Friday, March 27, 2015
1. Speaking for myself, I've had more than enough of political economy and political economists. Political economy is of a whole, and that whole is capitalism; political economists, in particular radical political economists are those who radically labor to prove that the alternative to capitalism is of course "radical" capitalism. Here's an experiment: take all the radical political economists in the world (starting with those clustering in Greece) put them all in one bag; shake bag; turn bag over. What comes out? Nothing. There's nothing there. End of experiment. Political economy is the original zero-sum.
2. Speaking for myself, if I never hear the words "fictitious capital" again, I'll be positively grateful. Really. And if I never hear a political economist uttering the words "fictitious capital" again... well can one person even expect so much good fortune in a single lifetime? Obviously not, but that's the point, isn't it? To not hear a radical political economist talking about non-existent capital capital is such good fortune that it could only occur in the end of the lifetime of a class, the bourgeois class. It takes more than a village to raze radical political economy and it's "go to" explanation, fictitious capital. It takes a revolution.
3. But, and there's always a but, this thing, er.. this relation, called a revolution just doesn't happen overnight, spontaneously, miraculously. We need to bend the stick in order to break it, and we are supposed to be all about breaking the stick, not making a better stick, or putting a better stick into "better hands." That's what radical political economists think they are doing, making a better stick, and finding better hands.
4. So here's the thing, er.. the relation, and it's not that fictitious capital doesn't exist. It always exists. It's part and parcel, inherent to, immanent in capital, in that capital has no life, no existence, separate and apart from the expansion of value; apart from its self-expansion. Ergo, hence, therefore any interruption or disruption in the accumulation process, in the process of reproduction, of capital makes all capital fictitious, more or less. The difference is circumstantial, not determining.
5. So... when they, the radical political economists, are talking "fictitious capital," they think they're talking debt, or credit, same-same. When Marx talks credit, he's talking about relation embedded in, determined by, the different turnover times of different capitals that somehow have to be reconciled, smoothed, averaged in order for exchange to exist period. Period.
6. Turnover times are the production times and the circulation times of the various capitals. Now as capital accumulates, in particular as greater portions of expanded value are embedded into the fixed assets, the fixed capital of value production, the portion of value transferred from the fixed assets to any individual commodity decreases. The time necessary for the turnover of the total capital embedded in production increases.
The time for the system as a whole is made up of individual times for the individual capitals which are necessarily asynchronous. There is no "harmony," "balance," "equilibrium" in capital. Accumulation is realized only through an "uneven" distribution of the total surplus produced in dynamic disequilibrium where capitals are of different sizes, different efficiencies, with different ratios. Credit/debt embody and reproduce this disequilibrium in, and because of, their "bridging" function of advancing money. Rather than representing a "fictitious" quantity, credit/debit represent the real quality of capital-- production of, by, and for exchange value; production subjugated to aggrandizement of value.
7. The iterations of credit/debt-- stocks, bonds, notes, syndicated loans, private equity, asset-backed securities, derivatives based on the future performance of stocks, bonds, loans, ABS, etc-- "advance" as the value mass of fixed assets accrues, as capital expands, as profits increase. The notion that "self-financing" of industry represents some sort of "healthy" or "productive" condition is pretty much nonsense, primitivist nonsense.
8. The radical political economists ascribe an all powerful role and function to "fictitious capital." When capital is expanding, the expansion is the product of "fictitious capital." When capital contracts, the contraction is the result of "fictitious capital." The source for capital's cycle, in fact for its very existence-- the exploitation of wage-labor; the compulsory organization of labor-power as a commodity, as a value for exchange-- is usurped by, and attributed to the volumes of "fictitious capital." Actually, "fictitious capital" is the radical political economist equivalent of "supply and demand"-- answers everything, explains nothing.
9. Consider this: the maritime shipping industry, and the ship-building industry, have been dire straits (pardon the pun) since 2008. Massive sums were invested in the ships and the ship-building, between 2004 and 2008, far more massive sums than can be generated by profits in any single year. So where does the money come from? From the profits accrued through all previous years by other capitals that are held/circulated in the capital markets. And those sums are in turn secured not by the assets, the ships built, delivered, in service, and anticipated to be in service, but by the value of those assets.
For the shipbuilding enterprises, those sums are secured by the values of the shipyards assets, the values of cranes, supplies of steel, aluminum, copper, microprocessors necessary for production...and by the value of the ships being built on contract.
10. Remember, the basis of capitalist ownership, of private property in production, is that the owner has no use for the commodities produced, but produces and exchanges the commodities only to accumulate value. The loans, notes, bonds, the finance capital, are simply, or not so simply, capital's, or rather, capitalists' attempt to do what capitalists wish they could do everywhere and all the time, separate, disentangle, the heavenly value, the exchange value of the commodity, from its earthly, profane form, its material body; it's existence as an object of use.
11. Continuing: hard times hit. Now 10 percent of the container fleet gets laid up, stored at anchorage, no longer functioning as container ships, no longer functioning as capital. Are the notes, loans, bonds, securities previously secured by the values of those ships now fictitious? Are the notes any more or less fictitious as capital values than container ships no longer operating in the Asia-Europe trade, no longer functioning as capital? Of course not.
The notes, like the container ships, like the capital values embodied in the container ships will be devalued, certainly. That devaluation may discount the value represented by notes, and the value represented by the ships, all the way to zero. Is capital thereby made fictitious? No, or yes, but only to the extent that all capital in whatever form represents the conflict between use and exchange, between need and value.
12. The container ship, as a commodity, can only function as capital to the degree that it absorbs labor power, and only to the extent that value is expanded can the container ship pass on, in increments, its own value. The container ship only functions as capital to the extent that it circulates in the processes of exchange. It transports itself as a value as it transports the value of its lading. Then the fullest expression of its exchange value is in the consumption, and the extinguishing, of its use value.
The problem is, for the expanded reproduction of capital, is that the exchange value fixed in the container ship a)reduces the rate of that expanded reproduction and b)cannot "outlive" the use value of the ship.
13. But what about...derivatives, credit default swaps? What about Exxon vs. Enron? What about say, Warren Buffett vs. Bernie Madoff? Differences of degree, quantity, circumstance, not source, quality, or determination. And certainly not of negation, abolition, overthrow. Thirteen's the charm.
March 27, 2015