I can honestly say I learned something new today. I read a snippet from The Wheels of Commerce by Fernand Braudel. I'd never heard of him, but he's got his own shelf in the library. He writes conversationally, even entertainingly, surprising for such a turgid topic as economic history. But his points make sense - or at least, I don't have the necessary background to criticize them, so they sound good to me.

Writes like he looks - Ferdinand Braudel

He tries to find the origins of the terms 'capital, capitalist and capitalism'. They're murky, in large part due to capitalist economics itself, which claims it sprung fully formed from the industrial revolution. To admit otherwise would be to say it has a history, there was a time it had to fight for dominance and thus it could be fought again (which was Marx's point.)

Braudel finds records of the terms' usage as far back as the 12th century, and traces how capital's definition coalesced into: accumulated labour used to generate more accumulated labour. Money, stocks, bonds, etc. - the usual definition of capital - are just forms of accumulated labour (again, Marx said this.) They're important in their own right, but not sufficient. Factories, equipment, raw materials are also forms of capital, but not in of themselves. They have to be used in a particular way: to mobilize labour power.

You're way off

Having arrived at a working definition, Braudel's main question is: if capital was around in 1199, why did it take so long to become dominant? He goes back to classical economic's "fixed" vs "variable" capital (Marx again, though he wasn't unique in this.) Fixed capital is the means of production: factories, machines, etc. They're permanent, or relatively durable: they're the tools to create capital. Variable capital is the forces of production: labour, raw materials. They're temporary: they get used up in the immediate production process.

Braudel argues that, before the industrial revolution, there was no fixed capital, for the simple reason that everything broke down, often. Roads, bridges, dams, windmills - they were in constant need of repair. So capitalists didn't bother investing in them, and the potential development of the means of production never took place. Instead, capitalists stuck to trade, creating merchant rather than productive capital. Even when they became very wealthy, they weren't very good capitalists, because they didn't invest in new technologies and forms of production, preferring to hoard or waste their wealth on monuments and art.

"These crutches don't work very well."
"Yeah, whatcha gonna do."

This conservative strategy meant that capitalism survived, even if it didn't flourish. Since productive investments wasted money, capitalists kept their capital safe, till technology increased to the point that profitable investments could be made.

It hasn't changed fundamentally today. There's so much capital in the world that it can't be invested profitably. This is entirely different from being invested usefully: socialism means taking the social wealth and putting it towards human ends, not further accumulation. And when capital finds a profitable investment, it swoops down, buys it all up and bleeds it dry - until the resource is exhausted (oil in about 50 years), or costs become prohibitive (decent wages). It's all on a much grander scale today, of course - capitalism is busy colonizing every aspect of production and circulation, including areas previously off-limits (patented genes, for example, or music.) But the strange contradiction: capitalism waiting till conditions are 'right', defined technologically or socially, and then over-doing it, continues to be a defining feature of the system.

I also read The Relevance of Economic Theory, by Joan Robinson. Her point is that socialists ignore bourgeois economics at their peril. Without critiquing the ideology of neoclassical economics (which I described briefly a few posts back), we leave the field open to the apologists of capitalism. Rather, she suggests "The radical has to be well versed in Sraffa and Kalecki if he is going to take them on."

Here's the problem: I don't get Sraffa and Kalecki. I don't even get the questions they're asking - or Robinson herself. Someone please explain the following to me:

- a "capital/labour ratio... identical for all products"
- how "prices of production" are proportional to labour-values"
- "relative prices vary with the rate of profit" (as opposed to what? Fixed prices?)
- "Products for which the ratio of the value of capital to the wage bill is higher than the average at one rate of profit will show a rise in price relative to the average when the rate of profit is higher and contrariwise."

Check it out! Blatant lies for your kids! - from Chester Comixs

These are altogether too many concepts to hold in my head at one time, even if I knew what they all were (and I don't). And that's just from one paragraph. Marx actually feels clear compared to this. If I familiarize myself with this strange, arcane language, I'll let you know.

Social Capital

Finally, I was in the art supply shop the other day, when the guy behind the counter gazed at me evaluatively, and said, "That's great. You look just like my ex, but you dress much better."

"Thanks," I said. "That's the best thing anyone's said to me all day."

"It was meant as a compliment." And he gave me my change. Damn, that was nice. I have to say, if I'm ever feeling in need of an ego-boost, I go to the gay neighbourhood, find a coffee shop, and invariably someone compliments me on my hands, my shirt, whatever. If everyone was as positive as gay men, we'd all get along better (upon pain of fashion ostracization, I suppose.)