The Going Price of Power

I’m really enjoying using twitter as a medium in which to do philosophy, because it forces me to make an argument that is organised in chunks, and to ensure that those chunks are more or less well formed and reasonably compressed. It then allows me to capture those thoughts here, and edit, extend, or recompress them. It also lets me use hyperlinks instead of references, which is impressively liberating. What comes out isn’t exactly perfect, but that’s the point: to enable one to make things better and better beyond the suffocating bounds of the optimal. As I have said many times before, I can be concise, but I find it much harder to be brief, but the twitter-blog feedback loop is helping me to work on that. Moreover, it has allowed me to think a bit more about the writing processes of different philosophers throughout history, some of whom are more or less accessible depending on the way they were able to write and permitted to publish.

I feel like Nietzsche and Wittgenstein would have loved twitter, while Leibniz would have preferred the blogosphere, and Plato would have immersed himself in youtube (Socrates: That’s all very well Glaucon, but you have not answered question with which we began: are traps gay?). I think Hegel would have preferred a wiki, and would have been a big contributor to nLab. I would have loved to have been Facebook friends with Simone Weil or Rosa Luxemburg, but I can imagine getting caught in flame wars with Marx and Engels if I stumbled into the wrong end of a BBS (Engels: Do you even sublate, bro?). I desperately wish I could subscribe to Bataille’s tumblr, or browse the comments Baudrillard made on /r/deepfakes before it got banned. I know the world would be infinitely richer for de Beauvoir and Firestone’s Pornhub comments, but we should be thankful we were spared Heidegger and Arendt’s tindr logs. However, I’m pretty convinced that nothing would have stopped Kant from thinking very hard for a couple decades and then publishing all his thoughts in several big books. We’d have gotten a few good thinkpieces from him (Clickbait: ‘This man overturned the authority of tradition using this one weird trick, now monarchies hate him!’), but nothing could have stopped his architectonic momentum.

If you look at the sheer diversity of styles and temperaments in the historical canon, Western and otherwise, one can clearly see that there are a wide variety of conditions which enable people to write and encourage people to read. And yet, we have somehow gotten ourselves into a situation in which the need to assess research output forces everyone to write and read in the same way, such that it’s not clear whether people aren’t engaging with one another because nothing interesting is being written, or because they’re not motivated to read it. There are many people in the para-academic fringe who have found ways to do the work that academia either no longer encourages or actively discourages, and even some institutions that support it. The great irony is that the point when I’m finally getting some university lecturing work is the point where I feel the greatest need to free myself from the constraints the university imposes upon the way academics communicate with one another.

Anyway, here are a couple long threads I wrote about economics over the last few days, discussing the nature of money, the nature of value, a way to deal with the biggest obstacle to political action on climate change, and the way we need to think about such problems more generally.

1. Money, Infrastructure, and Power

I’ve been developing this first set of thoughts for the last few years, and their coherence was recently catalysed by reading Karl Polanyi’s The Great Transformation with my politics reading group, at the urging of my good friend Phil Watson. This was accompanied by a reading of Hayek’s The Road to Serfdom, which was written and published at the same time (1944), and aimed squarely at Hayek and Von Mises. Despite not having a draft of Hayek’s book, Polanyi anticipates and responds to it with almost prescient deftness. I won’t say much more about this, as it’s better to let the thoughts speak for themselves. As ever, they’ve been refactored a little, and I’ve added some additional commentary where necessary, but I’ve tried to stick to the aphoristic form that twitter encourages.

Okay, here’s a slightly different twitter thread from the usual. I want to say something concrete about the way in which capital works as an incentive structure that’s supposed to co-ordinate human behaviour to solve resource allocation problems.

I think that the left has a fraught relationship with the concept of money. The two opposing poles that configure this relationship are something like: i) money is the root of all evil, and must be abolished; and ii) money is a neutral and homogeneous medium, which can be ignored.

Of course, there are a lot of intermediate positions here, but they tend to be arrayed along a line between the poles, rather than rejecting the presuppositions underpinning the polarity itself.

It’s fairly easy to see where the latter comes from, as it’s the default position under liberal capitalism, and is so precisely insofar as most people are oblivious to the different functions of money: as medium of exchange, as store of value, and as means of investment.

Most people understand that money is in some sense a fiction: it is socially instituted rather than naturally constituted. The exceptions are those who adopt extreme versions of the commodity theory of money, for whom it is any resource whose scarcity is relatively stable.

This takes different forms, from the more global libertarian obsession with gold backed currency to the more local market anarchist view that money spontaneously emerges in any economy with sufficiently complex distributed division of labour.

This is not to mention the cryptocurrency variants, that substitute computational asymmetry for resource scarcity, as either a local or global way of controlling the balance between scarcity and fungibility, and the properties this balance implies (e.g., liquidity and velocity).

Fiat currencies show that money needn’t be a commodity in either sense, but that the relevant properties can be deliberately manipulated by governmental and financial actors to modulate the economy. Yet this shows that money is not a fiction but a piece of infrastructure.

As an aside, this is one of the fundamental fault lines in the actual ideology of neoliberalism: Hayek’s arguments against state planning are notoriously abstract, and the monetarists made these concrete by explicitly restricting economic intervention to monetary intervention.

So, what are the functions of money as infrastructure, and how do the monetarists’ restricted range of tools for intervening in the money supply enable you to modulate it? I have already mentioned exchange (price), storage (savings), and investment (credit).

These functions interact in ways that define the parameters of capitalism, such that it evolves as they evolve: goods (exchange/storage), variable capital = labour (exchange/investment), fixed capital = industrial machinery (storage/investment), and rent (all of the above).

The standard techniques of monetarism are exercised through central banks, which are sometimes de jure independent even when they are de facto dependent. This is important, because it gives us our first glimpse of how the exercise of power is bound up with economic control.

On this basis, the government can control interest rates by changing how the central bank reacts to requests for credit (interest negotiation), and money supply by changing how it offers credit (quantity negotiation). Both have become more and more targeted over the years.

Crucially, these techniques are entirely dependent upon the co-operation of the hierarchy of financial institutions beneath the central bank, and the incentives for co-operating are largely based on the political equivalent of a handshake agreement between classes.

This is a principal agent problem if ever there was one, and the conjunction of the Bush regime’s immediate capitulation to the demands of finance capital, combined with the Obama regime’s unwillingness to leverage the residual power this granted, demonstrate its seriousness.

So, what’s missing in monetarism? Well, it represents a compromise between Hayekian neoliberalism and earlier forms of liberalism in more than one way. It makes concessions to both classical liberalism and the post-WWII social democratic compact that followed.

On the former front, it de-emphasises other ways of making sure that market mechanisms function as advertised, namely, by acting to undermine rent-seeking behaviour, such as monopolies, cartels, and less obvious forms of power based solely on resource differentials and market position.

The Reagan/Thatcher years saw a complete collapse of the whole conceptual edifice of anti-trust laws that had been introduced to reign in earlier excesses of capitalism. This was facilitated by brand new forms of guard labour that proliferated in the political ecosystem.

For those who don’t know, guard labour is labour designed to protect the resource differentials and geographic/economic positions that enable one to extract rent without providing any of the improvements markets are supposed to produce: police, accountants, lawyers, lobbyists.

Guard labour pays for itself, otherwise it would not exist. It is often extraordinarily valuable. Consider how much a lobbyist is payed (both as personal salary and for ‘greasing the wheels’ in the zone on the edge of bribery), relative to how much value they realise.

This is even more obvious in the case of tax lawyers, who construct elaborate devices for funnelling capital flows in ways that respect neither territory nor jurisdiction. It is in the interests of both the political and financial classes to permit and enable such guard labour.

This brings us to the issue of taxation. Here we encounter the other traditional functions of money in the liberal state: redistribution and provision of social goods. The promise made to labour by hegemonic Keynesianism was that these could be used to balance the public books.

A state with a fiat currency and restrictions on labour and capital flows (borders) uses money to encode its monopoly on power within those borders (and sometimes without, as we see in the case of the imperial era US).

The promise of social democracy was that this power could be exercised by representatives of the people as a form of counter-power in the ongoing class war between labour and rentiers (be they industrial capitalists, financial capitalists, or aristocratic landlords).

The system based on this compact collapsed for a variety of reasons, but it is clear that one aspect of this failure was the increasing alignment between the class interests of professional political representatives and the ramifying strata of guard labourers.

There’s an important story to be told here about the way that the adoption of general purpose management broke the fordist alliance between labour and industrial capital and reasserted that between industry and finance, and the consequences thereof. It is a story for another day.

The key point here is that the ‘financialisation‘ associated with the neoliberal era was the result of a double compromise: the need to use the tools of monetarism to preserve standards of living while turning a blind eye to auto-catalysing rent-seeking dynamics.

As is fairly obvious, when this double compromise began to fail in a variety of ways (e.g., the coupling of incentives for private homeownership and asset speculation from the 90’s to present), it was almost always resolved in favour of the compromise with capital.

Before I turn to the consequences of this gradual unravelling of the neoliberal compact between capital and ‘the people’ (within the workforce and without), I need to return to the topic of how the the left thinks about money, and discuss the pole left alone thus far.

What I have said thus far is that the right tends to deny that money is a fictional commodity, preferring to treat it as a natural one, and even when it concedes this, to reduce its engagement with money qua infrastructure to those dimensions covered by the naturalist analysis.

It’s worth noting that monetary naturalism comes in many forms. Those that preceded Smith, Ricardo, and Marx tended to focus on the function of exchange and storage. However, the classical view did not so much supplant naturalism as reconfigure it: it discovered investment.

However, this discovery was interpreted in terms of the interface between man and nature, i.e., labour. Instead of understanding money in terms of resource scarcity, the classical economists interpreted it in terms of labour scarcity.

This is the central claim of the labour theory of value (LTV): the limit governing how little you (as a capitalist) can pay for labour (in wages) is determined by the cost of reproducing that labour, rather than by how many resources one can extract from nature.

There’s an obvious sense in which this is true, and an obvious sense in which it is false. It’s clear that one cannot count on a worker who does not make enough to feed themselves, but it’s equally clear that one cannot feed workers with their own labour if the resources run out.

There’s a more detailed story to be told about the problems of LTV, but for now it suffices to note that it has been abandoned by everyone but the far left, where it exercises an influence proportional to the waxing and waning of Marxian/Marxist/Marxisht thought.

There are a bunch of interesting pressures here, but to explore them I need to say something about Marx, and thereby invite my mentions to be thoroughly waxed by Marx philologists.

Here’s my claim: Marx provided an immanent critique of classical economics and its normative consequences that was nonetheless to some extent dependent on its descriptive assumptions, and that this tension is responsible for the poor signal/noise ratio in Marxist circles.

So, there’s a sense in which the perennial preference for macroeconomics over microeconomics on the left is tied to its proximity to Marx and his inheritors. For example, it’s clear that Keynes is under pressure to defend capitalism from challenges coming from the far left.

Or rather, from further left. So, he drew up the blueprint for the post-war compact, though he is far from the only one responsible for the confluence of ideas and policies that congealed in response to the twin failures of classical liberalism: the great depression and the rise of fascism.

Marx provides a descriptive analysis of capitalism and an explanation of its failures that is quintessentially holistic, and it is this methodological orientation that many of his most perspicuous critics inherit: Veblen, Keynes, Polanyi, Sraffa, etc.

But by contrast, the normative dimension of Marx’s analysis – the account of exploitation in terms of surplus value – is all too easily read in a microeconomic fashion, i.e., in terms of relations of exchange (and employment) between individuals.

As William Gillis (@rechelon) has pointed out quite concisely, one can be compensated for one’s labour by a capitalist even if one’s labour has net zero productivity, net zero profit, or is consumed by a process that produces nothing that can be valorised through exchange.

Even if LTV is correct, which I sincerely doubt, it most certainly only makes any sense as a macroeconomic theory of the global dynamics of the capitalist mode of production and the systemic oppressions it produces.

But this does not stop its microeconomic interpretation from distorting the social imaginary of the political left. I think it is genetically responsible for much of the prelapsarian nonsense talked about ‘authentic community’ by many communists and fellow travellers.

“If we can only erase the taint of capitalism from the human animal, then we might live in true community, where people will have the sort of sociality that’s just right for me. Have you read my Paris commune alt-history fanfic?” – I wish this was more of a caricature than it is.

If classical economics discovered the dynamics of investment, then Marx most clearly saw what these dynamics implied: that the reconfiguration of the productive process had become endogeneous to that process itself.

But the microeconomic version of LTV stipulates that there can be no exploitation in a post-capitalist world, and this leaves one with only a few options for how to conceive of the economics of such a world. The easy option is to pretend there is no need for investment.

If we stipulate that all needs are met, and that all needs are fixed (because ‘authentic’, ‘natural’, etc.), this allows us to imagine an idyllic crystalline social order in which none of the problems that the infrastructure of capitalism has evolved deal with need be solved.

Post-capitalism, become the perfect imaginary commune, thus has no need of money, because it has no need of exchange, storage, or investment. It equally has no need of taxation or distribution, because the social relations which mediate means and ends are fashioned without flaw.

To provide a more vivid image: “If you want a vision of the future, imagine a washing up rota stamping on a human face for all eternity.”

I think it is entirely conceivable that money will outlive capitalism, because the relations between them might be reconfigured in ways that are no longer distinctly capitalist: there might be exchange without wages, storage without interest, and investment without profit.

Of course, this is by no means necessary. Yet, once one acknowledges that money is a fictional commodity, and that treating it as a real commodity can undermine its infrastructural role, there is no reason to tie the conceptual connection between money and capital so tightly.

So, what I am saying here is that the characteristic failure of the left in thinking about money is not so much naturalism as fantasism. Money is not merely treated as a fiction of sorts able to function as infrastructure, but a fantasy getting in the way of some purer thing.

But this purer thing is the real fantasy, and it stops us from giving honest answers to people who, when confronted with the idea of a post-capitalist society, wonder how they will get income support, or whether they will have to make do with vouchers that limit their choices.

It is fantasies like these that stop us from seeing the things actually in front of us. The concrete needs and the difficult strategic choices. The polymorphous perversion catalysed by production and the fragile solidarity required to unbind it from the whims of commerce.

So, after this marathon digression, here’s something that’s in front of us: the biggest single obstacle to tackling anthropogenic climate change is double entry book keeping.

Now, just in case your initial reaction to this is that I’m proposing the elimination of accounting, that’s not what I mean, though I’m less opposed to the elimination of accountancy as guard labour.

It is patently obvious to everyone who is not a free market fanatic of some stripe that the energy market as it exists is completely irrational when looked at from anything resembling an objective point of view.

It is completely incapable of handling the co-ordination problems posed by regular investment and provision of infrastructure (look at privatised energy companies in the UK) let alone the properly existential threat of fossil fuel externalities.

Even now that renewables are becoming cheaper than legacy fuels, we simply will not switch to them in anything resembling an optimal manner. If we’d put all the money captured by fossil fuel subsidies into R&D and infrastructure investment, we would be decades ahead in this.

This is a categorical failure of capital as a mode of investment, combined with a complete failure of liberal democracy as a means to modulate it: investment analysts have long had an accurate picture of the problem, but all incentives have been stacked against solving it.

There is, in fact, no greater sign that whatever it is, the current way in which we solve co-ordination problems does not scale, and is riddled with organisational pathologies that have accreted in layers since the end of the post-war period.

But putting all that aside, here’s the single biggest choke point right now: fossil fuel companies need to pretend that their infrastructure is an asset not a liability, and every bit of accumulated power they have is directed to ensuring that everyone plays pretend with them.

It doesn’t matter whether we think they should have this power, or whether they should be tried for crimes against humanity; they have power and are using it to distort the investment incentives for the global techno-industrial substrate. This is a transfer of power problem.

Transfer of power is the thorniest of political problems, and building systems to handle it reliably is incredibly difficult, but there are also one-off transfer of power strategies that can work, and we should at least try to apply them to this looming existential threat.

Here’s what I’m calling for: a fossil fuel infrastructure armistice. We buy it all back at the pretend value, no questions asked. We make people who do not deserve to be made whole whole, because that’s the easiest route around this obstacle.

There’s probably room to negotiate a bulk price, given that they know it’s overpriced, and also that they’re risking the lives of their descendants, but less than we might expect from anyone with a functioning conscience. If we want to do truth and reconciliation later, so be it.

To summarise: we’ve got to be serious about money as infrastructure, infrastructure as capital, and capital as accumulated power; and if we recognise that we should be willing to pay for the power transition we all really need, even if it deviates from our political fantasies.

One final point, before I go. The great underappreciated tragedy of the era of financialisation is the way management culture incentivised leveraging every enterprise to the hilt. This has created more systemic fragility than can be handled by derivatives.

Again, the near banking collapse of 2008 is the obvious example, but it’s important to see the case of fossil fuel infrastructure as belonging to the same genus. Too much fragility means too much incentive to feign ignorance to unanticipated problems, and even to generate it.

It’s worth pointing out that what I’m saying here about power, market position, and guard labour is quite importantly connected to things I have been saying for many years about cognitive economics and its role in the evolution of contemporary capitalism. Once you recognise that economics must account not merely for those resources disposed by our decisions, but the resources required to make those decisions, then the entire discipline changes, revealing most of what has been studied under the heading of neoclassical economics to be an artificially restricted limit-case. It is very much as if we had discovered non-Euclidean geometry, and then stubbornly insisted that we could still use the parallel postulate as an assumption due to the necessary idealisation involved in reasoning about real world surfaces like spheres and rubber sheets.

This is carefully cultivated ignorance, a mathematical fantasy built on an unwillingness to see things as they are. I do not think that I am the first to make this point by any means, as is obvious in tradition of institutional economics and Herbert Simon’s work on bounded rationality. But I have yet to see anyone else call a spade a spade here, and insist that this is a matter of mathematical axiomatics rather than empirical idealisation. The latter can be argued over, but the former cannot.

2. The Dialectic of Value

This next series of thoughts has been brewing for at least as long, and probably originated in my disagreements with Paul Mason’s Postcapitalism and Andrew Kliman’s  The Failure of Capitalist Production, along with my ongoing conversations with those who still have no better name than left-accelerationists regarding the perennial problems with the relation between political theory and political praxis on the left (e.g., the intersection between academia and activism), and the role that Marx’s thought plays in their genesis and potential solution. It has also been substantially influenced by my encounters with Thorstein Veblen, George Bataille, and Guy Debord.

Here is the reading of Marx that I have been slowly developing, along with some disclaimers regarding what I take myself to be doing in proffering it. This includes some anecdotes about my encounters with what I can only describe as pathological strains of Marxism that are not merely ineffective, but actively counterproductive. There is great work in Marxist thought out there, much that I consider great even though I disagree with it. But there are many more dogmatists who turn up to every debate with a series of pre-packaged dismissals in hand, unwilling to listen and all too willing to lecture. If you must post in the comment section, please don’t be ‘that guy’. Anyway, here you go.

Here’s a few more thoughts on economics, following up from last night’s monster thread on money, infrastructure, and the going price of power.

Allow me to explain my take on Marx in a little bit more detail, in order to articulate the way he binds the descriptive (explanatory/predictive) and normative (ethical/political) elements of his theory, the consequences this has, and what’s good/bad in this from my perspective.

Disclaimer (§1): I am still in the process of really getting to grips with Marx and the tradition built around him. I am by no means ignorant, but I do not devote myself to the study of it as if it were either rabbinical law, hermetic lore, or, somehow, both at once. As such, I will only attend to certain responses.

Disclaimer (§2): If your response is ‘you should read more Marx’ my answer will be ‘yes, I will, but only as is compatible with my other priorities’. If your response is ‘you should read more of [secondary source]’, my answer will be ‘maybe, but can you compress it for me?’.

Disclaimer (§3): I already know I need to read more Marx, and I have a list of what secondary literature I want to read too. If you want to add to that list, you need to convince me that you got something important out of it, and the only way to do this is to explain what this is.

Disclaimer (§4): I have had innumerable conversations over the years where I have been put in an asymmetric position where someone insists I must read something, but cannot tell me why, while they reject my own suggestions, even when I can. I have no time for this anymore.

Disclaimer (§5): Philology has its own role, but that role is not to browbeat people with a copy of Beyond Good and Evil, Beiträge zur Philosophie, Das Kapital, or whatever text one has decided to treat like a grimoire. I suppose what I’m saying is:

Now that’s out of the way, here’s my most concise description of the way in which Marx modifies and extends Hegel’s social thought: his analysis aims to show the sheer extent to which systems of mutual recognition can depend upon systems of mutual reproduction.

To this end, Marx begins by giving us an extremely compressed rational reconstruction of the ontogenetic story implicit in classical economics: the dialectic of use value, exchange value, and value simpliciter that emerges from the interface between man and nature (labour).

I lament Marx’s choice to use the unqualified term ‘value’ (Wert) for the third dialectical term, as it implicitly suggests that this is an analysis of the notion of value as such (including epistemic, aesthetic, and cultural values) rather than some notion of ‘economic value’.

There’s reasons for this, and it is correct to say that just as one can see the recognition supervening on reproduction, one can see non-economic values supervening on economic ones. This provides a genealogical methodology for studying such things.

However, just as it allows one to talk about the ways in which capitalism substitutes economic value for truth, beauty, and solidarity, it equally allows one to deny that any of these things are really possible within capitalism. This is, in two words, fucking stupid.

To elaborate, I have had many debates with Marxists who use variants of this argument to reduce everything to ‘the value form‘, such that there can be no analysis of anything that is not funnelled through the analysis of capitalism. Not art. Not science. Not even mathematics.

I once spent a frustrating half hour in the back of a taxi cab trying to explain to an otherwise very intelligent person that logic, and even just modus ponens, has nothing to do with the value form. Abstraction does not derive from money, and money is not identical to capital.

I have also been present at a lecture where someone said, unironically, if for effect, that he did not care if we destroyed every last life-form on earth, as long as the final miserable dying mutant got to live outside the value form for a moment or two.

If you genuinely propagate this sort of apocalyptic Marxism, even if only for effect, I can have no solidarity with you. If it comes down to allying with capitalists against your fantasy of watching the world burn, then so be it. I have no time for insurrectionist cosplay.

If your vision of the future involves not being able to produce insulin, antibiotics, and synthetic hormones, then I would genuinely prefer the nightmare vision of endless automated neoliberalism embodied by Google and Facebook. I say this for effect, but it is also true.

Incidentally, this is why I hated the ending of the Battlestar Galactica remake:

Anyway, returning to Marx: if the domain of specifically economic value is restricted to the relation between use value and exchange value, how is this relation articulated? What is the dialectic here?

Here’s how I see it. The use values of the two products/services/guarantees to be traded are potentially unique and thus primitively incomparable. The exchange value is then some common medium through which they can be compared: difference, identity, ‘that’s so Hegel’™️.

However, there is a question as to whether the relation between exchange values reached by the two parties (or the comparison implicit in the contract) is actual equality. There is a sense in which the parties in such exchanges can be wrong about the terms they are setting.

Here’s a deliberately stupid example: if I promise to never utter the word ‘blumpf’ on condition that you never utter the word ‘zooble’, can we be said to have exchanged anything thereby? Not all contracts can are exchanges in the relevant sense.

Exchanges presuppose some genuine standard of equality that we might fail to meet: we can exchange unequal goods. To be a bit more mathematical: in order to individuate these goods, there must be an equivalence relation over the associated behaviours through which we can quotient them.

It’s important to see that this is implicitly normative, because this is what forms the basis of the transition from exchange value to economic value more generally. If we can miscalibrate exchange, the question becomes: what determines the standard of calibration here?

Considered abstractly, economic value is a norm governing exchange. Considered concretely, it is some substance that gives content to this norm. Marx proposes that this is some average of the socially necessary labour time required to produce the relevant goods.

I think this is the key move in Marx’s system, precisely because it entwines his predictive ambitions (e.g., explaining price variation through organic composition of capital) and his normative commitments (e.g., the essential unfairness inherent in surplus value extraction).

However, there is a lot more left implicit in the transition from the formal to the substantive notion of economic value, and it is here that the concept of mutual reproduction is essential, because it reveals the extent to which the normative has priority over the predictive.

Allow me another silly example: imagine we are playing Monopoly, perhaps to teach children about capitalism. The in game money encodes a precise standard of exchange, but it is clearly stipulated. It has no connection to investment in production beyond our personal investment in the game.

What we want to say here is that there is ‘no skin in the game’ when one plays Monopoly. There is no real risk. But what is the reality of risk involved the real ‘game’ of investment in production for exchange, surplus value extraction, and capital accumulation?

The risk is always tied to the material needs associated with the reproduction of life in the last instance. This is true even of the capitalist, who may pass from riches to rags, even though the cumulative momentum of their capital tends to keep them aloft, all else being equal.

[It is important to see that these qualifiers (‘in the last instance’ and ‘all else being equal’) are strictly logical, insofar as they describe the shape of our reasoning about the relation between presumed value and actual economic dynamics. They say that we may use assumptions about material needs to make predictions about the patterns of decisions motivated by risk whose interactions produce price variations, but that such reasoning is non-monotonic, i.e., that there are systematic relations between various other factors that constitute exceptions to such predictions, and that we may not be able to enumerate all of these in advance.

The really crucial point is that open-endedness of economic reasoning does not allow one to conclude that there are no systematic factors unrelated to material needs that can be enumerated in such a way that we can provide a more complex theory of price dynamics that is an improvement upon that provided by Marx’s extrapolation of LTV. There might be a perfectly good successor theory that is required to accurately describe a new phase of capitalism in which the power relations embedded in the configuration of markets and their political substrates cannot simply be ‘averaged’ away in the calculation of value qua labour time. This is what it means to say that such factors cannot be excused as casualties of necessary idealisation, for doing so is equivalent to generating a continuous stream of ad hoc hypotheses, which is to say, becoming a degenerate economic research program.]

What this means is that, though the use values associated with the goods to be exchanged are potentially unique, they tend to be individually significant in virtue of their location within the system of means and ends through which we survive and thrive.

Moreover, things with singular value, such as sentimental objects, tend to be less closely tied to surviving than thriving. Although we can imagine exceptions, such as not being able to live without the possessions of one’s dead spouse, these are thoroughly specific in character.

The common features of the conditions under which we as individuals can survive (e.g., oxygen, water, calories, shelter, companionship, etc.) determine the semantic parameters through which we can meaningfully see goods to be exchanged as in any sense equal in value.

Another example: if by some cruel twist of fate I possess your dead partner’s ashes, and you possess mine, we can see that there is some parity to be achieved by exchange, even though they are uniquely valuable to us as individuals, and there is no labour embodied therein.

If we were each entirely self-sufficient, with our own personal system of production that met all our material needs – a mourning pair of astronauts crying out in the void between worlds – then these would be the only type of exchange for which there was any meaningful parity, and everything else would be adversarial negotiation: pure game theory.

Labour is able to mediate between use and exchange in determining economic parity insofar as it is bound up within some system of production upon which we both depend for reproduction. This ranges from ‘sharing the same biosphere’ to ‘complex/intractable division of labour’.

It is the fact that the reproduction of individuals is entangled in something like a (distributed) collective division of labour that makes it possible to talk about ‘average socially necessary labour time’. Economic value presupposes an economy.

The implicit question of economic parity is thus: what must each contribute to production in order for each to receive the goods required for their reproduction. If you add ought-implies-can, then this becomes ‘from each according to his abilities, to each according to his needs‘.

To summarise: if we are to make sense of complex norms governing patterns of exchange from which actual exchanges diverge, then we require some notion of a concrete economy with an actual division of labour. This holds before we get to commodities, money, or capital.

Compare this with Hegel’s idea that abstract mutual recognition must be made concrete in the form of social institutions that mediate our relationships and constitute specific forms of status through specific sorts of peer relations attached to different activities and expertise.

The Marxian variant of this is that abstract mutual reproduction must be made concrete in the form of economic institutions that mediate our exchanges and constitute specific forms of industry and investment therein. This is all independent of the account of capitalism.

This is the cash value of my claim that neither economic value nor the use of money as infrastructure for keeping track of it is specifically capitalist in nature. There can be other ways of configuring a system of mutual reproduction through exchange, storage, and investment.

Marx’s account of commodity fetishism, capital, wage labour, and surplus value, are all downstream from the initial account of exchange and economic value proper. However, it is this initial articulation of LTV that lays the foundation for the predicting and critiquing capital.

What all this means is that Marx’s version of classical economics allows us to view the mediating role of labour in the constitution of economic value from two perspectives: from the real (explanation/prediction) and from the ideal (evaluation/prescription).

I think that the purchase that it offers us upon the real is increasingly tenuous, as it is precisely the configuration of concrete economic institutions, complex infrastructure, and the subtle texture of class relations that really does the mediation, making the ‘average’ of labour time increasingly meaningless.

But the purchase it offers us upon the ideal is increasingly pertinent, as we need to analyse, criticise, and revise the concrete economic institutions that make all of our lives possible. Debord understands this best: free time is not spare time, but personal destiny.

To add one final point, this ideal/real split becomes even more pertinent as we try to replace pieces of our political and economic infrastructure with automated (and autonomous) systems. If one does not appreciate the difference, one recreates the power relations one seeks to eliminate.

Bitcoin was supposed to decentralise currency control and free us from the forms of power associated with its infrastructural sedimentation. It took less than ten years for it to independently reinvent banks (and bank heists). We were promised a new form of money, and what we got is a new class of speculative asset. I suspect the same will happen with smart contracts and legal systems (and crime).

If one doesn’t appreciate the problems that the existing institutions and infrastructure evolved to solve, then one will simply put oneself in a position where one inevitably recreates them, maybe in a less desirable form. From blockchains to chains in three generations.

However, if we are serious about understanding how things actually work (technics), and understanding how we would like them to work better, or even just differently, then we might be able to use these tools correctly. From smart contracts to smart jurisprudence.

In short: (1) don’t underestimate the extent to which power differentials determine price differentials for labour and ‘reproduction’ between contexts (e.g., conspicuous consumption); (2) try to design better alternatives in accordance with more nuanced accounts of both the real and ideal.

3. Conclusion: The Cost of Management

There is one final an idea to add, which I intend to work out in more depth at a later date. I have already noted that there is at least one axiomatic assumption of neoclassical economics that must be suspended in order to look at the world as it is, rather than some fantasy projected by our political aspirations. I think there is another, equally damaging assumption, that is perhaps responsible for the ravaging effects of managerialism on the private, public, and even non-profit sectors of the economy since the dawn of the neoliberal era. This is the practical correlate of the theoretical posit that cognition can be ignored in our understanding of economic systems and social systems more generally.

If the assumption that decisions are free prevents us from recognising that cognitive resource differentials (as concrete modes of power) tend to drive wealth differentials; then the assumption that every process that consumes labour must be productive, producing a non-zero amount of product/service that can be valorised through exchange, prevents us from recognising the ramifying non-linearities produced by pervasive and relentless attempts to impose metrics upon every economic process, save management itself. Attempts to impose efficiency upon a process are not free, and they can simultaneously consume the resources intended to run that process and make it less efficient than if there were no control mechanism at all. Once more, the very idea of optimality is pure epistemic poison.

This is the capitalist correlate of the microeconomic reading of LTV discussed above, and it is why we live in a society being torn apart by an epidemic of counterproductive assessment mechanisms. This is obvious to anyone who performs an economic function that is subject to management, and even more intensely to those whose autonomy is being progressively stripped away by management as they drift from the core to the periphery of the workforce, their jobs turning into gigs in the process. This is because the question of management is the question of the correct handling of cognitive resources within an organisation considered as an information processing system. This is to say that it is the cybernetic question of how one designs appropriate control systems, which is not the same as designing hierarchies of power. Compare, for example, a telephone switch board that supposedly connects every problem to the person who can solve it, and an organisation chart that gives everyone a line manager.

In the absence of such cybernetic self-consciousness, managers spontaneously exert an authority commensurate with their class interests (strictly different from those of Marx’s owners of capital), which asserts their own freedom while suborning the freedom of those they manage. It does not matter what the final product of the relevant process is (e.g., commodities, services, public goods, works of art, etc.), because the manager will tend to erase any feature of the process that they do not understand in order to subject it to the fantasy of their own self-sufficient will.

This is a tendency, not an iron law. The thing that keeps it in check is the same thing that keeps the Dunning-Kruger effect in check more generally, a healthy appreciation of the limits of one’s own competence and a willingness to delegate not merely tasks but decisions to those who one recognises have more knowledge about the relevant processes than one does, especially if they are those one is managing. The consequence of the spread of general purpose management in the latter half of the 20th century is the widespread substitution of such epistemic humility for active ignorance, as a whole class of people colonised the administrative heart of society and created one of the most frighteningly effective forms of solidarity (or complicity) ever seen. A class of people managing industrial capital whose interests were naturally aligned with those of finance capital rather than labour, precisely insofar as they had been taught the same skills as the former, and had not risen up from the latter.

This is the missing link in the history of the neoliberal era. This is the cause of what David Graeber calls managerial feudalism, along with the stranger, hybrid fealty structures that have been generated by privatisation in the post-industrial world over the last few decades. More concretely still, it is the root of the ethereal yet ever-present anxiety that society is driving off a several cliffs simultaneously (cf. climate collapse, declining health outcomes, simultaneous budget deficits and brutal austerity, liberal dementia and fascist resurgence… and on and on till one gets to those most perfect avatars of the charmed fool: Trump and Johnson), because there are idiots at every wheel.

This idea requires much, much more development, but it is the ultimate conclusion of my attempt to think through the insights of Mark Fisher‘s thought in a way that might finally do it justice. From k-punk to capitalist realism and back again.

Published by


Appropriate descriptors: (neo)rationalist, left-accelerationist, socratic wanderer, heretical Platonist, computational Kantian, minimalist-Hegelian, heterodox Foucauldian, dialectical insurgent, conceptual mercenary, philosopher of fortune.

3 thoughts on “The Going Price of Power”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s