Capital as Power

May 26, 2009

No, this is not going to be a magnum opus about the evils of capitalism. It is instead an announcement of someone else’s magnum opus about the evils of capitalism (or so I gather).

Jonathan Nitzan and Shimshon Bichler are releasing their new book, Capital as Power: A Study of Order and Creorder, discussing their alternative theory of capital, the power theory of value (in opposition to utility or labor theories). Taking their lead from the Institutional school of economics (the old one; think Veblen), they propose a theory of capital as the quantification of power measured by differential accumulation.

From the back cover:

Conventional theories of capitalism are mired in a deep crisis: after centuries of debate, they are still unable to tell us what capital is. Liberals and Marxists both think of capital as an ‘economic’ entity that they count in universal units of ‘utils’ or ‘abstract labour’, respectively. But these units are totally fictitious. Nobody has ever been able to observe or measure them, and for a good reason: they don’t exist. Since liberalism and Marxism depend on these non-existing units, their theories hang in suspension. They cannot explain the process that matters most – the accumulation of capital.

This book offers a radical alternative. According to the authors, capital is not a narrow economic entity, but a symbolic quantification of power. It has little to do with utility or abstract labour, and it extends far beyond machines and production lines. Capital, the authors claim, represents the organized power of dominant capital groups to reshape – or creorder – their society.

Written in simple language, accessible to lay readers and experts alike, the book develops a novel political economy. It takes the reader through the history, assumptions and limitations of mainstream economics and its associated theories of politics. It examines the evolution of Marxist thinking on accumulation and the state. And it articulates an innovative theory of ‘capital as power’ and a new history of the ‘capitalist mode of power’.

From what I know of their theory, I haven’t decided yet if it’s just a remix of the same leftist class-struggle tune (Marx 2.0…or 3.0 or whatever version we are on now) or if it is something truly original. They certainly seem to think so. I’m also always a bit skeptical when I hear fictionalist claims about the ontology of abstract objects, especially in mathematical applications (if not in ethics); no one has ever “seen” pi either. What matters, it seems to me, is demonstrating indispensability in a theory. And last time I checked, power was a pretty vague and abstract notion itself.

But shame on me for judging a book by its cover. Frankly, the book’s table of contents seems to promise a very in-depth and systematic treatment of some topics that interest me greatly. It’s enough to make any economics geek drool. Doesn’t everybody get a little turned on by capital theory? For that reason alone, I will give it the benefit of the doubt and I plan to read it. I’m also looking forward to the inevitable response over at the LvMI. If you can’t wait to fork over your $40, you can check out chapter one for free. If you are interested in more B&N, you can find an archive of their work here and a forum here.

Also of note on the literary scene, Jeff Klooger has just released the first monograph in English on the philosophy of Castoriadis: Psyche, Society, Autonomy. It can be yours for a mere $179 (free shipping, if that helps).


3 Responses to “Capital as Power”

  1. Jay Gallivan Says:

    ‘Differential accumulation’ seems a bit like ‘I win and you lose’. All elitists I’ve met believe they have ‘won’ on the basis of their (or family or tribe or religion or ideology or whatever) ability – and sometimes a little luck. Always, they deserved victory. But what motivates push for domination – for winning? That there are winners an losers is obvious. But why the game? Why can’t we all just ‘get along’? Is it simply manifestation of natural selection – with a perverted objective function?

  2. dtc Says:

    ‘Differential accumulation’ is a way of analysing the success of capitalists within the sphere of capital. It is also a way of understanding how capitalists assess their own success. That is, there can be no absolute register against which accumulation can be measured. Instead, it can only be measured against ones fellow participants/competitors. This way of thinking is readily seen in the business press. Comparisons to ‘the average,’ judged against a standard benchmark, like the Dow Jones Industrial Average or the S&P 500, are very common.

    One of the important implications is that this decouples the interest of individual capitalists from the interest in aggregate growth. If you shrink by 5% while ‘the market’ shrinks by 10%, you differentially accumulate. This means periods of stagnation, recession or depression can actually be in the interest of some segments of capital.

    To the original author: Have you had a chance to look at the book? What is your assessment?

  3. Neverfox Says:

    I’m still reading it and I’m just getting to the meat of the positive argument. However, I’m a bit disappointed that the authors limit the opposition to neoclassicals and Marxists, as if, say, the Austrian school doesn’t exist. Since I already reject neoclassical and Marxian economics, but I am familiar with the Austrian free market school, it feels like a bit of a red herring in that regard. I would be much more interested in, say, a version of the book that confronts more heterodox schools. There are times too where the authors go on some rants that feel like they are taking time to carry out some personal and professional vendettas; the book could do without it.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: