Periodically, ACM readers might want an introduction to anticapitalism. This emerges because of the disinformation propagated by kakistocratic clowns like Trump, who enables neoliberal capitalism while pursuing kleptocracy and monopolizing violence. This is important as yesterday Trump signed an executive order that had no effect on big pharma, and endorsed extrajudicial killing as “retribution”.
To that end here’s one of many introductory readings for those wanting to get a handle on anticapitalism, as some Democrats do wish to tame and reform capitalism, neutralizing its human and environmental harms while not explicitly endorsing many anticapitalist objectives or the tactics of many activists. You could even be antifa without being anticapitalist.
Below the fold is a more technical description of a search for analytic tools to critique regional economic policy.
As a start you might read Erik Olin Wright, How to be an anticapitalist today (2015)
The idea that capitalism can be rendered a benign social order in which ordinary people can live flourishing, meaningful lives is ultimately an illusion because, at its core, capitalism is unreformable. The only hope is to destroy it, sweep away the rubble, and then build an alternative. As the closing words of the labor tune “Solidarity Forever” proclaim, “We can bring to birth a new world from the ashes of the old.”
But how to do this? How is it possible for anticapitalist forces to amass enough power to destroy capitalism and replace it with a better alternative? This is indeed a daunting task, for the power of dominant classes that makes reform an illusion also blocks the revolutionary goal of a rupture in the system. Anticapitalist revolutionary theory, informed by the writings of Marx and extended by Lenin, Gramsci, and others, offered an attractive argument about how this could take place.
While it is true that much of the time capitalism seems unassailable, it is also a deeply contradictory system, prone to disruptions and crises. Sometimes those crises reach an intensity which makes the system as a whole fragile, vulnerable to challenge.
www.jacobinmag.com/...
Here’s one of many videos, I just chose something done recently:
Even more foundationally, you should read these books, they will lead you to the primary sources (remember that we strive to be ecumenical in ACM):
Ultimately the ideological frontiers remain in the academy, even as the subtext for a socialist economy would be to eradicate inequality. Like the distribution among universities of analytic philosophy versus continental philosophy, those heterodox economic studies are distributed as unevenly as its ideological absence among the dominant neoclassical, orthodox economic studies represented in academia. Often it is the arbitrary personnel division between college departments of business and economics. Darn those “unjustified hierarchies”.
82% of economists claim that statements and arguments should be evaluated on the content only, but the results of the study show the exact opposite.
One important step that helps identify the appropriate changes necessary to minimize the influence of ideological biases is to understand their roots.
As argued by prominent social scientists (e.g. Althusser 1976, Foucault 1969, Popper 1955, Thompson 1997), the main source of ideological bias is knowledge-based, influenced by the institutions that produce discourses. Mainstream economics, as the dominant and most influential institution in economics, propagates and shapes ideological views among economists through different channels.
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For example, when a statement criticizing “symbolic pseudo-mathematical methods of formalizing a system of economic analysis” is attributed to its real source, John Maynard Keynes, instead of its fictitious source, Kenneth Arrow, the agreement level among economists drops by 11.6%. Similarly, when a statement criticizing intellectual monopoly (i.e. patent, copyright) is attributed to Richard Wolff, the American Marxian economist at the University of Massachusetts, Amherst, instead of its real source, David Levine, professor of economics at the Washington University in St. Louis, the agreement level drops by 6.6%.
www.ineteconomics.org/...
Even as there’s an information economy there’s also a cost-efficient political economy of disinformation that often operates in 2020 as successful as it did in 2016.
The Russian objective is to create an illusion of deep-seated divisions between people like you and people who aren't like you, so that you won't be able to agree on anything.
Disinformation has its own kinds of maps/charts and in terms of value can benefit capitalism in terms of producing propaganda where it adds value to the uncertainty of misinformation. However there are tools like this one, Fighting Disinformation Online A Database of Web Tools.
Here's a notional example: Suppose you and a neighbor agree that your property taxes are too high, but disagree on issues related to sensitive topics like race relations or immigration. You start seeing online memes focusing on extreme views on these topics. Those memes evoke strong reactions, painting the issue as a battle between two extremes. You begin thinking of your neighbor based on this false dichotomy. The neighbor becomes one of “them” rather than a person with whom you had some commonality. After all, it's difficult to agree on most anything when you and your neighbor view each other as racist or anti-American.
The Russian objective is to create an illusion of deep-seated divisions between people like you and people who aren't like you, so that you won't be able to agree on anything.
www.rand.org/...
In my own work there are mapping issues or rather layers of sedimented material meaning that are part of the anticapitalist process of developing a critique of capitalism and tools for analysis, in this case theories of capital and working out a theory of virtual capital that cannot be reduced to the epiphenomenal(sic). Rather, rent-extraction can be seen in greater absolute and relative contrast to inequality.
One of my professors who was an economic geographer did his dissertation on mathematical geography, but went into flexible production and other spatial analyses of industries, but he did remind me that even as he wasn’t a GIS aficionado that spatial analysis was a historical and political economic matter. He combined the idea that the pre-fordist industrial revolution was not all mass production but more about scale and scope signified by its spatial networks or what would be smaller scale even artisanal sub-firms. For example, the distribution of CNC machines or the difference between producing specialty and common microchips might be a better measure of the capabilities of (post-)industrial growth.
For my own studies, all that got lost in the murkiness of neo-ricardian theory, but it remains that the microfoundations of any economic environment are also topological problems.
In the case of Steve Keen’s work trying to provide a quantitative foundation that might be actually applied to Modern Monetary Theory, a sub-area of concern would be trying smaller-scale models rather than Keen’s national scaling of a dynamic macro-economy, would it be possible to see the problem as mathematically worked out not in the traditional comparative statics of micro-economics, but as one situated in specific environments where the historical region and its ecological sustainability could generate policy solutions (like GND).
Keen’s research concerns have been the larger scale macro-economic matters but concludes that the attacks on MMT only emphasize public debt/credit even to the point that dimwits like Kevin Hern (R-OK) would even try to ban MMT.
The bottom line of this set of posts is that we have to think about finances in an integrated manner, and not just focus upon one component, as "deficit hawks" like Hern do. With an integrated perspective, the sensible conclusion is the one MMT reaches: that the government should run deficits and be in negative equity, to enable the private sector to run surpluses and be in positive equity. Periods of apparent prosperity that coincided with the surpluses of the Coolidge and Clinton eras were the result of private sector levered speculation by a private sector that was experiencing (identical) deficits at the time. Rather than "saving for a rainy day", these government surpluses helped set off speculative bubbles whose later crashes caused the greatest economic downturns in America's pre-Covid history.
Private sector deficits are "unsustainable, irresponsible, and dangerous". Public sector deficits are sustainable, responsible (subject to their impact on inflation and the balance of trade), and safe. It's time for the "Deficit Hawks" to worry about private sector deficits, not the public sector deficit.
www.patreon.com/...
For example if you construct a Minsky economy for a region it would have these below 19 elements. Minsky is a free and open source software tool developed by Keen. The problem extrapolated from this is the relationship of the monetary system to the space of a smaller micro-foundational model for a region the size of a state rather than a nation. It would not be the land itself or the property because the banks have made it so, as your mortgage payments might remind you.
This Minsky model is a simple but complete model of a domestic monetary system. It has six sectors which can be divided into five components:
- The Treasury, and the Central Bank, which together constitute the Government Sector;
- The Banking Sector;
- The Firm Sector, Capitalists and Workers, which constitute the "NonBank Private Sector";
- The NonBank Private Sector and the Banking Sector, which constitute the "NonGovernment Sector"; and
- The sum of the Government and the NonBank Private Sector, which constitute the "NonBank Sector".
For simplicity, taxes—and government spending—are levied only on the Firm Sector, and banks make loans only to firms (the aggregate outcome would be the same if the model were generalized to have taxes and spending and loans in all sectors—it would just be much harder to read the tables).
There are just thirteen financial flows:
- Treasury spends on firms (Spend);
- Treasury taxes firms (Tax);
- Treasury sells bonds to the Banking Sector to cover any deficit (BondB);
- Treasury pays interest on Treasury Bonds owned by the Banking Sector (InterestBonds);
- The Central Bank buys and sells Treasury Bonds in "Open Market Operations" (BondCB);
- Banks lend to firms (Lend);
- Firms pay interest to Banks (Interest);
- Firms repay some debt to banks (Repay);
- Firms hire workers (Wages);
- Firms pay dividends (Dividends);
- Workers buy goods from firms (ConsW);
- Capitalists buy goods from firms (ConsK); and
- Bankers buy goods from firms (ConsB).
Minsky provides an integrated view of how these flows interact to determine the financial position of each of the six sectors in the model in interlocking double-entry bookkeeping tables. It generates differential equations from these flows that show how the stocks—the financial accounts—change over time.
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Assuming one accepts some of the contemporary problems of land value one can get to the monetary questions of stock and flow because banks and rentier capitalists do own land and manipulate eminent domain. And as ponderous as the dynamic problems are for a national economy, one US state’s economy can be equally problematic especially when policy matters involve regional governance issues like public utilities or transportation. Or per force, there’s the political economy of voting apportionment revealed in gerrymandering.
The classical economists sought to make their nations more competitive by keeping down the price of labor so as to undersell competitors. The main cost of living was food; today it is housing. Housing and food prices are determined not by the material costs of production, but by land rent – the rising market price for land.
In the era of the French Physiocrats, Adam Smith, David Ricardo and John Stuart Mill, this land rent accrued to Europe’s hereditary landlord class. Today, the land’s rent is paid mainly to bankers – because families need credit to buy a home. Or, if they rent, their landlords use the property rent to pay interest to the banks.
The land issue was central to Russia’s October Revolution, as it was for European politics. But the discussion of land rent and taxation has lost much of the clarity (and passion) that guided the 19th century when it dominated classical political economy, liberal reform, and indeed most early socialist politics.
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Many middle-class families owe most of their net worth to rising prices for their homes. But by far the lion’s share of the real estate and stock market gains have accrued to just One Percent of the population. And while bank credit has enabled buyers to bid up housing prices, the price has been to siphon off more and more of labor’s income to pay mortgage loans or rents. As a result, finance today is what is has been throughout history: the main force polarizing economies between debtors and creditors.
Global oil and mining companies created flags of convenience to make themselves tax-exempt, by pretending to make all their production and distribution profits in tax-free trans-shipping havens such as Liberia and Panama (which use U.S. dollars instead of being real countries with their own currency and tax systems).
The fact that absentee-owned real estate and natural resource extraction are practically free of income taxation shows that democratic political reform has not been a sufficient guarantee of socialist success. Tax rules and public regulation have been captured by the rentiers, dashing the hopes of 19th-century classical reformers that progressive tax policy would produce the same effect as direct public ownership of the means of production, while leaving “the market” as an individualistic alternative to government regulation or planning.
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Since 1980 the Western nations have reversed early optimistic hopes to reform market economies. Instead of the classical dream of taxing away the land rent that had supported Europe’s hereditary landed aristocracies, commercial real estate has been made virtually exempt from income taxation. Absentee owners avoid tax by a combination of tax-deductibility for interest payments (as if it is a necessary business expense) and fictitious over-depreciation tax credits that pretend that buildings and properties are losing value even when market prices for their land are soaring.
These tax breaks have made real estate the largest bank customers. The effect has been to financialize property rents into interest payments. Likewise in the industrial sphere, regulatory capture by lobbyists for the major monopolies has disabled public attempts to keep prices in line with the cost of production and prevent fraud by breaking up or regulating monopolies. These too have become major bank clients.
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The post-Soviet collapse in the 1990s was not a failure of Marxism, but of the anti-socialist ideology that is plunging Western economies under domination by the Finance, Insurance and Real Estate (FIRE) sector’s symbiosis of the three forms of rent extraction: land and natural resource rent, monopoly rent, and interest (financial rent). This is precisely the fate from which 19th-century socialism, Marxism and even state capitalism sought to save the industrial economies.
A silver lining to the Soviet “final” stage has been to free Marxist analysis from Russian Marxology. Its focus of Soviet Marxology was not an analysis of how the capitalist nations were becoming financialized neo-rentier economies, but was mainly propagandistic, ossifying into a stereotyped identity politics appealing to labor and oppressed minorities. Today’s revival of Marxist scholarship has begun to show how the U.S.-centered global economy is entering a period of chronic austerity, debt deflation, and polarization between creditors and debtors.
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Socialism is incompatible with a rentier class of landlords, natural resource owners and monopolists – the preferred clients of banks hoping to turn economic rent into interest charges. As a vehicle to allocate resources “the market” reflects the status quo of property ownership and credit-creation privileges at any given moment of time, without consideration for what is fair and efficient or predatory. Vested interests claim that such a market is an immutable force of nature, whose course cannot be altered by government “interference.” This rhetoric of political passivity aims to deter politicians and voters from regulating economies, leaving the wealthy free to extract as much economic rent and interest as markets can bear by privatizing real estate, natural resources, banking and other monopolies.
www.socialisteconomist.com/...
The MMT hypothetical needs to test the State theory of money in an integrated regional model identifying the rentier financial flows among other things and placing them in contrast to other, more fictitious capital. As an example of a virtual regional economy, the divisions of telecom spectrum, media audience, and franchise allocation also represent a spatial model of regional capital that are also indicators of a complex geographical information space that might be more than a problem of value-form (don’t everyone reach for your revolvers, darn Chartalists).
Such a space is similar but not identical to the differences among the space of cable, satellite, and broadcast transmission laid upon a geographic space constrained by a variety of factors including tower siting, zoning, and regulatory licensing. Property (and its taxes) thus also have corresponding maps of capital. Exploitation and inequality have their own maps whose construction has analytic consequence.
