It’s money month on the Ark Review, so what could be better than making a quick and dirty introduction to some of the frequently used but often undefined concepts that are thrown around when we talk about the politics of money and cultural productions. First a few caveats. The outlines of these concepts given here are just that and should, of course, be understood as further complicated by factors like race, gender and sexuality. What’s more, they come from a mind soaked in the biases of post-Deleuzian/Marxian analysis. That said, these are some things you need to have something of a handle on if you want to analyse the role political-economy plays in the cultural productions that surround us. Starting with:
Actually, wait. We’ll come back to this one, first we need to talk about one of the most common places that have political economies; nation states.
You, reading this, probably live in something called a nation-state, which is basically the political category designation for the country you reside in. Nationalists find this all very straightforward thanks to the ability of nation states to appear somewhat stable when in fact it takes the constant application of force (both military and economic) to maintain their existence. A country like France for example or Denmark has been able to retain a pretty clear sense of self-definition over many centuries. Though this is only an illusion caused by the fluke of history you happen to have lived through. As former colonial powers, these nations were able to plunder the resources of other parts of the world to get the starting capital necessary for producing and projecting their self-definition and reinforcing it. As messy as this is, for many other nations this process is messier still and often came about through all types of the oppression and negligence of colonialism brings about (see Israel/Palestine, India/Pakistan, Ireland/Northern Ireland, UK/Scotland, UK/and every other nation state in the EU).
That being said the level of the nation-state is the level at which international politics is ostensibly meant to take place. The powers of these bodies are real, however, as we will see, they are far from ultimate. The majority of nation-states today claim to be something called liberal democracies. This means that a nation-state is made up of citizens who have rights as individuals. The structures within each nation-state are thus set up with the, again, ostensible intention of maximising the utility and liberty of each of those citizens. For a long time, this was believed to be a prerequisite for capitalism, though this is changing. But it is with this dynamic in mind, of a nation governed by the consent of disparate individuals, that we can give some shape to the notion of political-economy.
So today, nation-states have become the basic unit within which we can talk about the various power structures that comprise the assemblage of the government and law. The institutions of government and law have a monopoly on what is often framed as the legitimate use of violence. This violence can be used to enforce the law on areas like the economy. And the laws are made through political processes. So political economy is a way of describing a situation where economic activity is to some extent a matter of political control and similarly where the field of political possibility is in some part economically defined.
When people talk about political-economy they are talking about the balance of these forces, and how the priorities of a culture are materially expressed. If there is a cultural understanding that people should have education as a right, then one could expect there to be the political decision to be taken to enforce taxation to pay for it. If there is a cultural norm that frames illness as a matter of personal responsibility, then individual citizens may be expected to pay for their own health care and the taxation level for the country could be lowered as the state, theoretically, would not have pay for this expense. The point is that these decisions exist at an intersection between economic rationalism and political commitments.
The annoying things about capital is that it is at once simple and complicated. So complicated in fact that the subject could be explored over an unfinished seven-volume opus and only just scratch the surface. But we’ll try anyway. At its simplest, capital is the name we give to any resource that can be used by an agent to produce a net gain of resources. This usually refers to money because money can be turned into almost anything, but it would also refer to material resources, labour and the means of production (tools).
Put simply capital works like this: Life gives you lemons (capital), you make (labour) lemonade, you sell the lemonade at a profit (capital +), you buy even more lemons and repeat. This process is called capital valorisation. Anything that can do this can be considered capital and anything that can’t, can’t. Simple yeah? Not so fast though. There are a lot of complicating factors but we are only going to consider a few here.
First off, the above scenario is only possible if the maker of the lemonade has enough lemons (or other resources) leftover throughout this process to eat to survive. Indeed, when the lemonade is sold, one has only accrued capital if you make enough money to live, replace your original investment of resources and increase the quantity of resources to which you have access. This is a good time to note that capital cannot be conflated with money (or lemons) because a certain amount of money is needed to reproduce your life (pay rent, buy food and other things needed for survival). So capital is actually a conceptual term, referring to a resource held in surplus to the requirements of survival.
This gets us to the next thing, there is no capital, as we know it, without property. For a resource to be held in surplus requires us to have a concept of ownership and property. The bounties of the earth are such that everyone should have at least than enough to survive but this places huge limitations on the concept of capital. And the less capital you have the less you can do with it. To get around this we deploy the concept of property. This ties into the power of nation-states and the practice of political-economy discussed above. The idea that a nation-state is comprised of citizens gives definition to the idea of who can own something: a citizen can own a thing. Add to this the state itself has the power to act as an authority with the power to enforce the laws that define these notions of property of the idea of ownership and this is how one lemonade maker can come to have lemons while another lemonade maker does not. The first owns them legally while the other does not. Without this idea, we would be in a situation where either these two lemonade makers would fight for ownership of the lemons or they would share them. In the case of the latter, both would have all the lemons they need but probably not enough to make a significant profit to quickly advance their business.
Another quick thing to mention is that capital is intimately connected to the notion of time. This is actually very complicated but if we keep it simple, capital takes time for the labour (lemons to lemonade) and exchange (lemonade for money, money for more lemons) necessary for it to increase in value to take place. To have lemons doesn’t automatically equal more lemons, this takes the doing of something with them. So we can perhaps say that capital is a temporal concept; capital islike an artefact that has travelled back in time to suggest to you what the future could be like. When capital exists in objects it exists as a potential but it is only through action and interaction that this potential can be materially realised.
In cultural and critical analysis, people will often deploy the phrase “the logic of capital” and when they do that, it is really these three things that they are referring to: A surplus exists, it is owned by someone/something, if action is taken the surplus can be increased. Each of these forms the premises from which many build the justifications for the actions they take.
Capitalism is one such justification, though really there is no such thing as real existing capitalism, instead, there are capitalisms. Bear bones capitalism today is simply the idea that the best way to attain the ostensible goal of the nation-state is through the performance of the process of capital valorisation described above. This can happen in democracies (such as Denmark), where such a policy would be called liberal capitalism where individuals are incentivised to perform valorisation. Or in authoritarian regimes (such as China) where it could be called state capitalism. Theoretically, it could happen in libertarian corporation-states but that’s a whole other story.
As a matter of historical fact, capitalism is pretty good at releasing the energetic potential of the resources of the world. What capitalism is pretty bad at is directing this in accordance with any kind or remotely coherent moral or ethical code. The valorisation of capital is utterly amoral while the ideological imperative of capitalism is, to say the least, deeply problematic.
For Karl Marx, capitalism was a necessary step in the progression of history. Put simply, he thought that the dream of an egalitarian society hinged upon the democratization, relative to feudalism, of the productive capacity of society facilitated by capitalism, which would allow us to move beyond capitalism to a more rational form of social organisation. That said, he also thought that this unleashing of the productive capacity of society was dangerous and dehumanising due to how capitalism as an ideology deploys the logic of capital. This was particularly the case for labour and the ground on which he devised the labour-theory of value.
The labour theory of value
The labour theory of value is Marx’s controversial argument that the value of something increases because labour is put into it. If you have some lemons, sugar and water, you could theoretically sell each of those things for a certain amount of money as they each have their own uses. Every commodity has its uses. Water is a drink, sugar is a sweetener, and lemons are rich in vitamin C. Put them together and you get a sweet drink rich in vitamin C: lemonade. Selling them all separately would make you a certain amount of money but selling them combined as lemonade would probably make you more money, even though you are selling the same amount of things. This is because the value of the labour of transforming these things into lemonade has been added to them and thus increasing the overall use-value.
Here, Marx makes an important distinction between selling one’s labour and selling one’s labour-power. If you are a baker, who owns his bakery (the means of production) then when you make and sell bread, you are able to sell the product of your labour. This is because the price you sell it for will reflect the material expenses and the work you put into producing the bread and how useful the bread is understood to be. This sale would be compensating the price of your labour.
The price of the bread is not always stable. If there is more bread for sale then people need the price will fall; not enough then it will rise. Regardless of the price set by the usefulness of bread, the price is set by what people will pay for it. In order to keep the business afloat, the owner will adjust their prices, this is commodity’s exchange value. The ingredients of bread are subject to the same forces and the prices of these cannot easily be changed. This situation creates a risk for our artisan baker but this risk is spread out for those who own bakeries but are not bakers themselves. If you work in a bakery that someone else owns, and that same person says how much you are to be paid for making a certain amount of bread over a certain amount of time and then charges more than that for the bread when it is sold, this sale commodifies your labour-power. In this set up the work you do to increase the value of the flour, yeast and water by turning it into bread is not reflected in the price the bread is sold for or the amount you take home in pay. The value of labour-power need only be as much as to cover the labourer’s expenses for living or, at least, enough to keep you coming back to work. According to this theory, it is in the gap between the amount of value labour actually adds to a commodity (as expressed in market sensitive exchange-value) and the amount paid for the provision of that labour-power that capitalism as we know it takes place.
This gap is what the capitalists claim for their own for not really doing much more than adding a level of admin. What’s worse is, for Marx, treat the the actual performed labours of people as merely labour-power turns human activity into a mere commodity and alienates people from their own life and society.
Late-capitalism can taken to describe the modified form of capitalism during the Cold War. Others take it it to mean the capitalism has taken from the end of World War Two up until the present day, but I think further distinctions need to be made, so we are going to use the Cold War model. This is a period of capitalism that Marx had not really predicted, so the term in this form came from late 20th century thinks such as Ernest Mandel and Fredric Jameson. It describes a form of capitalism that had come to some form of consensus with labour unions, where the policy of political-economy was one of high taxation of high earners and social welfare programs redistributed this wealth. Essentially, this is a form of capitalism that was able to tolerate a smaller gap between the exchange value of commodities and the amount they pay (through wages and taxation) for the reproduction of labour-power. The incentive for this, however, was the existential threat to the system of capitalism posed by the so-called “real existing socialism” of the Soviet Union. Faced with the possibility of its demise, capitalism was able to be adjusted to compete with the kind of loyalty and solidarity apparently offered by a seemingly viable social alternative for society. Capitalism had to make itself appear more just than the world offered by the USSR. This was, however, a historical fluke.
The wealth redistribution that took place during these years is that of a social democrat’s dream. Because the pay workers received seemed more reasonable than it had previously been, citizens were cemented in their belief that the work they performed carried with it some inherent moral virtue. And because this was also a period characterised by a rush of technological development, particularly as far as media is concerned, this narrative was reinforced throughout the culture. This media was itself consumed via commodities that were afforded an emergent middle class through the redistribution of wealth that characterised late-capitalism. The economy shifted from one of production to one of consumption. Social mobility appeared to mean something while new high-paying, albeit bullshit, jobs were being created in the west as low-paying production jobs were being moved to other parts of the world. This combined with the new deluge of images produced new kinds of social relations and narratives based on simulacra rather than material bonds. As put by Fredric Jameson, postmodernism became the cultural logic of late capitalism.
With so many material needs satiated and desires fulfilled, the idea of putting an end to alienation came to be seen, more and more, as utopian. There was no need to change the inherent logic of the system because it all seemed to be fine. Especially when compared to the shit show of the Soviet Union. The problem was that at one point the shit show ended.
Neoliberalism is a term of critique. No one who champions the ideas associated with neoliberalism would refer to themselves as a neoliberal. But part of the strength of this idea is its ability to appear invisible. Neoliberalism refers to a mode of governance that emerged towards the end of the Cold War, which focused on the sovereignty of the individual, that individual’s rationality and the notion that the market expressed a kind of justice. As the powers of the Soviet Union waned, so too did the threat to capitalism posed by real existing socialism. Faced with no apparent alternative free-market liberal capitalism (the rise of China was still to come), the incentive to keep the gap between exchange-value and the cost of labour-power was removed. Thus the gap has steadily increased, as reflected in the wage stagnation of the last 30+ years.
This was not automatic, however. Neoliberalism emerged from both a set of historical circumstance but also the ideological conviction that allowing the market to behave in a more unrestrained manner was a social good. Neoliberalism holds that government intervention always does more harm than good and market competition will always produce greater efficiency. The individual is both loci of both all possibility and all responsibility and their capacity for rational decision making enshrines this. Despite being broadly anti-regulation, neoliberalism, with its focus on the individual citizen, requires a strong nation-state with a monopoly on violence to provide the environment in which business could take place with some consistency.
That said, a paradox here is that these are also the conditions in which the unit of the nation-state begins to fall apart. If an individual capitalist can rationally see that they could increase their profit by moving production from a country with strict labour laws to one with a more loose relationship to the sanctity of workers lives (say China), then she should be allowed to do so under the governance of neoliberalism. This removal of money from a nation-state’s economic base, combined with the stagnation of wages and myth-making of the social democrat’s dream, produced under late-capitalism, creates the kind of economic desperation that can make a state more fragile as a business climate. In the west, violence to suppress this discontent would probably hurt business more than help it. So, mechanisms are found to relieve this pressure and allow people to keep consuming. We have been allowed to dig ourselves into incredibly deep debt.
Debt has a long and tangled history, as long as civilisation itself. According to David Graeber, debt predates money (2011). Indeed, it may be the very precondition for money. Debt is a fun term in cultural theory, not least because almost everyone who plays with cultural theory has a large amount of it. But debts etymological relationship to concepts such as guilt and shame give debt a fascinating pathos, not to mention the way it serves as time travel.
Debt can perhaps be thought of as the inverse of capital, as debt also presupposes the progression of time and the individual’s movement through it. But where capital announces a future of possibility and transformation, debt reduces the future to a linear path of repayment in return for transforming the present. Take a mortgage and you become a property owner but your future is tied to the agreement made with your creditor.
This isn’t a bad thing as time travel can be incredibly useful. But its mechanisms are incredibly delicate. Debt can only function smoothly if the conditions are such that there is a fair chance it can be repaid. This is the trust that makes the transformation of borrowing possible. The over-saturation of debt under neoliberalism, along with the crisis of credit (what Bernard Stiegler has rephrased as the disappearance of trust) has foreclosed the future for so many to such a degree that noxious effects of neoliberalism can no longer be held back from the western societies that have coasted on debt for so long.
Marx thought this would be communism but there are only a few oddballs still interested in bringing this about in the ways we saw in the 20th Century. No one can really say what postcapitalist society will look like, but consider the following: Robots will mean the end of many many jobs. While our society currently functions by applying moral judgments to economic activity, this will make less and less sense (than the nonsense it already espouses) as fewer and fewer jobs are available. If this leads to a significant amount of structural unemployment, then will work be able to remain a moral imperative and a pre-requisite for survival?
A corollary point to this is that this same technology that is leading to the end of many traditional jobs is also blurring of subjectivity and individuality. Just as neoliberalism’s embrace of the logic of capital in the age of global communication has caused problems for the idea that the nation-state as the locus of political power, the same communication technology has been facilitating a shift in human consciousness. With more and more of our lives and identities interwoven through communication networks, it is becoming harder to lean on the definition of the individual as the singular unit of experience. The individual may have always been a myth, but now it is becoming utterly unbelievable. With this blurring ever more, the foundations upon which contemporary neoliberal capitalism is based (property rights and individualised responsibility) are losing the power of being our invisible shared assumptions.
Add to this that following the 2008 crash, neoliberalism has limped on, relying on ever-deepening debt to get it from one day to the next. The side-effects of this, increasing unemployment resulting from slow growth and the public discontent this brings has started to boil over. I agree with the analysis that many others have made over the last year that the turn to nativism and authoritarianism in the west is signalling a sea change. Whether this is the end of capitalism itself or just its neoliberal form remains to be seen. What also remains to be seen is if it can be better…
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