The Bichler and Nitzan Archives
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Dominant Capital is Much More Powerful Than You Think
No full textHow should we measure the power of dominant capital? Economists, although seldom if ever referring to ‘dominant capital’, quantify the relative size of large firms by measuring their so-called aggregate concentration. But for all their insight, measures of aggregate concentration have one serious shortcoming: they tend to underestimate the power of dominant capital and its temporal growth – by a lot
'Soft-wars': The Differential Trajectories of Google and Microsoft -- A Capital as Power Analysis
No full textFROM THE ARTICLE: According to the capital as power framework, pecuniary earnings, or profits, are a symbolic representation of the struggle for power between different capitalist groups. In this struggle, capitalists measure their own power differentially – that is, relative to other capitalist entities. The focus on differential power, expressed in differential earnings, leads firms to try to beat an average rate of return. In order for the profits of one firm to beat the average, others must be prevented from accessing the same earnings.
In an environment with hundreds, thousands or even millions of similar sized firms, it would be difficult if not impossible to empirically isolate the relationship between shifts in power between any two firms. However, in most industries, only a handful of firms dominate, theoretically making the microanalysis of such a relationship much more feasible. It is my contention that this is largely true for the computer technology industry in the US.
Within the computer technology industry, Microsoft and Google stand out as two of the most profitable and most powerful firms. As such, it is logical to assume that in differential power terms, Google’s rapid rise poses a direct threat to Microsoft’s dominance. Moreover, in recent years both companies have expanded beyond their respective core profitable businesses, coming into more and more direct competition. [. . .] The purpose of this paper is to show that, despite the fact that Google and Microsoft currently derive the majority of their profits from separate businesses, competition between them can be empirically observed in the way each firm pursues the differential accumulation of power
Book Review: Capital as Power
No full textFROM THE REVIEW:
You see, I’m trying to give you a picture of what it is like to read this book, and the experience of having a tantalizing insight dangled in front of you but then being forced to read far more history and statistics than you would really like to understand it is essentially all of Capital as Power.
Capital as Power is long, but extremely full of content [...] Bichler and Nitzan write in a very engaging way; not necessarily easy to read but certainly action-packed. And there are many, many interesting historical nuggets in the book, like the history of GM’s EV1 car.
[U]nlike the laws of economics which mostly claim to be universal across time, the strength of Capital as Power is that they can identify what things are true about some periods, and not of others, and integrate these assumptions into their models. In other words, rather than being a general theory of economics, Capital as Power is a general theory of the space of possible capitalist politics, or as Bichler and Nitzan seem to be so happy to coin, a general theory of possible capitalist creorders
A Brief History of the Buy-to-Build Indicator
No full textLet’s talk about Nitzan and Bichler’s ‘buy-to-build’ indicator. If you’re not familiar, this is an indicator that quantifies the portion of ‘investment’ spent buying other corporations...
Political Economy of Capital Accumulation (YorkU, LAPS/POLS 4292 6.0, Undergraduate, Fall Term, 2021-22)
No full textCapital is the central power institution of capitalism: it is the main force underlying the relentless transformation of power relations in capitalist societies. The course explores the accumulation of capital from three interrelated perspectives: conceptual, historical and empirical. At the conceptual level, the course examines the evolution of orthodox and critical theories of value and how these theories serve to explain and justify contending notions of accumulation. At the historical level, it traces the development of capital from its humble pre-capitalist origins to its present world dominance. At the empirical level, it studies and juxtaposes the qualitative and quantitative aspects of capital accumulation and explores what they mean for the contemporary political economy. In parallel to these explorations, the course introduces students to the art and science of empirical research. By the end of the course, students are expected to be able to develop and integrate theoretical arguments with their own empirical work
Economic Development and the Death of the Free Market
No full textAccording to neoclassical economics, the most efficient way to organize human activity is to use the free market. By stoking self interest, the theory claims, individuals can benefit society. This idea, however, conflicts with the evolutionary theory of multilevel selection, which proposes that rather than stoke individual self interest, successful groups must suppress it. Which theory better describes how human societies develop? I seek to answer this question by studying the opposite of the market: namely hierarchy. I find evidence that as human societies develop, they turn increasingly to hierarchical organization. Yet they do so, paradoxically, at the same time that the language of free markets becomes more common, and culture becomes more individualistic. This evidence, I argue, contradicts free-market theory, but only if we treat it as a scientific doctrine. If instead we treat free-market theory as an ideology, the pieces come together. Free-market thinking, I speculate, may stoke the formation of hierarchy by cloaking power in the language of ‘freedom’
Dominant Capital and the Government
No full textThis note contextualizes the ongoing U.S. policy shift toward greater ‘regulation’ of large corporations. Cory Doctorow and Blair Fix are optimistic about this shift. We doubt it
The Capitalist Degree of Immortality
No full textThis note offers some speculative ideas worth considering. One of the key features of all hierarchical civilizations is their rulers’ fear of death. This fear was famously narrated in the ancient myth of Gilgamesh – the Sumerian king who realized that, like all other humans, he too was destined to die and embarked on a desperate quest to annul his mortality . According to Lewis Mumford, this quest for immortality is the main reason why society’s rulers are forever obsessed with building and fortifying power hierarchies – or ‘megamachines’, as he called them. Controlling these megamachines, Mumford argued, is the rulers’ way of playing God, a futile yet all-possessive effort to conquer the future and live forever. In capitalism, the rulers finally figured out how to do it – sort of
El poder de las grandes empresas y el futuro del capitalismo en EEUU
No full textEl poder corporativo en los Estados Unidos ha crecido a niveles sin precedentes, pero el ritmo al que ha crecido este poder se está desacelerando. Ambos hechos tienen importantes implicaciones para el futuro del capitalismo estadounidense
GameStop Capitalism. Wall Street vs. The Reddit Rally (Part I)
No full textReflections on leveraging finance against finance