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There is a surprising amount of information in this chart. On that front, chart making is like writing. You don’t realize how much there is to it until you try to do it yourself.
This has turned into a very interesting thread. To return to Brian’s original comments, I think that the law and capital as power are in need of further research. The way I think of it is that Nitzan and Bichler have laid out what they see as the broad goals/methods of capitalism. The legal regime is the primary place where these goals are contested and enacted via property rights.
I, for one, could never be a lawyer because I find the minutia of the law to be incredibly dull. Still, it is a rich area to study. In particularly, I’d be interested in work that compares how different legal regimes relate to capitalization and differential accumulation.
About the seperation hypothesis, D.T. Cochrane and I had been scheming about a possible test where we’d look at the behavior of firms where the CEO owned a significant share of the company, vs firms where the CEO is a bit player. Unfortunately, we needed the Bloomberg terminal, which is only accessible at York University. But COVID shut down the libraries, putting the whole project on hold. Perhaps we will resurrect it while I’m doing my posdoc.
… people like Cochrane, Di Muzio, Fix and Hager have tried to breathe value and meaning into CasP, but despite their best efforts it remains obscure.
I think we have to be realistic here. We’re talking about a theory who’s founding text is decade old. A decade after Marx published his opus, he was still obscure. Only a handful of people went to his funeral … or so it is said.
Another issue is that Marxism was designed from the start with a goal — to overthrow capitalism. The theory was designed to justify that objective. CasP starts from a very different place — from an attempt to understand the workings of capitalism as best we can using the tools of science. It’s no wonder that it’s caught on slowly. Science is hard and slow, and it doesn’t give easy answers … at least not usually.
I have mixed feelings about bridge building. On the one hand, it is politically expedient. If the halls of academia are filled with people who believe theory X, then it is surely wise for someone with a new theory to engage with theory X, and to build bridges between their own work and the work of popular scholars.
Political expediency, however, is not always good science. For instance, I am glad that Galileo did not build bridges with the proponents of geocentrism. He knew he was right and they were wrong. And so he burned bridges … and paid a steep price. But science advanced.
Of course, there is something to be said for framing your ideas so that people not familiar with them can understand them. In developing his theories of gravity and motion, Newton created a whole new mathematics — calculus. But none of Newton’s contemporaries (except Leibniz) understood calculus. So Newton framed all of his most important arguments without calculus. To the modern observer (who understands calculus) that makes them extremely tedious. But it was a wise choice, given the state of science.
In the social science, of course, nothing is ever as clear cut. But perhaps this is where I differ from many social scientists … and perhaps why I have been drawn to the work of Nitzan and Bichler. If I think the evidence supports my ideas, I’m happy to burn bridges … in fact I think it is the principled thing to do.
None of this is to say that Polanyi had no insight. I think he was a fantastic economic historian, as was Marx. I’ve written many harsh words about Marx’s ideas, but when I first read Capital, I was blown away by his account of the enclosures. I as similarly enthralled by Polanyi’s account of the emergence of capitalism. And also Wallerstein’s account.
Here’s my two cents about the problems with Polanyi. He writes:
normally, the economic order is merely a function of the social order.
This is a perfectly good statement that doesn’t need the ‘normally’ caveat. In fact, we can simplify things:
the economic order is the social order (and vice versa)
This is true in every society. The ‘social order’ is what Nitzan and Bichler call a ‘mode of power’, and it gets imposed on all activity (‘economic’ or otherwise). The problem with Polanyi is that he can see this ‘social order’ in feudal societies. But in capitalism he suddenly sees an ‘economic order’ that is distinct from society. Very odd.
In capitalism, the same principle holds. But now rather than feudal rules, market value is the social order — the mode of power.
More generally, I challenge anyone to find a society in which social norms and ideology do not determine the way resources are harvested and distributed. In other words, the ‘economy’ (capitalist or otherwise) is always embedded in society.
Congratulations Jesús! It is an excellent paper that looks at an important problem in political economy — the focus on ‘commodities’ when what capitalists care about is assets. Well done.
Here is a New Republic piece about Bill Gate’s dubious role in privatizing vaccines: https://newrepublic.com/article/162000/bill-gates-impeded-global-access-covid-vaccines
Thanks Max. Interesting articles. I don’t have any other reading to contribute … just opinion.
I think many people on the left hoped that the immensity of the COVID crisis would cause rich countries to temporarily abandon IP enforcement on vaccines. In hindsight, we can see that this has not happened. The IP establishment is too entrenched. However, I still hold out hope for the future.
I like that the Jacobin article brought up Linux, as I think that’s a good example. Some people thought that Linux would immediately kill Windows, and other proprietary operating systems. That didn’t happen. But what did happen is that open source gradually transformed the whole software landscape.
I hope that the COVID crisis may be the kick the world needs to reform IP. The idea that intellectual property is a state-enforced monopoly was obscure a few decades ago. My guess is that, at least within the context of vaccines, it will become mainstream. But perhaps that is just wishful thinking. What we really need is a threat of a good example … an open access vaccine that is way cheaper than the proprietary alternative.
A very interesting list of books so far. Since my late 20s, I have been afflicted with a disease of not being able to suspend my disbelief long enough to read fiction. As a child I used to love getting lost in fantasy worlds, spending whole days reading novels. Now I can’t seem to do it. It started with not being able to read novels. More recently I’ve had a harder time watching movies. (But maybe that’s just because, as James has showed, Hollywood movies are increasingly derivative franchises. But I digress.)
That said, I have been enjoying reading what fiction writers have to say about current affairs. Cory Doctorow (https://pluralistic.net/) is particularly insightful … and unbelievably prolific. Seriously, a blog post a day, multiple articles a month, a book a year. Who is this guy?
I am also enjoying Peter Watts’ blog (https://www.rifters.com/). Like Doctorow, Watts is a sci-fi writer who also writes interesting stuff about science and current affairs.
Fiction writers have a knack for explaining things in such a simple way. If you gave the same idea to an academic, you’d probably get back a garbled, obtuse explanation.
Hi Ishi,
Lots to think about here. I will comment on just one of the things you mention — the similarity between ghe language used in Capital as Power and that of Foucault.
I personally cannot understand Foucault, but get the sense that when he speaks of ‘power’, he means some all-encompassing cultural ‘field’ that affects everything we do and think. Perhaps I am exaggerating, but after Foucault, post modernists took this line of thinking to the extreme … basically saying there is nothing outside of power.
I am quite skeptical of the post modern understanding of power because I think it is similar to Freudian nonsense — incredibly dense language, grand claims, and yet ultimately based on either complete vacuity or simple truisms.
Other CasPers may disagree.
What immediately springs to mind here is that the supposed demand curve (played out over 60 years!) doesn’t account for either population growth or economic growth. The fact that both income and population have changed enormously over this time means that the chart says nothing about the instantaneous habits of consumers (something that should hardly need stating).
In other words Alexander X. Douglas sees something with prices on one axis and quantity on the other, sees that it slopes downward and gets worried that it might support neoclassical economics.
This is a nice testament to the ideological power of neoclassical economics. Ideologies thrive on vagueness … that way you can constantly look at the world and find proof that your views are ‘correct’. This translates into fear of the ideology among critics. They fear that any evidence that even remotely looks like the (hopelessly vague) theory they are criticizing might reinforce the theory. That is the power of neoclassical thinking — the power of vacuity.
This thread has gone in many interesting directions. To add to the discussion of humans imposing our social order onto the natural world, here are some papers by John Stewart that are worth a read.
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Towards a general theory of the major cooperative evolutionary transitions
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The Trajectory of Evolution and Its Implications for Humanity
Stewart reviews the big history of evolution and concludes (as have I) that it tends towards the integration of autonomous units into larger hierarchies. What makes Stewart’s arguments different than mine, though, is his explicit focus on ‘management’ — that the advantage of hierarchies is that they are ‘managed’.
This idea is probably implicit in my own arguments, but I tend not to use the word ‘management’ (unless refering to human hierarchies). Anyway, I have not read Stewart’s arguments in enough detail to pass judgement. But they certainly fit into this discussion of the megamachine, and the ‘big history’ of hierarchy.
… we are imposing our own social world on the natural universe around us. And we aren’t the first to do so. Human societies have always conceived the cosmos in this way.
I agree that science is often tainted by humans projecting our social order onto the natural world. A century ago, Peter Kropotkin chastized Darwinists for their focus on ‘competition’, and their neglect of symbiosis and cooperation.
And David Sloan Wilson has commented about how the rise of ‘selfish-gene’ theory, made famous by Richard Dawkins, occurred during the Reagan/Thatcher era when individualism was en vogue.
That said, I am wary of going too far with this line of thought. Yes, we often project our social order onto the natural world. But we shouldn’t take this as far as the post modernists, and conclude that we can never understand the natural world because everything is clouded by ideology. Despite our tendency to delude ourselves, good science does happen.
I would actually use Darwin as an example. Darwin was deeply influence about Thomas Malthus’s ideas about population growth and reproduction. Today, Malthus is remembered as being wrong — population has yet to run into Malthusian limits. Still, what Darwin gleaned from Malthus remains correct — that usually a minority of individuals reproduce, and these are the ones that pass on their traits to the next generation. It would be a shame to through away this insight just because it came from Malthus’s dubious prediction (and dubious ethics).
On the ‘body metaphor’, biologist David Sloan Wilson notes how biologists frequently adopt the language of society when they describe components of the body. The immune cells act line ‘police’. Cancer cells are ‘rogues’. Muscle cells ‘cooperate’ … and so on. Here are Elliott Sober and David Sloan Wilson in Unto Others:
It is a great irony that the language of human social control — sheriffs, police, parliaments, rules that enforce fairness, etc. — has been borrowed to describe the social behavior of genes, without the reciprocal conclusion being drawn that human social groups can be like genomes.
I find body metaphors useful, but only to a point. The cells of the body, like human individuals, are trying to solve problems of collective action. But the cells of the body have had millions of years of evolution to suppress competition. The idea is that at the dawn of multicellularity, there would have been intense competition between cells. The key step in solving this problem seems to have been the evolution of the germ line, which meant that only a tiny fraction of the organism’s cells were actually involved in reproduction. This meant that competition among non-reproductive cells was essentially irrelevant for reproduction. The effect was to suppress competition between the cells of multicellular animals. No similar mechanism exists in humans.
That said, you can only take the comparison so far. Cells don’t have brains, and never did.
Brian,
You raise many important ideas. Let me respond to each.
Ultimately, I think the important question is this: what does money really buy? Or what do we really “consume” when we buy something with money?
Excellent question. The answer, according the theory of ‘capital as power’, is that money is a symbolic representation of power. Yes, you can use money to buy things. But ultimately what is being quantified is not the things themselves, but the property rights around those things. Without property rights, there can be no prices.
Now, property rights are ultimately about power — they are about the power of the owner to exclude you (and everyone else) from using their property. It follows, then, that money is just a quantification of power. (For a brief summary of the capital-as-power thesis, see this post.)
The idea that money is power is important, because ecological economists usually focus on the purchase of physical goods. And of course, such goods are some of the property that you can buy. But you can also buy things that are more abstract — human organizations themselves. This fact goes virtually undiscussed in ecological economics. But it’s a basic fact of capitalism.
I think the conventional heterodox economics and their theories, such as Marx/Keynes’ M-C-M’ (monetary theory of production) or endogenous money have more or less well explained these social organizations and operations.
I disagree here. Marx’s theory is fundamentally flawed. The entire theory rests on the idea that labor produces surplus value. The problem is that this surplus value is unobservable — indeed, based on units that do not exist. I won’t go into detail here. If you are interested in deconstruction of Marxist theory, read Nitzan and Bichler’s book Capital as Power
About Keynes, I have struggled to find an actual theory of capitalism in his writing, other than the theory of business cycles. I guess that’s why I’m not a post-Keynsian. A side note. Steve Keen was an external examiner for my PhD defence. During the defence, I mentioned that I had a hard time finding any core theory in post-Keynsian work. He agreed with me.
Frederick Soddy, for instance, called for a “Cartesian economics” in that human society is comparable to the mind-body dualism of Descartes and suggested that we should deal with both the mind and the body.
It’s an interesting analogy … but one that ultimately is reflected in mainstream economics as the distinction between ‘real’ economic activity, and its ‘nominal’ representation’ in money. I have thought about this dualism for a long time. I wrestled with it in my Masters thesis. In hindsight, the result was mostly gibberish.
A better way to think about things, in my view, is to treated prices as a nomos. Nitzan and Bichler borrow this word from Aristotle, and use it to describe the social order. Prices quantify, create, and recreate the capitalist social order. Yes, one of the effects is that physical goods have prices. But the price is not a reflection of those goods … it is a reflection of the social order.
there is seemingly a disconnection between money and throughput.
Yes! But that has always been so. Money was never designed to quantify physical flows. It was designed to quantify property rights.
is there any way to deal with this seeming disconnection between money and throughput (energy/entropy)?”
The way to deal with it is to treat prices as a quantification of property rights. Yes, these prices affect the flow of physical resources. And the flow of resources (or more properly, control of this flow) can affect prices. But the ‘disconnect’ is a fundamental feature of money. It is not a quantification of physical resources.
Money was never designed with sustainability in mind. It was designed to ration property rights. If we want to limit resource flows, then we should do so directly by rationing them directly. If we want consumption to be equitable, we can distribute the ration equally and bar selling the ration. That’s because as soon as money comes into the picture, people with great wealth can hoard resources.
To clarify to forum readers, this is an exchange that started via email. Brian asked me the question above, and I responded below. After Brian’s second response (which he will post shortly) I asked him if he’d like to continue the discussion on this forum, so that the back-and-forth would be public, and also so that other people could weigh in if they wish.
Hi Brian,
Thanks for getting in touch. About heterodox economics and biophysical economics, you are correct that there is a disconnect. I am increasingly convinced, however, that the way to solve this is not by ‘speaking the language’ of economics to heterodox economists. That’s because I think that almost everything about economic growth theory (including heterodox approaches) goes down the wrong path. (Obviously, many people don’t agree with me on this).
The problem is that the goal, in economic growth theory, is to explain the growth of real GDP. Even heterodox economists, who are generally skeptical of neoclassical theory, mostly agree on this goal.
In contrast, I think real GDP is a garbage indicator. Hence it’s growth is not worth explaining. (See this post for details: https://economicsfromthetopdown.com/2019/04/29/real-gdp-the-flawed-metric-at-the-heart-of-macroeconomics/). When we throw out real GDP (and the concept of ‘economic output’), that leaves models of economic growth (Solow, Goodwin, etc) with nothing to do. So there is virtually nothing left of economic growth theory.
The solution is to turn not to economics, but to biology. Ecologists and biologists study the growth of natural systems all the time. They never use production functions. They never measure ‘output’. Instead, they study biophysical flows. It’s these flows that are important in their own right. We should study them directly, and how they relate to social structure.
Yes, it may be politically easier to get heterodox economists on board with thermodynamic limits by evoking their models. But I think the result is bad science. On that front, I’d rather have good science that is politically naive, in the sense that most economists will ignore it.
That said, there are economists doing good work. Some of the most interesting stuff (that’s heavily influenced my thinking) is work by Giampietro, Mayumi and Sorman. They have written two books about the role of energy in human societies. They do not use production functions, nor indeed anything recognizable from economic theory. Instead, they’re influenced by ecology. The books
- The Metabolic Pattern of Societies: Where Economists Fall Short
- Energy Analysis for a Sustainable Future: Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism
To drill down to the point, you ask:
do you think there can be a Kaleckian or a Goodwin model that accounts for energy and natural resources – or that treats them as “factors of production” – and explain the determination of aggregate demand and income distribution?
My answer is no. I think these models are dead ends. But if you think otherwise, I would encourage you to explore your ideas.
Hope this helps.
Blair
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