Lecture
Having traced the spiral of the "negation of negation" in its own evolution (commodity production as the genesis of capital — developed industrial capitalism — imperialism and the subsequent stages of "decline"), capital at the end of the twentieth century began a process of restoring the universal power of the market as the dominant form of coordination (and resource allocation), a power that had been undermined during the social-reformist period. But this restoration occurs on a new basis (on the basis of information technologies, the achievements of the preceding evolution of capital, the crisis of mutant socialism, globalization...), and therefore with new content — which means the reproduction (again along the spiral of the negation of negation) not simply of the capitalist market, but of a certain new type of it.
Earlier sections of the main part of the textbook that are useful for understanding this topic:
Part 3. Classical Political Economy of Capitalism
Chapter 8. Anatomy of the Market: Commodity, Money, and the Theory of Value
The corporate capital of the era of globalization substantially modifies all the main
features of commodity relations, generating a process of the formation of a total
market.1 The totality of the market has been most noticeable at the empirical level since
the end of the twentieth century, when neoliberal practice and ideology extended their expansion
1 This phenomenon of the neoliberal power of capitalism, with its drive to subordinate all social processes to market criteria, is termed "marketization" by some researchers (see
Fine B. Theories of Social Capital. Researchers Behaving
Badly. L.: Pluto Press, 2010).
To his own great surprise, at the moment of finishing work on the first edition of the book, one
of us (namely, A. Buzgalin) came across this
term in... a science-fiction novel:
"The habit is still so strong in us that it would never
occur to us to call totalitarian a regime
in which violence is not applied on a mass scale...
And we shall fail to recognize the totalitarianism that
has finally reached the limit of its dreams and has so suspended the overwhelming majority of its population
on the strings of material rewards and punishments that
it simply has NO NEED to apply mass violence...
And we shall readily call the totalitarianism of the TOTAL MARKET by the name it gives itself — the free world" (Rybakov. At Someone Else's
Feast. M.: Act, 2000. Pp. 276–277. Emphasis in the text
is V. Rybakov's).
An interesting coincidence in conceptual apparatus, isn't it? It is also interesting that V. Rybakov
uses the image of a marionette, controlled by
someone else, to denote human behavior under
conditions of the total market — this apotheosis of alienation.
We should also stress that the thesis of the totalitarianism of the contemporary market is developed in a number of works
by L. A. Bulavka, which focus mainly on
the problems of the interaction between economics and culture
(see: Bulavka L. A. Toward a Phenomenology of Simulative
Being // Philosophical Sciences. 2012. No. 10. Pp. 56–71;
Bulavka L. A. Post-Soviet Culture: Coercion into
Mutation // The Political Economy of Failure. The Nature and Consequences of Market "Reforms" in Russia / Ed.
A. I. Kolganov. M.: URSS, 2013. Pp. 151–170; Bulavka L. A. The Imperatives of Simulative Being // Alternatives. 2012. No. 2).
up to the threshold of the so-called "market
fundamentalism."2
The most essential feature of this new
quality of the market, concealed behind the practice and ideology of market fundamentalism, is the completion of a transition — begun with the
era of monopoly capital — to a market where it is not the buyer who dominates, but the one who imposes on him a certain system of needs and actions,
namely, corporate capital. It is
corporate capital that consciously manipulates all the other
market agents, be they households or
small producers. All of them are turned into clients of corporations, or more precisely —
of corporate capital, which as a whole dominates the market rather
than submits to its spontaneous laws.
This system of domination has long been known to socio-economic theory.
It was reflected, perhaps for the first time, by
V. I. Lenin and his followers, who wrote, as we have already noted above, about
the undermining of free competition by market monopoly.
2 The thesis of "market fundamentalism," the "tyranny of the market," and the like is now quite popular both in Russia
(where its critique, however, tends to blend with condemnation,
mainly, of the West's geopolitical dominance
— this line is especially prominent in
the works of A. Zinoviev) and abroad (see, for example:
Bourdieu P. Acts of Resistance. Against the Tyranny of
the Market. N. Y., 1998; Soros G. The Crisis of Global
Capitalism. M., 1999). For a critique of market fundamentalism, see, in particular, the works of: Grinberg R. S.,
Rubinshtein A. Ya. Foundations of the Mixed Economy.
Economic Sociodynamics. M.: IE RAN, 2008;
Grinberg R. S., Sorokin D. E. Dangerous Pessimism. On Rejecting the Demonization of the State's Role in the Economy // The Economic System of Russia: An Anatomy
of the Present and a Strategy for the Future (Reindustrialization and/or Advanced Development) / Ed. A. V. Buzgalin. M.: Lenand/URSS, 2014.
It is significant that in this case they demonstrated, first, the material basis of this regulating influence (the socialization of production and exchange) and, second, that this regulating
influence of monopoly associations on the market is the embryo of a new relation that, in its developed form, belongs to the future — the planned character of social production. It is no accident that in
this connection Lenin stressed that
trusts already provide a planned regulating influence on
the market. Planned organization of the future, however, presupposes
that its subject is
society as a whole, and that it is
carried out in the interest of the development of every individual's personality, rather than the increase of corporate profits.1
This ideological legacy was taken up and developed by Soviet political economy (in
the first place, though not exclusively, by the "Tsagolov
school"), whose authors specifically emphasized the transitional character of the relations of monopolistic regulation
of the market, which they termed "incomplete
planned organization." Here it will be appropriate to indicate the complex of parameters of the regulating influence on the economy exerted by
monopoly associations. Among these
parameters are, in particular:
• The socialization of production as the
technological basis of dependence;
• The possibility of manipulating price, quality, and other parameters of non-price competition on the basis of a
high level of concentration and centralization of capital;
• For the same reasons, the imposition on
consumers and dependent suppliers of terms of deals
favorable to the corporations, through various mechanisms
(in particular, marketing and advertising);
• The use of mechanisms of merging with financial corporations to
exert influence on counterparties through
credit systems and other forms of creating
financial dependence;
• The use of personal unions in business
and of shadow forms;
1 We have already cited the corresponding
words of Lenin earlier, from his work "Remarks on the Second
Draft Program of Plekhanov."
• Fusion with government
structures and the mass media;
• The use of the corporate apparatus of violence (from "civilized"
industrial espionage in "First"
World countries to direct violence
by corporate mercenaries in "Third"
World countries), and so on.
Similar conclusions, independently of the Marxist researchers, were reached
by J. K. Galbraith in his well-known book The New Industrial State, where he noted, first of all, the "planned" character of relations within the corporate sector,
but to this he added also the regulating
influence of corporations on the consumer, in the
first place — the manipulative effect of advertising. Later this thesis became
almost a commonplace in the works of critics of "market fundamentalism."2
This line of classical institutionalism was continued in the works of many
authors belonging to the left-wing spectrum
of the "sixties" thinkers in the West,
though these were mostly socio-philosophical or even literary-philosophical
works, written at the intersection of existentialism and
Marxism (these motifs can be found in the books of Camus and Sartre), of Marxism and
anarchism (Cohn-Bendit), and others. Later this
theme arose as a "side" topic in the books
of Baudrillard and his colleagues in the postmodernist
"workshop." We will return to these works
later, in connection with the analysis of the market of simulacra, but for now let us continue our brief excursion into the history of research on the regulating influence of corporations.
1 We have already mentioned a number of these works, but let us recall them again: Galbraith J. K. The New Industrial State. M., 1969; Idem. Economic Theories and the Goals of Society. M., 1976; Eucken W. The Foundations of Economics. M., 1996; Toffler A. Powershift. M.: AST, 2001; Power in Economics. Harmondsworth, 1971, and others. A review of this literature is given, in particular, by V. Dementiev (Dementiev V. Economic Power and Institutional Theory // Voprosy Ekonomiki. 2004. No. 3), who proposed an original variant of the institutional interpretation of this problem.
At present the works of Naomi Klein1 are very widely known among critics of the corporate system (they are cited, almost as classics, even by such prominent researchers as S. Žižek; they have been translated into a great many languages, including Russian, and published in large print runs), in which the mechanism of manipulation of the consumer by corporate capital is revealed through a mass of examples. What is genuinely new here is the emphasis on the phenomenon of manipulation, which combines a complex set of not only strictly economic but also informational, cultural, and even ideological influences exerted on the consumer by corporate capital. In these works, however, the discussion generally concerns primarily the manipulative influence on the end consumer — the one who walks into a boutique or a supermarket (or orders goods over the Internet). Left aside is perhaps the deepest layer of all — the regulating influence of corporations on one another and on the non-corporate sector, as well as on the state.3 Within neoclassical theory this phenomenon is also noticed, but not strongly emphasized. As is well known, economics devotes its main attention to studying the mechanisms of imperfect competition. But this analysis of functional relationships, devoted to the quantitative aspects of price formation under oligopoly, says little about the nature of the phenomenon of the regulating influence of corporations on the market. It is another matter that the conceptual apparatus of economics does contain the category of "market power,"* which in essence corresponds directly to the relations of local corporate regulation and manipulative influence analyzed by other schools. This category enjoys minimal popularity among neoclassicists, and not by chance: on sober reflection, this phenomenon would have to be classified among the further failures of the market, but... This "failure," however, is characteristic of virtually the entire system of relations of the corporate sector, which is key to the contemporary economy — which implicitly poses the question: is the market itself, in this sphere, for the most part not simply a "failure"? In general, it should be noted that the problem of power in the economy is one of the central issues rather for theorists of the left. It has been examined especially clearly in works devoted to the economic problems of imperialism — beginning with the studies of J. A. Hobson, R. Hilferding, N. Bukharin, Rosa Luxemburg, V. I. Lenin, and ending with the works of Soviet specialists on the problems of state-monopoly capitalism. As we have already noted, it is also raised in the works of authors belonging to the current of classical institutionalism and related schools.4 At the same time, the practice of late capitalism has forced even neoclassical economics to look at it more closely.
1 See Klein N. No Logo: People Against Brands. M.: Dobraya Kniga, 2003; Idem. Fences and Windows. M.: Dobraya Kniga, 2005; Idem. The Shock Doctrine: The Rise of Disaster Capitalism. M.: Dobraya Kniga, 2009.
2 "Contemporary capitalism is the capitalism of generalized monopolies. By this I mean that monopolies are no longer like islands (however important) in a sea of other (still relatively autonomous) companies, but form an integrated system. They therefore tightly control the entire production system. Small and medium-sized enterprises, and even large corporations that are not, strictly speaking, oligopolies, are firmly enclosed within the network of control established by the monopolies. Their level of autonomy has fallen so far that they act as nothing more than subcontractors of the monopolies. This system of generalized monopolies is the product of a new stage of centralization of capital in the countries of the "triad" (the USA, Western and Central Europe, and Japan), which took place in the 1980s–90s. Generalized monopolies now dominate the world economy" (Amin S. The "Implosion" of Contemporary Capitalism and the Audacity of the Left // Alternatives. 2014. No. 2. P. 8).
3 Quantitative expressions of market power (that is, of a firm's ability to influence market prices) are the Lerner index of monopoly power and the Herfindahl–Hirschman index. It is assumed that the phenomenon of market power arises wherever there is a departure from free competition (which, generally speaking, long ago became the exception rather than the rule). There are also special studies on the problem of market power. See, for example: Tirole J. Markets and Market Power: The Theory of Industrial Organization / Trans. from English, ed. V. M. Galperin and N. A. Zenkevich. In 2 vols. St. Petersburg: Ekonomicheskaya Shkola, 2000.
4 See the works of J. K. Galbraith, W. Eucken, A. Toffler, and others mentioned above, and the review of publications on this topic given in the article by V. Dementiev, also mentioned earlier, "Economic Power and Institutional Theory."
Perhaps these problems are addressed most actively within new institutionalism, which in many respects continues the methodological line of neoclassical economics itself. New institutionalism, too, has not overlooked this phenomenon, singling out "bargaining power" as a parameter of the relations among market agents. But within this school the phenomenon is presented as, so to speak, neutral: it is positively noted that there exist opportunities to use a certain "power" in negotiations over the terms of a deal.
The Economic Power of Capital: New Institutionalism and Marxism:
In the language of new institutionalism the parameters of a deal can be interpreted as follows:
• inequality in the distribution (degree of monopolization) of ownership of a given type of resource;
• the asymmetric character of the distribution of specific resources;
• asymmetry in the distribution of information between the parties to exchange, or in "principal–agent" relations;
• differing costs for the parties to exchange associated with "exiting" a relationship with a given agent and searching for alternative sources of the resource (good);
• the absence of equilibrium between supply and demand in a competitive market;
• unequal access to means of coercion or violence (state and private);
• unequal elasticity of demand for the goods (resources) held by the parties to the transaction;
• unequal significance, for the parties to a transaction, of the resources held by the parties to the exchange;
• asymmetry in the purchasing power of economic agents.
If one compares these well-known "positive" achievements of new institutionalism with the "apologetic" formulations of Soviet political economy, briefly
summarized in one of the preceding texts, it turns out that most of
them were already disclosed in the theory of so-called "monopolistic planned organization." Its authors, in
particular, showed that the largest capitals:
• have the ability to participate directly and/or indirectly in the system of ownership relations of their counterparties (from holding shares to personal unions and extra-economic influence on the owners and/or managers of counterparties);
• control resources in a given sphere of the market;
• possess greater information about the parameters of the market and of the counterparty (down to the possibility of directly manipulating such information);
• "tie" counterparties to themselves technologically, economically, financially, and informationally, making it difficult for them to refuse interaction with large capital;
• control a significant part of technologies, production, and the market, not only limiting the "contractual" alternatives available to counterparties, but also creating a persistent disequilibrium in the ratio of supply and demand (hence, in particular, the phenomenon of monopoly price, about which so much was written in Soviet political economy of imperialism);
• form the technological dependence of counterparties on large capital;
• influence the financial parameters of counterparties, generating their financial dependence, and so on.
Below we will offer our own version of the systematization, generalization, and further development of these parameters within our analysis of the new quality of the market.
The possibilities of using unequal bargaining power are set out in considerable detail in new institutionalism (which should be recognized as a clear merit of this school), though only at the level of appearance. Theorists of this school, indeed, see this rather as a virtue, since it is precisely this kind of analysis that allows entrepreneurs to use the theoretical conclusions in formulating and making decisions — which is exactly the criterion of success for a positive economic theory. But, one must agree, the ability to give advice on what and how can be used to strengthen one's firm's position in negotiating yet another market deal is not the same thing as saying: it is a regularity of market transactions, beginning in the twentieth century, that there is a persistent asymmetry of "bargaining power" in the interaction between large corporations and other economic agents, that the cause of this asymmetry is such-and-such, and that its consequences are such-and-such... That said, among some representatives of institutionalism who grew up in dialogue with Marxism, one can find something resembling the thesis formulated above.1 Thus, within practically all schools, in one way or another, the phenomenon of the regulating influence of large corporate capital on the economy and its agents is noted. This phenomenon is already more than a century old, but in recent decades it has acquired a new quality, the study of which is of fundamental importance to us. The latter, however, can only be carried out within a broader study of the new type of "market" characteristic of the present stage of the "decline" of the capitalist system. And this study, which lies outside the scope of the present work, shows that behind the phenomena of "local regulating influence," "manipulation," "market power," and the like lies a substantial transformation of the contradictions of commodity relations, "sublated" by the development of global corporate capital.
This gives rise to a market which, on the one hand, is totally subordinated to the power not simply of capital, but of corporate capital as a whole (not of individual firms, but of capital as a concrete-universal relation of production2), and which, on the other hand, itself totally dominates all the parameters of socio-economic life. Thus arises a kind of market dictatorship, a market totalitarianism, uniting the power of the market, of capital, and of corporate structures into a single mechanism for the subjugation of humanity and society, concealing, under the guise of free competition, the total hegemony of capital. In contemporary capitalist society, the individual finds himself under the power of corporate structures sine prece, sine pretio, sine poculo.3 Let us examine the genesis of this phenomenon in more detail, turning first of all to an analysis of the transformations undergone by the basis of all commodity production — the contradiction between the social division of labor and the separateness of commodity producers. The expansion of the total market is accompanied by a new round of the unfolding (including, as postindustrial technologies and globalization advance) of the social division of labor (which, within Marxist theory, means not simply the growth in the diversity of particular kinds of activity and specialization, but also the subordination of the individual to the conditions of divided labor), and by the expansion of the partial worker and the partial human being. Global capital, having undergone the evolution noted above:
• deepens the world division of labor, which is the basis of the contradiction between the "First" and "Third" worlds (the development of the "tertiary" and "quaternary" sectors in the "First" world, the conservation of the "primary" sector in the most backward countries, and the development of the "secondary" sector in the newly industrializing countries of the "Third" world, with the threat of their crisis as knowledge and innovation, rather than raw materials, become the key resources for development);
• intensifies the processes of forming the partial worker, promoting the development of the "ordinary" industrial partial worker (mainly in the "Third" world) and channeling (mainly in the "First" world) the progress of the most contemporary forms of activity toward increasing professionalism rather than universality (the cult of the latter is reflected in theories of the "society of professionals");
• leads to the dominance of production of the "partial product" — that is, a product which, in its material form, is not a use-value in itself, but becomes one only in combination with services for the technical support of its operation... — and this list could easily be continued.
1 See, for example: Oleinik A. Power and the Market. The System of Socio-Economic Domination in Russia in the 2000s. M.: Rossiiskaya Politicheskaya Entsiklopediya, 2011.
2 Let us repeat the important methodological thesis of Volume I: the concrete-universal is not an external, formal resemblance, but the actual, real unity of a concrete whole in its genetic development (this is the content given to this concept in the works of E. V. Ilyenkov).
3 Without request, without bribery, without feasting (Latin).
At the same time, the genesis of postindustrial society (in the terminology of Marxism, the "decline" of the "realm of necessity," the era of the dominance of material production) objectively also gives rise to opposite tendencies — toward the abolition of the division of labor, based on the progress of universally accessible creative activity — but these tendencies are precisely what contemporary corporate capital holds back, while it intensifies the opposite tendencies (the orientation of education toward the mastery of a set of narrowly specialized knowledge, and of science toward narrowly positivist, mainly applied problems1).
But the most important change in the nature of the social division of labor, characteristic of the contemporary total market, is connected with the development of global socialization and information technologies. In place of an atomic structure (separate producers and their connections) comes a "viscous" and amorphous structure, formed as the mutual overlay of various networks. Both the "actors" and the connections between these actors become networks. They can be compared to a system of webs, constantly spun and interwoven by some "spider." These are flexible, amorphous formations that rapidly change their configuration, while at the same time remaining under the rigid control of the power center that forms them (the "spider"). This picture can be illustrated with examples from the production of information products, where the corporate centers that control this sphere are constantly re-weaving networks for the production of one development or another. Or with examples from the sphere of financial speculation, with its multi-level "webs" of transactions controlled by "rainmakers," or even with examples of automobile production, where the assembly plant in some "Third" World country merely crowns a complex network of supply chains, managerial links, marketing operations, PR, and financial flows, "woven" by this or that TNC for the specific conditions of assembly and, above all, of sale in that particular country.2 Thus arises a total market of networks, in which the place of separate, isolated units is taken by amorphous networks growing into one another, acting in most cases either outside material production or in border areas — in particular, in the sphere we have called the "perverted (useless) sector." This is a sector in which goods that promote the development of human qualities are not created (most of finance, bureaucratic administration, the military-industrial complex, mass media, mass culture, and so on). But at the same time this is precisely the sphere in which the most contemporary forms of the market are developing most actively.
1 Thus, in 2004 US business spent only 2.2% of its R&D expenditures on contract research at universities and at state and private non-profit research centers (Mindeli L. E., Khromov G. S. The State and Evolution of Scientific-Technical Systems in Industrially Developed Countries. M.: IPRAN, 2008. P. 19). According to data for 2006, of the 342.8 billion dollars appropriated for R&D in the US, 18.5% was spent on fundamental research. Of this sum, 55% went to universities and 40% to state laboratories (Research Universities of the USA: The Mechanism for Integrating Science and Education / Ed. Prof. V. B. Sunyan. M.: Magistr, 2009. Pp. 18, 74).
2 See: Castells M. The Rise of the Network Society. Malden – Oxford: Blackwell, 1996.
a market resting not simply on the social division of labor, but on the phenomena of dependency and subordination created by monopolistic tendencies, arising among various capitals. These ties, based on dependency and subordination, have the
character of flexible, changeable, not rigidly fixed, reconfigurable networks
economic forms that perversely reflect the content of production relations, to the point of creating an appearance directly opposite to their content
that part of capitalist production in which goods are created that are mainly not oriented toward the development or reproduction of human qualities, or toward the creation of the corresponding intermediate goods. This sector is not only useless but also perverted, since it is based on perverted economic forms, and the useless goods created within it are, for the most part, not material goods (even if these possess a fictitious utility), but likewise perverted eco[nomic forms]. One of the forms closest in its technological nature to the corporate-network market is the so-called "network enterprise," in which a unified system of information and standards links thousands of nodes into a single "just-in-time" production chain
for a specific consumer.1
The networks that form in the perverted sector, as well as network-enterprises, differ in principle in their characteristics from ordinary industrial links of the social division of labor, since they:
• are connected with the genesis of postindustrial technologies;
• are mobile, amorphous, weakly "centered," that is, weakly tied to a definite "place" (in terms of industry, territory, and so on);
• are potentially (and in a number of cases — the Internet and the like — actually) worldwide and unbounded;
• are indeterminate in their size and boundaries (indeterminately large/small) and constantly change their scale (growing, contracting, pulsating)...
This list could easily be continued, but something else is of fundamental importance. A significant change is taking place: a transition has begun from mass industrial production at separate specialized enterprises, working for a mass of unknown consumers, to individualized, late-industrial production with elements of the postindustrial, carried out at numerous networked enterprises and oriented toward specific consumers. In this case, a particular network (cooperation) of producers may form for each individual consumer. But alongside this there may also exist other, non-production networks, and networks oriented toward satisfying mass needs, and many others. At the same time, each such network is ultimately controlled by one or another corporate capital (or combination of them). Let us stress: this transition has only just "begun," and it is proceeding non-linearly, but the trend is unmistakable. Nor is this simply a matter of the development of small business: in the new century it is precisely the large corporations that are increasingly building their production in more diverse and targeted ways. They are, so to speak, making it more concrete.2
1 Researchers have been writing about this for decades. See, for example: Reich R. B. The Work of Nations: Preparing Ourselves for 21st Century Capitalism. N.Y.: Vintage Books, 1992, as well as the works of M. Castells on the network economy mentioned above.
2 In this context it is understandable that the phenomena noted by foreign authors already in the last century and generalized by V. L. Inozemtsev — the contraction of mass production (Inozemtsev V. L. The Split Civilization. M.: Nauka, 1999. Pp. 36, 41) and the development of individualized production (ibid., pp. 57, 60) — can indeed be regarded as characteristic features of the postindustrial system, but should not be absolutized or reduced, as some researchers have done (though not V. L. Inozemtsev), to a process that unfolds unambiguously and linearly.
It is significant that this tendency manifests itself in the sphere of material production as well. In this connection, let us note: following whatever happens to be fashionable in economics, some theorists, having noticed the popularity of the topic of reindustrialization — the need for which has been discussed not only in Russia but also in the US — are inclined to throw out the baby with the bathwater and declare all aspects of "postindustrialism" regressive. We have said more than once that the tendency to replace the production of goods people actually need with the creation of simulacra, and to displace the real sector with the perverted one, is indeed a purely reactionary tendency. But the transition from predominantly reproductive industrial labor to predominantly creative postindustrial labor can and should occur in the real sector of the economy as well. Moreover, it is precisely there that it should occur first and foremost. These changes, despite the continuing processes of financialization and the like, are occurring in the contemporary capitalist economy too. New material production, based on high technologies, is becoming increasingly postindustrial and "concretized."
This applies even to such "old" branches as the automotive industry. Even in this traditionally industrial sphere, today's "just-in-time" production technologies, "lean production," and similar contemporary forms require strictly specific, precise connections between suppliers and consumers, calculated literally to the minute. Orientation toward the specific consumer is also very widely developed in this sphere, manifesting itself, in particular, in the great variety of configuration options for base models. And this is an example of concretization penetrating even into mass production.
In the sphere of high technology in material production and in the creatosphere (microbiology, nanotechnology, space, contemporary medicine, education, the creation of know-how), this concreteness is the dominant principle of the organization of production (in the broad sense of the word — including exchange, distribution, and consumption). Thus arises concretely-oriented production, characterized by increasingly clear and unambiguous connections among suppliers, producers, and consumers. Nor is this an entirely new tendency: Marxist authors who analyzed the real socialization of production were already writing about it in the twentieth century, as we have pointed out more than once above. Such a change in the social division of labor cannot but be connected with a new quality of the separateness of producers. In place of the separateness of private commodity producers and commodity owners, operating at their own risk (one of the deep-seated features of any market), comes the total power of transnational corporations, which at the same time (NB! Note this dialectic!) itself generates the appearance of a "renaissance" of small business and free competition. Moreover, it is only within this seemingly free-competitive environment, and by means of it, that this power can develop. Let us examine this dialectic in more detail. The separateness of the subjects of the global market is quite specific, and breaks down into two large types of agents (actors) in the "network market." The first are the corporate capitals (the corporate "core," the "spiders") — those who form the field of dependency (the web).
They (1) are not so much a special kind of private producer as complex cooperative labor organizations of gigantic scale (qualitatively speaking, on a scale of market activity comparable to the economy of a medium-sized developing country), an imperium in imperio.1 At the same time, however, unlike the monopoly capital of the beginning of the century, they are, as a rule, (2) organized not as highly concentrated concerns or combines, but as amorphous web-networks (fields), in which the actual TNC-spider (the generator of the field) controls the entire system.
1 A state within a state (Latin).
As such, these "spiders" (3) are capable of creating a "web" (field) — of exercising local (partial, colliding with the struggle of other corporations) conscious influence not only over certain basic market parameters, but also over the "rules of the game." In order to exert this regulating influence, the "spiders" need an institutional environment which (4) as it were "restores" the appearance of free competition through a relative reduction in the regulating role of the state. It is significant that this is precisely an appearance, or more precisely — a simulacrum of a free-competitive environment (hence the phrase "as it were" above). In fact, they (5) influence (together with the state) the degree and parameters of their own separateness (including antitrust regulation) and the degree of separateness of their counterparties, creating, through a system of manipulation and other channels of "market power," a system of dependency of the latter on the "spiders." Finally, the "spiders" (6) are owned by an indeterminate and constantly changing circle of legal and natural persons (this indeterminacy — or more precisely, the complex specification of property rights, hidden from the outside observer — is one of the fundamentally important features of these networks); at the same time, however, there exists a narrow circle of hidden insiders who possess real economic power over the corporation (who actually control the key property rights). This last point requires special clarification. First, formal property rights differ substantially from real ones. Second, even in the sphere of formally fixed rights, the possibility of using the achievements of information technology to "track" the entire set of constant changes in the system of property rights — changes especially intense under the dominance of virtual capital (a particular kind of fictitious, financial capital, discussed in more detail below) — is to a large extent illusory. The complexity of the system stems not simply from the diversity and mobility of information, but from the fundamental uncontrollability and unknowability of the interweavings of these mutual-ownership rights. This has to do not only with commercial secrecy in this area, but also with the development of informal ties as one of the key components of the "bundle" of property rights, as well as with access to insider information and considerable ingenuity in misleading informational oversight. Already today one can trace large-scale tax evasion carried out through offshore structures,1 "tax optimization" schemes,1 and the like;
we also all know the term "misuse of funds"1... At high enough stakes, truth ceases to exist. All that remains are hypotheses. Various versions... The second type of agent in the network market is clients ("the periphery," the "flies") — those who are woven into the web, subordinated to the "field of dependency," and function within the limits formed in the course of the struggle among these spiders. These are, above all, end consumers, who are the objects of economic-cultural-ideological manipulation (marketing and, above all, advertising, "PR," client dependency...), but, as we have already said, not only they. The small and medium business sector, sustainably reproduced only with state support, is also an object of such manipulation; government bodies at the regional, federal, and supranational level, and even entire countries whose economies these networks can "pave over" — this is far from a complete list of the "flies." To continue with these images, this market, with the two types of agents named above — TNCs (the "spiders") and their clients (the "flies") — can be compared to an aggregate of powerful webs, or a kind of field of socio-economic "gravity," of dependency, whose centers of formation (the field generators, the "spiders") are the largest corporate capitals, agents of globalization (more on them at the end of the book), above all TNCs. Thus arises a total corporate-network market — a market of webs. How the large corporate capital-networks interact with one another, how the battle among these "spiders" unfolds — we will characterize this below; for now, let us move from the images characterizing the total market of networks to its politico-economic characteristics.
1 "Offshore business is mutually beneficial. Companies registered offshore, for instance, no longer need to pay the high taxes adopted, say, in the Russian Federation. Confidentiality of all transactions carried out, stability of economic life, and de facto political independence — all this makes offshore zones an excellent place to conduct business" — so runs the pitch inviting registration in offshore zones on the portal http://www.offshoreport.nj/newcompany.html; "The head of the Accounts Chamber, Sergei Stepashin, announced the agency's plans to audit the offshore-zone operations of major state-owned companies" (see: An Audit for Ties to Offshore Zones // Financial Gazette. 01/13/2012. Electronic version available at: http://finKazeta.ni/financial_markets/173803); Experts commented as follows on the claim, made in the program of the "Just Russia" party, that 70% of the assets of Russian companies are registered offshore: "I don't know how accurate this is — special studies would need to be done. But that most large companies are controlled through offshore structures is an unquestionable fact" (Andrei Nechaev, president of the "Russian Financial Corporation" bank. Most Large Companies Are Controlled Through Offshore Structures // Financial Gazette. 12/26/2011. Electronic version available at: http://fingazeta.ru/opinion/173549/?sphraseid=1831). In the first half of 2011, four countries (the British Virgin Islands, Ireland, the Bahamas, and Cyprus) accounted for 66% of foreign direct investment in the Russian economy (see: http://zhu-s.livejournal.com/188703.html). It is clear enough that this is not "foreign investment" at all, but simply the repatriation of Russian capital hidden in offshore zones.
1 The tax service is developing special methodological guidelines designed to help uncover typical tax evasion schemes. For example, the internal letter of the tax service dated April 21, 2004, No. 06-3-06/425dsp, to which are attached Methodological Recommendations for Identifying Tax Evasion Schemes Used by Construction Organizations (see: Khazheeva A. Schemes for evading taxes: how tax officials detect them // Dvoinaya Zapis. 2004. No. 8). One may also note the subtitle of the magazine "Practical Tax Planning" — "A magazine on how to safely save on taxes" (see: http://www.nalogplan.ru/). 1 According to the Federal Financial and Budgetary Supervision Service (Rosfinnadzor), the improper use of budget funds increased by 60% in 2010. Improper expenditure of funds and material resources in 2010 amounted to 45.475 billion rubles compared with 39.178 billion rubles in 2009. Total budget expenditures in 2010 amounted to about 10 trillion rubles (see http://www.gazeta.ru/financial/2011/05/06/3606737.html). Gazprom, like other state companies, is regularly audited by the Accounts Chamber. As a result of one such audit in September 2011, it emerged that in 2009 the gas monopoly lost $1 billion due to improper expenditures (see: An audit for offshore links // Finansovaya Gazeta, 13.01.2012. Available online at: http://fingazeta.ru/financial_markets/173803)
The socioeconomic nature of the "field of dependency" generated by the largest corporate capitals consists in multiplying the effect of that "incomplete planned coordination" which monopoly capital has been generating since the late 19th and early 20th centuries. This multiplication is achieved through a whole series of achievements of more than a century of e- (and in-)volution of late capitalism. First, characterizing the technological foundations of this "field," we can emphasize that recent decades have shown not only the persistence of the classical trends toward growing socialization in the sphere of traditional industrial production (in particular, in the countries of the "Third" world), but also a qualitative change in this process due to the development of general (creative) labor, which leads to an ever-wider deployment of the aforementioned "network" system of division and integration of labor on a global scale. Control over modern high technologies in general, and over the technologies of forming and operating networks in particular, constitutes the material basis of the manipulative effects of corporate capital. Second, the transition from the original forms of monopoly capital to network corporations has preserved the main features of the former. In particular, the processes of forming various types of monopolistic associations (from the simplest pools to cartels and syndicates) are being preserved and even revived, some of which have had and continue to have a "shadow" character. A relatively new phenomenon here is the formation of "secondary" associations, which unite into more or less legal alliances not individual enterprises but giant corporations. Moreover, the process of concentration and centralization of capital, which had seemed to slow down in the second half of the 20th century, has noticeably accelerated in the new century (especially on the eve of the 2008–2010 crisis): the subject of mergers and acquisitions became one of the most discussed among economists in the first decade of the 21st century. These new impulses and forms of the processes of concentration and centralization have become the basis for exploiting a broad range of advantages. These are not only the long-known mechanisms of using a high level of concentration and centralization of capital to extract monopoly profit, but also a number of other mechanisms, partly, as we have already noted above, theoretically identified in works on the political economy of imperialism of the Soviet period and described "positively" by the new institutional theory. Among these one can distinguish "old" and "new" forms of regulatory influence exerted by the largest corporations on their market counterparts. Among the former are various mechanisms for pursuing monopolistic policy through the manipulation of (1) market prices, (2) non-price parameters (here the formation of brands and other simulacra is of paramount importance, discussed below), as well as (3) the rate of profit and (4) the direction of investment policy. The material prerequisites for this are (5) the possibilities of flexibly changing the parameters of concentration and specialization, and, most importantly, (6) optimizing the forms of cooperation and organization of production, sales, management, and so on within large economic networks.¹ All this creates opportunities for a relative reduction in production costs and transaction costs, and/or the monopolization of certain resources, and/or the possession of especially significant market resources, and/or the conquest of markets and new revenues through the production of simulacra, and so on. Among the relatively "new" mechanisms of manipulating market agents one can include (7) mechanisms of "personal union" — direct influence on owners and/or top managers, or, better yet, on the shadow insiders who actually control "partner" firms.² No less effective is the creation and use of (8) advantages in access to information and (9) artificial information asymmetry. To accomplish these tasks, both well-known marketing mechanisms (above all, advertising), PR, and similar forms are used, as well as the deliberate formation of simulated needs, the production of simulacrum-goods, the "cultivation" of simulated image-structures (a typical example being show-business "stars"), and similar mechanisms, which we will turn to specifically below.
1 Let us emphasize: what is specific to the contemporary local regulation of the market by large corporations is the use not so much (or not only) of a high level of concentration and specialization of production and capital (this was characteristic of the countries of the "center" in the early 20th century and remains typical of the countries of the [semi-]periphery, and, in particular, of Russia today) as of the flexible management of these parameters, and, as already noted, of the parameters of cooperation within networks. 2 How can one not recall the famous Russian saying: "Why buy the plant when you can buy the director?"
Let us allow ourselves a small digression, since the authors would like to devote some additional attention to the problem of advertising. Among the thousands of researchers of this problem, only a few critically minded authors (Galbraith, Baudrillard, Klein, and others) emphasize the manipulative character of this phenomenon. And not all of them specifically point out that advertising, as a method of manipulation, inevitably contains a certain measure of unreliability and distortion of information about the advertised object — or, to put it more simply and precisely, a certain measure of lying. It may be direct (the ubiquitous toothpaste commercials featuring actors with dentures) or indirect (the claim that eating a chocolate bar will bring you "heavenly bliss"), but it is deception all the same. It is not customary to write about this in marketing textbooks, but any advertising practitioner knows that "if you don't deceive, you don't sell." The question, however, is the degree of this lying, for here (unlike in propaganda, where "the more monstrous the lie, the more effective it is") excessive defamation may trigger a rejection effect toward the product. This is a truism, but a truism that allows us to formulate a certain pattern by drawing a "Curve of the dependency of advertising effectiveness on its degree of falsity." This curve would look simple: an initial rise in effectiveness as the falsity of the advertising increases, up to a certain inflection point (let us call it, in the spirit of a political-economic game, the "optimum of lying"), followed by a decline in advertising effectiveness down to zero at excessive levels of unreliable information...
So, the second block of channels of influence on "clients," formed by the "field of dependency" created by corporate capital, can be defined as a system of total manipulation of resource allocation and economic actors. Above we identified only six parameters of such manipulation, but even this is enough to show that this is not simply an undermining of the separateness of commodity producers. It is already something more. But even this is far from being all the secrets of the "field of dependency."
Third, this "field of dependency" includes a system of diverse channels of financial subordination of the clients of corporate capital. The system of "financial webs" has by now been described in considerable detail, but most theorists do not link it to the problem of undermining market mechanisms of self-regulation and competition (as evidence of this, note that neither the Lerner index of monopoly power or the Herfindahl–Hirschman index, characteristic of neoclassical theory, nor the list of channels of "market power" proposed by the new institutional theory, includes parameters of financial dependence). Meanwhile, the system of channels of financial dependence is one of the most important blocks of subordinating the economy to corporate capital. The basis for this is the fusion of banking and industrial monopoly capitals and the formation of unified finance capital — described as far back as in the works of V. I. Ulyanov and Rosa Luxemburg¹ (who in turn critically drew on the research of R. Hilferding and K. Kautsky). We will discuss the contemporary form of the latter below; here we will note that this capital allows, at a minimum,¹ the following tasks to be accomplished:
(1) To consciously record and control the transactions of the corporation's clients. Let us mention just two examples. One of them — perhaps the simplest form of accounting and control — is the discount card of a retail chain supermarket. It gives the owners of the corporation almost exhaustive information about all the transactions of the overwhelming majority of its clients in real time, which makes it possible not only to forecast but to plan future sales volumes with very high accuracy, since the medium- and long-term trends of the main purchases of the "middle class" are very stable. Thus, what would seem to be the most "market-driven" of all possible spheres — the retail trade of everyday consumer goods — becomes a sphere of local planning, and not merely regulation. A second example — the old form of banking client service — hardly needs any commentary. Here we are talking about information that cannot be a commercial secret for the bank, since it is the very object of its activity. At the same time, the bank does not pass this information on to "third parties": it is itself part of the "third party" — a complex financial-industrial corporate structure. (2) To create systems of preferences (or of difficulties) in financing (credit, investment, guarantees, securities issuance...) for the clients ("flies") of the network corporation ("the spider"), pursuing a policy of deliberate credit-and-financial regulation of certain spheres of the economy — those where the given "spider" has already spun, or is spinning, its web, and where it cannot be interfered with by other spiders. (3) To carry out long-term development programs (including R&D, programs for "cultivating" human and social "capital," education in particular), which is especially important for ensuring sustained leadership and preserving (strengthening, developing) the monopolies of corporate capitals over high technology and knowledge-intensive production in general. The fusion of finance capital with the capital of the real sector in corporate structures comparable in scale to states allows these "private" agents to carry out development that is programmed and, to a significant degree, independent of at least the current market situation (states, too, suffer from global crises...). As a result, corporations form post-market mechanisms of development even in those spheres that were previously accessible only (predominantly) to the state. The list of channels of regulatory influence of finance capital could be continued, but that would already involve the subject matter of the next subsection, so let us move on in our study.
Fourth, as we already noted above, corporate networks form a complex and fundamentally non-transparent system of relations and property rights, which become one of the channels for subordinating the corporation's "clients" to the nomenklatura of global capital. This theme will be examined in more detail below; here we would like to note only a few of the most striking phenomena. One concerns the "periphery" of corporate influence — this is the "inclusion" in the corporation's ownership of a broad circle of, above all, "rank-and-file" employees. The latter, by turning into small shareholders of the firm, become in this case not so much owners (of all property rights, they possess only the right to receive dividends, the size of the allocations for which is not determined by them) as persons dependent on the corporation. They objectively develop an attitude toward the true owners of corporate capital not as toward an opposing class (the exploiter of their wage labor) or even as toward the opposite party to a market transaction (those to whom one must sell one's labor power as dearly as possible in exchange for a minimum of one's labor), but as toward partners in profit extraction. Supplemented by a system of social partnership and steps to implement the "doctrine of human relations," this dependency turns into a dense web of subordination of the corporation's employee. Thus we arrive at the problem of new forms of the subordination of labor to capital.
1 See: Buzgalin A. V. Rosa Luxemburg: answers to the challenges of the time // Alternativy. 2012. No. 2. 1 Note that, unlike contemporary Western theories, "old" Soviet political economy studied, generalized, and depicted this dependency in a perfectly clear manner, although (let us be self-critical) in a rather apologetic form. A somewhat similar (though less ideologized) analysis of finance capital was given in the 20th century, and is given at present, in the works of foreign Marxists. For more detail see: Zapetny A. A. Finance Capital: A View from Within. Moscow: TEIS, 2014.
The second phenomenon is the "intertwining" of certain secondary property rights of the corporation's "core" and the relatively independent firms that make up its "periphery" (outsourcers, distributors, subcontractors, sub-suppliers). The term "intertwining" is deliberately placed in quotation marks, for it reflects only the appearance of the phenomenon, beneath which lies a system of relations of subordination of "clients." Behind the "partnership agreement" with its "equality of the parties" lies control over the activities of clients and its regulation by the corporation's "core," including through the monopolization of a number of key property rights (control over information, financial flows, small shareholders, and so on), the formally equal exchange of which takes place between participants in this transaction possessing "unequal bargaining power." The third phenomenon is insider control, which leads to the redistribution of a significant part of property rights and their objects, as well as of income, in favor of the "core" of the corporate system. This core consists of a symbiosis, unified in its interests (and sometimes even in its personal composition), of majority shareholders and top managers, who do not necessarily own a controlling stake or occupy the highest formal positions in the managerial pyramid, but who monopolize key property rights — information, "intellectual capital," financial and personnel control, personal union with state structures and key partners ("authority").
We shall define this "core" as the "nomenklatura of corporate capital." Fifth, completing the system of channels of the field of dependency is a block of supra-economic mechanisms of power-ideological influence exerted by the "core" on the corporation's system of clients. This is a sphere of a kind of politics and ideology, carried out not by the state (understood here as a system of organs of power — administration and coercion) but by the corporation's "core." The latter, in this function of it, acquires the quality of a "quasi-state," having a different genetic nature than the state (hence the prefix "quasi"), for it arises on the basis of the economic power of corporate capital rather than as a product of social-class struggle (on the surface of phenomena in contemporary capitalist countries — a political process). These channels of power, in the literal sense of the word, are formed as a result of the negative (regressive) sublation of the achievements of social reformism: under conditions of a "neoliberal Thermidor," some functions of the state as, to a certain degree, a democratic institution representing (again to a certain degree — determined by the balance of socio-political forces) the interests of society as a whole are partially privatized by the nomenklatura of the largest corporations.
The largest corporations (at present, almost entirely transnational): (1) exert influence on the formation not only of market parameters but also of the socio-institutional parameters of economic life — what institutionalism calls "the rules of the game"; the parameters of the legal field and of current state administration are increasingly (regarding its qualitative and quantitative parameters, more detail is given in the section on the political forms of the hegemony of corporate capital) determined by the struggle among corporations;
продолжение следует...
Часть 1 Chapter 1. The Total Market of Networks
Часть 2 1.3. Cooperation and struggle among corporate networks (the "market of
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