Jonathan Nitzan Israeli-Canadian economist Country: Canada

1. Biography of Jonathan Nitzan
2. Capital as Power
3. Influence of Thorstein Veblen
4. Energetic Theory of Value
5. The Fear of Capitalism

Biography of Jonathan Nitzan

Jonathan Nitzan is an Israeli-Canadian economist and a professor of political economy at York University in Toronto, Canada. He is well-known for his book "Capital As Power: A Study of Order and Creorder," which he co-authored with Shimshon Bichler and was published in 2009.

Capital as Power

In "Capital as Power," Nitzan and Bichler explore the nature of capital in capitalism and present a radical perspective on Marxist and neoclassical economics. According to their theory, capital is a quantitative measure of power. The central concept in their theory is "differential accumulation," where firms seek to gain more profit by surpassing the average rate of return. In their model, it is not possible to speak of absolute accumulation or the inherent goal of companies to maximize profit.

Influence of Thorstein Veblen

Nitzan and Bichler draw on the intellectual legacy of institutional political economists like Thorstein Veblen, the author of "The Theory of the Leisure Class." They adopt Veblen's explanation that business itself, as a stimulus for monetary gain, drives the acquisition of exchange value, while production aims to create useful goods. Nitzan and Bichler argue that it is impossible to separate economics from politics, which is necessary for neoclassical economists to justify their theory based on consumer value and for Marxists to justify the labor theory of value based on the quantitative determination of abstract labor.

Energetic Theory of Value

Instead of the theories of value used in neoclassical and Marxist economics, Nitzan and Bichler propose an "energetic theory of value." According to this theory, the structure of prices has nothing to do with the so-called "material" sphere of production and consumption. They argue that value is not determined by external laws, whether natural or historical, but solely by the needs of society.

The Fear of Capitalism

In one of their articles, Nitzan and Bichler discuss the "systemic fear" of capitalism, which they claim was relevant to capitalists during two periods in modern history - the Great Depression and the 2000s. They limit their analysis to these two examples, suggesting that only since World War I have stock prices and current incomes been highly correlated. However, other researchers provide additional similar examples, such as the period from the 1950s to 1973, known as the golden age of capitalism. Nitzan and Bichler argue that capitalism, developing over the past century, becomes increasingly universal - more and more relevant for integrating the concept of power into the understanding of the nature of capital itself.