The General Theory of Capital: Self-Reproduction of Humans Through Increasing Meanings
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Introduction
“The level which a science has reached is determined by how far it is capable of a crisis in its basic concepts” (Heidegger 1962, p. 29).
“In matters of culture, haste and sweeping measures are the most harmful” (Lenin 1975, pp. 734-735).
The theory of capital has gone through many vicissitudes. First in classical political economy. Then in Karl Marx’s Das Kapital and the discussions around it in the late 19th and early 20th centuries. Then in the works of John Maynard Keynes, Friedrich Hayek and Frank Knight and their discussions in the 1930s. Finally in the Cambridge Capital Debate 1950s to 1970s. In fact, the investigation of the nature of capital ended with the dispute between the two Cambridges. The dispute itself has no clear conclusions other than that capital is the result of human activity, which is obvious since capital does not exist in nature outside of human culture. After the fall of the socialist camp, there were no broad discussions about the nature of capital. Thomas Piketty’s Capital in the Twenty-First Century (2013), although it contains the word “capital” in its title, does not attempt to re-explain its nature. It is time to reexamine the issue of capital using the insights of economics and other sciences.
The development of the theory of capital inevitably requires reference to the works of Marx. Because of its historical influence on the thoughts and destinies of people all over the world, Marxism is a stumbling block that cannot be bypassed or pushed aside. The influence of Marxism is determined not only by the unity of its theoretical form, but also by the integrity of its ideological content. Marxism as a theory and ideology must be overcome, and this cannot be achieved by its total denial. Marxism can be overcome only by developing a more general theory and a more relevant ideology, in relation to which the results of Marx would be only a special case.
The general theory of capital requires taking into account the achievements of economic science after Marx—the Marxist, neoclassical, Keynesian, Austrian, neo-institutional and other schools. If a general theory of capital is possible, these competing theories must ultimately be, to some extent, special cases of it.
To understand the nature of capital, we must consider its historical, logical and practical limits. It is not enough to trace the lower historical limit of capital, the path of its emergence from traditional society. It is also necessary to chart its upper limit, the path of its transition to another society that comes after capital. What will this other society look like? This question is of great importance for the construction of a general theory of capital. Considering these two limits dictates the structure of our book. It consists of three parts devoted to the origin, the peak and the decline of capital.
The first part of the book is devoted to the lower limit, the origin of capital from traditional society. It is impossible to develop a theory of capital without a concept of money and prices. The path to capital inevitably leads through exchange value, so we must return to the labor theory of value and the marginal utility theory to find their common ground. The lower limit of capital can only be understood by turning to abstract questions about human culture, its origins and its development. Here we must repeat after Albert Einstein:
“The initial hypotheses become steadily more abstract and remote from experience. On the other hand, it gets nearer to the grand aim of all science, which is to cover the greatest possible number of empirical facts by logical deduction from the smallest possible number of hypotheses or axioms. Meanwhile, the train of thought leading from the axioms to the empirical facts or verifiable consequences gets steadily longer and more subtle. The theoretical scientist is compelled in an increasing degree to be guided by purely mathematical, formal considerations in his search for a theory, because the physical experience of the experimenter cannot lead him up to the regions of highest abstraction” (Einstein 1954, p. 282).
In order to clarify the starting points of the general theory of capital, we are in many cases forced to resort to formal and abstract reasoning. However, there are no mathematical formulas in our book.
The second part of the book examines capital at its peak. Paradoxically, at least since the 19th century, the opponents of capital have contributed no less to its success than the capitalists themselves. Marx developed and began to implement a strategy in favor of the working class. Antonio Negri even calls Lenin a “factory of strategy” (Negri 2014). Insofar as the ultimate goal of Marx and Lenin’s strategy was the “emancipation of labor,” it has not been yet achieved. Soviet socialism and Western capitalism have been unable to solve the problem of coordinating personal and public interests. The East could not cope with the dictatorship of the plan just as the West cannot cope with market anarchy. The mixed economy that Paul Samuelson hoped for (Samuelson and Nordhaus 2010, pp. xvi-xvii) offers no answer. The “mixed economy” is a purely external combination of planned and market approaches, it does not provide an understanding of the inherent processes and therefore does not allow us to change society. We need a new model that takes into account the deep laws underlying the advance of technologies, institutions and ideas.
There were gaps in Marx’s argument that indicated promising avenues for further research. These gaps were due to both objective factors (the state of science and society at the time), and subjective factors (that is, Marx’s ideology). We mean the following points:
● Reducing the complexity of labor to the ratio between simple and complex labor and the associated disregard for changes in the complexity of the labor power and society as a whole;
● Considering surplus value as the result of the labor of individual workers, considering gross surplus value as the result of the labor of the working class;
● Focusing on only one side of the capitalist process—socialization, without working out the other side—individualization—in sufficient detail;
● Disregarding limitations on population growth, etc.
The third part is devoted to the upper limit of capital, its final transition. Marx formulated the conditions for the capitalist reproduction to cease: a fall in the rate of profit and the demise of capitalist private property. However, neither Marx nor his followers were able to describe the reproduction mode that would replace the capitalist one. The non-economic exploitation and state ownership on which 20th-century socialism was based were more a return to what preceded capital, than an advance to what will follow it.
We propose to view Marx’s work not as a scientific or political activity, but as developing and implementing a strategy on the scale of human history. We, in turn, are not developing a strategy, but are trying to paint an image of the historic future. It would be pointless to rewrite Das Kapital without offering an image of the future after capitalism.
Let us consider Marx’s ideas not as a finished product, but as a work in progress. Friedrich Engels wrote in the preface to volume III of Das Kapital that the opponents of Marx “rest upon the false assumption that Marx wishes to define where he only investigates, and that in general one might expect fixed, cut-to-measure, once and for all applicable definitions in Marx’s works” (Marx and Engels 1975-2004, vol. 37, p. 16). We too do not want to give definitions that are valid “once and for all,” we do not want to form beliefs in the reader, we do not intend to speak out against the reader’s beliefs. As is well known, beliefs are what divide people, doubt unites them. This work does not offer ready-made answers or recipes. It is a research program and a set of research tools:
“The object of our analysis is, not to provide a machine, or method of blind manipulation, which will furnish an infallible answer, but to provide ourselves with an organized and orderly method of thinking out particular problems” (Keynes 2013, vol. 7, p. 297).
Marx’s theoretical works were designed for such a long-term perspective that even in the 21st century it is best to read them in a futurological context. At the same time, the 20th century witnessed such tragic experiments in their practical application that many people find it difficult to even turn to them due to moral aversion or indifference caused by years of propaganda. Before saying goodbye to Marx, however, we must make an effort to return to him once again.
Part one. Simple self-reproduction
“…Just as society itself produces man as man, so is society produced by him” (Marx and Engels 1975-2004, vol. 3, p. 298).
“…Societies are much messier than our theories of them” (Mann 1986-2013, vol. 1, p. 4).
Chapter 1. Traditional society and simple consumption
1. Co-evolution of humans and meanings
Henrich-Popov bridge and the first needs trap
The human culture presents itself as an immense accumulation of meanings, its unit being a single meaning. The co-evolution of humans as living subjects of culture and meanings as its growing substance is the essence of all human history.
In its origin, meaning is a mutual adaptation of the natural environment and the human species living in it. In the course of this mutual adaptation, the natural environment became a toolbox for human self-reproduction, and the behavior of protohumans became its practice. Meaning is a mediation, a niche in the habitat created by the human species for survival. Humans evolved from animals because and when animals had to resort to extra-biological, meaning mechanisms of self-reproduction. Biological traits are transmitted through genetic inheritance, and cultural traits are transmitted through communication with other people, primarily in childhood. As is known, it is impossible to teach animals (including monkeys) to speak, since their body and behavior do not have the properties necessary for this. And the incidents with the feral children (Mowgli) show that it is impossible to teach a person older than about 12 years to speak, who as a child was completely isolated from communication with other people.
In the early stage of human evolution, that of natural selection, the very first meanings functioned as a continuation of the animal organs of hominids and as a differentiation of their animal signals. Just as a stick or a stone was an extension of the hand of prehistoric man, the various calls or gestures that warned of different dangers (e.g., from the ground or from a tree) were variations of animal signals. In this early stage, meanings were only a continuation of animal behavior, and their transmission occurred through so-called “animal traditions.”
As Vaclav Smil notes, the earliest feature that distinguished hominids from other animals was not the larger brain or toolmaking, but the structurally unlikely transition to upright walking, which began about 7 million years ago. Compared to chimpanzees, it saved 25 percent of energy, freeing the hands for tool-use, mouth and teeth for a more complex system of sound signals, i.e. proto-language. These changes demanded a larger brain with energy requirements three times higher than the brain of a chimpanzee (Smil 2017, pp. 22-23). Of course, upright walking itself demands an explanation that cannot be reduced to an unlikely accident. However, as Joseph Henrich notes, the precise evolutionary sequence in which meanings arose—gestures, vocal speech, social norms, tool-use—is not crucial, since cultural evolution created significant genetic pressure in all directions. If the freeing of the hands led to the development of language, then the evolution of tongue freed the hands for using tools, preparing food, and maintaining balance when chasing prey (Henrich 2016, p. 252).
Culture as an accumulation of meanings begins when an animal species goes beyond the limits of natural selection or mere adaptation to the environment and begins to adapt the environment to its needs, that is, it forms its own niche in the environment. The formation of a niche means, first, that the animal’s organs and their functions go beyond the animal’s body: part of the environment becomes a “continuation” of the organism. An ape, for example, takes a stick to “extend” its arm and pull termites—its favorite food—out of a termite mound. Second, the organism gradually changes due to its own niche-altering actions: for example, an increase in brain size in humans with the development of meaningful actions. The evolution of meanings is the evolution of indirect, roundabout, instrumental and symbolic behavior aimed at building a niche within nature, a domus for humans.
Henrich notes that cultural evolution initially faced a start-up problem: it had to provide both a bigger brain and more meanings. A small brain cannot retain too many meanings, and a bigger brain is not needed if there is nothing to learn. So, how could we jump-start the cumulative engine of cultural evolution? To make a leap over a chasm that can only be crossed in two leaps, you need a “bridge.”
“Once cumulative cultural evolution is up and running, it can create a rich cultural world, full of adaptive tools, techniques, and know-how that can more than pay the costs of building and programming up a larger brain designed and equipped for cultural learning. However, in the beginning, there won’t be much out there to culturally acquire, and what is there will be simple enough that it will still be learnable by one’s own individual learning efforts (without social learning), by trial and error for example. Thus, natural selection may not favor larger brain size or complexity, because brains are costly to develop and program” (Henrich 2016, p. 297).
According to Henrich’s hypothesis, the “bridge” problem was solved by two intertwined pathways (Henrich 2016, pp. 298 ff.). First, by multiplying meanings without notably increasing the size of the brain: in open areas with many predators large hominid groups formed for collective defense and exchange of meanings. Second, by reducing the costs of creating and maintaining larger brains. Henrich believes that female hominids, in order to avoid inbreeding, left their group upon reaching sexual maturity and moved to the neighbors, losing all family ties. The formation of stable protofamilial pairs in large groups, in which the child’s kinship could be established not only through the maternal, but also through the paternal side, made it possible to form a circle of relatives of the mother by marriage, that is, the child’s relatives (alloparents). This spread the burden of child-rearing among a larger number of individuals, thereby extending both the time in which the child could acquire a culture and the size of his brain.
Other hypotheses can also be put forward regarding the “missing link,” that is, the practices of self-reproduction that made it possible to build a bridge between the mental abilities of higher primates and the intelligence of Homo sapiens, living in the world of symbols. Evgeniy Panov believes that the entrance to the bridge has been discovered, but most of it has not been preserved, and the remains may never be found (Panov 2012, p. 383).
The problem of a bridge between animals and humans has been the subject of endless debate. Charles Darwin believed that “the difference in mind between man and the higher animals, great as it is, is certainly one of degree and not of kind” (Darwin 1981, p. 105). However, Derek Penn and his colleagues write that Darwin was wrong and that the deep biological continuity between humans and animals masks an equally deep divide between human and non-human minds and between their ability to employ systems of abstract physical symbols (Penn et al. 2008). We do not attempt to resolve this problem here. Apparently, at some point the great apes could no longer reproduce within the animal behavioral program. At this critical point, the animals resorted to cultural practices of self-reproduction and cultural needs emerged. Protohumans fell into a “needs trap” in which their animal needs became cultural needs, their animal behavior became meaningful behavior, that is, human action.
Material social abstraction in action
If behavior is an adaptation to the environment, then activity is an adaptation of the environment to one’s needs. The “needs trap” meant that proto-humans now had to again and again transform the environment, including their own organisms and behavior patterns, into means of self-reproduction based on the transmission and processing of social information. After this critical point was passed, the degree of adaptation to the environment, the degree to which the needs of proto-humans were satisfied, was determined not only by their animal instincts but also by the sociality and abstractness of their actions. Benjamin Schumacher noted that information is a paradox: on the one hand it is material, and on the other hand it is abstract. If we want to share information, we must give it the physical form of a signal—sound, light, electricity, etc. However, information is abstract in content: the messages transmitted by signals are not identical to the signals themselves (Schumacher 2015, p. 4).
As an elementary form of culture, meaning is social information in action, that is, an action (and its result) that has social, material and abstract properties. This active gist of culture is missing in most of its definitions, here is an example: “…Culture is information that is acquired from other individuals via social transmission mechanisms such as imitation, teaching, or language” (Mesoudi 2011, pp. 2-3). In fact, culture cannot be reduced to information and methods of its transmission; culture is the aggregate of human actions and their results. Unlike genes, which are bound to organisms, meanings go beyond humans: they can exist not only in bodies, but also in events. However, going beyond humans, meanings can only exist in their actions. They are reproduced in human activity just as genes are reproduced in a living organism.
The self-reproduction of man as a cultural being is based on the evolution of all three aspects of human activity: abstract, social and material.
(1) The evolution of the abstract side of activity consists in the development of thinking (intelligence or reason), i.e. complex types of adaptation based on the repetition and specialization of signals (stimuli) and an enlargement of the brain. From this side, meaning is a reflection (description, mediation) of the immediate environment in the mind and activity of an animal, that is, an abstract action.
Human thinking evolved as an abstract act, but it remains a deeply emotional act rooted in animal instincts. Human activities are meaningful—they are based on gathering, sorting and processing information, accumulating knowledge and skills (experience), applying experience to solve problems. Collectively, this is called reason or intellect. But intelligence is only the tip of a vast array of dumb processes that grow out of cultural learning (Henrich 2016, p. 12). We call practices those behaviors that are based on learning, such as morals, mores, techniques, customs, etc. Thousands and tens of thousands of generations of humans have produced practices that have proven to be “smarter” than the intelligence of any individual or even a group. Natural evolution affects simple processes—instincts—that allow animals to adapt to a complex natural environment. Cultural evolution also affects simple processes—practices—that allow humans to adapt to their complex natural and artificial environments. Instincts, practices and intelligence are three basic types of behavioral acts, the distinction between which goes back to the works of Darwin (Krushinsky 1986, p. 134; Zorina and Smirnova 2006, p. 42).
(2) The evolution of the social aspect of activity relies on the human ability to transmit complex types of adaptation through non-genetic mechanisms, through communicating, and above all, through learning. Meaning is a social abstraction: it exists only in the joint activities of humans as subjects of culture.
Sociality is not an exclusively human trait. Although communication among apes is thought to amount to the exchange of emotions, in reality they go beyond emotional contact and exchange referential signals: they do not only signal danger, but also indicate the type of approaching predator. This ability to give referential signals is not innate, but develops in apes as they learn at a young age (King 2001, p. 33). Both animals and humans exchange signals that convey messages (information). However, the form and content of human signals differ from those of animal signals. If animal signals act as stimuli that require a direct, emotional reaction, then human signals are symbols that require an indirect, abstract reaction. Although a signal shows that something has happened and what the response might be, it does not require modeling of a situation (event) or programming of an action. In contrast to a simple signal, a symbol presupposes an event model and a response model appropriate for a particular event (Friedman 2019, part 1, p. 24).
As is known, apes are able to learn symbolic language, for example, Amslen or Yerkish (Zorina and Smirnova 2006, pp. 137 ff.). But they cannot learn human language—not only because of the peculiarities of anatomy, but also because their vocal responses are involuntary and purely emotional (Zorina and Smirnova 2006, pp. 103-104). Human symbols, and especially language, evolved from gestures, sounds and other signals exchanged between animals. According to George Mead, vocal gestures were of utmost importance for the emergence of symbols, since they modeled not only the behavior of the addressees, but also that of the authors of stimuli (Mead 1972, pp. 61 ff.). According to Vladimir Friedman’s hypothesis, the stimuli shifted toward symbols when proto-symbols (“demonstrations”) differed both from animals’ immediate actions towards each other and from their emotional reactions that expressed their internal states (Friedman 2019, part 1, p. 59).
Ivan Pavlov called sensations, perceptions and mental representations of the environment the first signaling system that humans have in common with animals, and the word the second system that distinguishes humans. “But words have built up a second system of signaling reality, which is only peculiar to us, being a signal of the primary signals. The numerous stimulations by word have, on the one hand, removed us from reality, a fact we should constantly remember so as not to misinterpret our attitude towards reality. On the other hand, it was nothing other than words which has made us human” (Pavlov 1941, vol. 2, p. 179). Nevertheless, not only a word is a signal of primary signals, but every abstract, symbolic action. Both a word and, for example, a human gesture or instrumental action are types of abstract social action.
(3) The evolution of the material side of activity enlarges the niche that man occupies. From generation to generation, humans expand their domus, the part of the environment they use as a means of activity, thus extending the boundaries of their home. Meaning is a material abstraction, because meaning is both a process of interaction with things (making) and at the same time the material precondition and result of human self-reproduction.
Meaning made apes human. The coevolution of proto-humans and meanings gave rise to Homo sapiens. When we look at the universe of humans and meanings from the perspective of humans, we see society, and when we look at it from the perspective of meanings, we see culture. We call this universe culture-society.
Needs, motives and emotions
Self-reproduction of man as a living being presupposes the satisfaction of his needs. “The presence of needs in a subject is as a fundamental condition of his existence as metabolism [and signal exchange—A.K.]. In fact, these are different expressions of the same thing” (Leontiev 1971). Consumption, or the satisfaction of needs, is the beginning and end of self-reproduction. Essentially, consumption is the production of humans, since the product of consumption is man himself. In its origin, consumption was based on the search for food (foraging), appropriation of the material of nature and its minimal elaboration (mediation).