Financialization and Financial Crisis Looking through the Lens of Commodity Fetishism

18 Pages·2018·1.309 MB·English

by  Pranab Kanti Basu

International Critical Thought
ISSN: 2159-8282 (Print) 2159-8312 (Online) Journal homepage: https://www.tandfonline.com/loi/rict20
Financialization and Financial Crisis: Looking
through the Lens of Commodity Fetishism
Pranab Kanti Basu
To cite this article: Pranab Kanti Basu (2018) Financialization and Financial Crisis: Looking
through the Lens of Commodity Fetishism, International Critical Thought, 8:4, 518-534, DOI:
10.1080/21598282.2018.1539921
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INTERNATIONALCRITICALTHOUGHT
2018,VOL.8,NO.4,518–534
https://doi.org/10.1080/21598282.2018.1539921
Financialization and Financial Crisis: Looking through the Lens
of Commodity Fetishism
Pranab Kanti Basu
DepartmentofEconomicsandPolitics,Visva-Bharati,Bolpur,India
ABSTRACT ARTICLEHISTORY
Inthis150thyearofthepublicationofCapital,vol.1,itistimethat Received25January2018
werereadtheconnotationsofthericharchiveofconceptsinCapital Revised7May2018
toseetheinsightsthattheycanprovideintothemodernworld.We Accepted30May2018
intend to revaluate his critique of commodity fetishism (CF) and
KEYWORDS
readthemutationofthiscritiqueintheeraoffinancializationand
Commodityfetish;
see what insights it can provide into this phenomenon and into financialization;financial
financial crisis. In the first part, we construct a narrative of the crisis;fictitiouscommodities;
changes in the post-Fordist era, laying particular emphasis on autonomization
whathasbeencalledfinancialization.Inthissectionwetellastory
about the financial crisis that started in 2006, leading to what has
beencalledTheGreatRecession.Inthenextpart,weelaboratethe
concept and critique of CF and see how it grounds a radically
different way of looking at the capitalist order compared to the
mainstream or neoclassical narrative. In the last part, we examine
how, in the process of understanding the changes of the post-
Fordist era the critique of CF has to mutate. We examine the
changes and try to understand the crisis by deploying the
mutatedcritiqueofCF.
Part 1. Post-Fordism
1.1. Fordism
Thistermwascoinedtosignifythatthenatureofthedevelopedcapitalisteconomyfrom
the1st tothe6thdecadeofthelastcenturywasepitomizedintheproductionprocessof
modelTFordthatwasproducedbyFordMotorsin1908.Priortothis,automobileshad
been order made; hand crafted by skilled workmen. Model T Ford production was the
firstinstanceoftheuseoftheconveyorbeltforassemblylineproductionofstandardized
carsmeantforamassmarket.Soonthistechnologyspreadtootherindustriessothatthe
economy, as a whole, was restructured. The characteristics of the economy of this age
were:large-scale factoryproduction;assemblyline production ofstandardized commod-
ities; large consumer goods market sustained partly by rising real wages that resulted
from a vigorous trade union movement aided by the coming together of large number
of workers in the huge factories. The driving force behind increasing profits and capital
accumulationintheperiodprecedingthiswasfragmentationandanalysisofworkinthe
factory through “Time and Motion Studies.” This was largely an extension of the
CONTACT PranabKantiBasu [email protected]
©2018ChineseAcademyofSocialSciences
INTERNATIONALCRITICALTHOUGHT 519
industrial division of labour that Smith had discussed. This period has sometimes been
calledtheeraofTaylorism,afterFrederickTaylor(1911)whowasthefirsttoexperiment
with the principles of time and motion studies (though he documented it much later in
his Principles of Scientific Management in 1911). In the Fordist period, the emphasis
shifted to coordinating the fragments of the production process (that had been caused
bytheindustrialdivisionoflabour)moreefficientlythroughtheuse oftechnology—pri-
marily the conveyor belt.
1.2. Post-Fordism
Thestructuralcrisisofcapitalisminthe1970scausedaseriesofchanges.Thiswasdubbed
asthepost-Fordistera.Aseriesofdeepchangesinproductionorganizations,geographical
location of productive activities, nature of production technology and control processes
within the capitalist world system, in the nature of products as well as in the relative
importanceofdifferentkindsofentitlementstosurplusproducedglobally(i.e.,therelative
importance of profit, interest and rent), differentiated the new phase. This was
accompanied by changes in subjectivities that were sustained by and sustained these
changes.
Some of these changes can be traced to the greater commodity and capital mobility
forcedonunwillingso-calledthirdworldnationsbytheinternationaleconomicorganiz-
ations(liketheIMF[InternationalMonetaryFund],WorldBank[WB]and,later,World
TradeOrganization[WTO]);someweregroundedinfundamentaltechnologicalchanges.
One should not imagine, of course, that the impetus for the technological changes came
from autonomous scientific advances alone; all process changes are overdetermined or
mutually constitutive. To take an example: genetic engineering was, to a large extent,
motivatedbycapital’sdesiretoextenditsreachoverproductioninwhichhumanlabour
did not previously play any role.
Outsourcing of productive activity is the backbone of the economic changes of this
period. Outsourcing occurred in both material production (like, say, garment manufac-
ture) and knowledge and information processes (e.g., publishing, data collation for legal
and medical services, low end “analytics,” for example, for developing financial instru-
mentsaswellaslow-endbio-techresearch).Outsourcing ofmaterialproductiondidnot
depend on scientific and technological innovation but only on the greater mobility of
goods and capital under the neo-liberal regime. It needs to be mentioned that, contrary
to ideological propaganda, the neo-liberal regime promoted by the international econ-
omic organizations does not enforce movement without borders indiscriminately. There
are no natural rules or laws that global capital is constrained to follow. The system itself
is always hierarchical and the rules that are imposed on the world order are those that
suit the current dispensation. The most startling instances of restraint on mobility are
those imposed on labour services and on knowledge. While labour power has been a
private property owned by the labourers since the birth of capitalism, knowledge was
largely a common property. Imposition of immobility of labour services meant restric-
tions on immigration of labourers into high wage regions. Imposition of immobility of
knowledge meant the enclosure of knowledge commons through patents and conse-
quent access to power to extract surplus on the basis of monopoly over knowledge.
520 P.K.BASU
Both were sanctioned/enforced by the international economic organizations like the
WTO.
As a result of immobility of labourers, there are tremendous wage differentials
between the industrial nations and non-industrialized nations, who are largely the pre-
vious colonies. This induced consumer goods sectors in the rich countries that were
experiencing drastic reduction of surplus margins to outsource production to low
wage areas. This option was all the more attractive because of differential government
regulation and monitoring: use of child labour, absence or violation of labour and
environmental laws, etc., opened avenues of enhancing surplus extraction through out-
sourcing production to the post-colonies. Big brands like Nike, La Senza, The Gap and
others have been accused of using veritable sweat shops in India and Bangladesh. Open
trade regimes forced by IMF and WB facilitated the process of such lucrative
outsourcing.
KnowledgeProcessOutsourcing(KPO)washeavilydependentontechnologicalinno-
vationparticularlyininformationtechnology.Thisfacilitatedtheflowofcommandfrom
thesourcecompanytothelowendoperatorlocatedinSouthAsia,Malaysia,etc.,andthe
flowofinformationanddigital(immaterial)productsfromtheoutsourcedoperatortothe
source company.
Fragmentationoffactoryproduction,whichwasaspinoffofBusinessProcessOutsour-
cing (BPO), was complemented with greater flexibility of product composition that was
aided by CNC (Computer Numerical Control). These are basically versatile machines
that can produce a variety of goods and the current usage is determined by a particular
numerical control. There are two important differences between these types of machines
from their predecessors: first, most of the work is finely tuned within the machine and
requires only numerical orders to initiate production; secondly, the same machine can
doavarietyofproductiveactivities(muchlikethemixer-grinder-mincerinthekitchen).
Theresult:skilledlabourbecameredundantandsmallbatchesofproductscouldbepro-
ducedfornichecustomersincontrasttotheassemblylineproductionofmassconsump-
tion goods.
Flexibilityanddispersalofproductionfacilitatedandwasinturnfacilitatedbysignifi-
cantly larger capital flows. Differential control regimes and inflation rates led to large
financial investments. The manifold increase in financial investments was also aided by
the large and persistent deficits of the United States that had, over the years, created a
large fund of Eurodollars that needed investment outlets.
As Engelen et al. (2010, 47) have argued
as a result of pension reforms (the global replacement of pay-as-you-go systems by
pre-funded pension systems), international trade imbalances and rising commodity
prices (especially oil), there is a growing “wall of money” facing global financial markets
thatislookingforinvestmentopportunities.
The termination or drastic reduction in welfare spending, which we have already
remarked,alsoforcedthepoorsegmentsofthepopulationintheWestintothefinancial
market in the search of some asset backing for health care, education, etc. As long as
home equity was positive1 mortgage funded home owners could secure loans to meet
expenditures that were previously borne by the state.
INTERNATIONALCRITICALTHOUGHT 521
1.3. Financialization
Financializationistheemergenceofthefinancialsectorasthegrowthsectorincontrastto
themateriallyproductivesectorsoftheeconomy.Thisisaphenomenonthathasengulfed
the leading capitalist nations. The tendency was observed in the United States roughly
from the mid-1970s. Different empirical measures have been used to test the existence,
or otherwise, of this phenomenon. Krippner (2005) argued, in a widely cited article,
thattheemploymentratiosarenotgoodindicatorsoftherelativeimportanceofthefinan-
cialvis-a-visothersectors.Thisisbecauseofthelowemploymentintensityofthissector.
Instead she opts for profit ratios as better indicators of dominance. “Financial channels”
are channels through which liquid assets move in expectation of future gains. Krippner
concluded from her detailed empirical analysis that the shift towards financialization
was indeed significant since the 1980s.
TheofficialenquirycommitteereportoftheUnitedStateswouldlaterconcurwiththis
assessment:
From1978to2007theamountofdebtheldbythefinancialsectorsoaredfrom$3trillionto
$36 trillion, more than doubling as a share of gross domestic product. The very nature of
manyWallStreetfirmschanged—fromrelativelystaidprivatepartnershipstopubliclytraded
corporationstakinggreaterandmorediversekindsofrisks.By2005the10largestUScom-
mercialbanksheld55%oftheindustry’sassets,morethandoublethelevelheldin1990.On
theeveofthecrisisin2006financialsectorprofitsconstituted27%ofallcorporateprofitsin
theUnitedStates,upfrom15%in1980.Understandingthistransformationhasbeencritical
totheCommission’sanalysis.(FCIC2011)
Financializationhasthreeinterlinkedaspects—financialinnovation,layeringofsecurities
and the evolution of new institutional structures. Financial innovation usually takes the
form of devising new derivatives. A derivative is a financial asset (basically a piece of
paper with a promise of payment at future date/dates—a promissory note) whose price
is derived from the price of some other asset. This other asset could be a real asset or
anotherfinancialasset.Somearederivedonthebasisofspeculationaboutthemovement
of prices of stocks, bonds, commodities, currencies, interest rates and market indexes.2
Somearederivedfromsomeoriginaldebt/asset.Variousoriginalpromisesoffixedincome
(rateofinterest)givenbydebtors(saythepurchaserofamortgagedhouse)tothelenders
(the holder of the mortgage) are collected, bunched on the basis of similarity of promise
andsoldasderivedsecuritiesbytheoriginallender.Thisleadsdirectlytotherelatedaspect
of financialization—layering of securities.
Layeringofassetsincreasedtheopacityoffinancialassets(i.e.,obscuredriskaswellas
theidentityoftheliableinstitution).Likeinnovationinanyfield,itisnotasifthefinancial
assets and entities that emerged during this period had no antecedents, but the layers of
credit instruments (or financial instruments) based on a single asset multiplied so many
times over that the link between the original asset and the financial instruments ceased
to exist in the minds of thebuyers of the instruments. Thechain devolutionof liabilities
coupledwiththeunscrupulousratingbyagencies3createdasystemwheretheactualworth
of a financial asset (in terms of risk and paying ability) was entirely obscured from the
buyers of these securities. The original asset creator, the bank, was also protected as the
assets (whose worth proved highly inflated when the crash occurred) and the liability
were both pushed off its balance sheet. This was achieved through the evolution of new
522 P.K.BASU
institutional forms. These were called Special Investment Vehicles (SIVs). In the case of
the Great Recession, for example, the leading banks gave subprime loans against mort-
gages as long as home equity was perceived to be positive. But because of the subprime
nature the banks created SIVs to which they sold these Asset Backed Securities. The
SIVs then made layers of Collaterized Debt Obligations (CDOs) which they sold into
the hungry investment market.
1.4. The Great Recession
The great wall of investment fund, on the demand side, together with the host of finan-
cial innovations, layering of securities and the evolving impenetrable structures of
financial institutions all contributed to generating a fragile structure that collapsed, set-
ting off The Great Recession in the third quarter of 2006. It now seems obvious that the
bubble should have burst in the housing sector. Very simply, home equity (rate of
inflation in the realty sector minus rate of interest on mortgages) was high, keeping
both the mortgage givers and takers happy and burgeoning. On the other, the real
rate of interest in the US economy (rate of interest minus rate of inflation) remained
over 1.5% since 2004 and touched 2% in 2006 (FCIC 2011). The lopsided character
of the housing sector was obvious. Our concern in this paper is not primarily with a
standard narrative of the crisis but with trying to understand financialization and the
crisis in terms of Marx’s (1887, 1893, 1894) reading of the particular character of com-
modities and CF.
Part 2. Commodity Fetishism
ThereisanunresolvedcontroversyinMarxistcirclessurroundingthedesignation“finan-
cialization.” On the one hand Teixeira, Rotta, Hardt and Negri have all stressed on the
growth of immaterial production that includes, to a large extent, financial instruments.
Thethesisofautonomization(RottaandTeixeira2012)offinancialsectorfromrealpro-
ductionhasgainedcurrency.ThisviewhasbeenstronglycontestedbyBhattacharyaand
Seda-Irizarry(2018)whoarguethatthisthesisignorestheglobalvaluechainthathasbeen
createdbyBPOofthisera.Globalvaluechainalsobringsinthequestionofinterlockingof
capital withnon-capitalas bigbrands of garment,shoe,sport accessories, etc., outsource
their production to units in the poor countries where production is carried out under
semi-servile conditions. We will not go into the complexity of the debate but will rather
attempt to show how the two positions may not be so contrary in a certain sense on
the ground of a modified Marxist critique of CF. We will also attempt to show how this
necessitates modification of the ground itself. And this will bring us to the threshold of
a Marxian analysis of financialization.
WearguethatwhileMarx’scritiqueofCFwasausefultoolforpartlyunderstandinga
fundamental cause behind capitalist crisis in the pre-financial age (that can also be con-
sidered consonant with Fordism) in the current age the pristine critique of CF cannot
be fruitfully deployed. The reason behind this is that the two aspects of commodities
the reconciliation of which leads to the problem of CF mutate in the post-Fordist era.
But the very difference between the ways in which Hegel and the neoclassicals, on the
one hand, and Marx, on the other, reconcile the two aspects of commodities—use value
INTERNATIONALCRITICALTHOUGHT 523
and exchange value—indicates the possibilityof reconsideration of Marx’s reconciliation
with changes in the social order with no such possibility in the former.
WebelievewithAlthusser(1962)thatMarx’slogicwasoverdeterministicasopposed
tothelinear,reductionistlogicofHegel,thoughindifferencewithAlthusserweclaimthat
substitution of idea with matter is sufficient to warrant a change in logic, because of the
overdeterminedandcontradictorycharacterofmatter,perse,asopposedtothereducible
character of spirit/idea.
What is CF and where does it arise from?
“Thereitisadefinitesocialrelationbetweenmen,thatassumes,intheireyes,thefan-
tastic form of a relation between things” (Marx 1887, 72, emphasis added). This, Marx
says, is similar to the fetishism of religion. “In that world the productions of the human
brain appear as independent beings endowed with life, and entering into relation both
withoneanotherandthehumanrace”(47).Intheworldofcommodities:manproduces
commodities with his labour and then their relations (relative prices) appear to govern
socialrelations.HereMarxisreferring,primarily,toasubsetofsuchrelations—socialdiv-
ision of labour—and, in consequence, other social relations. But we will not enter into a
discussion of the pervasive social impact of CF.
Social division of labour necessitates social interdependence. Such interaction can be
achieved directly (through command, as in a feudal system, or consent, as in a peasant
community) or indirectly through market exchange. Exchange is a particular solution
to the problem of allocation of social labour or the problem of social division of labour.
With the emergence of exchange as the dominant motive of production, the problem of
socialdivisionoflabouracquiresanewdimension:theproblemofquantitativeequaliza-
tionofdifferentqualitiesoflabouranditsproducts.Touncoverthephilosophicconnota-
tion of Marx’s solution of this problem we will contrast it with that offered by Hegel,
which, in my view, mainstream economic analysis adopts.
2.1. The Idealist Resolution of the Enigma of Commodity
TheprocessofequalizationinHegelandinneoclassicaleconomicsstartsfromthepremise
ofindividual.InHegel,theessenceoftheindividualisfreewillfromwhichthroughdeduc-
tivetriadiclogichearrivesattheconceptofabstractutility.Inneoclassicaleconomics,the
point of departure is homo economicus who is a maximiser of abstract utility. In either
case,thereductionofqualitativedifferencetoquantitativeequalityisattributedtotheeter-
nalnatureofman.InMarx,incontrast,thepremiseiscapitalistcommodityproduction4
and is, hence, shot through and through with the contradictions of the capitalist order.
We start from Hegel. Hegel deals with the analytics of exchange in his Philosophy of
Right.
The thesis is pure free will (Hegel 2001, 44–45, paragraph 23–25). The anti-thesis or
negation of free will is pure externality (54, paragraph 39). The synthesis or the negation
ofnegationisproperty—manputshiswillintotheexternalworldandmakesithisprop-
erty(57,paragraph44).Thus,throughthetriadic dialecticsofHegelfrompure free will,
throughpureexternality,wereachthefirstgenerality—property.Itistobenoticedthatthe
lowermoments(purelysubjectivefreewill,pureexternality,etc.)areonlypartialinthem-
selves and attain their sufficiencyin thehighergenerality(property),whichthus absorbs
them totally. They are sublimated and become just lower moments of the universal.
524 P.K.BASU
Theobjectificationoffreewillinownpropertyisstillpurelysubjective,i.e.,recognized
only by the individual property owner, self.
Thethesisinthesecondsublimationismyproperty.Itdoesnotexistunlessitisrecog-
nized by another free will. It must be “unowned.” This is the negation or anti-thesis.
Unowning my property means giving it up to gain ownership of another’s property—
the act of exchange (Hegel 2001, 61, paragraph 51). The other’s will is manifest only in
theother’spropertythattheother,too,mustunownfortheother’swilltoberecognized.
Thissimultaneous“unowning”isexchangebasedoncontract.5Sofreedomofwillisrea-
lized/recognizedwhenwetreateachother’swillsasfreethroughcontract—thesynthesis.It
istherealizationofacommonwillincontractthatliftsupandabsorbs(sublimates)thewills
ofthetwo.AtthispointHegeloffershissolutiontotheproblemofexchangeorthepro-
blemofquantitativeequalizationofqualitativelydifferentthings,andthisistopicaltous.
Consciousness starts from awareness of differences in (concrete) use values. At the
moment of entering the act of exchange individual is indifferent about the concrete
uses; the difference (thesis) and indifference (anti-thesis) is sublimated in the notion
of abstract utilities, which Hegel calls “want.” “[Q]uality here becomes quantity”
(Hegel 2001, 70, paragraph 63). See “want” is clearly what the neoclassical economists
were to later call utility or what should, more appropriately, be called abstract utility,
i.e., utility that is not specific to each concrete commodity but is utility in general,
say,theutilitysignifiedbytheutilityfunctionofanindividualinneoclassicaleconomics.
ThepriceratiosarethereforedeterminedinbothHegel’sschemeaswellasinthescheme
of the neoclassical economists by the ratio of abstract utilities that can be derived from
theconsumptionofunitcommodities.Hegel’s“value”ortheabstractutilityofaunitofa
commodityisentirelyone’spersonalevaluation.Thismakesutilityprivateandhencenot
communicable. This is exactly what the neoclassicals too admit in saying that interper-
sonal comparison is not possible. This cloisters mainstream economics from social
tension.
Let us also remark here on the method of abstraction. “[Q]uality here becomes quan-
tity...[want] in its progress starts from the special quality of an object, passes through
indifferencewithregardtothequality,andfinallyreachesquantity”(Hegel2001,70,para-
graph 63, emphasis added). The process of Hegelian sublimation is succinctly stated.
There is no residual of the specificity or concreteness of the commodity as quality (use
value to Marx) is totally subsumed in quantity (abstract utility).
We leave Hegel and mainstream economics and turn to Marx.
2.2. Marx’s Resolution of the Enigma
Marxstartshisanalysisofcapitalisteconomyfromthecommoditiesproducedwithinthe
Simple Commodity Production (SCP). “The mode of production in which the product
takes the form of a commodity, or is produced directly for exchange, is the most general
and most embryonic form of bourgeois production” (Marx 1887, 51; emphasis added).
The product, not the labour power used in production, takes the form of commodities.
Ahostofculturalchangesneedtooccurbeforeexchangecanorderproduction.Thepro-
blemsaregeneratedbythebirthofthedichotomouscharacterofproducts,whichwehave
mentioned, appears as soon as they become commodities: quantitative equalization of
different qualities. This is done through prices.
INTERNATIONALCRITICALTHOUGHT 525
Marxarguesthatsincepricesarecommontoallcommoditiestheymustbeexplained
by something else that is also common to all commodities. What is this common some-
thing? There are two other attributes that are common to all commodities: one, they
have use values or are useful things; two, they are products of labour. So prices must be
explained by either of these attributes. But they cannot be explained by their utilities
because“Asusevalues,commoditiesare,aboveall,ofdifferentqualities,butasexchange
values they are merely different quantities, and consequently do not contain an atom of
use value” (Marx 1887, 27). So prices must be explained by the labour expended in
theirproduction.Butwhenwerejectusevaluesaspossibledeterminantofexchangevalues
or prices
[a]longwiththeusefulqualitiesoftheproductsthemselves,weputoutofsightboththeuseful
character of the various kinds of labour embodied in them, and the concrete forms of that
labour; there is nothing left but what is common to them all; all are reduced to one and
thesamesortoflabour,humanlabourintheabstract.(Marx1887,27;emphasisadded)
WeshouldpointoutthattheusevaluesthatMarxisreferringtoaretheconcreteusevalues
(thespecificusesofthings),tobedifferentiatedfromthe“want”thatHegeltalksoforthe
abstractutilitywhichneoclassicalanalysisuses.Ifoneabstraction(abstractlabour)canbe
useditisperfectlylogicaltousesomeotherabstraction(abstractutility).Thepointisthat
there is a choice involved and this has cultural-political connotations. The choice is
betweenmatterandidea/spirit,i.e.,puresubjectivity.Aswepointedoutearlier,thischoice
involves also a displacement of logical method. This takes us back to the question of the
various processes that Marxism announces or reaffirms and neoclassical economics,
among so many other theories, suppresses. There was an important political reason for
the choice of the abstract substance as labour. We know now that all that we have is
the truth effect, not the truth. The political objective of Marx was to show the source of
exploitation,tomotivateactionagainstexploitation,whichhedefinedastheappropriation
of surplus labour performed by the working classes. This reinforced the choice of the
abstractunitaslabour.TheapparentlylogicaljustificationthatMarxprovidesinCapital
Iisonlypolemical:wehavealreadypointedoutthatifabstractlabourcanbethesourceof
exchange value so can abstract utility.
To understand the speciality of commodity exchange let us read Marx:
Thetwofoldsocialcharacterofthelabouroftheindividual[qualitativelydifferentassocial
labourandquantitativelysameasprivatelabour]appearstohim,whenreflectedinhisbrain,
onlyunderthoseformswhichareimpresseduponthatlabourinevery-daypracticebythe
exchangeofproducts.(Marx1887,47–48)
Letusreadthetextsabitclosely.Marx,aswehavealreadyseen,talksof“put[ting]out
of sight ... the useful character of the various kinds of labour embodied in them [com-
modities]”(Marx1887,27;emphasisadded),healsotalksof“Thetwofoldsocialcharacter
ofthelabour”(Marx1887,47;emphasisadded).ContrastthiswithwhatHegelsays“Value
isthetrueessenceorsubstanceoftheobject,andtheobjectbypossessingvaluebecomesan
object for consciousness....Quality here becomes quantity” (Hegel 2001, 70, paragraph
63, emphasis added by author). Quality, in the Hegelian analysis, is sublimated in quan-
tity—usevalueinabstractutility.Inneoclassicaleconomics,theprocessofthissubsump-
tion is implicit. It has already been done in the production of homo economicus who is
526 P.K.BASU
constantlycomparingtheutilitylossesandbenefitsfromvariousdecisionsandmaximiz-
inghis/herabstractutilitysubjecttoaquantitativeconstraint.Theseabstractutilities(neo-
classicaleconomics)orabstractwants(Hegel)thataresynonymousarepurelyindividual,
self referential.
Marx, on the other hand, as we have remarked, talks of just putting the concrete
aspectofcommoditiesandhenceofconcretelabouroutofsight.Healsotalksofthetwo-
fold character of labour. Thus there is no work of sublimation. Hegelian dialectics is not
used.Thequalitativeandquantitativeaspectsofcommoditiesand,hence,oflabourcon-
tinue to exist, the problem is then one of repression (putting out of sight) of the quali-
tative aspect. Amariglio and Callari have also discussed the import of this twofold
character of commodities:
Equalityofexchangecanbetheorizedonlybyreferencetoapropertyoftheobjectsoftrade
otherthanactuallabortimes.Itispossibletodefinethispropertyinavarietyofways,eachof
which signifies particular, hence, different forms of consciousness and agency. (Amariglio
andCallari1989,45)
WehavealreadyseenthatthispropertyisdefinedasabstractutilitybyHegelandtheneo-
classical economists and as abstract labour by Marx.
The resolution of the problem involves the historical analysis of interpellation consti-
tutingandconstitutedbythecapitalistorder.CFisasignificantaspectofsubjectivityfor-
mation in the age of capital. To make a bold statement: the problem of quantitative
equalizationofqualitativedifferencesisposedandansweredwithintheHegelianandneo-
classicalapproachesthroughparadigmsconstitutedbythehegemoniccapital-commodity
order;Marxlooksattheproblemfromavantagepointoutsidetheorder;hecan,therefore,
problematize this interpellation and challenge the hegemony of capital.
In talking of CF we keep talking of subjectivities interpellated by the capitalist order
though Marx starts his discussion in Capital from SCP. Our position is that SCP is
only prior in the presentation in Capital; it is not ontologically prior.
[T]he economic categories, already discussed by us [in discussing Petty Production Econ-
omy], bear the stamp of history. Definite historical conditions are necessary that a product
maybecomeacommodity.Itmustnotbeproducedastheimmediatemeansofsubsistence
oftheproducerhimself.Hadwegonefurther,andinquiredunderwhatcircumstancesall,or
eventhemajorityofproductstaketheformofcommodities,weshouldhavefoundthatthis
can only happen with production of a very specific kind, capitalist production. Such an
inquiry, however,would have been foreign to theanalysisof commodities.(Marx 1887,118;
emphasisadded)
Marx in Capital (1887) is starting from SCP because to start from capitalist production
“would have been foreign to the analysis of commodities.” I read this to mean that in his
presentation he uses a semblance of the method of Hegel, though in his enquiry he has
already established that this is not the proper logic. His method of presentation appears
toproceedfromsimplecategoriestothemorecomplex.Inthissense,thereissomesimi-
larity with Hegel’s method.6 But even this similarity is only apparent. As Althusser has
observed, in Hegel’s logic the higher generalities are complex only in appearance: the
lower moments being totally sublimated and remaining as phantoms or memories. In
Marx’s scheme, however,the movement fromsimpler determinants towardssocial com-
plexity involves overdetermination-contradiction and not sublimation. That is why