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A CasP Model of the Stock Market

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  • Bichler, Shimshon
  • Nitzan, Jonathan

Abstract

Most explanations of stock market booms and busts are based on contrasting the underlying 'fundamental' logic of the economy with the exogenous, non-economic factors that presumably distort it. Our paper offers a radically different model, examining the stock market not from the mechanical viewpoint of a distorted economy, but from the dialectical perspective of capitalized power. The model demonstrates that (1) the valuation of equities represents capitalized power; (2) capitalized power is dialectically intertwined with systemic fear; and (3) systemic fear and capitalized power are mediated through strategic sabotage. This triangular model, we posit, can offer a basis for examining the asymptotes, or limits, of capitalized power and the ways in which these asymptotes relate to the historical and ongoing transformation of the capitalist mode of power.

Suggested Citation

  • Bichler, Shimshon & Nitzan, Jonathan, 2016. "A CasP Model of the Stock Market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 77, pages 119-154.
    • Handle: RePEc:zbw:espost:157801
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    References listed on IDEAS

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    1. Debailleul, Corentin & Bichler, Shimshon & Nitzan, Jonathan, 2018. "Theory and Praxis, Theory and Practice, Practical Theory," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(3), pages 40-57.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    4. Nitzan, Jonathan, 1992. "Inflation As Restructuring. A Theoretical and Empirical Account of the U.S. Experience," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157989, July.
    5. Nitzan, Jonathan & Bichler, Shimshon, 2018. "The CasP Project: Past, Present, Future," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(3), pages 1-39.
    6. Bichler, Shimshon & Nitzan, Jonathan, 2010. "Systemic Fear, Modern Finance and the Future of Capitalism," EconStor Preprints 157830, ZBW - Leibniz Information Centre for Economics.
    7. Fisher, Irving, 1907. "The Rate of Interest," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number fisher1907.
    8. Bichler, Shimshon & Nitzan, Jonathan, 2015. "Capital Accumulation: Fiction and Reality," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 72, pages 47-68.
    9. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720.
    10. Veblen, Thorstein, 1904. "Theory of Business Enterprise," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1904.
    11. Bichler, Shimshon & Nitzan, Jonathan, 2012. "Capital as Power: Toward a New Cosmology of Capitalism," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 61, pages 65-84.
    12. Nitzan, Jonathan & Bichler, Shimshon, 2014. "Can Capitalists Afford Recovery? Three Views on Economic Policy in Times of Crisis," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(1), pages 110-155.
    13. Nitzan, Jonathan, 1989. "Price and Quantity Measurements: Theoretical Biases in Empirical Procedures," EconStor Preprints 157849, ZBW - Leibniz Information Centre for Economics.
    14. Kliman, Andrew & Bichler, Shimshon & Nitzan, Jonathan, 2011. "Systemic Crisis, Systemic Fear: An Exchange," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 4, pages 61-118.
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    Cited by:

    1. Fix, Blair, 2021. "The Ritual of Capitalization," SocArXiv cf5xv, Center for Open Science.
    2. Fix, Blair, 2018. "A Hierarchy Model of Income Distribution," SocArXiv s3y2m, Center for Open Science.
    3. Fix, Blair, 2018. "A Hierarchy Model of Income Distribution," Working Papers on Capital as Power 2018/02, Capital As Power - Toward a New Cosmology of Capitalism.
    4. McMahon, James, 2020. "Reconsidering systemic fear and the stock market: A reply to Baines and Hager," Working Papers on Capital as Power 2020/04, Capital As Power - Toward a New Cosmology of Capitalism.
    5. McMahon, James, 2021. "Reconsidering Systemic Fear and the Stock Market: A Reply to Baines and Hager," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 2(1), pages 30-70.

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