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Open Access
Making America Great Again, 2024
(2024) Bichler, Shimshon; Nitzan, Jonathan
In 2019, we published a RWER paper assessing Trump’s promise to ‘Make America Great Again’. Here are updates of two key charts from this paper.
Open Access
הדרך לעזה: על משטרי הכוח וכנסיות האל העליון היחיד (The Road to Gaza: On Modes of Power and Supreme-God Churches)
(2024) Nitzan, Jonathan; Bichler, Shimshon
מלחמת הקודש המתנהלת בין המיליציות הרבניות לבין המיליציות האיסלמיות הינה מסוג חדש. אבל הדרך למלחמה בעזה נסללה עוד לפני כששת אלפים שנה, בעת שקמו לראשונה משטרי המלוכה-כהונה במסופוטמיה. אוליגרכיות אלה היו הראשונות שיצקו תשלובת חזקה של מלך עריץ בארמון וכוהני אל-עליון במקדש. ילידי המזרח התיכון היו הראשונים בהיסטוריה האנושית שזכו בכבוד להתקיים כנתינים כנועים במשטרי המלוכה-כהונה. אין פלא אפוא שמוצאן של שלוש כנסיות האל העליון היחיד – הכנסייה הרבנית, הנוצרית והאיסלמית – היה באזור זה. ככל שאופי-הכוח המדיני התמסד בקיסרויות המאוחרות יותר, באלף הראשון להולדת האל ישו – בביזנץ, באירופה ובמזרח התיכון – כך עלה והתמסד פולחן האל הריכוזי היחיד ונציגו המלך הארצי שכונה בשמות שונים (מלך, קיסר, צאר, ח'ליף, סולטן ועוד). המשטר הקפיטליסטי במאה ה-21 הוא בינתיים האחרון במשטרי הכוח שנכפו על החברה האנושית. בראשית דרכו, המיר הקפיטליזם את המשטר הישן של מלוכה-כהונה בדגם חדש של מדינה לאומית ("של כל אזרחיה"). הנתינים הכנועים זקפו עתה גבם והפכו לאזרחים חופשיים. הם החליפו את שכירי החרב המלוכנים כחיילים בחינם במטחנות הבשר של צבאות העם ולחמו במלחמות העולם של האימפריות החדשות. ההון הפך לאל הגדול במקומם של יהוה-ישו-אללה, אשר לא התאימו עוד ליחסי השליטה החדשים. את מקומם של כוהני הכנסייה הישנים ירשו כוהני האקדמיה וכנסיות הרציונליות בשירות שליטי ההון, ופולחן הקפיטליזציה הפך לאבן הכעבה של המאמינים החדשים. אלא שמאז שנות השמונים של המאה ה-20, הלך וגדל הקיטוב בין קבוצות ההון הדומיננטי לבין אנשי התחתית המתרבים ושכבות הביניים המצטמקות. המדינה הלאומית נמצאת מאז בתהליך פירוק ובמקומה צומחת מדינת ההון האוליגרכית. יחסי השליטה החדשים מבוססים על פולחני הניאו-ליברליזם והפוסטיזם, ומנגד על כנסיות אל עליון יחיד הישנות המעוצבות בלבוש חדש. מכאן מתחילות "מלחמות הדת" החדשות המנוהלות ברחבי העולם על ידי מיליציות בחסות ובמימון שליטי ההון הדומיננטי. בספרים קודמים עסקנו בתהליך המרכזי של הקפיטליזם העולמי, שהוא גם המנוע העיקרי המפעיל את המלחמות המחזוריות במזרח התיכון: רווחי קבוצות ההון הדומיננטיות. בעבר התמקדנו ברווחים הדיפרנציאליים של קואליציית הנפט-נשק ובעיקר בירידות המחזוריות ברווחים אלה המעוררות את המלחמות. ספר זה מדגיש את הצלע השלישית במשולש התאגידי-מדיני החבויה בתוככי אופי הכוח הקפיטליסטי ומלחמותיו: כנסיות האל העליון היחיד. כותבי הספר, יהונתן ניצן ושמשון ביכלר, הם מרצים לכלכלה-פוליטית באוניברסיטאות ובמכללות בקנדה ובישראל. *** The book is available for purchase on Amazon and in independent Israeli bookstores.
Open Access
30 Years to the AIC. A Speech at Beit Sahur
(2013) Bichler, Shimshon
The following is the text of a presentation delivered by Dr. Shimshon Bichler at the 30-year celebration of the Alternative Information Center (AIC), on October 5, 2013. Dr. Bichler is a political economist and veteran member of the AIC Board of Directors.
Open Access
The Road to Gaza, Part II: The Capitalization of Everything
(2024) Bichler, Shimshon; Nitzan, Jonathan
Our recent article on ‘The Road to Gaza’ examined the history of the three supreme-God churches and the growing role of their militias in armed conflicts and wars around the world. The present paper situates these militia wars in the broader vista of the capitalist mode of power. Focusing specifically on the Middle East, we show the impact these militia wars have on relative oil prices and differential oil profits and explain how the wars themselves, those who stir them and the subjects that fight them all get discounted into capitalized power.
Open Access
The Road to Gaza
(2024) Bichler, Shimshon; Nitzan, Jonathan
The war that started in 2023 between Hamas and Israel is driven by various long-lasting processes, but it also brings to the fore a new cause that hitherto seemed marginal: the armed militias of the Rabbinate and Islamic churches. The Rabbinate militias, embodied in Jewish settler organizations, have taken over not only Palestinian lands, but, gradually, also Israeli society. The Islamic militias, represented by Hamas and the Islamic Jihad, rose to prominence after the traditional resistance groups of the Palestinians – primarily the PLO and the PFLP and, by extension, also the Palestinian Authority – weakened and proved unable to reverse, let alone stop, the Israeli occupation. The rise of these militias, though, is hardly unique to Israel/Palestine, or even the Middle East. It is part of a broader, global process, in which ‘private’ military organizations, financed by states, church-related NGOs and/or organized crime, fight for and against states as well as each other. The ascent of such groups is closely related to the decline of the nation-state and its popular armies, a model that developed in the wake of the French Revolution but no longer resonates with the increasingly globalized nature of capital accumulation. Our previous studies of Middle East wars emphasized the ‘state of capital’ – our notion that the capitalist mode of power fuses state and capital into a single logic in which dominant capital groups are driven by the power quest for differential accumulation. We showed that, in the Middle East, this logic was imposed by a Weapondollar-Petrodollar Coalition of large oil and armament corporations, OPEC, financial institutions and construction firms, whose differential incomes and profits were tightly correlated with – and helped predict – the cyclical eruption of ‘energy conflicts’. But this mode of power comprises not two elements, but three. In addition to state and capital, it also includes the supreme-God churches, and in this paper we outline the role of these churches and their militias in capitalism generally and in Middle East wars specifically.
Open Access
Rethinking the Political Economy of Environmental Conflict: Lessons from the UK Fracking Controversy
(2023) Marshall, Adam P.
As governments and corporations have intensified their efforts to locate, extract, and capitalise oil, gas, and various other biophysical materials, the world has simultaneously witnessed a proliferation of social resistance to these efforts. While taking many forms, such resistance, and concomitant ecological distribution conflicts (EDCs), are invariably motivated by a diverse range of objections regarding the unequal distributions of power, harms, and benefits associated with these extractive endeavours. This thesis primarily addresses the EDC literature, an environmental justice activist orientated literature at the intersection of ecological economics and political ecology. Despite offering numerous insights regarding the socio-metabolic drivers of EDCs, this literature often tends towards problematic explanations regarding the role of capitalist power. Thus, while these explanations foreground questions of capitalist power, their core assumptions - especially the analytical distinction between ‘the political’ and ‘the economic’- serve to elide key aspects of capitalist power within this context. Moreover, they also tend to obscure an important counterpart to capitalist power of special relevance to the activists who mobilise for environmental justice within EDCs; namely, capitalist vulnerability. Consequently, this thesis enfolds existing EDC insights within a broader theoretical framework underpinned by the Capital as Power (CasP) approach to political economy. CasP’s overarching contribution is to enable researchers to map how intra-capitalist conflicts unfold through the reorganisation of social ecological relations. Mobilising this framework, and a unique combination of qualitative and quantitative methods in the context of the UK fracking conflict (2010-2020), this thesis aims to explore, understand, and explain capitalist power and vulnerability in fracking conflicts (specifically) and EDCs (generally). Alongside other key findings, the inherent uncertainty surrounding future earnings and the divergent interests of competing capitalist coalitions are identified as key sources of capitalist vulnerability that environmental justice activists can exploit within EDCs. These findings highlight the analytical benefits of a CasP-driven theoretical framework for elucidating capitalist power and vulnerability in fracking conflicts and EDCs, not only for activists and academics, but also for policy makers, businesses, and other advocates for just transformations towards sustainability.
Open Access
A Tour of the Jevons Paradox: How Energy Efficiency Backfires
(2024) Fix, Blair
When it comes to our sustainability problems, striving for greater resource efficiency seems like an obvious solution. For example, if you buy a new car that’s twice as efficient as your old one, it should cut your gasoline use in half. And if your new computer is four times more efficient than your last one, it should cut your computer’s electric bill fourfold. In short, boosting efficiency seems like a straightforward way to reduce your use of natural resources. And for you personally, efficiency gains may do exactly that. But collectively, efficiency seems to have the opposite effect As technology gets more efficient, we tend to consume more resources. This backfire effect is known as the ‘Jevons paradox’, and it occurs for a simple reason. At a social level, efficiency is not a tool for conservation; it’s a catalyst for technological sprawl.1 Here’s how it works. As technology gets more efficient, it cheapens the service that it provides. And when services get cheaper, we tend to use more of them. Hence, efficiency ends up catalyzing greater consumption. Take the evolution of computers as an example. The first computers were room-sized machines that gulped power while doing snail-paced calculations. In contrast, modern computers deliver about a trillion times more computation for the same energy input. Now, in principle, we could have taken this trillion-fold efficiency improvement and reduced our computational energy budget by the same amount. But we didn’t. Instead, we took these efficiency gains and invested them in technological sprawl. We took more efficient computer chips and put them in everything — phones, TVs, cars, fridges, light bulbs, toasters … not to mention data centers. So rather than spur conservation, more efficient computers catalyzed the consumption of more energy. In this regard, computers are not alone. As you’ll see, efficiency backfire seems to be the rule rather than the exception. Far from delivering a cure for our sustainability woes, efficiency gains appear to be a root driver of the over-consumption disease.
Open Access
Key points on Bichler/Nitzan’s text “Capital as Power”
(2024) Szepanski, Achim
FROM THE ARTICLE: At first glance, it would appear that Deleuze’s concept of structure involves a complex form of so-called creorder, a term that appears at the forefront of the methodological findings of the economists Bichler/Nitzan. If the structure is actualized in each of its moments in processes, then Bichler/Nitzan describe this process with the term “creorder”. They consider this to be a highly artificial term, which is intended to indicate that a structure/order must constantly construct and reconstruct itself in (historical) time, just as a form must constantly transform itself. According to Bichler/Nitzan, in the context of creorder, the meaning of the relationship between Heraclitean becoming and Parmenidean being lies precisely in the fact that the fusion of verb and noun results in the term “creorder”: “To have a history is to create order – a verb and a noun whose fusion yields the verb-noun creorder.” On the one hand, the so-called creorder may be completely vertically or hierarchically ordered, as is the case in ultra-bureaucratic systems, for example; on the other hand, it may also be horizontal, as could be the case in radical democracies, or it may be in between order and disorder.
Open Access
ההון ושברו (Capital and its Crisis)
(2022) Nitzan, Jonathan; Bichler, Shimshon
הקפיטליזם שולט בעולם. דיונים סוערים מתנהלים בין המלומדים הממסדיים לבין "הביקורתיים" על טיבו של הקפיטליזם הגלובלי. הבעיה היא שטיבו של המוסד המרכזי בקפיטליזם -- ההון -- אינו ידוע. לאחר יותר ממאתיים שנה של התפתחות קפיטליסטית נמרצת לא קיימת תיאוריית הון הגיונית אמפירית -- לא במדע הכלכלה, לא בכלכלה הפוליטית המרקסיסטית ולא במדעי החברה בכלל, בין אם הם פוזיטיביסטיים או ביקורתיים, בין אם הם מודרניים או פוסטיסטיים הדבר בולט בעת משברי הון. אז נחשפת אוזלת ידם של המומחים והמנהלים האמונים על רזי ההון, ולעתים, ברגעי חרדה, הם אף מתוודים כי אין הם מבינים לא את טיבו של ההון ולא את משבריו. וכאשר מונפים דגלי המחאה והמפגינים יוצאים בזעם אל הרחובות, מתברר שאין להם תוכנית אלטרנטיבית. אין הם מבינים את מהותו של ההון ואת תוצאותיו הספר מציג דרך חדשה להבנת ההון ומשבריו המחזוריים. ההון אינו עצם מטריאלי ואף לא תהליך ייצור כלכלי. הוא אינו הצבר של אמצעי ייצור או מלאי של ציוד וטכנולוגיה, אלא מוסד מרכזי של יחסי שליטה, המאפשר בין השאר לשלוט בקווי הייצור, במלאי הסחורות ובעבודה השכירה. ההון הוא סימבול פיננסי של יחסי כוח מאורגנים הפרושים ברשת היררכית, ובמרכזם ניצבות קבוצות ההון הדומיננטי ,אותן תשלובות תאגידיות-מדיניות. אלה כפויות לחלק-מחדש את יחסי הכוח לטובתן מול ההתנגדות ההולכת וגוברת, ובצירוף היחסים נוצר משבר ההון. משטר ההון (הקפיטליזם) הוא אופי-כוח מסוג חדש יחסית בהיסטוריה של המין האנושי -- משטר שהתמסד במאות האחרונות והלך והתגבש מחדש לאורך שבעת משברי ההון שהתחוללו מאז תחילת המאה התשע–עשרה הספר כתוב בשפה תמציתית פשוטה, ללא ערפל אקדמי, ואינו דורש מן הקוראים ידע מוקדם, "כלכלי", מתמטי, או אקדמי. הוא אינו מסתפק בסיסמאות ובהכרזות. הוא מציג לא רק היסטוריה ביקורתית, אם לא קטלנית, של תיאוריות ההון המרכזיות המקובלות, האקדמיות והרדיקליות, אלא גם תיאוריות ומודלים כמותיים אלטרנטיביים של ההון ומשברי ההון אשר יוכלו לשמש את הרוצים בדרך רדיקלית חדשה להריסת משטר ההון ולהחלפתו במשטר אנושי כותבי הספר, יהונתן ניצן ושמשון ביכלר, הם מרצים בכלכלה פוליטית באוניברסיטאות ובמכללות בקנדה ובישראל
Open Access
Stocking Up on Wealth . . . Concentration
(2024) Fix, Blair
It turns out that like the rest of us, billionaires experience wealth inequality. (Individuals who top the Forbes billionaire list are far richer than those at the bottom of the list.) Interestingly, this billionaire wealth concentration fluctuates over time … in tight correlation with the movement of the stock market. Why? A plausible reason — explored here – is that stock indexes like the S&P 500 are unwitting indicators of corporate concentration. And corporate concentration, in turn, seems to drive the concentration of individual wealth.
Open Access
Is Bitcoin More Energy Intensive Than Mainstream Finance?
(2024) Fix, Blair
When it comes to Bitcoin, there’s one thing that almost everyone agrees on: the network sucks up a tremendous amount of energy. But from there, disagreement is the rule. For critics, Bitcoin’s thirst for energy is self-evidently bad — the equivalent of pouring gasoline in a hole and setting it on fire. But for Bitcoin advocates, the network’s energy gluttony is the necessary price of having a secure digital currency. When judging Bitcoin’s energy demands, the advocates continue, keep in mind that mainstream finance is itself no model of efficiency. Here, I think the advocates have a point. If you want to argue that Bitcoin is an energy hog, you’ve got to do more than just point at its energy budget and say ‘bad’. You’ve got to show that this budget is worse than mainstream finance. On this comparison front, there seems to be a vacuum of good information. For their part, crypto promoters are happy to show that Bitcoin uses less energy than the global banking system. But this result is as unsurprising as it is meaningless. Compared to Bitcoin, global finance operates on a vastly larger scale. So of course it uses more energy. To be meaningful, any comparison between Bitcoin and mainstream finance must account for the different scales of the two systems. So instead of looking at energy alone, we need to look at energy intensity — the energy per unit of circulating currency. That’s what I’ll do here. In this post, I compare the energy intensity of Bitcoin to the energy intensity of mainstream US finance. Which system comes out on top? The results may surprise you.
Open Access
Follow the Money: The Political Economy of Petrodollar Accumulation and Recycling
(2023) Noble, Leonie
This thesis makes two unique contributions to the International Political Economy literature. It presents the first comprehensive, empirical investigation of petrodollar accumulation and recycling spanning the period 1980-2021. It also corrects the misconception that petrodollar recycling in the 1970s and 1980s involved the extension of loans to developing countries using fractional reserve banking and argues that these loans were the extension of created credit. Petrodollars garnered significant academic attention in the 1970s and 1980s when increased oil prices led to large influxes of petrodollars to oil-exporting states and widespread deficits and stagflation in oil-importing states. The recycling of these petrodollars led to increased militarisation in oil-exporting states, as well as increased national debts in oil-importing states which precipitated the developing world’s debt crisis. Between 1999 and 2021, oil prices have hit peaks higher than those reached in the 1970s and this has resulted in a similar transfer of petrodollars. This thesis uses a quantitative and qualitative methodology to explore the key role of petrodollars in the current global political economy, and to illustrate the impact they are likely to have in the future as resources deplete. Over the period 2004-2021, petrodollar accumulation averaged $1.27 trillion annually, with approximately 54.6 percent of this accumulated by the Organisation of Petroleum Exporting Countries. These petrodollars predominantly flow back into the global economy through one of two channels: economic, through increased imports and domestic expenditure; or financial, through foreign investments and the purchase of foreign exchange reserves. These recycling methods will have lasting implications as they impact on which oil-importers’ deficits are financed and which are not, and which businesses/industries are funded and which are not. The significance of petrodollar accumulation and recycling is likely to further increase in the future. While advances are being made in alternative energy, oil’s unique characteristics and its embeddedness in the petrochemical, agriculture, and transportation sectors make it invaluable in a petro-market civilisation which is dependent upon transnational supply chains and large-scale agriculture. This makes it likely that high oil-consumption rates will continue, as will petrodollar accumulation, until we reach depletion. *** Posted with the author's permission ***
Open Access
Degrowth and Capitalist Power: A Step Towards a Theory of Change
(2024) Vastenaekels, Julien
This article explores the relationship between degrowth and the theory of Capital as Power (CasP), aiming to understand how socio-ecological transformations can unfold against capitalist power dynamics. While degrowth scholars have largely overlooked this perspective on capital, CasP argues that capitalism is primarily a mode of power, with capitalisation quantifying power – the confidence in in – the ability to shape society against opposition. Key CasP concepts are brought into dialogue with degrowth research to identify potential implications and offer a step towards a theory of change for degrowth. The article first outlines the CasP perspective, including its notion of power, the process of capitalisation and the conflictual nature of capital accumulation, and highlights links with degrowth research. It then looks at the elements underlying the valuation of capital as power and how they provide entry points for degrowth transformations. The role of dominant capital groups and the concept of “sabotage” in exercising power over society are then addressed. As such, degrowth transformations must challenge the confidence of dominant capital groups in their ability to rule, as these groups inhibit possibilities for socio-ecological change. This dynamic, summarised in a conceptual diagram, provides a first step towards a theory of change for degrowth in the face of capital accumulation. Finally, the conclusion offers potential directions for further research.
Open Access
Правда об инфляции (The Truth About Inflation)
(2024) Fix, Blair
От редакции: среди всего набора макроэкономических тем, текущие показатели инфляции — одна из самых популярных и часто обсуждаемых. Аргументы сторонников режима жёсткого инфляционного таргетирования хорошо известны, равно как и возражения противников подобного подхода. Не касаясь их содержания, этой статьёй мы хотим привлечь внимание российской аудитории к самому подходу измерения инфляции. Как следует из представленного текста, определение уровня инфляции на практике сталкивается с теми же проблемами, что несут и прочие “средние”, “общие”, “агрегированные” показатели. Это делает актуальным вопрос о внедрении секторального, адресного подхода в управлении ценовой динамикой — что касается как фискальных мер, так и ДКП. *** Милтона Фридмана нет в живых уже более десяти лет, но его призрак всё ещё преследует нас. В 1960-х годах Фридман заявил, что инфляция "всегда и везде является денежным явлением" — проблемой печатания слишком большого количества денег. С тех пор всякий раз, когда инфляция дает о себе знать, вы можете рассчитывать на то, что кто-нибудь оживит призрак Фридмана и обвинит правительство в том, что оно слишком много тратит. Если бы только инфляция была такой простой. Как и многое в экономической теории, мысли Фридмана на первый взгляд кажутся правдоподобными. Инфляция — это общий рост цен. А поскольку цены — это ничто иное, как результат обмена (благ) на деньги, то больше денег в обращении означает, что цены должны расти. Следовательно, инфляция "всегда и везде является денежным явлением". К сожалению, при дальнейшем рассмотрении эта мысль рассыпается. Проблема в том, что она рассматривает инфляцию как равномерный рост цен. Теоретически это удобно, но эмпирически неверно. В реальном мире темпы инфляции сильно разнятся. В то время, когда цена на яблоки повышается на 5%, цены на автомобили могут вырасти на 50%, а цены на одежду — упасть на 20%. Чтобы понять реально существующую инфляцию, нужно обратиться не к учебникам по экономике, а к реальным данным. Именно этим занимался политэкономист Джонатан Ницан во время своего докторского исследования в начале 1990-х годов. Его работа вылилась в диссертацию под названием "Инфляция как реструктуризация". В реальном мире, заметил Ницан, изменение цен всегда "дифференцированно", что означает наличие победителей и проигравших. Как следствие, инфляция не является чисто "денежным явлением", вопреки заявлениям Фридмана. Инфляция перестраивает социальный порядок. Именно эта особенность инфляции в реальном мире является наиболее важной, поскольку она означает, что инфляция сигнализирует об изменении структуры власти в обществе. Предсказуемо, что именно эту особенность реального мира игнорируют мейнстримные экономисты — в основном потому, что она противоречит их стройной теории инфляции как "денежного явления". К счастью, доказательства очевидны. Инфляция является (и всегда была) в подавляющем большинстве случаев дифференциальной. Инфляция — это перестройка [экономики]. Сегодня, когда инфляционные страхи возвращаются и призрак Фридмана воскресает, стоит напомнить себе о реальных фактах.
Open Access
Degrowth and Capital: Assembling a Power-Centred Theory of Change
(2023) Vastenaekels, Julien
In the context of contemporary socio-environmental shifts, the concept of “degrowth” advocates for transforming societies to ensure environmental justice and a well-being for all within planetary boundaries. This PhD thesis, positioned within degrowth studies, provides a processual, holistic and interdisciplinary exploration of the dynamics between degrowth transformations and capital accumulation, understood as an all-encompassing power process. I start by critically exploring the role of capital accumulation in the unfolding of degrowth transformations, highlighting some shortcomings of conventional views that predominantly see capital accumulation as a primarily production-oriented process. While, historically, the degrowth project has opposed economism, these perspectives tend to overlook the deep intertwinement between economics and politics in the intersection between degrowth transformations and capital accumulation. This thesis then considers the theory of “Capital as Power” (CasP), which dissolves the boundaries between economics and politics in the study of capital. Key implications of CasP for the unfolding of degrowth transformations are highlighted. Through this lens, I identify four distinct elements of dynamics, each represented as a causal loop diagram (CLD), capturing the complex relationship between degrowth transformations and the power processes of capital accumulation. Using insights from Social Practice Theory (SPT), I further investigate how degrowth-aligned practices, reforms, and ruptures may be inhibited by “strategic sabotage” processes that bolster capital accumulation, conceptualising four modes of sabotage, set into motion through two additional elements of dynamics. These six elements of dynamics are then assembled into a single CLD, which is used to explore four scenarios for the unfolding or marginalisation of degrowth transformations against the process of capital accumulation. In short, as the journey progresses, this thesis assembles a power-centred theory of change for degrowth against the process of capital accumulation. It emphasises the importance of understanding and navigating these power dynamics for those willing to move towards a degrowth society.
Open Access
The Mismatch Thesis. Fiction and Reality in the Accumulation of Capital
(2023) Bichler, Shimshon; Nitzan, Jonathan
Political economists, both mainstream and Marxist, find it difficult to reconcile the «real» and «financial» appearances of capital. The conventional view is that «real» capital is an objective productive entity; that «finance» merely reflects this reality; and that, unfortunately, the reflection is often inaccurate, causing the two to «mismatch». This convention, we argue, is baseless if not fraudulent. First, although economists know full well that «real» capital, comprising different capital goods, cannot have a unique objective quantity – they measure this pseudo quantity anyway, arbitrarily. Second, when they realize that their arbitrary measure of «real» capital differs greatly from the corresponding magnitude of finance, they blame the deviation on invisible fluctuations in intangible capital, investor irrationality and market imperfections. And third, they insist that «real» accumulation drives «financial» accumulation, even though their own measures show that the two processes move in opposite directions!
Open Access
Unhealthy Profits
(2023) Mouré, Christopher; Gorsky, Shai
FROM THE ARTICLE: At the end of November 2023, the New York Times published an editorial: Why Are Nonprofit Hospitals Focused More on Dollars Than Patients? It is certainly a valid question. Most people might assume that not-for-profit (NFP) organisations focus on providing a public benefit rather than profit. At most, common wisdom suggests that any income derived from providing a service should be reinvested into expanding or improving the service. There is no obvious reason why a NFP should accumulate large profits over years. Yet in the NFP world of large US hospitals, profit, rather than public purpose, seems to have become the guiding light.
Open Access
Capital as Death Denial
(2023) Hager, Sandy Brian
Terror Management Theory (TMT) argues that subconscious fears about death shape our behaviour in often disturbing and destructive ways. Building on the work of Ernest Becker, the core theoretical claim of TMT is that human activity, including all forms of culture, is ‘…designed largely to avoid the fatality of death, to overcome it by denying in some way that it is the final destiny of man.’ Capitalism is unlike anything that preceded it, and this novelty stems from a specific behaviour amongst capitalists that leads to sustained growth: the routine reinvestment of profits in the anticipation of future profitability. What might this novel feature of capitalism have to do with death denial? What kind of phenomenological specificity is bound up with this historical specificity? My aim in this chapter is to tackle these questions, primarily through a comparison between the role of death in capitalism and the archaic gift economy. My argument can be summarised as follows. First, I place the archaic gift economy, organised around the redistribution and destruction of surplus, on the low end of the death denial continuum. Archaic economic activity is collective and sacred, actively involving the dead and death in order to make payable the existential debts that haunt us from the moment of biological birth. Cyclical time and periodic redemptive ritual are purposefully designed to prevent accumulation of anything, whether it be wealth, power, time, anxiety, or guilt. Second, I place the capitalist economy, organised around the routine reinvestment of surplus for profit, on the high end of the death denial continuum. With capitalism, economic activity is individualised and de-sacralised and the dead and death are banished, resulting in unpayable debts. Capital accumulation is the primary psychological defence mechanism, a power intended to stave off mortal dread. But because accumulation rests on linear time and is shorn of redemptive and sacrificial ritual, guilt and anxiety also start to accumulate. The system is driven by an endless and increasing neurotic charge. Third, I claim that since the 1970s, capitalist death denial has intensified. Structural transformations in the so-called ‘advanced’ economies over the past few decades have dissolved the remaining vestiges of collectivism in economic life and shattered any shared vision of social progress. The result is a disintegration of the remaining collective outlets needed to share, expiate, and to some extent relieve, the cumulative guilt and anxiety of capitalist life. Intensified death denial in the contemporary era finds its most spectacular manifestation in Silicon Valley’s quest for literal immortality. This privatised immortality project is a morbid escapism intended to hive the ruling class off from the irredeemable masses.
Open Access
Massaging the Message: How Oilpatch Newspapers Censor the News
(2023) Fix, Blair
FROM THE ARTICLE: In their book Manufacturing Consent, Edward Herman and Noam Chomsky argue that the mainstream media functions largely as a propaganda arm for the state. When the war drum beats, the corporate media tows the government’s line, censoring facts that don’t fit the official narrative. Outside of war, media bias is typically less overt. But to the careful observer, it can still be discerned. In this case, our careful observer is Canadian oil critic Regan Boychuk. Boychuk lives in Calgary — a prairie city that is famous for two things. Calgary hosts the world’s largest rodeo. And it is the corporate heart of the Canadian oil business. Calgary … home to cowboys and crude-oil CEOs. As you might guess, our story of media censorship is not about cowboys. Calgary’s main newspaper, the Herald, is staunchly pro-oil. And that means its editorial pages are filled with oilpatch jingoism. However, the rest of the paper is an archetype of neutral reporting. Just kidding. Unsurprisingly, the Herald’s pro-oil stance shapes the content that appears in the paper. This post takes a quantitative look at the editorial ‘curation’. Most of the heavy lifting has been done by Boychuk, who had the brilliant idea to track the reporting of environmental journalist Mike De Souza. Between November 2010 and July 2013, De Souza wrote a series of articles documenting scandals related to the Canadian oilpatch, and its staunch defender, the Harper government. At the time, De Souza was working for Postmedia, a news conglomerate that operated a wire service for its many subsidiaries. So when De Souza’s pieces were published, they were delivered to local papers like the Ottawa Citizen, the Edmonton Journal, and the Calgary Herald. Here’s the catch. Although owned by the same conglomerate, these local papers had leeway to edit (or shelve) their wire-service articles. The result, Boychuk realized, was a controlled setting to analyze media censorship. Earlier this year, Boychuk published his findings in a piece called ‘Proximity to Power: The oilpatch & Alberta’s major dailies’. My contribution here is mostly visual. I’ve taken Boychuk’s investigation and translated it into charts. The results largely speak for themselves. As De Souza’s articles approached the center of Canadian oil-and-gas power in Calgary, they were increasingly gutted, and their message changed. It’s a fascinating case study of how business interests shape the news.
Open Access
Does the US Tax Code Encourage Market Concentration? An Empirical Analysis of the Effect of the Corporate Tax Structure on Profit Shares and Shareholder Payouts
(2023) Hager, Sandy Brian; Baines, Joseph
EXECUTIVE SUMMARY Concerns about the market power of large corporations are growing. There are good reasons why monopoly now features so prominently on the political and economic agenda. Mounting evidence shows that corporate concentration stifles innovation and investment, resulting in lower-quality goods and services and less economic dynamism. Concentration is also a catalyst for rising wealth and income inequality, as monopolistic firms are able to suppress workers’ wages and charge consumers higher prices. Most of the public policy debate has been focused on the role of antitrust law in combating the monopolistic practices of large corporations. But recently, the focus has shifted somewhat, as more and more people come to recognize the role of federal and state-level taxation in understanding corporate concentration in the US. Yet, there are still many questions about the effect of taxation on market structure: Is there a tax advantage associated with bigness, as measured by revenues? If so, is this advantage confined to a few “bad apples” or is it widespread among large corporations? What role do the domestic and foreign tax systems play in encouraging monopoly power? What does an analysis of the relationship between tax and monopoly tell us about wider macroeconomic shifts in the US economy over the past few decades? The purpose of this brief is to address these questions by analyzing and comparing the overall effects of the US tax code on the profit share of large and smaller corporations. Our analysis reveals a striking tax advantage for big business in the US. Specifically, we find that the total post-tax profit share of the top 10 percent of listed corporations since the mid-1980s is consistently and significantly higher than their total pre-tax profit share, indicating that the overall tax structure (domestic and foreign) fuels profit concentration at the top of the corporate hierarchy. For example, in the most recent period covered in our analysis, 2019–2022, the overall tax structure has boosted the post-tax profit share of large corporations by 2.32 percentage points relative to their pre-tax share. We then assess the contribution of different tax jurisdictions to concentration by estimating the pre-tax and post-tax profit shares of large corporations, domestically and internationally. Here, our analysis reveals that the domestic tax structure is especially influential in driving concentration. Over the past four decades, the domestic post-tax profits of large corporations have been much larger than their pre-tax share, with the domestic tax structure augmenting the profit share of large corporations by 3.79 percentage points in 2019–2022. The effect of the foreign tax structure on profit concentration is more ambiguous. In most periods it is either slightly positive or slightly negative. For 2019–2022, the foreign post-tax profit share of large corporations was 0.87 percentage points higher than their pre-tax share. Based on these findings, we argue that the tax structure, especially the domestic tax structure, plays a crucial but still underappreciated role in exacerbating the monopoly problem. We go on to consider the wider consequences for the US economy of big business’s tax advantage. The political justification for corporate tax cuts—including those that were part of the Tax Cuts and Jobs Act (TCJA) of 2017—is that they would free up money for companies to invest in productive capacity, in turn generating higher employment and wages. But as our analysis shows, the capital expenditures of large corporations tend to decrease, not increase, when their tax advantage grows. Instead of fueling productive investment, the tax savings of large corporations are principally used to pay out dividends and buy back their own stock. This means that large corporations are less disposed to investments that may indirectly benefit ordinary workers and more disposed to shareholder value enhancement that directly benefits the asset-rich. Overall, we find that the tax system contributes in crucial ways to rising corporate concentration and to widening inequality among households. With the objective of leveling the playing field, our findings offer powerful justification for the restoration of graduated statutory corporate income tax rates in the US alongside a global minimum effective tax rate of 25 percent and a graduated excise tax on share buybacks. The monopoly problem has become endemic to US capitalism, and corporate tax reform on its own will not solve it. Yet one clear advantage of taxation is that it has a direct, and therefore much more easily discernible, effect on distributive outcomes compared to other policy measures. A more holistic approach, combining corporate tax reform with more robust antitrust regulation, the strengthening of workers’ rights, and increased public ownership in key sectors, is needed to build an economy based on equity, fairness, and prosperity for all.