In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.

Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Yves Smith at Naked Capitalism is calling the Geithner plan a fiasco:

In other words, Geithner followed the Paulson script of pushing hard to make the bailout industry friendly, to the extent of compromising the effort to get the plan fleshed out in adequate detail.

Smith is probably right that the plan won’t be much better than the one we got last fall from Paulson, though I think her general pessimism is misplaced. Geithner’s plan prevailed over countervailing opposition from David Axelrod and others within the Obama administration pushing for far more radical control over the banks we’re bailing out. It makes sense that the Obama administration would divide internally over how to deal with this problem and many others. Obama wasn’t elected by the left on a platform of social-democracy. He was elected by a coalition of students, white collar workers, blacks, and disaffected Republicans. The economy is the issue where mainstream American politicians tend to be the most conservative. The fact that the Obama administration is governing from the center and even from the same position as Bush on these issues at the moment shouldn’t come as a surprise.

Nevertheless, due to the severity of the situation we’re facing—the worst economic disaster of a generation, possibly a century—I expect the tone coming out of the White House to change rapidly. If this banking bill doesn’t sufficiently turn things around, it’s going to strengthen voices of opposition within the Obama administration, and we can expect even a drastic push to the left: not just caps on executive pay but also greater control over what institutions can do with bailout money. Geithner could easily be gone in a year.

The problem with Smith’s analysis and the analysis of those who take a “screw the Democrats” line isn’t that their criticisms of the plan are flawed but rather that they don’t take a nuanced-enough attitude toward politics in general. The Obama administration is hardly a homogenous body—to say nothing of the Democratic Party as a whole. The diverse interests present in the administration reflect the diverse class interests that brought Obama to power. While the interests present in the Bush Administration were uniform by comparison—representing a Dukes of Hazard mentality toward the world—one can begin to see the rudiments of actual class struggle playing out in the White House. I say “rudiments”, because there is hardly an open struggle right now between the interests of the people and the interests of the bourgeoisie. But it’s going to be impossible for Obama to continue to govern in the interests of a portion of his constituency which is growing in power while at the same time catering to the received wisdom of the financial markets that got us where we are. People are really fed up not just with the greed but with the seeming arbitrariness of the whole system, they want substantive change, and they’re not going to be able to get it so long as the Obama administration keeps one foot in the policies of the Bush administration. The class conflict we see playing out in the open is going to push him further to the left.

According to Smith’s and Ricardo’s labor theories of value, the economic value of the commodity is determined by the labor that goes into it. So the value of a bed comes from the labor of bed-making, and the value of a pair of shoes comes from the shoe-making. But making beds and making shoes have different ends. The end of the first is shoes, the end of the second is beds. Any two actions that aim at different things are really different actions. Therefore, bed-making and shoe-making are different actions. Apart from a mere expenditure of energy, sweat, etc., they have nothing in common in and of themselves. But if they have nothing in common, they can’t be the reason we say x beds = y shoes. So the labor that makes the useful thing can’t be the source of the economic value of the thing any more than its intrinsic usefulness can be.

This is Marx’s critique of the labor theory of value. Marx does not just believe there are problems with Smith’s and Ricardo’s labor theories of value. He doesn’t just think they’re magical or arbitrary. He thinks they’re flat out contradictory—and not in the pretty Hegelian sense. They’re just nonsense. Marx does not believe there is something special or exalted in cobbling or floor-sweeping that transfers a substance called “value” to a thing. All Marx sees in cobbling is the repair of shoes. All he sees in floor-sweeping is a dirty floor becoming clean. Anyone who thinks otherwise either has not read Marx or hasn’t bothered to read him carefully.

So what is Marx’s theory of value? Marx believes value is necessarily connected with labor, so Marx holds a labor theory of value as economists understand the definition of the word. Further, Marx believes there is a necessary connection between value and market price, and so there is a necessary connection between labor and market price. The connection Marx draws between labor, value, and price is, if not foundational, then at least essential to his analysis of the capitalist mode of production. So if what Marx says about the connection between these things is wrong, his theory about capitalism must be wrong, too. There is no Marxism without Marx’s labor theory of value.

Taking the aforementioned problematic of the commensurability of labors as our starting point, we can categorize Marx’s labor theory of value in very broad outline in the following way:

1. If labor is the matter of exchange-value, then it cannot be labor in the form of “natural” labor, labors as we understand them in the everyday, practical sense as activities directed toward unique ends. The only type of labor that can play that kind of role is a labor that is in some sense metaphysically unique: it has to be homogeneous, uniform, and without quality. This is the requirement any labor theory of value must meet if it is to make sense. Smith’s and Ricardo’s do not meet this requirement.
2. Marx believes there is such a homogeneous, uniform labor without quality, and pace Smith and Ricardo, he believes this, not natural labor, is the matter of exchange-value. Marx’s name for this type of labor is abstract labor.
3. At no point do any of us perform abstract labor simpliciter. Each of us has different jobs. Some of us write computer programs, some of us make music, some of us wash dishes. No one has the job of doing abstract labor in and of itself apart from particular natural labors. So if abstract labor really exists—and Marx believes it does—then we must be performing it at the same time that we’re performing natural labor.
4. No natural labor contains abstract labor in and of itself. Bees building a hive and making honey are not producing exchange-value, so they are not engaged in abstract labor. A chattel slave working his master’s olive orchard in 5th century Athens was not producing exchange-value, so he was not engaged in abstract labor, either. There is no quality of labor in and of itself that is abstract and produces exchange value. There is no material substance of value that olive-picking generates the way a gland produces a tear. So if abstract labor becomes incorporated into natural labor so that exchange-value is produced, it is only because a metaphysical transformation of that labor has taken place so that it is transformed from a qualitative thing distinguished by species into something purely quantitative which is now undistinguished by species.
5. According to Marx, systematic exchange brings about this metaphysical transformation of labor. Abstract labor and natural labor get tied together by virtue of a specific social interaction between people, viz., the adjustment of prices in a market economy.

That’s the outline. I’ve said nothing about the specific way in which abstract labor is related to concrete labor, i.e., whether abstract labor “belongs” to concrete labor somehow, whether it’s a “property” of it, whether and how natural labor is treated as abstract labor despite the concrete differences, etc. Nor have I said anything about how a social relation can change the metaphysical character of something (we normally think of metaphysics as being independent of society). Nor have I said anything about why this particular social interaction (systematic exchange) has this particular power to transform labor in this particular way. One has to have answers to all of those in order to fully understand Marx’s labor theory of value. All I wanted to do in this post was to show what one has to understand in order to comprehend Marx. It turns out to be very different from what many people believe they have to understand in order to understand Marx. It involves more than thinking that labor is the source of value (in fact, in an important sense, labor is not and cannot be the source of value). And it involves solving a metaphysical, non-economic problem about the essence of labor itself.

I would draw the reader’s attention to one aspect of Marx’s labor theory of value which is not quite at the core of it but which follows from it. If under conditions of systematic exchange, qualitatively distinct natural labors with different ends (production of use-values) are treated as qualitatively undifferentiated with the same end (production of exchange-value), then the metaphysical transformation of labor brought about by conditions of systematic exchange introduces a metaphysical contradiction into labor. Labor aims at two exclusively contradictory ends: the production of use-values and the production of exchange-value. At the core of Marx’s understanding of capitalism is the idea that capitalism is a mode of production that aims first and foremost at the production of profit (a kind of exchange-value). Meeting the concrete needs of humans (to say nothing of their desires and the things that would allow them to flourish) is secondary. This contradicts the bourgeois understanding of capitalism, according to which it is a system that aims at allocating scarce resources. This is an ideological difference, for sure, but it is more importantly a metaphysical difference. Aristotle might have been the first to recognize that exchange-value and use-value are contradictory ends, and that one cannot pursue both in equal measure by means of the same action. And even if one does it to produce a use-value more than he does it to produce an exchange-value (i.e., if a person practices medicine first because he loves medicine and second because he must make a living by doing it), the true and natural aim of the activity (e.g., curing people) will suffer from the presence of the ulterior motive (making money). According to Marx, there are many “contradictions” inherent in capitalism, all of which make it a system perpetually and necessarily prone to multiple kinds of crises. We can see one of these potentials for crises in the outline we have given of Marx’s labor theory of value: capitalism is ostensibly a system for delivering goods to people, and yet it aims at an end which is radically different. Were it not for the fact that capitalism must deliver the goods (i.e., sell them) in order to exist, this wouldn’t be a problem. But if capitalism cannot deliver the goods at all, it cannot make a profit, and so it goes into crisis. The end capitalism pursues, therefore, contradicts the necessary means of fulfilling that end. Capitalism perpetually and necessarily undermines itself. By pursuing exchange-value at the cost of use-value, it contradicts itself. But this necessary contradiction immanent to the capitalist mode of production itself is invisible if one does not start from the appropriate metaphysical perspective on labor and goods.

Sources/Additional Reading
Aristotle, Politics, Ch 1
Marx, Karl, Capital, Ch 1, Sec 1
Meikle, Scott, Aristotle’s Economic Theory, Ch 3 and 9

There is no necessary and direct connection between the value of a good and whether, or in what quantities, labor and other goods of higher order were applied to its production. A non-economic good (a quantity of timber in a virgin forest, for example) does not attain value for men if large quantities of labor or other economic goods were applied to its production. Whether a diamond was found accidentally or was obtained from a diamond pit with the employment of a thousand days of labor is completely irrelevant for its value. In general, no one in practical life asks for the history of the origin of a good in estimating its value, but considers solely the services that the good will render him and which he would have to forgo if he did not have it at his command…The quantities of labor or of other means of production applied to its production cannot, therefore, be the determining factor in the value of a good. Comparison of the value of a good with the value of the means of production employed in its production does, of course, show whether and to what extent its production, an act of past human activity, was appropriate or economic. But the quantities of goods employed in the production of a good have neither a necessary nor a directly determining influence on its value.

Yet Menger’s critique in this particular quote fails. Where he does not beg the question against Marx’s labor theory of value, Menger misrepresents the theory he is attempting to refute. But not only that, his own account of value falls short of the requirement any theory of value must meet, namely, to explain that by virtue of which commodities exchange in certain proportions. All this is evident from examining the quote piece by piece.

Menger begins his criticism by flatly denying his opponent’s position:

There is no necessary and direct connection between the value of a good and whether, or in what quantities, labor and other goods of higher order were applied to its production. A non-economic good (a quantity of timber in a virgin forest, for example) does not attain value for men if large quantities of labor or other economic goods were applied to its production.

It may be true that “there is no necessary and direct connection between the value of a good and … labor”, yet this is precisely what a refutation of the labor theory of value must prove. Assuming it from the start begs the question in an obvious way.

Menger clarifies his objection when he claims (again without argument) that the way in which a particular natural object is brought from the earth has no bearing on its economic value:

Whether a diamond was found accidentally or was obtained from a diamond pit with the employment of a thousand days of labor is completely irrelevant for its value.

As is, this statement is correct, though it has no bearing on Marx’s labor theory of value. Marx never argues that the value of a (particular) diamond is determined by the way in which it is found or produced. On the contrary, Marx argues in Section 2 of Chapter 1 of Capital that the value is determined by the socially necessary labor time required to acquire or produce the type of thing under consideration. So it makes no difference to Marx how much particular labor is involved in acquiring this one particular thing, but rather how much labor is required on average, given the average means of production of the entire society, to acquire or produce objects of that type. So indeed, Menger is right to assert that the value of a diamond is indifferent to whether it is found by the side of the road or dug from a pit, but Marx never claimed anything to the contrary anyway, so this is a blatant straw man.

In the remainder of the sentences of this section, Menger goes on to introduce his own positive theory of value which he claims comes from the “services that the good will render”:

In general, no one in practical life asks for the history of the origin of a good in estimating its value, but considers solely the services that the good will render him and which he would have to forgo if he did not have it at his command…The quantities of labor or of other means of production applied to its production cannot, therefore, be the determining factor in the value of a good. Comparison of the value of a good with the value of the means of production employed in its production does, of course, show whether and to what extent its production, an act of past human activity, was appropriate or economic. But the quantities of goods employed in the production of a good have neither a necessary nor a directly determining influence on its value.

The first sentence has an element of truth in it. It is true that in “practical life”—in ordinary, day-to-day experience in which the majority of us use things or go to the store to purchase things that we can use—none of us takes into account the “history of the origin” of the things we use or buy when considering the “services” such “goods” render us. It is worth pausing for a moment to consider the sorts of “goods” we encounter in “practical life”. They are really distinct objects, and they are really distinct objects because they possess really distinct qualities and so serve really distinct ends. A truck is a truck and not a swimming pool because a truck has wheels, a large engine, an exhaust system, etc., and a swimming pool has concrete walls, a diving board, and water in it. Because a truck has a large carrying capacity and a powerful engine, we use it to haul loads, but because a swimming pool can hold water, we swim in it. By virtue of these vastly different qualities, we use trucks and swimming pools to pursue vastly different ends. If two things have the same qualities and serve the same ends, they’re either in fact the same thing or they are two of the same sort of thing, in which case it makes sense to say they are equivalent. But if they have different qualities and serve different ends, it makes no sense to say they are equivalent from the practical point of view, because we do not incorporate them in the same way in the same sorts of practices, nor can we. They have different “values” for our practical activities. Marx called this type of value “use-value”. He meant the value things possess by virtue of having in themselves distinct qualities and ends. Since from the practical point of view, things are really distinct in their beingness by virtue of their qualities and ends, we might say, following Marx, that such things do not just possess use-value but are in fact use-values.

Menger claims labor plays no role in our estimation of use-value, i.e., value when conceived from the point of view of practical life, but this is not entirely accurate. It is true that under ordinary circumstances we do not think of the maker of a car while we’re driving it to the grocery store any more than we consider the maker of a cup when we are enjoying drinking the tea from it. However, if the product is defective or breaks at some point during its use, we do consider the maker of the thing, usually in a negative way. This is because the maker of the thing—whether it be a person, a machine, or a company—is in some sense a cause of the usefulness of the thing. (Aristotle designated this the “efficient” cause of the thing, as distinct from the formal, material, and final causes.) It might sound odd to our modern ears to hear the labor that goes into a thing be called its “cause”, but if we keep in mind that the skill or lack thereof with which a thing is produced has a direct bearing on whether or not the thing is useful and can fulfill its appointed task, and if we keep in mind that, from the practical point of view, the beingness of a thing is directly tied up with its ability to fulfill its ends, then it sounds less strange when we say that the labor is in some sense directly responsible for the intrinsic practical worth of the thing. Perhaps this is what Menger has in mind by “appropriate” when he says, “Comparison of the value of a good with the value of the means of production employed in its production does, of course, show whether and to what extent its production, an act of past human activity, was appropriate or economic.” Either way, we are clearly justified when we claim that, even from the practical point of view, labor often plays a large role in our estimation of the use-value of a thing.

The most serious problem occurs when in the same passage Menger conflates the serviceability of an object in practical life with economic value. You will recall that economic value is that property possessed by qualitatively distinct things by virtue of which we equate them. It is that thing possessed by beds, shoes, and houses by virtue of which we are allowed to say that x beds = y shoes = z houses = some amount of money. Marx claims that that which these things have in common which makes them commensurable is the socially necessary labor time required to produce each of them. Against this theory Menger argues that the service these things render us in practical experience determines their value. Yet we have just seen that the services rendered by really distinct things are themselves really distinct, and that in fact this distinction between the ends they serve constitutes their differences from one another. Were these things to have identical ends and so be commensurable in virtue of them, they would be the same thing or the same sort of thing. But we do not exchange beds for beds, we exchange beds for houses, etc. But beds and houses, insofar as we consider them from the perspective of practical life, have really distinct ends. To claim as Menger does that they’re commensurable in virtue of the ends they serve in practical life is bald contradiction.

This is a metaphysical problem, not an economic problem. The kinds of things Menger wishes to equate cannot be equated, because if they could be equated, they could not be what they are. Economic value is, if nothing else, a quantity. Its ultimate expression is as an amount of money, a price. The price is supposed to measure the quantity of value possessed by really distinct things like beds and houses. There is nothing in principle stopping us from applying the category of quantity across qualitatively different things. We do so whenever we measure the mass of a body. But in those cases we abstract away from the qualitative features of the thing and consider it just in terms of its bare corporeality. The problem with Menger’s assertion that the (qualitative) serviceability is the source of the (quantitative) economic value is that he is not abstracting from the really distinct qualitative features of the things that differentiate them from one another but is instead insisting that these qualities themselves make them commensurable. The thing by virtue of which they are really distinct is the same thing by virtue of which they are really the same. Unlike massive bodies which are commensurable only when we abstract from their differences, economic goods, according to Menger, are commensurable only if we attend to their intrinsic differences. This is a move no philosopher living or dead would condone, and neither should we.

So the sense in which these things are commensurable (if they’re commensurable at all) does not have its cause in the things themselves or their qualities, considered from the “practical” or everyday point of view. And since the being of a thing, considered practically, is inseparable from its end, the usefulness of the thing for this or that cannot determine its value, either. So whatever Menger is trying to say here about the labor theory of value—and I don’t profess to know exactly what he is trying to say—he’s going about it the wrong way by appealing to how we relate to objects in our everyday, practical activities. The use of something can never determine its economic value, because the use is directly tied up with the qualities that belong to the thing, whereas economic value expresses a quantitative relationship between things that leaves out of consideration the qualities or ends of the things that define their usefulness.

Sources/Additional Reading
Marx, Karl, Capital: Volume 1, Chapter 1
Meikle, Scott, Aristotle’s Economy Theory, Chapters 1 and 9

Lukács tells an amusing anecdote in the “Reification” essay about a legendary critic in India who sets about investigating the myth he has heard about the world resting on the back of an elephant. “If this is so,” the thinker proposes, “then we must ask about that which the elephant stands upon!” When he is told that the elephant is balanced with dramatic precariousness on the back of a tortoise, the thinker is satisfied and his inquiry ends. If he is not, of course, he can always continue his search and inquire after that which the tortoise stands upon. He can search for a third miraculous animal.

The point being that the line of inquiry itself is rotten.

The uncritical critic inquiring after the foundational myths is not the only example of poorly directed thought; there are myriad wrongheaded ways to think: Is it estrogen that prevents women from performing well in math, and if so can hormone therapy boost their test scores? How do we get the state out of the market in order to ensure the prosperity of all? Is it justifiable for the United States to use force to dispossess Iraq of its WMDs? The list is endless. What unifies each is an incorrect orientation toward the world, an orientation that accepts certain explanatory schemata, certain organizing formalizations, that are not only inadequate but in fact preclude the critic from approaching a more accurate understanding.

These distortions, stemming from cultural or linguistic patterns, are part blindness–they conceal certain aspects of the world–and part insight–they provide explanation. Unfortunately the insight they provide is no consolation, as it is false, even when it is not the expression of a inherent contradiction in the formation of the pattern itself. Lukács’ provides an example of this with antinomy between is/ought, necessity/freedom, etc, that arises out of the framework of classical German philosophy. Pressed with the need to explain how one might exercise freedom, might find a point of entrance into a world that is completely determined by necessity, Kant and those following him are caught in an impossible position; they cannot even explain in principle how this is supposed to be possible. The reified concepts–such as necessity, causality, etc–that they must assume to order the world they do not understand as historical achievements, but as mere givens. Hence there is a hard divide between the world so ordered and our action on it. This line of thought reduces one to the so-called contemplative stance.

It is this stance, or something akin to it, that underlies Schmitt’s explanation of the operation of laws. Concerned as Schmitt is with the status of the exception–the point at which the law no longer maintains–he is confronting the hard opposition of matter and norm, content and form: the break between the law considered as an ideal silhouette and its application in the roughhewn factual world that never will fit into it. Schmitt believes that disjuncture is what every legal theory must keep in mind, as the

awareness of what the essence of what legal decision entails. Such a decision in the broadest sense belongs to every legal perception. Every legal thought brings a legal idea, which in its purity can never become reality, into another aggregate condition and adds an element that cannot be derived either from the content of the legal idea or from the content of a general positive legal norm that is to be applied. Every concrete juristic decision contains a moment of indifference from the perspective of content, because the juristic deduction is not traceable in the last detail to its premises and because the circumstance that requires a decision remains an independently determining moment… [Legal decision] is rooted in the character of the normative and is derived from the necessity of judging a concrete fact concretely even though what is given as a standard for the judgment is only a legal principle in its general universality. Thus a transformation takes place every time.¹

The problem under examination here is none other than the one Lukács takes up in his essay. But unlike the facile liberals on whom Schmitt piles so much spleen, he will not remain in the contemplative stance; he will rejoin the divided order of is and ought through a positing of a godlike ability to decide normalcy–for this is, really what his theory of sovereignty comes down to: the decision of when to apply formal laws to matters at hand. Yes, unlike Kant and those following who labored hard to preserve and then lay prostrate before necessity, Schmitt will recognize that the law is the creation of an authoritative subject. However, he does not see the nature of this subject itself, and his sovereign remains beyond critique. One can almost see the play of uncritical criticism flashing across Schmitt’s mind: What is legality? The judgment of a concrete situation according to a legal norms, under normal conditions. What are normal conditions? Those that were foreseen, those that are not exceptional. What determines whether they are exceptional? The sovereign.

The history of law in this view is strangely one-sided: it is a chronicle of judgments by a subject with the capacity to decide on things. There is no way of overstating, it should be said, that it is grossly amenable to an autocratic ideology of the state. Besides this, however, it is incapable of providing a satisfactory account of the constitution of sovereign power itself: it just is seen as such (and, relatedly, is tied to an unimpeachable authority–otherwise there is no law). And so, Schmitt’s attempt to save the reified image of law as a formal norm by appeal to a sovereign decision falls victim to its own contradictions: we are bound by the law because it has been decided that it is binding on us, but why are we bound to the decision? Schmitt can provide no answer for why this ought to be; he must maintain that it merely is. But this is an impossible position, and there is no way Schmitt can make his case; for it seems we need not listen–or, at least, treat as anything other than the power-flexing of an autocrat–to the decision, unless we make it, and in that case the notion of sovereign agency is meaningless. Which raises certain problems for the understanding of law’s traction as a result of a decision about normalcy.

1. Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty, University of Chicago Press Ed. (University Of Chicago Press, 2006): 30-1.

I ran into Dr. Ikerd at an energy conference in 2006, where he was speaking, and had the pleasure of dining with him afterwards. He’s a passionate speaker and is obviously concerned not only with ecological sustainability but with the social impact of contemporary forms of production, although the depth of his knowledge regarding the social and political dimension of the capitalist mode is more or less what one would expect from a professor of agricultural economics.

In his estimation, the problems caused by capitalism are accidental, in the sense that he does not see anything inherently wrong with the way capitalism operates. Its ill social and environmental effects are accidents caused by the way capitalism developed. He argues that the “scientific” view of neo-classical economists (as opposed to what he saw as the morally healthy humanism of Smith and Ricardo), paired with the institution of the multinational corporation, have created a business environment that facilitates the creation profitable yet unethical decisions with impunity.¹

Ikerd nevertheless regards capitalism as “the most efficient economic system”, and in spite of the many “risks” that come with it, he — like many sustainability advocates and environmentalists — see some permutation of its existence as essentially inevitable. The reasoning behind this “inevitability” of capitalism is usually unclear, with many of those who elect to speak about issues of sustainability unwilling to pursue (oddly enough) the question of whether or not our current economic system is inherently unsustainable, nor the question of whether or not our present system of social and economic relations can in fact be changed. Nevertheless, one usually finds the following arguments in favor of the “inevitability thesis”:

(a) Capitalism is “the most efficient” economic system or “the best” system so far, and therefore any economic change must take the form of an improvement or modification to its basic workings. Most people who make this argument never go very far in elaborating on what they mean by “efficient” or “productive” or any of the other adjectives they unreflectively apply to capitalism. To what end it is productive, or for whose benefit it is efficient, generally remains unknown and unasked.

(b) Alternatives to capitalism have all “failed”. People who make this argument no doubt have the Soviet Union and communist China in mind. Ironically, proponents of these “historical” arguments often ignore all history in making them, and imagine instead a kind of “level playing field” in which nations experimenting with alternative economic systems somehow lost “fair and square” against the might of Western capitalism. This interpretation has no real basis in fact, what with embargoes, propaganda, espionage, terrorism, coups, political assassination, outright invasion, and every other conceivable trick in the book routinely pulled against any state foolish enough to try playing for the wrong team. What the Soviet Union and other states demonstrate is never articulated with any clarity; the value of the American legacy is evaluated in a positive light that is similarly vague and unreflective, fueled primarily by the safe assumption that American capitalism can be “the best” without being “good”, and that this simple realization justifies it going unchanged, unchallenged, and unquestioned.

Ikerd does not deviate from either of these articles of modern American faith:

Many people today question whether a capitalist economy can ever be sustainable. Admittedly, the ecological and social risks of capitalism are real. However, no other economic system has been found that can rival its efficiency and productivity in decisions and activities that are legitimately private, personal, or individual in nature. Societies that have tried communism, socialism, and religious theocracies have never been able to meet the physical and material needs of their people. They are ultimately rejected by their people because they are not economically sustainable. Most individual economic decisions do not deprive anyone of their basic social rights or violate any moral imperative. These decisions legitimately belong in the individual, private economy, where there is no logical alternative to capitalism. Capitalism, with all of its inherent risks, is still humanity’s best hope for sustainability. Fortunately, sustainable capitalism does not require some radical, new-age value system; it only requires that we return to the foundational principles of classical capitalism and grass-roots democracy.²

By this Ikerd means finding some way of injecting moral sensibilities back into the American economy, as they were in the good old days of Adam Smith, when land was appropriated by war and genocide, and when labor was supplied by slaves and indentured servants.

The problem here is a failure to recognize the basic logic of capitalism. The rational choice is not to attempt to reform capitalism with moralistic pleading, regulatory boondoggles, or vague hopes that an over-worked and under-educated public will miraculously coalesce and demand the enlightened and equitable oversight of policy and civil society. That seems idealistic and impractical. It would seem more productive to replace the entire system with one that is democratic, sustainable, and non-exploitive at its very core, rather than as a jury-rigged afterthought. Call me a realist.

Fortunately, not all mainstreamers are quite as naive as the good Dr. Ikerd. James Gustave Speth’s The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability, for example, clearly recognizes the role of the modern capitalist economy in producing the climate crisis. All of this is carefully and compellingly laid out by John Bellamy Foster (et al) in their article in the Monthly Review’s July-August 2008 issue. Speth basically sees a kind of zero-growth capitalism as being necessary for an environmentally stable Earth. In the process, he supposedly challenges the mainstream optimism of technocrats, who believe that “dematerialization” — a concept in industrial ecology that refers to the reduction of material impacts per unit of services or products — can preserve or even restore the environment while also providing the capacity for sustained economic growth.

So, for example, the United States might replace its vehicle fleet with cars and trucks that use only a half of the amount of fuel they do today. That’s great. But to have economic growth, we need to be driving more and buying more cars — by building and marketing cars in China, for example. But having twice as much of a product that has half the environmental impact gets you nowhere. To begin moving toward sustainability, you would have to maintain the vehicle fleet at its current size and make it more efficient at the same time. That’s all well and good for the environment, but it’s not profitable.

Coming from Speth, this is quite challenging. He was a co-founder of the National Resources Defense Council, was the chairman of the Council on Environmental Quality under Carter, is the founder of the World Resources Institute, is a former administrator of the United Nations Development Program, and he’s currently the dean of the Yale School of Forestry and Environmental Studies. Which is to say this critique is coming from the heart of bourgeois liberal environmentalism. ³

In case any of us were getting scared at this point:

Speth is no Marxist, and he’s not attacking capitalism in its ideal and theoretic form. But he’s marshaled formidable evidence that American-style consumer capitalism of the early twenty-first century is incompatible with maintaining quality of life for all of us. It is generating unprecedented environmental risks while failing to advance the happiness and social well-being of Americans, Speth argues. Our obsession with consumption and GDP growth has overshot its target and now causes more harm—to environment, social fabric, and world security—than good. ⁴

God forbid we risk fire and brimstone by criticizing capitalism in its “ideal or theoretic form”. Instead:

• We must change the very nature of corporations so they become legally accountable to society at large, not just to themselves and their shareholders.
• We must challenge the current obsession with GDP growth and focus on growth in the areas that truly enhance human well-being: growth in good jobs, in the availability of health care, in education, in the deployment of green technologies, in the incomes of the poor, in security against illness and disability, in infrastructure, and more.
• We must challenge materialism and consumerism as the source of happiness and seek new values about quality of life, social solidarity, and connectedness to nature.
• We must transform the market through government action so that it works for the environment, rather than against it.
• We must transform democracy through deep political reforms that reassert popular control, encouraging locally strong, deliberative democracy and limiting corporate influence.
• We must forge a new environmental politics that recognizes links among environmentalism, social liberalism, human and civil rights, the fight against poverty, and other issues. ⁵

Granted, these are quick talking points aimed primarily at promoting a book and (presumably) providing basic information to the press. And there is (even for me) something enticing at least about the first proposal about making corporations legally accountable to society. I have no doubt that Mr. Speth has in mind something along the lines of mainstream environmental regulation, rather than — I don’t know — prohibiting profit altogether and mandating democratic workplaces, although it’s hard to say when someone actually advocates for a “zero growth” capitalism. The only other somewhat challenging phrase in this list is the call for “deep political reforms”, by which he presumably means things like capping the power of lobbyists (the institution itself is something of a travesty) and making room for environmental voter initiatives. I don’t know.

But the central theme is that we have to challenge the culture of consumerism. We need new values. We must transform the market. It is not all that different from the naive moralisms of Dr. Ikerd. This is a puzzling though not uncommon approach, and there are parts of this that make a great deal of sense. The perception of our social ills as being the result of a moral failure, or a failure to recognize value, seems immediate and commonsensical, particularly for members of a society easily fixated by personal responsibility as an explanatory device. And part of the appeal of personal responsibility and moralizing is precisely that it is individualistic: it enables the criticism of vast groups of people without specificity, it allows for the appearance of concern, outrage, and various forms of progressive posturing, while at the same avoiding change and the tremendous ill will of interests aligned against it. Which is not to say that people don’t mean well, of course; indeed “meaning well” and “doing good” is the other side of the personal responsibility escape-hatch. Within the mainstream eco-yuppie paradigm, the most you can possibly be expected to do is “right thing” in your own life. You buy your indulgences in the form of a low-carbon lifestyle and an arsenal of “eco-friendly” products, and in return you are exempt from the uncomfortable task of looking your class, your politics, and your job in the face.

As for the puzzling part: such views, however well-informed, ignore the nature of capitalism. The extraction of profit from labor and nature isn’t some accidental part of what capitalism is. It’s what makes the thing go. Similarly, growth and GDP aren’t just bells and whistles that can be removed from some stripped-down, enviro-friendly version of the beast. Growth is why people invest. Without profit or growth, there would be no capitalists. But the bourgeois apologists generally take the position that capitalism is value-neutral and entirely mutable, freely reflecting the “values” of the consumer. For them capitalism is a form of economic tool and little more. The works of the apologists attest to an essentially technocratic understanding of capitalism, which itself has no tendency toward any particular society or way of living, at least not beyond the acceptance of certain unequivocal social goods such as private property rights, free association, equality under the law, etc. The idea that we would have to significantly alter or remove capitalism itself in order to rectify its ills appears nonsensical to the apologist, who regards capitalism as nothing more than the “most efficient” way of doing anything. Capitalism is even the “most efficient” way of “fixing” capitalism. Go figure.

Habermas has a few things to say about ethics and technocracy:

Technocratic consciousness reflects not the sundering of an ethical situation but the repression of ‘ethics’ as a category of life. The common, positivist way of thinking renders inert the frame of reference of interaction in ordinary language, in which domination and ideology both arise under conditions of distorted communication and can be reflectively detected and broken down. The depoliticization of the mass of the population, which is legitimated through technocratic consciousness, is at the same time men’s self-objectification in categories equally of both purposive-rational action and adaptive behavior. The reified models of the sciences migrate into the sociocultural life-world and gain objective power over the latter’s self-understanding. The ideological nucleas of this consciousness is the elimination of the distinction between the practical and the technical. ⁶

So what we’re observing in Ikerd and Speth is a partial breakdown of this ideology. It is a breakdown in the sense that there is ultimately a recognition that the technocratic capitalism of the post-war era has failed in ways that are important enough to warrant “deep” changes in “our”⁷ social, political, and economic behavior. But it has failed in terms of destroying the environment and investing in an energy, transportation, and residential development infrastructure that is wildly unsustainable. The Cold War conviction that capitalism succeeds in delivering social goods with an adequate level of equal opportunity and fairness remains strong even in spite of its failures in regard to climate and energy.⁸ That is one important sense in which the breakdown is partial, and it is fundamentally tied to the fact that environmentalism is a bourgeois movement. ⁹

But the second and more important sense that this breakdown is only partial has to do with the fact that the cult of “corporate responsibility”, of which people like Ikerd and Speth are the most advanced spokesmen, perceives “values” in a kind of vacuum. Values have no place to go. They are not social concepts connected to specific relations of class and power — values are privatized. To think that our collective social behavior is the product of personal values is a mistake, one that obfuscates the basic structural and historical forces that constitute at work in society; indeed the very idea of society is a blanket to be thrown over the web of institutions, classes, movements, and power groups to which we actually relate and live.

In any case, you can’t say you want an end to the GDP and economic growth as we know it without challenging these fundamental institutions. Similarly you can’t say that profit is the problem yet be unwilling to challenge capitalism in its “ideal or theoretic form”. Changing our “values” or our “culture” won’t magically allow us to consume our way to sustainability. Like it or not, capitalism is about extraction and profit, and when it comes to change, the sustainability movement has to decide to either shit or get off the pot.

¹ Sustainable Capitalism: Our Best Hope for the Future.
² Ibid.
³ Wikipedia article on James Speth
⁴ Beyond Reform.
⁵ Bridge at the Edge of the World.
⁶ Jurgen Habermas, Technology and Science as “Ideology”.
⁷ Commentators on climate change often speak of it as being “our” fault, but these assertions of collective guilt are a little hard to understand given that a very small class of investors are the ones who ultimately drive the development, marketing, and production decisions that determine the way we live. When isolated individuals who are over-worked, lied to, swindled, and presented with a limited number of bad options actually end up making bad environmental decisions, what exactly are we supposed to do? Blame them in the same way we blame highly informed and highly organized institutions looking for profit? No, I didn’t think so either. Among those who like to deride those who shop at Wal-Mart, I wonder how many have mutual funds or pension plans that include Wal-Mart stock.
⁸ In this respect, there are some uncomfortable grains of truth to the common reactionary and otherwise idiotic claim that environmentalists care more about nature than their fellow human beings.
⁹ But not exclusively. Rising Tide, for example, has taken a good position against carbon offsets, the most popular technocratic answer to climate change.

I don’t think the capital social relation is idiotic or stupid exactly. (Though I do think it is counterintuitive and destructive.) It has a rationality to it, and understanding capitalism is equivalent to understanding that rationality. But to my mind there has been no comprehension of the essence of the capital social relation that was more fundamental than that provided by Karl Marx in Volume 1 of Capital. And what Marx shows there is that the rationality of capital is inherently contradictory. This contradiction is more often than not understood as the inevitability of “crisis” in capitalism. It is less often understood as the inevitability of resistance to capitalism by the working class.

The difficulty lies in understanding how something can be both contradictory and rational. We tend to think that a contradiction in something (particularly an argument) is an indication of its irrationality. But the sorts of contradictions Marx speaks of when he talks about “immanent contradiction” and “absolute contradiction” in the Contribution and in Capital are ontological contradictions, not propositional ones. The contradictions belong to things, not to theories or arguments about things. The rationality of capital does not lie in its being “valid” in the sense of an argument. That wouldn’t make any sense. Nor does it lie in the fact that is an efficient organization of production (or one that matches “nature”). The rationality of capital lies in the fact that it is a social process that behaves in accordance with an essence or a real nature. That essence consists in the imposition of the commodity-form on labor-power. It is a fusion of form (commodity-form) and content (actual labor power and techniques of production). It is the fusion of these two things that is contradictory, but this is indeed the “nature” of the capital social relation. That’s what it is at all places and times. What’s different at different places and times is the degree to which this form is being imposed (and therefore the efficiency of the theft of surplus from the workers) as well as the degree of resistance of the working class to this imposition and exploitation.

This brings me to your [Jake's] second claim: “It’s highly adaptive, it seems, absorbs what it can and squashes the rest.” It absorbs what it can and squashes resistance where it can, but it’s also important to notice that it cannot crush or co-opt all resistance, and the degree to which it is successful at doing this is not the result of the spontaneity of the capitalist class and their degree of social technology; rather, it is correlated with the degree of working class resistance to the imposition of the commodity-form on labor. Resistance to this imposition is just as essential to the capital social relation as is the imposition itself. This follows from Marx’s analysis, but it is also visible in reality at all times and all places. Resistance not only took place through the party politics of the late-19th and early-20th centuries. It took place with equal force in the space between the wars (the workers’ councils in Europe). It took place in the “developing world” since the 50s up to today. It was and is visible in the struggles of the unwaged: students, blacks, prisoners, Native Americans, women, and houseworkers. It’s still taking place in the movement in Argentina to take over factories and in Chiapas. It took place in Cuba – sometimes with the cooperation of the state, sometimes without – during the “Special Period” when workers had to come up with innovative ways to deal with the first wave of Peak Oil in the 90s. And so on.

To ignore the actual struggles by the working class produces the sorts of one-sided theories of Marxist political economists like Baran and Sweezy as well as the equally one-sided “cultural” or “hegemonic” interpretations of the Frankfurt School. We want to reject theories which treat capitalism as something “irrational” just as much as we want to reject theories that treat it as something “hegemonic” which co-opts all resistance. What we want instead are theoretically grounded (”scientific”), strategic accounts of capitalism, beginning not just from what the capitalist class is doing but also taking into account the new and novel forms of resistance to the imposition of the commodity-form on labor. We want to take stock not only of the enemy, but of our own forces on the battlefield as well. We need to understand where we are, because that is in large part determining what they are doing.

In capitalist societies, the market is not an opportunity to be taken advantage of, it is an imperative. Its logic structures and impels society, and its fundamental tenets, though conventional, come to appear as expressions of natural laws. But capitalism itself is relatively novel: its genesis is most often traced to 17th century England, from where it has spread, over the past four centuries, to encompass the entire globe. Against the view that capitalism’s spread was inevitable, or even that it is latent in medieval commercial or traditional urban cultures, it can be argued that capitalist development amounts to a historical accident, an unintended consequence of pre-capitalist England’s internal arrangement. The argument that capitalism should not be conflated with commerce or even bourgeois benefits immensely from the juxtaposition of the case of England and the case of France. The nascent capitalist dynamics of English society reveal themselves to be quite different from those of absolutist France, and the archetypal “Bourgeois Revolution,” the French, shows itself to not be operating according to capitalist logic as those of its own absolutist way of doing things.

To see capitalism’s historical specificity and contingency, it helps to bear in mind its defining characteristics. Capitalist societies open up a sphere of dominance, the economic, that in other societies was more or less subsumed into other forms of power. So, while it is never the case that market forces can function without the threat of political or military coercion, with capitalism they obtain an autonomy that previously they lacked. People are dominated in capitalism not by the direct (at least, not the continually direct) application of force but by economic convention; the surplus they produce is not extorted from them by the King’s armed taxmen but in the fact that some have legal right to social product and others have legal right to sell their labor. Even political and military coercion come to be seen in terms of market logic: if you do not pay your rent, you will be forcefully evicted; in order to earn a good wage you must have a competitive skill set; “supply and demand” are used to explain the loss of one’s livelihood. In this way, the political maneuverings, legal decisions, and nepotism of power-jockeying take on an impersonal aura, as if society itself were subject to not the personal whims of a despot and his troops, but the objective workings of a natural law. People living under such conditions internalize the structuring logic of society in such a way as to maintain their livelihood: if you are the owner of a small business, you keep abreast of developments in your sector, lest you fall behind; if you are a hedge fund manager you look for the highest return on your investments; if you are a laborer, you attempt to acquire a set of marketable skills. These things are not so much free choices as what you must do if you are to survive: they are imperatives, and they follow from the “laws” of economics. The purpose of all this is, of course, the accumulation of wealth via sale of commodities within a single market frame.

This is in sharp contrast to all societies that are not dominated by the market. Comparing this picture of capitalism with pre-revolutionary France, we see that each operated according to different internal dynamics. In capitalism, the route to wealth was through economic means, through ever more efficient production; in absolutist France, the quickest road to wealth was through state office. Because of this, the French bourgeoisie came to loggerheads with the aristocracy, who enjoyed privileged access to wealth generating offices and special exemptions from taxes due to title. The bourgeois class revolted from these unequal social relations and sought to put the Third Estate on equal footing. Their ideological products reflect the internal dynamics in which they worked: the great treatises on private property do not come from France but from England; the French Revolution gives us the sweeping proclamations of Universalism, of equality of access, citizenship, the like against the entrenched privileges granted to the aristocracy because of particular birth, kinship, estate, or class.

As should be clear from this, the wealth forming social relations of absolutist France were not economic, did not work according to the laws of the market. They were constituted according to extraeconomic power: via political, military, royal, or religious rights or privileges. And the struggle for power, between the various classes, focused on these these extraeconomic privileges.

The case of precapitalist Britain is the same as in France: the respective classes of British society struggled to reproduce themselves according to their historical positions. Unlike France’s, however, Britain’s aristocracy did not weild a vast array of extraeconomic means of extraction; nor were they vying with the central monarchy for extraeconomic power. What they did have, and what their French counterparts lacked, was a highly consolidated grasp of land rights. Even before the enclosures, British landlords owned a far larger percentage of land than did smallholders and peasants. Gradually, the landlords shifted the terms of their leases from traditional amounts to those determined by market conditions. Tenants, in effect, had to bid for their leases. This introduced a market compulsion to the subsistence of the vast majority of the population. Since tenants had to compete, in economic terms, with their fellows to lease a piece of land from landlords, they had to adopt whatever techniques had been discovered to squeeze a bit more of a yield from the earth. These techniques originally may have been understood as innovations; yet due to the nature of market, they became imperatives: those tenants who were unable or unwilling to adopt them would lose their leases, as others would be willing or able to extract more from the earth and so pay more for the right to farm it. The extraeconomic domination that followed this initial arrangement, such as the enclosures, was carried out under the banner of market relations: the land could be more productively used according to market relations, or so the argument went, so it was in society’s (that is, the landlords’ and their capitalist tenants’) interest to close off traditional rights and subject the land wholly to market imperatives. From the initial severing of direct access of the means of subsistence and its mediation with market relations — in the countryside, in agrarian social relations — the course of capitalist development progressed. Unsuccessful capitalist tenants and dispossessed peasants first became laborers on farms, then migrated to the cities, where they became a supply of labor for newly functioning factories. But this movement was from the countryside, not the urban centers. And it has its genesis in the legal structures and social relations that determine how people are related to their most basic subsistence needs.

Both the medievals and the ancients lacked a concept of intellectual property, which developed from the Renaissance recognition of originality and artistic genius — a recognition that was not merely the result of technical developments within the arts, but that was made possible by concentrations of private wealth (for it was the proto-bourgeois humanists who underwrote the individuality of the artists) and the disintegration of the feudal conditions of production elsewhere in cultural and economic life.

The auction, which now occupies a central role in the art industry, gained popularity as an instrument of sale when it was used to liquidate art objects after the French Revolution (the auction’s other favorite commodity being slaves), although its development was roughly parallel with the Renaissance art trade itself, with the first public art auctions appearing in Paris and London during the middle of the 16th century.³

The second institution central to the modern art trade, the public art gallery, emerged several decades before the Revolution,⁴ and its predecessor — the private collection — had existed since the late feudal period. The patrimonial aspect of the private collection became, as with many things, nationalized, with the centralized state bureaucracy taking the place of the merchant patron and feudal lord.

The development (or re-development, in the case of the auction, which was used heavily by the Romans to liquidate plunder) of these financial instruments, in addition to the extension of property rights to works of genius, ran parallel with the development of capitalism, and was not at any point independent from it. That is to say, the world of modern art was never colonized by a mature system of capital, but developed — sometimes precociously — along side it.

And so it is no surprise to find that the art industry today seems to be just as sophisticated as any other sector of modern capital. The system of commercial art galleries, which mediate (along with the auction houses) many of the transactions within the contemporary art world, work within complex web of art investors, dealers, and even art hedge funds.⁵ Art has literally become a commodity, with some art dealers and galleries catering almost exclusively to the investor’s eye to appreciation value in both antiquities and the products of more contemporary luminaries.

Beyond accepting this status quo uncritically, there are two options available given the status of art and revolution in the current age.

The first is to accept that the means of artistic production are themselves intimately and necessarily bound with the conditions of the present, and (following Benjamin and Adorno) to find transgression in the tensions held within the inherent non-identity⁶ of artworks themselves. As socio-historical conditions change, the tensions held in the focus of particular works of art dissolve in relation to their stance toward the present, or they take on new roles wholly unintended by their makers. But with the tensions in focus, the inherent non-identity of the artwork stands in opposition to the social concepts of a given historical moment, both in spite and because of the productive relations that underpin it. It does not fundamentally matter whether or not an artwork is traded as a commodity; insofar as it still functions as art, its capacity to disclose those tensions will remain.

The second is to see art as a vanguard form that must be liberated from the present conditions of production. This would include various attempts to create art, or make art out of, non-sanctioned sectors of social activity, as was envisioned by the Situationists some decades ago, much as it has been again amongst some anarchists.⁷ This would be an aesthetics of praxis, “lived” art, and radical play.

As appealing as it might seem, there is a kind of circularity to this latter option, one which seems to open the way to both bad art and bad politics. On the one hand, it seems problematic to say that it’s possible to liberate the means of artistic production without liberating the means of production in toto, given that the social availability of food, housing, healthcare, education, and everything else is mediated by relations to capital. On the other hand, there’s something politically irrelevant to working from within the fissures of the current system or within zones of temporary autonomy. It would be like saying that squatting is a realistic solution the problem of affordable housing, or that dumpster diving is a socially viable alternative to high food prices. And then there is the question of the relationship between the means of artistic production and the truth-content of the artwork. What is the truth-content of artwork generated from anomalous conditions of production? Is it any more or less likely to disclose the tensions and contradictions of its moment as that which is produced within the commodity form itself?

¹The Sociology of Art
Arnold Hauser, K.J. Northcott. 1974.

²Ibid.

³Pedigree and Panache, Shireen Huda. 2008

⁴Inventing the Louvre, Andrew McClellan. 1999.

⁵ Art and the Deal, New York Post. 2008.

⁶ “Non-identity” in this case refers to the failure of concepts to fully identify with their content. Art is paradigmatic of non-identity in at least two important ways. Adorno once said that “art can not fullful its concept”, meaning that as a discipline or practice, art is always redefining what it is, is always transgressing the concept. In the second sense, artworks — their truth content being held in semblance — are themselves displays of the non-identical.

⁷ See Hakim Bey’s Immediatism or Temporary Autonomous Zone.

The conflation of capitalism with urban markets, trade, and commerce, and capitalists with burghers, we saw, springs from an assumption that capitalist social relations are somehow natural — they are outside of history, not contingent, and, unless there are sufficient restraints, would be the default manner of organizing any society any where. This assumption, besides being an irrational, faith-inflected posit of a natural law that is nowhere and everywhere at once, is glaringly contradicted by the historical record. Our Burghers of Calais were not proto-capitalists; they were were something else entirely. Their particular circumstance and the way they oriented themselves to the world, their fellows, and their profession did not differ from capitalism only in scale, but in quality.

Capitalism properly described is a way of organizing society according to the logic of the market. The market’s logic, not the logic of discrete markets, where a merchant can profit by buying cheap in one region and selling dear in another, drives the motor of capitalist society. This sort of market driven society is , in and of itself, entirely novel in history: it represents a moment when economic power comes into its own and achieves a freedom, relative to previous social patterns, from military, political, mercantile, dynastical, religious, and other forms of power. Before capitalism, economic power was united with power’s other forms, and wealth would be acquired and reproduced according to their respective logics: whether by militarist expansion, feudal domination, State office, or the like. Not so with capitalism: with it wealth is to be had by working in the market–by outcompeting competitors according to codified sets of rules that encourage a very specific social mode of behavior.

This becomes clearer by contrasting the logic of one market with the logic of many markets. The former is the method of capitalist society; the latter that of commercial, or mercantalist, society. Where capitalism seeks to pierce barriers to trade, absorb all things into one market, and equate them with a unified process of evaluation–where you will pay the same for box of pens in one town as you will in another–commercial society sees no basic need to do this, and in fact profits from a disjointed group of markets. Capitalists earn wealth by increasing productivity, by getting more grain from their acre or more pens from their factory; merchants earn theirs by achieving a monopoly control of a given market or commodity, or by having a corner on one market and selling dear what they acquire cheap. Capitalists become wealthy through production, mercantalists through circulation.

It becomes clear, then, that the consuming base of society in capitalism will be broader than that of a mercantalist society. As capitalists are always striving to increase production a bit more, to continue to edge out their opponents, they need to have their increased output purchased. Merchants in commercial society are not subject, or are not subject to so great a degree, to this concern. If they control the only shipping route that is bringing cinnamon into Europe, they will make their profit whether the total amount of production increases or not; in fact, it may be in the interest of a mercantile economy to restrict production, or at least the availability of produced goods. Hence the consuming base of mercantile societies was very limited, the aristocracy, nobility, and other elites, not the peasant or dispossessed masses. From this it is easy to see why capitalism seeks to produce a vast array of cheap consumer goods, while commercial societies tended to accrue their wealth through the limited trade of luxury items.

The most significant difference between the economic logic of capitalism and that of previous society, though, lies in the autonomy of the market. In capitalism, the market not only represents an opportunity: it represents an imperative. If a capitalist enterprise does not remain economically viable it will fail, and its owner will go bankrupt, lose his property, go under. This, again, stands in stark contrast to broader mercantalist societies. Where capitalist wealth is earned by economic means — by increased productivity — merchantile wealth is earned through privileges sustained by military or political power. If a merchant-society could not maintain its monopoly or keep its corner on the market, then its economy would collapse. Capitalist-society may need a certain amount of political and military coercion to keep on track, but the ultimate determining factor of its economy is neither; what maintains its wealth is the economy’s logic itself. And so economic imperatives become the motive anxiety of capitalist society as a whole. The non-capitalist world had no such economic worries: they struggled to maintain military or political dominance, certainly, but economic imperatives, the bottom line, and the drive to increase yields were not the central tenets of this effort.

Reading about capitalism fills me with the same incredulity at the fact that it continues to exist.

Think about what the capital power relation consists in. One class—the capitalist class—forces the bulk of the population to sell its labor power in order to survive and enjoy any access to the fruits of social wealth. People are forced to work to create social wealth. That social wealth is stolen from them, and then it is sold back to them as though it is the capitalist’s private wealth.

Pitched this way, capitalism is the world’s most elaborate confidence game. The first thing you do is force people to work. That’s nothing new. As a form of social control, forced work has existed in many societies. But no slave or serf is under the illusion that anything he is doing is forced work. The lord comes down from his castle, he takes a portion of what you’ve produced, and he lets you keep some for yourself.

Capital isn’t about half-measures, though. The capitalist takes the whole thing. Unless you’re stealing from the office or warehouse—which people spontaneously do as a primitive form of class struggle—you don’t keep anything you make. Instead you get a wage. You get a paycheck at the end of the week or every two weeks. And then you take that paycheck to the store and you decide what you’re going to spend the money on. For the vast majority of working families in the United States, what you spend the money on is determined in large part on what you can spend the money on. That is determined by the price of commodities, which in large part is determined by mere chance.

It’s sort of crazy when you think about it. The capitalist steals what you make. That’s not crazy, that’s just violent. But then he tells you he’s giving you the privilege of getting back some of what he and the other capitalists have stolen with credits earned through the labor which the capitalist forced you to do in the first place. It’s like winning the right to buy back your stolen goods from the trunk of a car on the side of the street two weeks after your house was robbed. If that happened, you wouldn’t feel privileged to buy your stuff back. You’d be pissed and call the police. But no one polices the capitalists but themselves.

You might wonder why people would ever stand for something so simultaneously unnatural and idiotic. The truth is that they don’t, and they never have. In any social organism where one class pumps surplus out of another class (i.e., steals what they make), the overriding and perennial problem is to maintain control over the class from which the surplus labor is pumped. In a sense, that’s exactly what the history of any class society is about: the changes undergone so that one class can continue to pump surplus out of another class. But the history of all societies is equally the history of resistance to this imposition of work and the various measures the ruling classes take to adjust to that resistance and keep the extraction going. When the extracting class runs out of options to meet these challenges, or when the challenges become so formidable they overwhelm all attempts to contain the contradictions, the pump stops moving surplus from one side to the other, and the history of that social organism is at an end.

Capitalism’s difficulty in this sense is twofold. Not only does it have to keep the condition of forced work in place, but it also has to keep the illusion going that it is somehow doing people a favor by allowing them access to anything less than 100% of the vast social wealth produced by our labor and ingenuity. In some places in the world, so much of the surplus is stolen from the workers and so little is given back that people are starving. Their access to social wealth is almost nonexistent. This is a necessary consequence of having the distribution of the surplus determined by the arbitrary averages of the price form. It is rife with contradiction, and we’ll quickly see the point where the contradiction explodes the system—just as it has done in every other form of slavery known to man.

Young people nowadays who never saw the upheavals of the 60s or 70s think the earth is more likely to be hit by a comet which eradicates all life than that capitalism will end. As if it will take a miracle for enough people to wake up and put a stop to this. In fact the real miracle is that this idiotic, counterintuitive, contradictory system of bald theft and violence continues at all.

It’s the capitalist who is the sickest man in the world, and the slightest breeze coming for him will be a hurricane.