D. T. Cochrane manages to reference two of my favourite social theorists in the title of his recent paper, "Castoriadis, Veblen and the 'Power Theory of Capital'," which is available for download here and really well worth reading. I'd recommend it to anarchists, anyway. If only Cochrane had managed to crowbar in Pierre Bourdieu and David Graeber as well, he'd have produced my all-time favourite article. The abstract reads
The prevailing, and largely unacknowledged, uncertainty around capital puts a question mark behind many proclamations regarding the ideology, theory, and praxis of the capitalist system. A clearer understanding of ‘what we talk about when we talk about capital’ is a priority if we wish to distinguish useful theoretical positions from misguided pretenders. In this paper, I examine the theoretical common points of Thorstein Veblen and Cornelius Castoriadis as they contribute to the 'power theory of capital' being developed by political economists Jonathan Nitzan and Shimshon Bichler.
The download is part of the Bichler & Nitzan Archives on account of Cochrane's heavy use of their book Capital as Power, which I've ordered but am yet to read. The "full description" at the Book Depository reads:
Conventional theories of capitalism are mired in a deep crisis: after centuries of debate, they are still unable to tell us what capital is. Liberals and Marxists both think of capital as an 'economic' entity, which they count in universal units of 'utils' or 'abstract labour', respectively. But these units are totally fictitious. Nobody has ever been able to observe or measure them, and for a good reason: they don't exist. Since liberalism and Marxism depend on these non-existing units, their theories hang in suspension. They cannot explain the process that matters the most - the accumulation of capital. This book offers a radical alternative. According to the authors, capital is not a narrow economic entity, but a symbolic quantification of power. It has little to do with utility or abstract labour, and it extends far beyond machines and production lines. Capital, the authors claim, represents the organized power of dominant capital groups to reshape - or creorder - their society. Written in simple language, accessible to lay readers and experts alike, the book develops a novel political economy. It takes the reader through the history, assumptions and limitations of mainstream economics and its associated theories of politics. It examines the evolution of Marxist thinking on accumulation and the state. And it articulates an innovative theory of 'capital as power' and a new history of the 'capitalist mode of power'.
Which may not grab many of our readers but which only serves to make it even more alluring to me. Yes, I'm perverted like that. Either way, do give the Cochrane paper a look over, because it provides a valuable (sorry) introduction to alternative theories of value.
22 comments:
"This is precisely the approach of both neoclassical and Marxist theories of capital. These theories postulate that value begins with utility or labor, respectively, and capital is that portion of valuation embodied in productive machinery...."
When the author gets something so basic so badly wrong, it makes you wonder whether it's worth ploughing on to the end...
Hi Stuart--
Is it that badly wrong? I'm assuming you mean that he hasn't distinguished between fixed and variable capital. He's elided the two together, I think, since labour-power is responsible for the value in both and his concern in this essay is with value.
The closest definition in Marx I can see is from "Wage labour and Capital":
"Capital does not consist in the fact that accumulated labour serves living labour as a means for new production. It consists in the fact that living labour serves accumulated labour as the means of preserving and multiplying its exchange value."
Hi John,
Shall we just move the Facebook discussion here? Seems weird using Facebook for anything other than meaningless gossip or organising a revolution...
Over at Facebook, I said:
You mean constant and variable. Or fixed and circulating. The author says:
"The ‘I know it when I see it’-approach results in a confusing hodgepodge of material and social entities being described as ‘capital’: money is capital, investment i...s capital, machinery is capital, workers are capital, political largesse is capital …"
Apart from 'political largesse' (don't know what he means by that), that IS Marx's theory. You don't have to like it, but you do have to understand it before you critique it. There's no critique of Marx's value theory in that document that I can see.
PS I'm talking about Marx's theory in Capital, which is different to that in earlier publications.
Cheers
Hi Stuart--
I followed you! The message I left on FB was:
He isn't trying to provide a critique of Marx's theory of value though, is he? He just outlines the various attempts that have been made to rescue it in the face of criticism (Sweezy, Hardt & Negri) and then outlines alternative theories of value (Castoriadis and Veblen) who consciously tried to improve on it.
And yes, constant and variable. Slip of the keyboard.
Point taken, but surely you need to understand what Marx's value theory is to do that. Imagine:
"Newton's theory that apples shoot upwards from the trees was clearly not adequate in the face of the real world. To improve on this theory in the face of criticism, Mr X proposed..."
Well, maybe Mr X has got some good points, but it has little bearing on what Newton said.
Contrary to what I said above, I did plough on to the end, and will reread more slowly on the train home tonight. It's hard, though, to focus on what may be positive in the piece when it is so irritatingly wrong about Marx.
PS I'll refrain from further comment till I've done that! Speak tomorrow. Cheers
PPS (And totally contradicting my PS): going back to my first comment, distinguishing between variable and constant capital does not rescue the sentence from being "badly wrong". More later – might pen a Big Chief!
Cheers
Hi Stuart--
From Cochrane's opening few paragraphs, I think he belongs to a milieu of sociologists in which it's already accepted that the Labour Theory of Value is unsustainable (along with, I guess, Castoriadis, Veblen, Castells, and the Analytic Marxists, among others), which is why he's not making any effort here to critique it. Just looking at his biography, he's a student of either Nitzan or Bischler, whose book is premised on the rejection of the LTV, judging by the blurb.
Cochrane's point about capital, as I understand it, is that sociology uses the term to refer to so many things - social capital, cultural capital, political capital, economic capital, symbolic capital - that it's difficult to clearly demarcate and define the term. This has some relevance for Marxism, for example in the long-standing debate over whether those who (re)produce symbolic, social, or cultural capital, such as teachers, lawyers, and nurses, generate (economic) value at all or whether they are paid from the surplus generated in the manufacturing sector? And if they do generate value, how can/should it be measured? But that's of no concern to Cochrane, obviously, because he doesn't believe the LTV is correct in any case.
What he does here instead is outline Castoriadis's argument that value is found wherever a particular society chooses to designate it. Under capitalism, the bourgeoisie attempts to do this by giving everything an economic value, that is to say, a price, by reducing everything to a commodity (although for Marx, of course, that isn't the commodity's real value). This allocation of value by a society doesn't arise naturally, nor in a historically determined manner (a point that I think Karl Polanyi also makes, in The Great Transformation); rather, it's an ideological decision. In other societies where classes are structured differently, value is assigned in other ways, usually to the benefit of some ruling class(es) or caste. But there's no law-like dynamic propelling history. It's about the struggle between classes or class factions; this is what Pierre Bourdieu spent all his time studying in Distinction, The State Nobility, Homo Academicus, and the like.
Unfortunately, and rather annoyingly, I gave away my copy of David Graeber's Towards an Anthropological Theory of Value, but I think he was pursuing a similar project, albeit focusing on the definition of value rather than capital.
I've ordered the Nitzan and Bischler book anyway, so we'll see what they have to say for themselves.
Cheers
John
As it turned out, got a chance to have a slower read. I just don't recognise the Marx they are talking about, or the theory they attribute to him. I'm no expert, but I have read Capital closely, and I don't see how anyone who has read Capital closely could say what they say.
It's not that I'm resistant: I liked Graeber, for example, because he so clearly had a sympathetic and accurate grasp of Marx's theory.
As for the relevance of Marx's theory, all I can say is that I'm more convinced of it than ever. I have recently been reading David Harvey's Limits To Capital (essentially a close reading and review of Marx's Capital, with some modern updating). It's extraordinary – I was reluctant to read it because it's lengthy and written in the early 1980s. But I had to keep reminding myself of that fact as I read: it reads like a detailed explanation of events since 2009.
Marx, and Marx as filtered through Harvey, seem to me to be much more relevant to our present situation than the philosophical novelties outlined in that document.
But maybe that's just me! On a positive note, I was glad to be introduced to 'Capital As Power', which I think I'll buy...
Cheers
PS Your reply there was far clearer and more interesting to me – thanks for the clarification!
Hi Stuart--
By "they," I assume you mean Cochrane, yes? I have to admit I don't agree with some assertions that he makes in the article, particularly about the deterministic aspects of Marxism; there's plenty of evidence to suggest the importance of human agency to Marx. And Cochrane would really have benefited from referencing Bourdieu, Graeber, and Polanyi, all of whom deal with the ideas of value and capital in one way or another.
I'm glad my "clarification" helped. It was actually my own way of trying to pick out what I thought was valuable in the article, besides the fact that it drew my attention to the Nitzan and Bischler book.
I've been reading a fair bit of Harvey myself. Like him very much, although his chronology of Postmodernity seems to be a bit out to me. It was he who drew my attention to Manuel Castells, who in turn took me to Immanuel Wallerstein's recent writings. They might be a bit unorthodox for you, mind. ;-) Castells isn't a Marxist any more, and Wallerstein, while still a Marxist, believes there's been a total gamechange since the 1960s. I'd really recommend his book The End of the World as We Know It.
Cheers
John
On a barely related note, Stu, have you read any Ilya Prigogine? Wallerstein mentions him all the time now for his breakthroughs in physic and their implications for history and free will.
Orthodox? But I swallow my Marx with doses of Thich Nhat Hanh, Dogen, Lao Tzu and the two Suzukis – what's orthodox about that? ;-)
I haven't read the folk you mention, but especially like the sound of Ilya Prigogine. Investigating such things is on my near-term radar, starting with Roger Penrose.
I thought, just for my own benefit, I might try to justify my first comment on this thread. Cochrane's summary of Marx's value theory, I said, was badly wrong. Capital, for Marx, was most definitely not "that portion of valuation embodied in productive machinery". Capital for Marx is value in motion, and as it moves, it takes various forms: money, commodities, variable capital, constant capital, and so on.
In my hand, I hold a spade. Is it capital? No amount of staring at it could possibly tell you. Nor could knowing whether it was produced as a use-value or by abstract labour. The spade as a spade is not capital. If I start digging with it, it's not capital. If I dig with it in order to provide food for my family, it's not capital. Only when the spade is owned by a capitalist, who hires me as a wage labourer, puts me to work, in the expectation that what I produce with the spade will be sold on the market for profit, does the spade become capital. Marx's theory of capital is therefore relational and social and caught up immediately in class relations, power relations, morality -- all the things your guys are saying is missing, but isn't.
Value is not embodied labour, as in Ricardo, but "socially necessary labour time". This does not have a reality independent of the 'real', of appearances, but does have an objective reality – objective, but social, not physical, not material. What is socially necessary? The concept, at least potentially, includes morality, class struggle, social institutions, including the family, technological organisation, and so on. Again, all the things the critics say is missing, but quite explicitly isn't, even if, at certain stages of his argument, Marx abstracts from them (and says so).
Cheers
Hi Stuart-
I replied back on FB again!
Just to re-iterate what I said there. Once value becomes socially necessary labour time and implicates all those other "non-economic" aspects of society, then both it and the term "capital," which depends in Marx on value, become so imprecise as to be useless. That pretty much confirms Cochrane's point about the term "capital" and why he is exploring alternative approaches to the definition of value.
Cheers
John
I've just bought Prigogine's book The End of Certainty. he's a Nobel laureate for his work on Complexity Theory. Wallerstein seems quite taken with him!
I agree, Marx's concept of capital is not 'precise', in that sense. It's dialectical -- it changes as our standpoint changes, and as we integrate more aspects of social reality into it.
Let me know how you get on with Prig's book!
Will do. It looks daunting enough (especially chapters 5 and 6, according to Prig himself!). But I'll give it a go.
And I'll report back on Penrose. Thanks for the chat, enjoyed it.
Me too! Must do it again some time. ;-)
Wow. Thank you for this discussion. I'm not sure why my trusted (and egotistical) Google Alert on my name failed to turn this up.
John, I'm glad that you appreciated the article. If you appreciated this I encourage you to make the time to read Nitzan & Bichler's 'Capital as Power.'
Stuart, my criticism of the LToV is heavily rooted in Castoriadis' article 'Value, Equality, Justice, Politics,' and depends on his claim of an antinomy in Marx. The claim is not entirely a criticism. In fact, Castoriadis argues that antinomy is a necessary - although not sufficient - condition for truly revolutionary thought. Breaking the heteronomy of received thought requires travelling into uncharted intellectual territory, and he claims this requires constructing contradictions. He says only those working entirely within a received intellectual tradition can be truly consistent, as there is a pre-existing framework with which to be consistent.
The specific antinomy within Marx's work that Castoriadis identifies is between Marx' 1) position that humans are the creators of, and responsible for, their own history and society; 2) efforts to locate the laws of historical motion. The second is where critics have located determinism, while the former is from where defenders have repudiated such claims. According to Castoriadis, both can be found in Marx.
My particular interest was in the part of Marx that sought to explain actual existing prices. I am hardly alone in believing this was an important part of Marx's thought, as reams of paper have been used trying to establish precisely how actual prices are determined by labour values. Although it's now fashionable to dismiss the transformation problem as a tempest in a teapot, the question motivated a great deal of important Marxian discussion, not least from Engels himself.
Marx undoubtedly was trying to do a very nuanced thing with his value theory, part of it was about trying to understand the spreading architecture of prices. Contrary to those who claim Marx did not have a LToV at all, instead having a 'value theory of labour,' his work contains numerous assertions that back-up a quantitative perspective on the relationship between labour-value and prices, especially in the opening of Capital, Vol 1. Further, I'll make the claim that Marx indulges in reductionism in order to try and operationalize his value theory. This is not a dismissal of Marx. In fact, I'm drawing on his insights about our inability to totally break free of our own societies. Although it is now a very dirty word, reductionism was - and is - producing stunning results in the technosciences. Marx is hardly to be blamed for adopting reductionist methods. Nonetheless, that reductionism led him to what I believe is an ontologically untenable position on prices.
It is this aspect of Marx's value theory that I am primarily interested in. Even if you reject the idea that Marx had a quantitative value theory rooted in the quanta of 'socially necessary abstract labour,' the question of where prices come from - especially the prices of capital - remains open. Working with Veblen, Castoriadis and Nitzan and Bichler 'Capital as Power' theory - and, in fact, drawing very heavily on Marx himself - I'm trying to get at this question.
Thanks again for the discussion. This is a new experience for me.
Hi D.T.!
My apologies for not posting your response sooner. We've been away from this blog for some time, as you can see, and I'm only now getting round to some updating. I'll notify tuart of your response. Thanks so much for taking time to respond.
All the best
John
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