- This topic has 5 replies, 4 voices, and was last updated November 1, 2024 at 9:56 am by .
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I’m trying not to overthink how I am applying a concept of physics to the methods of CasP, but I have recently been wondering where and why a picture of capitalist power is filled with dark matter — i.e., capitalist power that cannot be observed because it is private, informal, or illegal. There are the firms that are privately owned, so we cannot gather much financial information about them. There are organizations like churches where capitalization is relevant to what they own, but these types of organizations are not typically characterized in capitalist terms. Then there is the world of organized crime, where the biggest cartels have income streams that are large enough to compete with major multinationals. But good luck getting a glimpse of those ledgers — as Michael Corleone says to Kay at the end of The Godfather, only one time is she allowed to ask about the family business.
Here is the thought experiment: We somehow have a massive picture of every single person, firm, institution, church, and government that (a) sabotages by exerting control through ownership and (b) calculates future earning potential with a capitalization formula, sophisticated or rudimentary.
- How much of this picture is clear and observable to the outside researcher?
- What is required to see more of the picture?
- Do we need better data?
- Do we need more data?
- Do we require entirely new tools of measurement?
- Is this so-called dark matter a limit of CasP’s methods as they have been developed so far?
- If we magically could see the inner workings of private companies and other institutions, would we have better explanations for such effects as differential accumulation?
- Are the premises of this thought experiment false?
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While in physics, dark matter cannot be observed directly, it is studied through its effects on the broader system with which it exists.
Similarly, we could use resource flows around unobserved or unobservable capital.
Private firms do business with on-private firms, and while this won’t provide the full picture about them, it will provide hints on how to refine data about private firms.
Organized crime cartels and syndicates are already providing a ton of data…. But to the state entities that are meant to be investigating them. This data would include resource inputs, crime statistics, social networks, and probably a plethora of sources I can’t think of right now.
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Hi Pieter,
I wonder how CasP methods are weakened by the use of indirect measures. In my work, I know that I have to work very hard to substitute for the inability to use measurements of market capitalization, as Hollywood studios are only parts of larger conglomerates.
Take the concept of differential accumulation. In my opinion, it is a concept that is as substantive as the evidence that fills it. Indirect measures are better than nothing, but the concept really shines when it is possible to empirically measure the significance of events — i.e., differential accumulation occurred after X, or in parallel with Y.
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The ‘dark-matter’ syndrome is inherent to scientific modelling. All scientific models are wrong to some extent – either because the modellers exclude important elements and misrepresent or omit relevant relations, or because they over-simplify. The built-in errors are not always apparent — for example, initially, Ptolemaic cosmology seemed superior to the heliocentric one. And often the errors are being hidden by inventing new terms, such as Phlogiston in chemistry, the production-function ‘residual’ in economics, and (perhaps) the ‘dark matter’ of cosmology.
I think that, as a new approach with few researches and a very limited number of studies, CasP must be full of dark matter, residuals and Phlogiston-like substances. And I suspect that its unknowns extend far beyond the black and grey economies and unreported activities. In the grander scheme of things, CasP theory is still in its early sketching stages, and even its most brilliant studies merely scratch the empirical surface.
But there is an upside. Unlike neoclassical theory, which gave up science in defence of capitalism, and contrary to Marxism, which has been impaired by dogma and/or surrendered to postism, CasP is still young and uncommitted and therefore able to plow through many of these difficulties — at least for the time being!
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First, what is the motivation to incorporate a physics metaphor into CasP theory? For example, if “the quantum of capital exists as finance, and only as finance,” why are you looking to physics–and not accounting– for answers? Every corporate entity (whether private, public, for profit, not for profit, law-abiding or criminal) must nominally follow the same accounting rules for tax purposes. Whether or not you can see what’s in the books of private entities, you know what the accounting rules are. So, why can’t you build testable models based on the accounting rules?
Second, if it is appropriate to borrow metaphors from physics, is “dark matter” the right metaphor to use? From what I can tell, things like dark matter and dark energy are posited because, empirically, their absence implies a violation of the conservation laws physics calls thermodynamics. CasP theory, however, is not premised on conservation laws, and the fact that CasP theory to date has focused almost exclusively on the market capitalizations of publicly traded firms does not mean you need a theory of “dark capital” to understand capital as power in privately held firms. Yes, the fact that privately held firms don’t have market capitalizations may obviate the universality of certain assertions made by CasP theory, but it doesn’t obviate all of them, which suggests that the publicly traded firm, not the privately held firm, is the special case.
In any event, accounting is a system of conservation laws. Mirowski even argues that principles of accounting may have inspired the development of thermodynamics (see, More Heat Than Light.) This is one more reason to look to accounting for answers, not physics.
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To clarify, I am using a physics metaphor to illustrate the problem a theory will have with observable and unobservable phenomena. I was searching to find a general metaphor for the purposes of discussion. I had no intention to build new component of CasP with a more substantive concept of dark matter. I will let others decide what dark matter means in contemporary physics, and you are right be skeptical of integrating of an idea that is so foreign to accounting.
My curiosity relates to what Pieter and Jonathan are saying. CasP has blind spots and we might have different interpretations of what CasP is doing to solve for these blind spots. Is the method constructing problematic concepts in attempts to hide errors and assumptions? For example, Baines and Hager have published a critique of the CasP model of the stock market. As I read it, Baines and Hager believe that added concepts, like systemic fear, struggle to explain for the behavior of stock markets, relative to average income.
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