Home Forum Political Economy Market As Metaphor

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  • #247528

    The “market” of political economy is not the market of capitalism.

    The market of political economy consists solely of buyers and sellers who voluntarily and freely subject themselves to the laws of supply and demand in their respective pursuits of happiness.

    The market of capitalism is anything but voluntary: most people must sell their labor in advance of payment to even gain access to the market, which they must do for survival.  Moreover, the market of capitalism is dominated by finance, who controls the means of exchange and, for a price, mediates every transaction between buyers and sellers. Finally, prices in the capitalism’s market are not set by the laws of supply and demand but by the whim of the seller.

    This mismatch between the market of political economy and that of capitalist reality makes me question the utility of continuing to use the “market” as the focus of political economy. At best, the term “market” can be understood as a metaphor for understanding capitalism, but does that metaphor create blind spots that prevent us from seeing and addressing certain features of capitalism that we might not miss using a different metaphor as a prism to focus our attention and thoughts?

    Would Capital as Power benefit from using a metaphor other than the market? Arguably, Mumford’s “mega-machine” is a metaphor already used by CasP, but is it a substitute for the market or something else? If we argue that capitalism’s “mega-machine” is the market, does that encourage us to look for features of the mega-machine that are abstracted away by the market metaphor? In many ways, the market is an empty, neutral space the sole function of which is to host economic transactions, but if we instead view the market as a purpose-built machine that is not neutral but designed to favor dominant capital, does that open new lines of thought and inquiry?

    Is one metaphor enough for either theory or praxis? The mega-machine metaphor can be used to understand capitalism from dominant capital’s point of view. Is there a complementary metaphor that can be used to understand capitalism from the point of view of the ruled?

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    • #247529
      Jonathan Nitzan
      • Topics started: 30
      • Total posts: 180

      Scot,

      Your notion of a “market” refers to the neoclassical setting of perfect competition. But this is only one possible setting, even in neoclassical theory. In capitalism, a market is a setting where commodities are exchanged (usually) for money. This is a very general definition that can accommodate any commodity/ies, participants, institutions and patterns of activity.

      If you get rid of this concept, how would you describe the reality it refers to?

       

    • #247530
      Scot Griffin
      • Topics started: 16
      • Total posts: 118

      Scot, Your notion of a “market” refers to the neoclassical setting of perfect competition. But this is only one possible setting, even in neoclassical theory. In capitalism, a market is a setting where commodities are exchanged (usually) for money. This is a very general definition that can accommodate any commodity/ies, participants, institutions and patterns of activity. If you get rid of this concept, how would you describe the reality it refers to?

      I agree that I presented the neoclassical definition of a market subject to perfect competition.  At the very least, though, the concept of a “market” should require the voluntary exchange of commodities, shouldn’t it?

      So, let’s take a look at the infamous “company store,” the only store in town where commodities are sold to laborers by the company that employs them in exchange for company scrip (i.e., a form of private “money”) in which they are paid.  The goods offered for sale in the company store are curated (purchased, repriced to add a profit margin, and resold) by the company that employs labor to the laborers, and only company scrip is accepted for purchases.

      Is the company store a market, or something else?

      I think it is extortion by another name, something that helps secure the indentured, if not involuntary, servitude of the company’s labor force. The presence of an exchange of money for commodities does not change the asymmetry of power in the relationship that enables the company to not only consume the labor of its employees but the fruit of their labor, as well. The market has been made a tool for extraction and is not merely a neutral “setting.”

      I am considering a variety of alternative metaphors, and I am not certain that any single one fully captures the reality of asymmetric power.  All I know for certain is that the reliance of classical and neoclassical economists on the term “market” is intended to hide power, to assume it away, and I don’t know how continuing to use that term can do anything other than slow down progress in understanding capital as power.  This is an error that Marx made, as well. In many situations, if you accept your opponent’s framing of the debate, you lose the argument.

       

       

       

      • #247531
        Jonathan Nitzan
        • Topics started: 30
        • Total posts: 180

        At the very least, though, the concept of a “market” should require the voluntary exchange of commodities, shouldn’t it?

        I don’t think so. All monetary exchange involves aspects of power, so in that sense, it is never entirely or even mostly voluntary. But it is never only about power either. In a company town, the power of the company is significant, but not absolute. If it were absolute — like in a slave plantation or a concentration camp — there would be no need for monetary exchange.

        The capitalist mode of power is mediated through monetary exchange. And if exchange is a vehicle of power, you cannot assume it away. In this sense, capitalism sans markets is an oxymoron.

        But I could be wrong.

    • #247532
      Scot Griffin
      • Topics started: 16
      • Total posts: 118

      The capitalist mode of power is mediated through monetary exchange. And if exchange is a vehicle of power, you cannot assume it away. In this sense, capitalism sans markets is an oxymoron.

      I do not proposing assuming or abstracting away exchange, but the metaphor of the market assumes/abstracts away power. What I am proposing is using a different analytical metaphor that will encourage/allow us to focus on and better understand exchange as a vehicle for both using and extracting capital/power.

      For example, the way I see it, every market transaction involves two separate exchanges, the exchange of money which is always intermediated by finance, and the exchange of the commodity itself between buyer and seller. Accordingly, I illustrate the market to show each circuit (the money circuit and the commodity circuit) such that finance is central, not exogenous, to the market.  My concern is that defining the market as it is will not necessarily change anybody’s existing understanding of “market,” which like “freedom” and “liberty” is iconic and capable of meaning different things to different people.

      You have already explored pricing power as it affects  exchange, and Tim DiMuzio has explored credit-money as it affects exchange, so it is clear that CasP is robust enough to make progress even through the market metaphor, but that may be because “power” itself is the primary analytical metaphor of CasP.

      • #247545
        Scot Griffin
        • Topics started: 16
        • Total posts: 118

        The importance of metaphors and metonyms to both linguistics and how we think, generally, is discussed in George Lakoff’s and Mark Johnson’s The Metaphors We Live By. (available on SCRIBD at the link).

        The danger of employing the market metaphor is that it an orientational metaphor that suggests organizational structure beyond the market itself, especially in neoclassical economics where the assumption of perfect competition is embedded in the market metaphor.

        As suggested by the concept of “the state of capital” and the observation of Philip Mirowski and others that the market cannot exist without the state to structure, realize and enforce it, considering the market in isolation creates many blind spots regarding how capitalism actually functions, including, e.g., the importance of credit money to the system, which Marx did not fully understand and, therefore, blithely dismissed finance itself.

        Anyway, as I’ve said here before, for the market to be free, people must be in chains. For the 70% of Americans who live paycheck-to-paycheck and cannot afford an unexpected expense of $400, the difference between their lives and living in a gulag is the illusion of autonomy fostered by  a lack of a physical prison and guards along with the extension of high-cost credit that ensures they remain indentured servants.

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