The Capital Question

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“In other words, we have here a real process of abstraction. Precisely the same thing that we do inwardly in our abstract logical thinking, is here accomplished outwardly. The specific quality disappears. The specific qualities, both of the physical substance of land and of the different kinds of labour, gradually disappear in the masses of capital. … Here you have indeed, in the outer world of reality, the completest imaginable process of abstraction. Moreover, it is essential if the thing is to go on at all … for something to be there which is related as an abstract element to all the specific elements contained in the economic process.” (1)

The idea of capital presents us with a challenge. When something becomes entirely abstract it also becomes ungraspable by our normal consciousness which needs to identify particular qualities and associations with an idea in order to be able to make sense of it – to give it some experiential-perceptual content which relates it to our view of the world. Yet what Steiner is describing is “the completest imaginable process of abstraction”. It is little wonder that economists have struggled to get hold of the nature of capital with hard and fast lines.

The human mind endeavours to frame its observations in familiar conceptual terms. When one does so with the idea of ‘capital’, the risk is that capital itself (meaning in its essential nature) becomes identified with an outer expression of itself, which is necessarily of a lower order. Just as ‘the nature of thinking in itself’ is not to be identified in terms of a particular ‘thought’, the same is true of ‘capital: it eludes definition.

The process of thinking, which lies behind our abstract logical thoughts, is always in movement and beyond definition. The intellect can analyse, define and set down its own content in concepts which are clear and unambiguous; it cannot however satisfactorily give a full account of the ITSELF, it cannot ‘capture’ itself, in the way we expect a definition to do

Steiner advocates a descriptive method for coming to grips with economic phenomena which, like thinking, are dynamic and in constant movement. Does it make sense to approach ‘capital’ head on with categorisation and definition or should one not rather describe the process of capital formation, indeed experience it from within?

This issue of Associate! is framed around how one understands and categorises capital. It takes its cue from Gillian Tett’s Sign of our Time, a review of ‘6 Capitals‘, which begs the question as to how helpful or arbitrary classifications are – particularly if the background agenda is to socialise accounting by forcing it to represent something beyond what it currently does – as if a thermometer should be expected to tell the time. Is it one thing or many? And then how many? In an appendix to his 1976 work ‘The Liberation of Capital’, Folkert Wilken, an economist who worked with Steiner’s ideas, explores several categorisations, followed by Steiner’s own differentiation between trade capital, loan capital and industrial capital (called by Steiner, ‘entrepreneur capital’). The theme is then taken up on the AE-Exchange page, concluding with Accounting Backdrop, which endeavours to locate in accounting categories some of the above distinctions.

(1) Steiner, R. (1996) Economics: the world as one economy, Lecture 4, Canterbury.

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