What do capitalists do?

Posted: 15 May 2013 in Uncategorized
Tags: , , , , , , , , ,
H-Fire-Station-4

Robert Venturi, Fire Station No. 4

I often invoke Columbus, Indiana in my lectures.

One reason is to suggest to my students that they might shed their prejudices about Indiana and explore some of what the state has to offer—instead of staying on campus and complaining there’s nothing to do except attend football games.

The other reason is to encourage them to question what it is that capitalists actually do. When I ask them, the usual response—consistent with the neoclassical theory that has been presented to them as the only economic theory worth considering—is: “capitalists maximize profits.” (That’s equivalent to the neoclassical rule concerning consumers, that they “maximize utility.”)*

Well, no: capitalists do lots of different things. They do make profits (at least sometimes, but over what timeframe are they supposedly maximizing those profits?). But they don’t follow any single rule. They also seek to grow their enterprises and destroy the competition and maintain good public relations and buy government officials and reward their CEOs and squeeze workers and lower costs and build factories that collapse and. . .well, you get the idea. In other words, they appropriate and distribute surplus-value in all kinds of ways depending on the particular conditions and struggles that take place over the shape and direction of their enterprises.

And Cummins Engine Company is a good example, since it has distributed a good chunk of the surplus it’s managed to appropriate over the years to subsidize the design of gems by a litany of important American architects: I. M. Pei, Harry Weese, Robert A. M. Stern, Richard Meier, Kevin Roche, Robert Venturi, Cesar Pelli and others. In Columbus, Indiana of all places!

My point to the students is not that Cummins is an example of a “good capitalist” as against other “bad capitalists.” No, the idea is that capitalists—whether in the United States or Bangladesh—do lots of different things, and presuming they follow a simple rule means missing out on the complex, contradictory dynamics of capitalist enterprises and therefore of capitalism itself.

 

*It’s also equivalent to what one hears from many so-called radical economists, that “capitalists accumulate capital.” Again, no. Accumulating capital (that is, purchasing new elements of constant and variable capital) is only one of the many possible forms in which capitalists distribute the surplus-value they appropriate from their workers. Sometimes they accumulate capital, and other times they don’t. The presumption that they always seek to accumulate capital is the heroic story proffered by classical economists (so that, in their view, capitalist growth would take place), much as neoclassical economists today presume that capitalists maximize profits (so that, in their view, an efficient allocation of resources will result). Marxists presume neither that capitalists maximize profits nor that they always and everywhere accumulate capital.

Comments
  1. Bruce Norton says:

    Vivid stuff about basic differences in theoretical frameworks. Bravo.

  2. Magpie says:

    It’s posts like this that make yours an excellent blog and part of one’s education.

  3. […] more, Price’s decision proves once again (as I argued back in 2013) that “capitalists do lots of different […]

  4. […] know I’ve made the argument that capitalists are not all the same (using the example of the Cummins Engine Company). But the actions of TOTE Maritime, which owns El Faro, certainly demonstrates the continuing […]

  5. Todd Heller says:

    Nothing to do? A short train-ride from Chicago? Poor students! I’ve conducted environmental audits at a Cummins engine assembly plant in Columbus, IN. This is a magnificent, mostly underground manufacturing facility, with very impressive energy savings features. During the height of production, you can look out the wide, narrow windows and see deer grazing ten feet away. And I was convinced that they’re trying to do the right thing environmentally, but they can “afford” to.

  6. […] view, as I argued back in 2013, is that corporations have never done just one thing or followed a single rule. They […]

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