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Comments on Bichler and Nitzan’s 2012 Paper ‘Capital as Power: Toward a New Cosmology of Capitalism’
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Here is a quote from their paper:
“Political economy, liberal as well as Marxist, stands on three key foundations: (I) a separation between economics and politics; (II) a Galilean/Cartesian/Newtonian mechanical understanding of the economy; and (III) a value theory that breaks the economy into two spheres – real and nominal – and that uses the quantities of the real sphere to explain the appearances of the nominal one.”
I think Bichler and Nitzan are on the right track in a number of ways but I still do have some key disagreements with them. To illustrate these disagreements I will re-write the statement above in what I regard as the more correct form.
“Conventional economics stands on three key foundations: (I) a separation between economics and politics; (II) a Cartesian/Newtonian mechanical understanding of the economy; and (III) a value theory that breaks the economy into two spheres – real and nominal – that uses the quantities of the real sphere to explain the appearances of the nominal one (ideological justification) and that then uses the quantities of the nominal sphere to manage those of the real sphere (as an instrumental, formalised reason system for the purpose of deriving, in a sense, quantised values for the real).”
To explain these changes. . .
The Autocatalytic Sprawl of Pseudorational Mastery
Get PDF* Winner of the 2018 RECASP Essay Prize *
According to Jonathan Nitzan and Shimshon Bichler (2009), capital is not an economic quantity, but a mode of power. Their fundamental thesis could be summarized as follows: capital is power quantified in monetary terms. But what do we do when we quantify? What is the nature of money in a capitalist society? Indeed, what is power? In the following, we try to develop a concept of power as the ability of persons to create particular formations against resistance. The kinds of formations persons can think of depend on the society they live in, which can be identified by what Cornelius Castoriadis called its social imaginary significations (SIS). The core SIS of capitalism is rational mastery operating with computational rationality. Computational rationality in turn rests on a particular understanding of how signification works: it works through operational symbolism, as theorized by Sybille Krämer in analyzing the philosophy of Leibniz. When the concept of the SIS of modern rationality was developed in the 1950s and 1960s, bureaucracy was seen as the main organizational mode of rational mastery. We argue that there are two modes of rational mastery, capitalization and bureaucratization, that interact with each other in capitalist society. The paper concludes with deliberations on the future of rational mastery and possible ways out.
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FRONT PICTURE: International Space Station Expedition 26 Crew (24 Dec 2010), Montreal at Night. Astronaut photograph ISS026-E-12474 (https://earthobservatory.nasa.gov/images/48471/montreal-at-night). Image courtesy of the Earth Science and Remote Sensing Unit, NASA Johnson Space Center (https://eol.jsc.nasa.gov/)
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BIO: The author studied physics and informatics, along with a lot of philosophy, but is also interested in many other subjects. He came across Bichler and Nitzan’s Capital as Power in the first decade of the twenty-first century when he was politically active in various ways. He rediscovered Castoriadis through one of Bichler and Nitzans’s works. Since then, he has tried to understand what Bichler and Nitzan actually mean by power. As there is no concrete answer to this question, he has been trying to develop one by (con)fusing concepts developed by Castoriadis and other thinkers with some of his own
How the Rich are Different: Hierarchical Power as the Basis of Income Size and Class (Revised)
Get PDFThis paper investigates a new approach to understanding personal and functional income distribution. I propose that hierarchical power — the command of subordinates in a hierarchy — is what distinguishes the rich from the poor and capitalists from workers. Specifically, I hypothesize that individual income increases with hierarchical power, as does the share of individual income earned from capitalist sources. I test this idea using evidence from US CEOs, as well as a numerical model that extrapolates the CEO data. The results indicate that income tends to increase with hierarchical power, as does the capitalist composition of income. This suggests that hierarchical power may be a determinant of both personal and functional income
Ecological Limits and Hierarchical Power
Get PDFNowadays, it is commonplace to claim that the economy overuses our limited material and energy resources and that this overuse threatens both human society and the biosphere. Other than anti-science cranks, the only ones who seem to deny this claim are mainstream economists. In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological problems lies not in the ‘economy’, but in the hierarchical power structure of capitalism
Real GDP: The Flawed Metric at the Heart of Macroeconomics
Get PDFThe study of economic growth is central to macroeconomics. More than anything else, macroeconomists are concerned with finding policies that encourage growth. And by ‘growth’, they mean the growth of real GDP. This measure has become so central to macroeconomics that few economists question its validity. Our intention here is to do just that. We argue that real GDP is a deeply flawed metric. It is presented as an objective measure of economic scale. But when we look under the surface, we find crippling subjectivity. Moreover, few economists seem to realize that real GDP is based on a non-existent quantum – utility. In light of these problems, it seems to us that much of macroeconomics needs to be rethought
Capitalists Contra Workers
Get PDFOver the past 139 years, the total return on U.S. equities (capital appreciation plus reinvested dividends) grew 905 times faster than the manufacturing wage rate
Personal Income and Hierarchical Power
Get PDFAbstract: This article examines the relation between personal income and hierarchical power. In the context of a firm hierarchy, I define hierarchical power as the number of subordinates under an individual’s control. Using the available case-study evidence, I find that relative income within firms scales strongly with hierarchical power. I also find that hierarchical power affects income more strongly than any other factor for which data is available. I conclude that this is preliminary evidence for a hierarchical-power theory of personal income distribution
The Aggregation Problem: Implications for Ecological and Biophysical Economics
Get PDFThis article discusses the aggregation problem and its implications for ecological economics. The aggregation problem consists of a simple dilemma: when adding heterogeneous phenomena together, the observer must choose the unit of analysis. The dilemma is that this choice affects the resulting measurement. This means that aggregate measurements are dependent on one’s goals, and on the underlying theory. Using simple examples, this article shows how the aggregation problem complicates tasks such as calculating indexes of aggregate quantity, and how it undermines attempts to find a singular metric for complex issues such as sustainability.
[Data and analysis for this paper are available at the Open Science Framework: https://osf.io/3smra/
Jurisdictional Tax Rates. How the Corporate Tax System Fuels Concentration and Inequality
Get PDFCorporate concentration in the United States has been on the rise in recent years, sparking a heated debate about its causes, consequences, and potential remedies. In this study, we examine a facet of public policy that has been largely neglected in current debates about concentration: corporate tax policy. As part of our analysis we develop the first empirical mapping of the effective tax rates (ETRs) of nonfinancial corporations disaggregated by size and broken down by jurisdiction. Our findings reveal a striking and persistent tax advantage for big business in recent decades. Since the mid-1980s, large corporations have faced lower worldwide ETRs relative to their smaller counterparts. The regressive worldwide ETR is driven by persistent regressivity in the domestic ETR and a marked drop in the progressivity of the foreign ETR over the past decade. We go on to show how persistent regressivity in the worldwide tax structure is bound up with the increasing relative power of large corporations within the corporate universe, as well as a shift in firm-level power relations. As large corporations become less disposed to investments that may indirectly benefit ordinary workers, they become more disposed to shareholder value enhancement that directly benefits the asset-rich. What this means is that the corporate tax structure is connected not only to rising corporate concentration, but also to widening household inequality
Capitalism's Deniers
Get PDFA new, capitalism-denying book is on the shelves, and it makes a stunning discovery: ‘Capitalism without competition is not capitalism’! Capitalist crisis, like climate change, tends to breed ‘capitalism deniers’. The problem, argue the deniers, lies not in capitalism but in its ‘distortions’. In its pure form, they maintain, capitalism is the best of all possible worlds. But to the deniers’ chagrin, contemporary capitalism is no longer pristine. Unlike its original, once-upon-a-time version, its current one is subject to distorting ‘imperfections’, ‘shocks’ and ‘exogenous’ events. And it is these aberrations – rather than capitalism itself – that should be blamed for the system’s misfortunes