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Power (Re)distribution: How Dominant Capital Regained Control of the Energiewende
Full text linkThe Energiewende (energy transition) is the dynamic and contested project of energy transition in Germany. It encompasses both the sociotechnical transformation of the German electricity system and the reorganization of the sector’s ownership structure. In this paper, we present a Capital-as-Power (CasP) based analysis, investigating industrial path-dependency and innovation as part of the dialectics of power and sociotechnical change in capitalism. According to CasP, dominant capital seeks to increase its differential accumulation, i.e., accumulation relative to a benchmark. Energiewende policies initially decreased the differential accumulation of dominant electricity firms in Germany. However, we find that by concentrating their control over the shrinking conventional generation capacity, while variable generation expanded, dominant firms gained the leverage needed to increase differential prices and profits, thus managing to regain sectoral control by increasing their threat to reliable power supply. We find that these processes coincide with spatial centralization, ownership concentration, and decreasing penetration rates of renewable energy resources in Germany. By presenting new conceptual tools and empirical findings, we trace the ways in which the recovery of dominant capital in the German electricity sector shapes and restricts energy transition processes
A Tour of the Jevons Paradox: How Energy Efficiency Backfires
Full text linkAccording to mainstream thinking, efficiency is a potent tool for conservation — a way to live better while using fewer resources. Unfortunately, this simple narrative is contradicted by overwhelming evidence. Instead of spurring conservation, efficiency seems to stimulate the consumption of more resources. This paper surveys the evidence for efficiency backfire and concludes that efficiency is a general tool for catalyzing technological sprawl
Who Controls the Public Debt? A Critical Review of Sandy Brian Hager’s Public Debt, Inequality, and Power
Full text linkHager’s project examines the historical development of US public debt ownership and its political implications. His main innovation is to approach the topic from the perspective of disaggregated social class and frame questions of public debt ownership in terms of social inequality and power. He tackles four questions: who are the owners of the public debt; what are the distributional effects on income and wealth; what are the implications of increasingly foreign public debt ownership; and what is the relationship between debt-ownership concentration and political influence. He argues that the increasingly unequal power of bondholders undermines the ability of the US government to pursue a more equitable and democratic fiscal policy, which is essential to tackling a range of social issues (including inequality itself). The project is illuminating and has important political implications, though due to the narrow scope of the project, Hager gives light treatment of some key aspects of the relationship between debt and power
From Commodity to Asset: The Truth Behind Rising House Prices
Full text linkWhen it comes to rising house prices, nearly everyone has a theory about the cause. There’s ‘too much foreign money’. There are ‘too many immigrants’. There’s ‘too little construction’. And so on.
What unites these explanations is that they appeal, in some way, to the idea that rising prices are caused by a mismatch between supply and demand. And surely that’s true, right?
Yes, it is true … in the same way that death is caused by dying. But of course, that’s circular logic. And so it goes with ‘supply and demand’. Since prices are always caused by the interplay between what we want and what we can get, evoking ‘supply and demand’ leads us pretty much nowhere. Worse, it often puts the focus on short-term patterns, when the real scientific payoff lies in studying price trends over the long term.
Speaking of the long term, many people assume that rising house prices are a recent problem. But in the United States, the pattern dates to the early 1970s. For almost a century before that, US house prices had been dropping against income. And so Americans treated their house like a ‘commodity’ — a thing they bought to live in. But from 1972 onward, house prices began to slowly appreciate against income. And so Americans started to treat their house like an ‘asset’.
It’s this transformation — from commodity-like depreciation to asset-like appreciation — that is the real story of house prices. And the truth is that this story can’t be understood using popular scapegoats. To see why US house prices headed south and then north, we need to forget about supply and demand and instead, peer into the belly of industrialism. We need to ground house prices in the use of energy.
Now, if going from prices to energy sounds like a non sequitur, I’ll show you why it makes sense. And I’ll show you how, when we bring debt into the energy fold, we can explain almost all of the historical variation in US house prices.
The lesson here is simple yet disturbing. When it comes to rising house prices, the trend has less to do with a ‘supply crisis’, and more to do with basic physical limits to industrial supply chains
The Road to Gaza, Part II: The Capitalization of Everything
Full text linkOur recent article on ‘The Road to Gaza’ examined the history of the three supreme-God churches and the growing role of their militias in armed conflicts and wars around the world. The present paper situates these militia wars in the broader vista of the capitalist mode of power. Focusing specifically on the Middle East, we show the impact these militia wars have on relative oil prices and differential oil profits and explain how the wars themselves, those who stir them and the subjects that fight them all get discounted into capitalized power
Degrowth and Capitalist Power: A Step Towards a Theory of Change
Full text linkThis article explores the relationship between degrowth and the theory of Capital as Power (CasP), aiming to understand how socio-ecological transformations can unfold against capitalist power dynamics. While degrowth scholars have largely overlooked this perspective on capital, CasP argues that capitalism is primarily a mode of power, with capitalisation quantifying power – the confidence in in – the ability to shape society against opposition. Key CasP concepts are brought into dialogue with degrowth research to identify potential implications and offer a step towards a theory of change for degrowth. The article first outlines the CasP perspective, including its notion of power, the process of capitalisation and the conflictual nature of capital accumulation, and highlights links with degrowth research. It then looks at the elements underlying the valuation of capital as power and how they provide entry points for degrowth transformations. The role of dominant capital groups and the concept of “sabotage” in exercising power over society are then addressed. As such, degrowth transformations must challenge the confidence of dominant capital groups in their ability to rule, as these groups inhibit possibilities for socio-ecological change. This dynamic, summarised in a conceptual diagram, provides a first step towards a theory of change for degrowth in the face of capital accumulation. Finally, the conclusion offers potential directions for further research
Is Bitcoin More Energy Intensive Than Mainstream Finance?
Full text linkWhen it comes to Bitcoin, there’s one thing that almost everyone agrees on: the network sucks up a tremendous amount of energy. But from there, disagreement is the rule.
For critics, Bitcoin’s thirst for energy is self-evidently bad — the equivalent of pouring gasoline in a hole and setting it on fire. But for Bitcoin advocates, the network’s energy gluttony is the necessary price of having a secure digital currency. When judging Bitcoin’s energy demands, the advocates continue, keep in mind that mainstream finance is itself no model of efficiency.
Here, I think the advocates have a point.
If you want to argue that Bitcoin is an energy hog, you’ve got to do more than just point at its energy budget and say ‘bad’. You’ve got to show that this budget is worse than mainstream finance.
On this comparison front, there seems to be a vacuum of good information. For their part, crypto promoters are happy to show that Bitcoin uses less energy than the global banking system. But this result is as unsurprising as it is meaningless. Compared to Bitcoin, global finance operates on a vastly larger scale. So of course it uses more energy.
To be meaningful, any comparison between Bitcoin and mainstream finance must account for the different scales of the two systems. So instead of looking at energy alone, we need to look at energy intensity — the energy per unit of circulating currency. That’s what I’ll do here. In this post, I compare the energy intensity of Bitcoin to the energy intensity of mainstream US finance.
Which system comes out on top? The results may surprise you
The Road to Gaza
Full text linkYou can read, quote, reference and link this working paper, but you cannot reproduce or post it in any form unless permitted in writing by the authors
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The war that started in 2023 between Hamas and Israel is driven by various long-lasting processes, but it also brings to the fore a new cause that hitherto seemed marginal: the armed militias of the Rabbinate and Islamic churches. The Rabbinate militias, embodied in Jewish settler organizations, have taken over not only Palestinian lands, but, gradually, also Israeli society. The Islamic militias, represented by Hamas and the Islamic Jihad, rose to prominence after the traditional resistance groups of the Palestinians – primarily the PLO and the PFLP and, by extension, also the Palestinian Authority – weakened and proved unable to reverse, let alone stop, the Israeli occupation.
The rise of these militias, though, is hardly unique to Israel/Palestine, or even the Middle East. It is part of a broader, global process, in which ‘private’ military organizations, financed by states, church-related NGOs and/or organized crime, fight for and against states as well as each other. The ascent of such groups is closely related to the decline of the nation-state and its popular armies, a model that developed in the wake of the French Revolution but no longer resonates with the increasingly globalized nature of capital accumulation.
Our previous studies of Middle East wars emphasized the ‘state of capital’ – our notion that the capitalist mode of power fuses state and capital into a single logic in which dominant capital groups are driven by the power quest for differential accumulation. We showed that, in the Middle East, this logic was imposed by a Weapondollar-Petrodollar Coalition of large oil and armament corporations, OPEC, financial institutions and construction firms, whose differential incomes and profits were tightly correlated with – and helped predict – the cyclical eruption of ‘energy conflicts’.
But this mode of power comprises not two elements, but three. In addition to state and capital, it also includes the supreme-God churches, and in this paper we outline the role of these churches and their militias in capitalism generally and in Middle East wars specifically
Stocking Up on Wealth . . . Concentration
Full text linkIt turns out that like the rest of us, billionaires experience wealth inequality. (Individuals who top the Forbes billionaire list are far richer than those at the bottom of the list.) Interestingly, this billionaire wealth concentration fluctuates over time … in tight correlation with the movement of the stock market. Why? A plausible reason — explored here – is that stock indexes like the S&P 500 are unwitting indicators of corporate concentration. And corporate concentration, in turn, seems to drive the concentration of individual wealth
Key points on Bichler/Nitzan’s text “Capital as Power”
Full text linkFROM THE ARTICLE: At first glance, it would appear that Deleuze’s concept of structure involves a complex form of so-called creorder, a term that appears at the forefront of the methodological findings of the economists Bichler/Nitzan. If the structure is actualized in each of its moments in processes, then Bichler/Nitzan describe this process with the term “creorder”. They consider this to be a highly artificial term, which is intended to indicate that a structure/order must constantly construct and reconstruct itself in (historical) time, just as a form must constantly transform itself. According to Bichler/Nitzan, in the context of creorder, the meaning of the relationship between Heraclitean becoming and Parmenidean being lies precisely in the fact that the fusion of verb and noun results in the term “creorder”: “To have a history is to create order – a verb and a noun whose fusion yields the verb-noun creorder.” On the one hand, the so-called creorder may be completely vertically or hierarchically ordered, as is the case in ultra-bureaucratic systems, for example; on the other hand, it may also be horizontal, as could be the case in radical democracies, or it may be in between order and disorder