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Open Access
A Brief History of the Buy-to-Build Indicator
(2021) Fix, Blair
Let’s talk about Nitzan and Bichler’s ‘buy-to-build’ indicator. If you’re not familiar, this is an indicator that quantifies the portion of ‘investment’ spent buying other corporations....
Open Access
A Hierarchy Model of Income Distribution
(2018) Fix, Blair
Based on worldly experience, most people would agree that firms are hierarchically organized, and that pay tends to increase as one moves up the hierarchy. But how this hierarchical structure affects income distribution has not been widely studied. To remedy this situation, this paper presents a new model of income distribution that explores the effects of social hierarchy. This ‘hierarchy model’ takes the limited available evidence on the structure of firm hierarchies and generalizes it to create a large-scale simulation of the hierarchical structure of the United States economy. Using this model, I conduct the first quantitative investigation of hierarchy’s effect on income distribution. I find that hierarchy plays a dominant role in shaping the tail of US income distribution. The model suggests that hierarchy is responsible for generating the power-law scaling of top incomes. Moreover, I find that hierarchy can be used to unify the study of personal and functional income distribution, as well as to understand historical trends in income inequality.
Open Access
A Power Theory of Personal Income Distribution - Video and Working Paper
(2017) Fix, Blair
Due in no small part to the work of Thomas Piketty, the empirical study of income inequality has flourished in the last decade. But this plethora of new data has not led to a corresponding theoretical revolution. Why? The problem, I believe, is an unwillingness to question and test the basic assumptions on which current theory rests. Most theories of personal income distribution are deeply wedded to the assumption that income is proportional to productivity. However, this approach has a simple, but little discussed problem: income is distributed far more unequally than documented differentials in human labor productivity. But if not productivity, then what explains income? I propose that income is explained most strongly by social power, as manifested by one’s rank in an institutional hierarchy. Using a novel array of evidence, I show (for the first time) that there is a strong quantitative relation between income and hierarchical power. Moreover, I show that hierarchical power affects income more strongly than any other factor. I conclude that this is evidence for a power theory of personal income distribution. Refreshment will be served and everyone is welcome. WHERE: Verney Room, South 674 Ross Building, Keele Campus, York University WHEN: 2:30 - 5:30 pm, Tuesday, 17 October 2017
Open Access
A Reading List for Economic Heretics
(2019) Fix, Blair
FROM THE REVIEW: Few books offer both a compelling critique of mainstream economics and a bold alternative vision for political economy. But in Capital as Power, Jonathan Nitzan and Shimshon Bichler have the audacity to do just that [...] Capital as Power represents everything that I look for in a paradigm-shifting work of science. It presents a compelling critique of existing orthodoxies, offers an alternative approach to political economy, and grounds this approach in innovative empirical research. Read Capital as Power and have your worldview forever changed.
Open Access
An Evolutionary Theory of Resource Distribution
(2019) Fix, Blair
This paper explores how the evolution of human sociality can help us understand how we distribute resources. Using ideas from sociobiology, I argue that resource distribution is marked by a tension between two levels of natural selection. At the group level, selfless behavior is advantageous. But at the individual level, selfish behavior is advantageous. I explore how this tension affects the distribution of resources.
Open Access
Call for Papers: Energy, Institutions and Society
(2019) Fix, Blair
I’ve been asked to create panels for the upcoming International Conference on Thermodynamics 2.0. The conference aims to bring natural and social sciences closer. It will take place at Worcester Polytechnic Institute, Massachusetts, USA from June 22-24, 2020. I’m calling the panel(s) Energy, Institutions and Society. I’m looking for research that connects energy to the structure of human society. Both theoretical and empirical contributions are welcome. If you are interested, please send a title and abstract to me at blairfix@gmail.com. The deadline is February 1, 2020.
Open Access
Can the World Get Along Without Natural Resources?
(2020) Fix, Blair
In the distant future, aliens come to Earth. They ﬁnd a planet devoid of life. Looking closer, the aliens see that life on Earth was once abundant, but was wiped out by a mass extinction. Curiously, this event was driven not by geological disaster, but by one of the extinct species itself. In an orgy of consumption, an odd little animal put the planet under enough stress to drive itself — and the rest of life — extinct. Then comes a startling discovering. Preserved in the sediment lies a document written by a member of the doomed species. What secrets does it contain? The aliens work for years to translate it, hoping that it offers a clue about what drove the species to overconsume. And indeed it does. The document heralds a remarkable delusion: “The world can, in effect, get along without natural resources.” What a naive animal, the aliens conclude. While sucking the planet dry, the animal proclaimed its independence from natural resources. No wonder it went extinct. In this article, I discuss how economists reached such bizarre conclusions. And I offer some thoughts about the role that resources actually play in sustaining human societies.
Open Access
Capitalist Income and Hierarchical Power: A Gradient Hypothesis
(2018) Fix, Blair
This paper offers a new approach to the study of capitalist income. Building on the ‘capital as power’ framework, I propose that capitalists earn their income not from any productive asset, but from the legal right to command a corporate hierarchy. In short, I hypothesize that capitalist income stems from hierarchical power. Based on this thinking, I hypothesize that the capitalist fraction of an individual’s income is a gradient function of hierarchical power (which I define as the number of subordinates under one’s control). Using data from US CEOs, I find evidence that this is true. Furthermore, a hierarchical model of the United States that generalizes this data accurately reproduces many aspects of the US distribution of capitalist income, including the relation between income size and capitalist income fraction. This evidence suggests that the ownership structure of US society is closely linked to the hierarchical structure of firms. This has important implications for the study of income distribution.
Open Access
Das Ritual der Kapitalisierung (The Ritual of Capitalization)
(2022) Fix, Blair
Wenn man genau hinhört, kann man zuhören, wie Jeff Bezos immer reicher wird. Da ist es schon wieder, dieses Geräusch. Eine weitere Milliarde in Bezos‘ Kassen. Lassen Sie uns diesen Klang des Geldes mit ein paar Zahlen belegen. Seit 2017 ist das Nettovermögen von Bezos um etwa 4 Millionen Dollar pro Stunde gewachsen – das ist etwa das 500.000-fache des US-Mindestlohns. In normalen Zeiten wäre diese Anhäufung von Vermögen absurd. Heute, da viele Arbeitnehmer aufgrund einer schweren Pandemie ihre Arbeit verlieren, ist sie obszön. Bezos steht zwar für den Gipfel des kapitalistischen Exzesses, aber sein Reichtum ist Teil einer längeren Geschichte. In den letzten vier Jahrzehnten sind die Aktienkurse in die Höhe geschossen, während die Löhne stagnierten. Was hat dieser Trend zu bedeuten? In diesem Beitrag möchte ich dem Aktienmarkt auf den Grund gehen. Doch zunächst werde ich erklären, was der Aktienmarkt nicht ist: Er ist kein Indikator für die Produktionskapazität. Er ist auch kein „fiktives Kapital“. Was ist er dann? Die Börse, so argumentieren Jonathan Nitzan und Shimshon Bichler, ist die Art und Weise, wie Kapitalisten ihre Macht quantifizieren. Um zu verstehen, wovon Nitzan und Bichler sprechen, werden wir das Ritual entlarven, das unsere Gesellschaftsordnung bestimmt – das Ritual der Kapitalisierung. Lesen Sie weiter, um die rote Pille zu schlucken und den Schleier der kapitalistischen Ideologie zu lüften.
Open Access
Dematerialization Through Services: Evaluating the Evidence
(2019) Fix, Blair
Dematerialization through services is a popular proposal for reducing environmental impact. The idea is that by shifting from the production of goods to the provision of services, a society can reduce its material demands. But do societies with a larger service sector actually dematerialize? I test the ‘dematerialization through services’ hypothesis with a focus on fossil fuel consumption and carbon emissions—the primary drivers of climate change. I find no evidence that a service transition leads to carbon dematerialization. Instead, a larger service sector is associated with greater use of fossil fuels and greater carbon emissions per person. This suggests that 'dematerialization through services’ is not a valid sustainability policy.
Open Access
Die Wahrheit über Inflation (The Truth About Inflation)
(2022) Fix, Blair
Milton Friedman ist seit mehr als einem Jahrzehnt tot, doch sein Denken wirkt noch immer nach. In den 1960er Jahren erklärte Friedman einmal, dass Inflation immer und überall ein monetäres Phänomen sei — ein Problem der zu hohen Geldmenge. Seither kann man sich darauf verlassen, dass, wann immer die Inflation steigt, jemand das alte Diktum von Friedman bemüht und den Staat beschuldigt, zu viel Geld zu drucken. Wenn es nur so einfach wäre. Wie vieles in der Wirtschaftstheorie erscheint auch Friedmans Diktum auf den ersten Blick plausibel. Inflation steht für einen allgemeinen Anstieg der Preise. Und da Preise nichts anderes sind als der Austausch von Geld, bedeutet mehr zirkulierendes Geld, dass die Preise steigen müssen. Folglich ist Inflation „immer und überall ein monetäres Phänomen“. Einer näheren Betrachtung hält Friedmans Diktum aber nicht stand. Das Problem besteht darin, dass die Inflation als ein gleichmäßiger Preisanstieg verstanden wird. Das ist theoretisch bequem, aber empirisch falsch. In der realen Welt weicht die Inflation nämlich stark voneinander ab. Während der Preis für Äpfel um 5 % steigt, kann der Preis für Autos um 50 % steigen und der Preis für Kleidung um 20 % fallen. Um zu verstehen wie Inflation tatsächlich funktioniert, dürfen wir uns nicht auf Lehrbücher aus den Wirtschaftswissenschaften verlassen, sondern müssen auf reale Daten schauen. Das hat der Politologe Jonathan Nitzan während seiner Doktorarbeit in den frühen 1990er Jahren getan. Seine Arbeit gipfelte in einer Dissertation mit dem Titel »Inflation As Restructuring«. In der realen Welt, so stellte Nitzan fest, ist die Preisentwicklung immer „differenziell“, d. h. es gibt Gewinner und Verlierer. Daraus folgt, dass Inflation kein rein „monetäres Phänomen“ ist, wie Milton Friedman behauptete. Inflation strukturiert die soziale Ordnung um. Heute, da die Inflationsängste zurückkehren und Friedmans Diktum wiederbelebt wird, sollten wir uns an die realen Fakten halten.
Open Access
Do High Interest Rates Reduce Inflation? A Test of Monetary Faith
(2023) Fix, Blair
Whenever inflation rears its head, the call soon comes to raise interest rates. The rationale is simple. Higher interest rates put a damper on the supply of money. And this monetary clamp slows inflation. It’s so intuitive that it must be true. Or is it? As the Reverend Brooke observes, it takes a person of true conviction to ignore apparent contradictions. As such, this post is designed to test your monetary faith. According to monetary orthodoxy, higher interest rates reduce inflation. Yet the evidence demonstrates that the opposite is true: higher interest rates are associated with higher inflation. With this evidence in mind, I invite you to read on. Put your monetary faith to the fire and see if it can survive.
Open Access
Does Hierarchy Drive Income Inequality? Liberal Arts & Professional Studies Postcoctoral Fellowship Proposal
(2021) Fix, Blair
The York Faculty of Liberal Arts & Professional Studies (LA&PS) awards three postdoctoral fellowships annually, of which no more than one can go to a former York PhD. For 2021-2022, this fellowship went to former York PhD Dr. Blair Fix. The award is for one year, with a possible one-year extension. The project’s advisor is Jonathan Nitzan. PROJECT SYNOPSIS Income inequality has, over the last 4 decades, increased dramatically in the United States and Canada. It is a concerning trend. Not only is inequality objectionable ethically, it also seems to be corrosive to human welfare. As inequality grows, human well-being worsens. But while the extent and effects of inequality are well-studied, the cause(s) of growing inequality remains poorly understood. My research attempts to address this deficiency. I propose that hierarchy — the rank ordering of individuals within a chain of command — is central to how humans distribute resources. The idea is that individuals within a hierarchy tend to use their power to accumulate resources. The result is that income tends to grow with hierarchical rank. I have assembled a variety of evidence that conﬁrms (at static points in time) this hierarchy-income hypothesis. My post-doctoral research will attempt to extend the evidence to understand how hierarchy relates to the growth of inequality. I propose that the recent growth of top incomes (in the United States and Canada) has been caused by a hierarchical redistribution of income. The idea is that income has been taken from those at the bottom of the corporate hierarchy and given to those at the top. To investigate this hypothesis, I will extend a large-scale numerical model developed during my PhD studies. This model is the ﬁrst (to my knowledge) to rigorously connect the distribution of income at the macro-level to the ﬁne-scale, hierarchical structure of ﬁrms. I have previously found that this model accurately predicts key features of the US distribution of income. In my post-doctoral research, I will extend the model to study income redistribution — changes in income distribution over time. By studying how growing income inequality (in the US and Canada) relates to the hierarchical structure within ﬁrms, I hope to illuminate new ways to combat inequality.
Open Access
Ecological Limits and Hierarchical Power
(2019) Fix, Blair; Bichler, Shimshon; Nitzan, Jonathan
Nowadays, it is commonplace to claim that the economy overuses our limited material and energy resources and that this overuse threatens both human society and the biosphere. Other than anti-science cranks, the only ones who seem to deny this claim are mainstream economists. In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological problems lies not in the ‘economy’, but in the hierarchical power structure of capitalism.
Open Access
Ecological Limits and Hierarchical Power
(2019) Fix, Blair; Bichler, Shimshon; Nitzan, Jonathan
Nowadays, it is commonplace to claim that the economy overuses our limited material and energy resources and that this overuse threatens both human society and the biosphere. Other than anti-science cranks, the only ones who seem to deny this claim are mainstream economists. In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological problems lies not in the ‘economy’, but in the hierarchical power structure of capitalism.
Open Access
Ecological Limits and Hierarchical Power
(2019) Fix, Blair; Bichler, Shimshon; Nitzan, Jonathan
Nowadays, it is commonplace to claim that the economy overuses our limited material and energy resources and that this overuse threatens both human society and the biosphere. Other than anti-science cranks, the only ones who seem to deny this claim are mainstream economists. In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological problems lies not in the ‘economy’, but in the hierarchical power structure of capitalism.
Open Access
Economic Development and the Death of the Free Market
(2020) Fix, Blair
Free markets are, according to neoclassical economic theory, the most efﬁcient way of organizing human activity. The claim is that individuals can beneﬁt society by acting only in their self interest. In contrast, the evolutionary theory of multilevel selection proposes that groups must suppress the self interest of individuals. They often do so, the evidence suggests, by using hierarchical organization. To test these conﬂicting theories, I investigate how the ‘degree of hierarchy’ in societies changes with industrial development. I ﬁnd that as energy use increases, governments tend to get larger and the relative number of managers tends to grow. Using a numerical model, I infer from this evidence that societies tend to become more hierarchical as energy use grows. This result is inconsistent with the neoclassical theory that individual self-interest is what beneﬁts society. But it is consistent with the theory of multilevel selection, in which groups suppress the self-interest of their members.
Open Access
Economic Development and the Death of the Free Market
(2021) Fix, Blair
According to neoclassical economics, the most efficient way to organize human activity is to use the free market. By stoking self interest, the theory claims, individuals can benefit society. This idea, however, conflicts with the evolutionary theory of multilevel selection, which proposes that rather than stoke individual self interest, successful groups must suppress it. Which theory better describes how human societies develop? I seek to answer this question by studying the opposite of the market: namely hierarchy. I find evidence that as human societies develop, they turn increasingly to hierarchical organization. Yet they do so, paradoxically, at the same time that the language of free markets becomes more common, and culture becomes more individualistic. This evidence, I argue, contradicts free-market theory, but only if we treat it as a scientific doctrine. If instead we treat free-market theory as an ideology, the pieces come together. Free-market thinking, I speculate, may stoke the formation of hierarchy by cloaking power in the language of ‘freedom’.
Open Access
Economic Growth as a Power Process -- Video
(2015) Fix, Blair
Is economic growth a miracle of the free market? According to mainstream theory, growth is best ensured through conditions of ‘perfect competition’. However, economic growth is tightly correlated with the concentration of power in the hands of large corporations. Why? The capital as power framework provides potential answers that turn mainstream theory on its head: growth seems to be intimately related to the formation of hierarchy. *** Blair Fix is a PhD student at the Faculty of Environmental Studies, York University (blairfix@gmail.com) This presentation is the second in the Second Speaker Series on the Capitalist Mode of Power, organized by capitalaspower.com and sponsored by the York Department of Political Science and the Graduate Programme in Social and Political Thought. Refreshments will be served and all are welcome. WHEN: Tuesday, October 27, 2015, 3:00-5:00 pm WHERE: Verney Room, 674 South Ross, Keele Campus of York University
Open Access
Energy and Institution Size
(2017) Fix, Blair
Why do institutions grow? Despite nearly a century of scientific effort, there remains little consensus on this topic. This paper offers a new approach that focuses on energy consumption. A systematic relation exists between institution size and energy consumption per capita: as energy consumption increases, institutions become larger. I hypothesize that this relation results from the interplay between technological scale and human biological limitations. I also show how a simple stochastic model can be used to link energy consumption with firm dynamics.