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Firstly, as far as I can see, this hasn’t been covered in the forum yet but apologies if this has been addressed elsewhere.
My question is about how broadly and loosely can we use the terms (differential) breadth and depth before we’ve completely strayed from CasP theory? These terms seem to have a lot of potential for understanding power more generally so I’d like to clarify their strictly CasP usage.
Back in October 2021, Cory Doctorow posted a thread on Twitter discussing Chris Mouré’s terrific “Soft Wars” research. In the thread Cory provides a perhaps less than pure CasP definition of breadth and depth:
There are two strategies for accumulating power: one is “breadth”: to grow the market as much as possible, thus accumulating profits faster than the average competitor, eventually taking a commanding lead over the rest of the field.
The other strategy is “depth,” dominating your sector by capping its growth and then taking as much business away from your rivals as possible – if the industry is crucial (like, say, software), then dominating it gives you a LOT of power, even if you’re strangling it.
The Bichler and Nitzan twitter account replied clarifying the terms as per their proper use in CasP:
‘Breadth’ — raising employment faster than the average
‘Depth — raising profit or capitalization per employee faster than the average.
Multiplying breadth x depth tells you whether total profit or capitalization beat the average.
Breadth measures the *relative size* of the capitalized organization.
Depth measures the *relative power per unit of organization*.
Breadth x depth measures the *overall power* of the capitalized organization.
Differential breadth and depth can be increased through green-field growth, mergers & acquisitions, stagflation and cost cutting.
Economists glorify growth and cost-cutting, but differential accumulation is driven mostly by M&A and stagflation.
Why only count employees?
Why is it breadth and depth only measured in terms of employees and earnings per employee? Is this simply because it is easiest to measure?
Both external and internal breadth result in the control (employ/ownership) of both more employees and capital, and potentially other factors like land or market share more generally. Similarly with external and internal depth, both increase profits or capitalisation relative to employees, capital, land, etc, at least as far as I can tell.
The measurability has clearly been fruitful in empirically revealing the internal breadth to external depth cycle, so I’m certainly not questioning the validity of the strict definitions as they currently stand. But is there scope for insight on including more factors or focusing on different factors?
I am also a tad confused about this definition offered in the Bichler and Nitzan tweet as I had it in my mind breadth/depth mainly focused on capital accumulation rather than employees. A quick skim of those sections in the book hasn’t clarified this but more than likely I’m missing something.
Cogs in the Megamachine?
I remember CasP builds on Lewis Mumford’s idea of the “megamachine”, the social technology of large hierarchies. In this framework it would make sense to consider people employed in a firm to be “units of organisation” within the “capitalised organisation” – but is that the thinking behind the approach? That only people count in the equation of social power because they’re the only “factors” of production to which social power applies? I guess machines, IP and land don’t think or act, and their ownership is a wholly social matter in that it only exists with thinking, acting people.
Hard CasP vs Soft CasP?
I wonder if there’s a more “Soft Casp” way of seeing power accumulation that, while certainly less empirically inclined, might offer ways of understanding or at least speaking of power more generally.
For example, we could speak of a tyrant pursuing zero-sum growth of the (internal) breadth of their power over [insert object of domination here]. Similarly, we could speak of a tyrant who, feeling threatened in their power, decides to go for broke, stretching and pushing everyone around them to maximise the (external) depth of their power.
This would clearly be the least formal use of the terms, but if thats the limit, how much more specific do we need to be to get back in CasP territory?
Are there other factors besides employees worth considering as part of their own differential breadth and depth regimes in capitalism?
Lastly, how useful might the internal/external, breadth/depth matrix be to understanding other modes of power I wonder?
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Why is it breadth and depth only measured in terms of employees and earnings per employee? Is this simply because it is easiest to measure?
I could be wrong, but my understanding is that this narrowing of focus is because when we assess an entire market more broadly, we must necessarily be dealing with averages, rather than differentials. And so while we might get a general assessment of whether a market sector or industry is increasing depth or breadth, we lose view on the winners and losers within that market segment or industry, and that defeats the purpose of understanding the cycles of breadth and depth that individual firms go through in the process of accumulating power.
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Shimshon and I argue that capitalized power is a quantitative relationship between entities. In its broadest sense, it is conceived as a differential, measured by the ratio between the capitalization of the entity in question (A) and the capitalization of other entities (benchmark):
1. capitalized power of A = capitalization of A / capitalization of the benchmark
We further argue that this differential can be applied to the elementary particles of capitalization, which we identified as future earnings, hype and risk (the normal rate of return, being common to both numerator and denominator, drops from the differential equation).
Looking at profit only, we get:
2. differential profit of A = profit of A / profit of the benchmark
For any capitalist entity, the following identity (and its differential parallel) always holds:
3. profit = employment * profit per employee = breadth * depth
Mathematically, the choice of this specific decomposition is arbitrary. We can easily generate other decompositions that will be equally valid. For example, profit = sales * (profit/sales), or profit = number of company cars * (profit/cars) are as valid as Equation 3.
The reason we prioritize Equation 3 over other decompositions is theoretical. In our view, social power, including capitalized power, is exercised over people and by people. The exercise and impact of this power are multidimensional, of course, spanning much of what happens in society. But it is often useful to address this exercise/impact at two distinct levels, by looking at (1) direct power over the entity’s employees (breadth), and (2) indirect power, exercised through the activities of those employees on the rest of society (depth).
Two useful points follow.
First, our breadth/depth bifurcation is one of many possible choices. We found it useful in generating and explaining DA regimes and other processes. But that’s us. If you think, for example, that under certain circumstances profit = sales * (profit/sales) is more appropriate, go ahead and use it – but note the implications. For example, unlike employment, sales involve direct as well as indirect power, since they relates not only to the entity’s employees, but also to prices paid and spending made by buyers outside the entity.
Second, the decomposition itself neither reveals nor masks the underlying exercise/implications of power. It simply attributes them in a particular way. For example, the power aspects of advertisement relate mostly to depth in our Equation 3 decomposition, but span both depth and breadth if we use profit = sales * (profit/sales) instead.
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Thanks for the reply Jonathan! That really clears things up about how and why breadth and depth is defined and used in CasP.
The reason we prioritize Equation 3 over other decompositions is theoretical. In our view, social power, including capitalized power, is exercised over people and by people. The exercise and impact of this power are multidimensional, of course, spanning much of what happens in society. But it is often useful to address this exercise/impact at two distinct levels, by looking at (1) direct power over the entity’s employees (breadth), and (2) indirect power, exercised through the activities of those employees on the rest of society (depth).
So it seems there is some scope for concepts like breadth and depth to understand other modes of power, albeit in a less systematic way absent a CasP level model of that mode of power.
Perhaps something along the line of “(1) direct power over the entity’s [objects of domination] (breadth), and (2) indirect power, exercised through the activities of those [objects of domination] on the rest of [the broader social arena] (depth)”
Whatever the case, this clarifies the CasP approach. Thanks!
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Thanks for the reply Jonathan! That really clears things up about how and why breadth and depth is defined and used in CasP.
The reason we prioritize Equation 3 over other decompositions is theoretical. In our view, social power, including capitalized power, is exercised over people and by people. The exercise and impact of this power are multidimensional, of course, spanning much of what happens in society. But it is often useful to address this exercise/impact at two distinct levels, by looking at (1) direct power over the entity’s employees (breadth), and (2) indirect power, exercised through the activities of those employees on the rest of society (depth).
So it seems there is some scope for concepts like breadth and depth to understand other modes of power, albeit in a less systematic way absent a CasP level model of that mode of power. Perhaps something along the line of “(1) direct power over the entity’s [objects of domination] (breadth), and (2) indirect power, exercised through the activities of those [objects of domination] on the rest of [the broader social arena] (depth)” Whatever the case, this clarifies the CasP approach. Thanks!
Remember that capitalism’s differential accumulation (DA) is determined by differential growth. See, Chapter 14, footnote 17 of Capital as Power (2009) at page 328. Breadth and depth are just another way to say expansion and contraction (or consolidation), and which regime an industry finds itself in is largely determined by where it is on the so-called s-curve.
While differential growth likely is important to prior modes of power, the question is differential growth of what? I don’t think viewing feudalism and slavery as modes of power is useful in answering that question.
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Remember that capitalism’s differential accumulation (DA) is determined by differential growth. See, Chapter 14, footnote 17 of Capital as Power (2009) at page 328.
Differential growth rates of earnings, hype and risk. These are not necessarily tied to growth of production, especially in terms of expanding with the building of new green-field technology.
S-curves and other business cycle theories tend to fall into a common problem: stagnation is the twilight of business enterprise, which makes the next wave of growth the logical transformation or rejuvenation of what stagnated. The breath and stagflation indices (see also the work of Joe Francis) do have periods and amplitudes, but these are observed empirically, rather than theorized as a mechanical motion of a capitalist engine. ***Edited add: (It’s easy for abstract theory to make a historical pattern or tendency seem overly structural. For a good example of someone trying to think of hype as a business cycle, but without going too far in terms of defining an inherent rule of capitalist development, see the creative work of Yuri Di Liberto).
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Remember that capitalism’s differential accumulation (DA) is determined by differential growth. See, Chapter 14, footnote 17 of Capital as Power (2009) at page 328.
Differential growth rates of earnings, hype and risk. These are not necessarily tied to growth of production, especially in terms of expanding with the building of new green-field technology.If the goal is to search for analogs to CasP’s concepts of breadth and depth in other modes of power, insisting on using the precise metric with which CasP measures differential growth is unnecessarily limiting and, ultimately, misguided. You won’t be able to see anything because you’re wearing CasP blinders. We are searching for similarities and equivalencies, not identity, so it is better to abstract away some of the details to widen our field of view.
S-curves and other business cycle theories tend to fall into a common problem: stagnation is the twilight of business enterprise, which makes the next wave of growth the logical transformation or rejuvenation of what stagnated. The breath and stagflation indices (see also the work of Joe Francis) do have periods and amplitudes, but these are observed empirically, rather than theorized as a mechanical motion of a capitalist engine. ***Edited add: (It’s easy for abstract theory to make a historical pattern or tendency seem overly structural. For a good example of someone trying to think of hype as a business cycle, but without going too far in terms of defining an inherent rule of capitalist development, see the creative work of Yuri Di Liberto).
I made no claims about the s-curve other than the one I made, which is that the relative maturity of an industry largely determines the regime of differential accumulation firms in that industry find themselves in at any given time. The s-curve asserts the growth rate of an industry changes over time, an assertion that would seem to have empirical support. If the goal of a capitalist firm is to beat the growth rate of a benchmark (“the average”), which CasP says it is, then the maturity of an industry has a large effect on which strategic choices are available to a firm competing in that industry.
In any event, breadth and depth are best viewed as regimes at a macro level (e.g., individual industries or dominant capital writ large) and should not be viewed as strategies undertaken by individual firms. “Green-field” is only available when an industry is emerging, for example. If a large incumbent firm seems to be engaging in green-field growth, it is more likely engaged in anti-competitive behavior. See, Microsoft v. Netscape, Wal-mart v. local general stores, and Borders Books v. local booksellers.*** On the other hand, no firm in an emerging industry will ever engage in a depth “strategy,” which would gift market share to its competitors and doom it to failure.
*** CasP analysis relies on macro level stock market and economic data that necessarily is incomplete: the data only reflect what is measured. So, the stock market measured the growth of retailers like Wal-Mart, Target, Borders Books, and Home Depot, but it did not measure the destruction of local retailers that fueled that growth. What is green-field to the stock market may be long-plowed, well-known ground to the market more broadly, just as North America was green-field to the Europeans but not to the indigenous peoples who had lived here for thousands of years.
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If the goal is to search for analogs to CasP’s concepts of breadth and depth in other modes of power, insisting on using the precise metric with which CasP measures differential growth is unnecessarily limiting and, ultimately, misguided. You won’t be able to see anything because you’re wearing CasP blinders. We are searching for similarities and equivalencies, not identity, so it is better to abstract away some of the details to widen our field of view.
Who is this “we” in this search for similarities and equivalencies? There are unstated premises in this argument about method and the promises of historical research, so I am not clear about the things I am guilty of not doing well or at all.
Scot, I apologize if I came across as a hall monitor catching you breaking a school rule. I fully support any experimental modification to any method — I like to think that I have been able to make a few modifications myself — but the reference to a specific footnote about DA was a bit curious. If you think BN’s definition of differential growth is limiting, why must the abstraction come from a source that is constructed of variables you think are not helpful? Rather than interpret BN’s DA as really talking about differential growth in general, build a different pathway to your theory. To make BN’s version of DA function as a concept for all historical modes of power, you do have to empty it of all content. And then what is left? As you put it yourself, what in world would we be saying if we stated that a feudal lord or slave owner needed to differentially accumulate?
*** CasP analysis relies on macro level stock market and economic data that necessarily is incomplete: the data only reflect what is measured. So, the stock market measured the growth of retailers like Wal-Mart, Target, Borders Books, and Home Depot, but it did not measure the destruction of local retailers that fueled that growth. What is green-field to the stock market may be long-plowed, well-known ground to the market more broadly, just as North America was green-field to the Europeans but not to the indigenous peoples who had lived here for thousands of years.
I’m of the opinion that the incompleteness of differential measures of dominant capital makes it very easy for bad or lazy CasP research to be done. But that assumes the researcher is doing the bare minimum with a quantitative measure; and does the possibly for someone to do bad CasP research invalidate the method? I am not going to list all of the work I respect, but excellent CasP research knows that a measure of differential capitalization says, on its own, very little about how a firm or set of firms successfully differentially accumulated over a period of time. The harder job is to carefully demonstrate that relevant phenomena, including a qualitative history, corroborate a theory that financial measures are symbolic representations of power.
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Who is this “we” in this search for similarities and equivalencies? There are unstated premises in this argument about method and the promises of historical research, so I am not clear about the things I am guilty of not doing well or at all.
Apparently, the “we” is just Jordan and me.
Lastly, how useful might the internal/external, breadth/depth matrix be to understanding other modes of power I wonder?
So it seems there is some scope for concepts like breadth and depth to understand other modes of power, albeit in a less systematic way absent a CasP level model of that mode of power.
Or did my reading comprehension fail me this time?
Scot, I apologize if I came across as a hall monitor catching you breaking a school rule. I fully support any experimental modification to any method — I like to think that I have been able to make a few modifications myself — but the reference to a specific footnote about DA was a bit curious.
I referred to footnote 17 in a misguided attempt to avoid triggering a response like yours. I abstracted away the detail of growth rate and cited to the footnote to indicate (1) I was aware that within CasP it is growth rates that matter, and (2) provide the most simple and complete statement of differential accumulation/growth according to CasP, i.e., I was not hiding the ball, I was telling everyone exactly where to find it (and you did!).
If you think BN’s definition of differential growth is limiting, why must the abstraction come from a source that is constructed of variables you think are not helpful? Rather than interpret BN’s DA as really talking about differential growth in general, build a different pathway to your theory. To make BN’s version of DA function as a concept for all historical modes of power, you do have to empty it of all content. And then what is left? As you put it yourself, what in world would we be saying if we stated that a feudal lord or slave owner needed to differentially accumulate?
I was just trying to help Jordan think through the problem as he presented it (my response that referenced footnote 17 literally quoted the response in which Jordan referred to using CasP concepts to understand other modes of power, i.e., the second quote from Jordan, above).
Do I think BN’s definition of differential accumulation/growth is limiting? No, not in and of itself, and certainly not with respect to capitalism, but if, like Jordan, you are trying to extend the concept of differential accumulation to modes of power other than capitalism, you do have to “empty” at least some of CasP’s detail. Do you have to empty all of it? No, not if you free yourself of Marx’s framing of prior modes of production as stand-ins for prior modes of power and focus first on what makes those modes similar (compounding interest) before focusing on what makes them different. Then the central question becomes what is the difference that capital makes (my view: by cleaving the function of storing value from money itself and assigning it to finance, the innovation of capital eliminated the constraint that hoarding money placed on the economy and thus changed the nature of political economy from a zero-sum game to one that nominally permits perpetual growth). At least things seem that straightforward to me, but more work needs to be done, and I could be mistaken.
I’m of the opinion that the incompleteness of differential measures of dominant capital makes it very easy for bad or lazy CasP research to be done. But that assumes the researcher is doing the bare minimum with a quantitative measure; and does the possibly for someone to do bad CasP research invalidate the method? I am not going to list all of the work I respect, but excellent CasP research knows that a measure of differential capitalization says, on its own, very little about how a firm or set of firms successfully differentially accumulated over a period of time. The harder job is to carefully demonstrate that relevant phenomena, including a qualitative history, corroborate a theory that, even in empirical measures of the stock market, we are witnessing processes of power.
Again, I was not discussing CasP research. I was discussing whether and how CasP concepts can be applied to prior modes of power. As indicated by my quasi-footnote, however, I have seen instances where the concepts and terminology of differential accumulation regimes have been applied to the “strategy” of a single company, e.g., Walmart, and that is what I was objecting to as misguided, in part because the available data may not tell the whole story, i.e.:
In any event, breadth and depth are best viewed as regimes at a macro level (e.g., individual industries or dominant capital writ large) and should not be viewed as strategies undertaken by individual firms.
The written word is superior to the spoken word in many ways, but that does not negate the possibility of misunderstanding one another. I actually expect you and others here (looking at you, Jonathan) to act as “hall monitors,” especially if an interloper like me gets something obviously wrong. This is the CasP forum, not the Scot Griffin Pontification Channel. In this particular instance, I think you’ve been a bit overzealous in your hall monitor role, but I am okay with that, if you don’t mind me being a little annoyed (which I am, but I will get over it).
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In this particular instance, I think you’ve been a bit overzealous in your hall monitor role, but I am okay with that, if you don’t mind me being a little annoyed (which I am, but I will get over it).
Apologies for the annoyance, Scot.
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Apologies for the annoyance, Scot.
And the same to you, James.
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