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I know that Decapitalization is already an existing term within Finance, denoting when a portion of a principal of the fund is divested and made available to spend in support current operations per the terms of the fund.
But rather than use it this way, should Decapitalization be defined to mean the reversal of the process of Capitalization? (or would Uncapitalization be a better term?)
If Capitalization is the discounting of risk adjusted future expected returns to present value, and future expected returns are based on forecasts of revenue predicated on expected labour trends, company market comparisons, precedent transaction models, and consumption predictions, then can all the elements (I’m sure I don’t have all/the correct variables here) be influenced to increase risk and undermine capitalization?
Labour can be influenced through Strikes and Boycotts and Labour Unions
Precedent Transaction Models can be influenced through a domino effect of deflating some initial company valuations
Company Market Comparisons can be influenced by questioning the valuation methodologies and through Social Network effects that tarnish reputations
Consumption predictions can be influenced by gaining support for self-provisioning by communities, and cutting Dominant Capital out of the loop.Please help me understand the full range of variables that need to be affected for Capitalization to be adversely affected and undermined.
At present, the only concrete examples I’ve seen of suggestions for decapitalization, begin with housing, which will have a snow-ball effect on property markets, mortgage markets, rental markets, and ultimately will allow for greater levels of self-provisioning, but i feel like there are many variables that go unaccounted for.
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Anything that affects future earnings, hype, risk and the normal rate of return impacts capitalization. But undermining these factors must be intertwined, or at least go hand in hand, with autonomous, non-capitalized form of organization to address the material needs and wellbeing of most people. Without these alternatives, the power logic of capitalization remains intact and its quantities will rebound.
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Anything that affects future earnings, hype, risk and the normal rate of return impacts capitalization.
Is it possible to make an extensive list of all the factors that affect capitalization. My google searches are inadequate, because i dont know the correct search terms to look for.
But undermining these factors must be intertwined, or at least go hand in hand, with autonomous, non-capitalized form of organization to address the material needs and wellbeing of most people.
This is precisely what I’m trying to figure out. I know that it has to be a holistic approach that both supports resilient communities, and undermines capitalization. Otherwise there is a power vacuum that Capital will just re-fill.
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Is it possible to make an extensive list of all the factors that affect capitalization. My google searches are inadequate, because i don’t know the correct search terms to look for.
You might find the following observations overly general, but it is useful to point them out.
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You can make a list, but it will include everything that capitalists believe affects earnings, hype, risk and the normal rate of return. In other words, it will include anything and everything that capitalist modellers (and now days, also their AI algorithms) manage to map — and then some (gut feelings, animal spirits, etc.). However, I don’t think this long list will get you anywhere.
In my view, the first step is to create not a list, but a theory/model that allows us to organize, interrelate and, most importantly, weigh the different forces that bear on differential capitalization. This is what CasP research proposes and tries to do, and it is anything but simple.
In our paper ‘Growing Through Sabotage’ (2020), we have a section on ‘Full-Spectrum Hierarchy’, where we write that:
[…] the capitalist creorder can be conceived of as a full-spectrum hierarchy, an ever-changing enfoldment of vertical structures nested within other vertical structures. Ranking the different hierarchies of capitalism from the most abstract down to the most concrete, we can say that the more concrete hierarchies are regulated by – and in this sense enfolded in – the more abstract ones. A simplified illustration of this enfoldment is shown in Figure 3: the lowest level of abstraction comprises micro hierarchies; the micro hierarchies are nested in meso hierarchies; and the meso hierarchies are themselves encompassed by the meta hierarchies.
What do the different levels consist of? Begin with the most abstract, meta hierarchies. The hubs of these hierarchies comprise the foundational institutions of capitalism, including, among others, the notion of ‘liberty’ (the differential Latin libertates fused into a universal notion of freedom), the concept of ‘private property’ (the negative Latin privatus inverted into a positive notion of possession), the idea of ‘investment’ (the feudal power of investiture reincarnated as a productive act) and the ritual of ‘capitalization’ (the ancient Mesopotamian caput, or head, made into a fractal-like algorithm of power) (Nitzan and Bichler 2009: 26, 227-228; Part III). The nodes of the meta hierarchies are the broad facets of society – the various dimensions of culture, ethnicity, religion and nationalism, among other things. And the links that tie the hubs to the nodes are the conduits through which the former gradually, and with plenty of setbacks and reversals, mould, leverage, internalize and encompass the latter. [Footnote: Think of how the fractal-like sprawl of concepts such as ‘financial accounting’, ‘investment’ and ‘capitalization’ penetrate and permeate all levels of business – from the small grocery store, family firm and largest conglomerate, to mutual, pension and sovereign wealth funds, to patents and copyrights – as well as other social institutions and organization, such as the military (the capitalized ‘quantity’ of the military arsenal and the ‘return on military assets’), organized religion (‘Islamic finance’ and ‘faith-based funds’), NGOs (‘cultural capital’ and ‘social capital’), workers (‘human capital’) and so on (Nitzan and Bichler 2009: Ch. 9).] At the meso level, the hubs are capitalist polities, corporations and NGOs, the nodes are individual subjects and the links are the capitalist institutions, patterns of thought and modes of behaviour that weave them into shifting hierarchies. And it is only at the lower, micro level of this full-spectrum enfoldment that we find the inner structures of formal organizations examined by Fix.
So if [Blair] Fix is right in arguing that greater energy capture per capita requires more hierarchical coordination, we can go even further: we can hypothesize that, as the capitalist mode of power deepens and globalizes, a significant – and perhaps growing – proportion of this hierarchical coordination will occur outside the boundaries of formal organizations. It will take place not only at the intestinal micro hierarchies of corporations and governments, but also – and increasingly so – at the meso and meta levels of scale-free networks: the hubs and nodes here are the foundational institutions of capitalism, the broad cultural and political facets of societies and their basic organizational units, while the connecting edges are trade, production and ownership ties, the various media of ideology, religion and education, the law and, ultimately, the threat of force and violence.
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No matter how successful the theory, it is at best an approximation anchored in its own time and history. Moreover, and crucially, CasP theorizes and researches capitalized power, not the undermining of capitalized power. It is a guide to what is, not to what can be made. This is a crucial distinction. In order to overturn capitalism, you need to understand it; but understanding of what currently exists is not enough. The reason is that every step of overturning capitalism, even the smallest, generates new formations whose structures and constellations are difficult and often impossible to foresee. It took capitalists half a millennium of turbulent, path-dependent trial and error to undo feudalism. There is no reason to think that autonomous formations can overturn capitalism on a preset list or even a theory, no matter how insightful. Theory-informed action is forever work in progress.
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Anything that affects future earnings, hype, risk and the normal rate of return impacts capitalization. But undermining these factors must be intertwined, or at least go hand in hand, with autonomous, non-capitalized form of organization to address the material needs and wellbeing of most people. Without these alternatives, the power logic of capitalization remains intact and its quantities will rebound.
Again, I highly recommend Bob Meister’s Justice Is an Option, which posits the idea of using financial tools to “capitalize” the disruption caused by social movements; i.e., decapitalization through capitalization.
From the book description:
More than ten years after the worst crisis since the Great Depression, the financial sector is thriving. But something is deeply wrong. Taxpayers bore the burden of bailing out “too big to fail” banks, but got nothing in return. Inequality has soared, and a populist backlash against elites has shaken the foundations of our political order. Meanwhile, financial capitalism seems more entrenched than ever. What is the left to do?
Justice Is an Option uses those problems—and the framework of finance that created them—to reimagine historical justice. Robert Meister returns to the spirit of Marx to diagnose our current age of finance. Instead of closing our eyes to the political and economic realities of our era, we need to grapple with them head-on. Meister does just that, asking whether the very tools of finance that have created our vastly unequal world could instead be made to serve justice and equality. Meister here formulates nothing less than a democratic financial theory for the twenty-first century—one that is equally conversant in political philosophy, Marxism, and contemporary politics. Justice Is an Option is a radical, invigorating first page of a new—and sorely needed—leftist playbook.
Re-upping a link to a recent panel discussion with Meister regarding the book (in which he cites to Bichler and Nitzan) and his ideas.
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