Capital Escapes

This is not an easy subject for people to scan with calm, analytical detachment, but it is a crucially important one. It is among the rare topics that the Left is more likely to realistically evaluate than the Right. Much follows from the conclusions reached.

It can be fixed, provisionally, by an hypothesis that requires understanding, if not consent. Capital is highly incentivized to detach itself from the political eventualities of any specific ethno-geographical locality, and — by its very nature — it increasingly commands impressive resources with which to ‘liberate’ itself, or ‘deterritorialize’. It is certainly not, at least initially, a matter of approving such a tendency — even if the moralistic inclinations of gregarious apes would prefer the question to be immediately transformed in this direction. Integral Leftist animosity to capital is actually valuable in this respect, since it makes room for a comprehensive apprehension of ‘globalization’ as a strategy, oriented to the flight of alienated productive capability from political answerability. The Left sees capital elude its clutches — and it sees something real when it does so. By far the most significant agent of Exit is capital itself (a fact which, once again, politically-excitable apes find hard to see straight).

“It’s escaping! Let’s punish it!” Yes, yes, there’s always plenty of time for that, but shelving such idiocies for just a few moments is a cognitive prerequisite. The primary question is a much colder one: is this actually happening?

The implications are enormous. If capital cannot escape — if its apparent migration into global circuits beyond national government control (for non-exhaustive example) is mere illusion — then the sphere of political possibility is vastly expanded. Policies that hurt, limit, shrink, or destroy capital can be pursued with great latitude. They will only be constrained by political factors, making the political fight the only one that matters.

If capital cannot in reality flee, then progress and regress are simple alternatives. Either nations advance as wholes, in a way that compromises — on an awkward diagonal — between the very different optimisms of Whigs and Socialists (Andreessen), or they regress as wholes, destroying techno-economic capability on the down-slope of social degeneration (Greer). Only if capital escapes, or practically decouples, does it make sense to entertain extreme pessimism about socio-political trends, alongside a robust confidence in the momentum of techno-economic innovation. The escape of capital is thus an intrinsic component of split-future forecasts, in which squalid ruin and techno-intelligenic runaway accelerate in inversely-tangled tandem (Cyberpunk, Elysium). Try not to ask — if only for a moment — whether you like it. Ask first, with whatever intellectual integrity you can summon: What is the real process?

It is the contention of this blog that without a conception of economic autonomization (which means escape) modernity makes no sense. The basic vector of capital cannot be drawn in any other way. Furthermore, the distribution of ideological positions through their relation to this vector — as resistances to, or promotions of, the escape of capital — constructs the most historically-meaningful version of the Left-Right ‘political’ spectrum (since it then conforms to the social conflicts of greatest real consequence).

If capital is escaping, the emergence of the blockchain is an inevitable escalation of modernity, with consequences too profound for easy summary. If it isn’t, then macroeconomics might work.

November 21, 2014admin 25 Comments »
FILED UNDER :Political economy

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25 Responses to this entry

  • Lesser Bull Says:

    My belief is that capital can escape, to a point, and that modernity is the process of that escape. But like the story of the guy who swept everything in the house under the rug and then realized the same procedure wouldn’t let him clean the remaining messy spot, the one he’d made under the rug, capitalism can’t escape entirely. The less connection Antaeus has to the earth when he wrestles, the better he can wrestle. At the limit case, where he lays flat on the ground, he is self-pinned. But if he loses the connection entirely, he dies. The more completely Achilles can be dipped in the Styx, the more super-powered he is. But if his mother let go of him entirely, he would drown.

    I see much of the tragedy of modernity being the belief that because progress has worked so far, even more of it would work even better. If gasoline-powered autos are great, just wait until we adapt the internal combustion engine to the ordinary household toilet!

    I’m not laying out a detailed theoretical case here. I don’t know if I can, but if I did, most of it would be a rehash of basic arguments everyone is already familiar with.


    admin Reply:

    I’m not sure how far I disagree. Eventually, capital has to effectively discipline some minimal functional set of ethno-geographical political bases (that’s NRx, grasped in accordance with this teleology) — either that, or disappear into the asteroid belt, and it’s not quite ready for that jump yet.


    peter connor Reply:

    When capital can’t escape, e.g. Las Vegas, it buys politicians to prevent confiscation or restriction.


    Alrenous Reply:

    Unlike an individual, capital can superpose itself. Capital Achilles’ mother can grasp him both by only his right heel and only his left heel. Of course this can create superposed vulnerabilities, but in practice capital can use the left foot to block attacks on the right and vice-versa.

    China’s Great Firewall greatly inhibits cyberspace innovation. It’s fine, that’s what the West is for. The West’s Sophism infection inhibits practical realpolitik. It’s okay, the Chinese are very practical, and the Russians are into it too. Rather than capital suffering from both a maze of walls and a debilitated brain, it suffers from neither, instead uniting the resources plentiful in both countries using export, much as it does with prosaic physical resources.


    Posted on November 21st, 2014 at 6:36 pm Reply | Quote
  • blankmisgivings Says:

    I find the metaphor of ‘capital escape’ to be inherently dubious. Can Ebola ‘escape’ its human hosts in order to discover its higher destiny as a ‘virus without organs’? What is this capital supposed to do unattached to the sugar and porn receptors of obese apes shuffling around shopping malls? According to what economies of scale will capital replicate itself in Yarvin’s virtual gulch? Of course, you surely don’t mean it in quite this hyperbolic way: perhaps you mean that globalized capital will be able to pressure nation states into abolishing industrial policy and reducing social welfare spending, etc, which is just what The Economist magazine has been saying for 50 years (Oh the bourgeois banality!). And the equally banal counter is that a fully globalized corporate capital will also innovate new forms of administered philanthropy, transnational ‘governance’ structures, various transnational bodies for ‘cleaning up’ negative externalities that will stand in the way of future accumulation, and eventually something like a ‘world government’ that will look more like Tony Blair than an incarnation of Gnon. Of course, (to answer the question in your post) I think it more likely that capital will continue to ‘make use’ of the nation state for some time to come, due to ‘sunk costs’; the state is taken to be the legitimate discipliner of populations and for global capital oriented governance networks to commandeer this legitimacy directly would entail huge and risky investments.


    Posted on November 21st, 2014 at 7:13 pm Reply | Quote
  • Little Hans Says:

    Time to go back to Bataille? If capital is ever escapes it surely must do so as excess. Otherwise it just shuffles from A to B.


    Posted on November 21st, 2014 at 7:50 pm Reply | Quote
  • Porphy's Attorney Says:

    Here disaggregation matters for sure: financial capital has easier mobility and thus easier means of escape, though still not perfect (even without capital controls, if a place is in need of fleeing from, you have to find some sucker to take the fiduciary media of that place and give you the fiduciary media of some other place. Of course it is possible to keep some “off shore” in a form or another, there are all sorts of sub-complications here. In any case, financial capital yes, can escape fairly easily).

    Fixed “durable capital stock” less so: usually one has to leave some decaying hulk in a rust-belt somewhere, exchange it if possible for financial capital (or simply write it off as a loss and use whatever financial capital you built up during the period owning this asset was worthwhile), then build a new one someplace else. Perhaps some parts can be taken out of the husk and shipped to the new place. In any case, there is “stickiness” to durable capital stock.

    Which usually means capital mobility tends to involve shifting future investment/flows of investment: the exit is abandoning regulated places or hypertrophy places with whatever you can move, but leaving whatever cannot be moved behind. Future investment (with advancing technology) takes place somewhere else, and in the meantime even though “capital” is in some sense “fleeing” a Caudillo or Man of the People can simply run the economy – for a time – on the husk left behind that is immobile (c.f. Venezuela, which even some smart people today say shows Chavez’ program “works” at least under “a good, strong leader” like Chavez. Of course, I did not say such people were *sane* – I said they were smart/Cathedralite-educated. I happen to run into them in academic circles).

    There are more people than you think – who take nominal for real, and don’t notice the subtlties of genuine capital “Exit” – which is usually more a transfer of forward-looking entrepreneurship, the impact of which then unfolds over time, rather than “suddenly all the factories were gone – just gone.”

    Anyhow this post is necessarily half-assed. Someone will come along and poke it full of holes if they really want to. Some people, when they do like something, accept and grok it. Others – critics – expect a treatise on the subject (herein, Capital goods, treatises on which can fill hundreds of pages easily. I could point critics to some such, but if they read them, they would still dismiss. Some men, if they don’t already know, you can’t tell ’em).


    Posted on November 21st, 2014 at 9:34 pm Reply | Quote
  • Capital Escapes | Reaction Times Says:

    […] Source: Outside In […]

    Posted on November 21st, 2014 at 11:25 pm Reply | Quote
  • E. Antony Gray (@RiverC) Says:

    Seems to me that de-territorialization is something like re-organization. It’s less a general force of evil as it is a neutral force – something that naturally happens in time – that has to be balanced. De-territorialization must happen for there to be liberty of movement, and liberty of movement is important for survival. But since liberty of movement’s cost is de-territorialization, the effect must be countered by a robust and flexible pattern of re-territorialization in time.

    One of the weird parts about our era is the moralization of what seem like historically non-moral subjects (equality and liberty for example) that results in ‘nuance’ vis a vis traditional modes of morality, but extreme black-and-white thinking as regards certain natural processes and structures.


    E. Antony Gray (@RiverC) Reply:

    Further thought here. Those who think of civilization as merely a re-territorialization or a de-territorialization process would be likened to those who see information as pattern or noise (the latter conceiving of information as something we arbitrarily impose on randomness) – it is mode comprising and transcending both. Organisms are neither pure structure or entropy – the ‘order’ itself is necessarily metaphysical.


    Posted on November 22nd, 2014 at 12:23 am Reply | Quote
  • Driftforge Says:

    Care must be taken here in the understanding of capital. If by capital, one means retained value deployed in the creation of new value, then in many cases capital is quite fixed. Buildings, machinery, all the equipment of making real stuff is expensive to uproot and move. Not that it cannot be moved, but it has a certain inertia that ties it in place. Of course as the amount of and value of virtual ‘stuff’ increases, it creates a highly mobile component of real capital.

    Savings – not yet deployed – and the modern equivalent, capacity to loan – are highly mobile, and will tend to escape in inverse proportion to the energy expended in preventing them doing so. Not only does this escape occur, but there are people who primary purpose is to facilitate that escape, in timing, scale, and opportunity.

    The notion of capital and savings that have no desire to escape – held in the hands of an aristocracy committed to people and place – that is a powerful and necessary counter to the divergent world envisaged above.


    Posted on November 22nd, 2014 at 4:17 am Reply | Quote
  • Chris B Says:

    Current economics and economies are far simpler than people admit. we have spending fueled by wages and borrowing which creates a consumer economy which economic activity then builds on. (middle men, more services etc).
    states can fuel spending by also borrowing and spending, so they add to the consumers role.
    You have now some options – 1) let the economy run naturally and accept whatever growth occurs. 2) encourage consumers to borrow and spend to increase growth rapidly. 3) state spending to create growth.
    2 and 3 are what have been done by the Keynesians. This is great. Until you run out of state and consumer spending. the circle breaks. Keynesian solution? encourage MORE borrowing and more state/consumer spending. If this is not working because the consumers are not doing their part (by saving for example) then you need to either wipe government debt to get spending going there again, or “automate” the consumers by giving them money to spend (see helicopter spending, garanteed min income etc). All of this operates on confidence. If you can keep repeating this then great. if not, then this system is done. The key will be the reset step. When the debt write downs occur and the reset happens- will this sytem ever be trusted again? and can it reset? I really don’t think so for a myriad of reasons. One potentially funny outcome would be if this impending collapse pushed the system to colonisation to create more markets/consumers/ gov spending opportunities. China seem to be doing this in Africa. How long before the west gets going again (both internal colonisation of vibrant areas and abroad) – starvation avoidance is a harsh mistress. Keynsian confidence trick economics has allowed us to believe we can create a perpetual motion machine. Before we had this nonsense, colonisation was utterly neccesary. Maybe it was, and still is – The west has merely been living on a credit card the whole time thinking it didn’t need a job.


    VXXC Reply:

    I like this idea Mr. Chris B.

    The West moving again.

    I think we should go UP into space, but if not we can always make room in Vibrant-Stans of the Southern Hemisphere.


    John Reply:

    > All of this operates on confidence. If you can keep repeating this then great. if not, then this system is done. The key will be the reset step. When the debt write downs occur and the reset happens- will this sytem ever be trusted again? and can it reset?

    Bitcoin is the reset. It’ll take all this old clunker has left to get us to that point.


    jdsaunders03 Reply:

    Bitcoin is a beta test. It has flaws and shortcomings.


    Posted on November 22nd, 2014 at 5:40 am Reply | Quote
  • Henk Says:

    Both forms of capital, the one that can escape and the one that can’t, can conceptually coexist, and probably already do. Also, there’s probably a continuum linking the extreme poles.

    Looking at admin’s own post on “Politics on the Job”, could there be a correlation between capital-that-can-escape and left-progressive politics?

    Could capital-that-can-escape (from ethno-geography) and “The Cathedral” actually be the same thing? I think Moloch would be a good name for this beast.


    admin Reply:

    It’s an interesting point, and well worth further nagging at, but I’d tend to the exactly opposite conclusion. Locked-down capital has to compromise with the Cathedral, because it can’t get away from it, whereas escapist capital can afford to ignore it (at least comparatively). Still, I can see the rough contour of the contrary argument — if capital can escape, it can cooperate in driving social chaos without consequences — so I’m not expecting a rapid decision on the question.

    Facts would be helpful. It’s at least anecdotally significant that the most ‘deterritorialized’ fragment of Silicon Valley techno-capitalism is the constituency most consistently accused of collaborating with Dark Enlightenment cultural tendencies.


    Alrenous Reply:

    Puritans flee Britain.
    Capital flees Progressivism.

    Puritans are infected with smallpox, spreading it to its new land.
    Capital is infected with Sophism, spreading it to its new home. This process is one of the things often called ‘globalization.’

    Eventually, the only people left in the new land are resistant to smallpox, but in the meantime much damage was done.
    Eventually, everyone in the new home develops resistance to Sophism, shedding its poison. In the meantime, much damage is done.


    Posted on November 22nd, 2014 at 12:10 pm Reply | Quote
  • bob sykes Says:

    Even if only as 1’s and 0’s, capital must exist as a physical object in a real location. Capitalists also exist at at particular times and places. Therefore, it and they always subject to local political control and shakedowns (a union labor term). It and they might escape temporarily via the internet and 747’s to another locale, but the basic problem of local control remains. The main defensive strategy of capitalists has been bribery, e.g., Bill and Hilary Clinton, or any member of Congress since the git-go. Occasionally capitalists finance revolutions.. Globalization doesn’t change the problem of the capitalists, and the struggle is endless.


    admin Reply:

    “Globalization doesn’t change the problem of the capitalists” — that’s far too hasty. Capital gains clear leverage from a credible threat to re-locate. For a relatively parochial example, look at the recent history of American Trade Unionism — devastated by its inability to keep employers locked in place.


    Posted on November 22nd, 2014 at 1:33 pm Reply | Quote
  • VXXC Says:

    “If capital is escaping, the emergence of the blockchain is an inevitable escalation of modernity, with consequences too profound for easy summary. If it isn’t, then macroeconomics might work.”

    Are these the only 2 outcomes? Of course not. Another choice is to capture your Central Bank and Politicians to guarantee closed loop profits, both in terms of interest rates and Government Sponsored Enterprise Gambling. See practice since LTCM 1998, 2008 Bailouts and now policy made law under Dodd-Frank.

    I’m actually in favor of Capitalism as far as economics goes, which isn’t all the way. But what we have now is nothing like Capitalism. We have Power Capture of Finance, Central Banks and Governments and it’s impossible to draw any real distinction between them except by function and responsibilities. Governments do not rule Capital, and Capital isn’t regulated by governments. It would be nice if we built things for all this money, we haven’t. We have vast fortunes being made from “notional” fantastic sums that exist only on electronic balance sheets, I don’t think this is what Smith had in mind.

    Others have made the point Capital, and more importantly the capitalists must exist somewhere.

    We also can’t overlook that certain people wish to escape humanity and it’s failings altogether.

    Admin I don’t know if the American Trade-Unionism/Rust Belt example is a good one. Yes on the surface it’s true, but the industries themselves and the people who are in those industries were and are objects of conquest and destruction unto genocide. That would be like using the Ruhr valley 1944-45 as an example of Capital flight overlooking the RAF and 8th Air Force Flights overhead. You can’t quite control for certain negative externalities.


    Posted on November 22nd, 2014 at 6:49 pm Reply | Quote
  • Bryce Laliberte Says:

    I’m suspicious of this imposition of linearity. I suspect there are capital cycles, undoubtedly tied to the population cycle it is an element of; the 20th century saw capital call into being several billion human beings to serve as its consumers, but now it no longer has need of them and we could see the development of a techno-serfdom under a few lords of capital.


    vxxc2014 Reply:

    That’s not a good outcome of course Mr. Laliberte. And why do they keep these serfs around when machines can do the work? [they actually CAN’T but there’s always convenient theories they can].

    Consumerism is dead, and soon enough Keynes will be at last.

    When Capital doesn’t need serfs it gets rid of them, see 19th century Ireland. In particular when the people are resisting serfdom by Lords of Different races and religions, and these people are form groups and are dangerous. See Ireland, again. Remember we’re very much still the offspring of Albion. To the extent we’re not, we’re of the New World.

    The Rhyme of History in The New World is the Lands and Resources are Coveted, but The Peoples are despised. It’s simply the Americans turn, and we should have retrospectively expected History to repeat itself. When you accept what our Rhyme and Rhythms of History here are perhaps the last 50 years makes sense.

    The Radical American Left’s Power Base has always been Finance. Not even the Law has been consistently so Radical for so long. We have no need of Hitler or Stalin’s in America, for we have many Lord Palmerston’s. You have no need of Totalitarians when Whigs are in power Sir.

    There’s one more thing. Sure they Hate us and want us gone, but you see they have to Hate us. They owe fantastic debts, and we’re in the way of those debts being redeemed. Our resources we’re squatting on aren’t just coveted, they’re desperately needed. You have no need of Totalitarians when Whigs are in power.


    Posted on November 23rd, 2014 at 3:08 am Reply | Quote
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