Discussion by Nicolas Da Silva (FNEC, University of Paris 13)
Full text of the report

“I prepared this discussion of Olivier Favereau’s contribution based on the article « Valeur(s), exploitation et économie des conventions » published in 2018 in the Cahiers d’économie politique.

For me, this text presented two difficulties. The first difficulty is that it constitutes an open-pit mine, both in terms of the variety of fields in the literature covered and the analysis proposed. How then to start the discussion? From what angle? The proposed synthesis of the conventionalist program over the past 30 years? The presentation of Marx’s project? The criticism made of Marx? The attempt to bring economics of convention (EC) closer to Marx? The application of all this to the theory of enterprise developed within the Collège des Bernardins? The task is immense. The second difficulty is that this text is very finely written because not only does Olivier Favereau put forward his argument but, in addition, he gives the floor to his possible opponents to answer them in the process. He cuts off our whistle, and we have trouble finding the way back.

So I didn’t find a good solution to sort and prioritize my questions. So I will propose here a rather arbitrary discussion of three main issues: the evolution of the EC program, Favereau’s ambivalent relationship to Marx and the implications of all this on his theory of enterprise.

     1. The evolution of the Economics of Convention program

In this text, Olivier Favereau offers in a few pages a long-term analysis of the evolution of the research program on the economics of convention. Two important moments are distinguished and then better show their coherence.

Based on Boltanski and Thevenot’s book, “De la justification” (1991; English “On justification” 2006), the first part of the program was to propose a new way of doing business by combining the question of values, coordination and rationality. In Corcuff’s words, “there is no coordination of (economic) behavior without coordination of judgments about it” (p. 122). The concept of justification implies that the happiness of the big ones is the happiness of the small ones. According to Favereau, Boltanski and Chiapello’s publication of the New Spirit of Capitalism (1999) marks the second moment in the economics of convention program. They continue the work of re-imbricating between value, coordination and rationality by showing that, alongside competition, criticism (referring to values!) is another driving force behind the dynamics of capitalism. In other words, there is no reproduction of economic inequalities without criticism of these inequalities and their reproduction. Favereau then defined exploitation as the opposite of justification: the misfortune of the little ones makes the happiness of the big ones. Overall, while EC1 [first period of the economics of convention: at INSEE, the Centre de l’étude de l’emploi and Boltanski and Thévenot (1991)] seeks to generalize coordination, EC2 [second period of the economics of convention after Boltanski and Chiapello (1999)] emphasizes the importance of reproductive criticism.

My first question is about this evolution between EC1 and EC2. Olivier Favereau writes in the text that the initial focus on methodological individualism in 1989 was linked to “the urgency in criticizing the dominant neoclassical economy” (p. 122). In what way did this “urgency” require an approach based on methodological individualism rather than elsewhere? For example, the theory of regulation proposes at the same time (and even before) a critique of neoclassical theory of a different nature. Why focus on criticism of rational choice theory?

I have a complementary hypothesis to submit. Isn’t the way to criticize neoclassical theory – both among conventionalists and regulationists – less related to the economic situation and power relations in the university institution than to purely theoretical needs? Let me explain. Economics, the daughter of law, has never been a discipline marked by the seal of subversion. In addition to this, the 1970s and 1980s in France saw the growing influence of what the American historian Michael Christofferson called the anti-totalitarian left – that is, the anti-communist left. Wasn’t this period simply conducive to a radical critique of neoclassical theory since the economy? The peak of academic radicalism was then the French theory, which itself insisted more on the question of domination than on that of exploitation. For example, for Foucault, there is power everywhere but there are no capitalists anywhere!

Without making any theoretical or empirical judgments about EC1 and EC2, can’t we also read – and maybe first? – this evolution as a radicalization following the deterioration of the economic and academic situation? I do not recall the AFEP (Association française d’économie politique) fight in section 5. Olivier Favereau’s radicalization would then not be linked to the linear and coherent accumulation of knowledge … but to the questions we ask ourselves, the questions the researcher asks himself. And, when you look outside, there are indeed urgent questions to ask.

I then wonder if this is not another aspect of Favereau’s attachment to Keynes’ approach: like Keynes, he does not want to bypass the orthodox citadel, but does he not radicalize himself so theoretically and politically according to events? The provocative question would then be to know if, like him, capitalism has an impassable horizon or if it gives us the keys to get out of it – I would come back to that.

     2. Olivier Favereau’s ambivalent relationship with Marx

The second set of questions and comments concerns the ambivalent relationship at Marx. I describe it as ambivalent because, as it is underlined throughout the text, Olivier Favereau rejects Marx in order to find him better – unless it is the opposite …

The ambition is to reconcile Marx and Proudhon. After praising Marx’s “tour de force” in his definition of exploitation as an unpaid share of the value produced by the labor force, Favereau rejects his theory of labor value because it is based on an objective conception of value. Marx’s strength and mistake would be to seek to establish a scientific and objective basis for exploitation without resorting to the space of moral values. Property is not stealing. While rejecting this Marx, Favereau gives weight to what he calls his project (or metathesis): “it is only in an area of analysis and measurement where theory succeeds in integrating the variables “justice” or “injustice” that the laws of operation and evolution of capitalism become intelligible”. In short, Marx’s project would have been served, if not betrayed, by his theory of labor value” (p. 128-129). By integrating moral values, it would then be possible to define, with Marx and Proudhon, exploitation as a theft.

In this text, Favereau takes up André Orléan’s criticism in “L’empire de la valeur” (2011; English “The empire of value” 2014) that, like neoclassical theory, Marx was wrong in seeking an objective basis for value. For Marx, the value would be an objective quantity given by the quantity of work contained in the goods. However, this interpretation of the theory of labor value is disputed. For example, Jean-Marie Harribey points out that value-labor theory only makes sense in the analysis of capital as a social relationship of production. In this context, any work that produces a commodity, which does not sell, does not produce value: there is no “substance intrinsic to the object” and there must be social validation by the market. Moreover, it seems that Orléan’s object and Marx’s object are not the same. Marx is interested in production and reproduction while focusing on financial markets and money, André Orléan is interested in particular cases for Marx: goods that are not produced (raw materials), non-reproducible goods (art) and the product of speculation (financial assets). Rather than thinking of an opposition, can we not think of a complementarity between Orléan and Marx?

Just one last remark on the question of labor value and the rejection of an objective substance of value. I have a rather naive question. If all the value is intersubjective or mimetic, if the economy is only a science of relationships, is it that we are not missing one of the main issues of this century: the irreversible depletion of natural resources, the extinction of species and more generally ecological upheavals.

In his attempt to bring the economy closer to the conventions of Marx’s work, Olivier Favereau remains surprisingly silent on Marx’s theory of alienation. Reading note number 4 states at the beginning of the text: “By putting exploitation, rather than alienation, at the heart of Marx’s project, I choose the Marx of maturity, that of Capital, against the young Marx, that of the 1844 Manuscripts” (p. 120). This is quite strange because the concept of alienation seems a priori more suitable for a reconciliation with EC than the concept of exploitation. If Marx does not speak of it in this way, in his theory of alienation, there may be a space of values, criticism and justifications.

To put it briefly, alienation is the phenomenon by which workers internalize as a reality, as a truth, what is in fact a social relationship. In the capitalist mode of production, through their daily experience of labor power at the service of capital, employees internalize their position in the production chain but also their political inferiority compared to the capitalist holder of the means of production. Capitalist industrial labor impoverishes man both in terms of his means of material substance (exploitation) and in terms of his means of achieving himself as a complete man (alienation). By anticipating what will happen next, alienation implies that employees no longer even think that they are legitimate to decide what should be produced and how. Why would they be entitled to participate on the board of directors of companies? Beyond economic relations, all social activities contribute to the reformation of subjectivities in the service of capital – one can think of the media, culture, school, family, etc. Doesn’t the approach of economics of convention find here essential arguments for the criticism of industrial and commercial cities? Isn’t there also a theory of bad conventions in alienation?

This question on alienation refers to a more fundamental criticism of text concerning Favereau’s interpretation of Marx’s project. He presents Marx’s project around the idea that it is in the space of values that capitalism can be made intelligible. However, this is not what Marx is trying to do, this is what Olivier Favereau is trying to do to establish a link with the theory of exploitation. This does not mean that there are no possible links between EC and Marx, but we are not obliged to make Marx say what he does not say. What is the project of the Marx of the book Capital, the one that interests Favereau? It is to understand capital (and not capitalism) as a social relationship of production where exploitation is one moment among others. It is a social relationship in the sense that it is an element of a social architecture that binds and opposes social groups (there is not only capital!). It is a production relationship in the sense that capital organizes its social groups according to the relationships they maintain with their material conditions of existence. However, if capital is a social relationship of production among others (such as slavery, serfdom, small market production), it is original and is characterized by at least four main features:

1/ Expropriation of producers: producers are separated from their means of production. The serf, for example, is overwhelmed by personal dependence on his lord, but he is still attached to the land and can live from it.
  2/ Labor power is transformed into a commodity: a condition for its material survival, the potential producer (the worker) must find someone (the capitalist) who buys the only thing left for him, his labor power.
  3/ Added value: by unifying the labor force and the means of production, the capitalist derives an added value which is the difference between the price of the labor force (the wage) and what it produces (it is the exploitation ratio).
  4/ Accumulation: for capital as a social relationship of production to be coherent, the capitalist must not consume all the surplus value and must use at least part of it to increase his initial capital.

Exploitation is therefore a moment of capital. How can the economics of convention allow us to develop this more general Marxist project? I come back to the question on alienation: would the economics of conventions not be more compatible with Marx’s project when it seeks to understand why certain representations impose themselves and naturalize arbitrary social constructions? Why is capital as a social relationship of production so widely accepted among the employees who suffer from it? Why all this when other worlds – non-capitalist worlds – would be possible?

     3. Theory of the enterprise developed at the Collège des Bernardins

The third and final set of questions and remarks concerns the theory of the enterprise that Olivier Favereau developed as part of his research at the Collège des Bernardin. Its opponent is Milton Friedman’s theory that the company belongs to its shareholders because they have ownership rights. Favereau rightly notes that by relying on law, Friedman opens the door to criticism because companies are not objects of law (such as a table) but subjects of law (society). The use of law in business analysis is extremely fertile but raises questions.

On page 135, Favereau writes; “there is no capitalism without enterprise; there is no enterprise without right either; therefore by transitivity there is no capitalism without right”. But he acknowledges a few lines lower than: “In France, the law on public limited companies dates back to 1867 as far as the company contract is concerned; and the Bardou judgment of the Court of Cassation, which defines the employment contract by a relationship of authority, dates back to … 1931. This means that Marx will have published Book I of Capital in the same year in which the company contract was defined in law, and will not have experienced the legal stabilization of the employment contract, which will only occur in France nearly half a century after his death. »

If there is no capitalism without rights, then it would mean that there is no capital as a social relationship of production before 1867, or even 1931, i.e. before company law and labor law? Can we not rather say that capitalist law legitimizes a social relationship that is built earlier and that breaks with previous forms of law?

According to Olivier Favereau, we live “a form of the capitalist mode of production, which is chemically purer than in Marx’s time” (p. 136). It is a very strange formulation that seems to tell us that there is no law outside capitalism. However, for the sociologist of law Claude Didry, the employment contract is a workers’ conquest in the face of the naked relationship, which is capital. The contract of employment allowed the capitalist to wash his hands clean, to deny his responsibilities and to generate harmful competition for the workers (bargaining), competition organized by the workers themselves in a large chain of subcontracting. From this point of view, the employment contract is not capitalist, it is anti-capitalist. As we see today with platform capitalism, capital does not want to be an employer, it prefers self-entrepreneurs. The employment contract, if it does not free the workers because of the acceptance of the subordinate relationship, it makes the capitalists responsible to the workers. The whole challenge for capital in the 20th century is to destroy the employment contract, it doesn’t want it!

Favereau also rejects the idea that capitalism can only be understood on the basis of legal practices and insists that for Marx, exploitation is not theft, it is an injustice and not an illegality. Shouldn’t we rather say that capitalism should not be understood solely on the basis of illegal practices? Indeed, the same Marx, in the same book Capital, sets out the primitive conditions of capital accumulation that take all forms of violence: theft, looting, war, expropriation, massacres, etc. One could say that this is only ancient history. But, the privatization of public enterprises, land grabbing, the liquidation of the assets of the countries of the former Soviet Union, the current practices of fiscal and social exile, wars over raw materials, and so many other things are they not forms of primitive accumulation that are always being repeated?

To summarize my question on Olivier Favereau’s conception of the law, shouldn’t we think of the law as a means of legitimizing a production relationship (feudal, capitalist, slavery-like, etc.) rather than characterizing it as a capitalist production relationship? Paradoxically, if Favereau relies on the law to criticize the financialized company, he does so by giving the right to capital. While we can think that we must save the law, because it can be other than capitalist!

Regardless of how Favereau views the relationship between law and capitalism, his theory of the enterprise is very stimulating and needs to be clarified on some points.

Favereau mobilizes the concept of the intersubjectivity and normative regime (ReIN), which is a principle of order that gives meaning and coherence to dominant legal practices. Intersubjectivity: because a rule is neither pure individual subjectivity nor material objectivity. Normativity: because a rule must be followed. In the corporate world, the ReIN carrying the financialized business is based on two conventions, the business-shareholder agreement and the individual number valuation agreement. This ReIN equips the architecture of the powers of valorization which can evolve over time, rather favorable to wage labor during Fordism, rather unfavorable in neo-liberalism. According to Olivier Favereau, the lesson of the history of the second 20th century is that “the wage counter-power is fragile, if it is not accompanied by a radical democratization of the company, i.e. to speak concretely of a generalization of codetermination” (p. 137).

In my opinion, this theory of the ReIN and of the enterprise raises two questions:
– What is co-determination? Equal representation between employee and shareholder representatives on boards of directors? A more demanding conception of democracy would go further and be based on the mutualist principle: one person, one vote. Is this codetermination?
– What justifies the presence on the Board and the very existence of shareholders? If we consider that workers bring their labor power and are exploited, what do capitalists bring? What is the explanation, the justification for dividends in your theory of exploitation? If ownership is theft as suggested, why stick to co-determination?

One way to answer these questions would be to go back to what seems to me to be a missed meeting with the most conventional Marxist of all – Bernard Friot. Isn’t his conception of social security as a democratic (and anti-capitalist) form of production compatible with this theory of enterprise? The originality of French social security in 1945 is to build itself against the State and capital in order to produce value differently. Another point of convergence that seems obvious to me is the one of Olivier Favereau and Bernard Friot concerning the role of representations. For Bernard Friot (taking over Gramsci), a class is only dominant if it succeeds in imposing its discourse on reality. Is the strength of the capitalists not first of all to have succeeded in imposing the idea that it is them who must decide what is worth because they are the masters of the economy even though they produce nothing?”