Does capital exist as a quantity?
In a Twitter thread, my colleague J W Mason raises the question of whether capital exists as a quantity. His view is that the stock of capital, as a quantifiable entity, does not exist or cannot exist. Capital as a social relation does exist — he says. Capital as in “capital goods” (a heterogeneous collection of physical productive inputs, exclusive of labor power) also exists — he suggests. Yet, capital cannot be quantified as a stock of value. Thus, the attempts of economists to estimate (roughly quantify) the stock of capital are, to say the least, misguided.
However, if capital exists as a social relation, then where, in this physical world in which societies are embedded, do social relations reside? An object is not the social relation, an individual human alone is not a social relation, but if a social relation does not have an objective existence, i.e. separate from the subjectivity of related individuals, then where does it exist? A social relation is a social relation among individual humans. Humans are inter alia physical beings. Therefore, social formations — historically concrete ensembles of social relations — must exist in the physical world.
How do individual humans interact or relate to other individual humans in the physical world? They do it through objects. Their own bodies, physical objects in which their humanity resides, and also the other objects of the physical world touched by humans, the objects that we call human wealth (and ilth). It is impossible for humans to communicate (and all social interaction is communication, sharing or making common what is private or individual) with one another without means of communication, from the air that carries our voices to the electromagnetic spectrum. Come to think of it the entirety of what we call wealth (the totality of the means of production of ourselves), insofar as it embodies human design, is a means of communication!
Does the capital of capitalist productive units exist? If it does, does it not reside in the monetary balances, labor power under contract (so physical that it removes mountains and ships robots to Mars), and objects (inventories of intermediate materials, semi-finished and finished goods; machinery and equipment; buildings and structures, etc.) that constitute it? Can these objects be quantified jointly, as a bundle, asset portfolio, or firm — and evaluated as such?
Well, regardless of one’s opinion, capitalists conduct this evaluation all the time in their day-to-day practice. The whole point of M-C-M’ requires comparing M’s to C’s, measuring the surplus value incorporated in objects with diverse use values. The capitalists must estimate return rates on their assets, individually and collectively, which requires a standard of comparison or denominator in a ratio (“denominator,” from “de-nominating” or qualifying, giving name to something).
Now, if one accepts that a firm has a certain value (and price) in the market that can be quantified, then its estimated value must come from evaluating the host of heterogeneous assets that compose it? What is capital as a social relation if not value — “self-valorizing value” (Marx). And value, a more general social relation than capital: Does it not exist as a quantity? Does it exist in the qualitative realm as a sheer, unquantifiable social relation?
My response to this is rather general: Everything that is qualifiable — i.e. that can be qualitatively determined — is also ipso facto quantifiable — i.e. it also has a quantitative determination. Recognition of the inherent unity, contradictoriness, and mutual interdependence of the categories of quantity and quality goes back at least to Aristotle.
In a previously posted note, in which I pasted an old (2006) email on the matter, I offered my argument against the so-called “Capital Critique.” However, there is a more fundamental argument to be made against it, namely that — in mathematical terms — whenever a set (say, a Cartesian product) of dimension n>m is mapped into another set (say, another Cartesian product) of lower dimensionality m, there is an irretrievable loss of information. Think of a voluminous object (not a point, not a line, not a plane) in a 3D-space. Then, flatten it or project it on a 2D-space (say, a Cartesian coordinate plane). You inevitably lose information (yes, information as in I= — log p). The information you lose could be crucial, but there is no way to tell, because it is lost. The “reswitching” phenomenon that neo-Ricardians allude to is a particular form of information loss.
Thus, collapsing a set of diverse use values into an average, aggregate, or index involves a necessary loss of information. Admitting this necessity is not new in the history of science. The leap from mechanics to thermodynamics (and to statistical mechanics) came from accepting that, given the increasing awareness of the microscopic complexity of nature, dealing with aggregates, averages, or indices (“phenomenological physics”) was inevitable if chemistry was to advance beyond quackery and alchemy. The phenomenological approach must presume, implausibly, that the inner structure of a “solid,” “liquid,” or “gas” (taken as a unit) maintains some constancy or uniformity. In reality, that structure or inner composition is continuously changing or “reswitching.” Yet statistical mechanics contributes to knowledge and furthers human practice.
One can argue that a little knowledge can be worse than no knowledge, but such an argument has never prevented humans from acting as if a tiny bit of additional knowledge is better than no knowledge at all.
