Sunday, 28 August 2011

On "Accumulation By Dispossession"

This is my email response to someone who asked me whether I had heard of the Marxist term "accumulation by dispossession". The question was put with a link to the wikipedia entry here. Readers can judge for themselves...

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Privatization - one thing the wikipedia page neglects to mention is how these "public" assets came to be so in the first place. For instance, the construction of railways in England was initially carried out by private enterprise and only later captured by the State. The concept of "public assets" is presented as if it is a default setting. More importantly, the concept's political legitimacy depends on the public's acceptance of the terms under which the "asset" will be managed - that being the case, this legitimacy is always suspect simply because the public are not usually asked for their opinion as to whether the State should manage a given "asset", except indirectly through the election cycle or a rare referendum. The "default" assumption that a given thing is or ought to be a "public asset" unless privatized by the State is, I think, invalid on Lockean grounds (i.e. the rightful acquistion of property by individuals through labour or voluntary trade). In addition, I would add that calling anything run by the State an "asset" seems to me a corruption of the concept via its' application to the opposite kinds of things. If a State-owned company that turns a profit on the market is to be considered an "asset", then what is a State-owned company that does not turn a profit to be considered - a liability? OK, then why isn't it ever admitted that Britain's NHS is a "liability"? (That isn't the term I would use mind - I'd say "fucking monstrosity" or something). If it is to be argued that a "public asset" is an "asset" by some measure other than monetary calculation (e.g. "service"), then this can be dismissed on the grounds that economic value is subjective. Changing the example from "service" to something quantifiable like "number of lives saved per month" doesn't help either because saving another person's life is still something which you must decide to spend money on or not. If one stranger's life is worth your money over and above your other values - then why not any other stranger's? You'd bankrupt yourself that way and thus not be able to save anybody's life.

"Financialization" - this section conspicuously fails to mention that the "deregulation" of the 80s was followed by what might be termed "re-regulation" in the 90s and 2000s, e.g. the Community Reinvestment Act passed by the Clinton administration and the Sarbanes-Oxley Act passed by the Bush administration. I agree that inflation is a terrible thing - especially for the poor - and may in some sense be thought of as an "asset stripper", but the use of this term implies control, which inflation does not really confer. I would tend to be suspicious of some mergers, but not opposed in principle. On asset stripping per se, I have no objection in principle - if a firm cannot compete in the market and declares bankruptcy, then asset-stripping may be exactly the right thing to do - though how it is done is a seperate question.

The management and manipulation of crises - this would not occur under a system of competing currencies operating in a free market. The damage to small countries occurs because (a) their governments operate a central-bank supplied fiat currency, and (b) so does the U.S., and (c) governments, including the U.S. government, are typically the largest purchasers of commodities. When a large government makes bad decisions on the market, these decisions have enormous consequences for other people in smaller countries on the other side of the world. For instance, one aspect of the recent "Arab Spring" revolts was unrest at the rise in prices for grains which was caused partly by local inflation, but also by the U.S. government's demented subsidization of ethanol production as a "green" substitute for gasoline.

State redistributions - well, I'm against State redistributions! And that begins with taxation itself, never mind fiddling about with the tax code.


Criticisms are welcome, as that answer was fired off quickly and isn't worked out in any great detail. On the point about the "management and manipulation" of crises, the wikipedia entry isn't especially detailed (though I would guess it's the same sort of "shock doctrine" crap that Naomi Klein pushes). I say that these so-called "crises of capitalism" occur due to the price distortions and thus mis-incentives that loose monetary policy instantiates for the systemic malinvestment of capital. They are so bad primarily because the government operates a monopoly over the medium of exchange. Without that monopoly, these "crises" (i.e. the "bust" periods of the business cycle) would likely be mild since price corrections would be far easier for the market to make in the absence of systemic mis-incentives.

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