Thank you for your reply.
The main purposes of my original post were to try to begin to make sense of CAP, in part by distinguishing between what’s necessary, what’s incidental, and what’s implied by the theory; and to claim, tentatively, that some of the possible problems in the theory derive from the incidental rather than necessary bits.
The purpose of this reply is to defend myself against your critique. I know that I’m asking a lot of people to read through all this, so I appreciate your graciousness.Economism
There's more than one way to be an economic reductionist. The two reductionist extremes are (1) to maintain the distinction between economic and other things but claim that the economic determines those other things; and (2) to eliminate the conceptual distinction between the economic and other things while continuing to theorize or investigate only or almost only what (used to fall under) the economic. That is, simply eliminating the conceptual distinction between the economic and other things doesn't necessarily allow one to avoid economic reductionism.
As I said, I'm not sure if CAP is an economically reductionistic theory, but I expect that it is as it's currently formulated, for reasons that come closer to the second possible extreme. Three illustrations.
1. That which becomes capitalized becomes absorbed into capital.
“Numerous power institutions and processes—from ideology, through culture, to organized violence, religion, the law, ethnicity, gender, international conflict, labour relations, manufacturing techniques and accounting innovations—all bear on the differential level and volatility of earnings. When these earnings and their volatility are discounted into capital values, the power institutions and processes that underlie them become part of capital.” (9-10)
“Any process of power that systematically affects the expected level and patterns of profit is quickly capitalized.... Any regular effect on profit is instantly discounted into the present value [of an asset], and the power process this effect emanates from henceforth becomes part of capital" (271).
Capital "quantifies and reduces qualitatively diverse power processes into the universal language of capitalization, and by doing so absorbs them into the process of accumulation" (271-2).
These are examples of where a distinction between economic and other social phenomena is erased by absorbing those other phenomena into (what is typically thought of as) the economic.
Is there a non-sequitur in NB’s argument? Just because a social process is reflected in the price of assets and is thereby capitalized, it does not necessarily follow that that process becomes absorbed into capital. As far as I can tell, nothing needs to follow at all. It could just be that the risk or opportunity posed by that process to given corporations or sectors or the capitalist order as a whole is reflected in the price of assets.
Part of the problem is that I at least am confused about what capital is. Capital is finance and only finance. But it’s also “the algorithm that constantly restructures and reshapes [the capitalist] order" (9). Are those two the same thing? If they are, finance is what does the restructuring, and it includes all those social phenomena that have been capitalized. So capital might only be finance, but finance is a lot of stuff.
NB would argue that there is no non-sequitur. That what is capitalized becomes part of capital follows from NB's definition of the state. The state of a society is its mode of power. Finance is how the capitalist mode of power is expressed or manifested. So if one accepts their understanding of the state, something becomes part of the state of capital as soon as it’s discounted.
But as I tried to argue in my previous post, their understanding of the state is not necessary to the core of their theory, and it leads to an argument that at least appears to be economically reductionistic, as can be seen here and in (3) below.
2. DK is composed of both corporations and government organizations. As such, the ruling class should consist of both capitalists and government officials. Nonetheless, NB seem to identify only capitalists as members of the ruling class.
3. The relationship between corporations and government organs. Yes, NB claim that to understand the value of Microsoft, for example, we need to understand not only that corporation, but also intellectual property law, etc. But look at how they actually theorize the relationship between corporations and government organs. On the one hand, they examine "the degree to which the government has been capitalized by corporations." And on the other hand, they examine "the extent to which the various organs of government have been conditioned, habituated and shaped by the logic of capital" (299). "To be capitalized," if one accepts their understanding of the state, is "to be absorbed." As such, they argue that on the one hand government has been absorbed by corporations, and on the other that government has been shaped by capital. In either instance, it is government that has been impacted by capital. Again, they don't always make this claim in their empirical examples, but they do seem to be making this claim theoretically.
I want to add that my goal is not to read NB uncharitably (though I have done so in the past, and sincerely wish I had not done so). I use these three examples to demonstrate how CAP can be read as economically reductionistic. If its defenders want to claim that it's not, I think points such as these need to be addressed.Collective and distributive power, industry and business
My argument is that NB don't seem able to account for collective power, or why industry is so productive under capitalism, precisely because they try to maintain a radical distinction between industry and business.
(Here I am borrowing heavily from the critique I made of NB’s work at the Rethinking Marxism
conference last year.)
Your example of the ancient Egyptian megamachine demonstrates what I take to be possible confusion on NB’s part as to the relationship between collective and distributive power. Yes, here they imply that there is a necessary relationship between the two types of power. Organizing society for the purposes of distributive power also increases collective power.
Their understanding of creorder can also be read as implying a necessary relationship between collective and distributive power (305-6). And so can their understanding of the capitalist mode of power: it’s “counted in prices, and capitalization, working through the ever more encompassing price system, is the algorithm that constantly restructures and reshapes
this order" (9, my italics).
But look at their distinction between industry (collective power) and business (distributive power). Industry belongs to the realm of the human magma, which is unknowable. The "principal goal of industry... is the efficient production of quality goods and services for the betterment of human life" (219). Business, in contrast belongs to the realm of power. And remember that power for NB is confidence in obedience, or the ability to impose order (i.e. distributive power only). As they put it, “business is the domain of pecuniary distribution…" (15). These two processes are "inherently
distinct" (15-16). Business "does not and cannot make industry productive, by definition" (226). Or again, "business cannot 'promote' industry" (232). Instead, it must suppress industry because the profitability of business is not based on productivity, but on its ability to control productivity. Left to its own devices, industry becomes increasingly efficient and productive, which results in glut and therefore falling profitability for business. In order to remain profitable, therefore, business must engage in sabotage.
So why must industry be radically distinct from business?
As far as I can tell, NB develop three more or less explicit reasons, though I’m not sure they would agree with the exposition that follows.
First, unlike business, which can be measured in price terms, "the ends and means of industry do not have objective quanta" (225). It seems as if NB want to argue that (1) because industry cannot be quantified, it cannot be measured; (2) because it cannot be measured, it cannot be said to increase or decrease; and (3) because it cannot be said to increase or decrease, no causal relationship between it and business can be demonstrated. The conclusion in (1) follows from its premise, but the conclusions in (2) and (3) do not. In other words, even if it is impossible to quantify a qualitative process, it does not follow that an assessment of the growth in scale of that process is automatically invalid. And anyways, NB insist both that quantitative and qualitative processes are distinct and that the link between the two is necessarily speculative. That being so, they cannot argue that business cannot increase productivity because the former is a quantitative process while the latter a qualitative process that cannot be measured.
Second, NB claim that "business per se is distinct from industry and therefore cannot boost industry, by definition" (232). This claim seems to involve another non sequitur. Even if business were distinct from industry, it would not follow that the former could not boost the latter.
And third, NB argue that though capitalists are forced to innovate because of competition, they innovate only "in the expectation of adequate differential returns, and differential returns are possible only through restriction" (233). This argument seems to confuse intent with outcome. Capitalists want to earn differential returns. But even if differential returns were possible only by restricting output, it would not follow that capitalists succeed in restricting industrial output, as NB would also acknowledge.
And anyways, NB themselves acknowledge that the distinction is not as clear-cut as they want to make it. The realm of business "endlessly crisscross[es] that of industry" (226). And though business can only limit industry, this limitation takes two forms. First, it limits "the growth of industrial capacity and output" (235). And second, and more importantly, it influences "the very direction of industrial development" (233). That is, business forces industry to develop in directions different from those in which it would have developed on its own. The first form of limitation is actually limitation, but the second is diversion. The problem is that diversion is not limitation, as NB seem to be aware elsewhere: "business enterprise diverts and limits industry instead of boosting it" (16).
As long as NB insist on the radical distinction between industry and business, I don’t see how CAP can account for the growth of industry. That radical distinction seems quite problematic anyways. So why not allow that business can boost industry?
And that brings me to....Anarchism
All stripes of anarchism assume that there are two essential groups in society, though there can be gradations between them—those who appropriate and rule, and those who produce and are ruled. Debates revolve around the degree to which collective power is possible without distributive power. That is, are a high division of labour and a high material standard of living possible without coordinator-rulers? Primitivists (you know, back-to-the-lander-hunter-gatherer types) say no, and non-primitivists say yes.
I read NB’s theory as implying a non-primitivist anarchism. Their radical distinction between industry and business is a distinction between creativity and (distributive) power (e.g. 223). Creativity is an innate impulse in human beings to flourish, philosophize, organize democratically, and avoid control (xi, 15, 20, 225-6). Power, in contrast, is "the ability to impose order…" (305). Power seeks to quash creativity (20, 232, 263), presumably because creativity creates change, and change threatens power. Their argument about sabotage demonstrates that they believe that industry thrives unless it's controlled by business. Hence my anarchist reading.
I don't think NB claim that hierarchical organization is necessary. I think they'd argue instead that the predatory instinct is innate to human beings but that we can nonetheless organize ourselves in a way that minimizes the potential for that instinct to dominate society. Your quotation can be read that way, as can 225.