"It should be noted upfront that economics – or, more precisely, the neoclassical branch of political economy – is not an objective reality. In fact, for the most part it is not even a scientific inquiry into objective reality. Instead, neoclassical political economy is largely an ideology in the service of the powerful. It is the language in which the capitalist ruling class conceives and shapes society. Simultaneously, it is also the tool with which this class conceals its own power and the means with which it persuades others to accept that power." -- Jonathan Nitzan and Shimshon Bichler, Capital As Power: A Study of Order and Creorder (Routledge 2009)
The above is not a novel idea.
"...the absurd aphorisms of a political economy controlled by property have puzzled the most generous minds." -- P.-J. Proudhon
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It has also been said that: "Accordingly, the amount of the business capital of a given concern, or of the business community as a whole, varies in magnitude in great measure independently of the mechanical facts of industry, as was noted above in speaking of loan credit. The market fluctuations in the amount of capital proceed on variations of confidence on the part of the investors, on current belief as to the probable policy or tactics of the business men in control, on forecasts as to the seasons and the tactics of the guild of politicians, and on the indeterminable, largely instinctive, shifting movements of public sentiment and apprehension. So that under modern conditions the magnitude of the business capital and its mutations from day to day are in great measure a question of folk psychology rather than of material fact."
I assume you know about The Bichler & Nitzan Archives. If not, you can get the flavor of their work there. I haven't decided yet if it's just a rehash of the same leftist tune (Marx 2.0...or 3.0 or whatever version we are on now) or if it is something truly original. They certainly seem to think so. They claim to owe much of their inspiration to Veblen, Mumford and the Institutional tradition.
There is also a forum that grew up around their work here if you want to get into the discussion.
FROM THE BACK COVER
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 that 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 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'.The first chapter is here.
I'm always a bit skeptical when I hear fictionalist claims about the ontology of abstract objects, especially in math. No one has ever "seen" pi either. What matters is demonstrating indispensability in a theory.
Bruce, is that Veblen?
Neverfox, I see from the table of contents three areas of interest for me: the Cambridge Capital Controversy, the Labor Theory of Value, and Veblen's idea of business as sabotage. But I have a lot to read.
Hi Robert. If you're interested in all those things, then "Capital as Power" is chock full of goodies for you. I have a review copy and have yet to write the review. Too much to understand as I'm trying to write the review for ecological economists, and the book is really more political economy... ah well.
Robert, yes that is Veblen. Neverfox, if you would even dip into Bichler and Nitzan's book, and if you would cast a glance at The Theory of Business Enterprise from which BruceMcF quotes, it would save you the embarrassment of making statements like "They claim to owe much of their inspiration to Veblen, Mumford and the Institutional tradition." In fact their key idea of differential accumulation is clearly traceable to Veblen. And their statistical modeling is original and very challenging. I recommend their books to anyone who wants to understand the behavior of, say, Exxon or BP.
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