Capital as Power

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* Book: Jonathan Nizan and Shimshon Bichler. Capital as Power: A Study of Order and Creorder.


Note from Michel Bauwens: strongly recommended, crucial book that goes beyond both liberal and Marxist interpretations of capital.

Contextual Quote

Blair Fix:

"Speaking of Jonathan Nitzan and Shimshon Bichler, their work will be an important part of this blog. One hot summer with no air conditioning, I read their seminal book Capital as Power. I’m not exaggerating when I say that this book changed my life. It made me realize that most concepts in mainstream economics are built on a foundation of quicksand. This cemented, in my mind, that there was very little in mainstream economics worth keeping." (


Orsan Senalp:

"Jonathan Nitzan, Shimshon Bichler's concept of 'Capital as Power' (A Study of Order and Creorder) is in accordance with Alexander Bogdanov's ideas which allows an alaternative conception of 'social class' which is determined by insetead of the position of its memebers with regard to the forces of production (ownership or non-ownership) by their position with regard to power and capacity of organising society according to their self-image or collective consciousness / social being.

From the publisher:

"Conventional theories of capitalism are mired in a deep crisis: after centuries of debate, they are still unable to tell us what capital is. Liberals and Marxists both think of capital as an ‘economic’ entity that they count in universal units of ‘utils’ or ‘abstract labour’, respectively. But these units are totally fictitious. Nobody has ever been able to observe or measure them, and for a good reason: they don’t exist. Since liberalism and Marxism depend on these non-existing units, their theories hang in suspension. They cannot explain the process that matters most – the accumulation of capital. This book offers a radical alternative. According to the authors, capital is not a narrow economic entity, but a symbolic quantification of power. It has little to do with utility or abstract labour, and it extends far beyond machines and production lines. Capital, the authors claim, represents the organized power of dominant capital groups to reshape – or creorder – their society. Written in simple language, accessible to lay readers and experts alike, the book develops a novel political economy. It takes the reader through the history, assumptions and limitations of mainstream economics and its associated theories of politics. It examines the evolution of Marxist thinking on accumulation and the state. And it articulates an innovative theory of ‘capital as power’ and a new history of the ‘capitalist mode of power’."


A new definition of capital

By Shimshon Bichler and Jonathan Nitzan:

"We start with capital. Contemporary students of capitalism, hamstrung by nineteenth-century biases, continue to think of accumulation in the ‘material’ terms of labor, production and consumption. In our opinion, this emphasis has become insufficient and misleading. Over the past century, capital has grown increasingly politicized in nature and financial in form. ‘Free competition’ and the formal separation of ‘state’ and ‘capital’ — where they existed — have given way to a far more complex interaction of ‘dominant capital’ groups and ‘big government.’ Accumulation, which during the nineteenth century was anchored largely in proletarianization and technical advances, has come to depend more and more on corporate amalgamation and inflationary pricing. "


The new characteristics of capital accumulation

By Shimshon Bichler and Jonathan Nitzan:

We need "an alternative conceptualization of capital, understood not as a material entity but as a power institution. What gets accumulated, we argue, is neither ‘utility’ nor ‘dead labor,’ but financial claims on expected future earnings. These expected earnings, in turn, represent neither the ‘marginal productivity’ of capital nor ‘surplus value,’ but the way capitalists view the future structure of power in society.

A power understanding of accumulation leads to different units of analysis. Marx differentiated between three ‘types’ of capital owned by three corresponding ‘fractions’ of the capitalist class—‘industrial,’ ‘commercial’ and ‘fi nancial.’ This division is no longer tenable. All modern ownership is financial, and only financial. It is a claim on pecuniary earnings. And pecuniary earnings reflect not production or consumption, but power, and only power. Th is central role of power means that it is no longer enough to think in terms of capital ‘in general’ and ‘individual capitals’ in competition. Instead, the attention should be focused on dominant capital — namely, on the largest power coalitions at the centre of the political economy. Different coalitions within dominant capital sometimes are associated with different ‘types’ of business activity, such as oil, weapons, telecommunication or financial intermediation. But these differences are only partly, and sometimes not at all, related to the nature of ‘production’ per se. Business is a matter of profit, and profit comes not from production, but from power — the power to reshape the trajectory of social reproduction as a whole.

Different segments within dominant capital are differentiated by the nature of their power. Production, narrowly defined, is merely an aspect of that power.

Driven by the quest for power, the goal of these dominant capital groups is not absolute accumulation, but differential accumulation. They try not to maximize profit, but to beat the average and exceed the normal rate of return. Th ere is a big difference between these two goals. Profit maximizers focus on their own earnings. By contrast, differential accumulators also benefit, sometimes greatly, by lowering the earnings of others.

This difference is reflected in the ‘mechanisms’ of accumulation. Traditional analysis of accumulation emphasizes the importance to accumulation of overall growth and price stability. But for dominant capital, differential accumulation works best through mergers and acquisitions and through the redistributional effects of stagflation (stagnation combined with inflation). And, indeed, during the twentieth century, with the progressive spread of dominant capital and differential accumulation, there emerged an almost stylized cycle of diff erential accumulation ‘regimes,’ oscillating between relatively long periods of corporate amalgamation and shorter periods of stagflation."


More information

URL = pdf