Wednesday, September 16, 2009

After Capitalism: Ethics?

Five ideas on value and the crisis.

September 16, 2009 By Adam Arvidsson

As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure and hence exchange value [must cease to be the measure of] use value.'

Karl Marx, Grundrisse

We are, it would seem, in the midst of a historical crisis of the capitalist system. As the dynamo effects of the sub-prime collapse ripple through the economy, from financial markets to consumer spending and industrial production, it has become common to point at how our present capitalist system lacks long-term sustainability. If this used to be the privilege of a handful of left-leaning economists like André Gunder Frank (2005) or Robert Brenner (2004), economists, politicians and business leaders who used to be more than happy with the existing order of things have now joined the ranks. Even Richard Florida, whose theories of the 'creative class' stood at the heart of the gentrification-driven real estate boom that preceded the present crisis now proclaims that '[t]he housing bubble was the ultimate expression, and perhaps the last gasp, of an economic system some 80 years in the making, and now well past its "sell-by date" (Florida, 2009:9).

However, in order to understand why the 'system is past its "sell-by date"' and, by implication, what can be done about this, it is not enough to go beyond populist cries of managerial greed and corrupt banks. We need to move even deeper into the heart of the matter, beyond even most current explanations that focus on the perversities of advanced financial instruments and the need for tighter regulation of financial markets; we need to 'descend into the depths of production' to quote (an increasingly popular) Marx (1939[1973]:105) once more, and engage with the fundamental concept of any economic analysis: value.

This article will attempt a couple of moves in that direction. It will argue that we are witnessing a fundamental re-configuration of the very core logic of value with which our economy works: We are moving from a capitalist economy where value is directly related to investments in productive time, to an ever more influential ‘ethical economy' where value is related to the quality of social relations. I will develop this argument by presenting five (interconnected) ideas: One, that our crisis is a crisis of transition from one system, industrial capitalism, to another economy that has yet to find its political, juridical and ideological form, its 'superstructure' to keep using Marxist terms. Two, that this crisis of transition is driven by the emergence, within the institutional framework of capitalism itself of a new mode of production that works according to a logic of value that is different from that of industrial capitalism. Consequently a lot of the wealth actually produced by the economy cannot be adequately valued and, by implication, managed within existing structures of accounting, control and measurement. Seen this way, the crisis we are now living through is essentially a value crisis, where, as the opening quote claims, exchange value no longer adequately reflects use value, or, to put it in less cryptic terms, there is a general sensation that a lot of the real values that circulate in our economy cannot be adequately represented. Three, that the emerging 'new economy' has a distinct value-logic of its own. It is an economy where value is related not to productive time as in the capitalist economy, but to the ability to build ethically binding relations: it is, in this sense and 'ethical economy'. Four, that the emergence of such an ethical economy is the outcome of a dialectic that has been immanent to the very development of the capitalist economy, and in particular to its post-War globalization-phase. Five, that since, as recent economic sociology would argue, 'value' is essentially a shared convention as to the representation of economic processes (cf. Barry & Slater, 2005, Chiapello, 2008ii), the solution to the present 'value crisis' is contingent on the establishment of a new shared convention. Given the nature of the ethical economy, such a convention must be centred on a transparent and systematic measure of the social impact of companies and organizations.

I am aware that a bold statements like these are risky in an academic setting, particularly when expressed in the condensed format imposed by the medium of the journal article. (This article is in fact an attempt to summarize the ideas behind an ongoing book project.iii) As a sort of pre-emptive defence against the (legitimate) criticism that this article will no doubt produce, I want to remind the reader that its purpose suggest ideas that can guide our interpretation of current events. Although such theoretical work needs to proceed in close dialogue with the available facts, it stands no chance of even approaching the empirical rigour needed for a thorough substantiation of the hypotheses proposed. All this article aims to do is to present a number of ideas that can serve as heuristic devices, that may be, hopefully, developed, corroborated, criticized or refuted by others.

5 Ideas...


  1. " industrial capitalism " interesting.
    in order to have industrial capitalism, one must produce, and or manufacture global goods. we went away from that. instead we became a service, economy, and a society based on debt. " one can not life off of debt alone. lol

  2. hey RZ....I've been chewin over a gut feelin for sometime now...the problem is I can't quite pinpoint it or get it into words...I'll try:

    We are producing. We're producing an economical that the globe can't turn away from.

    Ireland began QE yesterday...this am they're UP...go figure.

    QE has the same affect as Communism: 'It works if everyone does it'.

    Sure there is and will be retaliations mixed with diversions but the die is caste.

    What Leads me to this 'assumption'?

    1. Wage Control...Control the citizens income and the mirage of wealth building and you control the majority.

    2. What else have we been doing? We weren't the first to go into the industrialization period but we were out of it quicker than anyone else...thereby using it for a stepping what...service debt?!

    3. Debt is a Tool for a Slave owner...Widespread Debt of Nations and Emerging Mkts is a powerful tool.

    4. The Emerging Nations and their Markets have NO SOCIAL SAFETY the time they rise to compete with their resources they'll already be close to revolts...Look to the new an improved IMF Bonds to rinse an repeat successful blackmail terms an conditions.

    5. Capitalism American style has been groomed to handle being the worlds Banking Industry...Notice the Arguments against Regulations in a time they 'should' at least be visited? Notice the posturing of other Nations...words China go from long bonds to short back to long and they do this because we dangle the 'lucrative' carrot.

    My gut tells me we, the US citizens, will do what we've been conditioned to do only more of it with less 'crumbs'.

    Will there be a wrench thrown in the Engineers' Engines? You bet...but this next generation is in no better shape to recognize or understand this economy and 'they're' banking on it...check the schools...check the 'talking heads'economist...information overload is the name of the game...just keep the information a tangle web!

    There are keener minds that can add and/or poke large holes in my gut theory...

    ...and that my friends is what I search far I've yet to see common ideas or common sense rise to the top and theres a reason for that...

    The Power of the Engineers' manipulation of an for their outcome.

  3. See What I Mean?...

    Cara's Commentary & Community Chat, Thursday, Sept. 17, 2009
    September 17, 2009 by Bill Cara

    [5:57am ET] In yesterday's commentary, I hope the following paragraph was not overlooked:

    One thing I would like to know from the regulators is why they allow Talking Heads to say this market is going a lot higher from here without giving us (i) a three-month track record every time they make these pronouncements in the major media, and (ii) the factual basis on which they made their determination, and I don't mean I want to hear that the Boys in NYC got together on the phone and said they could squeeze a little more out of this market.

    If for a moment you reflect on the fact that Wall Street and Big Business in America pay homage to the application of statistics for purporting objectivity, and that, every business school in the country teaches statistics to their graduates, you would think the documentation of the logic behind a projection (i.e., market related call) would be standard operating procedure.

    Truth is both business and government engage in practices that are a-scientific. E.g., why would any professional number cruncher elect or advise to report inflation with food and gas costs removed? Answer: it saved the US government a 5% increase in social security payments for the next year -- and "compound years" to come. I have never seen a statement of facts as to why this is Fed policy.

    The older you get, the more you realize the importance of social security as a needed core value in America. What the country has become, however, is indifferent to the poor, the elderly, the disabled, and the unemployed. It has become a nation of cheaters and lottery players.


    ****Where to pick-up future crumbs!

  5. Again...I rest my case....

    Thursday, September 17, 2009
    Ireland to Spend 28% of Gross Domestic Product to Suck up Banking Toxic Assets
    Posted by TraderMark at 7:45 AM TweetThis
    I can only assume Hank Paulson was the inspiration because this plan by Ireland, sounds a lot like Hank was trying to originally do in the states. Since then of course we've morphed into an even "better" plan (bigger, stronger, faster!). The numbers in this story are staggering - and effectively repeats much of what the U.S. is doing although we are funneling much of the bad assets... err, I'm sorry ... we're funneling much of the AAA rated paper into the burrows of the Federal Reserve. Then walking the emperor through the middle of town pointing at all his clothes... "oooh, ahhh... nice robe."

    So as we discuss career choices for your children it appears in addition to "federal government worker" & "healthcare worker" we will need to add "banking executive in any major industrialized Western country". Life is good when you take risks, profit from the gains, and shuffle losses onto the taxpayers when you lose. And still take home the bacon.

    This surely is only good news for speculators and banking executives - more and more risk is put on sovereign states and taken away from the private corporations - amazing to see this happening in country after country really. As you can see it was time to rejoice at Allied Irish Bank (AIB) and the Bank of Ireland (IRE) - wish I had caught this story early in the day or I would of jumped in... the government's of the West have made banks risk free investments.

  6. 8; i agree completely, this is another stepping stone. this last manufactured re/de pression, justifies their behaviour. it is all about keeping the masses in place. if it be media programmed, financially, [welfare][tax burden] [wages]. look at the average work week now, less, and less, with less $$$. a change is a comin.

  7. The author's reference to industrial capitalism seems to support a premise I have had for sometime and some of you have read my posts about; that is, we are experiencing the death of the industrial revolution. I have much to say on the direct we should be supporting for our future economic system as our current system continues to fail within this death spiral of the industrial revolution but I lack time currently to write these thoughts.