How to think of the stability of capitalism

The problem of how processes come to take on a stable recurrent form is widespread in science. It has been of particular concern to biologists and biochemists working on the origins of life. They have to explain how, contra the apparent preference of thermodynamic laws for maximal disorder, we do in fact see highly ordered structures; including ourselves. Both [Dawkins(2004)] and [Kauffman(1993)] have made useful contributions to how we can conceptualise the stability of orderly processes. The basic argument they develop is that features stabilise if their existence at time tnincreases their probability of existence at time tn+1. But this probability is a conditional probability, conditional on the features being situated in what Kauffman calls autocatalytic networks. These are networks, initially conceptualised in terms of polymer synthesis[Farmer et al.(1986)Farmer, Kauffman, and Packard], each of whose components, when present, increases the probability of the whole network persisting. A flame or a cell is such an autocatlytic network. A cell is a polymer collection : enzymes, lipids and nucleic acids which, in the presence of an external energy source will maintain itself and perhaps grow. The different enzymes work together to synthesise one another. Current cells depend on DNA, but at a much earlier epoch more primitive self sustaining networks must have existed, from which cells evolved. These networks, in the absence of the directing influence of DNA would have relied purely on enzymatic feedback.

These concepts are applicable to social forms of production and in particular to those, like capitalism, which develop without a definite directing influence. We should, I think, use these concepts either implicitly or explicitly in our analysis of the different historical modes of production and the social forms to which these give rise.

Any economic system is a process, a process that undergoes constant change at the fine level, but shows relative stability at the coarse level. There is change at the level of all the individual products that are being transformed by labour and are then being consumed or emplaced. The population is made up of mortal members, so its membership constantly turns over. But there are certain suitabilities. From year to year the number of people changes only slightly. Towns grow and shrink but they can endure with the same basic street plan for centuries. Industries and family lines grow up and die over periods from decades to centuries. Firms and households do the same over shorter periods.

But what are these things that grow persist and die?

They are all themselves processes, and their apparent ‘thingness’ rests on repetition enmeshing a homeostasis that preserves a certain basic structure. Production is often directly recurrent, as in the annual agricultural cycle, or the three minute repetition cycle of the original Ford production line. In other industries, like ship building, the repetition is more approximate. The individual ships differ in size, shape and construction time, but still retain a more abstract structural cycle from laying the keel, though assembly to launch and fitting out.

The fleeting stability of units of production rests on their slowly changing work forces and long lasting production facilities. For the domestic economy the slowly changing workforce were one or more generations of family members who gradually replace one another, the long lasting facilities were the buildings, granaries and farmland which, having been originally cleared from forest, had by generations of effort been developed. For a car firm you have employees who, as a collectivity, have the knowledge and skill to cooperate in making cars. The long lasting facilities are the buildings and equipment, which, like the farm, gradually develop over time.

These stable components combine, at any one instant, with material in flux. There is material waiting to be transformed: seed, car parts. There is material undergoing transformation : growing oats, partially assembled cars on the line. At times, there are are transformed products: a full granary, finished cars in the lot. The whole process is impelled by external sources of energy.

Traditional farms are solely solar. Industry has two energy sources. First is the primary motive power, electricity today, but once coal or flowing water. Second is human labour power, energised by food. The domestic farm generated human energy internally, but for a factory it comes from outside. Workers walk in fed and energised for the day’s work. Where the farm regenerated its own inputs, its seed corn, the factory’s components and raw inputs come in the gate. The transport and sale of commodities fits within these, almost, repetitive cycles.

The fact that the factory exists and produces things, constrains the rest of society to be so organised that: there is each day a cohort of workers ready to cross its threshold; that there is a flow of its primary energy source; that there is a stream of components and raw materials being delivered regularly and that there is a regular uplift and transport away of the products it makes.

When we say above that the factory constrains the rest of the society to have certain features we mean:

  1. That a particular combination of embodied technologies and social forms together form an autocatalytic net which tends to persist.
  2. That the actual existence of factories implies that there must exist one of the possible autocatalysis systems that boost the probability of factories.
  3. In this sense the factory, which we know to exist, constrains the rest of society.

In all, the factory implies a much more stringent set of constraints on the rest of society than is implied in the existence of a subsistence farm. The interface between the factory and society is complex. It implies that the society in which it is embedded must be able to generate and sustain the workers who come in each day. It is not enough that the people exist, and have the relevant skills. They must be generated as factory workers not as some other kind of person. They must be free to work in the factory rather than tilling their own farms or being tied up in some quite different activity.

The delivery of primary energy implies a whole organised supply network. At one time this might be something local, an enchanneling of a river by weirs and millraces. Later it is more encompassing: canals to deliver coal, mines to extract it. Now it implies electricity grids, with networks of generators synced to a 50Hz cycle.

The supply of raw materials and components implies a transport network, and a supply chain. It implies other factories. The complexity of the supply network grows, quite literally, exponentially with the the number of inputs to the factory1. This complex of recurrence constraints is the determining role of the productive forces. Recurrence relations select out only certain sets of social forms and relations as compatible.

There is not just a single set of reproductively competent social relations for industrial production. Theory and history teach us that there are at least two, possibly more, characteristic social forms of industrial society. Which set of social relations the factory is embedded within depends on real history. In modern terminology it is path sensitive, dependent on whether the society has undergone capitalist or socialist industrialisation.

We are here only concerned with the former. So we have to assume that there is no overarching social planning mechanism that will deliver the components that the factory needs, no system of general labour allocation that will ensure that fed and clothes workers turn up each day. Instead all of these preconditions must be arrived at by the exercise of private contract. Nothing arrives without a prior promise to pay a monetary equivalent. In the absence of a general social direction of labour and resources, the social power of the state symbolised in money is co-opted by private firms to command2both the living and embodied labour their survival demands. They can demand labour and components so long as they have the cash. Behind these transactions, admittedly, stands the state power, ready to enforce the law of contract, ready to enforce debts in its currency, but the contracts themselves are private. Hence the arguments that we have used earlier to explain the enforcement of another law, what Marxist economists called the ‘law of value’3, express the real dependence of firms’ reproduction on the laws of contract. These themselves are so constructed as to be neutral with respect to the distribution of the social power of money. The state treats both firms in a contract equally and is concerned only that appropriate monetary equivalents are paid for goods delivered. The law of contracts is neutral in the distribution of social power of money between subjects of right4. The survival of the firm as a technical and labour co-operative unit, then depends on its survival as a contractual unit, as a subject of right, an owner of property.

In order to reproduce themselves in the absence of a social plan, factories have to be able to command the delivery of labour and components. The latter implies that they must, albeit indirectly, be able order the allocation of social labour into the making of those components. The statistical laws regulating price, act to make sure that command over money becomes, on average, command over an equivalent amount of labour, thus allowing a decentralised ‘planning’ of the economy to take place.

1  Why is capitalist command mystified?

Finley[Finley(1980)] argues that whereas ancient authors where quite open about the exploitative nature of their society, modern ideology strives to suppress talking about it. The power of command, domination of the slave lord or dominus was open, unashamed and enforced with whips and branding irons. That of the capitalist is presented in the guise of equality on the market and fraternity as citizen. The worker and Ford, the farmer and Tesco meet and contract as legal equals. The fact is of course, that behind the legal facade, they are far from equal. Ford or Tesco have financial resources that are perhaps a million times as great as an individual worker or farmer. The £millions in the accounts of the firms put them in a position of vastly greater bargaining strength than a worker who would be hard put to survive a month without pay, or a farmer who, by harvest time, has run down his assets to almost nothing.

owennote

Figure 1: The labour certificates issued by Owen’s labour exchanges.

The classical economists had unmasked what was happening in this process. They wrote in a still aristocratic Britain, where the common people could neither vote nor, in the main, read. You find in Smith an openness about class and command that came to those with a classical education. He saw that money was the power to command the labour of the lower classes. In his day the coinage was still gold, open fiat money in Europe was yet to come, though the Chinese had long known it. But by the early 19th century, having experienced the suspension of bank note redemption during the French wars, socialist writers started to propose that instead of gold, money should be openly denominated in terms of labour. Instead of having the motto `I promise to pay the bearer on demand the sum of One Pound’ they would promise goods to the value of one hour (Figure 1).

There are two reasons why this idea has never been implemented. One of these is minor. Although prices are regulated by labour, it is approximate, so there is around a 10% margin of error above and below, so there would never be an exact equality between the labour performed and the price obtained. But that pales to insignificance compared to the much bigger political obstacle. Were such notes to be introduced they would highlight that behind the apparent equality of employer and employee there is in reality a deeply unequal relationship. Such notes would be little short of revolutionary pamphlets. They only made sense, in the context of Owen’s exchanges, if they were to be part of a process of moving the whole economy over to communist operation.

References

[Bordiga(1954)]
Amadeo Bordiga. Dialogue avec staline. Paris, Editions Programme Communiste, 1954.

[Bordiga(1975)]
Amadeo Bordiga. Structure économique et sociale de la Russie dáujourdh́ui: Développement des rapports de production après la révolution bolchevique, volume 2. Editions de l’Oubli, 1975.

[Dawkins(2004)]
R. Dawkins. Extended phenotype-but not too extended. A reply to Laland, Turner and Jablonka. Biology and Philosophy, 19 (3): 377-396, 2004.

[Farmer et al.(1986)Farmer, Kauffman, and Packard]
J Doyne Farmer, Stuart A Kauffman, and Norman H Packard. Autocatalytic replication of polymers. Physica D: Nonlinear Phenomena, 22 (1): 50-67, 1986.

[Finley(1980)]
MI Finley. Ancient Slavery and Modern Ideology ,London. Penguin, 1980.

[Kauffman(1993)]
S.A. Kauffman. The origins of order: Self-organization and selection in evolution. Oxford University Press, USA, 1993.

[Reifferscheidt and Cockshott(2014)]
Michael Reifferscheidt and Paul Cockshott. Average and marginal labour values are O nlog(n)—a reply to Hagendorf. World Review of Political Economy, 5 (2): 258-275, 2014.

[Smith(1974)]
Adam Smith. The Wealth of Nations. 1974.

Footnotes:

1[Reifferscheidt and Cockshott(2014)] shows that the number of inputs to an industry grows proportionally to the logarithm of the number of industries in the economy. Inverting this relation it follows that the number of other industries in the economy grows exponentially with the number of inputs to the average industry.

2“Wealth, as Mr. Hobbes says, is power. But the person who either acquires, or succeeds to a great fortune, does not necessarily acquire or succeed to any political power, either civil or military. His fortune may, perhaps, afford him the means of acquiring both, but the mere possession of that fortune does not necessarily convey to him either. The power which that possession immediately and directly conveys to him, is the power of purchasing; a certain command over all the labour, or over all the produce of labour, which is then in the market. His fortune is greater or less, precisely in proportion to the extent of this power; or to the quantity either of other men’s labour, or, what is the same thing, of the produce of other men’s labour, which it enables him to purchase or command. “[Smith(1974)]

3This phrase is widely used by Marxian economists. Some have taken it to simply mean contractual equality between agents in the market[Bordiga(1975),Bordiga(1954)], but more generally they seem to mean the law that labour time determines price.

4Actual inequalities, which are of course massive, arise outwith contractual enforcement.

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2 Responses to “How to think of the stability of capitalism”

  1. Alex Says:

    Very interesting as always. But I’m not sure you have explained the stability of capitalism. The analogy with ‘autocatalytic networks’ is very interesting, but it would be nice if it were more developed. Seemed to fade away a bit.

    Just as an example, the ramifying networks of suppliers of inputs that you identify, are, as you obviously well know, over time incorporated into larger unified legal entities, e.g to ensure security and stability of supply, achieve scale economies etc. And this process is ratcheted by competition. So one might ask why we don’t get a fairly seamless transition to socialism (i.e where firms have become so large that it becomes obvious to all to just go for integrated direct planning). Why is capitalism stubborn?

  2. Paul Cockshott Says:

    Well perhaps I was using the term stable in a slightly more short term sense. It is one of the assumptions of historical materialism that over time the system will change. What I was trying to do was give some way of thinking the process that Althusser in Philosophy of the Encounter, describes as the ‘taking’ of capitalism, through the encounter of social features that become self reinforcing.

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