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Still in the Danger Zone
Get PDFIn December 2017, we posted a RWERB entry, titled ‘Profit warning: there will be blood’. We warned that, although the Weapondollar-Petrodollar Coalition might no longer be in the Middle East driver’s seat, the oil and armament companies, the region’s oil-exporting autocracies and various non-state groups were all keen on seeing their oil incomes rise from record lows. And we ob-served that, in this context, ‘the prospects of a new energy conflict, whether premeditated or co-incidental, seem extremely high’. [. . .] We can only hope that the current round of Middle East hostilities won’t be proportional to the size of its current danger zone
Still in the Danger Zone
No full textIn December 2017, we posted a RWERB entry, titled ‘Profit warning: there will be blood’. We warned that, although the Weapondollar-Petrodollar Coalition might no longer be in the Middle East driver’s seat, the oil and armament companies, the region’s oil-exporting autocracies and various non-state groups were all keen on seeing their oil incomes rise from record lows. And we ob-served that, in this context, ‘the prospects of a new energy conflict, whether premeditated or co-incidental, seem extremely high’. [. . .] We can only hope that the current round of Middle East hostilities won’t be proportional to the size of its current danger zone
Disobedient Things: The Deepwater Horizon Oil Spill and Accounting for Disaster
Get PDFAnalysis of the Deepwater Horizon disaster and the accumulative decline of BP demonstrate both the analytical efficacy of the capital-as-power approach to value theory, and the irreducible role of objects in the process of accumulation. Rather than productivity per se, accumulation depends on (1) control of productivity, and (2) the evaluation of control. Capital-as-power focuses on capitalization as an expression of the evaluation by owners of their own power. In this article, I argue that the power of owners translated into capital values is power over both the human and non-human components of systems of production. Power is actualized through entities defined as cultural and political, as well as economic. Capitalization translates into the commensurable financial units of capital the irreducible social order—including objects—that bears on accumulation. The decline of BP’s capital valuation in the wake of the disaster expressed the market’s falling confidence in the expertise, experience and equipment that comprised the company’s productive capacity
Capitalismo de deuda. Una lectura crítica de la crisis mundial del endeudamiento
Get PDF‘Capitalismo de deuda’ es un esfuerzo por descifrar cómo la tecnología de la deuda se ha convertido en uno de los mayores obstáculos para las aspiraciones democráticas y racionales de la sociedad moderna.
Richard Robbins y Tim Di Muzio muestran que la deuda, entendida como una tecnología de poder, es un engranaje insertado en el corazón del capitalismo. En la deuda se anudan un mecanismo que transfiere riqueza desde los asalariados hacia los capitalistas, un instrumento de control político sobre las poblaciones de todo el mundo y un algoritmo que presiona a las economías a producir y consumir por encima de los límites físicos de la naturaleza. La deuda está en el origen del Estado moderno y en las innovaciones más recientes de los mercados financieros. Está implicada en las formas más descarnadas de violencia y control social y en las técnicas más refinadas de especulación financiera. Opera en las grandes transferencias de riqueza (como en los rescates bancarios) y en las transacciones ordinarias del día a día (pues bajo el vigente sistema monetario, el dinero es creado como deuda). La deuda es ubicua: es impagable y es uno de los motores del capitalismo contemporáneo.
¿Queda algo por hacer ante una tecnología social tan extendida y enraizada? ¿Es imaginable que al poder de la deuda pueda oponerse una lucha política fundada en el poder de los deudores? ‘Capitalismo de deuda’ es una excelente herramienta para adentrarse en la tarea de dar una respuesta a estas interrogantes
What Do Economists Mean When They Talk About 'Capital Accumulation'?
No full textTHE MISMATCH THESIS: What do economists mean when they talk about "capital accumulation"? Surprisingly, the answer to this question is anything but clear, and it seems the most unclear in times of turmoil. Consider the "financial crisis" of the late 2000s. The very term already attests to the presumed nature and causes of the crisis, which most observers indeed believe originated in the financial sector and was amplified by pervasive financialization.
However, when theorists speak about a financial crisis, they don’t speak about it in isolation. They refer to finance not in and of itself, but in relation to the so-called real capital stock. The recent crisis, they argue, happened not because of finance as such, but due to a mismatch between financial and real capital. The world of finance, they complain, has deviated from and distorted the real world of accumulation.
According to the conventional script, this mismatch commonly appears as a "bubble", a recurring disease that causes finance to inflate relative to reality. The bubble itself, much like cancer, develops stealthily. It is extremely hard to detect, and as long as it’s growing, nobody – save a few prophets of doom – seems able to see it. It is only after the market has crashed and the dust has settled that, suddenly, everybody knows it had been a bubble all along. Now, bubbles, like other deviations, distortions and mismatches, are born in sin. They begin with "the public" being too greedy and "policy makers" too lax; they continue with "irrational exuberance" that conjures up fictitious wealth out of thin air; and they end with a financial crisis, followed by recession, mounting losses and rising unemployment – a befitting punishment for those who believed they could trick Milton Friedman into giving them a free lunch.
This "mismatch thesis" – the notion of a reality distorted by finance – is broadly accepted. In 2009, The Economist of London accused its readers of confusing "financial assets with real ones", singling out their confusion as the root cause of the brewing crisis. Real assets, or wealth, the magazine explained, consist of “goods and products we wish to consume" or of "things that give us the ability to produce more of what we want to consume". Financial assets, by contrast, are not wealth; they are simply "claims on real wealth". To confuse the inflation of the latter for the expansion of the former is the surest recipe for disaster.
The division between real wealth and financial claims on real wealth is a fundamental premise of political economy. This premise is accepted not only by liberal theorists, analysts and policymakers, but also by Marxists of various persuasions. And as we shall show below, it is a premise built on very shaky foundations.
When liberals and Marxists say that there is a mismatch between financial and real capital, they are essentially making, explicitly or implicitly, three related claims: (1) that these are indeed separate entities; (2) that these entities should correspond to each other; and (3) that, in the actual world, they often do not.
In what follows, we explain why these claims don’t hold water. To put it bluntly, neither liberals nor Marxists know how to compare real and financial capital, and the main reason is simple: they don’t know how to determine the magnitude of real capital to start with. The common, makeshift solution is to estimate this magnitude indirectly, by using the money price of capital goods – yet this doesn’t solve the problem either, since capital goods can have many prices and there is no way of knowing which of them, if any, is the “true" one. Last but not least, even if we turn a blind eye and allow for these logical impossibilities and empirical travesties to stand, the result is still highly embarrassing. As it turns out, financial accumulation not only deviates from and distorts real accumulation (or so we are told), it also follows an opposite trajectory. For more than two centuries, economists left and right have argued that capitalists – and therefore capitalism – thrive on "real investment" and the growth of "real capital". But as we shall see, in reality, the best time for capitalists is when their “real accumulation” tanks! . .
The Political Economy of the Corporation: Sahil Jai Duta Interviews Sandy Brian Hager
No full textPERC’s Sahil Jai Dutta is joined by Dr Sandy Brian Hager (City, University of London) to discuss the political economy of the corporation. He is the author of the book Public Debt, Inequality, and Power: The Making of a Modern Debt State (2016) published by University of California Press. The conversation spans across the topics of ownership and the politics of public debt, the power of large banks in the US, and his most recent work exploring what drives long-term shifts in the stock markets in the ‘advanced’ economies
Political Economy of Capital Accumulation (YorkU, LAPS/POLS 4292 6.0, Undergraduate, Fall Term, 2020-21)
Get PDFCapital 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
Neoclassical Political Economy -- Skating on Thin Ice (Video Presentation)
No full textA critical examination of neoclassical political economy
Stocks are Up. Wages are Down. What does it Mean?
No full text[First of a two-paper series]
If you listen carefully, you can hear Jeff Bezos getting richer. There’s the sound again. Another billion in Bezos’ coffers. Let’s put some numbers to this sound of money. Since 2017, Bezos’ net worth has grown by about $4 million per hour — roughly 500,000 times the US minimum wage. This accumulation of wealth would be absurd during normal times. Today, as many workers lose their jobs to a brutal pandemic, it’s obscene. While Bezos is the pinnacle of capitalist excess, his wealth is part of a larger story. Over the last 40 years, stock prices have surged while wages have stagnated. What does this trend mean?
In this post, I take a deep dive into the stock market. I’ll first tell you what the stock market is not. It’s not an indicator of ‘productive capacity’. Nor is it ‘fictitious capital’. So what is it? The stock market, argue Jonathan Nitzan and Shimshon Bichler, is how capitalists quantify their power. To understand what Nitzan and Bichler are talking about, we’ll unmask the ritual that defines our social order — the ritual of capitalization. Read on to take the red pill and lift the veil of capitalist ideology.
[The second paper in the series, 'How the History of Class Struggle is Written on the Stock Market' (October 5, 2020), is here: http://bnarchives.yorku.ca/658/
Power -- Transcript and Video
Get PDFIn the book Walden, Henry David Thoreau famously wrote that “there are a thousand hacking at the branches of evil to one who is striking at the root.” And this is no accident. The structure of society, far from being easily interpretable, is purposely made opaque to us. Many veils are laid over the complex foundations of tyranny, many justifications which go unnoticed are marshalled to great success in confusing and distracting the people.
Philosophical ideas are the mental scaffolding that hold entire orders in place. The detours into philosophical analysis seen throughout political theory are not idle meanderings; they are the natural procession of political questions taken to their extent. This is why, early on in his Manifesto for a Democratic Civilization, Abdullah Ocalan says that “mighty social struggles are fought beneath the surface.” Enduring systems of thought and meaning silently underlie society’s functioning, giving it justification, forming its basic assumptions, and organizing the lives of the people that populate it under a paradigm.
This essay will discuss a great behemoth that lays just underneath the surface, often glimpsed, but rarely inspected in depth. It is what we actually discuss every time our conversations wander to the topics of suppression and revolt, conformity and autonomy, anarchism and authority. In these we are summarizing a much deeper structure, skirting an issue which subsumes all these common ideas. Let us lay out a theory of power