Orthodoxy of the Neoclassical Synthesis: Minsky’s Capitalism Without Capitalists, Capital Assets, and Financial Markets

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During the very years when orthodoxy turned Keynesianism on its head, extolling Reaganomics and Thatcherism as adequate for achieving stabilisation in the epoch of global capitalism, Minsky (Stabilizing an Unstable Economy) pointed to the destabilising consequences of this approach. The view that instability is the result of the internal processes of a capitalist economy, he wrote, stands in sharp contrast to neoclassical theory, whether Keynesian or monetarist, which holds that instability is due to events that are outside the working of the economy. The neoclassical synthesis and the Keynes theories are different because the focus of the neoclassical synthesis is on how a decentralized market economy achieves coherence and coordination in production and distribution, whereas the focus of the Keynes theory is upon the capital development of an economy. The neoclassical synthesis emphasizes equilibrium and equilibrating tendencies, whereas Keynes‘s theory revolves around bankers and businessmen making deals on Wall Street. The neoclassical synthesis ignores the capitalist nature of the economy, a fact that the Keynes theory is always aware of.

Minsky here identifies the main flaw of the neoclassical synthesis, which is that it ignores the capitalist nature of the economy, while authentic Keynesianism proceeds from precisely this nature. Minsky lays bare the preconceived approach of orthodoxy, which has mainstream economics concentrating all its focus on an equilibrium which is called upon to confirm the orthodox belief in the stability of capitalism. At the same time, orthodoxy fails to devote sufficient attention to the speculation in the area of finance and banking that is the precise cause of the instability of the capitalist economy.

Elsewhere, Minsky stresses still more firmly that from the theory of Keynes, the neoclassical standard included in its arsenal only those earlier-mentioned elements which could be interpreted as confirming its preconceived position that capitalism was so perfect that it could not have innate flaws. In this connection Minsky writes:

Whereas Keynes in The General Theory proposed that economists look at the economy in quite a different way from the way they had, only those parts of The General Theory that could be readily integrated into the old way of looking at things survive in today‘s standard theory. What was lost was a view of an economy always in transit because it accumulates in response to disequilibrating forces that are internal to the economy. As a result of the way accumulation takes place in a capitalist economy, Keynes‘s theory showed that success in operating the economy can only be transitory; instability is an inherent and inescapable flaw of capitalism. 

The view that survived is that a number of special things went wrong, which led the economy into the Great Depression. In this view, apt policy can assure that cannot happen again. The standard theory of the 1950s and 1960s seemed to assert that if policy were apt, then full employment at stable prices could be attained and sustained. The existence of internally disruptive forces was ignored; the neoclassical synthesis became the economics of capitalism without capitalists, capital assets, and financial markets. As a result, very little of Keynes has survived today in standard economics.

Here, resting on Keynes‘s analysis, one can find the central idea of Minsky‘s book: the innate instability of capitalism, which in time will lead the system to a new Great Depression. This forecast has now been brilliantly confirmed, but previously there were few who accepted it. Economic science was orchestrated by proponents of neoclassical orthodoxy under the direction of Nobel prizewinners, authors of popular economics textbooks, and other authorities recognized by the mainstream. These people argued that the main problems which capitalism had encountered in earlier times had already been overcome, and that before it lay a direct, sunny road to an even better future.

Robed in complex theoretical constructs, and underpinned by an abundance of mathematical formulae, these ideas of a cloudless future for capitalism interpreted the economic situation, it then seemed, in thoroughly convincing fashion. These analyses were balm for the souls of the people who had come to believe that capitalism had attained perfection. In this respect, capitalism has come to bear an uncanny resemblance to communism. There is, however, something beyond the preconceptions and prejudices innate to people in all social systems, and that is the reality of historical and economic development. This provides a filter for our ideas, and over time makes it easier to separate truth from error. The present financial and economic crisis is an example of such reality. While the mainstream was still euphoric about the future of capitalism, the post-Keynesians saw the approaching outlines of a new Great Depression. The fate of Post Keynesianism will depend very heavily on the future development of the world capitalist economy. If the business cycle has indeed been abolished (this time), so that stable, non-inflationary growth continues indefinitely under something approximating to the present neoclassical (or pseudo-monetarist) policy consensus, then there is unlikely to be a significant market for Post Keynesian ideas. Things would be very different in the event of a new Great Depression, to think one last time in terms of extreme possibilities. If it happened again, to quote Hyman Minsky, the appeal of both a radical interventionist programme and the analysis from which it was derived would be very greatly enhanced.

Neoclassical orthodoxy, that is, today‘s mainstream economic thinking proceeds from the position that capitalism is so good and perfect that an alternative to it does not and cannot exist. Post-Keynesianism takes a different standpoint. Unlike Marxism it is not so revolutionary a theory as to call for a complete rejection of capitalism. At the same time, it does not consider capitalism so perfect that there is nothing in it that needs to be changed. To the contrary, Post-Keynesianism maintains that capitalism has definite flaws, and requires changes of such scope as to allow alternative ways of running the economy to be fully effective. To the prejudices of the mainstream, post-Keynesianism counterposes an approach based on an objective analysis of the real situation. Its economic and philosophical approach – the methodology of critical realism – has been developed accordingly, the methodological import of which helps post-Keynesianism answer a broad range of questions, providing an alternative both to market fundamentalism, and to bureaucratic centralism within a planned economy. This is the source of its attraction for us….

Where Hegel Was, There Deconstruction Shall Be: The Dialectical Calculus Between Lukács and Laclau & Mouffe. Thought of the Day 81.0

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Lukács would be the condensation of everything that is deemed politically regressive about the social theory of “the rationalist ‘dictatorship’ of Enlightenment” (Ernesto Laclau New Reflections on the Revolution of Our Time), of just about everything that the new social logic of postmodern culture brings into crisis. In this context – which is theoretically and politically hostile to the concept of totality – Laclau and Mouffe’s recasting of the Gramscian concept of hegemony is designed to avoid the Lukácsian conception of society as an “expressive totality”. For Lukács, a single principle is “expressed” in all social phenomena, so that every aspect of the social formation is integrated into a closed system that connects the forces and social relations of production to politics and the juridical apparatus, cultural forms and class-consciousness. By contrast, Laclau and Mouffe insist that the social field is an incomplete totality consisting of a multitude of transitory hegemonic “epicentres” and characterised by a plurality of competing discourses. The proliferation of democratic forms of struggle by the new social movements is thereby integrated into a pluralistic conception of the social field that emphasises the negativity and dispersion underlying all social identities. “Radical and plural democracy,” Laclau and Mouffe contend, represents a translation of socialist strategy into the detotalising paradigm of postmodern culture.

For Lukács, the objective of a new conception of praxis is to establish the dialectical unity of theory and practice, so as to demonstrate that the proletariat, as the operator of a transparent praxis, is the identical subject-object of the historical process. The subject of history is therefore the creator of the contents of the social totality, and to the extent that this subject attains self-reflexivity, it is also the conscious generator of social forms. This enables Lukács to emphasise the revolutionary character of class conscious as coextensive with revolutionary action. Laclau and Mouffe’s concept of discursive practice has the same effect – with this difference, that Laclau and Mouffe deny that discursive practices can become wholly transparent to social agents (Ernesto Laclau, Chantal Mouffe Hegemony and Socialist Strategy Towards a Radical Democratic Politics). By reinscribing the concept of praxis within a deconstruction of Marxism, Laclau and Mouffe theorise a new concept of discursive practice that “must pierce the entire material density of the multifarious institutions” upon which it operates, since it has as its objective a decisive break with the material/mental dichotomy. “Rejection of the thought/reality dichotomy,” they propose, “must go together with a re-thinking and interpenetration of the categories which have up until now been considered exclusive of one another”.

Critically, this means a fusion of the hitherto distinct categories of (subjective) discourse and (objective) structure in the concept of “hegemonic articulation”. This theoretical intervention is simultaneously a decisive political advance, because it now becomes clear that, for instance, “the equivalence constituted through communist enumeration [of the alliance partners within a bid for political hegemony] is not the discursive expression of a real movement constituted outside of discourse; on the contrary, this enumerative discourse is a real force which contributes to the moulding and constitution of social relations”. In other words, the opposition between theory and practice, discursive practice and structural conditions, is resolved by the new theory of hegemonic articulation. The operator of these discursive practices – the new agent of social transformation – is at once the instigator of social relations and the formulator of discourses on the social.

The most significant difference between Lukács and Laclau and Mouffe is their respective evaluations of Hegelian dialectics. Where, for Lukács, a return to dialectical philosophy held out the prospect of a renewal of Marxian social theory, for Laclau and Mouffe it is “dialectical necessity” that constitutes the major obstacle to a radical postmodern politics. Laclau and Mouffe’s fundamental objection to dialectics is to the substitution of a logically necessary sequence for the contingency of the historical process. They applaud the dialectical dissolution of fixity but deplore the supposed inversion of contingency into necessity and the imposition of a teleology of reconciliation. Hegel’s work, therefore, “appears as located in a watershed between two epochs” and is evaluated as “ambiguous” rather than simply pernicious. On the one hand, Laclau and Mouffe reject the Hegelian notion that “history and society … have a rational and intelligible structure”. This is regarded as an Enlightenment conception fundamentally incompatible with the postmodern emphasis on contingency, finitude and historicity. On the other hand, however, “this synthesis contains all the seeds of its own dissolution, as the rationality of history can only be affirmed at the price of introducing contradiction into the field of reason”. Once the impossibility of including contradiction within rationality is asserted, it then becomes clear that the “logical” transitions between historical “stages” are secured contingently:

It is precisely here that Hegel’s modernity lies: for him, identity is never positive and closed in itself but is constituted as transition, relation, difference. If, however, Hegel’s logical relations become contingent transitions, the connections between them cannot be fixed as moments of an underlying or sutured totality. This means that they are articulations.

This is not a rejection of Hegel but a re-interpretation. Interpreted in this light, Hegel’s “logical” relations are the language games that frame social practices – rather than formally rational structures deducible a priori – and their “transitions” are only the contingent connections created by political articulations. In opposition to the logically necessary sequence of closed totalities, Laclau and Mouffe insist on a historically contingent series of open discursive formations. Resolutely contesting the category of the totality, Laclau and Mouffe declare that:

The incomplete character of every totality leads us to abandon, as a terrain of analysis, the premise of “society” as a sutured and self-defined totality. “Society” is not a valid object of discourse.

So where Lukács once declared that “the category of the totality is the bearer of the principle of revolution in science”, Laclau and Mouffe now announce, by contrast, that totality is an illusion because “‘society’ as a unitary and intelligible object which grounds its own partial processes is an impossibility”. Where Hegel was, there deconstruction shall be – or so it would seem.

Hegelian Marxism of Lukács: Philosophy as Systematization of Ideology and Politics as Manipulation of Ideology. Thought of the Day 80.0

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In the Hegelian Marxism of Lukács, for instance, the historicist problematic begins from the relativisation of theory, whereby that it is claimed that historical materialism is the “perspective” and “worldview” of the revolutionary class and that, in general, theory (philosophy) is only the coherent systematisation of the ideological worldview of a social group. No distinction of kind exists between theory and ideology, opening the path for the foundational character of ideology, expressed through the Lukácsian claim that the ideological consciousness of a historical subject is the expression of objective relations, and that, correlatively, this historical subject (the proletariat) alienates-expresses a free society by means of a transparent grasp of social processes. The society, as an expression of a single structure of social relations (where the commodity form and reified consciousness are theoretical equivalents) is an expressive totality, so that politics and ideology can be directly deduced from philosophical relations. According to Lukács’ directly Hegelian conception, the historical subject is the unified proletariat, which, as the “creator of the totality of [social] contents”, makes history according to its conception of the world, and thus functions as an identical subject-object of history. The identical subject-object and the transparency of praxis therefore form the telos of the historical process. Lukács reduces the multiplicity of social practices operative within the social formation to the model of an individual “making history,” through the externalisation of an intellectual conception of the world. Lukács therefore arrives at the final element of the historicist problematic, namely, a theorisation of social practice on the model of individual praxis, presented as the historical action of a “collective individual”. This structure of claims is vulnerable to philosophical deconstruction (Gasché) and leads to individualist political conclusions (Althusser).

In the light of the Gramscian provenance of postmarxism, it is important to note that while the explicit target of Althusser’s critique was the Hegelian totality, Althusser is equally critical of the aleatory posture of Gramsci’s “absolute historicism,” regarding it as exemplary of the impasse of radicalised historicism (Reading Capital). Althusser argues that Gramsci preserves the philosophical structure of historicism exemplified by Lukács and so the criticism of “expressive totality,” or spiritual holism, also applies to Gramsci. According to Gramsci, “the philosophy of praxis is absolute ‘historicism,’ the absolute secularisation and earthiness of thought, an absolute humanism of history”. Gramsci’s is an “absolute” historicism because it subjects the “absolute knowledge” supposed to be possible at the Hegelian “end of history” to historicisation-relativisation: instead of absolute knowledge, every truly universal worldview becomes merely the epochal totalisation of the present. Consequently, Gramsci rejects the conception that a social agent might aspire to “absolute knowledge” by adopting the “perspective of totality”. If anything, this exacerbates the problems of historicism by bringing the inherent relativism of the position to the surface. Ideology, conceptualised as the worldview of a historical subject (revolutionary proletariat, hegemonic alliance), forms the foundation of the social field, because in the historicist lens a social system is cemented by the ideology of the dominant group. Philosophy (and by extension, theory) represents only the systematisation of ideology into a coherent doctrine, while politics is based on ideological manipulation as its necessary precondition. Thus, for historicism, every “theoretical” intervention is immediately a political act, and correlatively, theory becomes the direct servant of ideology.

Pareto Optimality

There are some solutions. (“If you don’t give a solution, you are part of the problem”). Most important: Human wealth should be set as the only goal in society and economy. Liberalism is ruinous for humans, while it may be optimal for fitter entities. Nobody is out there to take away the money of others without working for it. In a way of ‘revenge’ or ‘envy’, (basically justifying laziness) taking away the hard-work earnings of others. No way. Nobody wants it. Thinking that yours can be the only way a rational person can think. Anybody not ‘winning’ the game is a ‘loser’. Some of us, actually, do not even want to enter the game.

Yet – the big dilemma – that money-grabbing mentality is essential for the economy. Without it we would be equally doomed. But, what we will see now is that you’ll will lose every last penny either way, even without divine intervention.

Having said that, the solution is to take away the money. Seeing that the system is not stable and accumulates the capital on a big pile, disconnected from humans, mathematically there are two solutions:

1) Put all the capital in the hands of people. If profit is made M’-M, this profit falls to the hands of the people that caused it. This seems fair, and mathematically stable. However, how the wealth is then distributed? That would be the task of politicians, and history has shown that they are a worse pest than capital. Politicians, actually, always wind up representing the capital. No country in the world ever managed to avoid it.

2) Let the system be as it is, which is great for giving people incentives to work and develop things, but at the end of the year, redistribute the wealth to follow an ideal curve that optimizes both wealth and increments of wealth.

The latter is an interesting idea. Also since it does not need rigorous restructuring of society, something that would only be possible after a total collapse of civilization. While unavoidable in the system we have, it would be better to act pro-actively and do something before it happens. Moreover, since money is air – or worse, vacuum – there is actually nothing that is ‘taken away’. Money is just a right to consume and can thus be redistributed at will if there is a just cause to do so. In normal cases this euphemistic word ‘redistribution’ amounts to theft and undermines incentives for work and production and thus causes poverty. Yet, if it can be shown to actually increase incentives to work, and thus increase overall wealth, it would need no further justification.

We set out to calculate this idea. However, it turned out to give quite remarkable results. Basically, the optimal distribution is slavery. Let us present them here. Let’s look at the distribution of wealth. Figure below shows a curve of wealth per person, with the richest conventionally placed at the right and the poor on the left, to result in what is in mathematics called a monotonously-increasing function. This virtual country has 10 million inhabitants and a certain wealth that ranges from nearly nothing to millions, but it can easily be mapped to any country.

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Figure 1: Absolute wealth distribution function

As the overall wealth increases, it condenses over time at the right side of the curve. Left unchecked, the curve would become ever-more skew, ending eventually in a straight horizontal line at zero up to the last uttermost right point, where it shoots up to an astronomical value. The integral of the curve (total wealth/capital M) always increases, but it eventually goes to one person. Here it is intrinsically assumed that wealth, actually, is still connected to people and not, as it in fact is, becomes independent of people, becomes ‘capital’ autonomously by itself. If independent of people, this wealth can anyway be without any form of remorse whatsoever be confiscated and redistributed. Ergo, only the system where all the wealth is owned by people is needed to be studied.

A more interesting figure is the fractional distribution of wealth, with the normalized wealth w(x) plotted as a function of normalized population x (that thus runs from 0 to 1). Once again with the richest plotted on the right. See Figure below.

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Figure 2: Relative wealth distribution functions: ‘ideal communist’ (dotted line. constant distribution), ‘ideal capitalist’ (one person owns all, dashed line) and ‘ideal’ functions (work-incentive optimized, solid line).

Every person x in this figure feels an incentive to work harder, because it wants to overtake his/her right-side neighbor and move to the right on the curve. We can define an incentive i(x) for work for person x as the derivative of the curve, divided by the curve itself (a person will work harder proportional to the relative increase in wealth)

i(x) = dw(x)/dx/w(x) —– (1)

A ‘communistic’ (in the negative connotation) distribution is that everybody earns equally, that means that w(x) is constant, with the constant being one

‘ideal’ communist: w(x) = 1.

and nobody has an incentive to work, i(x) = 0 ∀ x. However, in a utopic capitalist world, as shown, the distribution is ‘all on a big pile’. This is what mathematicians call a delta-function

‘ideal’ capitalist: w(x) = δ(x − 1),

and once again, the incentive is zero for all people, i(x) = 0. If you work, or don’t work, you get nothing. Except one person who, working or not, gets everything.

Thus, there is somewhere an ‘ideal curve’ w(x) that optimizes the sum of incentives I defined as the integral of i(x) over x.

I = ∫01i(x)dx = ∫01(dw(x)/dx)/w(x) dx = ∫x=0x=1dw(x)/w(x) = ln[w(x)]|x=0x=1 —– (2)

Which function w is that? Boundary conditions are

1. The total wealth is normalized: The integral of w(x) over x from 0 to 1 is unity.

01w(x)dx = 1 —– (3)

2. Everybody has a at least a minimal income, defined as the survival minimum. (A concept that actually many societies implement). We can call this w0, defined as a percentage of the total wealth, to make the calculation easy (every year this parameter can be reevaluated, for instance when the total wealth increased, but not the minimum wealth needed to survive). Thus, w(0) = w0.

The curve also has an intrinsic parameter wmax. This represents the scale of the figure, and is the result of the other boundary conditions and therefore not really a parameter as such. The function basically has two parameters, minimal subsistence level w0 and skewness b.

As an example, we can try an exponentially-rising function with offset that starts by being forced to pass through the points (0, w0) and (1, wmax):

w(x) = w0 + (wmax − w0)(ebx −1)/(eb − 1) —– (4)

An example of such a function is given in the above Figure. To analytically determine which function is ideal is very complicated, but it can easily be simulated in a genetic algorithm way. In this, we start with a given distribution and make random mutations to it. If the total incentive for work goes up, we keep that new distribution. If not, we go back to the previous distribution.

The results are shown in the figure 3 below for a 30-person population, with w0 = 10% of average (w0 = 1/300 = 0.33%).

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Figure 3: Genetic algorithm results for the distribution of wealth (w) and incentive to work (i) in a liberal system where everybody only has money (wealth) as incentive. 

Depending on the starting distribution, the system winds up in different optima. If we start with a communistic distribution of figure 2, we wind up with a situation in which the distribution stays homogeneous ‘everybody equal’, with the exception of two people. A ‘slave’ earns the minimum wages and does nearly all the work, and a ‘party official’ that does not do much, but gets a large part of the wealth. Everybody else is equally poor (total incentive/production equal to 21), w = 1/30 = 10w0, with most people doing nothing, nor being encouraged to do anything. The other situation we find when we start with a random distribution or linear increasing distribution. The final situation is shown in situation 2 of the figure 3. It is equal to everybody getting minimum wealth, w0, except the ‘banker’ who gets 90% (270 times more than minimum), while nobody is doing anything, except, curiously, the penultimate person, which we can call the ‘wheedler’, for cajoling the banker into giving him money. The total wealth is higher (156), but the average person gets less, w0.

Note that this isn’t necessarily an evolution of the distribution of wealth over time. Instead, it is a final, stable, distribution calculated with an evolutionary (‘genetic’) algorithm. Moreover, this analysis can be made within a country, analyzing the distribution of wealth between people of the same country, as well as between countries.

We thus find that a liberal system, moreover one in which people are motivated by the relative wealth increase they might attain, winds up with most of the wealth accumulated by one person who not necessarily does any work. This is then consistent with the tendency of liberal capitalist societies to have indeed the capital and wealth accumulate in a single point, and consistent with Marx’s theories that predict it as well. A singularity of distribution of wealth is what you get in a liberal capitalist society where personal wealth is the only driving force of people. Which is ironic, in a way, because by going only for personal wealth, nobody gets any of it, except the big leader. It is a form of Prisoner’s Dilemma.

Degeneracy: Mayhem While We’re Freezing and Starving (Jordan Peterson)

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One of the reasons Marxism fails is because its cognitive model of the world – which even low IQ knuckleheads can grasp – does not map adequately on the reality of human nature and the means of production. But it would be a huge mistake to think that cognitive simplification is of exclusive domain of the liberal temperament, Conservatives are quite capable of “intuitively simplifying” as well. Which brings us to the psuedo-Right. If I had to define the Pseudo-Right, I would define it as those of a conservative disposition who refuse to acknowledge reality. Reality, in this instance, is not rhetorical “reality” but objective Truth, since it makes them feel bad – The Social Pathologist

Many of the Alt-Right, for instance, are quite happy with moral degeneracy provided its ethnically pure. The problem is that even an elementary understanding of history will show that no stable or prosperous society has ever been built on moral degeneracy. It’s a belief that is miscalibrated to reality. But lounging poolside in a white brothel sure feelz good.  Likewise those of a traditionalist disposition wondering why it all went to Hell in a handbasket fail to understand that many of their “traditional beliefs” were miscalibrated to reality, and had the rug pulled out from them when reality intervened. Change induces bad feelings and these feelings must be avoided. Hence no change.

Activism and Militancy: Empire of the Sands. Note Quote.

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Negri writes:

In the post-modern era, as the figure of the people dissolves, the militant is the one who best expresses the life of the multitude: the agent of biopolitical production and resistance against Empire […] When we speak of the militant, we are not thinking of anything like the sad, ascetic agent of the Third International […] We are thinking of nothing like that and of no one who acts on the basis of duty and discipline, who pretends his or her actions are deduced from an ideal plan […] Today the militant cannot even pretend to be a representative, even of the fundamental human needs of the exploited. Revolutionary political militancy today, on the contrary, must rediscover what has always been its proper form: not representational but constituent activity.[…] Militants resist imperial command in a creative way. In other words, resistance is linked immediately with a constitutive investment in the biopolitical realm and to the formation of co-operative apparatuses of production and community.[…] There is an ancient legend that might serve to illuminate the future life of communist militancy: that of Saint Francis of Assisi. Consider his work. To denounce the poverty of the multitude he adopted that common condition and discovered there the ontological power of a new society. The communist militant does the same, identifying in the common condition of the multitude its enormous wealth. Francis in opposition to nascent capitalism refused every instrumental discipline, and in opposition to the mortification of the flesh (in poverty and in the constituted order) he posed a joyous life, including all of being and nature […] Once again in postmodernity we find ourselves in Francis’s situation, posing against the misery of power the joy of being. This is a revolution that no power will control – because biopower and communism, co-operation and revolution remain together, in love, simplicity, and also innocence. This is the irrepressible lightness and joy of being communist.

Once again it is particularly difficult to find any ideas that bear any relation to classical Marxism in the extract above. For Negri, the militant [activist] becomes an individualist who confronts the capitalist system in a “creative” way and who draws his own revolutionary strength from his or her own very uniqueness and his or her capacity to identify with the conditions of the masses. On top of this, the hero of this type of militancy is St. Francis of Assisi! In reality, genuine Marxist activists are able to place themselves at the vanguard of the working class, not only because they have won the trust and respect of workers through their ideas but also because they are able to connect with the political consciousness of the working class at a particular given moment and raise it towards the accomplishment of the socialist transformation of society. These types of activists never act on the basis of their own individuality, but know how to use it by linking it up with the individualities of other activists and put it at the service of the revolution. The political activist is in no way some sort of dour killjoy, but is the driving force of a whole class, the proletariat.

For the activist, being part of the proletariat also means not being afraid to represent it. On the contrary, each day of the activist’s life is dedicated to advancing the working class in its quest for the final victory. The Marxist activist’s revolutionary duty is to organise and lead, without ever becoming separated from his or her own class. Lenin, in a critique of Rosa Luxemburg’s conception of party organisation – which he saw as a vanguard based on revolutionary discipline – says the following in “Left-wing communism, an infantile disorder” about how the discipline of the proletariat’s revolutionary party can be maintained.

First, by the class-consciousness of the proletarian vanguard and by its devotion to the revolution, by its tenacity, self-sacrifice and heroism. Second, by its ability to link up, maintain the closest contact, and – if you wish – merge, in certain measure, with the broadest masses of the working people – primarily with the proletariat, but also with the non-proletarian masses of working people. Third, by the correctness of the political leadership exercised by this vanguard, by the correctness of its political strategy and tactics, provided the broad masses have seen, from their own experience, that they are correct.

All this has little to do with the ideal kind of activist described in the pages of Empire. In conclusion, we have a good suggestion for bringing Negri’s theory face to face with stark reality. What would happen if Negri’s “activist” went to a factory gate, or any other workplace at the beginning of the day’s shift, and invited the workers to “have fun” and “disobey”, in order to subvert the established order? We do not claim to know the conditions of every single workplace or factory, but we are certain that in those places that we know and where we often go to give out leaflets and organise campaigns, the level of alienation and fatigue caused by waged labour under the control of the capitalists is very high. Activists going to workers and proposing to them the type of activity that Negri suggests would be lucky to get away with less than a scratch! Again, once petit-bourgeois theories are confronted with the reality of the situation, they show their completely bankrupt nature.

Chinese Philosophical Pythagoreanism. Thought of the Day 14.0

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The universe is just like a right-angled triangle of standard unit. The two right-angle sides oppose each other and yet also complement each other like quantum entanglement. They superpose and counterbalance each other in a system. They grow and decline, but identically equal to “1”. From this perspective, the Traditional Yin-and-Yang Double Fish Diagram and the core idea behind it is counterbalance and unity of opposites, a geometric expression of “being of beings” and an illustration of the ground of “being”, or the “being” in “being of beings”, the “one” in “one is all”. It roots in the Pythagorean Theorem and goes beyond the Pythagorean Theorem. It illustrates the idea in the Euler Equation:

e·e−iθ =(cosθ + isinθ (cosθ − isinθ) = cos2θ + sin2θ = 1),

and has opened the door of relativity, expressing the key idea of Fuzzy Set in modern mathematics developed in contemporary and modern times. “If each right-angled side multiple itself, the sum will be the square of hypotenuse. The extracted root is hypotenuse”. Thus, the xian (in Chinese meaning either “hypotenuse” or “profound”) is “profound” because we don’t understand the principle and add too much mysterious explanations to it.

This reminds us of the “Needham question”, why didn’t science rise in China? And the emotional sigh of Mr. Liang Shumin, “The Chinese culture is a pre-matured one of mankind.” In a material desire-pursuing physical world, metaphysics is so lonely and with- ering. As Heidegger pointed out, truth is hardly acceptable just because it’s too simple. Facing the rapidly-changing advancement of science, we need inquire with earnestness and reflect with self-practice, and ask ourselves whether we need “lead people to perfection” and “having known where to reset at the end, one will be able to determine the object of pursuit”, and try our best to “return to things themselves”; Facing the cultural flourishing, whether we should keep to the original intention of “speech” and come back to the original point of language.

Facing the complicated world, human beings need another renaissance to search, keep and return to the “1” to create “a community of common destiny”. The philosophical element of traditional Chinese culture and the dialectical unity of Marxism could make continuing contributions to the aim since whether ancient or modern, Chinese or foreign, arts or sciences, they must be “unified” in basic principle of the universe.

Negri’s Dismissive Approach to Re-engaging Growing Ideological Opposition to Capitalism. Note Quote.

The Pyramid of Capitalism

Negri’s politics are shaped by the defeat of the movement of the 1960s and 1970s. His borrowed economic theory was shaped by the triumphalism following the restructuring of US capitalism in the 1980s and the collapse of the Stalinist regimes. Having created a Marxism gutted of its central emphasis on the working class, he filled this empty shell with the poststructuralist philosophy developed by a generation of disappointed post-1968 French intellectuals.

Atilio Boron argues that Hardt and Negri’s increasing reliance on poststructuralist philosophers flows from a shared backdrop of trying to come to terms with working class defeat and capitalist hubris. Faced with a system that appears, for the time being, unbeatable:…a series of theoretical and practical consequences emerge that…are neatly reflected in the postmodern agenda. On the one hand, an almost obsessive interest in the examination of the social forms that grow in the margins or in the interstices of the system; on the other hand, the search for those social forces that at least for now could commit some sort of transgression against the system, or could promote some type of limited and ephemeral subversion against it.

This concern with subversion and transgression is indeed characteristic of many of the autonomist movements with which Negri is associated. But for Negri, with the rise of post-industrial production and the multitude, the potential for postmodern subversion has spread across the whole social terrain, and across the globe. One might expect Hardt and Negri to explain what such a confrontation would look like. However, what we instead get is a retreat into philosophy and descriptions of the multitude that the authors themselves admit are merely ‘poetic’.

Hardt and Negri also borrow from the poststructuralists, especially Deleuze and Guattari, an eclectic form of expression known as ‘assemblage’.

Timothy Brennan writes in his Italian Ideology:

It expresses itself as a gathering of substantively incompatible positions. In Empire’s assemblage, the juxtaposition of figures whose political views are mutually hostile to one another…is presented as the supersession of earlier divisions in pursuit of a more supple and inclusive combination.

So, in Empire, philosophers such as Michel Foucault or Baruch Spinoza and revolutionaries such as Rosa Luxemburg rub shoulders with Bill Gates, former US labour secretary Robert Reich and St Francis of Assissi. This form of expression evolved as a rejection of attempts at a ‘grand narrative’ such as Marxism that could hope to explain and help transform the world, or of an agency such as the working class that could carry through such a transformation. For Hardt and Negri this method mirrors the multitude that they describe—a series of heterogeneous, isolated subjects, coming together to fleetingly act in common. Indeed they have gone so far as to say that the struggles of the multitude have become ‘incommunicable’ and lack a ‘common enemy’.

Their assertion would be contested by most of those who have attended the great international gatherings and protests of the anti-capitalist movement since Seattle. Here opposition to neo-liberalism and war have become common themes. The world working class may have been traumatised by the impact of neo-liberalism and the defeat of the movements of the 1960s and 1970s. But, rather than celebrating the much-exaggerated demise of the working class, the challenge today is to re-engage the growing ideological opposition to capitalism with the potential power that workers still hold. Negri is dismissive of such a project, but offersanothing substantial in its place.

His faux pas—over neo-liberalism, the EU constitution and the war in Iraq—stem from his failure to come to terms with either the defeats of the past or the nature of contemporary capitalism. Almost every assertion in his recent writings vanishes into thin air once subjected to even a cursory empirical examination. As for strategy, Multitude ends:

We can already recognise that today time is split between a present that is already dead and a future that is already living – and that yawning abyss between them is becoming enormous. In time, an event will thrust us like an arrow into that living future. This will be the real political act of love.

With an upsurge of the Techno-Commercial Right in the world, multinationals and Commodity Trading firms and HFTs and states wreaking havoc, and global warming (believe it or not!) threatening our very survival as a species, waiting for an act of political love to save us sounds like bad advice.

Kōjin Karatani versus Moishe Postone. Architectonics of Capitalism.

Kōjin Karatani’s theory of different modes of intercourse criticizes architectonic metaphor thinking that the logic of mods of production in terms of base and superstructure without ceding grounds on the centrality of the critique of political economy. the obvious question is what remains of theory when there is a departure not from the objective towards the subjective, but rather the simultaneous constitution of the subjective and the objective dimensions of the social under capitalism. One way of addressing the dilemma is to take recourse to the lesson of commodity form, where capitalism begets a uniform mode of mediation rather than disparate. The language of modes of production according to Moishe Postone happens to be a transhistorical language allowing for a transhistorical epistemology to sneak in through the backdoor thus outlining the necessity of critical theory’s existence only in so far as the object of critique stays in existence. Karatani’s first critique concerns a crude base-superstructure concept, in which nation and nationalism are viewed merely as phenomena of the ideological superstructure, which could be overcome by reason (enlightenment) or would disappear together with the state. But the nation functions autonomously, independent of the state, and as the imaginative return of community or reciprocal mode of exchange A, it is egalitarian in nature. As is the case with universal religions, the nation thus holds a moment of protest, of opposition, of emancipatory imagination. The second critique concerns the conception of the proletariat, which Marxism reduced to the process of production, in which its labor force is turned into a commodity. Production (i.e., consumption of labor power) as a fundamental basis to gain and to increase surplus value remains unchanged. Nonetheless, according to Karatani surplus value is only achieved by selling commodities, in the process of circulation, which does not generate surplus value itself, but without which there cannot be any surplus value. Understanding the proletariat as producer-consumer opens up new possibilities for resistance against the system. In late capitalism, in which capital and company are often separated, workers (in the broadest sense of wage and salary earners) are usually not able to resist their dependency and inferiority in the production process. By contrast, however, in the site of consumption, capital is dependent on the worker as consumer. Whereas capital can thus control the proletariat in the production process and force them to work, it loses its power over them in the process of circulation. If, says Karatani, we would view consumers as workers in the site of circulation, consumer movements could be seen as proletariat movements. They can, for example, resort to the legal means of boycott, which capital is unable to resist directly. Karatani bases his critique of capitalism not on the perspectives of globalization, but rather on what he terms neo-imperialism meaning state-based attempt of capital to subject the entire world to its logic of exploitation, and thus any logic to overcoming the modern world system of capital-nation-state by means of a world revolution and its sublation in a system is to be possible by justice based on exchange. For Postone Capital generates a system characteristically by the opposition of abstract universality, the value form, and particularistic specificity, the use value dimension. It seems to me that rather than viewing a socialist or an emancipatory movement as the heirs to the Enlightenment, as the classic working class movement did, critical movements today should be striving for a new form of universalism that encompasses the particular, rather than existing in opposition to the particular. This will not be easy, because a good part of the Left today has swung to particularity rather than trying to and a new form of universalism. I think this is a fatal mistake.

Moishe Postone: Capitalism, Temporality, and the Crisis of Labor. Note Quote.

Moishe Postone: Capitalism, Temporality, and the Crisis of Labor from The American Academy in Berlin on Vimeo.

Moishe Postone’s work establishes a crucial distinction between the critique of capitalism from the standpoint of labour and the critique of labor in capitalism.The former implies a transhistorical account of work, while the latter situates labor as a consistent category – capable of “social synthesis” – within the capitalist mode of production. But, does this distinction require us to abandon any form of ontological account of labour? As Postone would say,

It depends what you mean by an ontological account of labour. It does force us to abandon the idea that transhistorically there is an on-going development of humanity which is effected by labour, that human interaction with nature as mediated by labour is a continuous process which is led to continuous change. And that labour is in that sense a central historical category. That position is closer actually to Adam Smith than it is to Marx. I think that the centrality of labour to something called historical development can be posited only for capitalism and not for any other form of human social life. On the other hand, I think one can retain the idea that humanity’s interaction with nature is a process of self-constitution.

One of the most important contributions of Time, Labour and Social Domination is a novel theory of impersonal domination in capitalist society. To him “traditional Marxism” is a criticism of capitalism from the standpoint of labor. Postone’s Marxism, by contrast, is a critique of labor in capitalism. Since Marx’s theory refers to capitalism, not society in general, labor cannot be a transhistorical category. Instead, it must be understood as an integrated part of capitalism. This means that labor cannot provide a standpoint from which to criticize capitalism, and neither can the proletariat: “the working class is integral to capitalism, rather than the embodiment of its negation”. The struggle, then, should not be a struggle of labor against capital, as traditional Marxists thought, but a struggle against labor seen as an integral part of the valorization of capital.  This conclusion has implications for Postone’s understanding of domination in capitalism. Rather than being a matter of class relations, it takes the form of domination by impersonal and quasi-objective mechanisms such as fetishism, in the construction of which labor is deeply implicated. The benefit of this reinterpretation, according to Postone, is that it shows the usefulness of Marx’s theory not only in a criticism of liberal nineteenth-century capitalism but also in a criticism of contemporary welfare-state capitalism or Soviet-style state-capitalism. The latter forms of capitalism are just as capitalist as the former since they all build on the valorization of capital built on labor. Abolishing private ownership or rearranging the distribution of goods is not enough to escape capitalism. Postone both builds on and criticizes the approaches of Lukács and the Frankfurt School. There is much in his book that shows his affinities especially to the latter – such as the criticism of welfare state capitalism or the stress on fetishism – but he nevertheless criticizes these earlier thinkers for being bound to a transhistorical conception of labor. Lukács in particular is singled out for heavy criticism since he saw the proletariat as the Subject of history, as capable of grasping totality and hence offering the standpoint of critique. Engaging with the Hegelian legacy, or should I quip lunacy in Lukács, Postone arrives at one of his most important and provocative arguments. “Marx suggests that a historical Subject in the Hegelian sense does indeed exist in capitalism, yet he does not identify it with… the proletariat”. Instead it is capital that is portrayed as a Hegelian Geist – as a subject and self-moving substance, following its own immanent historical logic. Hegelian dialectics, then, is specific to capitalism and is not a tool for grasping history in general. Thus, to Marx, the “totality” was not the whole in general, and certainly not a standpoint which he affirmed. Instead, he identified totality with the capitalist system and made it the object of his critique: “the historical negation of capitalism would not involve the realization, but the abolition, of the totality”, Postone argues. The working class cannot lead history towards this negation. In fact, it is only by breaking with the logic consitutive of this totality, in which the working class forms part, that a different, post-capitalist society can be born.

The abolition of the totality would, then, allow for the possible constitution of very different, non-totalizing, forms of the political coordination and regulation of society.

In a question asked about if the capitalist form of domination not better defined as the appearance of truly abstract relations as if they were concrete, personal relations? Furthermore, does this inversion, or at least the recognition of the crucial role of abstraction in capitalism, render a definition of class struggle untenable, or are we rather in need of a concept of class that takes this distance from the concrete into consideration? Postone says,

I am not sure that I would fully agree with the attempted reformulation. First of all, with regard to the quote “relations between people appearing as relations between things” what is left out of this version of what Marx said is that he adds that relations among people appear as they are, as social relations between things and thingly relations between people. Marx only explicitly elaborated the notion of fetishism with the fetishism of commodity. All three volumes of Capital, are [our change] in many respects, however, a study on fetishism even when he doesn’t use that word. And fetishism means that because of the peculiar, double character of the structuring social forms of capitalism, social relations disappears from view. What we get are thingly relations: we also get abstractions. However, one dimension of the fetish is, as you put it, that abstract relations appear concrete.They appear in the form of the concrete. So, for example, the process of creating surplus value appears to be a material process, the labour process. It appears to be material-technical, rather than moulded by social forms. And yet there are also abstract dimensions and regularities that don’t appear in the form of the concrete. I am emphasising this is because certain reactionary forms of thought only view capitalism in terms of those abstract regularities and refuse to see that the concrete itself is moulded by, and is really drenched with, the abstract. I think a lot of forms of populism and anti-Semitism can be characterised that way. Now I am not sure that this appropriation of the categories of Marx’s critique of political economy renders a definition of class struggle untenable, but it does indicate that class struggle occurs within and is moulded by the structuring social forms.This position rejects the ontological centrality or the primacy of class struggle, as that which is truly social and real behind the veil of capitalist forms. Class struggle rather is moulded by the capitalist relations expressed by the categories of value, commodity, surplus value, and capital.

Postone’s approach only seems far-fetched if we continue to equate capitalism with the economy. Not if we think of it as a form of life. For example, after Darwin wrote, natural processes, such as adaptation or sexual selection, came to be seen as operating within history. This gave us the naturalist novel of Zola or Norris. “Nature” was seen to structure history (the Rougon-Marcquet saga, the strike in Germinal etc.) as well compel individuals from within. For Postone, it is not “natural” Darwinian processes that do this but an historic process, capitalism. Another example of the same idea is Max Weber’s “spirit of capitalism.” Weber can be read, and wanted to be read, as saying that there are forces outside capitalism on which capitalism depends, such as religious ethics. However, Postone is suggesting that such “spiritual” Weberian forces as asceticism, compulsivity and hypocrisy (Weber’s famous triad) are internal to capitalism, structuring its motion. But, there are ambivalences to his theory, and especially ones concerning science and technology. Postone rejects the view, associated with traditional Marxism, that sees industrial production as a neutral, purely technical process that could be salvaged from capitalism and carried on in similar form in socialism. To criticize capitalism, he argues that we also need to criticize industrial production, or at least the form it has assumed in capitalism. The problem is that he simultaneously argues – based primarily on a famous passage in Grundrisse – that science and technology creates the preconditions for an overcoming of capitalism, since they enable human beings to create unprecedented “material wealth” in a way that relies less and less on human labor. Since in capitalism “value” can only be created by labor, capitalism increasingly comes to be characterized by a contradiction between the processes generating “wealth” and “value”. Unlike “value”, Postone appears to think that “wealth” is a category that it is fine to apply transhistorically. “Wealth” existed in precapitalist societies and must also be imagined as something that can exist in post-capitalist, socialist societies. What happens with capitalism is that the creation of “wealth” can only take place through the production of “value”, i.e. through the exploitation of labor and valorization of capital. However, by showing that “wealth” can be produced in abundance without relying on labor, science and technology open up possibilities of overcoming capitalism. Here Postone portrays science and technology, not as irremediably implicated in capitalism, but as potentially liberating forces that point beyond capitalism. That is of course fine, but the question then becomes how to distinguish the good and bad moments of science and technology. Postone calls for a transformation of not only of “relations of production” but also of the “mode of production”, but without giving us much in the way of explaining how much or how radically the latter needs to be changed.

Then there is the problem of dialectics. As mentioned, Postone confines Geist and totality to capitalism. This claim has some antecedents in earlier critical theory. Adorno, for instance, claims that the role of Spirit in capitalism is taken by “value”: “The objective and ultimately absolute Hegelian spirit [is] the Marxist law of value that comes into force without men being conscious of it” (Adorno). The posture of taking up arms against “totality” itself is of course also familiar from older critical theory. Adorno, however, never confined dialectics in toto to capitalism. Although Postone does allow for some forms of dialectical interaction (e.g. people changing their own nature reflexively through acting on nature or the reciprocal constitution of social practice and social structure), he argues that such interaction only becomes “directionally dynamic” in capitalism. In other words, dialectics in the sense of a historical logic or necessity only exists in capitalism. This raises the question of how capitalism can be overcome. If there is no Geist but capital, then dialectics cannot point the way out of capitalism. Liberation can only mean liberating oneself from dialectics, by creating a world in which it is no longer dominant.

The indication of the historicity of the object, the essential social forms of capitalism, implies the historicity of the critical consciousness that grasps it; the historical overcoming of capitalism would also entail the negation of its dialectical critique.

However, sometimes Postone himself seems to grasp the relation between capitalism and its outside dialectically, as when he uses the term “determinate negation” for the movement whereby capitalism is transcended. But if the overcoming of capitalism is a determinate negation, doesn’t that require the premise of a totality transcending the capitalist system, as Lukács thought?  Sometimes Postone writes as if the totality of capitalism were driven towards its own abolition by its inner contradictions. However, apart from the discussion of technology and wealth referred to above, it is hard to see that he specifies anywhere what kind of contraditions might bring about this self-abolition.