The Market as Hierarchical Leibnitzian Space

[Scot Griffin]

In his recently published doctoral dissertation, The Difference that Money Makes: Sovereignty, Indecision and the Politics of Liquidity, Colin Drumm makes some interesting observations regarding the nature of “the market.”  I think Chapter 1 is of particular interest to CasP, but I found the whole thing to be fascinating.

Some quick excerpts:

“Everyone in society is dependent on one another, but not everyone in society is equal, and the basic function of money is therefore to make equal exchange possible between persons who are fundamentally unequal.”

“Money requires something outside of itself to be money, in the absence of which the holders of the money asset will learn, like Midas, that they cannot eat it. What it requires is the existence of a market, i.e. the existence of a monetized economy in which money can be spent on demand.”

“In order for money to be spent, there must exist a place where the holders of money can go in order to have their demands to transact accommodated, and this place must literally and physically exist in time and space. And if I am to go there and demand to transact, there must be someone else there, waiting for me, who accommodates the demand to transact without demanding it themselves. This person is ‘the dealer.””

“Both the capitalist and the proletarian theorized by Marx are examples of what Jack Treynor, in “Economics of the Dealer Function,” calls “time-motivated investors.” Both, that is, have inflexible needs to transact in a certain direction and at a certain time. The worker needs to sell their labor and also needs to buy consumption goods, and cannot wait to do either one. The capitalist, on the other hand, not only needs to purchase circulating capital and to sell consumption goods, but also requires the ability to sell fixed capital itself (at least potentially). While the capitalist might be somewhat time-flexible in their need to buy fixed capital, in order for it to function as collateral — and thus to have a value as capital — it needs to have some degree of “liquidity,” or the ability to be sold on demand, since banks do not lend against collateral that they cannot foresee being able to sell themselves in the event of foreclosure, because banks are not in the business of holding seized collateral on their own books and managing it as a going concern. Both proletarian and capitalist are, therefore, in virtue of their subject positions, fairly inflexible about the direction and time in which they need to transact using money if they are to meet what we could call their “survival constraints” — figuratively, in the case of the capitalist firm, and literally, in the case of the proletarian. The only dimension of transaction in which these actors have any flexibility is: the price.”

According to Drumm, to exist, the market needs participants with different liquidity preferences, rewarding most those participants who can afford to be most patient, i.e., those who can exchange time for a better price.

To me, this hierarchical ordering (capitalist, dealer, and worker) and rewarding of market participants (via differential accumulation) based on their relative need for money (or its financial equivalent, capital) implies the market itself is an hierarchical Leibnitzian space defined by each participant’s position relative to money/capital, not to each other (i.e., the participant’s position within the hierarchy is determined by the space itself).

This observation is consistent with (if not the same as) CasP theory. From “The Capital As Power Approach. An Invited-then-Rejected Interview with Shimshon Bichler and Jonathan Nitzan”

In our view, though, there is something amiss in the Marxist setup. By forcing on capital-ism the universal language of labour, Marx ended up making both workers and capitalists growth seekers. And by insisting on this common goal, he eliminated, in one fell swoop, what CasP argues is  the main positional property of capitalists: their perpetual quest to re-distribute – or, in the terminology of the Leibnitzian space, re-position – incomes and assets. Contrary to Marx, we argue that capitalists seek redistribution – and specifically, differential accumulation – and that they seek this differential not as a mere means of growing their ‘real’ assets, but as an end in itself. In this sense – and in contradistinction to the Marxist view – their very purpose is to continuously reposition-read-creorder the Leibnitzian space they inhabit/constitute. And if our emphasis here is correct, it calls for a sea-change in the way in which we study society and seek to change it.

Anyway, Drumm has a lot of interesting ideas and insights. His dissertation is well worth the read, and I expect to keep coming back to it as I dig deeper.

 

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