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Top Ten Reads from 2014

Spending the semester teaching my first class, and focusing a bit more on articles than book-length texts, this year’s reading list was a little light. Nonetheless, there were some real gems this year, here are the top 10.

10.) Jose Miranda: Marx and the Bible: A Critique of the Philosophy of Oppression
Given its title, it is surprising how much more Miranda’s Marx and the Bible is of “the Bible” than “Marx.” In fact, at its core, this text is essentially a large-scale commentary on the whole of the Christian scriptures. Emphasizing the key liberative portions of the bible (the exodus, the prophets, the gospels, and the epistles), Miranda suggests that the consistent stream that runs through the center of the all Christian scripture is a fundamental call to justice for the oppressed (the widow, stranger, and orphan). This call, Miranda will ultimately suggest, is not inconsistent with the liberatory call of marxist socialism. Rather, he will argue, within the Latin American context, the two must be held together.

9.) Alain Badiou: Paul: The Foundation of Universalism
In this short text, Badiou summarizes his philosophy of the event through a reading of Paul’s epistles. For Badiou, a staunch atheist, Paul’s subjective appropriation of the event (the resurrection of Christ) can be abstracted from its mythical ground (the resurrection as a literal event) and recognized as a clear exemplar of the proper form by which the subject responds to the revolutionary event. The text has a few obvious faults vis-avis Pauline scholarship, e.g. demphasis upon the communal character of Paul’s thought. Nonetheless, it is an insightful reading of Paul and likely the clearest presentation of Badiou’s philosophy.

8.) Slavoj Zizek: The Fragile Absolute
Zizek here presents — in his typically idiosyncratic and schizophrenic way — a fascinating defence of Christianity, particularly the protestant notion of “love” (caritas) as distinct from law. Christianity, in Zizek’s mind, is uniquely situated to offer a space to think beyond the strictures of the ruling capitalist ideology.

7.) Thomas Piketty: Capital in the Twenty-First Century
A bit of a sensation throughout the summer, Piketty’s Capital is intricately researched, and strongly argued. Central to his text is the argument that the average growth of capitalist economies is generally less than the standard rate of profit (his infamous r>g inequality). Thus, overtime, unrestricted capitalist economies always tend toward radical inequality. For a more intricate look into the argument, be sure to check out my (slowly moving) chapter-by-chapter analysis here.

6.) Gustavo Gutierrez: A Theology of Liberation
The foundation of liberation theology, now a classic of theology, is unexpectedly fresh even after all of these years. A truly remarkable text, Gutierrez succeeds in rethinking Catholic theology through engagements — not only with Marxist thought as generally noted — but also phenomenology, critical theory, and contemporary theology.

5.) John D. Caputo: The Insistence of God: A Theology of Perhaps
The functional sequel to The Weakness of God, Caputo’s most recent publication situates his theological vision of a “weak theology” within the context of a number of key philosophical and theological trends including: the radical theology of Slavoj Zizek, the radical orthodoxy of John Milbank, and the speculative realists.

4.) Thomas J.J. Alitizer: The New Gospel of Christian Atheism
Rethinking his unique vision, years after the publication of the first “Gospel of Christian Atheism,” Altizer presents a startling vision of an apocalyptic Christianity. A religion of the “absolute Novum” turned against any vision of a primordial return, Altizer’s Christianity pursues a radically Hegelian vision of an inbreaking of the authentically new.

3.) H.P. Lovecraft: Waking Up ScreamingThe Watchers Out of Time
Technically two books, I have recently reentered the world of fiction through H.P. Lovecrafts exquisitely written short stories. Absolutely essential reading for anyone interested in the history of science fiction or horror; Lovecraft has also been entering the philosophical domain, having been appropriated by the new materialists. Great fun, though there are certain problematic racist undertones, particularly in his early work, that most be recognized as Lovecraft’s unfortunate inability to think beyond the bounds of the racist early 20th century New England society in which he was raised.

2.) Karl Marx: Capital: A Critique of Political Economy, Volume I
Given its infamy, history, and declaration as “the bible of the proletariat,” it seems absurd to offer a meager praise of Marx’s Capital. That being said, the coherence and rigor of Marx’s magnum opus, is remarkable. Avoiding hasty generalizations, it both draws upon and critiques the preceding bourgeois economic tradition (particularly Smith and Ricardo), offering helpful correctives and laying out a profoundly nuanced labor-theory of value, theory of surplus value, and explanation of exploitation. Notoriously varied in rhetorical style, Marx seamlessly transitions between rigid economic prose, literary flourish (vampires and werewolves abound), and journalistic investigation.

1.) Hadewijch: Complete Works
A brilliant combination of love poetry, mystical theology, and theosophical reflections; the work of Hadewijch has been (rightfully) seeing a resurgence among medievalists and theologians alike. Its deeply embodied and sexually intricate theological vision is enlightening and inspiring. Truly Profound.

Capital in the 21st Century: Chapter 6

In his sixth chapter of his Capital, Piketty investigates the evolution of the “Capital-Labor Split” throughout the 20th century. This ratio is determined by the so-called first law of capitalism–α = r * β–elaborated in the first chapter of the work. Here,  α corresponds to capital’s share of national income, thus conversely, labor’s share of income can be  simply determined by subtracting capital’s share from total income. That is to say, if capital’s share (α) is 35% of national income, than labor’s share of national income is 65%. The first observation that Piketty draws from his analysis of British and French data, is that capital’s share of nation income follows precisely the “U-Shaped” curve of the capital/income ratio (β), though in an attenuated form, “the depth of the U is less pronounced” (200). This attenuation, Piketty suggests, may be a consequence of the rate of return on capital (r), which, he suggests, “seems to have attenuated the evolution of the quantity of capital, β: r is higher in periods when β is lower, and vice versa, which seems natural” (200). Said otherwise–and drawing upon the second law of capitalism (β = s/g)–since growth (g) is inversely proportional to the # of years of capital stock (β), periods of high growth/low savings correspond to periods of high rate of return on capital (i.e. high profit). That is to say, you can’t have your cake [savings] and eat it too [profit].

Of course, at this point it is worth clarifying what is precisely meant by “capital’s share of income” versus labor. In general, Piketty attempts to group together all forms of non-wage income in order to determine capital’s share. In practice, this includes rents, dividends, interest, and other miscellaneous forms of profit. Of course, this figure fails to recognize non-wage labor whose return is entirely in the form of dividends or other non-wage remuneration. Piketty will offer, as an example, the time and effort put into portfolio management by managers in the financial sector. In order to compensate for this time and effort (labor), Piketty has subtracted a set portion of capital’s income to create a “pure rate of return.” “The pure rates of return obtained in this way are generally on the order of one or two percentage points lower than the observed returns” (206).

Having thus adjusted the rate of return, Piketty is able to chart historical trends. The results are startlingly stable. “In both France and Britain, from the eighteenth century to the twenty-first, the pure return on capital has oscillated around a central value of 4-5 percent a year, or more generally in an interval from 3-6 percent a year. There has been no pronounced long-term trend either upward or downward” (206). This stability (“or more likely this slight decrease of about one-quarter to one-fifth” [206]) will be central to Piketty’s argument later in the work, as it will constitute one of the key variables of his now famous inequality r > g, or, the rate of return on capital is higher than the rate of growth.

As a final note in this section of the chapter, Piketty next considers capital saturation. Whereas a certain quantity of capital is necessary for a functioning economy: with unlimited growth “saturation is eventually reached” (215). Simply, there is only so much land that can be worked, machinery that can be run, and houses that can be occupied. In such saturation scenarios–as predicted by the inverse relation of the rate of return (r) and capital stock (β) in his formula α = r * β–the rate of return tends to plummet. Conversely, if the rate of return on capital can be maintained during capital stock growth (or at least fall more slowly than capital stock grows) than capital’s share of nation income (α), can nonetheless grow during capital stock growth.

* * *

Untitled

Common notation of the “Cobb-Douglas Production Function”

Shifting focus, Piketty spends much of the remaining chapter situating his theory among previous economic commentators. Most importantly, Piketty takes on the so-called “Cobb-Douglas production function.” This function supposed that capital maintained a constant share of national income (α). Piketty suggests that the popularity of this formulation may have been as ideological as it was scientific, as stability in capital’s share of income would suggest a certain level of social/class harmony. Yet, as Piketty notes, “the stability of capital’s share of income […] in no way guarantees harmony: it is compatible with extreme and untenable inequality of the ownership of capital and distribution of income” (218). Without moving through Piketty’s analysis of the various positions vis-a-vis this function, it is safe to say that his basic outlook is that economists from both side (liberal and Marxist) have failed to view capital’s share of income from a properly broad frame of reference (the consistent refrain of Piketty’s Capital).

Following Cobb and Douglas, Piketty next situates his analysis of the Capital/Labor split in relation to Marx’s theory of the falling rate of profit. Contrary to many leftist reviews of Capital, Piketty here offers a rather generous reading of this central Marxist notion. In particular, he recognizes that, for 19th century Britain, the notion of indefinite growth was unfathomable. Thus, it was only natural for Marx to posit a point when growth would flatline. Were such a flatline to occur, then Piketty’s formula–β=s/g— would predict infinite growth of capital stock–and a correlate crash in rate of return (r)–precisely the sort of apocalyptic failure that Marx predicted. But unfortunately for Marx–and fortunately for the capitalists–permanent structural growth now appears to be a very real possibility. Thus, while Marx’s thesis is mathematically sound, it nevertheless fails to account for the seemingly infinite growth potential of capitalist production. It is my hope to soon delve into Andrew Kliman’s (who you might remember from a few posts back) thoughts in this regard, who’s Reclaiming Marx’s Capital includes, among other things, a defence of Marx’s theory of the falling rate of profit. (For application to the recent economic crisis, see: The Persistent Fall in Profitability Underlying the Current Crisis: New Temporalist Evidence)

Setting up his next major section (which we will begin tackling in the next post), Piketty ends with the recognition that the West appears to be moving towards very low growth, “particularly zero or even negative demographic growth” (233). Thus, by his formulation, capital will continue to make a “comeback” in the upcoming years, easily achieving or even surpassing the capital/income ratio of 700-800%, common in the 18th and 19th centuries. “Modern growth,” he concludes, “has made it possible to avoid the apocalypse predicted by Marx and to balance the process of capital accumulation. But it has not altered the deep structures of capital–or at any rate has not truly reduced the macroeconomic importance of capital relative to labor” (234).

David Harvey on: Capital in the 21st Century

In honor of my current project working through Piketty’s tome, here is an interesting critique of the work by the prominent Marxian economist, David Harvey. Harvey, with greater vigor than I have mustered, challenges the work from the position of Marx’s Capital, and accuses it off failing to offer a coherent notion of capital, and thus, a coherent account of the underlying reality which generates the “law” r>g.

Taking on ‘Capital’ Without Marx

What Thomas Piketty misses in his critique of capitalism.

[ Edit: if the above link doesn’t work, here is the full address: http://inthesetimes.com/article/16722/taking_on_capital_without_marx ]

 

Capital in the 21st Century: Introduction

This summer I will be working through a comprehensive exam engaging the intimate link between leftist economics and liberation theology. Since Piketty’s controversial Capital in the Twenty-first Century has been the increasing center of economic, political and social debate, I couldn’t help but incorporate it into my work, even if its liberal approach sits somewhat uncomfortably within the more explicitly left/socialist work of Marxian economics and liberation thought. That being said, I am nonetheless excited to break into this powder-keg, it being (I suspect) the first piece of serious (sorry Freakonomics) economic thought to have broken into the public consciousness to this degree in decades (having reached #1 on the NYT Nonfiction Best Sellers list in early June [presently 3rd]).

With this reading in mind, I have decided to blog my way through the text, devoting a small note to each chapter of the lengthy book. My hope is that these blogs will function as “cliff notes” for those who don’t have the time (or desire) to slog through 600 pages of economic data, as well as offering bits of my own thoughts and critiques, particularly as related to the Marxian economic writings that I will be reading simeltaneously.

Today I completed the introduction, which attempts to historically situate the work within political-economy, as well as lay out the basic methodology. While distinct, these two concerns are by no means divorced from eachother. Rather, the principal critique that Picketty will level against the classic political economists–from Malthus and Young, through Ricardo, to Marx–is a failure to properly ground their work in the “data.” Data, it already seems, will be the recurring refrain of the work, a fact which is consitent with his public appearences and self descriptions as a bit of a data-phile.As he writes, “intellectual and political debate about the distribution of wealth has long been based on an abundance of prejudice and a paucity of fact” (2). Nevertheless, to his benefit, Piketty does not merely denigrate the non-empirical character of classical political-economics, and unequivocally throw it out. Rather, he recognizes the strengths in each thinker, pulling out small noteworthy pieces which will be incorporated into his overall project (e.g. the relevance of population in Malthus, scarcity in Ricardo, and the internal contradictions of capitalism and the indefinite return on capital in Marx).

Nonetheless, it is the twentieth century optimist, Kuznets, who will function as Piketty’s true spiritual forefather. For, it is Kuznets who attempted an investigation on wealth inequality methodologically centered on data; “it was the first theory of this sort to rely on a formidable statistical apparatus” (11). Ironically, for important historical reasons (the Great Depression and the World Wars), Piketty will suggest that Kuznets’ conclusions are misguided, even directly opposed to his own (Kuznets argued that inequality naturally decreases over time). Nevertheless, the methodological strength of Kuznets–even if his data was insufficient or narrow (only covering, roughly, 1920-1950)–leads Piketty to rate and regard the economist rather highly.

It is in this way that Piketty’s methodological concerns are directly tied to the historical, for it is this heavily statistical/data-oriented Kuznetsian approach that Piketty himself takes up in Capital. Drawing upon a variety of sources, most importantly income and estate tax records, Piketty charts a course of inequality inverse of Kuznets’ curve (the claim that inequality follows a bell curve, getting initially worse, then correcting itself over time). On Piketty’s account, the share of wealth among the top decile has a tendecy to expand over time, a process which was merely momentarily disrupted by the Great Depression and the World Wars, but which has, since the 1970’s, returned to its “natural” state of rapid increase.

This tendency is sumarized by Piketty in his now (in-)famous formula “r>g”. That is to say, the rate of return on capital investment is greater than the growth of GDP. Thus, if the top decile’s wealth is increasing faster than the economy is growing, than by necessity their share of total wealth will necessary increase, along with wealth and income inequality.

Since this is an introduction, and Piketty has not yet begun to lay out his thoughts in detail,  I will refrain from too much critique. I will merely say that–as I am currently working through Marx’s Capital at the same time–Piketty is certainly correct that Marx makes very little use of statistics or hard-data. Though, I think that Piketty may be overstating the case to mark this as a failure of Marx’s policital-economic writings. Simply put, Marx appears, at least in my reading, to be undertaking an entirely different sort of program than Piketty, one which does not use data in the same way, but in my opinion at least, also doesn’t appear to “need” it. Marx is much more directly concerned with the internal structure of capital, a concern which appears quite well fitted to his ideological and notional analyses. But, again, it is worth noting that as uninterested in connecting his work to Marx as Piketty seems to be, he also does not seem particularly interested in disparaging him.