Commentary on Political Economy

Wednesday 31 August 2011

Addendum to Comment on Martin Wolf

As you can see “the wage relation” is central to our analytical critique of capitalism. The “wage relation” is not limited to nominal monetary wage negotiations. It is a much broader notion that moves far away from wage negotiations and distribution of income to the much more crucial notion of the nature of work and the nature of production. The antagonism of the wage relation would be relatively easy for capitalists to fix if it was confined to contractual negotiations with capital as to the retribution of workers. The point here is much more important than that: - antagonism over the wage relation extends to the actual subordination of living labour to capitalist command in the process of production (of goods and services) and, therefore, also to the nature of the work that workers are coerced to perform under capitalist command in the workplace and, by extension, the nature of the pro-ducts created in the capitalist productive process.

You will appreciate that even admirably enlightened economists like Minsky entirely by-pass this “critical” aspect of capitalism – only to concentrate on its “financial instability” which, if anything, is an effect of wage-relation antagonism but not its cause. And he also failed to capture “critically” the amazing Schumpeterian insights into the capitalistic “use” of technological innovation as a practical tool of command inside and outside the workplace. (Schumpeter himself encouraged the development of an “economic sociology” in this regard.)

You would have noticed that bourgeois economic “science” has just awarded a Nobel Prize to Oliver Williamson whose work, once again, can be described as a Schumpeter-inspired “microeconomic-managerial” study of the capitalist corporation as a “structure of command” that bypasses “market or price mechanisms” to internalise these political functions within the “corporate” hierarchy (legally, administratively as well). (Hayek’s analysis of the “price mechanism” as an “economy of information” is similar and offers important analytical clues.)

The vice of modern economists (academic or journalistic or professional) is to neglect this dimension of capitalist social relations of production for reasons that seem obvious to me: - because considering these elements of “the economy” would lead to the immediate political challenge of both the productive process in the workplace (how we work) as well as the distributive process in the sphere of consumption (what we produce and how it is distributed). These are “explosive” questions that bourgeois economists find it impossible to address because they call into question the very legitimacy of the society of capital, of its “corporate sector” and of its “State-Plan” that is now reduced to a “Crisis-State”. What makes them “explosive” is the fact that the antagonism of the wage relation can no longer be “mediated” through inflation and even less through “austerity measures”, but rather invests im-mediately the “political sphere” of the Crisis-State.

For bourgeois economists to confront these crucial, critical elements of “economic” analysis would necessarily draw them into accepting that “the economy” is not a quantifiable entity that can be described, let alone understood, with a system of mathematical formulae and equations leading to a (metaphysical) “equilibrium”. Rather, “the capitalist economy” is a set of relationships of power, of domination and command especially in the sphere of production, in the workplace, which is why “the wage relation” is ineluctably central to it.

(For a theoretical introduction to these themes I would recommend Raniero Panzieri’s work. Please google his name. Panzieri is one of the greatest theoreticians of the last century. The fact that scholars like him are ignored by bourgeois “science” is in itself a ringing indictment of the complete contempt these people have of workers, their reality and their interests.)

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