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The Political Economy of Destructive Power
Mehrdad Vahabi
(Université Paris 8, France) © Copyright 2004 Mehrdad Vahabi 1. Destructive power: a
new field of study
Neoclassical economics
rejected social disequilibrium and conflict, and assumed a sustainable
harmony among individual agents through a market economy. Consequently,
revolutions or radical conflicts undermining the social system are considered
to be “unnatural” or irrational, and thus treated as actions resulting from
passions and emotions and not from reason. Since by definition Neoclassical
economics was the study of “rational behaviour”, the study of this type of
irrational behaviour was, as Pareto urged, delegated to sociology, politics,
psychology and history. Of course, Pareto ([1902] 1966) acknowledges that
“The efforts of men are utilized in two different ways: they are directed to
the production or transformation of economic goods, or else to the
appropriation of goods produced by others”. However, since the appropriative
activity does not come within the scope of free choice, it can not under the
Neoclassical view concern the economist. It is true that elementary
textbooks frequently introduce the production possibilities frontier between
“guns” and “butter” (as Samuelson’s favourite example describes the optimal
allocation of resources in his Economics,
1948) to illustrate the nature of the economic problem and the concept of
opportunity cost. It is noteworthy, however, that they never consider the
question of how “guns” might be used in a destructive
manner to appropriate resources from neighbouring peoples or states, and thus
push out the production possibilities frontiers of the society. I propose an alternative
approach to Political Economy, one that considers both the creative
and the destructive power of human beings. This requires that a new field of study,
namely destructive power, be explored by economists. This field
consists not of fragmented and specialized studies regarding the military
sector, criminal activities or the economics of warfare. Instead it embraces
the destructive power of human beings in all its diverse forms. Federating
existing fragmented studies will not achieve a general comprehension of
destructive power, because these studies are based on standard and
inappropriate economic assumptions and methods, such as maximizing and
rationality behaviour, and individual cost/benefit analysis. In this paper I am going to explain what I
mean, in an economic context, by destructive power. 2. Definition of
destructive power To understand destructive
power, we must distinguish between destruction as an integral part of “creation”
(or what Hegel calls “specific, limited or definite negation”) and
destruction as the antithesis of creation (or what Hegel calls “abstract
negation”, [1807]1977, pp. 359-60, 567-68). 2.1 Destruction as an
integral part of creation In a sense, destruction can be considered as the
very act of creation, since all
production involves what might be called “destructive transformation”, like
wheat being ground into flour, or flour baked into bread (Boulding,
1989, p. 239). To produce a chair, we need to use, consume, and thus destroy wood, and the destruction of
wood in a particular way leads to the construction of the chair. Final
consumption can also be viewed as a form of destruction. Destroying a product
through consumption is the counter part of creating utility. In this sense,
destruction is part of creation. In a similar way,
innovative activity can be considered as creative
destruction, as Schumpeter referred to the process of capitalist
development (Schumpeter, 1951, chapter vii). This kind of destruction is the
direct outcome of innovation, namely the destruction
of old products, past processes of manufacturing and archaic forms of
organisation through the introduction of new products, ways of producing, and
organisational methods. The process of learning is
also a kind of self-destruction,
namely the reshaping of our knowledge framework, the rearrangement or
reconstruction of our data and mental representations, and through which
biases can be removed or replaced by new ones. Science can be defined as a
form of destruction, or a process
of permanent destruction of certain ideas, concepts, or paradigms. The
negation of past knowledge is mental
destruction, which like material
destruction, may give
birth to the construction of something new, in this case new knowledge. The accumulation of capital
involves concentration and centralisation of different forms of capital (such
as industrial, financial, or commercial capital) which results in the
elimination of small property owners. Property rights are not limited to holding things for oneself, since through capitalist development, they result in
withholding things from others (Commons, [1924] 1995, pp. 53-54). Thus this process of
capital accumulation generates bankruptcy,
i.e. the destruction of certain firms and the creation of new firms, job destruction and job
creation, as well as mergers and acquisitions in financial markets with
their direct consequences in terms of value
creation and value destruction.
Competition as a natural selection mechanism of capitalism brings into play
forces necessary to weed out elements which can hinder capitalist
development. Budget, monetary and financial constraints provide economic
sanctions through which competition exerts its full power as a selection
mechanism. In all these cases, destruction is an integral part of the
creative process. Overconsumption and
overproduction are part and parcel of economic crisis. Karl Marx clearly
speaks of the “destruction of capital” through crises (Marx, Part II,
[1861-3]1978, pp. 495-96) and distinguishes two different meanings of capital destruction during crises,
namely destruction of real capital (use-value and exchange
value) and destruction of capital defined as depreciation of exchange values. Destruction
of capital through crises constitutes a necessary moment of the capitalist
reproduction process. In this respect, destruction of values is an integral
part of value-creation. Nonetheless, the destructive
power of crises is a “spontaneous” or an “unintended” destruction which
does not result from strategic decisions of individuals or social groups. 2.2 Destruction as the
antithesis of creation To differentiate
destruction from creation, we have to focus on abstract destruction, for which destruction is not just a moment
of the creative process, but constitutes a moment in itself: it means destruction
for the sake of destruction. This is what Boulding
refers to as “the dark side of destructive power”, which goes back a long
way, as shown in the story of Cain and Abel (1989, p. 22). This brings us
once again to threat power which is
different from creative power. The
remainder of this paper will focus on this particular sense of destruction
and destructive power rather than on destruction as an
integral part of creation. Strictly speaking,
destructive power is threat power that may lead to the destruction of use or
exchange values or even human beings and nature. This instrumental
definition of destructive power is free of value judgments. I do not
necessarily consider a destructive action to be a “bad” or Mephistophelian
one. By the same token, a creative action is not necessarily a “good” action.
In other words, my distinction between destruction and creation, as well as
destructive and creative value is not based on an ethical criterion. It does not mean that the ethical or
legitimising aspects of any recourse to destructive or creative power are
denied, it simply implies that in this definition, the value has a purely instrumental character, and does not
contain a judgmental value. Moreover, destructive
power should not be reduced to violence (revolution, civil war and
war, terrorism, hostage taking or other criminal type of activities). It also
includes non violent activities (strikes, demonstrations, or
deliberate exclusion). Among different non-violent forms of destructive
power, exclusion plays a key role. Exclusion is the supreme mechanism
available to a dominant institution (academic, religious, political,
economical or cultural) or a social group, caste, or nation, enabling it to
exert its destructive power against opponents. Destructive power is
both physical and moral or spiritual. The earliest civilisations were
allegedly based on priesthoods. Priests established social rules and threatened
disobedient people with social exclusion or divine punishments. Non-believers
were told they would be punished by preternatural powers and should expect to
endure excruciating pains after their death by going to an awful place like
hell, while believers were promised a blissful life in a beautiful place like
paradise. Moral destructive power
can be carried out through moral threat. However, there exist other forms of
this power that cannot be reduced to moral threat. For instance, gossip is
not a moral threat. But it can spread scandals against certain targeted
people, put them down, exclude them from collective action or groups, and
even morally lynch them. If in gossip, destroying one’s reputation is not
necessarily based on the truth, in blackmailing, the non-revelation of the
truth can be a source of power. Lying and historical
forgery are other forms of destructive power that can destroy individual or
collective memory or identity. This sort of behaviour cannot be reduced to a situation
of asymmetrical information. It may be deployed by a dominant group that
tries to impose its “truth” by every means, including destroying facts,
historical forgery and excluding non-believers. As Napoleon justly remarked:
“What is history but a fable agreed upon”. Finally, destructive power
can be individual or social. When a child “cries” or “breaks
things” and throws a tantrum to impose her/his desire on its parents, s/he is
using her/his individual destructive power. But the power of a community to
exclude or to sanction is its social destructive power. Destructive power has
a strong integrative power. Its importance in social integration is such that
the etymology of “society” gives credence to the idea that “society” was
historically perceived as a military
alliance. Let us examine the etymology of “society”. It derives from the
Latin word societas.
This elaborated socius,
meaning a non-Roman ally, a group willing to follow Rome in War. Such a term
is common in Indo-European languages, deriving from the root sekw, meaning
“fellow”. It denotes an asymmetrical alliance, society as a loose
confederation of stratified allies.” (Mann, 1986, p. 14). The recourse to
destructive power is not only a symptom of crisis or disequilibrium, but a
constant dimension of collective action. 3. Two different
functions of destructive power Destructive power has two
different functions: appropriative
and rule-producing. Although these
functions are inextricable, I treat them separately for theoretical clarity.
For example, the war of the Bush administration against Iraq is being waged
to pirate Iraq’s petrol and to control its economy. In this sense, war as a
form of destructive power has an appropriative
function. But this colonialist war also has a rule-producing effect, since the United States tries to establish
its sovereignty over Iraq, its hegemony in the Middle East, and perhaps to
draw a new map for the whole region in co-operation with Israel. These two
different functions are present in other forms of destructive power. A
revolution is for changing rules, but it also has an appropriative aspect. In
the case of strikes, the appropriative function
is straightforward, since their targets are usually to increase salary,
reduce working hours and so on. Nevertheless, strikes also decide on the way
an enterprise should be run. For workers’ trade unions, striking is a very
strong means that allows them to negotiate with employers concerning workers’
participation in the management. Even the right to strike is an important
political question that involves the rule-producing
function of destructive power. Criminal activity, as another form of
destructive power, has both types of function. Its pirating or appropriative function is obvious, but
it has a more enduring effect, namely a destabilising or rule-disturbing effect which implies disorder, anarchy, and
insecurity. 3.1 Destructive power in
its appropriative function The difference between
these two functions is crucial. Destructive power in its appropriative function is a means, whereas in its rule-producing function, it is an end
in itself. In the former case, destructive power can be defined as an
alternative means of reallocating resources. It can be dubbed “rent-seeking”,
“predation”, “appropriative” and be integrated in a rational expectation or
general equilibrium model of individual agents choosing between creative and
destructive activities in accordance with their private costs and benefits. In a perfect world of fully informed
agents with no randomness, and devoid of radical uncertainty, it can be shown
that the appropriative function of
destructive power may be realised with no real destruction or violence (See
Grossman and Kim, 1995, 1996). All strands of the Neoclassical approach, such
as rational conflict theory, general equilibrium models of violence, and
socio-political instability models of new political economy lead to this
result. Money neutrality in a
general equilibrium model of creative activity is analogous to violence neutrality in a general
equilibrium model of appropriative activity. In both cases, money and
violence are considered to be the means to achieve a particular end. In
Neoclassical theory, money neutrality is related to the role of money as a
means of commodity circulation, or fiat
money. By the same token, violence neutrality is related to the role of
destructive power as a means of appropriation. In both cases, money and
violence disappear in equilibrium. Agents are regarded as self-interested and
calculating individuals endowed with ex
ante rationality and maximising behaviour. 3.2 Destructive power in
its rule-producing function Destructive power in its rule-producing function resembles
money as a store of wealth. Money in
its function as a store of wealth is required for its own sake, for its liquidity and can be regarded as an
end in itself. What determines the liquidity
preference of people? “Our desire to hold Money as a store of wealth is a
barometer of the degree of our distrust of our own calculations and
conventions concerning the future […] The possession of actual money lulls
our disquietude; and the premium which we require to make us part with money
is the measure of the degree of our disquietude.” (Keynes, 1937, p. 216).
Uncertainty about conventional judgements resulting from a multitude of
agents’ anticipation about the state of the market in the future, and their
distrust about their own calculations are the sources of liquidity preference. Money can serve as an insurance against
uncertainty because of its social
or universal value. Liquidity preference is thus decided
not by individual agents but by
conventional judgements, which are formed through a social process. In this process, the dominant opinion of the
leading deciders in financial markets determines the social norm. Destructive power in its rule-producing function is most likely
required for its own sake, since it is the foundation of law or legal order.
Destructive power as the last resort to maintain a desired order can overcome
or mitigate our distrust about the possible violations of order by others.
While the appropriative function of
destructive power may be dealt with in an individualistic framework, the rule-producing function of this power can
only be grasped in a social context. Keynes’s famous phrase “in the long run,
we are all dead” reveals an important aspect of economic reasoning. Any
individual is concerned first and foremost by economic interests during
her/his personal lifetime. Individuals do not behave as species or dynasties
with regard to their short-term economic interests. However, it is true that
in war as well as revolutionary action “individualism is the first to
disappear” (Fanon, 1968, p. 47). In such cases, one can observe a kind of
group coherence which is more deeply felt and shared by large masses of
people and shows a much stronger, but less enduring, attachment than all
other varieties of private or civil friendship. Individual self-consciousness
thus turns into a collective consciousness and the immortality of the species
takes the centre stage of our experience. Nonetheless, it is not only in
wars, revolutions, or other violent forms of action implying death that we
are confronted with this sort of behaviour. In almost all protestations
undermining the existing order, individuals become conscious of their role as
part of a species or a dynasty. Broadly speaking, if economic reasoning leads
to Keynes’s motto that “in the long run, we are all dead”, political reasoning
results in the opposite motto “in the long run, we are all alive”. The time
horizon of economic reasoning is different from that of political reasoning. Destructive power in its appropriative function follows
economic or private reasoning,
whereas destructive power in its rule-producing
function complies with political, social groups’ (classes) or public reasoning. This explains why
the appropriative function of
destructive power is consistent with an individualistic Neoclassical
framework, while the rule-producing
function of this power is in contradiction with such an approach. Conclusion Integrating both functions
of destructive power into Political Economy is a new challenge for economists
who think that economics should extend its traditional frontiers as a science
of creative power of human beings. My objective is to bring together the
question of sovereignty with that of property, which is more in tune with
what Adam Smith (1776) considered to be the main concern of Political
Economy: “The great object of the political economy of every country is to
increase the riches and power of that country”. In doing so, I
must emphasise that my intentions are free from economic imperialism for two
reasons. First, I do not find the application of the present standard
assumptions of economic analysis such as rationality and optimisation
appropriate for my goal. Second, the integration of destructive power in
economic analysis requires economics to come closer to other social sciences,
such as philosophy, political science, psychology, sociology, and military
science. Nevertheless, I think that in analysing the value of destructive power
economists have something to say, since they have been dealing mainly with
the issue of value over the last three centuries. As a student of social
science, I have tried elsewhere (Vahabi, 2004), to
take advantage of all social sciences that are relevant to my subject in
order to contribute to the Political
Economy of destructive power. This effort comes within the scope of an
approach that regards Political Economy as a discourse both on the creative
and destructive power of human beings. Note1. Contact address:
Mehrdad.vahabi@wanadoo.fr. This article draws extensively on a book I have
recently published: Mehrdad Vahabi,
The Political Economy of Destructive Power (Edward Elgar,
2004). References Boulding, K.E., 1989, Three faces of power, Newbury Park,
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