NFT artwork "Everydays — The First 5,000 Days" by artist Beeple (Image: Christie's)

The news that Christie’s has auctioned an NFT artwork for almost $90 million tells us at least one thing: that the global financial industry would like us to talk about NFTs. As with the news, circulating last week, that an NFT had sold for $300,000, now chump change. Or that Jack Dorsey, CEO of Twitter, was thinking of turning the first ever tweet into an NFT.

Or that… sorry, what? NFTs? Don’t you know???

But press releases have been pumped out about these things from finance houses for weeks now!

NFTs, or non-fungible tokens, are purely digital entities — artworks, or bits and bytes in general — given a unique digital signature, by blockchain (which also undergirds crypto-currency).

The NFT signature allows the image to be infinitely shared, but still uniquely owned. The weirdness of that has been played up in reports, but it’s really a variant on intellectual property rights.

As you hummed “Rockstar” this morning, you are freely using a song Nickelback will get a few cents for every time it plays in a pub. But whereas such IP has hitherto had to be enforced by industry-wide agreements, actual inspections, logs, lawsuits etc, NFTs can be underpinned by technological guarantee.

This is great news for digital artists, a half-dozen identikit articles intoned. Oh really? It will be great news for the dozen or so artists the NFTs of whose work come to be traded stratospherically. The rest, not so much.

NFTs are being presented as a way of paying creators. They’re really a way of carving out a new asset class, from a hitherto uncommodified bit of the world.

Their promotion is in the interest of financial capital, which desperately needs more things that can be owned — and whose ownership provenance can be guaranteed by non-state means, since much of the cash to pay for it will be laundered or crypto.

The sudden prominence of NFTs tells us that there is so much money sloshing around the world (ha, none of it sloshing your way) that new ways must be found to conserve its value that does not involve the risk of actual investment in actual commerce. 

In that respect, the explosion of the NFT is a repeat, with variations, of the art market explosion of the 1980s, when the already high prices for a universally admired group of artists — the Van Goghs and Pollocks — inflated vastly, and new artists like Jeff Koons and Basquiat were created to add to the supply of non-fungible unique artworks (guaranteed by provenance certificates).

Why art? The financial world was looking for something that could hold its value, anchored by the common agreement that it was valuable, rather than by any external factor subject to circumstance.

The cultural valorisation of Van Gogh as a unique entity — no one like him, lonely genius etc — served as a sort of cultural guarantee that could only be matched by gold. But why create such a new asset at all?

Why not just park money in endlessly created new high yield bonds, or some such? Well, of course, they did: the ’80s art market explosion ran parallel with the creation of the mortgage bond, and other meta-instruments, which would bring the western world crashing down in 2008.

It was an expression of the need to retain overall value, by having different classes of assets, ostensibly heterogenous. In the 80s, this money needing a home came from the liquidation of the post war social democratic state, the first downward push on wages, oil wealth etc, and then began to bubble.

The current episode is a product of the great era of quantitative easing, in which endless money is pumped into a global system by government bond buy-backs. For three years, governments of the world have been switching off the QE tap — then switching it on again, as the financial system wobbles.

The layers of financialisation reduce on-ground investment to a fraction, much of that going into donut franchises. The rest — as it runs out of property, tech, etc to go into — is now chasing things like NFTs.

Western states are essentially paying the financial sector a separate, second, bonus dividend, for owning capital, further raising inequality and extending public impoverishment.

When the state does funnel money directly to society — as per parts of Joe Biden’s $2 trillion stimulus — it is coming disproportionately from wage-earning taxpayers themselves, since corporations avoid so many taxes.

The politics of which is another question entirely. What’s the upshot of all this? It is surely that we are experiencing a further shift in relations between global capital’s two great halves, East and West.

The East is still accumulating in a fairly straightforward way, still has billions of people to turn into consumers. The West has an elite trading tokens, as its social plant — housing, cities, the education sector — stagnates.

For decades, the East has been the locus of radicalism, after the failure of Western revolutions between the wars. Could this be about to shift polarities again? The possibility that it might arises from the fact that capital is now at a stage where people pay $60 million to buy a certificate saying they own nothing at all.