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Economic Power

Capitalism begets a new monster, the putatively autonomous market that mediates interpersonal relations:

Capitalism is a system in which all economic actors — producers and appropriators — depend upon the market for their most basic needs. It is a system in which class relations between producers and appropriators, and specifically the relation between capitalists and wage labourers, are also mediated by the market. This is in sharp contrast to non-capitalist societies, where direct producers typically had non-market access to the means of production, especially land, and therefore where sheltered from the forces of the market, while appropriators relied on superior force to extract surplus labour from direct producers. In capitalism, the market dependence of both appropriators and producers means that they are subject to the imperatives of competition, accumulation and increasing labour productivity; and the whole system, in which competitive production is a a fundamental condition of existence, is driven by these imperatives.1

This seeming reliance on economic imperatives is beguiling, really. While the dominant ideology claims that capitalism is the triumph of freedom and liberty, that so-called free enterprise is the incarnation of the very ideal of these things, capitalism itself is no more free of the structural violence of thuggish expropriation than simple tyranny. And while in pre-capitalist or non-capitalist societies the link between military/political and economic power is far clearer, the smoke and mirror tricks celebrating the emancipating powers of the market are a thin front — they do not withstand scrutiny. The separation of economic power into the market only creates one more tool of coercion. Emily Meiksins Wood sums this in the following:

Coercion in capitalist societies, then, is exercised not only personally and directly by means of superior force but also indirectly and impersonally by the compulsions of the market. The dominant class, with the help of the state, can and certainly does manipulate those compulsions to its own advantage, but it is difficult to trace them to a single source of power.2

Finding a single source of power within a system so multifaceted as modern globalized capital would be difficult indeed — but perhaps also unnecessary. The actual workings of the system itself seems to engender a vast deal of that power in minutia: each book bought by you or me (who are not, if you are reading this, under the heaviest oppression) at a big box store is as pertinent a point of investigation as the dealings in boardrooms that ensure a supply of paper for the physical text of the book itself (and the environmental degradations that a print-run large enough to feed the shelves of all the branches) and the effort of marketing-execs at the ever-more-consolidated publishing houses to create the next Da Vinci Code — as pertinent a point of investigation into the vast, flowing structure of coercion, because without the sum-total of small-seeming actions, large-seeming, seemingly condemnable ones would be meaningless. Resisting the system itself seems to be more difficult than resisting a visible master. This is why, perhaps, that modern revolutions have not occurred in capitalist societies, but those that presented a target for the oppressed wrath — a target, at least, that was easily distinguishable from themselves.

1. Empire of Capital, 9.
2. ibid, 11.

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4 Responses

  1. While it is correct to say that touting the capitalist system as “the triumph of freedom and liberty” is merely propaganda, it is also true that capitalism was not designed to pass freedom from the powerful classes to the poorer ones. Adam Smith holds that the strength of a laissez-faire economy is its adaptability. Thus it could be argued that this greater flexibility has in most cases lent success to those who have employed it. As a result, many of the peoples who live under the capitalist system are often granted just enough affluence to be placated by their respective governments. However, in nations where this balance is not achieved, a great deal of social unrest is not uncommon – the current situation in Mexico is a good example of this.

    It would appear that the difference between a faltering capitalist democracy as opposed to a totalitarian system is as follows. Because the central governments of capitalist democracies are often weaker to begin with, power tends to be syphoned off slowly and by multiple competing factions: crime syndicates and mafias, political/ethnic/tribal factions, guerilla fighters, etc. After descending into this chaos, some sort of centralized power may rise depending greatly on the nature of the state in question. In contrast, totalitarian systems generally enjoy a greater degree of centralized power and are often free from the restraints of the rule of law. Thus a more unified effort is required to overthrow the incumbent power. The result tends to be cleaner, coup d’etat or civil war, and is therefore more easily identified as a classic revolution.

    Of course all of this speculation and generalization drastically over-simplifies what are highly complex and nuanced events if taken on a case-by-case basis.

  2. Smith might hold this or that about laissez-faire economies, but there can in reality be no such thing: the market is instantiated by the State. Without what essentially comes down to coercion, the market would crumble (which is not to say that people would stop exchanging goods; it means that what we think of as a “free exchange between equals” is no such thing). What makes capitalism really interesting — or what distinguishes it from past empires — is that the coercion employed is by and large economic. It’s once removed from direct force.

    Capitalism isn’t about transfering ‘freedom’; it’s about transferring surplus value from producers to the people who own the means of production. That sounds all crazy and Marxist, but if you drop the abstraction it is a pretty good appraisal of reality, in America and the “developed” world at least: consider your or my situation. We are renters, so if we do not pay to rent our places, we will be removed (violently if need be) by the agents of the State. “Gee, that’s just the way it is.” forgets that it wasn’t always this way [this is a fine example of the state enforcing market practice] and that it isn’t necessarily the best way. Anyhow, we essentially must rent our productive capacities on the market in order to acquire capital to pay back into the market to obtain our subsistence. In a sense, we are ‘enslaved’ to the market. But those at the top are no less chained to its dynamics, though they employ all manner of hedging to protect their situation; so they are ‘enslaved’ as well, but with far greater means to maintain their position as appropriators.

    Because market economies are instantiated by the State, the amount of give or take to and from depends on how power is leveraged within it. I’d bet that disparate sources of power would lead to a more ‘democratic’ distribution of wealth.

    I finished the book while on the plane to Vegas, so I will write some more later.

    livingfossil22 January, 2007 @ 3:09 amReply
  3. No, that is a poor example. What you are essentially describing is the state enforcing laws against theft. The recalcitrant renter is depriving the owner of his property and therefore owes compensation – or I can stop paying for smokes. Subsidies and tax-breaks granted to oil companies, massive bailouts for airlines, no-bid government contracts, participation in the WTO and NAFTA, and even excise taxes are all better examples of government’s interference in the so called free market.

    Neither is it an epiphany that states use several types of coercive force. (An important factor in the success of states is their ability to “monopolize” coercive force within their borders.) Coercive force basically falls into three groups: military, diplomatic, and economic. The latter two are known as “soft” power, and have been employed by states for thousands of years.

    It has also been long understood that a strong economy is paramount to all, and for that reason, wise rulers have jealously guarded their prosperity. Cicero said it best I think; “the sinews of war are infinite money.”

    Finally, you make two assertions that could use some clarification:

    1) “‘Gee, that’s just the way it is.’ forgets that it wasn’t always this way … and that it isn’t necessarily the best way.”
    -Specifically, when was it not this way, aside from in tribal/nomadic life, and what alternative/s are you advocating?

    2) “I’d bet that disparate sources of power would lead to a more ‘democratic’ distribution of wealth.”
    -This sounds like the beginning of a theory … please continue . .

  4. It is a valid example: “property” is legally constituted; one’s so-called rights to “property” become real as “economic” rights — rather than right by force — only when the State stands in for thuggish force. All your examples are more extreme and significant quantitatively, but they seem to be similar qualitatively. Remember that Locke wrote during the time capitalism was coming about, so all this intuition and feeling about “property” should be understood with its historical context.

    Previous types of Empire have relied more-so on the direct application of force rather than the seemingly circuitous means used by the WTO, for example, to expropriate from their colonies. In fact, you can’t even really argue that most of the places that the “American Empire” extracts wealth from (in the form of Nike sneakers, GAP sweatshirts, and Starbucks coffee beans) are de facto colonies. The cheap producing nations of the South are also independent States, not occupied territories or colonies (Iraq may signal a departure; but more on that later); and the value that is added to each cheaply produced item there brought here depends largely on a legal apparatus that is a means of indirect force. It’s not, on the face of it, enforced militarily. And, in fact, it seems that this sort of indirect domination allows for a wider reach of power: the threat of retaliation from (American, essentially: you know how you feel about our military) Power makes states enter into agreements that are grossly imbalanced, and so they compete on unfair terms.

    Yes, the economy is the driving force of the empire: you might say that Wood’s book is a manual for different sorts of imperial engines.

    1) Well, I had in mind the pre-enclosure England, when wide swaths of land were held in common and were not considered to be “property”; honestly I don’t think too fondly of the idea of wandering about as a nomad, nor do I hold much faith in tribal society. Enclosure is an interesting case; it occurred roughly at the same time as Locke wrote his treatises on labour and property, coincidence of historical coincidence. But enclosure is just a case amount many (though one often cited).

    2) It seems clear to me that the more concentrated power becomes, the more extreme the difference of wealth will be. I’ll see if I can put my intuitions into intelligible language.

    livingfossil24 January, 2007 @ 12:24 amReply



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