The nature of the natural rate of
interest on capital, and the causes that are responsible for determining its
level, should by now have been made sufficiently clear—on the assumption, of course, of universally
free competition. No distinction has been made between the original (uncontrolled) rate of interest
and the contractual (lending) rate of
interest. (Wicksell, Interest and Prices)
Bourgeois hypocrisy
when it comes to capitalism as a social system is encapsulated in the notion of
“capital” – because, on one hand, for the bourgeoisie the word capital
describes the wealth owned by them expressed in monetary terms, whilst, on the
other hand, it applies also to the “physical” objects that make up both the
means of production and the products. The hypocrisy involved concerns the
undying belief of the bourgeoisie that it is “capital” that creates “wealth” –
and that therefore it is the “owner of capital” who is entitled to “its”
product. But anyone with a slice of brain can see that “physical” production
and “legal” ownership and entitlements are two categorically different things:
the one cannot ever lead to the other conceptually or in any other way. Yet it
is the necessity for the bourgeoisie to believe in this totally inexistent “link”
between “physical” production and “legal entitlement” to it that makes it impossible
for the bourgeoisie to penetrate the real and essential political meaning and
function of money in a capitalist society. The “veil” of money befogs the
bourgeois theory of money – and necessarily so because a true understanding of
the meaning of money as capital would lead to a thorough immediate
demystification and debunking of capitalist social relations of production –
something that the bourgeoisie understandably opposes and eschews.
As can be clearly
discerned from the quotation above, Knut Wicksell – who was a mathematician and
engineer long before he became an economist – the “real” link between the
contractual rights to capitalist production (lending) and the physical
production (which is “uncontrolled” politically) lies ultimately in the
existence of “universally free competition”. In other words, it is only when
the ideal goal of “universally free competition” is achieved that the natural
and the monetary rates of interest coincide – only because the “lending” or “controlled”
or, if you like, political and “artificial” monetary rate of interest is “compressed”,
“crushed” if you will, into the “natural” rate of interest by the forces of “universally
free competition”. Competition between individuals in society therefore must be
“universally free” for “the economy” to function “naturally”, that is, “universally
free” from all political and monetary interference with “the real economy”.
Here the crushing
brutality of bourgeois economic theory is revealed in all its stark bestiality.
To put it with “the bitch”, Margaret Thatcher, in this view “society is nothing”:
there is no “society” apart from a “contract” freely entered by all “individuals”
to set up a State or political convention that protects their “natural rights”
to any “capital” or more broadly “estate” or “property” they possess.
It is the
existence of “contract”, then – this convention of civil society, this legal
fiction, this political interference with the “original” or “uncontrolled”
human economy – that determines the divergence of the monetary interest rate from the natural
rate. For Wicksell, money exists only as a social fiction, as a convention; it does not belong to the real economy. And it is this contractual
aspect, this political side of the
economy that determines and effects a deleterious divergence between monetary
and natural rates of interest. And money arises only because of “lending”, only
because individuals are willing to let others borrow their capital instead of
utilizing it directly. Lending and money effect therefore a “separation”
between production and individual utilities. Were it not for this “separation,
this “veil” between “real” production and individual utilities, there could be
no divergence between rates of interest. Indeed, on the assumption of “universally
free competition”, there would be only one
rate of interest, the natural rate of
interest. It follows therefore that the natural rate of interest is one that is
calculated and depends on the existence of such competition. And it follows
that money and credit interfere fictitiously
with such naked competition, with the
“state of nature” of naked conflict: Here is the Hobbesian state of nature
opposed to the state of society based on a social contract.
Here therefore,
clearly there arises an unbridgeable hiatus between the “real” nature of
interest expressible in quantitative terms of physical consumable output or
“product”, and the “contractual” side that determines individual rights to
products that are made through the contractual separation of means of
production and output. And yet, once again, if we reflect but an instant, it is
clear that all “production” is contractual in nature because there will always
be a separation between the act of production and the social legal
claim to its output. Wicksell totally fails to comprehend that the “natural” or
physical consumable output or product has no “natural” relation to the means of
production, but has only a social or political or legal and contractual
relation. Wicksell tries at every step to turn what is a social political
reality into a physiological one in terms
of subjective utilities and then even into a physical or real objective one
based on the marginal contribution of physical objects called ‘capital’ to productivity.
And this real side of capitalist production, Wicksell attributes as the
ultimate reality of universally free competition! What can he mean by this
curious phrase?
No comments:
Post a Comment