November 29, 2008

Being and Capital

Filed under: NP, Philosophy — duncan @ 7:24 pm

So here’s a fun parlour game. (NP is best at it :-P). Spot the many different ways in which philosophers attribute to Being the properties of capitalism, or of capital. Here’s a good one, from Heidegger’s A Dialogue on Language:

We say ‘correlation’ also when talking about the supply and demand of commodities. If man is in a hermeneutical relation, however, that means that he is precisely not a commodity. But the word ‘relation’ does want to say that man, in his very being, is in demand, is needed, that he, as the being he is, belongs within a needfulness which claims him.

Doesn’t this demand for man “as the being he is” (and the attentiveness to this demand required for an authentic relation to the two-fold of presence and presence of beings) sound a lot like the capital-labour relation?

“J: Man stands ‘in relation’ then says the same as: Man is really as man when needed and used by…

I: … what calls on man to preserve the two-fold.” [Those aren’t my ellipses – they indicate great minds finishing each others’ sentences.]

“[M]an who by nature stands in relation to, that is, is being used by, the two-fold.”

It is only when man is made into a use-value, when man is used (or used up ) in the relation to Being – that is, when man is used by capital in the relation to and production of capital (or, if you prefer, in the preservation of the two-fold) – it is only in this scenario that man truly is. That which uses man can only be preserved if man maintains his relation to it – capital depends on the capital-labour relation for its reproduction. Therefore it is our ethical duty, above all else, to attend to capital/Being’s demand.

It’s probably not a coincidence that this dialogue between “a Japanese and an Inquirer” also thematises what Heidegger calls “the complete Europeanization of the earth and of man”; the “modern technicalization and industrialisation of every continent.” I ought to say more about this – the way in which Heidegger’s romantic anti-capitalism reinscribes the production of the capital-labour relation within its (manifestly troubling) discourse of authenticity – but I think the parlour-game fragment will do for the moment…

November 18, 2008

Marx on Debt

Filed under: Economics, Marx, NP — duncan @ 5:51 pm

Why is there a social imperative, in capitalism, towards valorisation, accumulation, expansion of markets and production? Here’s a passage from Capital Volume III. Marx is talking about interest rates, and the division of surplus value into interest on capital and profit of enterprise.

[T]his mutual ossification and autonomization of the two parts of the gross profit, as if they derived from two essentially separate sources, must now be fixed for the entire capitalist class and the total capital. Furthermore, this is true irrespective of whether the capital applied by the active capitalist is borrowed or not, or whether or not the money capitalist who owns the capital uses it himself. The profit on any capital, and thus also the average profit based on the equalization of capitals among themselves, breaks down or is divided into two qualitatively different, mutually autonomous and independent parts, interest and profit of enterprise, which are both determined by particular laws. The capitalist who works with his own capital, as well as the one working with borrowed capital, divides his gross profit into interest that accrues to him as owner, as lender of his own capital to himself, and profit of enterprise, which accrues to him as an active, functioning capitalist. It becomes a matter of indifference, as far as this division is concerned, whether the capitalist really does have to share with another or not. The person who applies the capital, even if he works with his own capital, breaks down into two persons, the mere owner of capital and its user

Money that is lent out must be returned to the lender with interest added on – this is the principle of lending. [Though see below.] Another way of saying that: money lent out must be valorised. Now – this doesn’t mean that money lent out will ‘really’ be valorised, through the production of ‘real’ additional value. It doesn’t (contra my macroeconomics textbook) mean that all money lent out must be lent out for investment purposes (still less for successful investment). But the additional value that’s returned to the lender as the price of borrowing has to come from somewhere. For the particular borrower, this additional money could come from, say, reduced consumption at the appropriate time. But just as the capitalist class as a whole can’t make money by individual capitalists thieving off each other, so for the system as a whole interest on borrowing can’t be repaid just by taking money from elsewhere. If the economic system as a whole necessarily involves lending (which it does), then, for the system as a whole, there are only two options (both of which can be (and are) operative at once, of course): 1) default; 2) growth. [Though this ignores changes in price levels, which is really important. Sorry :-(.] I hope I’m more or less right in saying this.

What’s particularly striking about the Volume III passage I quoted, is that here Marx suggests that the logic of lending applies even to capitals that are not in fact lent out – that even the capitalist who invests his own money obeys the capitalist logic of interest and (therefore) valorisation. This is turn suggests that it’s a mistake to give too much emphasis to private property, in our analysis of the capitalist system. One of the things that’s distinctive about capital as a movement of valorisation, Marx suggests, is not private property per se, but rather the interplay between private property and debt, and the entrance of the social logic of debt into some kinds of apparently clear-cut private property.

November 15, 2008

Labour Theory of Value: Interim Report (Part 3)

Filed under: Economics, Marx, NP — duncan @ 5:16 pm

Okay – here’s the really controversial one [edited down substantially, since the original version – oh dear…].

In my opinion, the Labour Theory of Value is a fetishised form of thought – a theory that’s the product of, rather than say an expose or analysis of, fetishism, as fetishism is defined in Chapter One of Volume One of Capital.

Here’s part of the famous passage.

“It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things… I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities”.

This sort of fetishism stuff is I think generally read as something like: the thing which is manifested and occluded in commodities is the value-producing activity of labour. Value may appear to be a quality of the commodities themselves, but it is actually a property produced by labour, and then fetishistically attached to commodities, occluding the fundamental link between labour and value.

Now, as I’ve already said, I don’t think we should accept that labour has the particular property of producing value, or of endowing commodities with value. Instead, value is a social category produced or enacted by a whole set of social and economic relations.

Under some circumstances, in capitalism, it becomes plausible to attribute the property of producing value not to this whole set of relations, but rather to a particular relation – the relation between a worker and the means of production – and in particular to the labouring activity itself. It becomes plausible to see labour as solely productive of value. But this is not, in fact, the case. We have taken a complex set of social relations, actions, interactions, etc. and attributed their properties or the social properties they produce/enact to a particular object or activity. In relation to the commodity, in Chapter One, Marx calls this fetishism – a “definite social relation among men” which “assumes the fantastic form of a relation among things”. But men are things too – and our labouring activity can also fetishistically be granted properties that are in reality produced by a larger set of social relations. I think the labour theory of value can best be understood in these terms.

Now clearly this kind of ‘fetishism’ is less pervasive, in capitalism, than commodity fetishism; and there’s a whole lot of other stuff that really ought to be said, expanded on, or qualified. But the usual excuses. More to follow, eventually, hopefully.

November 12, 2008

Labour Theory of Value: Interim Report (Part 2)

Filed under: Economics, Marx, NP — duncan @ 4:23 pm

Okay.  Here’s my current favourite passage in Capital:

“It is the extraction of this surplus-value that forms the immediate process of production, and this faces no other barriers than those just mentioned.  As soon as the amount of surplus labour it has proved possible to extort has been objectified in commodities, the surplus-value has been produced.  But this production of surplus-value is only the first act in the capitalist production process, and its completion only brings to an end the immediate production process itself.  Capital has absorbed a given amount of unpaid labour.  With the development of this process as expressed in the fall in the profit rate, the mass of surplus-value thus produced swells to monstrous proportions.  Now comes the second act in the process.  The total mass of commodities, the total product, must be sold, both that portion which replaces constant and variable capital and that which represents surplus-value.  If this does not happen, or happens only partly, or only at prices that are less than the price of production, then although the worker is certainly exploited, his exploitation is not realized as such for the capitalist and may even not involve any realization of the surplus-value extracted, or only a partial realization; indeed, it may even mean a partial or complete loss of his capital.  The conditions for immediate exploitation and for realization of that exploitation are not identical.  Not only are they separate in time and space, they are also separate in theory.”  (Vol. III, p. 352)

I’m not sure I’m in a position to expand on this adequately now – but this passage strikes me as articulating the central equivocation in Capital.  The issue is – what is the relation between the “immediate production” and the “realization” of value?  According to this schema, value can be ‘produced’ that is never realized – and, indeed, the ‘production’ of non-realized value is central to the capitalist system.  Does not this lack of ‘realization’ of value that’s been (immediately) ‘produced’ reflect back on, expand, and in a sense transform the concept of ‘production’?  Indeed, isn’t this the heart of Marx’s argument – not just his argument about the systemic contradictions that produce crises, but also his argument about the coercive power of capitalist social relations to enforce the exploitations of capitalist production?  And doesn’t this stand in marked tension with the ‘standard’ labour theory of value, which I was complaining about in my last post?  If I were going to offer an interpretation of Capital – which I’m not, any time soon, because I’ve still got a whole lot of Marx still to ingest – I think I’d probably take my bearings from this passage, and others like it.

October 20, 2008

Working Definition of Capitalism

Filed under: Economics, Keynes, Marx, NP, Politics, Social Theory, Vitiated by Ignorance — duncan @ 5:29 pm

I’m feeling a bit behind in economics stuff. So I thought I’d throw up a working definition of capitalism, open to wholesale revision if necessary, of course.

Say that capitalism has two main features.

1) Blind accumulation / consumption.

Capitalism is a system of economic and social organisation oriented toward production as an end in itself. Clearly the ‘profit motive’ is important here. But the ‘profit motive’ is only one of the more important of the various group or individual inclinations created by and sustaining a system oriented to production for its own sake. It’s a secondary question what is produced, and why – which is why Marx talks about people being subordinated to the processes of production, rather than the other way around. Another useful touchstone here is Keynes, in The Economic Consequences of the Peace.

The immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, were, not less than the pyramids of Egypt, the work of labour which was not free to consume in immediate enjoyment the full equivalent of its efforts.

Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the labouring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of society into accepting, a situation in which they could call their own very little of the cake that they and nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated.

Another good touchstone here would be Weber on the Protestant Ethic, but it’s a while since I read it. And thinking of Weber, an important point of divergence from Keynes in this passage, I think, should be his analogy with religion. Depending on our understanding of religion, this may be fine – but it’s important to register, I think, that a general social inclination towards blind accumulation need not be produced by any individual or group faith in or orientation towards that end. We ourselves don’t need to believe in the virtues of blind accumulation in order for our actions to part of a social-economic system oriented towards it.

Another question here is what we mean by ‘production’. Capitalism counts certain behaviours as productive and others as non-productive. Indeed, there’s a two-fold division – between those activities that supposedly fall entirely outside the capitalist system of production (say, much of family life), and those in some sense non-productive activities that are universally acknowledged as central (e.g. finance). Not sure I’ve got anywhere to go with this just yet. But worth noting, I think, that lots of stuff that’s supposedly external to capitalism even in the former sense is no doubt important to the reproduction of the social forms that everyone acknowledges as capitalistic.

More should be said on all this, obviously, but moving on…

2) A system of production oriented around wage labour.

This is altogether shakier than #1, I think. Clearly slavery has played and continues to play a profoundly important role in capitalist accumulation. Nevertheless, the reason Marx gives labour such an important role in his economic & political writings isn’t just that he’s participating in and trying to foster a political movement of the working class; and isn’t just because labour as a transhistorical activity is essential to any production at all. Marx also sees wage labour as an essential feature of the capitalist system. (c.f. Diane Elson on The Value Theory of Labour.) My historical knowledge is more than a little shaky – but I think it’s probably fair to see capitalism proper emerging alongside the social upheavals that created a large-scale market in wage labour.


Probably worth noting, however, that we don’t necessarily need to find an essence of capitalism in order to, like, talk about or oppose it. It’s worth at least thinking about what such an essence might be, however, since lots of the central features of capitalism that we want to fucking abolish – e.g. massive exploitation – clearly aren’t specific to capitalism (even if capitalism’s specific forms of exploitation are). Also, contrariwise, because if we have an inaccurate sense of what’s essential to the capitalist system, we may direct our critiques and action against political or social forms that capitalism (and its regimes of exploitation) can operate perfectly well without.

Or it may be unhelpful even to think in these terms, I’m not sure.

[As will become customary, the ‘NP’ tag means that this stuff is… erm… in dialogue with Rough Theory. NP has a couple posts about Diane Elson’s essay here, for instance.]

October 13, 2008

Between Totality and Individualism

Filed under: Economics, NP, Politics — duncan @ 4:21 pm

Good old economic individualism: I’m sure I read somewhere in Krugman’s textbook (he’s won the Nobel Prize, you know) that economists have nothing to say about the origin of individual preferences. Contrariwise, your Hegelian Marxists will bang on and on about the need to understand capitalism from the perspective of the totality. Here’s Marx in Volume III: “The distinctions between rates of surplus-value in different countries and hence between the different national levels of exploitation of labour are completely outside the scope of our present investigation. The object of this Part is simply to present the way in which a general rate of profit is arrived at within one particular country.” Why is a country the unit of analysis, here? When your Marxy social theorists talk about the forces present in a society, how is the limit and cohesiveness of a ‘society’ determined? There’s a big problem with the sort of Lukacsian stuff oriented toward a general (hypostatised) social entity, which has, apparently, powers of agency. (I’ve also been reading Postone.) How the fuck is the identity and nature of this social being determined – is it just a Durkheimian social apriori big blob of jelly, floating around, influencing individual actions? Obviously some kind of ‘social’ needs to be posited if you’re not going to end up with wacked up monadic individualism – but a lot of the political-economic stuff I’m looking at seems to alternate between either wacked-up monads or frankly mystical Hegelian-Durkheimian hypostatisation of ‘Society’. It’s enough to turn you Thatcherite.

Take the present ‘financial’ crisis. Boring repetition: the root cause is the decline of US power. Your post-war Pax Americana was a system or set of systems principally oriented toward the appropriation of the ‘developing’ world’s resources. At some basic level, this is all backed up by military power. But of course power and influence work in a multitude of mysterious ways – the system runs on its own; the set of personal and institutional orientations that have their quote-unquote ‘objective’ basis in the threat and reality of violence are monstrously powerful in their own right. The thirty-year credit boom just ended was, in a way, the system continuing to operate toward this end as the ‘objective’ grounding for it ebbed away. So you’ve got a situation where the dollar is acting as the world’s reserve currency, because the US is the biggest of the too-big-to-fail economic entities we hear so much about, and yet the dollar’s supposed rock-solid stability is used to ground the massive indebtedness of the apparent exploiters to the apparently exploited. [and yes yes I know fine.]

Point is that in, say, the Great Depression, the different social forces at work in capitalism ground against each other to undermine the general orientation of the system: blind accumulation / consumption. This kind of thing can’t be understood from the perspective of ‘totality’ – because ‘totality’ (or the Durkheimian ‘social’) can’t provide adequate resources to describe such conflicting or contradictory movements. But neither can these movements be understood from the perspective of individualism – because one needs to take account of social and institutional inclinations and inertia that can’t be placed in the black box of individual preference. You don’t have individual preference on the one hand, and then the system within which individual preferences operate, on the other. Not as in the individuals, states and markets model of economic textbooks – but not as in the Durkheimian distinction between a hypostatised society providing conditions of possibility of social thought or action, and individuals operating within it, either. The social conditions of possibility and the choices that are made within them are ‘ontologically’ the same, if that makes any sense at all. And we need to hold this thought, while also being able to think about social activities that can’t be understood while focussing simply on the micrological. At one level this is trivially obvious. But I find it troublesome.

Newsnight’s economics editor, Paul Mason, has a blog that’s well worth reading. He’s a solid lefty – according to Amazon, he’s written a book about the global labour movement called ‘Live Working or Die Fighting’ (!) – and in this post I think he’s perhaps being a little optimistic. Still:

“My thesis is, now, competition is effectively over. These banks were competing with each other at the margins – churning customers to get people onto more lucrative deals, encouraging credit-card swapping, bombarding us with ads designed to generate specific business etc.

Any state-backed bank that does this will be greeted with howls of protest by the others and some customers…

Once the wing public realises these companies are being run in part in the public interest there will be an avalanche of campaigns: over small business interest rates, over rip off lending practices, over offshoring. The banks, in other words, will be required to show some social responsibility towards their actual customers…

When my grandfather’s colliery was nationalised they stood there and watched the flag go up, got in the cage and hacked away at the same coal on the same wages etc. Only crazy radicals believed there ought to be some actual change in the way the pits were run. This is a very 21st century nationalisation: the first in the age of info-capitalism. I have no way of predicting what its social or economic outcome will be, because there is nothing in the manifestos, think tanks, books, speeches of any of the main parties to indicate what they might do.”

To be honest, I’ll be pleased if the politicians manage a transition to a multi-polar world without killing us all. But if they’re going to be transforming it anyway, it’d be nice to get a banking system oriented towards something other than profit. Fat fucking chance – but possibly worth making some noise over.

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