[OPE] Capital as Power -- A new book by Nitzan & Bichler

Simply put, the central problem of the analysis is, that you can have a lot
of capital and little power, or little capital and a lot of power, and that
capital can vary, while power remains constant, or power can vary, while
capital remains constant. And thus a theoretical framework is needed, which
can explain the determinacy of both capital and power, and how they are
really related. We cannot simply infer that if A own $10m and B owns $20m,
that B has more power than A, and will keep that power through time.

The postmodernist impression that "capital is power" probably has its source
in the fact that, especially in the heydays of the neoliberal era,
investment companies of all types could globally borrow plentiful cheap
money, and invest it to extract large amounts of taxfree net income, with
comparatively little effort. Assets seems to rise and fall in value without
any obvious connection to production and consumption.

This creates the impression, that ownership (property) is merely a legal
nicety or a nominal fiction from the point of view of income extraction, and
that everything depends on your financial credibility, influence and
authority as a capital dealer who has access to resources and can mobilize
them (the ability to raise loans, buy assets etc.).

However I suspect in the future this impression will change: the problem of
the overextension of credit gives rises to a gigantic global restructuring
of debt schedules, in good part through restructuring the ownership of debt
obligations and liabilities through mergers, takeovers, acquisitions and the
like. In that case, "property rights" become decisive. And thus, we can look
forward to new theories of "capital as property" in the future - it is no
longer simply the power of a business to raise capital, that is important,
but what the business actually owns.

Jurriaan

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Received on Thu May 21 06:24:23 2009