Commentary on Political Economy

Thursday 20 February 2014

A Theory of Capitalist Metaphysics (Homage to our Ukrainian Friends)

We wish to dedicate the study below to the heroic friends in Kiev, some of whom alas have already paid the heaviest price for opposing the dictatorial regime that seeks to silence much more than just their voices - a regime all too prone to suppress their lives. Ironic link, this, between the aspiration to join the European Union - itself run by a ruthless bourgeoisie every day less capable to contain our explosive, irrepressible demands for a new society (Gramsci's "citta' futura") - and the libertarian content of this very demand. Yet it ought not to surprise us, and our dear friends in the Ukraine are nobly right in this, that the way forward to this "future city" lies precisely in further European integration and solidarity!
Our deepest aspirations must be supported by the clear-sighted analysis of the material oppressive foundations of the society of capital - a "society" built in the likeness and image of capitalist executioners whose only interest is to reproduce and expand the yoke of dead labour over living labour. That is why we are spending so much energy in seeking to understand the very foundations of capitalist society, down to the outline of the "capitalist metaphysics" that underpin bourgeois exploitation.
There has always been a dis-connect, a discrepancy between the "cultural" critique of the society of capital and its de-ontological - that is to say, both ontological and ethico-practical as well as "economic" - aspects. Our purpose here is to remove this dis-connect by tracing the all-important links between the will to power of the bourgeoisie and its "scientific" rationalization of it (mainly, of course, by means of "economic science"). Cheers to all!

The propositions of the Protestant Ethic and of the Labour Theory of Value are fundamentally antithetical to the metaphysical positions of the negatives Denken and also of Neoclassical Theory. For Weber’s Calvinists and Puritans, wealth is a sign of “Beruf”, of divine grace and active “divine calling”. But the Beruf, even in its religious specification of Entsagung, of “renunciation” and Askesis, does not yet sever decisively the theoretical link between labour and the accumulation of wealth by interposing the role of “capital” in the trans-formation of existing natural resources or wealth into greater wealth for individuals. The “wealth” of the Protestant Work Ethic is still a constructive universal human value that can be socially aggregated and accumulated by means of labour as “effort” first, and then as sacrifice and “renunciation” of consumption, even though labour is not seen as social fulfilment but rather as expiation and sacrifice by the individual soul in its univocal relation with the Divinity.

Two are the essential foundations of the Protestant Work Ethic and of the Labour Theory of Value that bourgeois economic theory needs to demolish: the first is that all economically significant “wealth” – that is to say, all use values pro-duced by human beings and not occurring naturally – derive their “utility”, and therefore also their exchange or market value, from labour itself. And the second is that “labour” is a homogeneous entity that can be measured in terms of the amount of it that is “embodied” in exchange values and upon which market prices are agreed upon by market agents. In order to do so, however, the negatives Denken had to develop an entire metaphysics upon whose foundations it could erect “a specifically bourgeois economic ethic”. The aim of this section is to dis-cover the essential content of this "capitalist metaphysics” and so to un-cover and expose a ritroso, as it were, “going backwards”, the theoretical vestiges that connect bourgeois metaphysics with bourgeois ethics and economics.

Classical Political Economy intended both “wealth” and “Value” as objective or inter-subjective realities – that is, as an entities whose content and quantity can be agreed upon scientifically by all human beings and be the subject of social and economic co-ordination either through planning (socialism) or through the market (liberalism). It is this universality, this concordance and possible “harmony” – this inter esse, this “common being” - that the negatives Denken attacks most virulently. For the negatives Denken, human wants are entirely subjective and cannot in any way shape or form be regarded as homogeneous or commensurable between human beings. Hence, “wealth” can be considered only from the point of view of “Subjective Value” pertaining to each “individual” in isolation from other “individuals”. And “labour”, although it is the immediate factor in the production of wealth, can exist, it can manifest itself, only as “individual labours” - precisely because neither wealth nor labour can be homogeneous use values that apply to human beings as a species – that is, phylogenetically – and whose quantity and value may be calculated scientifically independently of the conflicting and competing claims put forward by each individual with regard to all available “wealth” whether naturally-occurring or humanly produced.  For the negativesDenken, labour can and must be regarded only ontogenetically, as mere mechanical operari, only as the physical bodily exertion on the part of the individual worker separate from the exertions of other workers and separate from any “tools” that the worker may “utilize”. Indeed, the “utility” of the tools is considered to be entirely distinct and separate from the actual body and bodily exertions of the worker. Consequently, labour always and ineluctably consumes its object, whether it be the tools it utilizes or the materials it “works upon”, to provide for the present material wants of the labourer.

In no circumstances can labour be considered to be homogeneous or to satisfy homogeneous human needs and therefore to constitute the most basic form of the human social synthesis, of human inter-est, of social co-ordination and fulfilment. A fortiori, there can be no notion of “social labour” for Neoclassical Theory, nor can there be any “separation” (Trennung) in the Marxian sense between “labor” and the “means of production” - because there was never any union between them! The human operari is entirely “instrumental” to its goal – the provision for want. There is and there can be no Gattungswesen, no species-conscious being, no “original union” of workers with tools or with one another in the labour process or indeed with the product of the labor process - simply because labour is not seen as a social, phylogenetic activity. Quite to the contrary, the insatiable nature of human wants and the “scarcity” of their provision ensure that there is “conflict” between and among workers, and between workers and nature, let alone between workers and capitalists! Human beings are irreducibly and ontologically “things-in-themselves”; they are Schopenhauerian “Wills” or, as Nietzsche describes them, “instincts of freedom” that can “co-operate” or “col-laborate” to the extent that their “needs”, their “iron necessities” and their “wants” are provided for and satisfied.

Wants expand to absorb the available output by labor and indeed all the wealth and resources available to the individual Will: that is why economic “science” deals always with scarce resources (recall the description of economics as “the dismal science”). All wealth and resources, natural or produced, are inevitably “scarce” because human wants are insatiable and because wealth cannot be created but can only be conserved or transformed or consumed. All natural and produced resources have “utility” only for the individual Will. The negatives Denken relies on the notion of utility, yet this is not based on the Benthamite conception of utility as an intersubjective and phylogenetic quality that made it consistent with the Labour Theory of Value espoused by Classical Political Economy from Smith to Ricardo and Mill. For the negatives Denken, instead, utility is an entirely subjective and inscrutable entity that can be “measured” as “Value”, that can be given “social significance” or a “social Form” – that can be “reified” – only through the inevitable “clash of Wills”, the irremediable and irresoluble conflict between the wants of individuals. Any “social osmosis” is possible only through the market pricing mechanism where individual Wills “clash” or “com-pete” and come into conflict for the same wealth rendered “scarce” by insatiable individual human appetites. Of course, the evident inconsistency lies in the fact that it is impossible to specify “market rules” that apply to individual Wills that are in irreconcilable conflict with one another: the “com-petition” (shared claim) of market agents is a contradictio in adjecto!

Wealth and nature are seen by the negatives Denken as being antithetical to human being (in Schopenhauer’s phrase, “the Will to Life”), as ob-jects (Gegen-stande) literally “standing against” human beings, first, because human wants are bottomless; and second, as a corollary, because each individual’s wants and “labour” must be antithetical to and in competition and conflict with the wants and “labours” of other individuals. Wealth and nature do not and cannot represent a source of uniform homogeneous commensurable and compatible objectification of human potential, of social labour, but are seen rather as the source of satisfaction of strictly individual wants that are absolutely incommensurable between individuals and indeed are a source of universal conflict between one another and between them and Nature, individually and collectively.

“Wealth” and “nature” therefore are not seen as resources by means of which human beings through their “labour” - understood as social labour, that is, as being also a resource indivisible and inseparable from “nature” - necessarily and constructively objectify their “abilities” and fulfill their needs as a species, phylogenetically and collectively. On the contrary, both nature and wealth are seen as “resources made scarce” by the insatiable subjective wants of human beings understood as atomistic in-dividuals, that is, ontogenetically, in competition and in conflict both with nature and with one another; – infinite subjective wants for which labour can provide only immediate provision as “hand-to-mouth” subsistence. Thus, “labour” is first broken down into “individual labours” that can in no manner shape or form be regarded as “social labour”, and then, as a direct corollary, these individual labours are seen as unable to do more than provide for the immediate wants of labourers without the intervention of labour-saving tools or “capital”.

This is the Hobbesian status naturae, the bellum omnium contra omnes, the state of nature in which homo homini lupus obtains and that Schopenhauer postulates in Book Four of Die Welt als Wille und Vorstellung, after his pitiless critique of Kantian ethics in the Grundprobleme der Ethik, of the “moral theology” of the Categorical Imperative. In the negatives Denken initiated by Schopenhauer in response to the Hegelian dialectic, the instrumental “operari”, the Arbeit, “labor” itself, does not have “utility” because it is “the objectification of the Will to Life” with its unfathomable Wants, with its “evanescent World”. Only the World is “wealth”; only consumption goods have “utility” for the Will. The individual Will alone ultimately “measures” or “values” or “prices” the marginal utility of “the means of production” not in an “objective or substantive sense”, but merely from its unfathomable desire (conatus) and appetite (appetitus), from its individual “viewpoint” (Gesichtspunkt), from the “per-spective” of the “individual choice”.

Unlike Classical Political Economy and the Labour Theory of Value, which saw “nature” as  a universal “use value” for the human species, all “wealth” or “value” or utility is “subjective” for the negatives Denken to the extreme point that it is “incommunicable” and “incommensurable” between individuals and certainly not quantifiable either individually or socially. Even social welfare can be assessed only relatively as in Pareto optimality, in terms of the increase of welfare of the last individual, but cannot be aggregated because wealth is “objective” only to the extent that its value or utility to each individual can be exchanged between in-dividuals. Clearly then, the market economy envisaged by the negatives Denken and Neoclassical Theory is one that is always in “equilibrium”, as a “static” economy that can “grow” only by moving from one equilibrium to another. (The point was made by Schumpeter in the Theorie. The theoreticians who formalized general equilibrium – Arrow, Debreu and Hahn – later concluded what any serious reflection on neoclassical theory could have told them from the outset: - that equilibrium theory is incompatible with the notion of “money” as a means of exchange and a store of value.)

It follows from this perspective that human living activity is conceptually “separated” from its “object”, from its environment which supplies it with “the means of production”. Human living labour is seen from the outset as pure and utter “destitution”, as “poverty”, as “want”. Accordingly, the means of production, the tools utilized by labour, cannot serve as means for the expression or objectification of human living labour but rather as “labour-saving tools”! We should note the difference between Jeremy Bentham’s Utilitarian or “hedonistic” calculus of pleasure and pain and the strict nexus established by Schopenhauer between operari as “Arbeit” (labor) and “A-skesis” as “release from Pain”, as “renunciation of the World” – and therefore the identification of “labor” with “want and pain”. This nexus is entirely missing in Bentham just as it is in JS Mill who espoused the Labor Theory of Value as the last great representative of Classical Political Economy. But it is this Schopenhauerian nexus that is vital to the early development of the theory of marginal utility.

What this means is that human living labour itself is already considered, for one, as a “tool”, as an instrument whose “productivity” can be measured in terms of “units of output per unit of time”. And for another, living labour is seen as an activity or a “labour power” that is purely abstract, mere “potentiality”, utter “possibility”, sheer “pro-ject”  not bound by any phylogenetic and social needs of any description whatsoever. In practice, it is the latter “view” of living labor – the assumption that living labor is only “mere potentiality” - that serves as the premise that leads inexorably to the former conclusion – that is, that living labor is only a “tool”, a force or power that can be rendered homogeneous not through organic co-operation but exclusively through mechanical conflict between human wills. Marx’s critique of political economy as founded on “abstract labor” is all here.

In this perspective, “abstract labour” is sheer, naked, destitute poverty, barren misery – “potential” that can only become “actual” if, and only to the extent and manner that, it is allowed by “the laws of supply and demand” to come into contact as a tool with “the means of production” that are the “endowment” and “possession” of the capitalist. Labor is a fire that devours or consumes or at best transforms its object simply to keep itself burning - and yet cannot, for all its burning, pro-duce anything. For the Neoclassics, then, “labour” and workers are by definition the factor of production that is in “want” or “need”, that suffers “toil” and “pain” and “dis-utility” – and that “needs” capital (the means of production as “labour-saving tools”) in order to satisfy its “wants” that are made “immediate”, “urgent” – in contrast with the capitalist owner who can “defer” consumption – by the very fact that it does not now have “provisions” for its subsistence and reproduction and survival!

“Labor” can have no “utility” because “labor” is “effort” (Kampf), it is the “objectification of the Will”, it is the “operari”, it is “Pain” (Leid) without “Pleasure” (Lust): “labor” is “dis-utility”! And the “marginal utility” of the consumption goods produced “to provide for the worker’s wants” – the wage - must be equivalent to the “marginal dis-utility of labor” if the production of consumption goods is to be optimal. Neoclassical theory from Gossen onwards begins with Schopenhauer’s notion that human living activity is “toil”, it is “effort”, it is “pain” and “want” (Bedarf) in search of “provision” (Deckung), as Bohm-Bawerk styles them in the Positive Theorie.

In 1884 there appeared Böhm-Bawerk's critical work which established not only the untenable but also the superficial character of the existing explanations of interest and opened a new era for the theory of interest. This book and the one entitled Positive Theorie, which followed four years later, trained numerous theorists of interest and hardly a single one remained unaffected by them. Of all the works on the theory of marginal utility these two volumes had the deepest and widest effect. We find the traces of their influence in the way in which almost all theorists of interest phrased their questions and proceeded to answer them.

There are signs of this influence even in those writers who rejected the concrete solution of the problem of interest as offered by Böhm-Bawerk. This solution is based on the fundamental idea that the phenomenon of interest can be explained by a discrepancy between the values of present and future consumer goods. This discrepancy rests on three facts: first, on the difference between the present and the future level of supplies available for the members of the economy, secondly, on the fact that a future satisfaction of wants stands much less vividly before people's eyes than an equal but present satisfaction. In consequence, economic activity reacts less strongly to the prospect of future satisfaction than to that of present enjoyment and the individual members of the economy are in certain circumstances willing to buy present enjoyment with one that is greater in itself but lies in the future. The discrepancy between present and future values is, thirdly, based on the fact that the possession of goods ready to be enjoyed makes it unnecessary for the economic individuals to provide for their subsistence by


producing for the moment, e.g. by a primitive search for food.
The possession of such goods enables them to choose some
methods of production which are more profitable but are more
time-consuming: the possession of goods ready to be enjoyed in
the present guarantees, as it were, the possession of more such
goods in the future.
In this 'third reason' for the phenomenon of interest there are
contained two elements: First, the establishment of a technical fact
which so far had been unknown to the theorists, namely that the
prolongation of the period of production, the adoption of 'detours'
of production, makes it possible to obtain a greater return which
is more than proportionate to the time employed. Secondly, the
thesis that this technical fact is also an independent cause of an
increase in value of consumption goods which are in existence at
any given time.
Interest as form of income then originates in the price struggle
between the capitalists on the one side, who must be considered
as merchants who offer goods which are ready for consumption,
and landlords and workers on the other. Because the latter value
present goods more highly and because the possible use of present
stocks of consumer goods for a more profitable extension of the
period of production is practically unlimited, the price struggle is
always decided in favour of the capitalists. In consequence, landlords
and workers receive their future product only with a deduction,
as it were, with a discount for the present.
The achievement which this formulation contains was epoch-making
and a great deal of the theoretical work of the last twenty
years has been devoted to a discussion of it and to its criticism.
(Schumpeter, Economic Doctrines and Methodology.)

(To be continued.) 

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