In A Thousand Plateaus, Deleuze and Guattari take up Marx’s “trinity formula”—that which “comprises all the secrets of the social production process”, unifying the differing dynamics of land, labor and capital—and, through significant modification, offer a picture of the tripartite structure that underpinned the economic logic of the ‘archaic Urstaat‘. The Urstaat, organized around the gaze and reach of the emperor-despot, is what Lewis Mumford described as the “megamachine”. Deleuze and Guattari take the inner logic of this megamachine as one of machinic enslavement, where “human beings themselves are constituent pieces of a machine that they compose among themselves and with other things (animal, tools), under the control and direction of a higher unity”. The overcode is key here, as the mechanism through which these various elements come under the directive of that ‘higher unity’.
The Urstaat is also an apparatus of capture, and it is through this prism that Deleuze and Guattari build their theory of the primordial trinity formula. Three forms of capture, each with a correspondence to a different aspect of the stock: rent (-> land), profit (-> labor), and taxation (-> money). Each is based in a different mode of “monopolistic appropriation”: land by ‘absolute rent’, labor through the imposition of the “work-model”, which instantly generates the surplus labor that is appropriated, and money through “the issuance of currency”.
It’s this last bit that interests me the most at the moment—I wrote in my post on Deleuze and Guattari’s theory of money how the ‘schizophrenia’ of capitalism is understood on the basis of the conversion between two distinct forms of money, money as “pure creative flux” that is created ex nihilio by central banks and the money-capital of the production/circulation circuit. There’s a convergence between Deleuze and Guattari here with modern monetary theory (MMT), which emphasizes how the state, not commercial relations, is the basis for money used in financing productive enterprises and in circulation. And like Deleuze and Guattari, MMT also looks to the central bank’s role as the creator of money. Directly echoing the usage of French economist Bernard Schmitt by Deleuze and Guattari, prominent MMTers Éric Tymoigne and L. Randall Wray write that
the theoretical insight that MMT draws is that government spending (by the Treasury or spending and lending by the central bank) must come first, i.e. it must come before taxes or bond offerings. Spending is done through monetary creation ex-nihilo in the same way a bank lends (buying financial assets) by crediting bank accounts; taxes and bond offerings lead to monetary destruction… in the same way that loan repayments destroy bank deposits.
MMT is ultimately a revival of Chartalism, a school of monetary theory inaugurated by Georg Friedrich Knapp in the early 1900s. For Knapp, money’s status did not derive from its status as a commodity or (in the case of the metallists) from magnitudes of gold; instead, the value was in the first moments determined by money’s legal status. Money, issued by the state, as legal tender, which the state recognizes as the valid form for payments. This theory of money, importantly, could bring together differing manifestations of legal currency: be it coins forged from precious metals or paper notes, the internal logic remain the same.
Proto-Chartalist themes can be found in Marx; while his commodity theory of money is far better known and recognized, the points where he dips into the historical progression of money often brings him to the edifices of the state. In the Grundrisse, for example, he writes of how “Prussia has paper money of forced currency. (A reflux is secured by the obligation to pay a portion of taxes in paper.)” The reflux referenced here is the flux/reflux model of Tooke and Fullerton—both great influences on ‘circuitists’ like Bernard Schmitt—that analyses how money is issued from a given authority (usually a bank) for financing purposes, and then is returned again as a portion of the profits accrued by the indebted enterprise. But where Tooke and Fullerton are more concerned with the way that a financing-structure underwrites the productive economy, Marx here is using the same language to analyze state financing and the way that taxes precede money through the state’s monopolization on what is and isn’t currency for payments.
Such insights stand at the dawn of MMT. Former Wall Street trader Warren Mosler initiated the whole school by arguing that taxes were not the prerequisite for government spending. Spending, instead, is the very creation of money itself. So what then of taxes? As the Critical Finance blog summarizes:
According to Mosler, the purpose of taxation is instead to create the demand for government-issued currency. In the absence of taxes, Mosler contends, there would be no demand for essentially worthless pieces of paper. But in declaring and imposing the unit (the dollar) in which tax obligations must be discharged, the government ensures widespread use and acceptability of its currency.
These ideas turned out to be compatible with those of Randall Wray, an academic who was working on “Chartalist” ideas concerning the role of the state in defining and enforcing what is used as money. In the Chartalist view, money is not and has never been a commodity such as gold. Instead, money is essentially a system of IOUs that keeps track of credit and debit positions across a society too large and complex to rely on direct credit relationships…
The core of MMT is a synthesis of Mosler and Wray’s ideas about government money with elements such as Abba Lerner’s “functional finance”.
In their discussion of the Urstaat‘s ‘trinity formula’, Deleuze and Guattari likewise stumble across this same basic dynamic. Taxation is one point of the threefold apparatus of capture, but it is through taxation that rents and the ‘work-model’ (i.e. the molding of free activity into labor) emerge. Money itself is realized only after the consolidation of taxation:
As a general rule, it is taxation that monetarizes the economy; it is taxation that creates money, and it necessarily creates it in motion, in circulation, with turnover, and also in a correspondence with services and goods in the current of that circulation. The State finds in taxation the means for foreign trade, insofar as it appropriates that trade. Yet it is not from trade but from taxation that the moneyform derives. And the money-form thus derived from taxation makes
possible a monopolistic appropriation of outside exchange by the State (monetarized trade).
The touchstone for Deleuze and Guattari’s arguments is the analysis of the Greek monetary system by Edouard Will. In his summary of Will’s work in Lectures on the Will to Know (the book that introduced to Deleuze and Guattari to Will), Foucault describes how 7th and 6th century Greek societies introduced money “above all (as) an instrument in the hands of the State enabling taxes and fees to be established (commercial use being secondary)”. Will himself situates this in what has been called the “redistributive crisis”, where taxes were levied on the wealthy in order to finance the temples, the public works, and the provisions for the poor. In its initial guise this tax was exacted upon the landowners, but did not address the problem of debts; for this reason, tax was applied to incomes.
The twist, as Deleuze and Guattari are quick to note, was that this taxation in fact benefited the wealthy due to the question of debt settlement: through the matrix of redistribution, the money allotted to the poor allowed them to pay the debts they held to rich. But beyond this question (which Deleuze and Guattari, in Anti-Oedipus, describe as the basis for the capitalist realization that “heavy taxes are good for business”) is the formation of money itself. For taxation, redistribution, and debt-repayment to take place, a standardized medium must be put in place. Thus taxation itself has birthed money, the logical and historical predecessor to the legal means of payment. It’s at this point that the basis for money as a commodity—via the comparison and equivalence of good on the market—can begin to emerge.
One of the problems I have with MMT as a theory is that it at times seems to tilt away from understanding capitalism as a historically-bound mode of production; the lectures of Wray and others, while very good, are often a hop and skip through the annals of history, a mad dash through reams of archaeological and anthropological data on disparate and unrelated locales to determine the true essence of money. By taking taking Deleuze and Guattari’s comments on the Urstaat on the one side and their reflections on banking (especially central banking on the other) and drawing comparisons between the state-form through each, the same problem might seem to arise.
This isn’t, I think, the real heart of the matter. My last post was about how the state undergoes a qualitative shift in the passage from pre-capitalist social formations to the capitalist social field proper. This shift is precisely one from where the state (originally the Urstaat, or ‘Asiatic despotism’ as Marx called it) stood apart and above the social and commercial field as a transcendent figure, to a series of relations embedded within an immanent field. The Urstaat, its apparatuses of capture, and ‘machinic enslavement’ all return within capitalism, but they return in new, freshly subordinated guises—compensatory mechanisms at both the interior limit and external horizon of capital, as an extension of it (analogous to a sort of means-ends reversal).
Thus: the public land becomes the presupposition for private land, which becomes decoded into commercial flows, and money that spin off from taxation becomes the decoded flow of money, the “pure creative flux” that undergoes conversion into money-capital. In the tripartite structure of rent, profit, and taxation, the first two pass from the hands of the state into the hands of the private actor, though the state retains the last one.
Or, as they summarize,
…the overcoding of the archaic State itself makes possible and gives rise to new flows that escape from it. The State does not create large-scale works without a flow of independent labor escaping bureaucracy (notably in the mines and metallurgy). It does not create the monetary of the tax without flows of money escaping, and nourishing or bringing into being other powers (notably in commerce and banking). And above all, it does not create a system of public property without a flow of private appropriation growing up beside it, then beginning to pass beyond its grasp; this private property does not itself issue from the archaic system but is instituted on the margins, all the more necessarily and inevitably, slipping through the net of overcoding.
…we must take int account a “materialist” determination of the modern State or nation-state: a group of producers in which labor and capital circulate freely, in other words, in which the homogeneity and competition of capital is effectuated, in principle without external obstacles. In order to effectuated, capitalism has always required there to be a new force and a new law of States, on the level of the flow of labor as on the level on the flow of independent capital.