Who controls the future? The answer to this question concerns the role and politics of financial investment under capitalism. Through its mode of investment, capitalism distinctively values and creates our future. First, it does so by capitalizing the future, by means of economically valuing now certain goods and assets, while devaluing others, based on what investors expect their future returns to be. The fact that, say, car-sharing companies are now valued on the stock market billions of dollars represents the fact that investors believe in a future where such companies will be able to generate revenue, by achieving market dominance. The ownership of these companies’ shares is a claim, obtained in the present, to the profits that dominance, once achieved, will generate in the future. The main source of investors’ wealth, in the form of future returns, is thus not accumulation from the past, but rather the power to shape the future. Investment itself provides such a power. Indeed, the more investment there is in car-sharing companies now, as opposed to, say, public transportation, the more such companies will have the material power, in the form of available capital, to survive competition and thus to shape the future according to their own vision. The more these companies will have such power, the more they will also have the power, and the incentive, to block the formation of alternative futures—a future with efficient public transportation—since doing so will be necessary to survive competition and to satisfy the investors’ present claims to future returns.
Investment not only shapes the future by capitalizing it, and by treating it as a malleable source of profits. It also does so by serving as a precondition of material production in the present—production which, in turn, determines what jobs and objects will exist and which social commitments will be possible for a society to achieve. Take the example of fossil fuels. Their extraction from the ground presupposes the process of capitalization, as it requires huge amounts of capital to support the needed infrastructure, from offshore oil rigs to long-haul pipelines. The availability of investment based on expected future returns thus determines whether fossil fuels will exist qua fossil fuels. As one author puts it, “Fossil resources do not first exist as physical assets awaiting to become financial assets in a following step. Rather, capitalization is the condition for fossil materials to become fuels at all.”
The fact that the production of needed resources depends on the amount and direction of investment raises, in turn, many of the most central issues faced by governments today. Will there be sufficient private investment to support a green energy transition, and soon enough? What technological innovations will be developed? Which social aspirations will it be feasible to achieve—will there be sufficient investment in culture, education, and the arts? What will the cities of the future be like? Will we have the resources to meet pressing ethical obligations, like caring for dependents, including children and the elderly? These questions echo in current European political debates, whether over the future direction of the European Union itself, possible military rearmament, or possible Europeanization of national debts through new devices like “Eurobonds.”
Yet, despite its crucial importance and much talk about increasing public investment, investment under capitalism remains largely privatized, or subject to what Stefan Eich calls “the politics of depoliticization.” States may incentivize and attempt to direct investment through so called “derisking,” including monetary and fiscal policy, and there is some public investment. However, decisions as to whether to invest in productive activities or to hoard cash or to speculate through financial instruments largely remain at the discretion of private actors, including corporate asset managers, leading to notorious, if contested, economic and social problems, such as stagnation and the underproduction of needed resources.
In response to these concerns, some question the appropriate role of the state and international organizations in directing, taming, or regulating the capitalist mode of investment and the behavior of major institutional investors, through regulatory mechanisms, monetary incentives, and changes to corporate governance.
What these debates neglect, however, is a more fundamental normative question: If capitalism, by simultaneously capitalizing the future and privatizing investment, deprives citizens of collective control over the making of their society’s future, does focusing on the capitalist mode of investment tell us something new about what may be distinctively wrong or amiss with capitalism itself, beyond traditional concerns of labor exploitation and domination?
In a recent article, I argue that capitalism’s distinctive mode of investment and monetary valuation is best understood as a form of impersonal governance. The investment process “governs” because it imposes on us transformative decisions, which largely determine the ends and future course of our society. Unlike gravity or other ‘impersonal’ laws of nature, it does not simply constrain our options for choice or set the background conditions against which we can freely act. Rather, it sets ends. It orients us towards particular futures rather than others.
The investment process constitutes a form of “impersonal” governance, for the decisions that emerge from it do not express the free decisions of any particular agent. The great power of some institutional investors notwithstanding, there is no agent, whether individual or collective, who can unilaterally determine the direction of investment. Further, investment patterns cannot be attributed to the will of a group agent, whether a corporate agent, a team, or a class, because investors lack the features—shared intentions, a shared plan, and consciousness of shared intentions—that are necessary to qualify as an agent of this kind.
If we, therefore, want to understand what is distinctively amiss with capitalism, we cannot simply ask what may be wrong or amiss with being subject to the arbitrary, agential power of individual capitalists or corporations, we also need to ask what is wrong or amiss, if anything, with being subject to “the rule of none”—a system of impersonal governance by capitalism’s mode of investment.
The answer, it turns out, cannot be framed in terms of domination because, as we’ve just seen, subjection to the capitalist mode of investment does not amount to subjection to the will of any identifiable superior agent, but rather to an impersonal form of governance. Even if investors may qualify as a diffuse collective, diffuse collectives, unlike group agents, cannot, I believe, dominate, as subjection to their power does not come with the kind of status harms that are constitutive of domination. Nor we can say that we are impersonally dominated by investment markets. The reason is that the notion of impersonal domination is conceptually incoherent, for subjection to impersonal market arrangements lacks, once again, certain inegalitarian features that are constitutive of relations of domination.
Interestingly, the problem at stake is not reducible to an egalitarian one either. This is not only because we can all be equally subject to the impersonal power of stock and capital markets, but also because the privatization of investment, as well as the fact that investment under capitalism is primarily oriented towards future returns, may still be problematic even if every private investor had equal power to influence the making of the future. The problem, simply put, has to do with the fact that a world that emerges from the atomistic, uncoordinated, and profit-oriented aggregation of private choices through an impersonal investment process is a world citizens cannot relate to as something they have jointly authored and can collectively affirm.
The problem with being subject to the capitalist mode of investment is, I would argue, better understood in terms of social alienation, by which I mean a deficient, because non-authorial and non-affirmative, relation between citizens and their sociopolitical order. The capitalist mode of investment necessarily produces social alienation, so defined, because, by being privatized, (i) it deprives citizens of joint authorship over, and involvement in, the making of their society’s future and, by being anarchical (unplanned), (ii) it leads to patterns of production that are too irrational to be a fit object of affirmation. If investment markets are largely anarchical and depoliticized, how can citizens be reasonably expected to relate to the world these markets produce as the product of their collective doing and valuing, rather than as an alien imposition by impersonal forces? And, how can they relate to it as something they can affirm, rather than as something alien to them? Contrary to celebrating, with Hayek, impersonal market forces as a form of freedom-enhancing “spontaneous order,” my view is that such subjection amounts to a serious form of social alienation, and ultimately of collective unfreedom. Phenomenologically, alienation is characterized not by a feeling of intimidation and subordination, but rather by a sense of powerlessness and detachment. These, I take, are common features of societies whose future destinies are largely decided by impersonal market forces, rather than by democratic or even authoritarian rulers.
We should agree, I think, with those who argue that an interest in non-alienation is among the values that ground the case for collective-self-determination. What is the reason why we want to live in a world governed by laws and decisions that we have contributed to making rather than in a world ruled by robots, however reasonable or rational? The reason is largely that we want to relate to our socio-political world as something we have authored and can affirm as expressing our own priorities and joint intentions. In other words, we want rule of all rather than rule of none because we want a non-alienated relation to our sociopolitical world.
We should also agree that collective self-determination cannot be validly exercised in ways that violate or contradict its own grounding values. Yet, if this is correct, and if nonalienation grounds collective self-determination, then a collective, even if democratic, decision to authorize a necessarily-alienating capitalist mode of investment should be regarded as lacking normative authorizing force. Capitalism, as a mode of governance, is thus illegitimate (it lacks valid democratic authorization), whether or not it is also unjust.
The normative problem with capitalism, then, is not just that it produces inefficiencies, unjust inequalities, or that the capitalists, individually or as a class, exploit or dominate workers through the institution of private property, as liberal-egalitarians, analytical Marxists, and radical republicans have all, in different ways, pointed out. The problem is also, and perhaps more fundamentally, that capitalism alienates everyone, by subjecting all citizens to the impersonal governance of investment forces. By alienating citizens, capitalism further provides an illegitimate, and thus wrongful, form of governance. Capitalism is illegitimate, whether or not it is also unjust.
Importantly, for citizens to be able to enjoy a nonalienated relation to their sociopolitical world, they must not only recover efficacious control over transformative investment decisions that shape the course of their society, as demanded by the authorship requirement of nonalienation. It is also necessary that such control amounts to a form of rational planning according to a plurality of values, and that the agency of citizens be directly involved in the exercise of such control, as demanded by the affirmation requirement of nonalienation. This in turn means that any socialist project aimed at overcoming capitalism’s social alienation should demand not simply workers’ collective ownership of, and control over the means of production, but also the democratic planning of investment. Financial democracy is the answer.
Chiara Cordelli
Chiara Cordelli is Professor of Political Science at the University of Chicago and Affiliated Faculty in Philosophy. She is the author of The Privatized State, which was awarded the 2021 ECPR political theory prize for best first book in political theory. She is currently working on a new book, provisionally entitled Ruled by None: A Political Theory of Capitalism.
