Excerpt: Joseph Vogl, The Specter of Capital

Since the Middle Ages, the rudiments of a functioning credit system have been necessary conditions for the expansion of commercial capitalism. […] It is all the more surprising, then, that it was not until the end of the eighteenth century that a sufficiently systematic discussion of banking, capital, and credit mechanisms got underway. This may be due to a delay in the emergence of a systematic science of economics, which was notoriously late in catching up with manifest business practices; but it may also have owed something to a certain theoretical resistance to the fact that a genuinely capitalst structure — one that trades with credit, assets, prospective profits, and hence with time — could no longer be directly translated back into elementary exchange and balance relations. Though people still assumed that there was a balancing dynamic at work in the market, the constant circulation of debt, credit, and capital they observed seemed to contradict this assumption, and they were evidently alarmed by the wide-ranging impact of the economic decisions and actions being taken.

Joseph Vogl, The Specter of Capital (Stanford: Stanford University Press, 2015), p.41.

Excerpt: Joseph Vogl, The Specter of Capital

Even if the concept of equilibrium has taken different theoretical and epistemological forms on its journey from classical economics, via the marginalists of the nineteenth century, to twentieth-century neoliberalism, these versions share a limited spectrum of basic assumptions. They assume that all market players are interested in maximizing profit or use-value, that a self-regulating relationship between different quantities, forces and other factors obtains, that exchange mechanisms operate most effectively when arbitrary intrusions and interventions are kept to a bare minimum, and hence that the market should be seen as an exemplary arena for the clarification of otherwise inscrutable and opaque forms of social interaction.

Joseph Vogl, The Specter of Capital (Stanford: Stanford University Press, 2015), p. 35.

Excerpt: Joseph Vogl, The Specter of Capital

There may be little agreement about the actual status to be accorded this equilibrium in the nascent discipline of political economy (for example, about whether it should be understood as an optimum, a principle, or a reality), and Smith himself may never have set out exactly what he understood by equilibrium; nonetheless, equilibrium theory became a crucial element of economic knowledge and was passed on through Ricardo, Walras, Jevons, and Pareto to the doctrines of the twentieth century. […] Economic theory was born as a theory of equilibrium.

Joseph Vogl, The Specter of Capital (Stanford: Stanford University Press, 2015), p. 31.