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The feudalist state provides another example of two sovereigns sharing and coordinating power within one “state”: the feudal lords of a nation, on the one hand, and the resident clergy of the Catholic church, on the other.
b. Second, the measurement itself plays a dual role in representing and acting upon capitalized power, insofar as it also governs the behaviour of elements within the state of capital. In this way, it can also act as a lever to impose power, especially on those elements which attempt to resist.
Another good example:
At the president-elect’s end of the table, Clinton’s face turned red with anger and disbelief. “You mean to tell me that the success of the program and my reelection hinges on the Federal Reserve and a bunch of fucking bond traders?” he responded in a half-whisper.
Nods from his end of the table. Not a dissent.
Clinton, it seemed to Blinder, perceived at this moment how much of his fate was passing into the hands of the unelected Alan Greenspan and the bond market.
Stephanopoulos also saw that it was a crucial moment in Clinton’s growing realization. It was no longer a political campaign. They faced new economic realities and had to start all over again. Their first audience would have to be the Fed and the bond market.
Woodward, Bob. The Agenda: Inside the Clinton White House (pp. 73-74). Simon & Schuster.
I was hoping to get some feedback broadly in terms of these questions: 1. Do you think the approximation of health financing ratios to ratios of public/private control of health care systems is warranted? What additional information or questions answered do you think might strengthen or weaken this assumption? 2. Is the explanation and treatment of the quantitative analysis comprehensive enough/too comprehensive (and how)? What further information/calculation/chart illustrations would you like to see (e.g. other variables, larger sample size, etc.). Is there anything that is unnecessary or superfluous? 3. Any other notes on the empirical evidence, including ideas of how to expand the study? Many thanks in advance!
For the duration of 2020, COVID-19 was an untreatable disease and largely remains so now. You can get vaccinated, but if you contract COVID-19, the only question is whether you survive it. By the end of 2020, the US had approved remdesivir and monoclonal antibodies as treatments, but I don’t believe they are broadly deployed even today. Given this inability to treat the disease, how do we measure quality of care or efficiency? Alternatively, if neither the quality of care nor the efficiency of its delivery affects the outcome, why do they matter?
Responding to your questions:
1. Does the mix of non-profit v. for-profit private providers affect your approximation of health financing ratios? I know that you chose to leave the US out of most of your analysis, but the American health care system is the only one I have studied. According to the Kaiser Family Foundation, in 2019, only 24% of American hospitals were for-profit entities, 57.3% were non-profit entities, and the remainder were government entities (state or federal). Nominally, then, 76% of American hospitals are not driven by the demand for differential accumulation. To be clear, I believe that it can be shown that an increasing number of non-profit hospitals are managed exactly like for-profit hospitals, but the profits are distributed as salaries and bonuses to management, not as dividends to the owners.
2. The explanation and treatment of the quantitative analysis seem comprehensive enough based on your assumptions and the limits you placed on your study. If you had included the US healthcare system in the meat of your results, I probably would have had something to say because I don’t think differential accumulation in US healthcare manifests itself purely as a strategic scarcity (i.e., the most common form of sabotage). In fact, the real scam in US healthcare is price fixing, or more precisely “annual price increase fixing,” between insurers and providers. The whole point of the US healthcare system appears to be transfer what little wealth elderly Americans have to dominant capital (over 60% of all healthcare costs are incurred by people 50 and over).
3. I have some ideas, but they’re probably more relevant to a different study than the current one. That said, to the extent you do discuss U.S. healthcare costs and COVID-19 outcomes, you may consider consider comparing outcomes among the states themselves, as the per capita data for both healthcare costs and COVID-19 deaths are available. Unfortunately, the CMS’s per capita healthcare costs data seems to end in 2014, but newer data seems to be available elsewhere.
If I were to advance one criticism of the framework of ‘the state of capital’, then, it is that it supplants an explanatory concept (however flawed) for a descriptive one – one might say (perhaps reductively) in Hegelian terms that the concept is simply the name for the unity of its parts. On the other hand, this may be a benefit: if the state of capital increasingly permeates all aspects of societies and the distinction between corporations and governments is becoming ever more blurred, then a reset of our fundamental categories may be the most useful way forward. In any case, I think the concept deserves further attention and elaboration.
It is possible (even helpful) to think of CasP’s “state of capital” as an autonomous state that is a constituent of another autonomous state, i.e., as something analogous to the state of California within the United States of America.
Under the U.S. Constitution, both California and the federal governments are sovereign states, each with its own citizens and its own economy. All citizens of California are also citizens of the United States, but not all citizens of the United States are citizens of California. The U.S. government’s control over commerce is limited to interstate and international commerce, while California maintains control of all commerce wholly within California. To the extent the laws of California and the United States conflict, the Supremacy Clause of the U.S. Constitution holds that federal law preempts California law.
The “state of capital” is just another state of the United States, but it happens to be a de facto state not de jure one. The state of capital has its own economy (based on the sale of capital assets instead of commodities) and its own citizens, who also happen to be citizens of their respective states as well as the United States. The biggest difference between the de facto state of capital and de jure states like California is that the state of capital has the power effectively to “preempt” the laws of all states and the United States to creorder American society as it sees fit.
Using an example from the research I posted originally, one of the mechanisms used by main-stream economists to influence policy now, is Economic Devices like GDP. Your own work has shown what utter nonsense GDP is, and we’ve seen plenty of evidence that economic growth is the opposite of a good thing. So in CasP policy implementation, let’s assume that the CasP Power Index were to be used as a device in the shaping of policy, such that minimum and maximum power caps were set, with a maximum Power Index difference to be strictly adhered to, and that an Organisation like the IRS, were to enforce such a policy, Taxing the wealthy, and redistributing the wealth to those without power, and that Corporate governance were also required to adhere to these “power equalizer” policies.
Econometrics like GDP serve to further the goals of dominant capital. It is not enough to “debunk” them, you need to explain why they are dangerous in and of themselves (e.g., they focus on you on one thing to the exclusion of other things that might be more important), and it is not clear that replacing capital-friendly econometrics with neutral econometrics would further the goal of dissipating or preventing the accumulation of power. After all, the capitalism we have today is largely due to Karl Marx because dominant capital is a living thing that reacts and adjusts to the circumstances it faces. Neoclassical economics was a reaction to Marx, for example, as was neoliberalism.
Speaking of GDP, Dirk Philpsen has written a book all about GDP called The Little Big Number: How GDP Came to Rule the World and What to Do About It that might be of interest (it is one of many books in my queue).
I think I have come to the conclusion that power itself is not the problem, but that having power structures that cannot be dismantled, or that are so deeply institutionalized that we are fearful of disentangling them, is the problem.
I’d argue that most people are not aware of these power structures, and those that are either want to disentangle them or further entrench them. CasP, like Marx in his time, offers a new way of understanding society that should be able to get everyone to see those power structures for what they are and to drive consensus to change them. We cannot do that without getting beyond the “debate” (capitalism v. socialism) as currently constructed.
I am very quick to admit that I don’t think CasP has developed far enough, or deeply enough, to provide a building framework for setting up policy devices, or providing sufficient cognitive infrastructure to allow for bottum-up movements to propose adequate policies, let alone for any CasPer to assume an institutional position and implement any kind of policy directly… But I do think that it is an avenue worth exploring
CasP currently lacks a theory of praxis. See the discussion in Theory and Praxis, Theory and Practice, Practical Theory. by Debailleul, Bichler and Nitzan.
For now, CasP seems mostly limited to identifying how capital manifests itself as power (e.g., the Power Index; two regimes of sabotage; hierarchy) and how capital’s power waxes and wanes (e.g., the Systemic Fear Index). While there is no reason that CasP must remain in this state, Bichler and Nitzan articulate many reasons why it is likely to do so for quite some time, largely because dominant capital will have a say.
For now I am hitting SUBMIT so I don’t lose this.
LOL.
By the way, I’ve “lost” posts before, but I was previously able to recover them with the “back” button of my browser.
One of my metrics for identifying the sabotage of creativity is the number and pace of remakes/reboots these days. We’ve had three different versions of Spider-Man in less than 20 years (all with sequels!), four versions if you include the animated “Into the Spiderverse.”
But it isn’t just rebooting/remaking familiar franchises (e.g., Ghostbusters, the “third” Star Wars trilogy which just retold the “second”), it is story forms, as well. Since Disney acquired LucasFilm, almost all their movies (regardless of the Disney studio brand used) rely on the Joseph Campbell’s Hero’s Journey story form, which George Lucas really pioneered in Star Wars.
FYI – in preparing my last response to Pieter, I spent some time reviewing the annual reports of Disney, Comcast, ViacomCBS and AT&T, and the content industry has become increasingly verticalized. Disney, for example, owns the Disney, ESPN+ and Hulu streaming platforms as well as numerous studios. In other words, they own the content makers and major players in the distribution channel, which allows them to manage risk from birth to grave, e.g., by switching at the last minute a movie slated for theatrical release to go direct to streaming. In many ways, the movie industry has reconstituted itself into an image of what it was in the early 1930s, when the FDR administration studied it.
Interesting thoughts, Pieter. When it comes to policy, capital-as-power research is in a very different place than most economics research. Since CasP research focuses explicitly on analyzing power, it is most practical for bottom up activists who are critical of power. Using CasP research to implement policy (i.e. wield power) would be odd … kind of like an anarchist becoming a CEO. When you’re critical of power, you are self selected from becoming powerful. That said, I do hope that CasP research becomes influential among the non-powerful. If it ever became widely recognized, it would be a sign that capitalism is in trouble.
Is CasP really critical of power, generally? At the end of the day, power is unavoidable. The real issue is how power is distributed, and I’d argue that CasP critiques how capitalism distributes and organizes power, not the fact of power itself.
CasP is in a position to become influential among both those with power and those without, if we can find the right narrative construct. For example, MMT is increasingly influential with Congressional Democrats, and I don’t think it should take much to demonstrate that CasP provides a better lens than MMT through which to set fiscal and monetary policy.
I just had a lengthy response eaten by website, but here is a condensed version.
I am not arguing that you are wrong in what you say, as far as it goes, I just cannot agree that your narrative offers a complete explanation of the interaction between the movie industry (the creators) and the movie business (those who sabotage the creators in search of profits).
The homogenization of media content of all types is undeniable and has been noted by many people over the last decade or two. Homogenous does not have to mean “bad,” but it always means “the same or similar.”
The fact is that five companies are responsible for more than 80% of annual revenue for theatrically released films, but they are only responsible for releasing 15-20% of all films. Whether these five companies refuse to fund ground-breaking movies with unfamiliar or unproven themes, or just crowd such movies out by buying up all the theater space, creativity is being hindered.
If capitalism ultimately succeeds, there truly will be nothing new under the sun because capitalists seek pareto efficiency, which requires sticking with what reliably works, i.e., the familiar.
I only briefly perused the article, and right off the bat, their understanding of entertainment risk seems to be inconsistent with corporate and financial risk. They seem to be conflating the notion of stories that might not viewed, with the risk that CasP explicitly describes as the risk of not beating the average. While there is probably some slight overlap, the 2 are not the same. They also, in a single article, state that movie content is becoming universalized, and that streaming content is becoming ever more niche and diversified in order to appeal to specific demographics. So both strategies, according to Jacobin, are risk averse, suggesting that no matter what trend would be taken by content creators, it would be considered the result of risk aversion. This indicates that their understanding of Risk needs a lot more clarification
I don’t agree.
First, the author uses the term “risk” as everyone in finance does, i.e., to refer to the possibility of losing invested capital.
Second, what the author describes are two different markets for content, each with its own risk profile and its own propensity to homogenization due what the end product is.
A movie made for theatrical release is the end product.
A movie made for release on a streaming platform is not the end product, the underlying subscription service is.
Movies made for theatrical release are tailored to appeal to the broadest possible audience. The individual movie-goers are the end customers.
Movies made for release on a streaming platform are tailored to the specific needs of the streaming platform to retain and grow its subscriber base. The streaming platform, not its subscribers, is the end customer.
The success of a movie made for theatrical release is determined by the raw number of movie-goers that pay to see it. If enough people pay to see the movie, the investors will break even or, hopefully, make a profit.
The individual success of a movie made for release on streaming platform is secondary to the success of the streaming platform itself. Yes, streaming platforms want to deliver content that is critically acclaimed and popularly successful, but no single franchise is likely to result in a capital loss for the streaming platform.
Both content markets are subject to content homogenization. Movies made for theatrical release are homogenized based on the interests and tastes of the population as a whole. Movies made fore release on a streaming platform are homogenized based on the interests and tastes of the platform’s subscriber base.
Thus, at the end of the day, the twin goals of minimizing risk of capital loss while maximizing the annualized total rate of return constrains creativity in the same basic way despite the fundamental differences between the two markets.
The history, practice and effects of the legal fiction of corporate personhood might be worth researching. Also political donations from the early days right up to the SuperPacs. And, the rising practice of think tanks and lobby groups writing legislation for legislatures. The American Legislative Exchange Council (ALEC) was formed in 1973, 48 years ago. That’s about at the time of the early rise of neoliberalism.
We the Corporations, linked to above, is probably the single best discussion of the history of corporate personhood under U.S. law.
This article from Morton Horwitz is a chapter in the first volume of The Transformation of American Law, and can be used to find pretty much all law review journal articles on the topic of corporate personhood.
But how you “follow the money” and “plot the differentials” in the CasP-ian method I do not know. My analyses seem to be informed only by broad Marxian considerations, undisciplined speculative philosophy, some readings of history and general outrage at the current system: not because I have suffered in political economy or class terms (I haven’t) but because squeezing vulnerable people for more and more just seems so unnecessary. There would be plenty for everyone if equitably shared: enough for need, just not enough for greed.
Following the money is pretty easy, but plotting the differentials may be difficult, even if you are a lawyer (it is often difficult to find and understand the law as it was, especially the farther back in time you go). That’s why I would focus on sea changes in the law such as corporate personhood and the elimination of courts in equity (or chancery).
Instead of focusing on specific changes in the law, you can focus on movements within the legal profession, e.g., American legal positivism of the late 19th century. The present Law and Economics movement could be of particular interest because it pushes the Coase Theorem, a doctrine that, if taken to its logical conclusion, would eliminate private property as we know it: the ownership of property would always be awarded to whoever can economically exploit that property most efficiently, regardless of who initially holds title to that property.
Scot Griffin, I agree. I have written, on other blogs if not here, of “my” thesis that modern capitalism has dual circuits of capital, to some considerable extent. There is the worker-consumer circuit and that part of productive business which uses productive workers and supplies consumers (while in a sense parasitising on the whole process by exploiting workers and consumers both). There is also the debt-asset circuit which functions mainly to create debt money for the purchase of assets and the concomitant process of generating asset inflation (relative to wages and the consumer items workers buy on a weekly to annual basis). The cross-over is perhaps fairly limited (though I have no data on this). The circuits are kept mainly separate and the two different sets of inflation are able to be kept apart and “differentialed”, as a verb. Q.E. (Quantitative Easing) is perfect to run this set up. It’s a brilliant scheme. The innovators of it have stolen a march, and many billions, on everyone else.
Rowan, In broad terms, your thesis is very similar to mine. Perhaps the biggest difference is I am viewing the two “circuits” as related in the sense that one (the capital economy) controls the other (the political economy) as a type of space state control system. Such control systems have an internal representation of the physical world that they use to control physical systems. Robot arms in automotive factories are a good example of manufacturing equipment that uses space state control systems.
My thesis also has a conscious political overlay that recognizes that only capitalists are “citizens” of the State of Capital and everyone else in the political economy exists to be consumed by the State of Capital, which reminds of an experience I had almost a decade ago.
Back in 2012, I met wit the CEO of the Semiconductor Industry Association (SIA). The SIA was originally formed in the 1970s by companies like Intel and AMD as an industry consortium to develop general industry guidance in terms of technology roadmaps, etc. By 2012, SIA had gone from being a primarily inward facing industry consortium to being a primarily outward facing lobbying organization for the semiconductor industry, a way for even small companies to have their voices heard in Washington. The CEO was fairly new to the job. His prior gig was working for PhRMA, the industry consortium/lobbying arm of the pharmaceutical industry, where he was among the lobbyists who wrote what became known as Obamacare. He had many war stories about that time, but there is one thing he said that has always stood out to me:
“In Washington D.C., if you are not at the table, you are on the menu.”
And then he chuckled, as if he believed he had just said something funny.
Rowan,
For whatever it’s worth, I think you are “on track with respect to CasP.” By blending a little Steve Keen with Richard Warner, CasP heterdoxy, and my heresy, I can explain a big reason why even asset inflation is redistributional according to CasP theory.
MMT, while correct as far as it goes, is a counterfactual hypothesis and will remain so as long as private actors are able to create money through the extension of interest-bearing credit.
The key here is credit, as it is credit (aka “leverage”) that drives asset inflation.
Steve Keen has previously noted that credit also drives GDP growth, and he has shown, in very coarse terms, that credit contraction leads to increasing unemployment, while credit expansion leads to increasing employment.
But this is only true of credit that gives rise to money spent on goods and services. Credit that gives rise to capital that is spent on financial assets (which includes M&A) does not add to GDP (except indirectly as payment for services; GDP does not count the value of financial assets exchanged in the financial markets).
Because of this economic segregation (or disaggregation) of goods and services, on the one hand, and financial assets, on the other, I’ve come to think of capitalist societies as containing two distinct poleis, each with a distinct economy, both “real” and operating according to their own rules, that are bound together by one thing more than any other: a finite amount of available credit.
According to “orthodox” CasP theory, capitalists are bound just as much by certain laws of the system they rule, and the cardinal law is that debts that cannot be repaid, won’t be repaid (a Michael Hudson reference). Financial crises, which fundamentally always begin in the capital economy, most often come about due to the overextension of credit (in either or both economies) and the resultant inability to cover called debts, which leads to the fire sale of financial assets, as it did with Lehman.
Richard Warner, a German economist, observed that low interest rates, contrary to mainstream dogma, correlate to low GDP growth not high GDP growth, and he theorizes this is because the interest rates, when low enough, encourage the purchase of financial assets of the capital economy over productive investments in the political economy. That is credit extended to the capital economy results in that same amount of credit being denied the political economy, resulting in low or slow GDP growth.
So, this redistribution of available credit to fuel asset inflation over productive investments in the political economy harms the political economy significantly, not just by inflating the cost of buying a home, but by failing to produce good paying jobs for everyone willing to work.
I spent all day today typing up a response to this post, gathering information from various sources, and fleshing out my ideas… and when I went to submit… everything just disappeared. Will try again I suppose Basically my comment came down to this though. The Covid Crisis analysis should be broken up into 5 Facets (while keeping in mind that all the facets have strong interlinks and overlaps)
- The Science
- Dominant Pharmaceutical Capital and their differential accumulation throughout the pandemic
- The Rest of the Dominant Capital Market and their differential accumulation throughout the pandemic
- The State of Capital and its Support Structures for the a) Accumulation of Capital and b) creating a Global Inequitable Vaccine Divide
- The Role of Misinformation and Disinformation in Expanding the Pandemic Problem
Regarding the fifth factor, you might find this book (and other similar work by its authors) of interest: Agnotology: The Making and Unmaking of Ignorance. The book includes a version of this 2005 article, which is directly on point. I suspect all of the articles in the book can be found for free in some form.
Jonathan,
This is a very interesting and welcome excursion from current events that doubles as a revelatory application of CasP theory. Are you able to share the underlying data, especially the historical data for r and g (or at least point us to it)? Also, have you undertaken individual analyses of the “epochs” of capitalism sometimes discussed by Blair Fix and others (e.g., golden age, neoliberal era, etc.)? Thanks.
–Scot
I knew a physics professor who, when asked to explain an unclear statement, answered: ‘as I was saying’. So: 1.
Perhaps I am completely misunderstanding CasP theory. Does CasP assume that the “price is always right,” that share price is always and everywhere determined by the discounting of future earnings, even when there is evidence to the contrary? If so, this would imply that capitalization isn’t really a ritual of capitalists, but an assumption of CasP. Does CasP assume that all capitalists agree that the price is right? If so, why would anyone ever sell? More importantly, why buy a stock that doesn’t issue dividends, which is the case for at least 60% of publicly traded companies, unless you expect the price to increase? Every stock sale has a seller, who is shorting the stock, and a buyer who is going long, i.e., every stock sale involves a disagreement about the future value of the stock.
Yes, the questions you ask here seem to suggest that you might misunderstand our theory. No, CasP doesn’t suggest that the price ‘is always right’ or vice versa, simply because nobody knows what the ‘right price’ is. No, CasP doesn’t claim that share prices are always determined by discounting. There are technical analysts, momentum traders, and other magicians that use alternative rituals, but most if not all believe that, in the long run, prices discount future earnings. No, CasP doesn’t suggests that capitalists agree with one another. And no, CasP doesn’t consider dividends as necessary relevant for stock pricing. As I was saying.
The questions were rhetorical and intentionally absurd.
As I was saying.
I am not against the concept of hype. It has its place. Unfortunately, what you define as hype and what you claim to measure as hype are two different things, but you discuss them within the same chapter as if they are one and the same.
Disagreement is an acceptable outcome.
