Home > Uncategorized > The 3 foundations of the bifurcation of economics and politics

The 3 foundations of the bifurcation of economics and politics

from Shimshon Bichler and Jonathan Nitzan and RWER current issue

Foundation 2: The self-equilibrating economic machine

This view emerged together – and remains deeply interlaced – with the mechanical cosmology of the seventeenth century. Throughout history, human beings, perhaps as a way of alienating themselves from nature, have tended to politicize their cosmos, imposing on their natural environment the power structures of their own society.[1] And this politicization continues in the liberal-capitalist order.

Think of the mechanical world, articulated since Machiavelli by Kepler, Galileo, Descartes, Hobbes, Locke, Hume, Leibnitz and above all Newton. The gods of this liberal cosmos represent absolute rationality, or natural law. The structure of this natural law is numerical and its language mathematical. The universe it gives rise to is flat. The particles that populate it have no inherent hierarchy. They don’t obey or submit, but freely interact through attraction and repulsion. Their actions and reactions are dictated not by a lineage of differential obligations, but by universal gravity. They are tuned not to the willful caprice of the Almighty, but to the structured relations between force and counterforce and the invisible power of equilibrating inertia.

This flat universe mirrors the flat ideals of liberal society. Reduced to its bare essentials, the liberal cosmos is a perfectly competitive market, populated by particles – or actors – each of which is too small to significantly affect the overall outcome. The actions of these particles – namely the market’s producers and consumers – are determined not by patriarchal responsibilities, but by scarcity – the gravitational force of the social universe. They are repelled from and attracted to each other not by feudal obligations, but through the universal utilitarian functions of supply and demand. And they obey not the dictates of hierarchy, but the equilibrating force of the invisible hand.

These mutual reflections help explain why politics and economics must remain distinctly constituted, and why politics must be seen as subservient to economics: if they are not, the arbitrary character of politics – and of power more generally – is bound to distort if not totally annul the rational-mathematical automaticity of the perfectly competitive economy; with mathematical rationality gone, liberals lose their universal laws of the economy and Marxists their capitalist laws of value, if not of motion; and with these laws defunct, political economy can no longer claim to be the science of society.   read more  

  1. Ikonoclast
    April 28, 2021 at 11:37 pm

    Bichler and Nitzan have solved the central problem of economic value theory. Instead of trying to unravel the Gordian knot of value they have shown that money does not measure value at all. The Gordian knot of value theory is cut at one stroke. However, there are issues to follow up.

    CasP argues that capital “is not a productive economic entity, but a symbolic representation of organized societal power writ large, and capitalism should be analysed not as a mode of production and consumption, but as a mode of power. In this approach, finance is neither a reflection nor a fiction, but the symbolic language that organizes and reorders –or creates the order of –capitalized power.”

    We need to expand on that last thought. If finance is the “symbolic language that organizes and reorders – or creates the order of – capitalized power” then finance (or rather humans and automated systems using finance) is a control system. The basic behavior of the real economy is as an unstable, open-loop dissipative system. Controlled by capitalist finance and unfettered human wants, it grows exponentially, but only until overshoot conditions are reached. In theory, the real economy could be stabilized effectively and efficiently by applying the principles of control theory, most notably the use of feed-backs. The feed-backs signals perforce would need to be taken from the real biosphere system, not from finance. However, the fallacy that money measures the real prevents us (under capitalism) from doing exactly this.

    Our control system (finance) sets up a (nominally) parallel and reflective virtual sphere. But whereas other virtual modelling systems (from climate simulators to computer assisted drafting systems (CADs) to computer simulation games) use essential principles from scientific laws to geometric modelling (descriptive laws), the property-finance system uses prescriptive axioms to develop a formal system un-modelled on the real world. Rather, the property-finance system models an idealised world which in turn is ideal only for the already propertied or for those rapacious or intelligent enough to game the rules of property-finance system to become propertied.

    Essentially, the issue is as simple as having a faulty navigation system or GPS for a dangerous journey. A faulty system will lead you to the wrong destination, to no destination or to a disastrous pass or impasse where you become stuck, lost and then deceased. We would not expect a map of Tolkien’s Middle Earth to be able to lead us across Australia’s Central Desert. Why then do we expect lumps of capital which measure nothing real, but certainly control real things via human actions, to guide us through climate change, the sixth mass extinction and even the COVID-19 pandemic? The proposition is absurd.

    The proof that this system has failed is in its empirical outcomes. Climate change is real and rapidly spinning out of control from real positive feed-backs. The sixth mass extinction and the dire results it portends are real. The capitalist world’s failure to deal successfully with the COVID-19 pandemic is also real. Only dangerous, anti-science and fascistic buffoons like Trump, Bolsonaro and Boris Johnston could spin the current dire state of capitalism as a success.

    The question is this. When do people realize the system has comprehensively failed and needs a radical overhaul? The current answer seems to be “Too Late!”.

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