artefactphil

E = m.c^2

KABOOM!!!

Further reading: Three laws of movement (again).

Sidere mutato,
mens eadem,
unfortunately.
M — C — M+ΔM
M — C — M+ΔM
M — C — M+ΔM
…
Keep digging,
keep drilling,
Sunburnt Country!

I come home
after many years’ absence,
bearing gifts,
greeting the jacaranda,
and there is no dog
in the Quad
to recognize
who I am.

The role of central banks as masseurs

Central banks worldwide have the important task of massaging the Medium without their knowing at all they are doing so. Their indispensable task is supposed to be primarily to manage monetary policy to keep inflation within bounds — neither too high nor too low. But central bankers as masseurs?! And why is money implicitly referred to mysteriously as the Medium with a capital M?

As any newspaper reader or radio listener or podcast subscriber knows, central bankers have to keep an eye on the empirical data about inflation coming in regularly from various sectors, and also on unemployment levels of the workforce in various segments. Central banks are able by fiat to set key interest rates at which other banks can borrow from the central bank and also determine how much capital banks must deposit at the central bank, thus restricting or loosening banks’ ability to lend, both of which determine interest rates throughout the given national economy. By adjusting interest rates post facto (after the data) they aim at a Goldilocks scenario of around two per cent per annum, i.e. 2% p.a. This rate is deemed to be healthy. It keeps the gainful game going.

All this is well-known and elementary for the practice of central banks. They want to contain inflation, avoid deflation, but also to prevent a credit crunch that will strangle economic activity. After all, it is money in various guises that lubricates a capitalist economy and keeps it ticking over. Is it money that is the lubricating medium? Not so fast. Since central banks do not control the economy by direct intervention into economic activity, they can only react to its movement through non-invasive ’soothing’ massage techniques which may or may not work, since it’s all a matter of timing, in much the same fashion as a surfer may catch a wave or miss it. The surfer has no control over the wave itself.

What’s left out of account in all this is that central banks, along with economists in general, do not know what money is. Sure, they know what it’s good for and what its various functions are and all the myriad sub-kinds of money such as government expenditure or capital expenditure or consumer savings and so on. Economists do not confront themselves with the question concerning the value of money and the relation of this monetary form of value to other forms such as, say, real estate or share capital. Questions concerning the various value-forms and their interconnection and what constitutes their unity are not posed, for they lead into dangerous, pre-empirical territory that calls for thinking. There are no data that could be collected to answer such questions, and therefore they are disposed of as somehow ‘metaphysical’ and, in any case, beyond the bounds of respectable science which, they say, is always ‘evidence-based’.

In this way they stubbornly overlook that all the various value-forms are forms of appearance of thingified value and also that this thingified value serves as the Medium of sociation (Vergesellschaftungsmedium) that mediates the movement of a capitalist economy. Thingified value as Medium can only be brought to light through careful, conceptual, phenomenological thinking. It has its very own kind of circular movement, namely, the endlessly accumulative movement of thingified value itself that asserts itself as the inexorable principle of movement of the global capitalist economy: advanced capital must return fattened with a surplus value. Otherwise, the economy’s in trouble. This accumulative movement of thingified value may be called valorization, a kind of movement sui generis that asserts itself behind the backs of all those caught up in our global capitalist economy — including the central bankers.

The principle of endless valorization asserts itself like a blind law of nature, on a par with Newton’s or Einstein’s laws of physical motion. Only ‘like a law of nature’ because economic activity is social, sociating. The valorization principle does not allow mathematized equations of motion like physics does to predict physical movement, but it nevertheless asserts itself like an iron law of nature, irrespective of how central bankers or politicians or economists may attempt to control the movement of the capitalist economy, whether partially or totally.

This inexorability leaves central bankers in the role of careful, soothing, non-invasive masseurs of the Medium, for a capitalist economy is based on private property that deprives the central bank of ways to directly intervene. The Medium itself remains invisible in all this, seeping as Medium of sociation into every conceivable crevice of social (including private) life. The encroachment of the Medium as such goes unnoticed; only its ubiquitous symptoms are perceived. It is not sufficient to identify the Medium with money; rather, money itself has to be carefully deciphered and conceptualized as one form (or ‘face’ or ‘look’) of thingified value, alongside others with which it intermeshes.

The pernicious, exploitative principle of endless valorization of thingified value circling through its intermeshing value-forms goes hand in hand with an insatiable need for physical energy to keep the economy itself moving. The latter is the material side of the value-formal movement. After all, the economic form-transformations require the corresponding physical movements in production and circulation processes and these, in turn, require physical energy to drive them. If sources of such physical energy become unreliable and supply falters through some contingent ‘external shock’ or other, such as war or drought, energy prices spike. This induces inflation to which central banks are obliged to respond by raising core interest rates which, in turn, reverberate throughout the economy. Higher interest rates adversely affect the valorization of thingified value advanced by enterprises (i.e. functioning capitals), by lowering the net profit, due to increased interest costs for loan capital. Enterprises may be forced to respond to this slump in net-profit generation by laying off employees, thus causing unemployment.

The central banks nevertheless have to raise the official core interest rates to dampen inflation, thus unknowingly massaging the mysterious Medium of thingified value itself to nurse it back to health, albeit at the price of causing economic pain for all the players. Whether it be a slump or a fully-fledged economic crisis, the Medium itself remains invisible, and the economic perturbations hit everyday understanding like a violent fit of nature. Blindness reigns as the normal state of affairs.

Further reading (selection): Laws of movement & Energy.

Three laws of movement (again).

An Invisible Global Social Value TT&S Vol. 5 no. 2, 2024.

Critique of Competitive Freedom and the Bourgeois-Democratic State: Outline of a Form-Analytic Extension of Marx’s Uncompleted System Kurasje, Copenhagen 1984 580 pp. ISBN 8787437406. Third paperback edition with added preface CreateSpace, North Charleston 2015 722 pp.

On Human Temporality: Recasting Whoness Da Capo De Gruyter, Berlin 2024.

Hans-Georg Backhaus*) and Jürgen Habermas, both born in 1929 and both students of Adorno in the Frankfurt School, died this week aged 96.

Who is the more important thinker?

On 18 June 1981 I gave a talk in the General Philosophy Department at Sydney University Whatever happened to the Frankfurt School? Habermas or Backhaus. On 23 October 1981, at the invitation of Peter Beilharz, I gave the talk once again in the Sociology Department at Monash University in Melbourne. Its conclusion reads, “I close with the following thesis: The conceptualisation of the capitalist relations of production, which must be performed at least as a ‘partial theory’ of the Habermasian system, cannot be successfully executed by a research program which takes a sociological theory of action (Handlungstheorie) as the paradigm for grasping bourgeois economic forms. There is an irreducible residue of alien objectivity which clings to categories such as money and capital and which eludes subjectivistic, normative theoretical approaches.”

The brief, rebellious opening that was the General Philosophy Department has long since closed. Delusory bourgeois (a.k.a. liberal) thinking quickly recovered its composure in the West and now everyone’s worried about the collapse of the ‘rules-based global order’ as liberal democracy slides into populist ‘authoritarianism’ (a.k.a. autocracy).

*) English version Hans-Georg Backhaus

Further reading: Critique of Competitive Freedom and the Bourgeois-Democratic State: Outline of a Form-Analytic Extension of Marx’s Uncompleted System Kurasje, Copenhagen 1984 580 pp. ISBN 8787437406. Third paperback edition with added preface CreateSpace, North Charleston 2015 722 pp.

A reading of the Preface to Critique of Competitive Freedom and the Bourgeois-Democratic State by Free Association on YouTube 2025.

Translators’ introduction (with Mike Roth) to Hans-Georg Backhaus’ On the Dialectics of the Value-Form in: Thesis Eleven No. 1 1980 pp. 94-98. The publication of an English translation of Backhaus’ seminal paper in the Melbourne journal Thesis Eleven, followed up by the publication of two out of four instalments of a reconstructed value-form analysis (cf. the Appendix to Critique of Competitive Freedom… for the complete reconstruction) triggered vigorous resistance from the empiricist minds of English-speaking leftists, who could make neither head nor tail of this kind of dialectical thinking specifically or of phenomenological thinking at all. The contributions by Peter Beilharz and Helmut Reichelt aimed at assuaging such empiricist qualms, but with little success. The incomprehension of (Hegelian or hermeneutic) phenomenological thinking on the part of English speakers, of course, is not restricted to leftists, but contaminates the entire Anglophone world as a seemingly natural state of affairs. In fact, today all the modern sciences, independently of language and globally, are empiricist through and through, adhering as they all do to the scientific methodology of empirically verifiable model-building.