Thursday, August 11, 2016

the political economy of dominant ownership


dissidentvoice |  Tim Di Muzio, a senior lecturer in international relations and political economy at Wollongong University in Australia, has written a book – The 1% and the Rest of Us: A Political Economy of Dominant Ownership (Zed Books, 2015) – that answers so many questions and provides so much relevant background to readily understand wealth and its maldistribution.

Who comprise the 1%? Why is there an income and a wealth chasm and why are the chasms widening? What does the existence of a 1% mean for the 99%?

Looking at data from top financial institutions and using the financial nomenclature (high net worth individuals, HNWIs, in place of 1%-ers), Di Muzio reveals that the 12 million HNWIs on a global scale represent 0.2% of the population (p 32). The HNWIs are concentrated on Turtle Island, Europe, and Asia (87%) and are predominantly male.

Di Muzio cites economists Jonathan Nitzan and Shimshon Bichler who define capital as power rather than a mode of production: “… commodified differential power expressed in finance and only in finance.” (p 50) The goal of capitalists is differential accumulation – to primarily increase the wealth gap between themselves and others: i.e., they seek greater wealth inequality. (p 49) For this reason, the capitalist system cannot rid wealth inequality or significantly reduce the inequality. (p 48)
Why this pursuit of differential accumulation? Di Muzio writes it is pathological: “this addiction for wealth and power is destroying the planet for future generations.” (p 9)

At the corporate level, the goal is the same: to gain a larger share of the wealth pie than competitors. (p 63)

Chapter 2 provides a solid overview on the capitalist mode of power: commodification, legalizing organizations as firms, and capitalizing income streams; finance: the bond market (of the government bond market, Nitzan and Bichler are quoted: “the first systematic capitalization of power, namely, the power to tax. And since this power is backed by institutionalized force, the government bond represents a share in the organized violence of society.” (p 77); the stock markets that “largely serve as the state-protected markets by which dominant owners organise and redistribute ownership claims to money and power.” (p 81); real estate; commodity and derivatives market; the foreign exchange market whose “gradual emergence … has facilitated the transnationalisation of dominant ownership and the capitalisation of power” (p 85); the money and spot markets; central and commercial banks; tax havens (“the private economy of the 1%, the corporations they own and the illicit traffickers in arms and drugs.” (p 102).

How has this come about? “The market and price system were imposed on humanity not as a matrix of choice but as a mechanism of domination.” (p 134)