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David Harvey in his short criticism of Thomas Piketty’s Capital in 21 Century, rightfully questions Piketty’s definition of ‘capital’ as one of his central difficulties:
“Capital is a process not a thing. It is a process of circulation in which money is used to make more money often, but not exclusively through the exploitation of labor power. Piketty defines capital as the stock of all assets held by private individuals, corporations and governments that can be traded in the market no matter whether these assets are being used or not. This includes land, real estate and intellectual property rights as well as my art and jewelry collection. How to determine the value of all of these things is a difficult technical problem that has no agreed upon solution.”
However, David Harvey’s definition capital remains very much influenced by its 19th century Marxian understanding of industrial capitalism. In 21st century, capital deserves a more comprehensive and a more representative definition than just a process in which money makes more money through production relations. I, therefore, propose the following definition:
Capital is a ‘social process‘ , through which surplus value is produced and controlled by ‘unsustainable’ and ‘un-sovereign’ ways of exploiting labor (both manual and intellectual), land (and other commons), nature (non-renewable sources of energy and the earth’s bio-capacity including climate), and societal cohesion/solidarity (from the level of household to the world community level).
Capital is a social process and not just an economic one, since it involves specific sociocultural and political modes of sociability as well as particular modes of livelihood. It is based on exploitation rather than ‘self-sustaining use’ of human and natural resources. Here, ‘exploitation’ is distinguished from ‘use’, since the former makes (1) the resources to lose their capacity to be sustainability reproduced over generations, and (2) the communities to lose their capacity to ‘determine’ the levels and ways of use democratically and autonomously.
Thus, a comprehensive analysis of capital and capitalist systems requires not only the theorization of the exploitation of labor, land and nature through the processes of production (the first dimension of exploitation), but also of financial speculations, enclosures and hoardings, that are determined undemocratically through the chaotic interplay between the uncertainty of market mechanisms and the plutocratic influences of financial monopolies or corporate powerhouses. The latter includes what David Harvey calls ‘capital strike’ used by monopolies to cause “artificial scarcity” and thereby increase the “rate of return” or what I would like to call in more general terms, ‘spurious surplus’, which has real impacts on real production processes. Despite acknowledging this fact, Harvey (unlike Piketty) unjustifiably excludes the latter process of producing spurious surplus from his definition of capital!:
Money, land, real estate and plant and equipment that are not being used productively are not capital. If the rate of return on the capital that is being used is high then this is because a part of capital is withdrawn from circulation and in effect goes on strike.
The withdrawal of capital from productive circulation is part of (and has become increasingly a significant component of) today’s capital. This is because, according to our new definition of capital, even ‘capital strikes’ are about creating and controlling surplus (no matter how spurious it is) and it prevents democratic determination and sustainable use of resources associated with the withdrawn capital.
Accordingly, ‘alternatives to capital’, from this point of view, consist of a broad range of approaches from reformist orientations to democratic social regulations of ‘capital’ (like post/Keynesian visions), to antipodal alternatives to the existence of capital (like anti-market, anti-trade initiatives).
Citation: Hosseini, S. A. H. (2015). “Capital and Its Alternatives: Why capital in 21st century needs a better definition.” GlobalAlternativesWordpress.com, Retrieved 22 Feb 2015, from https://globalalternatives.wordpress.com/2015/02/22/capital-and-its-alternatives/
Joseph Stiglitz, the Nobel prize winning economist, warns that the trend towards inequality is rising worldwide. So what’s causing it? Why is it on the increase and what are the consequences?
* Duration 54:27, Play Position: 49:52
* Published 4/11/14 8:05:00 PM
* Episode Download Link: http://mpegmedia.abc.net.au/rn/podcast/2014/11/bia_20141104.mp3
* Podcast Feed: Big Ideas – Full program podcast (http://www.abc.net.au/rn/podcast/feeds/bia.xml)
The reality is much more complex than what Palmer, Abbott and this Fact Sheet present. People older than 65 comprise only 13.5 percent of population. The death rate at age 65 is “currently” 10 percent but increases very sharply to 20% at age 70 and almost 50% at age 75 and “around” 100% at age 85. Palmer might be wrong today but his estimation is going to be proved optimistic in next one or two decades. I tell you why:
(1) Remember this should not be about age 65 but rather 70. The bipartisan push for increasing it to 67 by 2023 and 70 by 2035 make Palmer look optimistic in near future.
This fact check might be right about the current status, but it won’t be true in next one or two decades when many of us (aged 25-50) will become pensioners. If the pension/retirement age is lifted to 70 (most likely due the bipartisan commitment and the lack public commitments to resist it) then we should recalculate our figures.
(2) It is true that the current life span (which is only an average number) is around 82 (in this age the death rate is actually around 90%). But considering the accelerating Americanization of our economy and especially the decaying, deserted social services, particularly health services (caused by these constant budget cuts and privatization processes), plus longer working hours and years (under the corrupt-tax-evading-resource-dependent capitalistic regime brought by the Australian elite – Coalition, Labour, Palmer, mining and media corporations, etc) the life span in Australia is expected to decline to 75-78 in next decade (78 is the current life span of Americans and will be our near future life span too). In this case, those who survive will have only 8 years to enjoy their retirement while many of them will be in poor health conditions with lower amounts of pension paid to them (if the whole pension is not gone). The death rate at age 65 will be around 20-30 percent and the death rate at age 70 (future pension age) will be around 50-60 percent (with the shrinking life span, the current death rate will be shifted 5 years earlier). Besides, the cost of living beyond 65/70 will also increase significantly.
This means that 50-60 percent of us (those who are in ages between 30-50) will be dead by the time we become eligible to receive pension. The government recommends that people must have a saving that would cover 60 percent of their last salary after they retire. Assuming that these people will have paid off their mortgages by that time and own their houses (and raised their children to become independent) they still need to have 1.2 million dollars in saving and/or assets to bring them 60 percent of their last income (the inflation rate in next 25 years is included in my calculations). But the superannuation companies are telling us that if no more crises happen in next 25 years (!), people can accumulate in average 350k in their funds which is only one third of what they need to secure a decent retirement. For the remaining two third of their living costs they will be dependent on pension which will be given to them after they turn 67 or 70.
So good luck young Australia if you foolishly think you will enjoy retirement life as much as your parents and grand parents enjoyed. Or Australians must wake up now before it’s too late.
ABC here by this dodgy fact check is helping the Australia capitalist elite to justify their draconian pension reform.
In terms of solutions, instead of making people work from cradle to grave, better to open up our labour market to skilled and manual immigrant workers (who based on history bring jobs rather than take jobs) and fortify our manufacturing sector (by shifting it towards green alternatives). This will increase the labour mobility internationally which reinforces their power in their home countries (China, India, etc.) to negotiate for better conditions. Thereby, Capital will have less incentives to fly abroad, and therefore you will make the economy more productive, the population younger, and the prospective retiring life more decent.