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From Piketty’s Capital to Marx’s das Kapital

Thomas Piketty’s book Capital in the Twenty-First Century has created a very new platform for a discussion of the global economy. There is possibly no other book on economy which has been published in so many languages, printed in so many copies, and has found its way to such a varied global public. Piketty’s Capital has been discussed in many high ranked academic journals, and at the same time, it has come out to a broader audience with advertisements in places like the underground public transportation in metropolises around the world. The title of the book is also very ambitious in so far as the title Capital claims to be a follow up of Karl Marx’s Das Kapital for the twenty-first century. Piketty is similar to Marx in his ambition to give a large historical, or a world historical perspective on the significance of capitalist economy for the development of global society. Given this background it could be interesting to consider the relations between Piketty’s Capital and Marx’s Das Kapital.



Main Thesis

My main thesis is that although Piketty gives a very essential theoretical and historically based prognosis and critique of the development of inequality as he expects it to increase in the twenty-first century. Ultimately, he is not able to provide a conceptual critique of capitalism which can surpass the basic market perspective in Adam Smith’s tradition of classical and neoclassical economy.

On this basis my thesis is that Marx’s conceptual determination of the capital, das Kapital, the capitalist mode of production, and capitalism in general could contribute to sharpen the outcome of Piketty’s enormous empirical and historical research on the development of inequality in capitalist societies beginning from the French Revolution. In addition, Piketty has also presented a calculated prognosis for the exacerbation of inequality in global capitalism during the twenty-first century.

According to Marx, the development of inequality is not accidental but inherent in the principle of capital and the capitalist mode of production. Therefore, Piketty’s empirically documented development of inequality should lead to a fundamental critique of capitalism. However, this is not the case.

On this background, I would like to consider a change of perspective from Adam Smith’s liberal market perspective to Marx’s productive perspective on capitalism. For Marx, capitalism is seen as an autopoietic bureaucratic and productive machinery or social system, which not only determines the production of inequality but also the basis for all social relations on a global scale.

Outline of the paper

In the following paper, I would like to substantiate this thesis with a presentation of Piketty’s theory, method and main results. I would further like to present Marx’s critical concept of the capital and capitalism. Finally, I would like to illustrate some of the consequences of Marx’s critical theory for the understanding of Piketty’s empirical work.

Piketty’s Capital


Piketty’s theory is situated in Adam Smith’s liberal tradition.

Piketty’s work is situated in Adam Smith’s liberal tradition. Adam Smith’s main work Wealth of Nations (1981 I-II) from 1776 is interesting because it represents the foundation of modern economy. Smith’s theory can be read in many ways and it has brought inspiration to many different perspectives on ethics, societal ethics, common moral, political philosophy, political theory, sociology and economy. Normally the economic perspective has been emphasized, but one could say the same regarding the other perspectives.

Wealth of Nations begins with a presentation of the division of labor as the basis for creation of wealth in a nation. Therefore, it should be emphasized that Smith has a general concept of work as the basis for his economic theory. Smith formulated this generalization on the basis of the Physiocrats’ more restricted idea that only agricultural work created value.

The second essential line of thought by Smith is that the products of work should be sold at a price determined in an open market, which on a larger scale implies the world market as its perspective. Therefore, the free market is essential for Smith.

The third line of thought is that the price of the commodity is determined by the work behind the creation of the product. However, Smith is not completely clear on this topic. The other perspective in Wealth of Nations is that the price is determined by the exchange in the market. In other words, Smith’s theory is ambivalent concerning the creation of value.

It is this ambivalence in Smith’s theory, which is in the center of discussion during the next two hundred years among economists, especially in the neoclassical economic tradition.

On the one hand, the work perspective leads to an internal understanding of the fundamental role of work in comprehending societal relations and institutions. This is what leads to the sociological perspective on the relationship between economy and society. Marx’s, Durkheim’s and Weber’s theories should also be mentioned here.

On the other hand, we have the price and market perspectives, which become the dominant perspectives in later economic traditions. It is in these traditions that we find the most economists having an influence on economic practice and on economic education. Thomas Piketty should be placed in these traditions.

Piketty’s research method: economy as part of the social sciences

Piketty is a market economist based in Adam Smith’s liberal tradition and the later neoclassical liberal tradition. However, Piketty has a much broader theoretical and methodical horizon, which should be understood on the background of Piketty’s French formation.

The interesting thing about Piketty’s method is that he wants to integrate economics as a sub discipline of social sciences, alongside history, sociology, anthropology, political science and even literature (Piketty 2014: 573 ff.). Piketty has his specific methodological perspective from the French Annales School and from Francois Furet’s quantitative historical method, which gives him a long and convincing historical perspective (Bouvier & Furet 1965; Piketty 1998; Piketty 2001; Piketty 2004; Piketty 2006). Piketty would not have been able to come to his results, if he had not integrated all these different perspectives.

Following this, Piketty wants to reconstruct the classical political economy as a value based science, which is connected to its political, normative and moral purpose (Piketty 2014: 573 ff.). This is the same ambition found in Adam Smith and further back in classical political philosophy by Aristotle and Thomas Aquinas. The fundamental question according to Piketty is, how public policies and institutions can bring us closer to an ideal society (Piketty 2014: 574). This was also the question raised by Aristotle, Aquinas, Adam Smith, Hegel and Marx. They had very different answers to this question, but they all had in common that the economy should be subordinated to the political, normative and moral value horizon. Economy could not be sustained independent of the moral, social and political interpretation.

According to Piketty, political economy should be a part of public discussion meaning that the shared values should be found in public democratic discussion. According to Piketty, this is not the case in most economic theory and practice in which economic models are used without regard to the political, social, cultural and historical context.

Piketty’s basic thesis: r > g – revenue is bigger than growth in a long historical perspective

Although Piketty has these critical perspectives on economy, he is in many ways still a traditional market economist based in Adam Smith’s liberal tradition and the neoclassical tradition. Piketty’s focus is price, market and equality in the distribution of goods. It is in this background that Piketty is concerned with the liberal discussion of inequality.

Piketty’s basic thesis is that revenue, r, has been bigger than growth, g, during the last two hundred years in Europe and the US, and more generally in all higher developed societies in recent history. Therefore, there has been a tendency towards a strong inequality in the last two hundred years in Europe. In general, this has also been a tendency throughout European history and in all higher developed societies. In that sense, all societies in history have been class based societies, albeit in different forms.

Patrimonial Capitalism

It is Piketty’s expectation that a new form of capitalism has been created, which he calls patrimonial capitalism (Piketty 2014: 173). It could seem to be a new form of capitalism, but in fact, it is a form of capitalism, which was known from the late 1800s until 1914. It is characterized on a huge accumulation of private wealth among a small part of the population, the upper 10%, 1%, 0.1% and 0.01%. At the beginning of the 1970s, the total value of private wealth in the Western societies stood between two to three and a half years of national income. Forty years later, in 2010, private wealth represented between four to seven years of national income in the Western world. The general evolution is clear: This is a strong comeback of private capital in the rich countries since 1970 (Piketty 2014: 173). This concentration of wealth is what Piketty calls ‘patrimonial capitalism’.

Piketty regards the new patrimonial capitalism as a repetition of something, which was formerly known in history from the late 19th to early 20th century. It is characterized by a high concentration of wealth in a low-growth environment like the nineteenth century (Piketty 2014: 237). The crisis of 2008 was according to Piketty the first crisis of the globalized patrimonial capitalism of the twenty-first century (Piketty 2014: 473). He expects that it will be followed by other crises. This is the scenario that Piketty expects for the twenty-first century.

Patrimonial capitalism, heirs and entrepreneurs

Consequently, the strong concentration of wealth can give rise to a tendency where the ‘entrepreneur’ transitions to the ‘heir’ as the basic figure of capitalism. According to Piketty, all large fortunes, whether inherited or entrepreneurial in origin, grow at extremely high rates, regardless of whether the owner of the fortune works or not (Piketty 2014: 439ff.).

Piketty gives a very illustrative example comparing Bill Gates, the entrepreneur among all entrepreneurs, and Liliane Bettencourt, the heiress of the cosmetics company L’Oréal. Between 1990 and 2010, Bill Gates’ fortune increased from $4 billion to $50 billion. In the same period, Liliane Bettencourt’s fortune increased from $2 billion to $25 billion. Both fortunes thus grew at an annual rate of more than 13 percent from 1990 to 2010.

Piketty also mentions Steve Jobs, who is regarded as a more creative entrepreneur than Bill Gates. But at the top of his career, his fortune was only $8 billion in 2011.

Piketty’s conclusion is that inheritance becomes the main access to the creation or growth of fortunes, and not the entrepreneurial spirit. Therefore, wealth is not just a matter of merit, and capital grows according to its own dynamic, when it has passed a certain size. The reason for this is the simple fact that the return on inherited fortunes is often very high solely because of their initial size.

Inequality – The economic system is the problem

It is a common discussion in liberal political theory that inequalities are acceptable if they serve the common good. This is also what has been stated in §1 of the Declaration 1789: “Men are born and remain free and equal in rights. Social distinctions may be found only upon the common utility”. It is on this basis that entrepreneurs becoming extremely rich while compared to other people becomes acceptable.

However, Piketty claims that the entrepreneurial argument cannot justify all the inequalities of wealth, no matter how extreme (Piketty 2014: 443). This is a claim that we find in Rawls’ liberal theory as well (Rawls 1971). As we have seen, the general class based inequality r > g combined with better returns on capital as a function of initial wealth makes it possible that fortunes can grow and perpetuate themselves beyond all rational limits and beyond any possible rational justification in terms of common utility.

In this way, it does even not take one generation to move from an entrepreneur to a rentier. Entrepreneurs can be transformed into rentiers in their own lifetime, and their wealth can be multiplied more than tenfold in twenty years as in the case of Bill Gates and Liliane Bettencourt (Piketty 2014: 443ff.).

The consequence is that even the merit criteria in §1 of Declaration that social distinctions are acceptable if they serve the common utility or the common good is very difficult not to say impossible to concretize. It is very difficult in praxis to sustain the distinction between the entrepreneur and the rentier when the first can be transformed into the second in a very short time as has been exemplified with the case of Bill Gates.

As I understand Piketty, he draws the conclusion that the most important problem is not to clarify whether inequality serves the common utility or not? The most important problem is that the accumulation of wealth among the 1%, the 0.1% and not at least the 0.01% tends to represent 70%-90% of all the countable wealth in global societies. It is this enormous concentration of wealth that justifies Piketty’s use of the concept of patrimonial capitalism.

Patrimonial Capitalism

The concept of ‘patrimonialism’ is situated in Max Weber’s classification as a traditional form of governance (Weber 1980: 682 ff). It has its origins in the specific patriarchal form of authority in the family. Following up, it can be broadened out to concern patrimonial forms of government in which political and or economic power can be concentrated. In this form of government, authority and power form a political unity. It is this traditional unity which transgresses into the power and authority of economic wealth in the patrimonial form of capitalism, as has been described above.

Problems with Patrimonial Capitalism

Per my observations, Piketty draws the following conclusions concerning the patrimonial form of capitalism.

Society will fall behind the French Revolution

Piketty’s perspective is overall that patrimonial capitalism will bring society back to before the French Revolution. Some of the modern institutions may formally be maintained but the reality may be different.

Suspension of basic principles of Human Rights 

The second point is that the basic values of modern society are suspended as they are formulated § 1 of the Declaration: “Men are born and remain free and equal in rights. Social distinctions may be found only upon the common utility”. In patrimonial capitalism, there are basic distinctions which are bound to inheritance and which therefore are transferred from generation to generation. This is exactly what characterizes a traditional pre-modern society. In such a society, men are not equal in rights, because wealth is the basic structuring parameter for the life chances of people in all matters concerning wealth, education, health, work, and political, social and other positions in society. In short, human rights are suspended in such a society.

Suspension of democracy 

The third point is that democracy will be strongly weakened or even suspended in such a society, and there can be no possibilities to develop democracy in such a society.

Stagnation of society 

The fourth point is that patrimonial capitalism will not be able to develop a society because the entrepreneur and innovator will lose their possibilities compared to the primacy of secure reproduction and accumulation of the inheritance.

Violence and corruption will dominate society 

The fifth point is that such a society will be built on violence and corruption instead of legal and deliberative political institutions.

The rule of war between states 

The rule of war between states will be dominant because interstate conflicts cannot be solved through diplomacy and international law.


Patrimonial capitalism does already exist in many societies in the world

The description of patrimonial capitalism may seem like a doomsday prophecy, a description of the last days. But in fact, the reality is that this form of capitalism does already exist in different forms in many societies in the world and maybe even the most societies with a developed economy combined with a strong authoritarian and corrupt regime. Even in the US we find signs of patrimonial capitalism, when wealthy people have enormous possibilities to influence elections, political life, allocation of resources and social decisions.

Piketty’s Capital: A platform for a critique of capitalism and its perspectives

In the end, the interesting thing about Piketty’s analysis is in the end that it is an economic analysis on the basis of the fundamental principles of the French Revolution. Piketty’s own conclusion is that the French Revolution failed and is an illusion.

With this background, one could have expected that Piketty had been critical toward capitalism as an economic system. But this is not the case. Piketty is worried about the historical consequences of capitalism, but he does not criticize capitalism in itself as an economic and social system. However, this seems to be a relevant topic as he has at least created a new platform for a discussion of capitalism, because he has uncovered some of the historical destructive perspectives in capitalism.

Marx’s Das Kapital

Introduction to Marx

It is in this background that I would like to discuss Marx’s concept of capital, das Kapital, and some of his perspectives on capitalism. Marx is such an interesting thinker in this context because no one has delivered such a strong critique of capitalism and political economy as him.

If we want to understand Marx’s critique of capitalism, we have to look shortly at his intellectual background and development. Marx (1818-1883) is a German intellectual strongly influenced primarily by Hegel’s political philosophy. Marx is a Hegelian who criticizes Hegel’s perspective on state, civil society, politics, and economy in Kritik der Hegelschen Staatsphilosophie 1844 (Marx 1841/42: 20-149). His basic critique of Hegel’s Philosophy of Law (Hegel 1955; 1991) is that Hegel ‘aufhebt’, lifts up or sublates the basic contradictions in civil society into a reconciliation, ‘eine Versöhnung’, in the State as an all-encompassing unity of the contradictions in civil society. According to Hegel, the contradictions in civil society were first of all constituted through the struggle between economic agents, who were only concerned with their own business. This is an insight Hegel had acquired through Adam Smith’ Wealth of Nations (Smith I-II 1981) and David Ricardo’s Principles of Political Economy and Taxation from 1817 (Ricardo 1996).

In his Kritik der Hegelschen Staatsphilosophie 1844, Marx mostly critizised Hegel’s Aufhebung and Versöhnung. Later on, his project became to reconstruct this political and political-philosophical critique of Hegel as a critique of political economy. Therefore, it would be right also to consider Marx as a Hegelian in this later period of his life after 1849, when he arrived as a political refugee to London. This is also what Marx remarks in his postscript to the second edition of Das Kapital (Marx 1970: 27f.). Marx comments on his method and claims that there must be made a distinction between the research (die Forschungsweise), in which the subject is taken in consideration, and the presentation (die Darstellungsweise), in which the topic is reconstructed as it has taken place. Die Darstellung, the presentation, means for Marx the same as how the subject can be developed in an idealized way which gives the impression that it could be a pure construction. One could say that it could give the impression of being a pure construction without relation to the reality in so far as it should present the essential (das Wesen) of the topic. In that sense, ‘die Darstellung’ could also be considered as a form of presentation and interpretation at the same time. Although Marx claims to be a materialist, he has such a style of presentation that it does remind us of a constructed model in the idealistic tradition of Plato and Hegel.

Marx’s Hegelian method

It is very essential to understand Marx’s Hegelian method, because it indicates that for Marx and for Hegel there are always two levels in the understanding of social phenomena. On the one hand, we have the surface, ‘die Erscheinung’; this is the empirical level, where the events happen. On the other hand, we have the understanding of the phenomena; this is the level where the essence, ‘das Wesen’, is expressed. As the third step, Hegel and Marx claim that it is only from the perspective of the essence, ‘das Wesen’, that we can understand the empirical level, where the events take place. According to Marx and Hegel, this was the meaning of dialectics.

It is exactly this phenomenological double perspective with the movement from Erscheinung to Wesen and from Wesen to Erscheinung, which is so strange for the American and English way of thinking, and is also the dominant perspective in modern liberal economy. However, it is this double perspective, which gives Marx the possibility to make a critical reconstruction of the political economy and present a new perspective on the relation between economy and society.

Marx’s project is to reconstruct the classical political economy

With this background we can discuss what Marx is concerned with in Das Kapital. Here we should remark on the subtitle of Das Kapital, which is Kritik der politichen Ökonomie – Marx wanted to criticize and reconstruct the political economy because it did not present what should be its essence, das Wesen. One could say that Marx wanted to write a new edition of Smith’s Wealth of Nations. According to Marx, political economy had moved away from a scientific project to a political project that was only concerned with price and market, the surface, ‘die Erscheinung’, because it served to hide that the dominant economy’s ‘Wesen’, the workproces, was based on exploitation of the workforce, who produced value and surplus-value.

Marx did not finish his project; he did not finish the presentation of the total reproduction of the economic system. In that sense, we cannot say that Marx has presented a model for the total reproduction of the economic system. Marx edited only the first volume of Das Kapital in 1867. Friedrich Engels edited the next two volumes with support from Marx’s remaining manuscripts. Therefore, the question is what status can Marx’s theory have, when it is not finished in the same sense as Adam Smith’s Wealth of Nations is a finished work?

The three edited volumes of Das Kapital, the collection of Marx’s preparatory work papers collected in Grundrisse der Kritik der Politischen Ökonomie (Marx 196-?), combined with the rest of Marx’s work give a sufficient basis to understand Marx’s new theoretical contribution to the political economy. Marx presented the basic principles in a critical theory with a new perspective on political economy understood as the reproduction of what he called the capitalistic mode of production or the capitalistic economic system. Broadly speaking, it gives a new understanding of the basic principles in a capitalistic society. In that sense, Marx’s theory provides the basis for a sociological understanding of the relation between economy and society, and in a wider perspective for the interpretation of history.

The glorious and tragic days of Marxism have ended. Therefore, today Marx’s theory should be seen in line with other economic and sociological theories, and it should be seen as part of a hermeneutical work, which in the end determines the integration of the different possible scientific perspectives.

With this background, I would like to present some of the essential topics in Marx’s theory in Das Kapital and Grundrisse, which will be relevant for a discussion of Piketty’s Capital. I will concentrate on the first chapters of Das Kapital as it is here that we find the basis for all of Marx’s theoretical construction.

The concept of Capital – The constitution of das Kapital

It already becomes clear from the title page itself that Marx’s Das Kapital is a very special treatise. On the one hand, it is in fact very similar to Hegel’s Philosophy of Right (Hegel 1955), and on the other hand, it is very different compared to Adam Smith’s Wealth of Nations and Piketty’s Capital. Therefore, it can be enlightening to compare it with these treatises.

Smith’s theme is the nature and causes of the wealth of nations, and chapter 1 begins immediately with a presentation of the division of labor as what has mostly improved the production of wealth (Smith 1981, I: 13 ff.). All the categories here and in the rest of the treatise refer to empirical matters. All of Smith’s categories have an empirical reference.

The same could be said about Piketty’s subject, which is equality and inequality with reference to the distribution of wealth.

Marx’s Introduction does not have this character. The title of the book, Das Kapital, is an abstraction and does not have an immediate empirical reference. The subtitle is Critique of the Political Economy. This means that the treatise is concerned with a critique and reconstruction of political economy as we know it from Smith and Ricardo. The subtitle of the first volume of Das Kapital is the Capital’s Production Process. The subject in Das Kapital is the capital. This is very strange in itself. How should capital be understood in a determined form? Normally we understand capital in quantitative terms, however, in Marx’s determination of das Kapital (Marx 1970: 12) we have to do with a concept. Capital is a conceptual abstraction, and it is the production and reproduction process of this subject, which is the topic of Das Kapital. This is also, what Marx emphasizes in the introduction to the first edition of Das Kapital in 1867 (Marx 1970: 11-17). In the postscript to the second edition from 1875, Marx comes back to the same theme concerning his method, which he designates as being the same as Hegel’s method, although turned around, because Marx claims that Hegel is an idealist, and Marx claims to be a materialist (Marx 1970: 27). I think that the two methods are very closely connected, and I find it difficult from a methodological perspective to see the difference between the beginnings of Hegel’s Philosophy of Right and Marx’s Das Kapital.

Marx’s development of the concept of capital

The first chapter of Das Kapital begins in the same abstract style with an analysis of the wealth in a society dominated by the capitalist mode of production, which presents itself as an amazing collection of commodities. The skeleton, ‘die Elementarform’, the basic element of such a society is the commodity. This is the reason why Marx begins his analysis with an analysis of the commodity.

In chapters 1-3, Marx develops all the basic concepts of work such as the production of the commodity, the use and exchange value of the commodity, the equal exchange of commodities, and the invention of money as the means of exchange of equal values.

I would especially like to emphasize chapter 1, section 4, where Marx introduces the fetish character of the commodity and it’s secret. In a commodity producing society, all social relations become hidden in the commodities, which are all a product of the work process. It is the commodities that seem to be the real actors in society (Marx 1970: 86). This is the beginning of the creation of the alienation in a society dominated by the capitalist mode of production.

In the third chapter, Marx describes how money becomes the general presentation of the circulation of commodities. There is a change from the form ‘commodity – money – commodity’ to the form ‘money – commodity – money’. In this way, money comes into the center of society and becomes an aim in itself.

In the fourth chapter, The Transformation of Money into Capital, Marx questions the addition of value when only equivalents are being exchanged all the time. Marx’s simple answer is that the workforce, ‘die Arbeitskraft’, is a commodity, which has the ability to produce more value, a surplus value or ‘Mehrwert’, than it costs to reproduce it.

Marx speaks about the transformation of money into capital, when the production takes the character of a production of surplus value, ‘Mehrwert’, and in that sense a production of Capital (Marx 1970: 180 ff.). Marx speaks about society as a capitalist society when the production of capital dominates society.

The term ‘capitalism’ is a technical term, a concept for a specific form for economy and society. The concept capitalism has its origin in the Late Latin word capitale derived from caput, meaning ‘head’, which is also the origin for chattel and cattle in the sense of moveable property. Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money, or money carrying interest. In English language, the word capitalism is used since the 1850s as the determination of a specific form of society, in which capital and capitalist modes of production have a determined significance.

On the basis of the concept of capital, Marx’s project is to develop an all-encompassing description of the reproduction of a society dominated by the capitalistic mode of production. As mentioned, Marx did not finish this project. In this sense we could say that Marx did not succeed. However, this would not be a correct judgement, because Marx developed the base for a new understanding of economic significance in a modern society.

I will not go in detail with a further presentation of Das Kapital, but would only like present some of the consequences of Marx’s perspective. I speak here about the abstract theory in itself and not about the specific historical forms, which are determined by many other historical and social factors. In that sense, the abstract principle of capital does only indicate the determinate productive principle in a specific historical form of society.

Marx gives a totally new perspective on liberal economy

The essence is that Marx determines a new perspective on economy and society. Das Kapital, the capital, is a driving machine or subject, which aims to produce capital in an escalating intensity and quantum. This is also determined as accumulation of capital.

Das Kapital is a critique of the liberal market economy

Marx theory is a critique of political economy. The word ‘critique’ could be mystifying. Therefore, let me first express what I think critique means in this context. It primarily means to show what is inconsistent, hidden or suppressed in the understanding of a liberal market economy, and secondarily to present a reconstruction of a basis for another understanding of economy. In the liberal economic perspective, the economy does only mediate social relations; it does not produce social relations. The basic categories are therefore price, market and commodity. In this perspective, the economy is in itself a neutral mediator. In Marx’s perspective, it is different.

Das Kapital is the productive and destructive subject of society

In Marx’s perspective, das Kapital not only produces ‘Mehrwert’ and ‘Kapital’, or is not only an economic productive force. Das Kapital forms a society, its institutions and its social relations in a specific adequate way. In this context, the following topics can be emphasized:


Das Kapital has a tendency to create a commodification of all social relations and all human life.

Die groβe Profanierung – All pre-given norms are broken down and restructured in accordance with the new historical imperatives

All pre-given norms are broken down, because they are under pressure to be relativized and commoditized. This is ‘die groβe Profanierung’, this is the big profanation of the Holy and of all social norms. In The Communist Manifesto, it is stated in this way: “All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind” (Marx 1968b: 529).

Die groβe Verschleierung – the big concealment

The big paradox in capitalism is that its consequences are ‘verschleiert’ or veiled. The astonishing thing is that this veil is constituted through the liberal market economy, in which all distinctions are ‘aufgehoben’, lifted up and abolished in the general equivalent, money, at the market. All social distinctions are relativized and hidden on the market. In the end, there is only the distinction more or less of the general equivalent, money.

The big illusion – the liberal market economy produces the big illusion about society

The liberal market economy creates or produces the big illusion about this same form of society, because the abolishment of all distinctions becomes a hindrance for critique. We are all equalized in the general equivalent, money. Therefore, there is no internal way from the liberal market economy to a critique of the specific formation of the social relations, because these distinctions are not inherent in the economic theory. The liberal market economy is constituted through an abstraction from the possible distinctions.

Summing up – Marx has presented a specific theory which can be applied on empirical work with economy and society

What I have presented are the basic principles in Marx’s critique of the political economy. As mentioned, Marx has developed a much broader and differentiated theory compared to, what has been presented here. However, in the end, what we have from Marx is a theory with a specific perspective on economy and society, making it possible to apply it in specific empirical work.

From Marx to Piketty – From Piketty back to Marx


Marx and Piketty on empirical work – What is the difference?

In this context, it could be interesting to question how empirical research would be different in a Marx perspective compared to a Piketty perspective. Let us imagine that Marx had conducted similar research as Piketty on the development of inequality in France the last 200 years. What would be different? I am not sure that the concrete research method would be different. Piketty has gone down to the sources and tried to give an answer to his question. The difference would lie in how the questions are posed. Piketty poses his questions inside the horizon of the liberal market economic theory and the neoclassical economic theory. He does not pose questions to or discuss this economic perspective. It is as if it were pre-given or impossible to fundamentally question it. Consequently, we do not move outside the framework of this economic perspective.

The practical results of Piketty’s research are not very significant compared to the enormous research he has done.

The taxation card is Piketty’s only solution to the huge problems created by growing inequality. However, Piketty does not really believe that it is possible to establish the necessary taxation system. Therefore, one could say that there is a lack of critical potential in his theory although he delivers amazing empirical material. The practical results of his research are not very impressive compared to the enormous research he undertook.

Marx’s perspective on empirical economic research

On the other hand, Marx has an incomparably stronger critical theory, which can help pose many interesting research questions and could be integrated in an empirical project.

In the end the dividing line between Piketty and Marx is the following. For Piketty, the liberal market economy is regarded in itself as a neutral system. For Marx, the problems of inequality observed by Piketty are an inherent consequence of capitalism. It could simply not be otherwise because a basic principle in capitalism according to Marx is capital accumulation and capital concentration. Piketty remarks that contingent historical events, the first and second world wars combined with a strong left wing policy, created the basis for diminished inequality in the period 1945-1975, and not fundamental changes in the liberal economic system.

In Marx’s perspective, it would also have been a good idea to change inequality through taxation. However, the interesting perspectives are the basic contradictions in the economic system itself, and whether these contradictions can find a practical solution is a political question.


Marx and Piketty – research perspectives and strategies

What to do in a world dominated by the liberal economic perspective?

A basic question would be how one should conduct research in economic oriented topics when most research resources are concentrated around the liberal economic perspective. The strategy could be to integrate research from the liberal economic perspective in a hermeneutical horizon, which is more influenced by critical theory. In this way, it would be possible to use the given empirical resources in another critical hermeneutical perspective in which an inherent critique of capitalism could be formulated.


Declaration of Man and the Citizen 1789

Bouvier, Jean; Furet, François; Gillet, Marcel (1965), Le mouvement du profit en France au XIXe siècle, Paris and La Haye, Mouton & Co

Hegel, G. W. F. (1955), Grundlinien der Philosophie des Rechts, Hamburg, Felix Meiner Verlag.

Hegel, G. W. F. (1991), Elements of the Philosophy of Right, Cambridge, Cambridge University Press.

Marx, Karl (1968), Die Frühschriften. Stuttgart, Alfred Kröner Verlag.

Marx, Karl (1968a), Kritik der Hegelschen Staatsphilosophie 1841/42, in. Marx, Karl (1968), Die Frühschriften. Stuttgart, Alfred Kröner Verlag

Marx, Karl (1968b), Manifest der kommunistischen Partei, in: Karl Marx, Die Frühschriften. Stuttgart, Alfred Kröner Verlag.

Marx, Karl (1970), Das Kapital band I, MEW 23, Berlin, Dietz Verlag.

Marx, Karl (196-?), Grundrisse der Kritik der politischen Ökonomie, Frankfurt, Europäische Verlagsanstalt.

Piketty, Thomas (1998), Les hauts revenus face aux modifications des taux marginaux supérieurs de l’impôt sur le revenu en France, 1970-1996, CNRS, URA928, numero 9812. [High-Income Taxpayers’ Reaction to Marginal Income Tax Rates Changes in France, 1970-1996].

Piketty, Thomas (2001), Les hauts revenus en France au 20e siècle: inégalités et redistribution, 1901-1998, Paris, B. Grasset.

Piketty, Thomas (2004), L’impact de la taille des classes et de la ségrégation sociale sur la réussite scolaire dans les écoles françaises: une estimation à partir du panel primaire 1997, EHESS, Paris-Jourdan.

Piketty, Thomas; Valdenaire, M. (2006) L’impact de la taille des classes sur la réussite scolaire dans les écoles, collèges et lycées français – Estimations à partir du panel primaire 1997 et du panel secondaire 1995, Ministère de l’éducation nationale, Paris.

Piketty, Thomas (2014), Capital in Twenty-First Century, Cambridge Massachusetts, The Belknap Press of Harvard University Press.

Rawls, John (1971), A Theory of Justice, The Belknap Press of Harvard University Press, Cambridge, Massachusetts.

Ricardo, David (1996), Principles of Political Economy and Taxation, Amherst, Prometheus Press.

Smith, Adam (1981), An Inquiry into the Nature and Causes of the Wealth of Nations, Volume I-II, First edition 1776, Indianapolis, Liberty Fund.

Weber, Max (1980), Wirtschaft und Gesellschaft: Grundriss der Verstehenden Soziologie, 5. Rev. Aufl. Tübingen, Mohr.

Piketty’s Capital. The Revival of Political Philosophy, Political Economy and Social Sciences in the Light of the Declaration of Human and Citizens’ Rights in the French Revolution of 1789

Piketty’s Capital in Twenty-First Century has posed a totally new platform for the discussion of the economy and capitalism. Piketty has reinvented the classical political economy founded by Adam Smith in his 1776 Wealth of Nations. Piketty has shown via massive historical research how growth and inequality have developed since 1793. Piketty’s conclusion is that the French Revolution did not change the existing inequality either in the medium or in the long term. Piketty’s prediction is that a new form of global capitalism will arise, patrimonial capitalism, in which inequality will develop further and the 1% of the World population will control 95% of all wealth in the World.

Continue reading Piketty’s Capital. The Revival of Political Philosophy, Political Economy and Social Sciences in the Light of the Declaration of Human and Citizens’ Rights in the French Revolution of 1789

Thomas Piketty – The Adam Smith of the Twenty-First Century?


The essential achievement of Capital in Twenty-First Century is that it represents a revival of political economy, in the classical sense, on a global scale.

In Piketty’s book, economics is initially regarded as a social science and, in the end, as a moral, philosophical and political science. Here, we are placed in the tradition of Aristotle, Thomas Aquinas, Adam Smith and Karl Marx. In this manner, Piketty utilizes an economic perspective and reconstructs the unity in the practical sciences, at the same time as he recognizes that each of the different human sciences has its special perspective.

Piketty’s book could be regarded as a revival of Adam Smith’s main work, The Wealth of Nations (1776) in which the modern political economy was grounded. Later on, economics became an independent and specialized social science that lost its relation to the other social sciences. This has especially been the case in the period after the Second World War, when economics increasingly became an exercise in mathematical calculation, a mathematical modeling technique that totally lost its connection to the other social sciences. During the same period, the global economy has been developed on an unprecedented scale. Consequently, it has become difficult to discuss global society within the perspective that signified the classical political economy.

On one hand, we had the dominating economy, where it was possible to make some mathematical calculation about specific economic topics without any relation to a broader social scientific, political, and moral understanding of the significance of the economy for society and its environments.

On the other hand, we had the social sciences, sociology, political sciences, law, humanities, historical sciences and, finally, the moral sciences in their broadest sense. These sciences could criticize the economically driven uniform creations of global society, but they were not able to substitute the economic perspective and therefore, in the end, their impact was relatively limited.

Consequently, economics had become the triumphant sovereign perspective for understanding the transformation of modern global society. Given this background, it cannot be underestimated that Piketty reintroduces the classical political economic perspective in economics and on today’s global society. This is the essential significance of Piketty’s book. It has created anew a platform for a discussion of essential topics of classical political economy.

In this context, it should be emphasized that the global perspective is the central perspective in Piketty’s book. He recognizes that the economy has transformed the world into a global world. It is from this perspective that he tries to understand the transformation of the nation states in the world. By so doing, Piketty gives an articulate understanding of how the economy may be able to transform global society in the twenty-first century. In this context, the long historical perspective from the past to the future becomes essential. Piketty’s description could be called a historical analysis of the transformation of modern society from the origins of capitalism in the 18th century until the global perspective of the 21st century.

In the following, we would like to present some of the essential topics of Capital in Twenty-First Century, and in conclusion pose some questions for a further discussion of Piketty’s book.



I.The Fundamental Arguments in Piketty’s Capital in Twenty-First Century


Part 1: Income Capital and Inequality

In the introduction and part One of Capital in Twenty-First Century, Piketty poses some of the fundamental questions of political economy: What is capital? How is the wealth in the world distributed? Has wealth increased so that there is more equality or is the situation of wealth the same in the world? Piketty looks at the relation between income and capital, and argues that capital still has paramount significance for income today and that this implies reproduction of inequality. Therefore, according to Piketty, it is still capital and not work that is the basis for income in society.

Piketty gives the following important definition of capital: ”The first fundamental law of capitalism is ? = r x ?, where r is the return on capital. This links the capital stock to the flow of income from capital. The capital/income ratio ? is related in a simple way to the share of income from national income, denoted ?. The formula is ? = r x ?. For example if ? = 600% and r = 5%, then ? = r x ? = 30 %. “The return on capital is the central law of capitalism. Return on capital is a broader notion than the rate of profit and the rate of interest while incorporating them both” (Piketty 2014: 52)

For example, the housing market in Paris shows how an old relation between ownership, rent, and capital is still reproduced. It was also like this in the 20th-century and 19th-century novels that just took the capital income on real estate or other capitals for granted. We can see this in the novels of Balzac or Jane Austen. The author makes many references to the description of money and wealth of characters in novels. He argues that this helps us to understand the perception of wealth and inequality, but it also shows the changes from the 19th to the 20th century, because Jane Austin and Balzac can easily use money to describe the wealth of their characters in the sense that Austin’s characters earn approximately 1,000 pounds when they are rich, and 30 pounds on average a year just to live. Balzac talks about 10,000-20,000 francs on average to live well (Piketty 2014: 105 f.). This reference to literature to understand economics is an important contribution to the creation of a methodology of economics beyond the exclusive formal references to mathematics.

In the book, the growing inequality in the world is analyzed in terms of world regions. If we compare the numbers of population with input-output of capital/production in different parts of the world, we cannot really document a convergence of equality between the parts of the world even if the number of people and total output in Europe and America has decreased. Due to the increase of population in Asia and Africa, inequality between the regions still becomes bigger (Piketty 2014: 60-61).

Piketty says: “To sum up, global inequality ranges from regions in which the per capita income is on the order of 150-250 Euros per month (Sub-Saharan Africa, India) to regions where it is as high as 2,500 Euros to 3,000 Euros per month (Western Europe, North America, Japan) that is ten to twenty times higher. The global average, which is roughly equal to the Chinese average, is around 600-800 Euro per month.” (Piketty 2014: 64)

But these figures have to be corrected with regard to differences in purchasing power and exchange rates in different regions. So there may be important regional differences to take into account. We still see a situation where the rich countries have a higher income of their domestic product because they invest more abroad, and own more than their domestic product abroad. This is particularly true of Africa where foreign investors akin to the old colonial days still own more than 20% of the country’s capital producing units. So the rich countries earn money on capital ownership in the poor countries.

One possible conclusion from this is the following: That the rich countries still own a large part of the poor countries could be regarded both as good and bad. It can facilitate access to the international economy and growth, but it can also be a danger to development and self-determination, in consideration of marginal utility theory, meaning that the poor countries do not equally get access to their goods like the rich countries, who get increased wealth but do not need it as much as the poor countries.

The book discusses the law of cumulative growth. There is a close link between demographic growth and economic growth. Capital ownership structure has a close influence on this relation: “The central thesis of this book is that an apparent small gap between return on capital and rate of growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality. In a sense everything follows from the laws of cumulative growth and cumulative returns” (Piketty 2014: 77).

According to the law of cumulative growth in demography, we were 600,000,000 in year 1700, now we are 7 billons, and if this continues with cumulative growth dependent on life expectancy and birth rate in year 2300, we may be 70 billion. The accumulation of people in the developing world, and the stagnation of people in the developed world will lead to greater inequality due to the inequality of capital income in the developed and the developing world. The people in the regions with little demographic growth will become richer because of their increased capital income. On the other hand there is no doubt that growth has been extremely important for the developing countries. We have now moved from a life expectancy of 40 in the 18th Century to 80 in the 21st century, and today it has become normal to have access to health care and cultural goods. But can we sustain this kind of growth?

When we look at growth in the 20th century we see that rapid growth only happened in Europe in the glorious period between 1945 and 1970. This was due to the fact that Europe was far behind the US and could reach the US quickly during that period. After that period, growth has been slower, close to an average of 1.5 % annually. In fact, liberalization policies in the 1980s did not change this, and there is no evidence that state intervention really caused harm to growth. However, it is difficult to foresee growth and we cannot predict how growth will increase in the future and growth may also decrease in the 21st century.

Piketty talks about the “double bell curve of global growth”: “To recapitulate, global growth over the past three centuries can be pictured as a bell curve with a very high peak. In regard to both population growth and per capita output, the pace gradually accelerated over the course of the eighteenth and nineteenth centuries, and especially the twentieth, and is now most likely returning to much lower levels for the reminder of the twenty-first century” (Piketty: 2014: 99).



Part 2: The Economic Dynamics of Inequality

In part two of Capital in Twenty-First Century, the dynamics of capital/income ratio over time are analyzed. Piketty argues that the present state of inequality in the 21st century in Europe is just a return to the situation of the 19th century, which was interrupted by the public policies following the Second World War. Starting with the references to Balzac and Jane Austen, where the unequal distribution of wealth in 19th-century society is clear, Piketty analyzes the distribution of wealth in western societies today. He shows that a small group of people owns virtually most of the wealth, while millions of people have a very limited relation to capital. Piketty shows that the richest 10 % owns 60 % of the wealth, while the remaining 90 % owns very little and of only 40 % of the wealth (Piketty 2014: 259). They own so little that capital for them is a very abstract concept. The growth of the middle class in the 20th century was the social invention that contributed to hide these differences in wealth from view and, possibly, from memory.



Part 3: What was the Justification of Inequality?

In the third part of Capital in Twenty-First Century, Piketty questions the justification of this inequality. We can call it a hyper-patrimonial society, that is, a society based on inherited wealth. This was the case in Europe. In the US there was hyper-meritocratic society, a society of super-managers, but this distinction does not hold. Piketty does not only make the mathematical measures of inequality by Gini and Pareto, but he also uses real examples from life to illustrate inequality. However, if we look at the numbers, the fall in inequality in the 20th century is due to the collapse of rentiers and high income from capital, at least this is the case in France (Piketty 2014: 274). But, we have gone from a society of rentiers to a society of managers (Piketty 2014: 278), where the managers today are the ones with the high income. After ’68, a minimum wage was introduced in France and this increased equality, but from the 1980s this trend did not continue so strongly and from the 1990s super-salaries was introduced to top managers. In the US, the numbers of rentiers in the beginning of the 20th century were lower than in Europe, but they existed. The US were even more egalitarian than France between the 1950s and 1980s. However, since then inequality has exploded and contributed to the instability of the US economy and led to the financial crisis. The highly paid superstar managers in the US have recently contributed to the increase of inequality.

How should we understand wage difference and inequality? Education plays a key role. In particular, minimal wages are important to avoid inequality in combination with investment in education. But the race between technology and wages cannot explain the increase of top-income in the US since the 1980s.

In the beginning of the 20th century, inequality in Europe was bigger than in the US, even in the Scandinavian countries, including Denmark. The top incomes in Germany increased during the Nazi-period 1933-1938, and later in the 1950s. We can also document rising inequality in salaries in the developing world, particularly in China, after the changes to a capitalist system in the 1980s.

Piketty has also studied inequality of capital ownership. In France a tax on estate and gifts was established in 1791, and this gives us a historical picture of wealth distribution since that time. In fact, we can document hyper concentration of wealth during the Belle Epoque in France, and we can also document hyper-concentration of wealth in Europe in the 19th century, particularly in societies prior to the First World War. The society of rentiers flourished during “la belle époque”. It seems that the return on capital is greater than the growth rates in such “inheritance societies”.

Inequality remains very big: “To recap: the inequality r > g (return on capital is bigger than growth) is a contingent historical proposition, which is true in some periods and political contexts and not true in others. From a strictly logical point of view it is perfectly possible to imagine a society in which the growth rate is greater than the return on capital – even in the absence of state intervention” (Piketty 2014: 358). This is a historical relation that changes in different historical periods. The fundamental inequality r > g can explain the failure of the French revolution (Piketty 2014: 365). The concentration of wealth today, though markedly lower than in 1900-1910, remains extremely high (Piketty 2014: 375), and taxation may not change this fact.

Piketty says: “To sum up: the fact that wealth is noticeably less concentrated in Europe today than it was then in the Belle Epoque is largely a consequence of accidental events (the shocks of 1914-1945) and specific institutions such as taxation of capital and its income. If those institutions were ultimately destroyed, there would be a risk of seeing inequalities of wealth close to those observed in the past or, under certain conditions, even higher. Nothing is certain: inequality can move in either direction. Hence I must now look at the dynamics of inheritance and at the global dynamics of wealth. One conclusion is already quite clear, however: it is an illusion to think that something about the nature of modern growth or the laws of the market economy ensures that inequality of wealth will decrease and harmonious stability will be achieved” (Piketty 2014: 376).

Piketty studies capital accumulation in the long run. Referring to Balzac he asks whether study and hard work or marriage with a rich person or inheritance leads to wealth. He looks at the annual flow of inheritances in the long run, and he can document that “the inheritance flow accounts for 20-25% of annual income every year in the nineteenth century with a slight upward trend toward the end of the century” (Piketty 2014: 379). From 1910 until 1920 it diminished, and from 1920 until 1980 it was rather low (from 10% to 4% to 7%). From the 1980s it began to rise again, and in the year 2010 it seems to be 12% (Piketty 2014: 380). The baby boomers had very little inheritance, but the children born in the 1970s and 1980s have already inherited. For them the decision to buy a house may have been dependent on this (Piketty 2014: 381).

Decreasing mortality rates do not necessarily influence the transmission of gifts as inheritance. Inheritance is also realized through the transmission of gifts. Inheritance occurs later in aging societies but is still very important. In the aging society there is a growing importance of inheritance and gifts are given approximately ten years before the death of the donor. Gradual increase of gift giving between generations contributes to enforce this trend (Piketty 2014: 393). In an aging society people also inherit a larger amount. If we look at the distribution of inherited wealth since 1790, we can see that 25 % of income comes from heritage while 75 % from work. But this is very unequally distributed. This explains the young man Rastignac’s dilemma, that is, rich people were a very little group so it is difficult to find a rich girl, so it may be better to work to get a decent salary (to be or not to be!).

Inheritance represents one quarter of total lifetime resources of cohorts born in 1970 or later. So we are moving towards the society of petits rentiers (Piketty 2014: 418). The fact of living of money from the past will increase. This is the case with the movie Dirty Sexy Money. In France today we see the reemergence of inherited wealth – and not only wealth achieved by hard work, education or merit. This is the case even though the words rents and rentiers took on very pejorative connotations in the 20th century. In the book the concepts are used in their descriptive sense. Capitalism remains a society of rentiers even though it has become more democratic. The return of inherited wealth seems to be a global phenomenon. This is the case not only in Europe and the United States, but globally as well. We can see this among others with the increase in global billionaires.

The wealthiest 0.1 % on the planet, some 4-5 million out of an adult population of 4-5 billion apparently possess fortunes in the order of 10 million Euros on average, nearly 200 times of the average global wealth. The wealthiest 45 million possess 3 million euros on average (Piketty 2014: 438). Liliane Bettencourt, the heiress of L’Oreal had a fortune that increased from 2 billion to 25 billion dollars from 1990 to 2010. This was a little less than Bill Gates and more than Steve Jobs (Piketty 2014: 440). However, the entrepreneurial argument cannot justify such differences in wealth. Is the inequality of the fortunes justified? Moreover, Piketty discusses the Sovereign Funds of the Oil states like Norway, Abu Dhabi, Saudi Arabia and other gulf states. What about all the people who worked very hard in the businesses? Maybe we need a progressive fiscal tax on capital!



Part 4: Regulation of Capital in Twenty-First Century

In part four of the book, Piketty deals with this question about regulation of capital in the Twenty-First Century. Can we imagine political institutions that contribute to the regulation of these issues?

Piketty thinks that a progressive tax on capital is the way to solve the challenges of the 21st century. Piketty argues for greater state intervention in the economy. He looks at different solutions to inequality problems in relation to university systems, pension systems, tax systems etc. Then he argues that we need to rethink the progressive income tax and introduce a global tax on capital in chapters 14 and 15 of the book. It is argued that estates must be more heavily taxed than income.

Piketty argues that it was war, not democracy that gave us progressive taxation. We need to rethink income tax in a more egalitarian way in the globalized economy. However, a global tax on capital is a utopian idea. It is difficult to impose a tax on global wealth. A simpler solution could be automatic transmission of banking information.

There is a contributive and intensive justification for capital tax. The three types of tax on income, on capital, and on inheritance complement each other.

Piketty proposes also a European wealth tax enforced by European institutions and the European central bank. A tax on capital is a better and less totalitarian solution than a centrally planned economy. Piketty says: “To sum up: the capital tax is a new idea, which needs to be adapted to the globalized patrimonial capitalism of the twenty-first century. The designers of the tax must consider what tax schedule is appropriate, how the value of taxable assets should be assessed, and how information about asset ownership should be supplied automatically by banks and shared internationally so that the tax authorities need not rely on taxpayers to declare their own asset holdings” (Piketty 2014: 534).

The tax on private capital is the most efficient solution to reduce public debts. This is a way to solve the problems of the current crisis in many states. It is presupposed that this would be the solution for the European Union.



II. Some Essential Questions for a Further Discussion of Capital in Twenty-First Century

Instead of moving towards a society of equal chances and resources, we face a society with increased inequality. In this sense, Piketty’s book represents an important challenge to mainstream ethics and political philosophy.

However, we can still point to a number of important questions that remain after this discussion of Piketty’s work. In particular, it would be possible to address the following questions to Piketty’s work:

1. Are Marx and Piketty right when they argue that capital will be the basis for income rather than work in the long run, or do they forget that value-creation through work will still makes work very important?

2. How should we evaluate the dangers to democracy of increased individual wealth? Should we argue that this is not only a challenge to equality, but also to political freedom and social cohesion in democratic societies?

3. Does the law of accumulative growth work? The belief in the existence of such an economic law seems to be the fundamental presupposition of the work of Piketty.

4. How should we evaluate the use of literary examples in Piketty? They seem to be very important. But can we give them an essential significance for economic theory?

5. Is Piketty right in saying that, due to capital ownership, the developing world is still owned by the developed world?

6. Is it really true that we live in a hyper-patrimonial society where richness and wealth are based on inheritance and rentiers after all? It seems that this is the case, and that it is an illusion to believe that we live in a kind of democracy with equal conditions for everyone – given for example the fact that most students at Harvard have parents who belong to the richest 2% in the US.

7. What should we say about the idea that it was accidental that there was equality in the 20th century due to the world wars. How do we ensure equality in the future, without wars?

8. What about Piketty’s analysis that we live in a society where people get 25% of their life income from inheritance, and that this will also be the case in an aging society because even though inheritance will only come later, it will still be a general part of society’s function? Is that not contradictory to the idea that older people today want to spend their money rather than to give it to their children? Maybe Piketty underestimates the egoism of the ‘68 generation?

9. Is the idea of a global tax on capital income the way to proceed? If it is only possible at the EU-level, what does it mean for the national tax systems?

10. What will happen if we do not have such a tax in the future – will we, as Piketty suggests, experience further increase of inequality throughout the world?

These questions do not exclude the significance of Piketty’s research. As mentioned in the introduction, the essential achievement of Piketty’s book is that this book represents a revival of political economy, scaled for global society, in the classical sense. Economics is placed as a social science and a humanistic science, and in the end as a moral and political science. In this manner Piketty utilizes an economic perspective and reconstructs the unity in the practical sciences. At the same time as he recognizes that each of the different human sciences has its special perspective.

Piketty’s reconstruction could be called a historical analysis of the transformation of modern society from the origin of capitalism in the 18th century till the global perspective in the twenty-first century. In conclusion, Piketty revives the political-economic project of Adam Smith and Piketty’s work has already had an impact comparable to that of Adam Smith during the 1770s. Therefore, it would be fair to see Piketty as the Adam Smith of the Twenty-First Century.


Reference Piketty, Thomas (2014), Capital in the Twenty-First Century, The Belknap Press of Harvard University Press, Cambridge, Massachusetts and London.



Winning the War of the World

Not even prophets like Chris Hedges decode it. Journalists are trained not to. Not even moral philosophers question the system worship masked as ‘the free market”. Freedom means no accountability to human and world life, while competition means competing to externalize all costs onto the lives of citizens and environments. The value driver behind it all is no more questioned than the Almighty. It can do no wrong. But one underlying lock-step of false equations propels this unnamed war on the world through its mutations and metastases:

Rationality = Self-Maximizing Choice

= Always More Money-Value for the Self is Good

= Self-Multiplying Sequences of Ever More Money to the Top as the Ruling Growth System

= All Else is Disposable Means to this Multiplying Pathogenic Growth


My 15-year study, The Cancer Stage of Capitalism: From Crisis to Cure diagnoses this ruling value mechanism as cancerous. It is, in short, a deregulated self-multiplication of transnational money sequences accountable to nothing but their own multiplication with no committed life functions. With the Hayek-Reagan-Thatcher crusade to reverse the history of the world into a moronic ‘free market’ and ‘conservative values’, the march was on. Marxists would not engage this Great Reversal on moral grounds because morality was believed to be only ruling class ideology. This left no value ground to stand on. From the transnational victory of corporate world rule from 1991 on, reversals of social states were portrayed as ‘market miracles’ whatever the results for people’s lives. ‘The magic of the market’ was the new world religion, ‘the end of history’. The mass media were  consolidated into one collective corporate organ across cities and borders. Death squads erased community opposition in the South. The academy was and is still defunded to serve the global corporate market and commodity development.

The nations of the world are all ‘restructured’  to be subordinate functions to the supreme moral goal of transforming humanity and the world into ever more private commodities and profits. Society itself s does not exist to this ruling value mechanism. Its logic of growth is totalitarian and malignant to the marrow. More precisely, deregulated global corporate money sequences abolish by treaties and wars all barriers whatever to their free multiplying growth through all that exists whatever the destruction of natural and social life support systems. My work has been to decode this globally life-invading value system. Predictably the diagnosis is taboo to mention in the press, however confirmed by the facts and predictions. No social disorder allows its ruling program to be publicly unmasked. Thus the malignant value code marches on. Alarm bells at the degenerate symptoms increase, but policies of solution only extend the system further and deeper. Life-value economics is as unspeakable as the fatal disorder itself.


The Essential First Step in Winning the War of the World is Comprehension of It

The essential first step in winning the war of the world is comprehension of it. Only system analysis can lay bare the underlying value program, but it is avoided. The sciences do not study values and specialize in domains of self-referential meaning. Journalists report facts, spectacles and impressions, but not the underlying values governing them. Philosophers seldom analyse the ruling value system of the societies within they live from social habit and fear. In the age of instant culture, value-system comprehension does not sell. Together these blocks of normalized avoidance make the value code selecting for all the degenerate trends invisible to us. As in immune system failure, the life host fails to recognise the disorder devouring it.

Lacking any unifying framework of comprehension, people are lost. Thus when millions rise in the Occupy Wall Street movement, there is no diagnosis or policy demand. Although Wall Street had indisputably defrauded masses and had failed to its knees broke, no policy shift arose – not even public control of the public money infusing the system cancer, $16 trillion dollars by Senate  count in the U.S. alone – thanks to the heroic Bernie Sanders. Nor was there movement for a needed public mortgage system – even after the private system had perpetrated the biggest fraud in history, indebted tens of millions into ruin and collapsed the economies of the West in irreversible debt. The lost alternative of public banking on which the U.S. revolution was founded, Lincoln won the war of Union, North Dakota has had 100 years of debt-free prosperity, the West itself managed the 1939-45 war and post-war years to unprecedented full employment, and first Japan and now China wins in productive investment – all is  amnesiac in the West.

Fast forward to today, and the underlying system cancer advances on. The financial giants causing the 2008 Crash are bigger and richer in criminal impunity. They speculate with publicly supplied trillions on food and water futures. They control even Rio + 20 as the life-ground catastrophe they finance explodes on one front after another. Transfused with endlessly with more public money to bleed and indebt the world dry, the money-printing system metastasizes further – now occupying the once prosperous social democracies of the European Union with public money bled out of peoples’ lives and life bases to private banks with no limit . Refusing any regulatory limits, converting pensions into more stockmarket feeding troughs, investing nothing as youth unemployment and debt spike ever higher – where does it all end? It ends when public money and human rights stop being fed to the failed system. It ends when commodity cycles of destructive waste are stopped. It ends at the base of the disorder when the 97%-counterfeiting of debt and credit by private financial institutions is publicly controlled.


Economic Doctrine Allows Money-Cancer System Free Reign

Neo-economic theory is a pseudo-science. Its defining postulates are unfalsifiable by facts. All organic, social and ecological life requirements are absurdly assumed away. Infinite demand on finite resources is presupposed as sustainable. Mechanical reversibility of everything is taken for granted. Whatever does not fit the doctrine is rejected. Endlessly self-maximizing atomic selves are believed to necessitate the best of all possible worlds by the market’s invisible hand.  

Is this not a fanatic religion? Supra-human laws dictate commands across peoples. No deadly consequences lower certitude in the miracles of the market God. Even when the ruling value mechanism visibly depredates the very life bases of the world, the only reforms are to globalize it further. Corporate-lawyer treaties coined in secret rule as the new laws of nations, while hostile zones are subjected to covert forces sponsoring civil wars, as promised in 2001 – Afghanistan, Iran, Iraq, Lebanon, Libya, Somalia, Sudan and Syria Iraq, and now the Ukraine as I write.  All is believed in and pursued as a world crusade, even if fascists lead it. One supreme goal governs underneath bizarre beliefs –  multiplying growth of transnational money-sequences at ever higher velocities and volumes with no life limits tolerated. This is the moral DNA of the ruling value mechanism. In theory, it is expressed well by University of Chicago professor and godfather of the U.S. National Security Council, Leo Strauss, who wrote in his canonical Natural Right and History (p. 60): “limitless capital accumulation” is “a moral duty and perhaps the highest moral duty”.  On the ground, Strauss’s patron, David Rockefeller, expressed the moral-political program more concretely at the turning point in 1991, “A supranational sovereignty of an intellectual elite and bankers is surely preferable to the national auto-determination practiced in past centuries”.  The promises are kept. There is no binding regulation to protect any life carrying capacity on earth from the loot-and-pollute bank money system in the years since.

Many blame capitalism, but unlike classical capitalism this mechanism is not driven by productive force development. It is driven by transnational money-sequence multiplication with no productive standard which despoils more means of life than it produces. It eliminates the working class itself. The ruling idea that the system is peerlessly productive is increasingly contradicted by far more life goods disappearing than are created. Something much more sinister is afoot.  The social and natural life bases by which the human species evolves are reversed and overrun. Yet not even the opposition defines what ultimately counts – humanity’s universal life necessities themselves. The meaning of ‘the economy’ itself – to produce and distribute life goods otherwise in short supply through generational time – is lost. While the very air humanity breathes is going more toxic and acidic, the contradiction to ‘productive growth’ is unseen. As the waters of the world are simultaneously destroyed, the dots are not joined. Even as there are mass extinctions of species, youth without futures, and irreversible debt servitude of the world, all is well if ‘more growth is returning to the system’ which causes all of them. That at the same time the earth’s very soil cover taking tens of millions of years to evolve is simultaneously mined, acidified, salinated, degraded and exhausted as forest and mineral covers are stripped from one continent to the other are not connected into common meaning. The ruling value mechanism devours the life substance of humanity and the earth, but remains assumed as ever ‘more productive’ even by angry unions. 

Well at least, someone might reply, climate warming has been recognized by a blue-ribbon economic panel, Britain’s Stern Review, as “the greatest and widest-ranging market failure ever seen”. This is a step towards rational observation. But even with a UN panel of over-1600 scientists on the case, there is no connection to the other basic life carrying capacities driven towards collapse by the same organizing value mechanism. No secret is more unspoken. So more rights to pollute and profit are instituted, and the climates and hydrological cycles spiral to more deadly extremes. “The world’s poor suffer first and most”, Lord Stern also rightly observes, but this fits the reigning value mechanism. Those without money do not exist.


Unmasking the Ruling Code of Value Driving the War on Life  

Let us summarize. Behind every step of the Great Reversal lie failures of knowledge and value understanding: (1) failure to diagnose the regulating value mechanism at work; (2) failure to connect across the domains of life despoliation as predictable from the system’s blind money-sequence multiplication; (3) failure to define or demand any public policies against its feeding on life support systems with public treasure; (4) failure to recognise any life-value principle or the life ground of the economy itself.

This knowledge black-out is understandable once one recognises that the vaunted “knowledge economy” has no criterion from the start. All it means is what can be controlled, sold or manipulated to grow the ruling value mechanism. Pause on that general fact. This is why true knowledge is now so often denied or attacked as “uncompetitive’.  Look for exceptions to this spread of the ruling money-value mechanism into the very capacities of human understanding.  Diagnosis of this disorder is the knowledge most needed, but unspeakable. Who even now recognises that ‘new efficiencies’, ‘reforms’ and ‘cost cutting’ are always attacks on people’s lives, means of life and life functions?  Who connects across the one-way falls of life standards and regulations, public science and testing, agrarian communities and lands, workers’ rights and unions, social infrastructures and protections, and social life security while money demand multiplies out of control at the top? Who names the innermost ruling code driving all – whatever protects or enable human and ecological life is eliminated as a barrier to private money-sequence multiplication. This is the source code of the cancer system. It explains why transnational corporate, equity and bank profits grow to ever new records as the world’s majorities are dispossessed. It explains why social and natural life-carrying capacities are despoiled across continents.  The war on life is built in.

The ideals of “freedom”, “democracy”, and “economic growth” are thus reversed in the name of them. The big lies become so automatic that few notice them– for example as I write, food-stamp slashes reducing 47 million hungry U.S. people below $1.40 a meal and $90 less a month for life necessities “protects the most vulnerable Americans” (President Obama, Jan. 29, 2014). There is a recourse against lies which is as old as the species. Humanity’s deciding evolutionary advantage is that knowledge wins in the end. Above all knowledge evolves through recognition of how life is enabled or disabled by material conditions and social rules. For example, the binding abolition of the most profitable commodity of world trade ever, human slaves, won. Knowledge won again from the 1929 Crash and subsequent World War when the collective life security of peoples evolved by known facts and social policies more in 30 years than in the prior twenty-five centuries.  

The missing link for this long life-and-death struggle is the life value code. We do not know it because we are without a reference body in a vast ocean of self-maximizing money-sequences for which the goods are only what sell for private profit. A life-ground and compass almost emerged after 1945 when peoples recognised how ruling delusions of self-maximizing fanaticism almost destroyed civilisation. Learning from the greatest war and depression in history, societies forged binding international covenants for collective life security and free human development. Universal education, health, and income security infrastructures were publicly formed across societies. But no unifying life-value code underlying them was found. In absence of any sound life base of understanding to re-ground in, the Great Reversal from 1980 on has gone from one extreme of life-blindness to the next with endless lies of better days to come – even as there is ever more joblessness, meaningless employment, deprivation of more majorities, commodity diseases across the globe, debt servitude chaining the futures of peoples, and deepening ecodidal trends advancing one way with the system’s growth. Locked into the ruling frame of thinking, people blame humanity for the catastrophe unfolding even as the demands of the ruling value mechanism have been imposed every step by a secretly negotiated and adjudicated transnational corporate system backed by global armed force, financial sabotage and embargo, and limitless lies. From secret codification by corporate lawyers of treaties overriding constitutions to free looting of human and natural life-carrying capacities across borders, ever more money-sequence ‘investor’ rights are prescribed and multiplied across nations. Those who resist are ‘against competition’ or ‘terrorists’. Reverse projection rules.

An absurd metaphysic is assumed throughout. The economy’s provision of goods through time mutates to ‘laws of supply and demand’ that are fatuous caricatures of both. Demand is never people’s needs or necessity. It is private money demand minted by private banks without the legal tender to back it to indebt people and gamble on their future means of life. ‘Supply’ is not the life means people require to survive and flourish. It is ever more priced commodities for profit promoting more human and ecological ill-being across continents. The supreme moral value of the system is then equated to its opposite as well. Freedom = freedom for private money demand only = in proportion to the amount controlled = ever less freedom for those with less of it = no right to life for those without it.  

When mass uprooting, joblessness and misery follow, more reverse meaning is proclaimed. “Uplifted out of poverty” headlines proliferate over a money-gain equal to the cost of a coffee for subsistence farmers who have been forced into city slums without any means of natural and communal life support left. Peoples are too distracted by competitions for vast prizes to notice. The global struggle for life is displaced by ever more contest spectacles as global mass-marketing sites – the meaning now of ‘sport’.  But behind the perpetually revolving mirrors, the meaning is taboo. People may see “greed of the rich”, but not that greed is the global system’s r driver at every level. “More productivity”   is liked across classes, but who sees that it only means less cost per unit of profitable commodities bringing more life waste and destruction. Workers and left thinkers may no more want to see this than the corporate press.

The meaning of ‘the free market’ itself is reversed. Over centuries it has meant the opposite of the global corporate system – public places of local life goods, all exchanged for legal tender, featuring real foods and crafts, no mass conditioning ads, no debt servitude, no dominance of transnational money-sequences, no throwaway packages and waste, no lobbies controlling government, no invisible head offices pulling puppet strings, and no bribery controlling supply and demand. Yet the free market like the real economy is overwhelmed. There are only more absentee money sequences with no required life functions or accountability to the communities and life conditions they competitively bleed. The enemy is undefined. The common life capital it attacks is unknown. But the life and death choice cannot be made without knowing both.  


The Life-Value Turn as the Next Stage of Civilisation

Reality hides in the language of the past. So ‘capitalism’ is blamed by critics when real capital is, in fact, destroyed every step. Journals report ‘global wealth has soared 68% in 10 years’. But life wealth is devoured as fast as the money-sequence system can grow.  Always the underlying life ground  is lost beneath the competitive self-multiplication of money demand invading all that exists. With no life value anchor and compass, the degenerate trends only deepen beneath reference body to recognise them. I have spent most of my life as a professional philosopher on the problem of life value and social value systems. Although the sane may agree life value is what ultimately matters, nothing has been less understood.  People called ‘pro-life’ usurp the woman’s body in the name of fundamentalist religions. Nations absurdly assume that ‘standard of living’ is measured by the private money spent. Animal rights theory has no criterion to tell the life value of a snail from a person. ‘Life sciences’ sacrifice billions of animal lives a year for private money-value gain. ‘New and better technology’ has no life-value standard to decide better from worse.  

Life value is the missing base. But there are as many proxies for life value as there are values. Specialist domains like physiotherapy and medicine recognise life-value in organic functions, but without principled meaning to apply to wider life systems. In general, life value ignorance defines the age. This is how the greatest of all fatal confusions has mutated: that money-sequence growth = life value growth. Just as the multiplying grotesque cells eating the life-host alive are not recognised on the micro level, so too on the social level. Thus tidal bank notes of bets, credit and debt without legal tender drive ‘financialization’ across the planet. They must loot life and life bases to keep growing without inflation as trillions of new dollars are printed without life function. Endless slashing of life goods in wages, benefits, social security, pensions and environmental protections result, as money-demand powers multiply at the top. This is why endless bonuses for financial failure, stripping of the middle classes and the poor, squandering of public wealth on rich corporations – the list can go on – are demanded as U.S.-led wars for resources, lands and corporate markets never stop and taxes on the rich are reversed. All is predictable once the cancer system is diagnosed.  


An ultimate question arises. What is the ground of response to this ruling value mechanism which cumulatively plunders human and other life to feed itself?  We know the ultimate ground is life value. But what is life value? To roll thirty years of research now in three UNESCO volumes – the objective standard and measure can be defined in three steps:   


(1)           all value whatever is life value,

(2)           good versus bad  equals the extent to which  life is more coherently enabled versus disabled,

(3)           by greater/lesser ranges or capacities of thought, felt being and action through time.


Visions of world peace, the classless flourishing of peoples, a planetary ecology in which humanity is its conscious understanding – all such ideals express this underlying life code of value.  But “who decides?” skeptics ask. No-one decides because gains and losses in life capacity are as objective as the laws of biology and medicine. Anything is better or worse by the greater or lesser range of life capacities it enables. This value code is built into evolution itself. It is no more a matter of opinion than people’s life necessities are: that without which life capacities are always reduced. The ruling value mechanism is the polar opposite. It attacks life and life conditions everywhere as ‘externalities’ to its self-multiplying growth. Because this growth is assumed to be life value, however, the greatest value reversal in history goes unseen.


The three-step life code of value provides the generic value compass and base which has been missing. It is objective because it is true independent of anyone’s perception of it. It has unlimited validity because there is no exception to it (which is testable by searching for one). It is presupposed in value judgements – as you can observe when these judgements are defended. Life value is also universalizable because all values derive their worth from it. Finally life value is sovereign because it trumps any other value in cases of conflict. All are testable generalizations.


But what of measure of more or less life value? Life value is measurable in degrees by greater/lesser capacities of thought, felt being and action shown through time – for example, how much life capacities gain or lose by nourishing versus junk foods. Today the macro trends are in one-way loss of life capacities. Knowledge is the exception. It forms the way stations of life understanding passed onto others and subsequent generations across epochs, the distinguishing life capacity of our species. But even knowledge is threatened by corporate rights against its dissemination at the same time as there is mass propagation of public lies. New electronic communication capacities without corporate control still win the war by the greatest civil community development in history. But the life-and-death fields of invasion by the ruling money-value mechanism are not decoded – the money tides of hit-and-run buying and selling of lands and currencies across the world, free and growing use of ecocidal extraction methods, life-starving hours, wages and no benefits in global dispossession of workers’ century-long gains, one way global growths of disease commodities and lethal arms trading, oil-guzzling and air-polluting noise vehicles of multiplying kinds, big oil and big pharma looting of public lands and health dollars growing business on ill effects, a world-wide pension raid for corporate-stock gains at the life cost of hundreds of millions of people, and most invisibly, full-spectrum assault on humanity’s thinking and feeling sides of living itself – the zombie effect.  


Where we might ask do the transnational money-sequences not destructively invade the evolved fields of life of humanity and fellow species? The movement is by exponentially multiplying money-sequences eating away at the margins of every private transaction, public funding, life exchange and substance within and across borders. Consider all the bites every moment across business and exchange sites – before and beyond the ‘carrying trade’ in exploiting lower interest in one country to flood another with the cheaper money advantage, beyond the trillions in derivatives betting every day, beyond the raids on sovereign currencies and bonds without tax or regulation. On the local level, hardly a shop, a buyer, a builder, a home-dweller, anybody who lives today is not invaded by the same financial mechanism with ever more rights to demand at every exchange site with no function while enforcement is paid by the public being stripped by it. The apparently free credit-card system, for example, imposes a 2% charge to the seller for sales at a hidden 33% annual debt-charge rate, before the debt predation of poorer consumers begins. There is no end to the invisible lines of life devouring demands now deeply into higher learning and public health themselves while destroying workforces and companies overnight by hostile takeovers, bid-up mergers, asset strippings, capital flights, and straight-on funding of civil wars and destabilizations from which fire prices and dominant positions are extracted. Ruining societies is the medium of metastases. How else would a cancer system behave? 


The world-choosing choice begins with what you buy. Clearly for example eating, selling or supplying junk foods is objectively bad to the measure that it disables human life and produces global epidemics of obesity, heart failure, cancer and diabetes. Yet even economic ‘science’ calls them all ‘goods’ whatever the rising disease effects. Simultaneously violence entertainments flood public airwaves and play-spaces before the same consumers – most avidly the young – with images of humanity being killed, tortured, injured and humiliated. As the sugar-salt-lard concoctions are ladled into bloodstreams and throwaways clog the earth`s circulatory channels at the same time, we begin to see the multiplying destructive occupation of the fields of life and life substance as built into these runaways growths and their ‘goods’. Life capacities at every level are attacked as ‘market freedom’. Only life-value ground and measure can penetrate the disease mechanism none define – to addictively disable human life capacities for more transnational money-sequences through ever more lives from infancy onwards.  Where is there exception to the pattern?  Life-activity-replacing motors and commercial games in multiplying life occupation, endless unneeded and non-recycled conveniences locking into habits of life, political-junkie election images and spectacles where the truth is what sells corporate lines and candidates, and commercial internet and television hooks everywhere in front of which children spend 11 waking hours. Which of any of these is not geared to addict consumers to compulsive consumption against life capacity development? Which does not input toxic wastes into the circulatory flows of ecosystems at the same time? But all is optimal for the ruling economic model for which life and society are reduced to atomic desiring machines propelling more money demand to money controllers as the nature of the growth the official world calls for..  


The moving line of the true war of liberation begins with what we are able to control, our own lives. Consider your own life, what you know best.  Every value you enjoy, lose or gain has a bottom line – its life capital, what enables life to reproduce and grow rather than degrade and stagnate through time. We defend it and our health by buying life goods and nothing else. The turning point is as old as physical and cultural evolution. Every human advance is by knowing what enables life from what does not. Collective life advance is transmitting this life-and-death knowledge across selves, space-time and generations. The life value code holds across cultures. But the universal life goods and necessities are not even known. Their meaning is obscured everywhere, but are exactly definable. Life goods are always that without which life capacities decline and die. All real needs are known by this criterion. Every human life suffers and degenerates towards disease and death without breathable and unpolluted air, clean water and waste cycles, nourishing food and drink, protective living space, supportive love, healthcare when needed, a life-coherent environment, symbolic interaction, and meaningful work to perform. All are measurable in sufficiency across cases. (author note: a systematic explanation is available by google of “Universal Human Life Necessities”). Yet all universal human life needs and capacities are attacked, polluted or perverted by the ruling value mechanism in product, process and lobby demand across the world. Yet where are the universal life needs named and  connected against the malignant growth system spreading through ever more nodes?


Not zero growth, but zero bad growth is the way. A real economy by definition regulates for these universal life necessities and against toxic junk, and individuals would not buy 99% of corporate commodities if they did. Victory or loss in the war of the world lies in how we live.. So why does anyone buy such commodities? System addiction is how it grows, and knowledge of life goods versus bads is the through-line of the good life and human evolution itself. What deeper motivation could there be? I like others have long lived without corporate-ad television, regular private auto or gas-vehicle use, any junk food or beverage, any throwaway  item, any new fashion or commodity not more life enabling than the old, or business with big private banks –  selecting solely for life goods at the local level. The organizing principle is the spirit of the Tao-te Ching and the free autonomy of the wise. It is as old as the good life. The life-code formula is clear: minimal market demand to enable life capacities to flourish. This value imperative defines transformation to true economy and liberates life wherever it moves.


Collective Life Capital as the Common Value Ground and Measure Across Divisions

We know the war of the world can be won. The plague addiction to corporate cigarettes has been conquered by 30-50% of the developed world’s population. This shows how the life code can select against habituated system harms of the most compulsive kind, and everyone live better the more it is done.  At the personal level, it begins with zero-base accounting with money demand only justified by life-enabling gain. Yet for collective life goods, we do not have a principled ground and measure. Collective life capital does not exist in public or expert meaning. Any common life interest or agency at all is excluded unless it promotes profits. The implications are fatal but unseen. Collective provision of the universal human life necessities that have evolved by long social organization and human evolution are blinkered out of the ruling value mechanism. It sees only mechanical ‘growth’ by commodity sales and profits. Everything that makes a society civilised or liveable is blinkered out – common water and sewage systems for all, free movement pathways and life spaces without cost to use, public libraries with unpriced books and films, non-profit healthcare and disease-prevention by public institution, public income security from disemployment, old age and disability, life-protective laws including sufficient minimum wages and environmental regulations, primary to higher education without multiplying debts, and family housing, food and means of life assistance for children without parental money. Yet all these are defunded or eliminated to pay debt-services to private banks and grow business, with the IMF to the Tea Party leading the charge as ‘new efficiencies’ and ‘savings’.


From this built-in erasure of common life ground, the hollowing out of collective life goods  proceeds without any feedback correction. Public wealth is privatized at every level to feed corporate money sequences. Thus fed with endless giant tax and subsidy hand-outs and deregulations to invade further, the demands of the ruling value mechanism multiply further. The collective life base to steer by and regulate does not exist. For example, when Amartya Sen titles his Nobel Laureate monograph “Social Choice”, even he can get no further than atomic aggregates of individual preferences. No collective life goods in themselves are conceivable within the market paradigm. When another progressive economist, Elinor Ostrom, wins the Nobel Prize for Economics years later for her book, Governing the Commons: The Evolution and Institution of Collective Action, she is trapped within the same paradigm. No principle of common life interest or agency beyond mutual self advantage can be conceived. “The commons” and “collective action” are posted on the cover, but no civil commons or agency is seen from universal health care to a public bicycle path. Common life bases can no more compute through the ruling prism than the collective actions required to provide them.  

In fact, the underlying problem is ancient. We have lacked a common life-ground since the genocides of first peoples began. It is a very ancient blind spot which has become increasingly fatal with all-powerful technologies of destruction and the deranged money-value code driving them. The eco-genocidal streak goes deep – from the old-testament tribal god command to exterminate all other peoples in Palestine to, millennia later, the first peoples in the New World saying to their modern invaders: “When all the trees have been cut down, when all the animals have been hunted, when all the waters are polluted, when all the air is unsafe to breathe, only then will you discover you cannot eat money.” Even “life, liberty and freedom” in the US Constitution reduces to the commerce clause and corporate rights by Supreme Court interpretation. Abdication of life responsibility is built into the-system. The Global Market God rules, and the common life interest and its agency do not exist to it.  

How are we to ground beneath this life-blind paradigm whose global mutations threaten evolved life on earth? In the end, the organizing principle crosses the lines of death itself – the life code of value at the collective level. But this common life interest is usurped in its very name. That is why, for example, the young can be killed in masses and arms budgets bankrupt U.S. public sectors  to enrich Big Oil, or people’s homes can be expropriated for private developers as ‘the public interest’ and ‘eminent domain’.  This is the dark side of history, one oppressor rule after another. But the collective life interest is the true bottom line of legitimate governance. The proof is in the conditions of its definition. It must be consistent with the life carrying capacities of all through time. It must be open to life-enabling change. It must go deeper than family, gender, and culture differences. It must include past as well as future generations. It must supersede the ruinous man/nature, economy/environment splits and individual/society duality of interests. It must realize the Three R’s of ecological literacy to be life coherent. It must bridge the past to the present to the future as one process to steer development beyond the holocausts of history. It must embody the economic principles of efficiency, productivity and innovation in life-serving form. It must make all freedom responsible to its life conditions of possibility. It must embed the life bases of all as supreme so it cannot in principle go wrong. 


Such a moral code seems impossible. Every demand of the ruling value mechanism is structured against it. Opposing ideologies do not find its common life base. Postmodernism and relativism deny any universal principle of value except the actually ruling one. Political policies are confined to what serves the corporate market system. Issue politics rule fixated on sexual preferences. There is no common life ground recognized or life-value compass to steer by. Collective life capital re-grounds us. It is the life base of the common interest – that without which humanity’s life capacities degrade and die. It is the bridging concept across the ‘the economy-environment’ division as well as cross present and future generations. It is the true meaning of economic necessity and the sole substance of growth and development. In all, collective life capital transcends all divisions by impartial principles that cannot go wrong: (1) a unifying life value regulator enabling all, (2) a generic life-value measure to tell greater from lesser by margins of capacity loss or gain in any case, (3) production of more life value capacity through generational time, (4) cumulative life gain as the organizing goal of the process throughout, (5) the more coherently inclusive in enabling life the better. In this way, the common interest is provided an exact progressive meaning, and collective agency is built into its inner logic of life progression.       


Conversely, whatever person, group or system destroys common life capital is objectively evil to the extent of life capacity destruction through time – for example, corporate U.S. oil wars or leisure vehicles destroying natural life. Advancing collective life capital, in contrast, is what “make the world a better place” means. It could be by cures to diseases, more ecological methods, life infrastructure building, advancing knowledge, new ways of seeing, or life-protective laws. All more inclusively enable life without loss and cumulative gain. No real progress is ever made without satisfying this logic of value.  Feeling with across species and tribes, for example, may bind many of us in this room. So too even more so advancing life-coherent knowledge and visual comprehension, as Peter’s films do. The understanding and feeling sides of life keep extending despite death and moral numbing by the ruling value mechanism. Public knowledge via the Internet commons wins against corporate media silencing and propaganda. We see here the underlying struggle across the fields of life. The rising and falling of life capital base and compass can in fact be found in every social policy, decision or movement that goes right or goes wrong. There is no exception. The war of the world is everywhere, and so is our task of life commons awareness and building.


This is not hope without substance. The common life interest is already built into our lives over millennia without our knowing it – the ‘civil commons’ of language, collective water sources and sewage, common safety regimes, shared pathways everywhere, community health rules and healing sites, and everyday life-enabling knowledge institutions at every level – all collective life capital formations that keep advancing beneath notice despite and through diseases and wars. Unseen too is that all are more threatened now by the ruling value mechanism than ever before.   The defining general meaning is all social constructs which enable universal access to life goods. This too is no utopian ideal. It is the measure of true development across all cultures before and after our lives – from environmental economy to universal libraries and education to public water and waste cycles to life-serving laws before which all are equal. These are all forms of collective capital in continuous development without loss and cumulative gain but all are attacked bite by bite by the multiplying money-sequence system now out of control.

The collective life capital developments that are needed now are many, but can be crystallized into three system shifts in general:

(1) public banking for credit and investment in individual and collective life capital growth,

(2) ecological quotas for all consumption of non-renewable energies and materials,

(3) citizen income security guaranteed in return for life-enabling hours of public service.


Movements of masses to demand them completes knowledge in public action.


Under the ruling value mechanism today, in contrast, evolved life on earth is under totalizing attack. 95% of all gains go to 1% with no required life function, while 95% of the world’s life support capacities are pillaged by life-blind money-sequences.. Yet life-value steering is easier than not. Norway for example has led the world in holding onto and advancing its common life capital bases through the system sickness, and emergent Latin America is implicitly building collective life capital deciders from decades of death-squad and foreign money-sequence ruin. Before the Great Reversal, societies everywhere were becoming governed by public policy patterns of similar kinds  – national recovery of control over public owned resources, progressive taxation, public banking and investment, and policy-led elimination of structural depredation of the poor and the environment.  All are methods of collective life capital formation inclusively enabling the lives of individuals across time. “Inclusiveness” is a concept much invoked today, but not with the life capital bases and compass required in the real world.


Let us overview the condition we face. Once upon a time in the distant past, capitalist organization under public control mass-produced healthy food, clothing and utensil commodities despite brutally exploitative methods.  There was a long painful taming of it over 200 years, and then the Great Reversal from 1980 on usurped progressive social development at every level possible. Since then, the private transnational money-sequence system has been increasingly deregulated to competitively multiply and override all life carrying capacities as its supreme goal – propelling endless wars, public and public sector debt slavery, mass disemployment and majority dispossession for obscene riches. This is the global cancer system which occupied states subsidize, enforce and grow as fast as they can – stripping the soils and forests, poisoning the waters, disemploying peoples and producing disease-causing junks in ever greater volumes. Re-grounding in common life capital, however, exposes every disorder and directs solution to it – the long missing base and measure of ‘the moral science’. It re-sets evolutionary theory itself in which only selfish gene multiplication counts – the biological correlative of the self-multiplying money mechanism. Self-maximizing game theory dominates both and military doctrine, justice and moral analysis besides. Yet common life capital bases are excluded from all of them as the lost life-ground and reference body of our capsizing planetary condition.  


New ‘natural’ and ‘social capital’ categories may seem to assist us here. But they now only repeat the vicious circle. ‘Natural capital’ is what can be exploited for more money. ‘Human capital’ is more future private money-demand for its owner. ‘Social capital’ is lower transaction costs for profit. ‘Physical capital’ follows suit. Life capital remains without a name. Collective life capital does not exist. All must be steered back into conserving and producing life goods rather than destroying them, the ultimate policy imperative of the world. The public authority, policies, subsidies and right to issue sovereign money now lavished upon the life-destructive mutations of private money capital thus end without a shot fired. They are now so dependent on counterfeit money-sequences, treaty edicts, public hand-outs and resources that they cannot go a day without them. The public needs only to reclaim them, not to take a thing. .


“Let the Market decide!” all money interests cry. This ruling superstition is more barbaric than any before – essentially, ever more for those with more money to suck the lifeblood of humanity and the earth dry.  Its  ruling delusion is that the best of all possible worlds must follow by the invisible hand. In fact, a deregulated global chaos of private transnational money-sequences exponentially multiply while the world of life capital and goods is cumulatively destroyed. The life capital alternative is self-evident once seen. It grounds in common life capital – life wealth that produces more without loss and new gains for successive generations. Its moral logic is, in fact, the through-line of all human development since language and the cooperative provision of means of life. Unlike the global market of atomically self-maximizing corporations devouring the world for more private profit extraction without end in the delusion that an unseen hand directs all to the best of all possible worlds, collective life capital steers across divisions by an objective and universal life-value base and measure in exact progression which cannot  as life-coherent go wrong. Ecological capital and knowledge capital are its baselines of value compass and coordination across life capital domains, and the unifying principle of all is already implicit in the architecture of modern human thought.


All that is lacking is life value, ground and measure. They connect life, the ultimate onto-ethical concept, to capital, the ultimate concept of political economy: and so by transitivity, to law, human rights, sustainability and intergenerational equity. The meaning is clear. Valid law is a collective life capital formation providing the rules to live by that coherently protect and enable life.  Human rights are instituted claims of all to what enables their life capacities to be realised as human. Sustainability is of collective life capital, or it is a fraud. Intergenerational equity is access to collective life capital across generational time without loss, or it is a lie. Throughout we see a missing life base presupposed but not yet conscious or defined. Throughout we see that the ruling money-sequence value mechanism is incompetent to comprehend it. Building without loss and for better life across generations is what is ultimately worthwhile. No-one might deny it, but ignorant usurpation of its meaning is what rules. All universally life-enabling progressions of human evolution and history to now are the result of its implicit understanding. You cannot take a clean breath, meet a child safely, enjoy a drink of water, without their support from the past. The warped streak of epics and histories of power is opposite, but even state mass murderers and Wall Street bankers think that they are improving the world – the primary delusion which received theory rationalizes so that few understand.  


The lost life-ground is already implicit in healthy lives. Our organic fitness and powers, our depth and breadth of knowledge acquisition, our abilities to perform productive tasks of needed kinds, and most of all our sustained intent to create more life wealth without loss and cumulative gain are the generic parameters of a life code already built into us as human. More than ever we know the plague is ruling, and “the 1% and the 99%” expresses it. But a real economic law holds beneath opinions and times. Public investment in common life capital capacities is the only allocation that works over time.  We know this from America and Canada before their falls, Germany, Japan, Korea after 1950, and the post-1945 age of social life standards across the world. It has been proven again despite sabotages, coups and financial strangulations in Latin America after 1999. The unseen enemy is borderless money sequences with ever more rights. The missing map is diagnosis of the ruling value cancer. The missing link is the life-capital economy all breathe and move by. The war of the world today is won by knowledge action.   


It is the age of forgetting everything,

It is the age of remembering all.

It is the age of competing to death,

It is the age of our coming together.

It is the age of ignorance and falling apart,

It is the age of more knowing more than ever.

It is the age of losing all that lives,

It is the age of finding common life ground.

It is the age of ever more commodity diseases,

It is the age of choosing world life.

It is the age of sleepwalk

to catastrophe,

It is the age of awakening

to shared life meaning.

It is the age when capital destroys the world.

It is the age when life capital wins.




Michel Chossudovsky and Andrew Gavin Marshall (eds.), The Global Economic Crisis / The Great Depression of the XXI Century (Montreal: Global Research Publishers, 2010)

Its outstanding advance is in laying bare what analysis of all stripes has avoided for a long time – the unconstitutional control over credit and currency by private financial institutions whose global debt-control centre, Wall Street, is responsible for the 2008 economic meltdown and the ruin of countless people. The main victims are public sectors and workers’ pension plans across the U.S. and Europe, while the Goldman-Sachs empire on top of Wall Street and the U.S. Treasury has become far wealthier and more monopolist by the collapse. Presidents and Congress, “the best that money can buy”, have poured endless public-debt money into the greatest fraud in history. This book provides a wide-lensed explanation of the greatest-ever transfer of wealth to the rich from governments and citizen majorities and the systematic brutalization and impoverishment of the world on other planes at the same time. In this crisis alone, $12.3 trillions of public dollars to fill the black hole in the U.S. have already been committed with the U.S. Federal Reserve – in fact, a private bank system except for the Chairman – selling government bonds at a frantic pace to keep the ultimate looting system afloat and, along with speculators, inflating food prices at the same time. At the system level as a whole, the book  explains, Wall Street-US Treasury is connected to the U.S. military empire is connected to the IMF is connected to collapses of societies which are connected to the mindless equilibrium models of contemporary ‘economics’.

The DNA of this system is turning money into more money for those who have no need of it, which systematically impoverishes the world’s majority while wasting and destroying life capital at every level. This underlying meta pattern and the progressive alternative to it, however, are rather lost in the trees by the distinguished analysts who include Ellen Brown, Michel Chossudovsky,  John Bellamy Foster, Michael Hudson, Fred Magdoff, AG Marshall, James Petras, Peter Phillips, Peter Dale Scott, and Claudia von Werhof.  All provide expert analyses, but while the ruling system’s deranged effects are trenchantly exposed, the life-blind inner logic propelling them is not.  There is no life-value ground to understand the system’s anti-economy in principle, and no life-coherent alternative of capital and production emerges. Karl Marx himself began Capital with a definition of the commodity which explicitly ruled out life value as an issue, and economics left and right, orthodox and critical have stayed within this life-blind frame before and since. No known economics is based on what all economics is meant to be about – non-wasteful provision of life goods otherwise in short supply. Instead analyses are locked into priced commodities for profit with no principle of life-need – organic or ecological – ever involved.

This book’s analyses identify the disastrous social effects, but the exponential private money circuits which have hollowed out the world are still assumed as “capital” although they are the opposite. They produce no new wealth, but only more financial demand on existing wealth to appropriate and cumulatively depredate it. While these political-economic critiques lay bare the disastrous economic consequences which the sleepwalk of orthodoxy blinkers out, they do not penetrate the deranged meta program at its core. So-called “overproduction”, “over-accumulation” and “stagnation” are much discussed but with no life-grounded meaning to them. While such categories dominate contemporary critical economic theory, they are disconnected from the real economy of life-goods security and provision – exactly what the ruling money-sequence system is destroying through generational time. How can there be “over-production” when most people in the world are increasingly without the means they need to live? How can there be “over accumulation of capital” when the world is in ever more ruinous deficit of natural capital? How can system “stagnation” be a problem when the system’s growth is carcinogenic in nature? The cumulatively threatened ground of all production and distribution – ecological bases and the nature of universal human life needs – are essentially abstracted out.

Yet the book bursts with what standard academic texts and corporate media do not discuss: a massively destructive and collapsing world empire, hair-raising growth rates in inequality and poverty, global narcotics trade linked through the banks, systematic plans to integrate Canada and the U.S., the reason Eliot Spitzer was politically assassinated, the HAARP weather destabiliser, the EU Bolkenstein amendment, Ben Franklin on the repressed reason for the American Revolution, terminator-seed forced on all Iraq agriculture, and an ever more brutal war on the poor by an unaccountable global class dictatorship. Much is explained which has been kept under wraps. The pervasive dumb-down propaganda of the transnational money party destroying society’s life support systems at every level is given no comfort here.

The Transcendental Character of Money: An Exposition of Marx’s Argument in the Grundrisse


The recent economic crisis has certainly raised a number of questions about the conception of free markets and the neoconservative economic theories on which the capitalist nations have relied. Free marketeers like former Federal Reserve Chairman, Alan Greenspan, have acknowledged that unregulated markets have enormous costs and in the end could be damaging to the welfare of our citizens, the financial health of our economic institutions, and to the fiscal strength of our nation states.[1] In a National Public Radio interview, Greenspan even went so far as to call this crisis a “credit tsunami,” admitting that “the free market ideology may be flawed.”[2] Still, despite this painful admission, Greenspan had very few suggestions for regulating or correcting the failures of the free-market system.[3] Other observers of global capitalism have been concerned for some time about the boding dangers of the free market system. John McMurtry, for example, who locates the origins of capitalism in the work of John Locke and Adam Smith reminds us that both of these thinkers developed their economic theories out of their ethical philosophies. But how has economic thought moved so far from ethical and moral considerations? Presumably, the free market was justified because it led to human happiness. As Mary Rawson states in her review of McMurtry’s Unequal Freedoms: The Global Market as an Ethical System, the question is: “If the market system was to bring a better life to all, why can we find everywhere armaments, killing fields, malnutrition, brown water, and the disappearance of species? Why do we find, not life, but death?”[4] Citing Robert Lane’s The Loss of Happiness in Market Democracies, McMurtry argues that, although most current economic theory would not agree, “human satisfaction actually declines as income and commodity consumption rise beyond need.”[5] Furthermore, since our government leaders are tied to large corporate interests, the public interest is completely ignored.

As Governments decline into ‘the best democracies that money can buy’ there is no public authority left to protect the common interest. Our political leaders assume market growth is essential to society’s development. So public welfare is sacrificed to ‘more global market competiveness’ – and more life-system depredation. To name the causal links remains taboo.[6]

Additionally, recent economic theory has claimed that the market is “objective,” “value-free.” Some have complained that we have made the market into a god. As George Soros argues, however, “by claiming to be value free, market fundamentalism has actually undermined moral values.”[7]

In February, 2009, George Soros, founder of Soros Fund Management LLC and a philanthropist, claimed that the current global economic problems, sparked by the mortgage crisis, have “damaged the financial system itself.”[8] Extremely pessimistic about the success of the Obama administration’s attempts to respond to the crisis, by October, 2009, he cautioned his audience that the recovery from the current crisis “may run out of steam”; and he feared a “double-dip” in 2010 or 2011.[9] While he distinguishes the current crisis from the collapse of the Japanese economy because the current problems are not confined to one country, Soros distinguishes it from the “Great Depression” because the world economic system has not been allowed to collapse completely; it has been propped up by various national governments. Soros predicts that a “new world order … will eventually emerge” and it “will not be dominated by the United States to the same extent as the old one.”[10] Summing up his position, Soros maintains that “a global economy demands global regulations. … Regulations must be global in scope.” Echoing these concerns, Joseph Stiglitz asserts that “the truth is, most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.”[11]

Obviously, those who have suffered from this crisis are angry; many want to know: Who is going to jail? For how long? And when? While those who have been personally affected by this recession have suffered loss of jobs and homes with foreclosures, taxpayers have been bailing out the large Western banks that, according to John Lanchester, have been allowed to become “Too Big to Fail.”[12] Indeed, this was “the most important lesson” of the failure of Lehman Brothers – these institutions are “Too Big to Fail.” Truly, we are living with a “monstrous hybrid,” Lanchester continues, “in which bank profits are privately owned, but are made possible thanks to an unlimited guarantee against losses, provided by the taxpayer.” He agrees with German Chancellor Angela Merkel, “No bank should be allowed to become so big that it can blackmail governments.”[13] If capitalism is about assuming risk, i.e., “about ‘creative destruction,’ and the freedom to fail,” then we no longer have free market capitalism, but an economy dominated by the “banksters”; or, to speak precisely, Lanchester concludes “the most accurate term would be ‘bankocracy.’”

Others argue that the recent crisis is not an exception to the rule, but that these kinds of crises are endemic to the nature of capitalism; they belong to the logic of the capitalist system because once a means of exchange, money, when it becomes capital, becomes an end in itself. In other words, the economic system no longer serves to produce various products required to make human beings happy, but the system serves to produce one commodity, i.e., capital, and the problem for the corporations and the banks is how to produce, control, and accumulate capital. There are two questions here. The first is the historical question: when in the development of the capitalist economic system was there a concentration of production and the emergence of monopolies that led to the enormous accumulation of capital in the hands of a few large banking concerns? Citing the German economist, Otto Jeidels’ Relation of the German Big Banks to Industry with Special Reference to the Iron Industry, (Leipzig, 1905), V. I. Lenin answers this question: “Thus, the twentieth century marks the turning-point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital.”[14] Clearly others would answer this question differently; most would probably go back to the beginning of the twentieth century, but would look more specifically to contemporary problems relevant to the current capitalist system. This paper, however, is not concerned with these historical questions; rather, this essay is concerned with a second question: how, according to the logic of capitalism did money which served as a means of exchange become capital? My paper will address this question by examining Karl Marx’ argument in the Grundrisse.

Written during the winter of 1857-58, the Grundrisse[15] was authored by Karl Marx between the 1848 publication of the Manifesto of the Communist Party and the 1867 publication of the first volume of Capital. The text is a series of seven notebooks in which Marx strives to gain conceptual clarity on a number of fundamental economic concepts, including production, distribution, exchange, consumption, and money. Although the Grundrisse was not published during his own lifetime ? indeed, the work was not even published in the nineteenth century[16] ? this work is essential for our understanding of the nineteenth century, because in it Marx articulates one of the most important transitions for modern bourgeois capitalism, namely, the transition from money as a medium of exchange to money as a commodity. In this paper, I shall examine Marx’s argument for this transition under the heading of the transcendental character of money. To achieve this end, I have divided my discussion into three parts. The first part is a brief consideration of what Marx calls “the scientifically correct method” of political economy (Grundrisse 100). Before exploring the concept of production in general, I shall consider how Marx justifies beginning his reflection with this concept. Then, I shall reconstruct the way in which Marx understands the concepts of production, distribution, exchange, and consumption in his “Introduction” to the Grundrisse.[17] Finally, I intend to identify the conceptual moments of money as it moves from a mere medium of exchange to a commodity necessary for the productive process.

“The Method of Political Economy”[18]

Reflecting on the method of political economy, Marx distinguishes two approaches to this science: the historical method of the seventeenth century political economists and “the scientifically correct method,” i.e., “the theoretical method.” Marx criticizes seventeenth century political economists for beginning scientific reflection with an indeterminate abstraction like “population.” For if we begin with population, we must “move analytically towards ever more simple concepts [Begriff], from the imagined concrete towards ever thinner abstractions until [we reach] the simplest determinations.” In other words, if we begin with population, we shall have to consider the classes that constitute the given population. But according to Marx, the concept of “classes” has no content unless we understand “the elements on which they rest” such as “wage, labor, capital, etc.” And since “these concepts in turn presuppose exchange, division of labor, prices, etc.,” those political economists who start with the concept of “population,” make the mistake of beginning with “a chaotic conception [Vorstellung] of the whole.”

Rejecting this confused approach, Marx claims that “the scientifically correct method” of political economy is one that begins by sorting out “a small number of determinant, abstract, general relations” ? and here Marx is thinking of “labor, money, value, etc.” ? which he calls “the simplest determinations” (Grundrisse 100 and 101). These determinations, however, are not yet concrete. Once “these individual moments [have] been more or less firmly established and abstracted,” Marx writes, “there [begin] the economic systems, which [ascend] from the simple relations, such as labor, division of labor, need, exchange value, to the level of the state, exchange between nations and the world market” (Grundrisse 100-01). This is not the mistaken historical method of the seventeenth century political economists that begins with the “imagined concrete” (e.g., population); rather, according to the scientifically correct method, the concrete is something to be attained. “The concrete,” Marx argues,

is concrete because it is the concentration of many determinations, hence unity of the diverse. It appears in the process of thinking, therefore, as a process of concentration, as a result, not as a point of departure, even though it is the point of departure in reality and hence also the point of departure for observation [Anshauung] and conception.[19]

Reality is not transparent to the understanding; it is not immediately accessible to political economists. To attempt to comprehend reality in terms of the most immediate determinations only serves to confuse; reality is over-determined, i.e., as having so many determinations that we cannot sort them all out in theoretical discourse. Instead, reality must be understood. Beginning with the simplest determinations, the political economist brings to conceptual clarity chaotic conceptions by identifying “a small number of determinant, abstract, general relations” which “lead towards a reproduction of the concrete by way of thought” (Grundrisse 100 and 101). Hence, political economists do not produce reality as the product of thought; rather, they proceed correctly by conceptualizing reality in thought.

Reconstruction of Production, Distribution, Exchange, and Consumption

Production in General

Marx employs this scientifically correct method in his own work when he takes up the concept of “production” (Grundrisse 85-88). In any reflection on production, we always refer to “production at a definite stage of social development — production by social individuals” (Grundrisse 85). Because of this, Marx argues, there would seem to be two possible ways to speak of production. If we are to “talk about production at all we must either pursue the process of historic development through its different phases, or declare beforehand that we are dealing with a specific historic epoch such as[,] e.g.[,] modern bourgeois production.” But to start in this manner would once again lead us down the thorny path of the historical method; beginning with “the chaotic conception of the whole,” we would have to search for the simplest determinations that constitute production.

Alternatively, Marx suggests that we can begin with “a rational abstraction,” i.e., “production in general” because “all epochs of production have certain common traits, common characteristics.” The difficulty, however, is that production as it appears has many determinations. In fact, it could be characterized in its specificity as being over-determined. Furthermore, not all of these determinations belong to every epoch as identifiable moments. “Some determinations belong to all epochs, others only to a few. [Some] determinations will be shared by the most modern epoch and the most ancient.” If we are to develop this kind of theoretical discourse, Marx argues, we must allow certain determinations to be stripped away and removed from this process of abstraction, the residuum, albeit an abstraction will not be an indeterminate abstraction; rather, it will be a concrete abstraction. And the scientifically correct method demands that we begin our theoretical reflection with a concrete abstraction, i.e., a concept of production which includes just those clearly articulated, essential moments that all specific instances of production have in common. Consequently, we shall begin the present discussion with the concrete abstraction of production in general.

If we simply consider the concept of production in general, it appears in the first instance to be the making of products. In production, human beings appropriate nature “within and through a specific form of society” (Grundrisse 87).[20] Production in its immediacy, however, assumes the three following moments: 1) human activity, i.e., work; 2) the subject of the work, i.e., the material worked on, and 3) the instruments through which the work is accomplished, i.e., the instruments of production.[21] Moreover, the products of production belong to someone; they are property which fulfill human needs. “An appropriation which does not make something into property,” Marx writes, “is a contradictio in subjecto” (Grundrisse 88).[22] “In production the members of society appropriate (create, shape) the products of nature in accord with human needs”; Marx calls this “the obvious” or “trite notion” of production. Furthermore, “production, distribution, exchange, and consumption,” according to Marx, “form a regular syllogism: production is the generality, distribution and exchange the particularity, and consumption the singularity in which the whole is joined together” (Grundrisse 89). However, this does not mean that “production, distribution, exchange, and consumption are identical, but that they all form the members of a totality, distinctions within a unity. Production predominates not only over itself, in the antithetical definition of production, but over the other moments as well” (Grundrisse 99). What then is the relationship of each of these determinations ? distribution, exchange, and consumption ? to production?

“Consumption and Production”[23]

Marx distinguishes three “identities between consumption and production” (Grundrisse 92): (1) “Production is consumption, consumption is production.” And he calls this first identity “immediate identity”;[24] (2) Production “appears as a means for” consumption and consumption “appears as a means for” production. [25] (3) “Each of them … creates the other in completing itself, and creates itself as the other.” [26] Marx does not name the last two mentioned identities. In keeping with the Hegelian vocabulary he employs here, however, I shall refer to the second and third identities as mediate identity and self-mediated identity, respectively. Let us consider each of these identities in turn.

The Immediate Identity of Production and Consumption

“(1) Immediate identity: Production is consumption, consumption is production.”[27] Production which appears immediately as consumption, Marx maintains, is “twofold consumption”; it is both “subjective and objective” (Grundrisse 90). It is subjective because the producer “develops his abilities in production”; it is objective because the producer also “expends” these abilities ? “uses them up in the act of production.” In producing the product, “the means of production” are consumed; they “become worn out through use” in the productive process. To illustrate his point, Marx appeals to the image of combustion. While fire and heat are produced in combustion, the material that supports combustion is consumed. Similarly, in production “the raw material” surrenders “its natural form and composition by being used up.” “The act of production,” Marx argues, “is therefore in all its moments also an act of consumption. Production as directly identical with consumption, and consumption as directly coincident with production, is termed … productive consumption.”

At the same time, “consumption is also immediately production.” Drawing an image from nature, Marx argues that just as a plant produces itself by consuming certain nutriments, so too a “human being produces his [or her] own body” by consuming nourishment. And this, Marx continues, “is true of every kind of consumption which in one way or another produces human beings in some particular aspect” (Grundrisse 90-91). Consumption that is immediately production, according to Marx, is “consumptive production” (Grundrisse 91). Consumptive production, however, is “secondary” because it involves the “destruction of the prior product” in the productive process. In production, “the producer objectified himself”; in consumption “the object he created personifies itself.” Hence, productive consumption is to be distinguished from “production proper.” For although production is immediately consumption and consumption is immediately production, their “immediate duality” remains unaltered; each process retains its unique character and is independent of the other.

The Mediate Identity of Production and Consumption

“(2) [In the sense] that one appears as a means for the other, is mediated by the other.”[28] According to Marx, a “mediating movement” occurs between the two processes ? production and consumption. These two processes are “related to” and “indispensable to one another”; Marx insists on “their mutual dependence” that “still leaves them external to each other” (Grundrisse 93). Each process is “a means for the other” ? each “is mediated by the other.” “Consumption,” Marx argues, “mediates production” because “it alone creates for the products the subject for whom they are products” (Grundrisse 91). “Without production, no consumption; but also, without consumption, no production; since production would then be purposeless.” Indeed, “consumption,” Marx argues, produces production in two ways. First, consumption produces production because it is only by being consumed that a product “becomes a real product.” A product achieves its “‘last finish’ in consumption.” A product that is not consumed is not actually a product at all; it is only potentially a product. For example, “a railway on which no trains run, hence which is not used up, not consumed,” Marx insists, “is a railway only ??????? [potentially], and not in reality.” This means that a product is quite different from a natural object. While a natural object simply is what it is, the product “becomes a product only through consumption.” “Only by decomposing the product,” Marx maintains, “does consumption give the product the finishing touch; for the product is production not as objectified activity, but rather only as object for the active subject.”

Second, consumption produces production “because consumption creates the need for new production, that is it creates the ideal, internally impelling cause for production which is its presupposition.” In other words, consumption produces production by creating “need” that will be satisfied by production. As the object of production, however, need is not external to the productive process; rather, need is understood “as internal object of production, as aim”; the goal of production is to fulfill need created by consumption. Hence, according to Marx, consumption is understood as “the aim of production”; consumption motivates production by creating “the object which is active in production as its determinant aim” (Grundrisse 93 and 91). If it is true that production “offers consumption its external object,” then it is equally true, Marx contends

that consumption ideally posits the object of production as an internal image, as a need, as drive and as purpose. It creates the objects of production in a still subjective form. No production without a need. But consumption reproduces the need (Grundrisse 92).

At the same time, Marx identifies three ways that production mediates the process of consumption. First, production “produces the object of consumption.” In production, products are produced for no other reason than to be consumed; “production creates the material, as external object, for consumption” (Grundrisse 93). Without an object to be consumed, consumption would not be consumption at all. It is by supplying the material to be consumed that “production produces consumption” (Grundrisse 92).

Second, production produces “the manner of consumption.” Previously, we observed that only in consumption does the product achieve its final finish. Similarly, production does not merely create a product for consumption; rather, it “also gives consumption its specificity, its character, its finish.” Production does not create any object or “an object in general.” In the productive process, specific objects are produced. Because production produces the product, and because the product is the product that it is, i.e., a specific product, production also produces the way in which the product is to be consumed. Hence, “the object,” Marx argues, “is not an object in general, but a specific object which must be consumed in a specific manner.” Marx appeals to an example of satisfying one’s hunger. The need to gratify our hunger is the same in any context. After all, “hunger is hunger.” But there is a difference between our “bolt[ing] down raw meat with the aid of hand, nail, and tooth,” and our satisfying our hunger “by cooked meat eaten with a knife and fork.” Since production produces a specific product, and since production produces the manner in which the product is to be consumed, Marx argues that “production thus creates the consumer.”

Finally, production produces “the motive of consumption.” Motivated by need, production creates the material to satisfy need. But production also “supplies a need for the material.” As it first appears, consumption exists in its immediacy ? “a state of natural crudity.” However, consumption is “mediated as a need for the object” produced by production. Hence, production not only creates the material object for consumption, and it not only creates the manner in which the material object is to be consumed, but it also creates the need for the material object. In other words, production creates “the perception” of need. Borrowing an example from the arts, Marx maintains that in this there is no difference between an “object of art” and any other product. For just as an artifact produces “a public which is sensitive to art and enjoys beauty,” so too, in the creation of every other product, production produces a perceived need. “Production thus not only creates an object for the subject, but also a subject for the object,” i.e., the consumer.

The Self-Mediating Identity of Production and Consumption

In addition to the two previous identities ? the immediate identity of production and consumption and the mediate identity of production and consumption ? production produces consumption and consumption produces production, and in so doing “each of them … creates the other in completing itself as other” (Grundrisse 93). For its part, consumption creates production because in consumption the product is consumed. If the product were not consumed, it would not be what it is, namely, a product. In the activity of the product being consumed, consumption not only brings the product to completion, but it also produces the need for production and re-production. Insofar as the process of consumption brings the product to completion, and insofar as the process of consumption produces the inclination for production and reproduction, consumption completes the process of production by producing the producer. “Consumption,” Marx argues,

accomplishes the act of production only in completing the product as product by dissolving it, by consuming its independently material form, by raising the inclination developed in the first act of production, through the need for repetition, to its finished form; it is thus not only the concluding act which the product becomes product, but also that in which the producer becomes producer (Grundrisse 93).

Hence, consumption creates production by bringing itself to completion; and in this way consumption is distinguished from production.

For its part, production completes the productive process by producing consumption. Insofar as production produces both “an object for the subject” and “a subject for the object,” production creates consumption

(1) by creating the material for it; (2) by determining the manner of consumption; and (3) by creating the products initially posited by it as objects, in the form of a need felt by the consumer. It thus produces the object of consumption, the manner of consumption and the motive of consumption (Grundrisse 92).

Furthermore, besides producing the material or object, the manner, and the motive for consumption, “production produces consumption … by creating the stimulus of consumption, the ability to consume, as a need” (Grundrisse 93). In other words, when Marx writes that production produces the subject for the object of consumption (Grundrisse 92), he means that production not only produces the product that is to be consumed, but it also produces the consumer that needs the product (Grundrisse 92 and 93). Production thus creates consumption by bringing itself to completion; and in this way production is distinguished from consumption.

Marx, however, stresses that while each of these moments ? production and consumption ? “creates the other in completing itself, and creates itself as the other,” still the moments articulated here belong to production in general. Production and consumption “appear as moments of a single act” (Grundrisse 94). In other words, production must be understood as “one process” to which all of the identities and the moments constituting them belong. Hence, production in general is the “predominant moment.”

With a single subject, production and consumption appear as moments of a single act. The important thing to emphasize here is only that … they [production and consumption] appear in any case as moments of one process, in which production is the real point of departure and hence also the predominant moment. Consumption as urgency, as need, is itself an intrinsic moment of productive activity. But the latter is the point of departure for realization and hence also its predominant moment: it is the act through which the whole process again runs its course. The individual produces an object and, by consuming it, returns to himself, but returns as a productive and self-reproducing individual. Consumption thus appears as a moment of production. (Grundrisse, 94)

“Distribution and Production”[29]

Marx begins his discussion of distribution with the following question: “Does distribution stand at the side of and outside production as an autonomous sphere?” Although he will answer this question in the negative, by arguing that production does indeed include distribution, there are a number of reasons to think that distribution does not belong to the sphere of production. From the standpoint of the individual, distribution seems to be prior to production because it establishes his or her place in the process of production. According to this point of view, Marx writes, “distribution appears as a social law” because it fixes the individual’s place in the social system, i.e., “the system of production” (Grundrisse 96). Since the individual’s place within this system is determined prior to his or her participation in the process of production, it would stand to reason that distribution does not belong to the sphere of production; rather, distribution would seem to precede production. “To the single individual,” Marx argues,

distribution appears as a social law which determines his [or her] position within the system of production within which he [or she] produces, and which therefore precedes production. The individual comes into the world possessing neither capital nor land. Social distribution assigns him [or her] at birth to wage labor. But this situation of being assigned is itself a consequence of the existence of capital and landed property as independent agents of production (Grundrisse 96).

The individual comes into this world without capital or land; he or she possesses only his or her own body which may be sold in the form of the individual’s labor power for wages. But Marx emphasizes that it is the mode of production that determines the individual’s place in the system of production. Hence, distribution is not an autonomous sphere existing outside of production; rather, distribution belongs to the sphere of production.

From the standpoint of whole societies, Marx mentions four historical examples that provide reasons to think that distribution precedes production, i.e., “that distribution is not structured and determined by production, but rather the opposite, production by distribution.” When one nation or people, for example, conquers another and divides the land among themselves, they force a certain mode of “distribution and form of property in land” on those who have been defeated; thus, production would seem to be determined by distribution. Again, if a conquering nation enslaves those it has defeated, and if, as a result, production were founded on slave labor, distribution would appear to be both prior to production and to determine the mode of production. Or, in the case of a revolution when a people revolts against the land owners or the landed gentry and redistributes the land by dividing their holdings into smaller tracts of land, distribution would appear to change the features of production. Similarly, in a caste system in which a legal system distributes, as a result of “a hereditary privilege,” property to some, land to others, and still others are restricted to the caste of laborers, distribution would seem to be prior to production, to determine production, and, hence, to stand outside of production as an entirely autonomous sphere.

Marx, however, rejects the notion that distribution belongs to an autonomous sphere; rather, he argues that “in all cases, the mode of production … is decisive” (Grundrisse 97). While the process of production involves appropriation, i.e., involves making something into property, “the producer’s relation to the product, once the latter is finished, is an external one”; in other words, the producer does not take possession of the product immediately (Grundrisse 94). In production, the producer does not intend the immediate appropriation of the products; the producer does not produce products for his or her own personal consumption. Rather, the producer can only take possession of the product insofar as the product is distributed to others. Distribution depends on the producer’s relation to other individuals. Hence, distribution, Marx argues, like consumption, belongs to the sphere of production.

Distribution steps between the producers and the products, hence between production and consumption, to determine in accordance with social laws what the producers share will be in the world of products (Grundrisse 94).

At the most immediate level distribution and production appear independently of one another. Distribution seems to be the mere distribution of products according to certain social laws which first appear as natural laws. However, “this distribution of products” is a moment in production realized as:

  1. “the distribution of the instruments of production, and …
  2. “the distribution of members of society among the different kinds of production” (Grundrisse 96).

For its part, production produces distribution, and different modes of production require different forms of distribution. “The structure [Gliederung] of distribution,” Marx writes,

is completely determined by the structure of production. Distribution is itself a product of production, not only in its object, in that only the results of production can be distributed, but also in its form, in that the specific kind of participation in production determines specific forms of distribution, i.e., the pattern of participation in distribution (Grundrisse 95).

In other words, while the structure of distribution appears as the naturally determined distribution of products, actually, the distribution of products is the result of this structure of distribution which is in turn the result of production as it changes the natural determinants to “historic determinants.” “At the very beginning,” Marx continues,

these may appear as spontaneous, natural. But by the process of production itself they are transformed from natural into historic determinants, and if they appear to one epoch as natural presuppositions of production, they were its historic product for another (Grundrisse 97).

Thus, distribution, belongs to the sphere of production and Marx calls it “production-determined distribution”; as production-determined distribution, distribution appears as one moment of production.

“Exchange and Production” [30]

Exchange appears as a moment mediating “production with its production-determined distribution on one side and consumption on the other …” (Grundrisse 99). Because of this mediation, exchange makes a threefold appearance, each level of which is either determined by or appears in the sphere of production:

  1. It is within production “that exchange of activities and abilities [division of labour] takes place” (Grundrisse 99]. This moment of exchange is the essential constitutive moment of production.
  2. Exchange as the “means” of bringing a product to its concrete reality, i.e., exchange preparing the product for consumption, is also determined by production. It is exchange that brings the product to consumption wherein the product is completed. In other words, production determines the way in which consumption receives its object by means of exchange (Grundrisse 99).
  3. The form of exchange, i.e., the way in which exchange is organized “between dealers and dealers …,” is “itself a producing activity” while at the same time being “entirely determined by production …,” i.e., the mode of production (Grundrisse 99). In other words, the organization of exchange which is determined by production determines the intensity and extensity of exchange. And, only in this last instance “where the product is exchanged directly for consumption” does exchange begin to appear separately from production (Grundrisse 99).

Thus, exchange, like distribution and consumption, appears not as an autonomous activity, but “as either directly comprised in production or determined by it.” Each of these concepts: production, distribution, exchange, and consumption, exists as moments within a complex whole where each mediates and is mediated by the others, but the determinate concept is that of production in general. Thus, distribution, exchange, and consumption always return us to production.

The Transition of Money as Exchange to Money as Commodity

Thus far, I have sketched out the concepts Marx presents in the “Introduction” to the Grundrisse (85-100). The question that must now be answered is: what are the conceptual moments of money as it moves from a mere medium of exchange to a commodity necessary for the productive process? Marx provides us with a clue to answer this question when he writes “circulation itself [is] merely a specific moment of exchange, or [it is] also exchange regarded in its totality” (Grundrisse, 98). One of the specific moments of circulation, however, is money that in turn exists in its concreteness in so far as it is seen in its determinate nature, i.e., as having certain specifiable determinations. Money can be understood to have the four following moments:

The properties of money as (1) measure of commodity exchange; (2) medium of exchange; (3) representative of commodities (hence object of contracts); (4) general commodity alongside the particular commodities, all simply follow from its character as exchange value separated from commodities themselves and objectified (Grundrisse 146).

Money as the “measure of commodity exchange.” If commodity A and commodity B are to be exchanged, then there must be an existent measure or standard to which both A and B may be related or compared in order to determine the feasibility of exchanging A for B. This process of quantification takes place in thought as “both commodities to be exchanged are transformed … into exchange values and are thus reciprocally compared” (Grundrisse 144).

Money as the “medium of exchange” (Grundrisse 146). Money takes on a character of its own independent of the products to be exchanged. In other words, in order to obtain commodity B, we no longer need to exchange commodity A for commodity B. All that need be done is to exchange a socially determined representation, i.e., exchange value, which, as it is attached to commodities A and B, appears as the price of these commodities, for commodity B. This socially determined representation, i.e., symbol (money as it appears as coin or paper) of the price of commodity B, may be obtained by exchanging commodity A for money. Thus, at this moment money mediates exchange because money may be exchanged for commodities, or commodities may be exchanged for money.

Money as the “representative of commodities.” Money comes to represent commodities as it attains a character of its own. When this happens it is no longer necessary to think in terms of exchanging one commodity for another, i.e., exchanging commodity A for commodity B. At this moment it is simply possible to purchase either commodity A or commodity B, or both commodities A and B for that matter, with a socially determined amount of money. Or looking at this purchasing process from another point of view, it is possible to sell commodities A and B for a certain amount of money. Hence, commodities are said to have an exchange value that appears as a price in terms of a specific quantity of money. At the same time, money has an exchange value that appears as a price in terms of commodities. In short, a commodity is said to have a price that is attached to the commodity in terms of money.

Money as a “general commodity along side particular commodities” (Grundrisse 146). Thus, as money takes on a character of its own, it becomes an object, i.e., a thing-in-itself. It becomes completely separated from specific commodities while taking on the characteristics of a commodity. It is in its commodity character that money is borrowed and lent, and generates interest. Hence, money has the capacity to produce money and money qua commodity takes on the character of capital.

By virtue of its property as the general commodity in relation to all others, as the embodiment of the exchange value of the other commodities, money at the same time becomes the realized and always realizable form of capital; the form of capital’s appearance which is always valid (Grundrisse 146).

Therefore, money in its four moments appears as a process in which the exchange value of a product qua commodity “obtains a material existence separate from the commodity” and in so doing becomes a commodity itself (Grundrisse 145); money is produced not for its use value, but for its exchange value.

At the same time, certain contradictions corresponding to this fourfold development arise.

Firstly: The simple fact that the commodity exists doubly, in one aspect as a specific product whose natural form of existence ideally contains (latently contains) its exchange value, and in the other aspect as manifest exchange value (money), in which all connection with the natural form of the product is stripped away again – this double, differentiated existence must develop into a difference, and the difference into antithesis and contraction. The same contradiction between the particular nature of the commodity as product and its general nature as exchange value, which created the necessity of positing it doubly, as this particular commodity on one side and as money on the other – this contradiction between the commodity’s particular natural qualities and its general social qualities contains from the beginning the possibility that these two separated forms in which the commodity exists are not convertible into one another (Grundrisse 147).

In other words, the commodity exists qua commodity and qua money. In that money has now attained a character of its own, it exists independently of the commodity. At the same time the commodity exists independently of money. As money comes to exist independently of the commodity, the commodity is no longer necessarily exchangeable for money because, as Marx writes, “the exchangeability … is abandoned to the mercy of external conditions … which may or may not be present.” Thus, exchangeability becomes “something different from and alien to the commodity, with which it first has to be brought into equation, to which it is therefore at the beginning unequal; while the equation itself becomes dependent on external conditions, hence a matter of chance” (Grundrisse 148).

Secondly: Just as the exchange value of the commodity leads a double existence, as the particular commodity and as money, so does the act of exchange split into two mutually independent acts: exchange of commodities for money, exchange of money for commodities: purchase and sale (Grundrisse 148).

There is no necessary correspondence between purchase and sale which often appear “temporally and spatially separate” and for this reason their “immediate identity ceases.”

Thirdly: With the separation of purchase and sale, with the splitting of exchange into two spatially and temporally independent acts there further emerges another new relation.

Just as exchange itself splits apart into two mutually independent cts, so does the overall movement of exchange itself become separate from the exchanges, the producers of commodities. Exchange for the sake of exchange separates off from exchange for the sake of commodities (Grundrisse 148).

Exchange for the sake of exchange, according to Marx, is commerce. The purpose of exchange is the object for which the exchange exists, but “the purpose of commerce is not consumption, directly, but the gaining of money, of exchange values” (Grundrisse, 149).

Fourthly: Just as exchange value, in the form of money, takes its place as the general commodity alongside all particular commodities, so does exchange value as money therefore at the same time take its place as a particular commodity (since it has a particular existence) alongside all other commodities (Grundrisse 150).

In other words, money, as it comes to exist independently of commodities, becomes a commodity itself. On the one hand, money is a commodity just like any other commodity. But on the other hand, it is different from other commodities: “it is not only the general exchange value, but at the same time a particular exchange value alongside other exchange values” (Grundrisse 151). Therefore, money exists in contradiction with itself. But “money does not create these antitheses and contradictions; it is, rather, the development of these contradictions and antitheses which creates the seemingly transcendental power of money” (Grundrisse 146).

In conclusion, money is a specific moment of circulation which in turn is “a specific moment of exchange, or … exchange regarded in its totality” (Grundrisse 98). From the point of view of production, we see that production no longer produces products for consumption, i.e., products that are to be complete in consumption, but rather, production produces exchange values. Consumption seems to slide out of the picture. Production comes to be determined by exchange values as money which first appeared as a means of exchange comes to be the end of exchange (Grundrisse 146 and 151).

[1]See, for example, Edmund L. Andrews, “Greenspan Concedes Error on Regulation,” New York Times, , October 23, 2008 (http://www.nytimes.com/2008/10/24/business/economy/24panel.html).

Almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he [Greenspan] told the House Committee on Oversight and Government Reform.

[2] See Brian Naylor’s October 24, 2008 interview with Alan Greenspan, “Greenspan Admits Free Market Ideology Flawed,” in which Greenspan said, “We are in the midst of a once-in-century credit tsunami. Central banks and governments are being required to take unprecedented measures.” (Transcript at http://www.npr.org/templates/story/story.php?storyId=96070766).

[3] Edmund L. Andrews, notes “despite his [Greenspan’s] chagrin over the mortgage mess, the former Fed chairman proposed only one specific regulation: that companies selling mortgage-backed securities be required to hold a significant number themselves.” At the same time in the same article, Greenspan expresses his continued belief in the market: “Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets … . Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.” “Greenspan Concedes Error on Regulation,” New York Times, October 23, 2008 (http://www.nytimes.com/2008/10/24/business/economy/24panel.html).  

[4] Mary Rawson. “Review of Unequal Freedoms: The Global Market as an Ethical System, by John McMurtry, Toronto: Garamond Press, (1998). Peace Magazine 15, 3, p. 31 (http://www.peacemagazine.org/archive/v15n3;31.htm).

[5] John McMurtry. “Myths of the Global Market.” New Internationalist, issue 301 (June 2007) (http://www.newint.org/columns/essays/2007/06/01/essay/).

[6] John McMurtry. “Myths of the Global Market.” New Internationalist, issue 301 (June 2007) (http://www.newint.org/columns/essays/2007/06/01/essay/). One cannot help thinking of the recent United State Supreme Court ruling that gave corporations the right to contribute unlimited funds to political campaigns; thus the pseudo-democracy has officially become a plutocracy.

[7] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n).

[8] Walid el-Gabry. “Soros Says Crisis Signals End of a Free-Market Model (Update 2),” Bloomberg.com, (February 23, 2009). (http://www.bloomber.com/apps/news?pid=20670001&sid=aI1pruXkjr0s).

[9] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n). “I regret to tell you that the recovery is liable to run out of steam and may even be followed by a ‘double-dip’ although I am not sure whether it will occur in 2010 or 2011.”

[10] George Soros. “The Way Forward,” Financial Times. October 30, 2009. (http://www.ft.com/cms/668e074a-bf24-11de-a696-00144feab49a.html?_i_referralObject=11135588&fromSearch=n).

[11] Sean O’Grady. “The Money Man: Super-economist Joseph Stiglitz on How to Fix the Recession,” The Independent, (February 9, 2010) (Http://license.icopyright.net/user/viewFreeUse.act?fuid-NzA3MDM4NQ%3D%3D).

[12] John Lanchester, “Bankocracy,” London Review of Books, 31, 21 (November 5, 2009): 35-36. (http://www.lrb.co.uk/v31/n21/john-lanchester/bankocracy/print).

[13] John Lanchester, “Bankocracy,” London Review of Books, 31, 21 (November 5, 2009): 35-36. (http://www.lrb.co.uk/v31/n21/john-lanchester/bankocracy/print). Lanchester cites Merkel comments after her fall, 2009, meeting with the French president Nicolas Sarkozy.

[14] V. I. Lenin, Imperialism, the Highest Stage of Capitalism in: Selected Works, Moscow: Progress Publishers, 1963. (http://www.marxists.org/archive/lenin/works/1916/imp-hsc/).

[15]Karl Marx, 1973. Grundrisse: Foundations of the Critique of Political Economy, translated with a forward by Martin Nicolaus, New York: Vintage Books. For the particulars regarding the writing and publication of the Grundrisse, see Martin Nicolaus, “Forward,” 7-66.

[16]Martin Nicolaus, 1973. “Forward,” in: Karl Marx, Grundrisse, n. 1, p. 7. Nicolaus reports that a limited edition consisting of two volumes (one published in 1939, the other, in 1941) was published in the twentieth century.

[17]Marx, 1973. The General Relation of Production to Distribution, Exchange, Consumption. In Grundrisse, 88-100.

[18]Marx, 1973. The Method of Political Economy. In Grundrisse, 100?08.

[19]Marx, 1973. Grundrisse, 101.

[20]Marx, 1973. Grundrisse, 87. Compare Capital, I, pp. 177-78.

[21]Marx, 1973. Grundrisse, 87. In Capital, I, Marx calls these “the elementary factors of the labour process” (Capital, I, p. 178).

[22]Since production (i.e. bourgeois production) involves property, since property assumes a distinction between “mine” and “thine,” and since there is a need for a mechanism whereby “mine” can be made “thine,” according to Marx, bourgeois economists have assumed that the introduction of property demands certain specific legislative and juridical frameworks to protect private property. But “history,” Marx notes, “shows common property (e.g.[,] in India, among the Slavs, the early Celts, etc.) to be the more original form, a form which long continues to play a significant role in the shape of communal property” (Grundrisse, 88; italics added.) Furthermore, Marx argues, “every form of production creates its own legal relations, form of government, etc.” (Grundrisse, 88). “All the bourgeois economists are aware of,” he writes,

is that production can be carried on better under the modern police than[,] e.g.[,] on the principle of might makes right. They forget only that his principle is also a legal relation, and that the right of the stronger prevails in their “constitutional republics” as well, only in another form (Grundrisse, 88).

[23]Marx, 1973. Grundrisse, 90-94.

[24]Marx, 1973. Grundrisse, 93.

(1) Immediate identity: Production is consumption, consumption is production. Consumptive production. Productive consumption. The political economists call both productive consumption. But then make a further distinction. The first figures as reproduction, the second as productive consumption. All investigations into the first concern productive or unproductive labour; investigations into the second concern productive or non-productive consumption.

[25]Marx, 1973. Grundrisse, 93.

(2) [In the sense] that one appears as a means for the other, is mediated by the other: this is expressed as their mutual dependence; a movement which relates them to one another, makes them appear indispensable to one another, but still leaves them external to each other. Production creates the material, as external object, for consumption; consumption creates the need, as internal object, as aim, for production. Without production not consumption; without consumption no production. [This identity] figures in economics in many different forms.

[26]Marx, 1973. Grundrisse, 93.

(3) Not only is production immediately consumption and consumption immediately production, not only is production a means for consumption and consumption the aim of production, i.e. each supplies the other its object (production supplying the external object of consumption, consumption the conceived object of production); but also , each of them, apart from being immediately the other, and apart from mediating the other, in addition to this creates the other in completing itself, and creates itself as the other. Consumption accomplishes the act of production only in completing the product as product by dissolving it, by consuming its independently material form, by raising the inclination developed in the first act of production, through the need for repetition, to its finished form; it is thus not only the concluding act in which the product becomes product, but also production produces consumption by creating the specific manner of consumption; and, further, by creating the stimulus of consumption, the ability to consume, as a need. This last identity, as determined under (3), [is] frequently cited in economics in the relation of demand and supply, of objects and needs, of socially created and natural needs.

[27]Marx, 1973. Grundrisse, 93.

[28]Marx, 1973. Grundrisse, 93.

[29]Marx, 1973. Grundrisse, 94-98.

[30]Marx, 1973. Grundrisse, 98-100.