Teaching is over now – most of the exam papers corrected and time …, to look forward. Teaching always is caught in the tension: dealing with the ‘real realities‘ on then hand and with ‘clear’ theories and the supposed ‘objective, value-free’ analysis of the reality on the other hand – and in economics it is even worse than other disciplines: the ‘objective reality’ being the reality of rational individuals. If it would be only for my neighbours and colleagues: I know that humans are not rational actors. Some are not acting, some are solely actors, some are not rational – and the worst category are the irrationally acting actors …
Well, leaving this aside …, or actually no: taking it from here, there is always also the point that even the ‘rational systems’, as central banks, money, exchange values etc are never following the books – it is not because they have their own lives but more because text books create ‘an own life’: the life of a world as it should or could be, the life of a world that had been imagined by some as political programs etc.
Two issues, the one like to pure doctrine when it comes to banking and central banks: be they independent or not, they are usually considered to be public bodies, committed to the common wheal etc. Still, in one way or another, i.e. more or less explicit, these banks serve – in most if the cases – public AND private interests, usually without being specified.
However, sone specification can be seen in the generally agreed upon ‘holy trinity’: maximisation of employment, stabilisation of prices, moderating interest rates.
But ….. where is the challenge addressed that Dani Rodrik poses as irresolvable trilemma: we cannot have democracy AND sovereignty AND global integration.
In fact – this is indeed part of the story – we see that over the recent years and even decades the overall goal of controlling inflation is positioned over the goal of maximising employment. Stating this, it is necessary to ask as well: why maximising employment if we are already producing large surpluses?
From there it is worthwhile to look at the second issue: the question of value, valuation and valorisation. It haunts me for a long time, always asking myself and perhaps even more so: talking about values, calling for living along the lines of the cardinal virtues …- beh, forgotten what the quarterly reviewer said?
“Capital is said … to fly turbulence and strife, and to be timid, which is very true; but this is very incompletely stating the question. Capital es- chews no profit, or very small profit, just as Nature was formerly said to abhor a vac- uum. With adequate profit, capital is very bold. A certain 10 per cent, will ensure its employment anywhere; 20 per cent, certain will produce eagerness; 50 per cent., posi- tive audacity; 100 per cent., will make it ready to trample on all human laws; 300 per cent., and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged. If turbulence and strife will bring a profit, it will freely encourage both. Smuggling and the slave trade have amply proved all that is here stated” (T.J. Dunning, 1. c, [Trades’ Union and Strikes,] pp. 35-36; from: Marx, Karl, 1867: Capital; Volume I; in: Karl Marx/Frederick Engels. Collected Works; Volume 35; London: Lawrence & Wishart, 1996: 748, footnote 2)
Still, working currently in the ‘mainstream’ [or to be more precise: trying to swim against it], I am looking at questions of digitisation, all the new economic forms emerging in that context, linked to primarily in the issues about technical developments but more about relations of procession and the mode of production. Profitability plays a role and …, exactly the issues around value, valuation and valorisation. in the context of a paper I am still developing not least in connection with the preparation of the G20-discussions I am wondering of it is time to change perspectives in political economy. Famously Max Weber centre-staged an issue that was already issued – more en passant – by Marx: the question of the protestant ethics. Marx saw it, of course, as matter of the superstructure, without denying its importance whereas Weber saw the emergence of this ethics system as driving force.
My question is a different one at this stage: instead of counterpoising catholicism and protestantism, we may have tops of a merger, we may call it
Protestocatholicism …. or … Cathoprotestanism …
The reflection behind it? Well, quoting from the paper – work in progress –
Early capitalism was characterised by the fundamental ambition to follow the principle of exchange of equivalents – inequality existed at the point of departure but after ‘free individuals entered the economic sphere of exchange – they had been equals. The ten new capitalism stood against the feudal system that was based on violence. However, looking at the situation today, we see that the foundation is not simply and solely about the different points of departure. The economic process of the data economy is itself a violent relationship that has little to do with equivalence: it is the violence of withholding information, utilising the directional power of information, the enforcement of conditions, perfectioning of control etc.
A world which has lost much of the foundation in reality and where, indeed, values seem to be virtual, even if they are presented by concrete numbers as Peter Wahl pointed out already some time ago:
Even if every business transaction was protected by derivatives, the real economy-based proportion would still be less than 5%. Therefore, by far the largest portion is used for speculative trading. Buyers and sellers no longer have anything to do with each other. Dealers with not the slightest interest in wheat purchase large quantities of grain forwards in order to sell them profitably when the contract matures. Only a very small proportion of this business actually refers to material objects such as grain, gold or oil – the BIS assumes this proportion to be approximately 1%. The predominant proportion concerns financial products. There is practically no end to fantasy in developing derivatives: meanwhile, the system has achieved such a complexity that there are derivatives dealing with derivatives of derivatives.
Protestocatholicism …. or … Cathoprotestanism … – just another form of indulgence payments, from old violence to new violence.
And in any case, this violence is real.