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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/
The Harder They Fall
Get PDFUntil a few months ago, the stock market narrative in the United States could have been summarized by the popular acronym BTFD – or ‘buy the fucking dip’. Analysts and strategists, emboldened by the world’s synchronized recovery, Trump’s pro-business policies and ample liquidity, predicted that equities would continue rising and recommended that investors take advantage of any temporary weakness to augment their stock holdings in anticipation of further upside. But the atmosphere of boom has since given way to doom and gloom. With equity markets having entered ‘correction’ territory, many observers, including some of the world’s richest investors, now warn of a coming crash and a protracted ‘bear market’.
On the face of it, this shifting sentiment has much to do with investors anticipating an earnings reversal. Corporate earnings growth has reached extreme levels from which a downturntrend in profits – and therefore in equity prices – seems imminent. But then, why should forward-looking stock prices be dependent on current earnings in the first place?
Our ‘CasP model of the stock market’ (2016) quantifies the changing importance of current earnings for US stock prices. This importance scales with the power of stock owners relative to workers: the higher the power, the greater the importance of current earnings. Now presently, this power is at record highs, which makes equity prices hypersensitive to changes in current earnings, and current earning are about to tank. Buckle your seatbelts for a hard fall
Global Capital: Political Economy of Capitalist Power (YorkU, GS/POLS 6285 3.0, Graduate, Fall Term, 2019-20)
Get PDFWhat is capital?
Despite centuries of debate, there is no clear answer to this question – and for a good reason. Capital is a polemic term. The way we define it attests our theoretical biases, ideological disposition, view of politics, class consciousness, social position, and more.
Is capital the same as machines, or is it merely a financial asset? Is it a material article or a social process? Is it a static substance or a dynamic entity? The form of capital, its existence as monetary wealth, is hardly in doubt. The problem is with the content, the stuff that makes capital grow – and on this issue there is no agreement whatsoever. For example, does capital accumulate because it is productive, or due to the exploitation of workers? Does capital expand from within capitalism, or does it need non-capitalist institutions like the state and other external forces? Is accumulation synonymous with economic growth, or can capital expand by damaging production and undermining efficiency? What exactly is being accumulated? Does the value of capital represent utility, abstract labour – or perhaps something totally different, such as power or force? What units should we use to measure its accumulation?
Surprisingly, these questions remain unanswered; in fact, with the victory of liberalism, most of them are no longer being asked. However, the silence is incomplete. As crisis and social strife intensify, the questions resurface. The accumulation of capital is the central process of capitalism, and unless we can clarify what that process means, we remain unable to understand our world, let alone change it.
The seminar has two related goals: substantive and pedagogical. The substantive purpose is to tackle the question of capital head on. The course explores a spectrum of liberal and Marxist theories, ideologies and dogmas – as well as a radical alternative to these views. The argument is developed theoretically, historically and empirically. The first part of the seminar provides a critical overview of political economy, examining its historical emergence, triumph and eventual demise. The second part deals with the two ‘materialistic’ schools of capital – the liberal theory of utility and the Marxist theory of labour time – dissecting their structure, strengths and limitations. The third part brings power back in: it analyses the relation between accumulation and sabotage, studies the institutions of the corporation and the state and introduces a new framework – the capitalist mode of power. The fourth and final part offers an alternative approach – the theory of capital as power (or CasP for short) – and illustrates how this approach can shed light on conflict-ridden processes such as corporate merger, stagflation, imperialism and the new wars of the late twentieth and early twenty-first centuries.
Pedagogically, the seminar seeks to prepare students toward conducting their own independent research. Students are introduced to various electronic data sources, instructed in different methods of analysis and tutored in developing their empirical research skills. As the seminar progresses, these skills are used both to assess various theories and to develop the students’ own theoretical/empirical research projects
PIB: Métrica Defectuosa en el Corazón de la Macroeconomía
No full text“Argumentamos que el PIB real es una métrica profundamente defectuosa. Es presentada como una medida objetiva de la escala económica. Pero cuando vemos debajo de su superficie, encontramos una subjetividad paralizante”.
Esa afirmación proviene de Blair Fix -economista especializado en energía y desigualdad por la Facultad de Estudios Ambientales de la Universidad de York-, Jonathan Nitzan -profesor de economía política en la misma universidad-, y Shimshon Bichler- profesor de economía política en diferentes universidades de Israel-, en una investigación conjunta publicada recientemente.
En su trabajo, Fix, Nitzan y Bichler analizan y desnudan varias falencias en la métrica del PIB real, encontrando sus debilidades incluso en la lógica y la matemática que lo subyace, comenzando con el uso del año base para calcular su valor, algo que de entrada desdibuja su objetividad y legitimidad como medida, pese a que es apenas “la punta del iceberg” de los problemas de PIB
Canada's Carbon Capitalism: In the Age of Climate Change
Get PDFThis historically and critically informed dissertation investigates the question why Canada has become one of the world’s leaders in promoting fossil fuels through its unconventional hydrocarbon industry in spite of the science and growing awareness of climate change. Using a critical historical political economy approach that encompasses both ecological or biophysical scientific realities and historical materialism, I examine this contradictory developmental trajectory as embedded in both the historical structures of everyday life and within Canadian and the wider global political economy. This dissertation argues that Canada’s current situation should be understood in a broader context as a morbid symptom that is embedded within the current global organic and leadership crises, since current leadership appears to support the contradiction of supporting carbon-based globalized social reproduction and preventing climate change. In doing so, this dissertation critiques both fields of international and Canadian political economy for largely sidestepping the importance of energy and energy systems in the production and reproduction of the global political economy. Using the conceptual lenses of carbon capitalism, petro-market civilization, and social reproduction, I demonstrate that energy or energy systems are just as foundational and inseparable from labour, technology, capital and war in the making and remaking of the global political economy. I show how growing energy demand, the peaking of conventional oil, potential energy insecurities, and a debt-based monetary system perpetuates and is dependent on unlimited growth. Moreover, I argue that the Canadian state and economy has become increasingly locked-in by disciplinary neoliberalism and the new constitutionalism – which are reforms, policies and laws that entrench capitalist social reproduction and make it more difficult to alter capitalist patterns of energy-intensive development. As a result, the current world order and global political economy is organized into a vicious cycle of path dependency whereby production and social reproduction require evermore fossil fuels. This could potentially be the largest paradox in human history as climate science suggests that humanity should be attempting to limit the production and consumption of greenhouse gases. I conclude by attempting to create a new pathways and objectives forward for social forces of resistance in current webs of power to form a post-modern prince movement in Canada that would seek to work collectively in rebuilding a new world towards decolonialization, promoting and establishing alternative modes of living and development that will replace the current fossil fuel-based dependency, monetary-debt system, mass consumption, and unlimited growth in Canada
A Reading List for Economic Heretics
No full textFROM THE REVIEW: Few books offer both a compelling critique of mainstream economics and a bold alternative vision for political economy. But in Capital as Power, Jonathan Nitzan and Shimshon Bichler have the audacity to do just that [...] Capital as Power represents everything that I look for in a paradigm-shifting work of science. It presents a compelling critique of existing orthodoxies, offers an alternative approach to political economy, and grounds this approach in innovative empirical research. Read Capital as Power and have your worldview forever changed
Yüzyılın Dünyevi Mabetlerinin Kapitalizasyonu ve Stratejik Sabotaj (The Capitalization of the 21st Century Secular Temples and Strategic Sabotage)
Get PDFTURKISH: Günümüzde kültür, teknoloji, tasarım ya da insan sermayesi gibi elle tutulur faydaları muğlak olan kavramlar en çok; bir şirketin, sanat eserinin, yazılımın ya da herhangi bir ürünün finansal değerini belirlemede etkin rol oynar hale gelmiştir. Bu durum da, bu muğlaklığın hem sektörde hem de akademide analiz edilebilmesi ve ölçülebilmesi çalışmalarını tetiklemiştir. Kentteki fiziksel çevrenin değerine etki eden önemli bir girdi olan “iyi tasarım”ın ne olduğu konusu ve ölçülebilme sorunsalı da, mimarlık alanında araştırma gündemini meşgul etmeye başlamıştır. Ne kadar çok elle tutulamayan fayda tespit ve ifşa edilirse, kentlerde o kadar daha çok “iyi” tasarım olacağı hakim görüşü, bu alanda araştırma yapanları çok kapsamlı modeller geliştirmeye yöneltmiştir. Fakat, 90’lardan itibaren başlamış bu çalışmalar, ne yazık ki, daha yaşanılır kentlerin oluşup gelişmesine beklenildiği gibi etki edememiştir. Bu bağlamda, finans sektörünün bu faydaları nasıl okuduğuyla ilgili daha içsel bir anlayış elde etmek için, “değerin güç teorisi” çerçevesinde, bu teorinin merkezine aldığı köksüz transnasyonel kapitalist sınıf lehine olan diferansiyel kapitalizasyon ve stratejik sabotaj kavramlarının fiziksel mekandaki izleri aranarak konu tartışmaya açılmış ve şehirlerdeki en büyük bütçeli projeleri finanse eden %1lik mimari patronajın mülkü olan günümüz seküler mabetlerine ve uzamsal boyutlarına bu mercekten bakılmıştır. Çalışmanın çıktısı olarak; bu mabetlerin ve onları ilgilendiren uzamsal boyutun farklı aktörler için ifade ettiği farklı değerler ve bu farklı değerlerin ya da faydaların nasıl kapitalize edildiği ve neden olduğu sabotaj biçimleri detaylandırılarak açıklanmış, ayrıca literatüre provokatif bir katkı sağlamak hedeflenmiştir.
ENGLISH. The concepts such as culture, technology, design, or human capital, the tangible benefits of which are vague, are mostly effective in setting the financial value of a company, a work of art, a software, or any product. This situation triggered both sectoral and academic studies intended for analyzing and measuring this vagueness. The subject of what the “good design” is, which is an important input affecting the value of the physical environment in the cities, and the problematic of its measurability started to occupy the architectural research agenda. The prevalent view that the more intangible benefits are detected and disclosed the more “good” designs the cities will have has prompted the people who conduct research in this field to develop very comprehensive models. However, these studies that started in the ‘90s unfortunately failed to have the expected impact on creation and development of more livable cities. In this context, to get a better insight of how the financial sector reads these benefits, the subject has been opened up for discussion within the framework of the “power theory of value”, by searching for traces of the differential capitalization and strategic sabotage concepts in the physical space, which are in favor of the rootless transnational capitalist class that is at the center of this theory and the modern-day secular temples owned by the 1% of the architectural patronage who finance the highest budget projects in cities and its spatial dimension have been seen through this lens. As an outcome of the study, different values these temples and the spatial dimension concerning them carry for different actors, and how these different values or benefits are capitalized, and the types of sabotages they cause have been explained in detail, and it has been targeted to make a provocative contribution to the literature
Has Wealth Gone Digital?
No full textHas wealth gone digital?
Both critics and cheerleaders of capitalism claim it has. The critics see non-material wealth as a problem. Digital wealth, they say, is fictitious. It’s lost touch with reality. The cheerleaders of capitalism see the same thing as a boon. Non-material wealth, they say, will decouple the economy from physical constraints. So the economy can grow forever! Which side is right? Neither, in my opinion. Instead, both sides misunderstand the nature of wealth. Wealth is not becoming non-material. No. Wealth has always been non-material. So the digital revolution isn’t changing the nature of wealth. It’s just laying bare the facts that have always been there
Call for Papers: Energy, Institutions and Society
No full textI’ve been asked to create panels for the upcoming International Conference on Thermodynamics 2.0. The conference aims to bring natural and social sciences closer. It will take place at Worcester Polytechnic Institute, Massachusetts, USA from June 22-24, 2020.
I’m calling the panel(s) Energy, Institutions and Society. I’m looking for research that connects energy to the structure of human society. Both theoretical and empirical contributions are welcome.
If you are interested, please send a title and abstract to me at [email protected]. The deadline is February 1, 2020
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