September 1, 2016 | Posted by D. T. Cochrane
The presiding logic of capitalism is that of accumulation. CasP re-emphasizes and re-theorizes accumulation as ‘Moses & the Prophets’ of capitalism. However, Nitzan and Bichler’s theorization severs the link between accumulation and productivity that grounds both mainstream and critical value theory. Instead, they emphasize the meaning of the nominal quantities of capital as a translation into finance of capitalists’ power, which transcends systems of production. That transcendence introduces an incredible amount of indeterminacy both for capitalists and for those who study capitalist power.
Although the presiding logic is accumulation, inside the indeterminacy of the accumulatory struggle is a complicated, intersecting mix of motives and operating logics. The relationship between these logics and the logic of accumulation is one that deeply interests me and I’ve written about it here multiple times. One of the reasons for the continued intrusion of other logics into mechanisms that have the ostensible purpose of accumulation – such as the corporation – is the fact that those mechanisms depend on people. Is there any person who could function purely according to the logic of accumulation? Likely, every individual will have motives other than returns. As is well recognized, there is no homo economicus. Further, their own accumulatory interests will often conflict with those of the mechanism for which they work. Mainstream theory acknowledges this latter fact in the form of the so-called principle-agent problem.
These other logics do not inherently contradict the logic of accumulation. In fact, often other logics are enacted on behalf of the system of capitalism itself. For example,Eric Ben-Artzi, a whistleblower who drew attention to account misstatements by Deutsche Bank, turned down his share of a $16.5 million (USD) reward. He did so because he thinks bank executives, rather than the bank itself, should pay the fine levied by the SEC. This expression of fairness is a defence of an idealized version of capitalism. Resonant with comments by Berkshire Hathaway second-in-command Charlie Munger that I also wrote about, Mr. Ben-Artzi is trying to protect the game from the players. If it is widely believed that the system is rigged, then people are likely to revolt against it.
Part of capitalism’s mythology has been that it is a meritocracy rewarding hard work and ingenuity. But, Mr. Ben-Artzi points to a revolving-door between Deutsche and the SEC as a reason why the executives got away with misdeeds and escaped punishment. He is expressing disgusting with insider corruption as contrary to the spirit of capitalism.
A question arises: Are reforms to prevent such activity intended to actualize the idealized version of capitalism or merely to assuage critics? Secondly, does it matter?