Category: Capitalism

What Is Value? A Marxist Perspective

desmondmcneillLeave a comment

Marx鈥檚 critique of capitalism, and more specifically his theory of value, is still very relevant today, as I argue in my new book聽

But his work is often misunderstood, not only by orthodox economists but also by others 鈥� such as 鈥榞reens鈥� 鈥� who seek inspiration in his writings. Economists, if they refer to his work at all, have tended to focus on the quantitative labour theory of value, ignoring what Marx called the qualitative theory of value: his critique of the economic categories of 鈥榖ourgeois鈥� economics which mystify 鈥�  and hence also justify 鈥� the reality of what is really going on. The concept of fetishism is crucial to this theory, but by economists this has been either ignored or treated as the work of Marx the philosopher or Marx the sociologist. Marx introduces the concept of commodity fetishism in the very first chapter of Capital Volume I, where he seeks to get to grips with the mysterious phenomenon of exchange value. Rather than simplistically equating value with price 鈥� as is the practice of the market system and mainstream economics 鈥� he delves deep into the beliefs and practices that constitute and sustain the capitalist system. In other works, he applies the concept of fetishism to capital, money and interest-bearing capital. By reference to what he calls the 鈥楾rinity Formula鈥� he shows how, by presenting profit as the return on capital and rent as the return on land, both profit and rent are taken for granted, and go unchallenged. That the surplus value generated in production accrues solely to capital is treated as somehow 鈥榥atural鈥�.

In my book, I show the continuing relevance of Marx鈥檚 theory today, especially with regard to finance and the environment. Both the financial crisis of 2008 and the continuing crisis of environmental destruction are related to the way in which the market increasingly extends its grip over our lives: through the financialisation of everyday life, and through the use of market instruments and market principles that shape our relationship with nature.

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The Social (Relations) Dilemma

Aabid Firdausi1 Comment

The Social Dilemma that is currently streaming on Netflix has garnered much attention by raising a single question 鈥� how have we come to accept as normal the fact that a few hundred tech-enthusiasts in Silicon Valley has had an unprecedented impact on billions of lives around the world? Directed by Jeff Orlowski, the Social Dilemma features tech industry insiders raising ethical concerns about business models that shape our everyday digital experience. 

Though the docudrama has topped charts, the narrative on reckoning with this digital Frankenstein moment is not new. For example, Black Mirror is a popular show streaming on Netflix that speculates on how unchecked tech developments can result in a dystopian world. What makes Social Dilemma unique is perhaps because it features an array of 鈥� usually white males who got rich working for big tech, but then got disillusioned and subsequently achieved 鈥渆nlightenment鈥�. 

The tech-bros point out that most platforms were started with good intentions to improve the quality of human lives. However, due to the advancements in AI, coupled with a shareholder model of revenue maximization, these platforms have become weaponized by those with nefarious interests. This has threatened liberal democracies, leading to political polarization. We are warned that a civil war is on the horizon, ironically triggered by social networks apparently aimed at bringing people together.

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The return of the visible hand: How struggles for economic and political dominance turn state capitalism into authoritarian capitalism

gschnydr2 Comments

budapest-parliament-hungarian-parliament-building-hungary-people-politicians-viktor-orban-hungarianBy and

The state has made a return with a vengeance in economic matters in the past decade or so. Mainly due to the success of the Chinese model and the 鈥� less permanent 鈥� strong economic performance of countries like Brazil and Russia, the erstwhile Washington Consensus of the superiority of markets over states as mechanisms of economic coordination has been put in serious doubt.

Scholars have picked up on this trend by increasingly referring to the term (new) 鈥榮tate capitalism鈥�. consider it an undesirable threat to the existing economic world order, while others show how states can effectively promote development and economic growth.

While the term state capitalism has been useful to into debates in political economy, the term itself is not unproblematic. Indeed, there is a risk that it perpetuates, rather than surpasses, the sterile debate about the state versus the market. Put bluntly: If there is such a thing as state capitalism, what does non-state capitalism look like?Read More »

Financializing state capitalism: Exchanges, financial infrastructures & the active management of capital markets in China

jpetry12 Comments

DCE trading floorThe development of capital markets has been a core focus of financialization research. For Epstein, financialization 鈥�鈥�, while Pike and Pollard define financialization as the 鈥�鈥�. Other scholars also attribute a significant role to capital markets in financialization processes, be it in the , the rise of , or 鈥�鈥�. At the heart of and as a precondition of many aspects of financialization stand capital markets and their development.聽

This is not only the case when it comes to financialization in advanced economies, but also with respect to the study of . Financialization processes are not uniform, they are rather variegated and refracted by national institutional settings that lead to . As Lapavitsas and Powell emphasized, 鈥�鈥�. This has also been picked up in debates about the relationship between financialization and the state. Previously, many scholars argued that financialization often results in a and the effects on developing economies are often described as potentially negative with financialization for instance or . But stemming from earlier discussions on , more recent scholarship has highlighted that . It argues that an increasing takes place in which state and (quasi-)state institutions often co-constitute financialization processes.聽

Contributing to the growing literatures on variegated financialization and the state, in a paper titled 鈥�鈥� (recently published in ) I argue that states are not only important actors facilitating financialization but can also exercise a considerable degree of control over financialization, thereby shaping its very form. Instead of a financialization process that , what we see in China is a 鈥榝inancialization with Chinese characteristics鈥� where the state actively tries to manage financialization and its social outcomes.聽Read More »

Is Postcolonial Capitalism a Thing to Itself? Reviewing Sanyal鈥檚 Rethinking Capitalist Development

srishtiydv3 Comments

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Kalyan Sanyal鈥檚 Rethinking Capitalist Development (2007, 2014) is a rare work of political economy for many reasons. It is written by an economist, but it鈥檚 so interdisciplinary that you won鈥檛 be able to tell. It is an attempt to theorize capitalism in the postcolonial context from the inside-out rather than outside-in, i.e. with no reference to an ideal type. It refuses to sit neatly in theoretical boundaries 鈥� it is not entirely Marxist, not entirely Postmarxist, not entirely neo-Gramscian, not entirely Foucauldian, but a strange concoction of all. Perhaps the only thing that is not rare is that like most interesting and influential works that emerge from the Global South, it too has been largely ignored in the academic circles of the Global North, especially in Economics.聽Read More »

RMB internationalisation as an extension of Chinese state capitalism

keanfanlim1 Comment

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Why has the RMB gone global?

More than a decade has passed since the launch of what is now widely known as 鈥楻MB internationalisation鈥�, or the strategic attempt by the Communist Party of China (CPC) to expand the global reach and usage of the Chinese currency, the renminbi (RMB). Such is the scale and ambition of this strategy, some policymakers and scholars have proclaimed RMB internationalisation as a form of reserve currency succession 鈥� as a as the world鈥檚 preferred currency for market exchange. This development is especially intriguing given how the financial system within China remains in spite of market oriented reforms since 1978. Could RMB internationalisation truly be about global currency supremacy when financial flows in and through China continue to be highly scrutinised?Read More »

Corporate Planning in the Coronavirus Economy

Terry Hathaway3 Comments

woman-wearing-mask-in-supermarket-3962289The global pandemic and associated developing global recession are calling into question a whole range of economic truths and demanding novel solutions to various interlinked societal problems. In this blog post, I want to connect what we鈥檙e currently seeing in the retail sector during this pandemic to deep-seated narratives about the nature of economic exchange, in particular to the notion of 鈥渢he market鈥�.聽

The market is one of the most dominant concepts for making sense of the social world, primarily because of the prestige of the economics discipline and the elevation of the market concept by the discipline (albeit in a highly abstract manner). At its most basic, it paints the economic sphere as akin to a marketplace, where there is a level playing field and rivals compete for custom primarily through having the keenest of prices. Other, more complex, ideas often get laid over this concept, such as the market pricing mechanism allowing supply and demand to equilibrate, price signals communicating complex information to market participants, and, as such, the market allowing for decentralised decision making led by consumer demands. (For a much (much) fuller account of the market concept, see .)

However, as a result of the coronavirus pandemic increased demand for basic goods 鈥� such as toilet roll, hand sanitiser and flour 鈥� has put a strain on the distribution of these goods and has engendered a response quite dissimilar to the narrative of the economic system as a competitive, decentralised, profit-maximising market. What we have seen, instead, is retailers working as sites of governance in order to ensure a degree of equity in the distribution of resources.聽Read More »

When does state-permeated capitalism work?

Andreas N枚lkeLeave a comment

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In recent years, state capitalism has become an important buzzword in the development economics discussion (again). In view of the very different ways in which this term is used, Ilias Alami and Adam Dixon recently highlighted the dangers of using the term too loosely in an article in . In view of its recent popularity, state capitalism could suffer a similar fate to the terms “neoliberalism” or “financialisation” by becoming a very loose rallying cry without any significant analytical value. To overcome this problematic situation, Alami and Dixon propose that future research should (1) develop a theory of the capitalist state, (2) circumscribe the time horizons of state capitalism, and (3) locate state capitalism more precisely in territorial and geographical terms.

Although I am not sure whether the genius can be put back into the bottle by developing a unified theory of the state (too many different theoretical traditions are involved by now), I am very sympathetic to the latter two demands. Our recently published book “State-permeated Capitalism in Large Emerging Economies” () is a modest contribution to the latter goals. It deals with the economic development of Brazil, India, China and South Africa between 2000 and 2015. Departing from a 鈥�鈥� perspective, we have developed an ideal type of state-permeated capitalism – as opposed to liberal, coordinated and dependent capitalism – and examined to what extent large emerging markets are approaching this ideal type. Read More »