The
Philosophy Hammer
Philosophy, Economics, Politics & Psychology Tested with a Hammer

65: Michael Hardt and Antonio Negri part X:
Economics of the Common Wealth

Summary by: Jeff McLaren

         As the modern world moves into the postmodern world the nature of economics changes. Modern economics is premised on a few basic assumptions some of which were generally true in the past but which are now becoming less and less true and others that were never true but only appear true due to specific manipulations from hegemonic ideas. Most economists believe we live in a world of scarcity (there are limited resources, goods and services)(Q1) and that we all have unlimited wants (human nature is such that it always wants more of anything)(Q2). Actually there are very few markets in which there is any real scarcity or any natural demand therefore modern economics describes its own created world not the world as it is now or could be. Modern orthodox economic theory describes a world which it tried to create, came close to creating but which is now diverging from its theory (Q3).
        
         The postmodern world is better (and especially for the middle class) characterized by the hegemony of immaterial labour (Q4). This means that modern economics should change with the times too. The key is in the commons. Modern economics brings in the commons as an after thought; as a fudge factor under the term “externality”. Externalities are things that neither the buyer nor seller pays for but which add or subtract value from a good or service. They are used to help modern economic theory better fit with observed results. The common is a very difficult notion for most economists because there is a hegemonic notion in the discipline that private property is the source of all value. This notion is often expressed this way: Private individuals seeking their own best interest in the market will, as if guided by an invisible hand, do what is best for the public interest. While the statement may have been more true in the past, today it is true in a fewer and fewer cases because, as we saw last time, both private and public property, production and interests depend on the common but the common does not depend on private anything nor on public anything: today the common is being converted to private property at a rate that makes capitalist accumulation predatory and cannibalistic.
        
         A postmodern economic system should therefore start at the ground source of production: the commons as primary and private property as derivative not the other way around. Consider this inversion: the private property narrative claims that private property is the source of freedom (you need your money), efficiency (people look after their interest better than the public or common interests) and innovation (private companies have created all the modern inventions and innovations) therefore private property is sacred and indispensable for society and progress. However from the commons perspective the common is the source of freedom and private property imposes all sorts of costs, restrictions and controls; the commons is the source of efficiency of production of truly needful things where private property imposes production of less needed things, fashions and fads; the commons is also the source of all innovation since all innovation is innovation of or on something that existed before(Q5).
        
         Given this inversion of narratives we must rethink all current economic notions. Consider what economic growth means: for the private property narrative it means getting more control over more private property, money or goods but as we saw last time in the extreme this is unsustainable, self destructive and unjust. In the commons narrative “economic growth” would be better named “social growth” and would mean an increased capacity for production based on the common and increased access to the common goods in society.(Q6)
        
         Consider the economic cycle: the economic cycle of growth and recession in the private property narrative is the growth and recession of private business activity (such as input purchases and output production) however from the commons' perspective the cycle would be a qualitative measure of the relative change in beneficial commons to detrimental commons (Q7).
        
         All of these inversions and re-conceptions are improvements on economic science from the point of view of the commons but because they keep the old existing categories they risk turning economics into an undead monster hobbled by its past and unable to become its own person. A new economic science is needed that starts from scratch with its own axioms.
        
         Q1 Mainstream economists claim that the earth is limited and cannot produce everything that people want. Do you believe this? The authors would like you to consider that there really are very few things that are limited in our modern world. 1) Scarcity is often created by branding: there is no scarcity of bags in the world but there might be a scarcity of Louis Vuitton bags. Branding is a method of creating the perception of scarcity where none really exists. 2) Immaterial production (affects, relationships, ideas etc.) which is becoming the dominant form of production in the world does not have a supply curve: its supply is beyond measure. If you make a movie and put it on YouTube everyone in the world can see it or only one person can see it. Is scarcity really decreasing even as its perception increases? Who benefits from the increasing perception and fear of scarcity? Mainstream economists claim that if there is a price then there must be a supply curve because price is indicative of scarcity. The authors happily claim that real supply curves are endangered species but they are unfortunately propped up by artificially created scarcity. Which argument sounds more believable?
        
         Q2 Mainstream economists claim that we have unlimited wants. Do you really have unlimited wants? Can you think of some goods or services you would not want even if they were offered free? The authors would like you to consider that there is nothing natural about wanting an iPhone5 or a McDonald's hamburger. The “unlimited wants” that economists talk about are all taught to us. Even our want of specific western style foods, our desire for western style entertainment and even our lust for western style sexual practices are all taught to us and we are taught to want them in unlimited quantities. Real demand curves exist but not nearly in the abundance that economists claim. The widespread prevalence of demand curves is due entirely to the creation of artificial wants. Do you believe that your desires are really yours or were they given to you?
        
         Q3 How does the notion that your theory makes your world strike you? Is there an objective reality? And if so how can we actually access this reality. There are hints in the text that all our perceptions are coloured by our ideology. If this is true then changing our ideology will change our perception of reality. Where did you get your default ideology and is it really serving your best interests?
        
         Q4 In the modern world the factory was the hegemonic form of labour because it created the most goods and therefore the most value. Today in the postmodern world all markets in the developed world are saturated: they are closed systems where a gain for one comes at the expense of another. Is it possible for all players in any existing (not new) industry to grow simultaneously? Gains made by one player in a market do not come from the manufacturing process but from the immaterial production associated with the product (i.e. the affective value, image value etc. created). Since immaterial production does not have a supply curve and since supply curves are foundational to all modern economics, modern economics fails more and more to account for the world we actually live in. Do you believe that supply and demand should be losing their importance in economics?
        
         Q5 This inversion takes the popular private property narrative and fully inverts it. Is it convincing? Who benefits most from the private property narrative? Who would benefit from the commons narrative?
        
         Q6 How do you conceive of economic growth? What do you see as the benefits and detriments of each narrative? Which one bests suits your interests and why?
        
         Q7 Last time we saw that the family, the corporation and the nation hold out the promise of the common wealth but they all too often corrupt the common wealth too. The health of the commons (the economic cycle) would be a qualitative measure (not a quantitative measure) of the health of good commons. How does the notion of qualitative measurement as opposed to quantitative measurement for the economy strike you? Who benefits from telling you it is impossible?


© 2008 - 2017, James Jeff McLaren