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Manuel DeLanda on labor and self-organizing economic systems

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Manuel DeLanda is a writer who I really appreciate because of the number of strong contemporary computer-model-based references he draws on, a strong power analysis derived from post-structuralist work by Deleuze & Guattari and combined with in-depth historical analysis of wealth and finance from Braudel that rejects idealist tenets of mainstream conservative economics (or “classical” economics or the typical econ 101). I’m trying to dig more into the implication of his work on the economics of labor organizing. I also find engaging with his work really useful in fleshing out and playing with anti-capitalist concepts. Here are some notes.

From this interview:

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One fascinating thing in your writing is how you debunk the existence of “Capitalism” as a generalized whole, in favor of much more heterogenous, emergent processes at play in the global economy. This seems like a refreshing non-conspiratorial position to take. Is this one of the ways your new materialism stands in contrast to marxist materialism? Could you talk about this and some other important differences?

Manuel DeLanda: The author that inspired me in this respect is Fernand Braudel, the main economic historian of our time. His history of European economies from 1400 to the Industrial Revolution is the most comprehensive that has ever been written: he and his disciples actually checked Florentine bank books from the 15th century; the books from factories in Milan in the 16th century; the history of the Venetian arsenal, the most important military-industrial complex in the early part of the past millennium. And after gathering all this data, his conclusion was that as far back as the 13th century there have always been at least two economic spheres: wholesale was never like retail (until the 20th century); industrial production using economies of scale was never like that based on the agglomeration of talent in a region or city and based on small firms; and high finance has always been an entirely different world from that of small money lenders. At the end of the third volume of this work, Braudel concludes that there never was a single overall system. To fix this misconception he changes the definition of the term “capitalism” to signify Big Business, with its capacity to manipulate demand and supply, and keeps the term “market economy” for populations of small firms that are in fact governed by anonymous economic forces. Today, in the middle of an economic crisis created by firms that were too big to fail, a crisis in which profits were privatized while losses socialized, Braudel’s words sound deeply prophetic.
As far as a contrast with Marxist materialism, the answer is two-fold. Against historical materialism we need a new vision of history without teleology, one which avoids a periodization into internally homogenous eras: feudalism, capitalism, socialism (or the Age of Agriculture, the Age of Industry, the Age of Information). There were never such Ages or Eras. Braudel, for example, shows how in the 14th century the areas of Europe that would become France and Spain did have manors ran by feudal lords, but the city-states in northern Italy and northern Germany (the Hanseatic league), as well as Flemish and Dutch towns, were already modern in many respects. Thus, we need to rethink our philosophy of history in the face of historical evidence. On the other hand, dialectical materialism is objectionable for different reasons. Any materialism needs a theory of synthesis to be able to account for the historical identity of mind-independent entities. But Marx took his theory from Hegel, synthesis through the negation of the negation, and this is an a priori scheme, the inadequacies of which were made obvious by Engel’s attempt to apply it to nature. What we need are a variety of a posteriori schemes of synthesis (from physics, chemistry, biology and other fields) to account for all the different morphogenetic or synthetic processes that shape the non-human world, as well as the world of economics, starting with an account of the emergence of prices (when not manipulated via economic power) as a collective unintended consequence of intentional action.

so MDL (DeLanda) is perhaps best known for his book A Thousand Years of Non-linear History. He spends a lot of time writing about the troubles with discussing history as stages of inevitable causal events (like most economics courses will do when discussing “competitive equilibrium”), rather than complex systems with ebbs and flows and dynamic interactions. Capitalism, for example, could have shown up anywhere in the world, and in fact tried many times to reach an alarmingly self-reproducing level in many parts of the West and wasn’t able to succeed until a number of other circumstances were reached (among them tightly controlled colonial trade routes, steam power, a robust banking system). This is why he puts a lot of stock into mathematical modeling, in order to be able to more accurately explain how these interacting elements yield directionality to wealth, resources, energy, economic power.

(side note: deleuze and guattari are marxists, while Braudel rejected traditional marxist materialism and I think MDL rejects this as well. There are some critiques against his work that basically amount to a lack of analysis of non-economic types of power which I think is solid, and some other critiques that assert bad readings of D&G and contemporary marxism that I personally don’t buy. Although he basically rejects fundamental marxist theory of conflict as an oversimplification insofar as it applies to economic power, IMHO the synthesis of these two major influences creates a better framework of economic power for marxism to build on that digs into specific interactions between e.g. workers and owners.)

In previous works MDL drew a distinction between the parts of an economy that could be described as “market forces” and the parts that were monopolistic in nature and sought to extract (with the caveat that that delineation is nuanced and not cut and dry). Above he’s trying to demonstrate that this makes a difference in the direction that surplus value flows, which he expands on here:

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Do you have any thoughts on what a neo-materialist social and/or economic politics would look like? For example how could issues like privatization versus socialization be approached?
Once we break with the idea of the capitalist system, a system that you must replace as a whole via a Revolution, many options open up. I mentioned before the distinction between industrial production based on economies of scale and that based on economies of agglomeration. The former is typically based on routinized labor (Taylorism); the leaders are managers of a joint-stock company (in which ownership and control are separated); its actors have pricing power (managers add an arbitrary mark-up to their costs); and it typically forms oligopolies, dominated by a few giant firms. The latter uses skilled labor (it depends on the agglomeration of talented people in a region); it is led by entrepreneurs (owners with a vision that risk their own savings); its actors do not have pricing power; and it forms large populations of firms in which, unlike oligopolistic rivalry, there is real anonymous competition. Now, this is a rough distinction that needs to be nuanced in many ways but it will serve to make my point. While economies of scale are private, the system resembles that of a government ran set of companies. As John Kenneth Galbraith, a great but neglected economist, pointed out half a century ago, oligopolies constitute a planning system, hardly distinguishable from communist central planning. And the fact that large firms are ran by hired guns (managers can own stock options but they do not have to) also resembles government ran firms in other countries. So, as it turns out, the distinction between the private and the public is a lot trickier than it seems.

Politically, this matters because if you are, say, part of the Occupy Wall Street movement, you need to make a distinction between fair competition among small firms ran by entrepreneurs and the rigged system of large corporations in which the impersonal forces of demand and supply are manipulated, and hence, do not allow prices to set themselves. You need to make this distinction because you do not want to come across as denouncing the “system” as a whole. In a study by Annalee Saxenian comparing Silicon Valley (dominated by economies of agglomeration) and Route 128 near Boston (once dominated by economies of scale) she shows that during bad economic times, economies of agglomeration are more robust and “weedy,” while economies of scale are brittle, and hence, must rely on government bail-outs when external shocks bring them down. Hence, there are choices to be made that are not the old choice between “privatization” and “nationalization,” a distinction based on marxism, and one still carrying the stigma that Marx, borrowing from Proudhon, phrased with the ridiculous slogan “Private property is theft.” There are many leftists out there who still believe in that silly slogan.

(If you disagree with that last sentence I would love to talk about it lol)

The basic idea is that with “market” firms, wealth tends to be more evenly distributed and communities more directly served than with monopolistic, Big Business Capitalism and firms that want to be Big; these anti-market forces are more likely to homogenize processes to squeeze out every last dollar from the worker as it flows up to the owner. They also extract value from their often-remote (as in not urban, e.g. office park/campus) surroundings, uproot communities and dump waste back into the very same locations. He expands on this in his books, and also in other interviews like this one:

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Protevi: …I certainly would agree with you that far too much Marxist work has been simplistic, historical determinist, reductive, totalizing, functionalist, top-down, etc., but I wonder if you aren’t being too harsh with Deleuze and Guattari’s attempts to define a theory of capitalism that avoids each of these dangers? They certainly adopt a notion of “machinic surplus value”, moving beyond a simple labour theory of value (machines as “congealed muscular energy”, as you put it in A Thousand Years (1997: 79)). Don’t they also consistently deny any historical determinism of stages of development by emphasizing the contingency of capitalist formations, as well as conduct a sustained polemic against reductive base-superstructure models of society? …

DeLanda: I agree that if I had to choose among all the Marxist accounts of economic history I would probably pick theirs. It does have all the advantages you mention. (Even Braudel quotes D&G on the idea that “capitalism could have emerged anywhere” not just the West.) …Once we separate oligopolies from the market (they are strategic not primarily exchangist entities) and identify capitalism with oligopolies (as Braudel does) we can still use some of Deleuze and Guattari’s ideas since markets (as well as anti-markets) have always caused “lines of flight” to pass among societies, particularly closed societies (it’s in the marketplace that we meet outsiders; that foreign objects and ideas enter a city; that heterogeneity is injected etc).

So how does this tie into labor? The same interview discusses the potential of collective worker power at a small firm vs. a big one:

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Protevi: So for you, it’s the type of productive organization that counts, not just productivity as such… From this productivist perspective (which I think is amenable to a nonlinear dynamics analysis of the material and energy flows that keep the open production systems far-from-equilibrium), the key issue is the productive conjunction of capital and labour (here machinic surplus value vitiates a pure labour theory of value), whether or not the products of that labour flow into markets or anti-markets. And the key to coercing labour into exploitative production processes is to threaten the production of labour power with interruption of the flows that sustain it.

DeLanda: Well, but the same point applies here: the conjunction of capital and labour can take place in different forms (scale, agglomeration) and it is clear that only the economic power of the former allows the kind of threat of withdrawal you are talking about: only if a firm is very capital intensive (large machines, large start-up costs functioning as barriers to entry) and if the process is based on routinization (the less skills a worker brings the less bargaining power he/she will have when it comes to set wages) can this form of coercion work. I am not saying that power relations are absent from networks of small producers but there the ability of workers to bargain for a fair wage (particularly if unions exist) is much greater and the permeability of the division between classes is greater too (if a typical firm has less than a hundred employees and it is not capital intensive, it’s much easier for a motivated, creative worker to start his/her own business). The point is that all of this is obscured (if not made invisible) by the blanket concept of “capitalism”. As to theories of value: we need to go beyond the very notion of surplus value. (It’s not enough to simply add the “machinic” type to escape the labour theory). Why just adding machines to “abstract labour” (read, routinized labour)? Why not also fossil fuels, starting with coal? And what of knowledge, skills and organizational procedures? And then, the main defect of labour theory here is to include supply factors and not demand factors, but the latter also matter, and so marginalist approaches to this side of the equation must be added. (Over the objections of Marxists who would rather die than include bourgeois marginalism in a theory of value.)

Later in that interview his co-guest John Protevi digs into this distinction of ownership and what really matters in this analysis (warning, many post-structuralist buzzwords):

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Protevi: … I also accept Manuel’s suggestion that the difference in productive organization between economies of scale (centralized management and routinized, deskilled labour) vs. economies of agglomeration (networks of skilled labour) should be a fundamental category (along with differences at the city and regional levels). There is a turn of the screw here though, concerning not organizational differences, but ownership (that is, worker co-operatives vs absentee-owner firms). Let’s grant that the ethical impulse behind Marx’s denunciation of private property (not of course personal property, but ownership of the products of someone else’s labour in exchange for a wage), needs to be bracketed when it is put in terms of an a priori demonstration that such alienated labour betrays the essence of human nature qua Gattungswesen (“species being”, or co-operative production). Nonetheless, I suspect Deleuze and Guattari would have a pretty strong predilection for worker co-operatives over absentee-owner firms, although they would also say we need to investigate the life-affirming or life-denying aspects of particular concrete assemblages, and ask whether in fact this or that worker co- operative (whether a centralized economy of scale operation or a networked economy of agglomeration operation) produces better and larger sets of affects than this or that absentee-owner firm. And I think Deleuze and Guattari would also have to admit that it’s not at all clear that worker co-operatives will always be superior: it might be that the fear of bankruptcy might paralyse the initiative of some worker co-operatives, and so on. This is not an entirely satisfying way of posing the question however. To perform a good evaluation of the life-affirming or life-denying affects of worker co-operatives, we need to have lots of examples of them to study, but they aren’t very prevalent. How do we account for their scarcity? In what Deleuze and Guattari call “population thinking” (what Manuel calls the investigation of an “institutional ecology”) you have to specify the variation-generating mechanisms and the selection pressures that accounts for the distribution of traits in a population, in this case, the ownership patterns in firms. In terms of variation, we might surmise that the very availability of credit, based on predictions of return on investment (based perhaps on past performance of worker co-operatives, but which might also be influenced by sheer fear of the unknown or simple class prejudice on the part of bankers), constrains the variation of ownership forms and makes the generation of worker co-operatives difficult. The price of the credit, the interest a worker co-operative would have to pay, would in turn form part of the selection pressures, as would lots of other factors (can worker co-operatives bargain with absentee-owner firms for materials, or would they be subject to boycotts, price-fixing, etc.?). In other words, the accent has to be on the “political” in “political economy”!

Tying all of this together is this albeit open-ended discussion on power and coercion:

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Thanem: Deleuze and Guattari’s (1984, 1988) discussion of Marx, capitalism and fascism includes some examination of bureaucratic organization. In A Thousand Years of Nonlinear History, Manuel touches upon issues of formal organization and control, taking issue among other things with Peter Drucker’s (1967) uncritical attitude to Taylorism. In Empire Michael Hardt and Antonio Negri (2000: 152-153) discuss the transformation of capitalism in terms of the emergence of the postmodern organization, corporate culture and diversity management. Is this an indication that organizational theorizing - beyond Williamson’s and Simon’s economistic perspectives - has a role to play for philosophers concerned with the social? And are there reasons to expect that further engagement by philosophers will take place?

DeLanda: As far as I can tell, on the question of Taylorism, the most important insight which goes beyond economics is due to people like Michel Foucault. The basic idea is that several of the key elements of mass production are not of bourgeois origin but of military origin. It was in French armories in the mid 18th century and later in American armouries and arsenals, that a system of industrial management and discipline was created in order to produce weapons with interchangeable parts. (See here Merrit Roe Smith, ‘Military Enterptrise and Technological Change’,1987) The degree of uniformity needed to create true spare parts needed to be imposed on artisans via routinization of the labor process and constant monitoring from above. As Foucault says, discipline increases the powers of the body in economic terms of utility but decreases them in political terms of obedience. How are we to change this oppressive system if we are not even aware of its origins? (Remember that Lenin welcomed Taylorism into the Soviet Union as a “good thing” from capitalism, which shows how uncritical marxists have always been in this respect. We had to wait one hundred and ten years for one of them, Harry Braverman, to perform the first critique, and even this one is marred by false problems such as ‘do white collar workers produce surplus value’. As long as we call this system “Fordism” are we not concealing its real sources? Marxists at this point like to mention Adam Smith’s pin factory as example of a civilian use of discipline prior to rifle manufacturing, but for every example they use I can find an earlier military one, such as the Venetian arsenal which by the 15th century was already the largest military-industrial complex of its time.)

Protevi: Just a few additional points. As Manuel himself pointed out in his War book (1991: 63), Virilio’s concept of “military proletarianization” shows that it’s impossible to draw clean lines around the use of force, coercion, duress, persuasion, etc. by military, police, and “social welfare” (either governmental, private, or “faith-based”) organizations to herd people into disciplinary institutions. The situation would be even more complex considering the disciplinary situation in the Caribbean sugar plantations Sidney Mintz examines in Sweetness and Power, for there you would have to factor in the intricate assemblages in the Atlantic slave trade, which combined State and private enterprise factors in varying proportions. We would also have to investigate the way patriarchial systems have provided the means to “pre-discipline” girls in family settings well before they become workers in sweatshops.

He touches on power in a broader sense but doesn’t focus on it here. Still, monopoly of force and control of capital have gone hand in hand since the earliest forms of capitalism. I think a takeaway is that understanding labor power means understanding the dynamics and origins of its oppression fully, and to be able to assess structures comprehensively in order to discuss their merits and drawbacks to the workers they comprise whether that’s to build those structures, alter them or to tear them down.