bnarchives | Economic, financial and social commentators from all directions and of all persuasions are obsessed with the prospect of recovery. The world remains mired in a deep, prolonged crisis, and the key question seems to be how to get out of it.
There is, however, a prior question that few if any bother to ask: Do capitalists want a recovery in the first place? Can they afford it?
On the face of it, the question sounds silly: of course capitalists want a recovery; how else can they prosper? According to the textbooks, both mainstream and heterodox, capital accumulation and economic growth are two sides of the same process. Accumulation generates growth and growth fuels accumulation, so it seems bootless to ask whether capitalists want growth. Growth is their lifeline, and the more of it, the better it is.
Or is it?
Accumulation of What?
The answer depends on what we mean by capital accumulation. The common view of this process is deeply utilitarian. Capitalists, we are told, seek to maximize their so-called ‘real wealth’: they try to accumulate as many machines, structures, inventories and intellectual property rights as they can. And the reason, supposedly, is straightforward. Capitalists are hedonic creatures. Like every other ‘economic agent’, their ultimate goal is to maximize their utility from consumption. This hedonic quest is best served by economic growth: more output enables more consumption; the faster the expansion of the economy, the more rapid the accumulation of ‘real’ capital; and the larger the capital stock, the greater the utility from its eventual consumption. Utility-seeking capitalists should therefore love booms and hate crises. [2]
But that is not how real capitalists operate.
The ultimate goal of modern capitalists – and perhaps of all capitalists since the very beginning of their system – is not utility, but power. They are driven not to maximize hedonic pleasure, but to ‘beat the average’. This aim is not a subjective preference. It is a rigid rule, dictated and enforced by the conflictual nature of the capitalist mode of power. Capitalism pits capitalists against other groups in society, as well as against each other. And in this multifaceted struggle for power, the yardstick is always relative. Capitalists are compelled and conditioned to accumulate differentially, to augment not their absolute utility but their earnings relative to others. They seek not to perform but to out-perform, and outperformance means re-distribution. Capitalists who beat the average redistribute income and assets in their favour; this redistribution raises their share of the total; and a larger share of the total means greater power stacked against others.
Shifting the research focus from utility to power has far-reaching consequences. Most importantly, it means that capitalist performance should be gauged not in absolute terms of ‘real’ consumption and production, but in financial-pecuniary terms of relative income and asset shares. And as we move from the materialist realm of hedonic pleasure to the differential process of conflict and power, the notion that capitalists love growth and yearn for recovery is no longer self evident.
The accumulation of capital as power can be analyzed at many different levels. The most aggregate of these levels is the overall distribution of income between capitalists and other groups in society. In order to increase their power, approximated by their income share, capitalists have to strategically sabotage the rest of society. And one of their key weapons in this struggle is unemployment.
The effect of unemployment on distribution is not obvious, at least not at first sight. Rising unemployment, insofar as it lowers the absolute (‘real’) level of activity, tends to hurt capitalists and employees alike. But the impact on money prices and wages can be highly differential, and this differential can move either way. If unemployment causes the price/wage ratio to decline, capitalists will fall behind in the redistributional struggle, and this retreat is sure to make them impatient for recovery. But if the opposite turns out to be the case – that is, if unemployment helps raise the price/wage ratio – capitalists would have good reason to love crisis and indulge in stagnation.
So which of these two scenarios pans out in practice? Do stagnation and crisis increase capitalist power? Does unemployment help capitalists raise their distributive share? Or is it the other way around?
There is, however, a prior question that few if any bother to ask: Do capitalists want a recovery in the first place? Can they afford it?
On the face of it, the question sounds silly: of course capitalists want a recovery; how else can they prosper? According to the textbooks, both mainstream and heterodox, capital accumulation and economic growth are two sides of the same process. Accumulation generates growth and growth fuels accumulation, so it seems bootless to ask whether capitalists want growth. Growth is their lifeline, and the more of it, the better it is.
Or is it?
Accumulation of What?
The answer depends on what we mean by capital accumulation. The common view of this process is deeply utilitarian. Capitalists, we are told, seek to maximize their so-called ‘real wealth’: they try to accumulate as many machines, structures, inventories and intellectual property rights as they can. And the reason, supposedly, is straightforward. Capitalists are hedonic creatures. Like every other ‘economic agent’, their ultimate goal is to maximize their utility from consumption. This hedonic quest is best served by economic growth: more output enables more consumption; the faster the expansion of the economy, the more rapid the accumulation of ‘real’ capital; and the larger the capital stock, the greater the utility from its eventual consumption. Utility-seeking capitalists should therefore love booms and hate crises. [2]
But that is not how real capitalists operate.
The ultimate goal of modern capitalists – and perhaps of all capitalists since the very beginning of their system – is not utility, but power. They are driven not to maximize hedonic pleasure, but to ‘beat the average’. This aim is not a subjective preference. It is a rigid rule, dictated and enforced by the conflictual nature of the capitalist mode of power. Capitalism pits capitalists against other groups in society, as well as against each other. And in this multifaceted struggle for power, the yardstick is always relative. Capitalists are compelled and conditioned to accumulate differentially, to augment not their absolute utility but their earnings relative to others. They seek not to perform but to out-perform, and outperformance means re-distribution. Capitalists who beat the average redistribute income and assets in their favour; this redistribution raises their share of the total; and a larger share of the total means greater power stacked against others.
Shifting the research focus from utility to power has far-reaching consequences. Most importantly, it means that capitalist performance should be gauged not in absolute terms of ‘real’ consumption and production, but in financial-pecuniary terms of relative income and asset shares. And as we move from the materialist realm of hedonic pleasure to the differential process of conflict and power, the notion that capitalists love growth and yearn for recovery is no longer self evident.
The accumulation of capital as power can be analyzed at many different levels. The most aggregate of these levels is the overall distribution of income between capitalists and other groups in society. In order to increase their power, approximated by their income share, capitalists have to strategically sabotage the rest of society. And one of their key weapons in this struggle is unemployment.
The effect of unemployment on distribution is not obvious, at least not at first sight. Rising unemployment, insofar as it lowers the absolute (‘real’) level of activity, tends to hurt capitalists and employees alike. But the impact on money prices and wages can be highly differential, and this differential can move either way. If unemployment causes the price/wage ratio to decline, capitalists will fall behind in the redistributional struggle, and this retreat is sure to make them impatient for recovery. But if the opposite turns out to be the case – that is, if unemployment helps raise the price/wage ratio – capitalists would have good reason to love crisis and indulge in stagnation.
So which of these two scenarios pans out in practice? Do stagnation and crisis increase capitalist power? Does unemployment help capitalists raise their distributive share? Or is it the other way around?
4 comments:
The solution would fall under your "not gonna happen" label. The only way that a small number could bully a majority is due to the moral weakness of the majority. People aren't that interested in evolving. Then we have old people in leadership positions that have outlived their usefulness. And they aren't capable of helping the majority on a large scale.
The way a small number of humans can control the masses of humans is with nuclear weapons and nuclear technology in general. I call it the "unspeakable" in part because it's the ultimate instrumentality of totalitarian control. You'll notice that the systematic exercise of that control has remained within a tiny, tiny minority of the overall human population worldwide, and that since it's inception during the original "war of the physicists" it has exerted a profoundly disproportionate effect on the course and shape of human history for the past 80 years or so. The nuclear value chain from raw material through final application and use is vastly more closely guarded than the ultimate secrets of the banksters.
You know of course that a lot of the inner workings of nuclear weapons are gold plated, because only gold is sufficiently inert to resist the toxic degeneration of some of those nasty radioisotopes.
Since they can't seem to find a good place to store their waste, why not shoot it into space? It's a better idea than whatever the plan is now.
The "plan" is to allow the "accident" to proceed to its inevitable population-culling conclusion. Scriptures will emerge from this event - and specific humans with outcome-effecting agency in the matter - will never be held accountable.
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