I'm unsure about attributing this directly to Marx's Capital, although the inspiration, if not the explicit exposition, is clearly there. Wennerlind's analysis is grounded in a critique of what he calls "credit fetishism" an explicit hat tip to commodity fetishism.
What I am suggesting is an analysis that takes issue with the intuitive/Marxist notion that it is the "reserve army of labor" that disciplines labor, if only because the crucial moment when such discipline is needed is when the threat of unemployment is least credible. Peter Frase has a post today at his blog on "The Scourge of Overemployment" (http://www.peterfrase.com/2012/03/the-scourge-of-overemployment/) that I have commented on. Here is my comment:
As you know, I've been grappling with this issue for quite some time.
Not only have economists "chosen not to pay attention to this gross
distortion of the labor market," they have also chosen to not pay
attention to the neoclassical theory -- Chapman's -- that predicts
precisely such a gross distortion.
The structural, cyclical and frictional explanations still leave me
with a riddle: why do these conditions persist through successive
"regimes of accumulation" and why has there been such an enduring and
spirited defense, by economists, of the effects of these structural,
cyclical and frictional distortions? It can't be (I suspect) because
they actually think long hours are more "productive".
I think I have an explanation but it involves setting aside the
"intuitive" assumption that production precedes distribution and working
through the problem with the sequence: 1. consumption, 2. distribution
and 3. production. This is how the modern credit system evolved, with
government war debts representing the first stage of the sequence,
followed by monetary expansion facilitated by that debt and finally
production stimulated by the monetary expansion.
I suspect the logic will be difficult to follow without close
acquaintance with the history of the English financial revolution and I
strongly recommend Carl Wennerlind's "Casualties of Credit" for an
exposition of that history. The financial revolution was literally a
"revolution" in terms of turning the expected sequence of production and
consumption upside down! To continue the account of that inversion into
the industrial revolution, I would recommend Robert Steinfeld's
"Coercion, Contract, and Free Labor in the Nineteenth Century."
Steinfeld challenges the conventional wisdom that employment relations
in the 19th century U.S. and the U.K. was "at will" and describes the
key role played by state enforcement of coercive master/servant
As your opening quote suggests, there is a tendency, following Marx,
to see the "industrial reserve army" and the threat of unemployment as
the great enforcers of labor discipline. But that really is only salient
during the slumps. The trick for capital is to enforce discipline
during the boom period. All those seemingly perverse structural
incentives start to make sense in a regime compelled by credit to "make
hay while the sun shines".
I should mention a brief essay of mine that refers to the Wennerlind and
Steinfeld theses, "Crisis, Credit and Credulity: the incredible
circulation of a counterfeit idea." (http://tinyurl.com/belgianlol)
It was written for an "ethics in economics" online conference, so it
takes that angle. Eventually, I'll work up a step-by-step presentation
of the argument that credit imposes an inverted production cycle.
On Wed, Feb 29, 2012 at 11:23 PM, Sabri Oncu <sabri.oncu-Re5JQEeQqe8AvxtiuMwx3w@public.gmane.org>
Sandwichman:I like what Tom say a lot. We can say this: accounting is about the
> I would challenge the implicit assumption that surplus value is first
> produced and then redistributed. It might seem "intuitively obvious" that
> you can't redistribute something that doesn't exist yet but of course you
> can. You just distribute claims on future wealth creation. That's what
> capitalization is about.
past whereas finance is about the future. Can we say this: what is in
Capital Volume 1 is about accounting whereas what is in Capital Volume
3 is about finance? Therefore, the LTV should go beyond Volume 1 and
incorporate Volume 3, also? As you may remember, Minsky was claiming
that any economic theory which does not take finance into its heart
cannot explain the world we live in well or something to that effect.