by capitalisms normal operation, which is a continual material crisis for many. During all growth phases in the cycle of accumulation capitalists seek out or create new ways of creating extra surplus value (super profits). In doing so these capitalists gain a competitive advantage over other capitalists, who, for whatever reasons, have not or cannot revolutionize their production and produce as much surplus value. Those who cannot keep up will fail. Schumpeter termed capitalisms revolutionary creative tendencies and its concomitant obverse destructive tendencies, creative destruction (Schumpeter 1987). This creative destruction is highly selective: what [it] produces is pronounced spurts of growth in certain industries or regions, not incremental across-the-board expansion. Indeed, such booms often produce as side effects a decline in other industries or regionsthus, the growth of attractiveness of the United States sunbelt in the 1970s and 1980s helped to produce a corresponding rust belt in Northern and Mid-western industrial regions (Sewell 2008: 528).

Of course it is not simply an economic concern but also a political concern where the destructive side of creative destruction is to be felt (Harvey 2006; Wallerstein 1991a). In the United States there is a major concern with illegal immigration from Mexico. This immigration is being partly fueled by the creative destruction of capitalism. Agricultural production in Mexico that cannot compete with subsidized US agriculture, which utilizes not only cheap labour from illegal immigrants but also technological innovations and centralizing benefits that derive from the massive agricultural corporations, flood Mexico

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with cheap exports and destroy parts of Mexicos agricultural industry. This influx of immigration swells further the ranks of the reserve army of unemployed in the United States. Financial literacy as an individual skill is of no assistance in overcoming free trade agreements that increase the rate of exploitation or in helping those who have lost their jobs. Where and who will bear the brunt of destruction is not primarily a battle between nations but between classes. For example, locating automobile production in Mexico to take advantage of the low cost of labour leaving agricultural work and proximity to the large US market is carried out in order to lower the cost of production as part of an initiative to discipline the pampered Western worker (Chomsky and Otero 2004: 783). This discipline is not carried out by representatives of Mexico but by the capitalist class in the United States who wish to lower wages and worker expectations. Financial literacy as a neutral technology does not see class war and is thus of no assistance in resisting its effects. These destructive aspects of capitalism threaten societies and create a surplus of humanity (Davis 2007: 174) and this is not even during times labeled a crisis! The destructive effects of capitalism lead Wallerstein to write that the large (still rural) majority of the populations of the world-economy works harder and longer today for less reward than 400 years ago (Wallerstein 1991b:129). He does not suggest this in order to idealize pre-capitalist societies but only to draw attention to the fact that skilled workers in a Western country are better off than their ancestors says little about the standards of living of an unskilled worker in Calcutta today, not to speak of that of a Peruvian or Indonesian agricultural casual worker (Wallerstein 1991b:129). The global nature of the

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capitalist world economy is important to keep in mind, though its destructive effects in the Global South are probably easier to understand now that neoliberal globalization has brought the destructive effects of capitalism increasingly into the Global North, most spectacularly through the destruction of the Norths manufacturing sector. Financial literacy will not alter the basic fact that creative destruction is an inherent characteristic of capitalism and it will not provide a basis for workers on the destructive side assistance to overcome their predicament. It will not provide them with jobs or social security but it will attempt to foist responsibility for creating wealth through the growing financial speculative system on the individual qua investor or entrepreneur. Financial literacy as a means to, in the words of the Task Force on Financial Literacy (2010), promote self-sufficiency and financial independence and reduce the pressure on social programs treats capitalisms creative destruction as something that can be prepared for or mitigated by individuals. This is however not possible as capitalisms uneven development (Sewell 2008) is an inherent aspect of a system that is forced to continually increase productivity in order to maximize surplus value. Financial literacy not only fails to eliminate capitalist crises it also fails to eliminate or assist individuals suffering from the crises caused by the creative destruction of the normal operating of capitalism. Financial literacy is not a panacea for capitalisms destructive tendencies regardless the phase of accumulation. Its failure is not however what marks financial literacy as a technology of domination and alienation instead what marks it as such is its promise of success.

Financial Literacy as a Technology of Domination and Alienation

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Financial literacy holds out the possibility that it will successfully assist in shifting responsibility for economic failure further onto the individual qua entrepreneur or investor and away from the State or capitalism. This neoliberal responsibilization equates success in maximizing ones capital with a fulfillment of ones moral duty (Shamir 2008). This moral aspect is inherent in the concept of financial responsibility given its supporting assumption which posits that ones actions as an individual are the cause of their own and their nations economic well being. The successful realization of this moral duty by some and the expectation and creation of resources to achieve this end normalizes and sets up as an ideal those who are successful in maximizing their capital and not wasting collective resources but are instead creating opportunities for others for investment or wealth production. Those who are successful may for example through their success attract global capital investment and create jobs or drive up property values, inflating the value of their neighbours homes. They are not only acting responsibly for themselves as individuals but are acting as responsible citizens. Financial literacy attempts to create people as entrepreneurs or investors who can manage economic risk as individuals. It does this through providing the illusory means with which to manage economic risk and through which to create wealth. Some will be successful in maximizing their capital but some will not. The failure of some merely means that more technological fixes are in order (perhaps more effective financial literacy) or that they chose to fail. Regardless the outcome, all are expected to maximize their wealth using financial literacy skills and knowledge and to judge others success based on this norm. Through these attempts to manage or maximize ones capital utilizing financial literacy to support the consumption of financial products and

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entrepreneurial activities, individuals produce not only wealth but also themselves. As individuals express their life, so they are. What they are, therefore, coincides with their production, both with what they produce and with how they produce (Marx and Engels 1998: 150). Financial literacy offers the means with which we can produce ourselves as investors and entrepreneurs and take part in the market. Financial literacy as a form of technology is a form of purposive-rational action (Habermas 1979), which is concerned with the proper or most efficient strategic action to achieve an end not questioned. Habermas makes a distinction between purposive-rational action and symbolic or communicative action (Habermas 1979), defining the latter as a discourse that aims at understanding and calls into question ends. Financial literacy does not call into question the end of maximizing ones capital. Instead this aim appears as a moral imperative. The Task Force on Financial Literacy is forthright in stating that in order to be responsible for ones own financial well-being and the economic well-being of ones nation one should manage ones finances responsibly, i.e. maximize ones capital. Like the political economy criticized by Marx, financial literacy also implicitly embodies capitalisms needs. Its principal thesis is the renunciation of life and of human needs. The less you eat, drink, buy books, go to the theatre or to balls, or to the public house, and the less you think, love, theorize, sing, pain, fence, etc. the more you will be able to save and the greater will become your treasure which neither moth nor rust will corruptyour capital. The less you are, the less you express your life the more you have, the greater is your alienated life and the greater is the saving of your alienated being (Marx 1961: 144)

Instead of merely saving however, financial literacy, reflecting capitalisms current needs, offers the possibility of growing our capital through the purchase of financial

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products (stocks, bonds, CDOs, etc.). We are not forced to purchase financial products or become investors or entrepreneurs but are instead given a technology (financial literacy) that purports to assist us in becoming investors and entrepreneurs who can manage capitalisms creative destruction. Financial literacy helps to control our conduct not through force but through our freedom. This form of government as the conduct of conduct (Dean 2010) is a question not of imposing law on men but of disposing things (Foucault 2003: 237). Neoliberalism as a regime of government does not determine forms of subjectivity. (It) elicits, promotes, facilitates, fosters and attributes various capacities, qualities and statuses to particular agents. They are successful to the extent that these agents come to experience themselves through such capacities (as being an entrepreneur or investor of ones capital including human capital) (Dean 2010: 43-44). The success of this experience is influenced by the provision of the means (financial literacy) with which to enact ones freedom. For example, any financial literacy implemented in Ontario public schools will come equipped with procedures for monitoring the effectiveness of financial literacy information and instruction as well as procedures for data collection (grading of students, student and teacher responses, etc.) so as to increase the effectiveness of financial literacy instruction and information. The procedures, though ineffective for alleviating poverty, offer the opportunity to support those who oppose the destructive tendencies of capitalism are trying to alleviate poverty. Through supporting our freedom in certain ways (maximizing our capital) financial literacy obscures other possibilities for countering economic risk and other ways of problematizing capitalisms oppressiveness and alienation. That it will not achieve the

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goals of stemming economic crisis or managing economic risk for individuals will not alter the eternal optimism that a domain or a society could be administered better or more effectivelyThe failure of one policy or set of policies is always linked to attempts to devise or propose programmes that would work better(Miller and Rose 1990: 4). The problem with financial literacy is that it will likely be effective in supporting a system that not only materially impoverishes some but further alienates all from the products of their labour, the labour process, others and their species being. By speciesbeing Marx is referring to our free conscious activity (Marx 1961: 101). Marx thought production should move beyond the production of things to the production of fully developed human beings and that humanity under capitalism is stunted by capitals never-ending thirst for accumulation. Machines which should serve to provide for human needs, so that we can work on the development of our human faculties, end up controlling humans through dictation of the pace of labour, the number of individuals needed to work the machine and the nature of the work to be completed. The division of labour likewise stunts human growth. In the words of Adam Smith the labourer naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.. (Copley 1995: 15). This is not a concern for financial literacy, which instead treats our productive life not as an end in itself but as a means with which to procure ever more capital. Any increase of income for Marx would be nothing better than a better remuneration of slaves, and would not restore, either to the worker or to the work, their human significance and worth (Marx 1961: 107). Under capitalism our creations, commodities, appear and actually do have power

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over us (Marx 1991). As noted earlier, commodities are embodied with value from labour. This value is specifically the socially necessary labour time that it takes to produce a commodity. Marx uses the term socially necessary to signal that labour must be of a certain duration (relative to that embodied in other like commodities) and put towards the creation of a product that can have its value realized. If I, for example, take two hours to make an object while everyone else takes fifteen minutes then I will have wasted an hour and forty-five minutes of my labour because I cannot realize the total value of my labour embodied in the commodity. Likewise if I produce something that cannot be exchanged for money I will have wasted my labour.13 Marx did not envision a return to some idyllic state of nature. In order to be able to realize his or her true capacity and species being humanity requires a certain level of productivity so that our needs can be met. Marx wrote for example that in general, people cannot be liberated as long as they are unable to obtain food and drink, housing and clothing in adequate quality and quantity (Marx and Engels 1998: 169). Marx thought it was of benefit for future generations that the bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together (Marx and Engels 2009: 10). However, it is quite clear that now the class character of the economic system has become a barrier to further production that can be of use to us in realizing our human potential.

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While there are numerous controversies surrounding the Labour Theory of Value (LTV) and the idea of value as an accounting tool or as an empirically observable magnitude plainly had to be abandoned, it could still be treated as a real phenomena with concrete effects (Harvey 2006: 36). What this theory allows us to see is that given the class feature of capitalism, labours value is continually constrained by the value of the commodities it is to produce (see the auto-worker example below).

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Financial literacy would have us treat commodities, objects of our own creations, as reified beings that we should endeavor to gain knowledge of so as to perceive where best to invest our monetary and human capital. This fetishization of commodities supports individuals in creating themselves as investors or entrepreneurs who see as natural a state of society, in which the process of production has the mastery over man, instead of being controlled by him (Marx 1990:174-175). Financial literacy is a technology of domination and alienation because it furthers our enslavement as our activities are regulated by our own creations. Financial literacy mystifies the fact that the value of commodities is a result of human labour and that they only have the power we have collectively given them and that our system of production and consumption can be made otherwise. The Canadian Federal Industry Minister Tony Clement offers a recent example of the process of productions mastery over us as he warns GM auto workers that the choice of the workers is to have a job that is cost competitive or to have no job at all (Alphen 2009, May 8). There is a problem with autoworkers wages being dictated by the labour-time socially necessary for [automobile production] which forcibly asserts itself [and appears] as an over-riding law of nature (Marx 1990:168). There is a problem with capital acting like a virtual parliament (Chomsky 2000), which can devalue regions that implement policies not amenable to the maximization of surplus value. Capitalism alienates us from our species being. We are thus not free but are instead forced by our own creations to either be thrown out of work or labour in order to live rather than live in order to develop our human capacities to their fullest. Financial

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literacy, while ineffective in preventing or ameliorating general or routine crises of capitalism, supports this alienation and oppression. This is its real success and danger.

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Mirowski, Philip, and Dieter Plehwe. (2009) "The Road from Mont Pelerin." (Cambridge, Massachusetts: Harvard University Press). Norris, Trevor. (2008) "Consuming, Schooling and the End of Politics: Critical Reflections on Consumerism and School Commercialism." Ontario Institute for Studies in Education of the University of Toronto. Pinto, Laura Elizabeth. (2009) "Is Financial Literacy Education the Solution to Credit Crises?," Our Schools, Our Selves, vol. 18, no. 4. Resnick, Stephen, and Richard Wolff. (2010) "The Economic Crisis: A Marxian Interpretation," Rethinking Marxism, vol. 22, no. 2. Rowland, Wade. (2005) Greed, Inc. Why Corporations Rule Our World and How We Let It Happen. (Toronto: Thomas Allen Publishers). Schumpeter, Joseph A. (1987) Capitalism, Socialism and Democracy. (London: Unwin Hyman Ltd). Shamir, Ronen. (2008) "The Age of Responsibilization: On Market-Embedded Morality," Economy and Society, vol. 37, no. 1. Wallerstein, Immanuel. (1991a) "Class Conflict in the World Economy." in Balibar and Wallerstein, eds. Race, Nation, Class: Ambiguous Indentities (London: Verso). . (1991b) "Marx and History." in Balibar and Wallerstein, eds. Race, Nation, Class: Ambiguous Indentities (London: Verso). . (1991c) "The Bourgeois(Ie) as Concept and Reality." in Balibar and Wallerstein, eds. Race, Nation, Class: Ambiguous Indentities (London: Verso).

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